On April 2, 2025, Donald Trump spoke in the White House Rose Garden to announce a series of protectionist measures, termed Economic Liberation Day.
Foundation of New Tariffs
In his nearly 45-minute speech, Trump announced new tariffs on all US trading partners, starting at a base rate of 10%. Specific tariffs are based on trade practices: 20% for EU imports, 34% for China, 46% for Vietnam, and 24% for Japan.
Partial Reciprocity and Auto Tariffs
Trump emphasized the principle of partial reciprocity: "What they impose on us, we will impose on them half of it." Starting April 3, a 25% tariff on auto imports will take effect to encourage production relocation to the US. Trump stated, "no company will be allowed to set up in other countries," targeting firms moving production abroad.
Market Reaction
Stock markets reacted with significant drops, particularly in technology and discretionary sectors, down about 3%. Major stocks like Nvidia, Amazon, and Tesla saw declines of over 4% after trading hours.
Trump's tariff announcement marks a key point in his protectionist policy, shaking markets significantly. The long-term global economic impacts remain uncertain.
