Donald Trump unveiled and then enacted a two-step tariff approach Wednesday as his long-awaited “Liberation Day” plans were released during a Rose Garden event at the White House.
The president is imposing a baseline tariff rate of 10% on all countries that will go into effect on April 5. On top of that, additional tariffs are to be added on top for some of what the administration considers the worst offenders, which will follow on April 9.
Read more: The latest news and updates on Trump’s tariffs
The president said those additional rates were calculated based on both tariffs and non-tariff barriers that he has long bemoaned.
The president held up a chart at the event with the additional rates he has planned. Atop the list was China, which is set to receive a 34% tariff. The European Union was second on the list, in line for 20% duties.
To the many clamoring for protection, Trump said, “I say terminate your own tariffs and drop your barriers.”
Trump said the tariff calculations were actually only half of the cheating his team has found, saying he could have gone higher. He called his approach Wednesday “kind reciprocal.”
The tariffs will be enacted by Trump declaring a national emergency based on chronic trade deficits, using a 1977 law called the International Emergency Economic Powers Act.
It’s the same law that Trump has used since taking office to impose duties on Canada, Mexico, and China over illegal immigration and drugs.
Trump released his long-awaited plan before the vice president, top Cabinet officials, and congressional leaders, as well as workers he said will benefit from his policies.
The dramatic move, if it holds, could reorient the global trading system and represents the climax of Trump’s decades-long focus on tariffs and unfair trading relationship that he says has led to America being ripped off.
“There will be complaints from the globalists,” Trump added Wednesday, claiming “every prediction our opponents have made for 30 years have been wrong.”
Wednesday’s announcement marks a middle ground of sorts between competing tariff approaches that the president and his team had been weighing and have been debated within the administration in recent weeks.
President Donald Trump holds a signed executive order after delivering remarks on reciprocal tariffs during an event in the Rose Garden on April 2. (SAUL LOEB/AFP via Getty Images) · SAUL LOEB via Getty Images
One early plan had focused on levying differing duties for each country while another focused on a flat universal rate that Trump had pushed on the 2024 campaign trail.
Wednesday’s highly anticipated unveiling comes at a delicate moment for the economy and markets, with stocks facing volatility for weeks on ever-changing tariff news and also few indications that this week’s announcement will quickly end the investor uncertainty.
Worldwide retaliation to Trump’s plan has already been promised with nations like China, Japan, and South Korea even making plans to team up and jointly respond to Trump’s move.
Capitol Economics said in a note Wednesday that uncertainty may remain in the stock market even after today ”judging by the president’s mercurial approach to imposing tariffs.”
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The approach unveiled Wednesday was also an attempt by the president and his team to reflect not just tariffs but also so-called non-tariff barriers that have long galled him.
Trump’s team factored in a wide array of practices into its calculations, from currency manipulation to things like value added taxes to export subsidies to technical barriers to agricultural constraints.
“Tariffs are customized to each country,” a senior administration official told reporters, saying it was “based on the concept that the trade deficit that we have with any given country is the sum of all the unfair trade practices, the sum of all cheating.”
“In many cases, the non-monetary barriers were worse than the monetary ones,” the president added Wednesday.
Some of the barriers Trump and his team cited may be easy for countries to change but others —especially things like Europe’s Value Added Tax (VAT) — could provide more of a challenge.
Others will perhaps be easier. India, for example, has already said it will repeal its current digital service tax as part of the negotiations.
Wednesday’s announcement was also just the latest example of Trump relying on novel legal authorities to implement his tariffs by using a 1977 law called the International Emergency Economic Powers Act.
It’s a tactic that allows him to move quickly but could also be vulnerable to legal challenges in the months ahead with relevant portions of the law not facing legal tests in decades.
Other duties have been on a different track, including this week’s 25% duties on automobiles that are being levied through a different and more legally tested authority derived from Section 232 of the Trade Expansion Act of 1962 focused on national security.
The variety of authorities — and the focus on legally untested quick strike options — have led to deep criticisms from Trump’s critics.
“Looking at that legal authority will tell you whether it’s going to be an immediate action if it will require more time,” Katherine Tai, President Biden’s trade representative, said in a call ahead of the unveiling, adding that “we are seeing increasing lawlessness and an emboldened administration and throwing off the requirements of legal compliance within our own system.”
Top cabinaet officials are seen during Trump’s speech to announce new tariffs. (AP Photo/Evan Vucci) · ASSOCIATED PRESS
Wednesday’s tariff unveiling comes at a fraught moment for Trump politically following a weaker than expected GOP showing in special elections Tuesday and with the Senate set on a resolution to undo Trump’s Canada tariffs.
The wariness with tariffs is deep enough that at least a handful of Republicans are set to join Democrats in voting for the resolution and against the White House.
“They don’t like the tariffs either,” Senate Majority Leader Chuck Schumer said on Wednesday afternoon.
Yet the administration appeared undaunted Wednesday, with Trump appearing triumphant as his long awaited announcement finally commenced. The White House said the president has secured about $5 trillion in new company investments since taking office and pushed out a fact sheet about how “Tariffs Work.”
For Trump, as he put it Wednesday, it was “promises made, promises kept.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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