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Trump's Reciprocal Tariffs Set to Reshape Global Trade on April 2

With markets in correction territory and inflation risks mounting, Trump hints at potential flexibility in the scope of his sweeping trade tariffs.

German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 21, 2025. REUTERS/Staff/File Photo
Image
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, March 19, 2025. Federal Reserve officials held their benchmark interest rate steady for a second straight meeting, though they telegraphed expectations for slower economic growth and higher inflation. Photographer: Michael Nagle/Bloomberg via Getty Images
People work on the floor at the New York Stock Exchange in New York, Wednesday, March 19, 2025. (AP Photo/Seth Wenig)

Overview

  • President Donald Trump plans to implement reciprocal tariffs on April 2, targeting countries that impose duties on U.S. exports, with steel, aluminum, and other goods among the affected sectors.
  • The Federal Reserve has warned that the tariffs could drive inflation higher and create economic uncertainty, while markets remain volatile with the S&P 500 in correction territory.
  • Trump has referred to April 2 as 'Liberation Day in America,' emphasizing the tariffs' significance as part of his 'America First' trade policy aimed at reducing the U.S. trade deficit.
  • Reports suggest the White House may narrow the scope of the tariffs, potentially excluding certain industry-specific duties, but no official confirmation has been made.
  • Economists caution that retaliatory measures from trading partners could increase the risk of recession, with global GDP forecasts already revised downward for 2025 and 2026.