Published 25 March 2025
President Donald Trump has promised to unleash the largest sweep of his trade policy agenda next week, with a raft of new tariffs to be applied globally and armed with a set of legal justifications for a range of actions beyond just tariffs. April 2, which Trump is now calling "Liberation Day," will be the most important turning point in reversing the last 80 years of US economic integration with the world in favor of implementing America First.
President Donald Trump has promised "Liberation Day" on April 2, when his reciprocal tariff agenda goes global. He said that the United States will be "getting back a lot of the wealth" that friend and foe alike have taken from America over the years.1
While there has been a long debate over whether to take Trump’s statements "literally but not seriously," or "seriously but not literally," his early actions in office indicate that major changes are ahead. It is rare to be able to see a turning point in history coming so clearly, as most are obvious only in hindsight. In this instance, however, April 2 is shaping up to be an economic milestone with actions that will reverberate globally for decades to come.
To understand the importance of this period, it is worth taking a short step back to examine what actually happened before looking ahead to what is expected in early April. Since his inauguration on January 20, Trump has threatened and used his favorite policy tool, tariffs, against a wide array of targets with diverse justifications.2 He has often moved very quickly, with tariff decisions taken and implemented within hours or with some policies imposed and then reversed almost as swiftly. April 2 will be the early culmination of his vision to rebalance global trade and economics in favor of the United States alone.
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Higher US tariffs currently in place
By the end of March, tariffs on imported goods to the United States have been imposed against all products arriving from China, starting at 10% and moving to 20%. These 20% tariffs are applied on top of any existing Section 301 or Section 232 tariffs which can be as high as 25%. This means imported Chinese goods may have total additional tariff costs of up to 45%.
Tariffs are also in place now at 25% for many Canadian and Mexican goods into the United States, unless the products meet the Rules of Origin (ROO) criteria as outlined in the US-Mexico-Canada Agreement (USMCA). In practice, this has left many firms paying 25% as proving ROO compliance was not required in the past and often takes time for companies to set up internally. Some goods will not be eligible for USMCA duty-free or reduced tariff benefits as they will not meet ROO requirements.
Canadian energy products are subject to 10% tariffs, along with potash.
The Executive Orders for China, Canada, and Mexico also suspended the use of de minimis for shipments under US$800 a day. The provision had provided a means for lower-value imports to enter the United States duty-free. Now, every shipment of any value would be subject to payment of all tariffs from these three locations. However, this Trump order was among the earliest examples of how the new administration appears to favor the shock of chaos over an orderly implementation of carefully considered policy. Difficulties in logistics at the border quickly led to a suspension of the suspension, which means that goods from all three markets can still use de minimis entry rules. This situation, however, is meant to be temporary until the United States Customs and Border Protection (CBP) agency resolves the technical issues. CBP subsequently issued guidance on March 18 to indicate that border issues have been resolved, which means de minimis could be quickly eliminated for these three countries (or, indeed, revoked more widely) at any time.
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Tariffs against China, Canada and Mexico were all imposed using the legal justification of International Emergency Economic Powers Act (IEEPA).3 The specific emergency cited by Trump was migration flows and fentanyl imports. Congress has declined to vote on the use of IEEPA in this case.4
On March 12, the United States began collecting globally applied 25% tariffs on steel, aluminum, and derivative products. These derivative products include most goods made with steel or aluminum, including kitchen products like frying pans, furniture, and sporting goods. These tariffs have been applied using Section 232 for national security purposes.5
Retaliation underway
These various tariff actions have led to retaliatory measures against US exporters. China has now issued two sets of action lists, including the imposition of 10% tariffs on imports from the US of crude oil, agricultural machinery, large-displacement vehicles, and pick-up trucks.
After the US escalation of tariffs to 20%, China then imposed 15% tariffs for American chicken, wheat, corn, and cotton, and a 10% additional duty on imports of US sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products. In conjunction with these tariff measures, China also banned 15 US entities from importing any dual-use items from China.6
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Canada has also imposed two sets of retaliatory tariffs. The first, in response to IEEPA tariffs, included 25% tariffs on US meats, dairy, vegetables, oil seeds, beverages, lumber, furniture, and toys.7 The second, against Section 232 steel and aluminum tariffs, included 25% retaliatory tariffs on those metals along with computers, sports equipment, and other products.8
The European Union has released a long list of US products to receive tariffs in response to steel and aluminum charges.9 This retaliatory action is now going to be delayed until later in April to allow for inclusion of new measures to counter America’s reciprocal tariffs expected on "Liberation Day."
Trade chaos ahead
The opening few weeks of the Trump administration have already delivered a dramatic set of policy actions, particularly around the imposition of tariffs that have landed even on historical American allies. However, this early phase has been relatively muted compared to what appears to be on the horizon by April 2.
Coming next week, the US will release of a series of reports on April 1. The America First Trade Policy Executive Order requested a wide range of assessments from across government agencies.10 For example, government agencies have been instructed to use any and all existing legal avenues (including older, often obscure provisions) to address topics such as unfair trade practices; currency manipulation; application of trade rules and remedies like anti-dumping and countervailing duties; export controls; determination of losses from counterfeit and illicit trade including through provisions such as de minimis; adjustment of imports that threaten the national security of the United States (including steel and aluminum); and inbound and outbound investment rules.
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Reports are meant to deliver more details on the Trump administration’s plans for foreign partners, including necessary adjustments to the USMCA, other free trade agreements, the World Trade Organization’s government procurement agreement, and a review of whether US companies or citizens are experiencing extraterritorial or discriminatory taxes.
There are also a range of documents due to look at resetting the relationship with China such as listing unreasonable or discriminatory actions taken by China as well as additional scrutiny to "ensure reciprocal and balanced treatment of intellectual property rights with the PRC (People’s Republic of China)." The upcoming reports should also include a recommendation on revoking Permanent Normal Trade Relations (PNTR) with China,11 a bedrock of postwar US-led multilateral trade architecture that extends equal tariff treatment by one WTO member to all others.
Given the sweeping nature of these report requests and the high level of time commitment involved in getting documents drafted and circulated among participants, it may be that not all reports are delivered on April 1 as originally intended. Nevertheless, trade policy watchers should still be ready to examine a set of documents in early April that will give greater clarity on how the Trump administration is likely to proceed.
Reciprocal tariffs on Liberation Day
Armed with reports providing additional information on policy directions and beefed up with specific legal or regulatory provisions that can back US objectives, Trump has promised to deliver reciprocal tariffs on April 2. As with many pledges in the Trump administration, it is not guaranteed that he and his team will be able to deliver clarity on proposed timelines, or much clarity at all, on Liberation Day.
Plans are still fluid, with announcements from the White House changing on the nature of reciprocal tariffs on a daily basis, including signals in recent days that it may be limited to 15 "worst-offending" economies – which would still cover some 80% of US imports.
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Nevertheless, given the repeated importance that Trump has placed on this deadline and his various promises made over the past few weeks, it is highly likely that trade policy decisions will be taken, including the imposition of tariffs starting as soon as 12:01 am on April 3.
This is, it should be noted, not the expectation of many who believe that Trump will instead announce a plan of action to deliver his "Liberation Day." By announcing tariff rate hikes to be implemented over a longer time horizon, it would give foreign leaders time to potentially craft an appropriate bilateral arrangement or deal to limit or avoid tariff application, give firms time to prepare, and help ensure that government and regulatory processes are fully ready to manage the likely trade chaos ahead.
But as an examination of Trump’s actions since the inauguration on January 20 shows clearly, he has no hesitation with declaring a policy change in the morning, pushing out a regulatory announcement in the afternoon or the next day, and imposing tariffs by midnight (even late on Friday afternoons leading to scrambles before tariffs start on Monday night/Tuesday morning).
Hence, there is no reason to think that Trump will just be willing to lay out a process for imposing his favorite tool on what he has repeatedly called the most important day of the year. This is true even if global tariff rate hikes lead to border chaos and even if his own advisors are split on the details of implementation.
Reciprocal tariffs, to recap, are meant to include five key assessments.12 These include mirroring high foreign tariff levels with higher US tariff levels,13 any domestic Value Added (VAT) or Goods and Services (GST) taxes, non-tariff barriers, "burdensome requirements" on American businesses, and any other "structural impediments" deemed "unfair." This means that reciprocal tariffs can be applied to any and all countries, even those with free trade agreements in place and those with lower or zero tariffs, as the concept is not simply limited to tariff rates alone.
The difficulty of managing this system is going to be high. It has clearly placed a significant burden on officials tasked with sorting out tariff rates on bilateral trade partners. This complexity has been increased by Trump’s repeated calls to consider sector-specific tariff issues as well, particularly for autos, pharmaceuticals, semiconductors, lumber, and metals.
Nevertheless, on April 2, Trump wants to be able to announce country-specific tariff actions against a wide array of trade partners. It is currently looking like a mix of country-level tariffs (say, 10% for most partners with a higher base number for particularly “unfair” countries) coupled with possible sector-specific tariff line applications. These tariffs could take effect with very little lead time.
Thus, April 2 is shaping up to be a turning point in history. The creator of the existing global trading system will be clearly operating outside the trade rules and norms that have governed economic interactions worldwide for almost 80 years. It will, in a matter of days, be seen turning its back on principles of non-discrimination and actual reciprocity in favor of a new scheme that delivers unilateral trade benefits to the United States alone. The consequences for businesses, consumers, and governments will be profound.
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[1] https://www.washingtonpost.com/business/2025/03/19/trump-tariffs-imports-liberation-day/
[2] See, for example, the tariff tracker at the Peterson Institute for International Economics by Chad Bown. https://www.piie.com/blogs/realtime-economics/2025/trumps-trade-war-timeline-20-date-guide
[3] See, as an illustration, the order against Canada at: https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-flow-of-illicit-drugs-across-our-national-border/
[4] https://www.politico.com/live-updates/2025/03/11/congress/house-republicans-move-to-block-vote-on-trumps-tariffs-00223947
[5] https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-restores-section-232-tariffs/
[6] For a recap of actions, see https://www.whitecase.com/insight-alert/china-retaliates-tariffs-and-non-tariff-measures-response-trumps-additional-tariffs
[7] See the full list at: https://www.whitecase.com/insight-alert/canada-imposes-25-tariffs-united-states-retaliation-trump-tariffs
[8] https://www.reuters.com/markets/commodities/trumps-steel-aluminum-tariffs-take-effect-us-canada-trade-war-intensifies-2025-03-12/
[9] The details are a bit complicated but basically the EU had already announced retaliation in 2018 for steel and aluminum tariff threats which were later suspended. The initial 99-page list of products in line for retaliation in 2025 were split into the original 2018 list and a second batch of tariff responses. https://ec.europa.eu/commission/presscorner/detail/en/ip_25_740
[10] For more details on this agenda, see Elms, https://www.hinrichfoundation.com/research/article/us-china/trump-america-first-trade-policy-memo/
[11] https://www.hinrichfoundation.com/research/article/us-china/what-it-means-if-the-us-revokes-pntr-with-china/
[12] https://www.hinrichfoundation.com/research/article/trade-distortion-and-protectionism/trump-reciprocal-tariffs/
[13] It appears that any lower foreign tariff rates will not be mirrored by the US, as the Americans will not be lowering their own tariffs.
© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).
Author
Deborah Elms
Dr. Elms is Head of Trade Policy at the Hinrich Foundation in Singapore. Prior to joining the Foundation, she was the Executive Director and Founder of the Asian Trade Centre (ATC). She was also President of the Asia Business Trade Association (ABTA) and the Board Director of the Asian Trade Centre Foundation (ATCF).
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