Trump's Incoming Tariffs Are Petty, But 'Liberation Day' Still Deserves Your Attention. Here's Why

President Donald Trump listens to a question from a reporter before signing an executive order in the Oval Office of the White House in Washington, Monday, March 31, 2025.Countries around the world are bracing for Donald Trump’s “Liberation Day” announcement of tariffs on foreign imports.Just two months into his second term, the US president has caused global alarm by confirming he plans to go through with his threat to slap what is effectively a tax on all goods sold to the States from abroad.The US has already raised duties on Chinese imports, along with some goods from Canada and Mexico, while levies on cars are set to come in next week.But it’s unclear exactly what tonight’s seismic moment will entail, meaning leaders around the world - including Keir Starmer - will have to tune in to watch Trump’s news conference at 9pm UK time to find out what exactly he has in store.After all, the made-for-TV announcement could shift geopolitical alliances, officially start a trade war and sent shockwaves across the global economy.Here’s what you need to know.Why does Trump want to introduce these tariffs?The US president has proudly dubbed April 2 “Liberation Day”, claiming it will level the playing field between America and the rest of the world when it comes to trade, and potentially raise billions for his government’s coffers.The theory is that making foreign goods more expensive will make American consumers buy cheaper US-made products instead, thereby boosting the country’s economy.But senior history lecturer at the University of Exeter, Dr Marc Palen, suggested there was more to it than that.He said Trump is trying to take the US economy back to what he perceives as its protectionist “golden age” – the late 19th Century.Dr Palen told HuffPost UK: “Trump’s tariff plan explicitly draws from a very old [Republican Party] playbook that dates to a period Trump regularly lionises, the 1890s, especially the highly protectionist US president William McKinley.“But in reality, the McKinley Tariff helped kickstart a decade of economic depression, trade wars with Canada and Europe, and even a failed [Republican] attempt to annex Canada that backfired spectacularly.”While the White House has predicted that this will boost America’s economy in the long-term, choosing to announce the tariffs after markets closed tonight could be a sign that they are expecting to take an immediate economic hit.What will the tariffs look like?The threat of further tariffs has caused chaos for international businesses, because Trump has been particularly unclear how large these new taxes will be.The US president claimed in mid-March that they will be “reciprocal” tariffs, and said whatever countries are charging the US, “we’ll charge them” in return.The EU currently has a 24% tariff on US goods coming into its trade bloc, while the US charges the EU just 4.5% on EU goods coming the opposite way.So reciprocation would mean the US slaps 24% tariffs on the EU – a huge increase on where they are now.But, just two weeks later, Trump said: “The numbers will be lower than what they’ve been charging us. And in some cases might be substantially lower.”The White House has also suggested that it will impose tariffs on countries which charge VAT – such as the UK – which he claims is unfair on the US.Who will be hit?The White House has been particularly unclear on just who they want to target.Trump has said it will be a blanket tariff for all countries, however, some nations – like the UK – hope to be able to negotiate more favourable terms in the future.The US treasury secretary Scott Bessent said in March that the US would be focused on the so-called “Dirty 15”.That’s the 15% of countries or partners who trade with the US most and are believed to have a trade deficit with the US (meaning they export more than they import) or put higher tariffs on US products.They are believed to be:The UKThe EURussiaArgentinaAustraliaBrazilChinaCanadaIndiaIndonesiaJapanKoreaMalaysiaMexicoSaudi ArabiaSouth AfricaSwitzerland TaiwanThailandTurkeyVietnamTrump warned last week that “friend has often times been worse than foe”.Canada, Mexico and China are the only three countries to be hit so far, and they stand to lose the most from today’s news.NEWPresident Trump:“Friend has often times been worse than foe… we are going to be doing is a 25% tariffs on all cars not made in the US…”Seems to be all cars, no exemptions, ie including UK, one of our major exports there. 18% of UK car exports go to US. pic.twitter.com/sFWvi57uWT— Faisal Islam (@faisalislam) March 26, 2025What kind of impact will ‘Liberation Day’ have?The companies which export goods to the US will have to bear the brunt of the cost.So firms will probably have to charge suppliers more, ask investors to contribute or pass the cost onto the Americans consumers – meaning the US could find itself in a recession.Trump has refused to rule out such a possibility, saying: “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.”This whole exercise is meant to attract more firms to do business within America.But it could have a devastating impact on those countries which rely heavily on selling goods to the US.If they retaliate by imposing reciprocal tariffs on American exports, that could lead to a global trade war which could be hugely damaging to the world economy.For instance, the Office for Budget Responsibility has warned that such a scenario would reduce the UK’s gross domestic product and wipe out the spare cash Rachel Reeves hoped to have.Canada and the EU have already said they will retaliate, but Keir Starmer has so far stopped short of following suit.He told the Commons at PMQs: “A trade war is in nobody’s interest and the country deserves, and we will take, a calm, pragmatic approach.”Related...UK Is Expecting To Be Hit With Trump Tariffs – But Has Not Ruled Out Retaliation, No.10 SaysTrump Says He 'Couldn't Care Less' If His Tariffs Push Up Car PricesBlow For Rachel Reeves As Trump Announces 25% Tariffs On All Cars Imported To America