U.S. President Donald Trump's escalating tariff threats have set global markets on edge as April 2 approaches—dubbed "Liberation Day" by Trump himself. His plan? To impose "reciprocal tariffs" matching duties other countries charge on U.S. goods. But will this move liberate the economy or ignite a trade war?
Reciprocal Tariffs 101: Fair Play or Economic Gamble?
Trump argues that reciprocal tariffs are "very simple": if Country X charges a 10% tax on U.S. cars, the U.S. charges 10% on X’s cars. But experts warn the reality is anything but simple. With ~5,000 product categories and 186 countries/regions involved, calculating these tariffs could require up to 930,000 assessments! Goldman Sachs predicts the policy could slash U.S. GDP growth to 1.5% in 2025, while raising recession risks to 35%.
A Flashback to the 1930s?
Economists like Stephen Roach see eerie parallels to the Smoot-Hawley Tariff Act of 1930, which worsened the Great Depression. Today, Trump’s push to "buy American" could unravel global supply chains, hitting U.S. firms just as hard as foreign ones. Tu Xinquan, a Beijing trade expert, warns this decoupling could send "shockwaves through global industries."
April 2: D-Day for Global Trade?
Will Trump’s tariffs revive U.S. manufacturing or spark a domino effect of retaliation? As the clock ticks, businesses and consumers brace for higher costs—Goldman Sachs estimates a $214B spike if value-added taxes are factored in. The stakes? A potential post-WWII tariff high of 8.4% and a fractured global trade system. Buckle up.
Trump’s Tariff Tensions: ‘Liberation Day’ or Trade War Ground Zero?
Goldman Sachs predicts the policy could slash U.S. GDP growth to 1.5% in 2025, while raising recession risks to 35%.
