Trump’s Liberation Day Focuses on Reciprocal Tariffs, With 10% Minimum on All Countries

Donald Trump just finished a press conference detailing his tariff plans for Liberation Day. Essentially, his administration calculated existing tariffs against the US and plans to implement half their amount.

These reciprocal tariffs will apply to all imports, regardless of industry-specific initial tariffs, and impose a 10% minimum on all nations. Stock and crypto markets have fallen in response to this announcement.

Trump’s Liberation Day is Here

President Trump’s Liberation Day, when he announces a sweeping array of US tariffs, is here, and the markets are waiting expectantly. In a live broadcast, Trump detailed the tariffs that are coming to the world’s various nations. In addition to a flat tariff on automobiles, he also described his metric for assigning them to individual nations:

“At midnight, we will impose a 25% tariff on all foreign-made automobiles. Starting tomorrow, the United States will implement reciprocal tariffs on other nations. For nations that treat us badly, we will calculate the value of all their tariffs, and we will charge them approximately half of what they are charging us. They won’t be reciprocal, but I could’ve done that,” he claimed.

Trump claimed that the Liberation Day plans are centered around reciprocal tariffs. Essentially, the administration is calculating other nations’ tariffs regarding various industries, like agriculture. Once the total of these tariffs have been calculated, Trump will assign either half that value or 10% in reciprocal tariffs, whichever is higher. He included a chart to help visualize this.

Trump Explains Liberation Day Tariffs. Source: New York Times.

Trump’s Liberation Day plans involved stiff tariffs against major allies and trading partners. He will institute 34% tariffs against China, 20% tariffs against the European Union, and 32% tariffs against Taiwan. Surprisingly, he also put a 17% tariff against Israel, even though it canceled its tariffs yesterday, and did not mention tariffs against Canada or Mexico despite previous disputes.

Additionally, Trump’s tariffs apply to all imported goods, while the original tariffs are often specific to areas like grain or dairy production. This may incense hostility from allies and trading partners, who typically impose agricultural tariffs for domestic security reasons.

The uncertainty around Liberation Day has highly fueled fears of a US recession. As Trump’s speech proceeded, the stock market took a dive, with Nasdaq-100 futures falling 2.6% and S&P futures declining 1.67% and counting. The price of Bitcoin behaved similarly, decreasing by about 1.4%.

Bitcoin (BTC) Price Performance. Source: CoinGecko

Ultimately, Trump commenced the Liberation Day ceremony after TradFi markets closed, and his tariffs won’t take effect until midnight.

In other words, it may be difficult to assess their real impact for several more hours.