Trump "Liberates" the U.S. from Cheap Imports
President Trump announced a minimum 10% tariff on all U.S. imports on "Liberation Day." Many countries that supply large percentages of U.S. imports will have "reciprocal" tariffs added to the %.
President Donald Trump provided some long-awaited details to his tariff and trade policy yesterday (April 2, 2025), speaking from the White House Rose Garden on what Trump calls “Liberation Day.” Trump signed an Executive Order declaring a “national emergency” over imports. A minimum 10% tariff on all imports will take effect April 5, 2025. Additional “reciprocal” tariffs on certain countries will be put into place on April 9, 2025.
Trump’s Executive Order, the oh-so-succinctly titled “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits,” states the President’s reasoning for the order, finding:
“that underlying conditions, including a lack of reciprocity in our bilateral trade relationships, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits, constitute an unusual and extraordinary threat to the national security and economy of the United States. That threat has its source in whole or substantial part outside the United States in the domestic economic policies of key trading partners and structural imbalances in the global trading system. I hereby declare a national emergency with respect to this threat.”
Mexico and Canada, supplying 17.2% and 13.6% of U.S. imports, were not included in the additional tariff list. The two U.S. border-sharing neighbors will be subject to the previously announced 25% tariff rate for most goods. Energy, Canada’s largest import to the U.S., is subject to a lower 10% rate. Some items, such as certain levels of agricultural potash and fertilizers, are exempt under terms of the U.S. Mexico Canada Agreement Trump negotiated in his first term.
Trump’s new list of tariffs does include some exemptions. No additional reciprocal tariffs above the 10% baseline rate will be added to imported steel, aluminum, copper, pharmaceuticals, semiconductors, lumber, bullion, energy, and “other materials not available in the U.S.”
China—the leading supplier of U.S. electronics, machinery and equipment, home and furniture goods, and more—will now face an effective 54% tariff rate (20% previously announced rates + the 34% reciprocal rate). That means likely rising consumer prices on smartphones, laptops, batteries, and many, many other consumers goods.
The European Union, facing a 20% reciprocal tariff, is a major supplier of industrial equipment, chemicals, plastics, rubber, medicines and pharmaceuticals,, wine + other specialty food products, and more.
Automobiles and auto parts make up a very large chunk of U.S. import values. Mexico, Japan, South Korea, Canada, and the EU are the largest suppliers of automobile imports to the U.S. market. These expensive items are covered under a previously announced proclamation: “ADJUSTING IMPORTS OF AUTOMOBILES AND AUTOMOBILE PARTS INTO THE UNITED STATES.” The baseline tariff rate for automobiles is 25%, though Mexico and Canada have some exemptions under the USMCA. Trump also proposed a tax deduction for interest on purchases of U.S. produced automobiles during his speech yesterday, though that is a federal tax matter that Congress would most likely have to approve.
While the order does provide important details about baseline and reciprocal tariffs on imports, confusion and chaos remains at the center of the trade debate. There does appear to be room for negotiation on tariff rates on a country-by-country basis. It is possible that Trump and his trade team could work on bilateral trade agreements to reduce rates in some cases. There remains open and unclear language about exemptions.
What is clear is that:
U.S. consumers will likely face higher prices for Toyota Corollas, Mexican avocadoes and fresh tomatoes (providing 90% and around 50% of the U.S. supplies), iPhones, French and Italian wine, Vietnamese t-shirts, Brazilian sugar, and much, much more.
U.S. agriculture exporters are likely to face retaliatory rates from other countries. Look out soybean markets.
Stock markets, most international finance types, and mainstream economists are going to keep freaking out. The market for punditry and spin will be strong.
Other countries—allies included—are similarly (and rightly?) going to keep freaking out and responding to U.S. isolationism and withdrawal from international institutions, treaties, aid efforts, and other previously semi-functional cooperative agreements.
U.S. political realignment around trade and trade policy will continue to churn. Many Republicans, traditionally the “free trade” party, are lining up behind Trump (whether they agree with him or not). Many Democrats, on the other hand, see an opening in the free trade space and could move even further toward the neoliberal corporate-managed trade regime camp (arguably a very, very questionable move).
Manufacturers and retailers are certainly going to increase prices. Many corporations are likely to raise prices far above their increased cost-of-goods as they have in the past. Look for price gouging at a store near you.
Fear, uncertainty, confusion, worry, chaos, and social-media-friendly hot takes will continue to drive the “democratic” debate over economic and trade policy.
During Trump’s speech, he outlined his belief that tariffs will actually be a large source of revenue for the federal government. He harkened back to the “Golden Age” of the 1800s and early 1900s, before the dreaded income tax.
The President, wrong or right, is making the case that regressive short-term price increases are worth it, that they will lead to economic benefits through increased domestic production and manufacturing over a longer timeline, that tariffs will bring in large sums of money to help pay for his proposed tax cuts (that primarily benefit multi-millionaires and corporations). Like it or not, that’s the experiment now facing the American people and the global economy.
(NOTE—Today’s edition of The Cocklebur is meant to be an informative article explaining what we know about Trump’s order and tariff rates. Tomorrow’s edition will feature more “thoughtful” analysis.”)
The Cocklebur covers rural policy and politics from a progressive point-of-view. Our work focuses on a tangled rural political reality of dishonest debate, economic and racial disparities, corporate power over our democracy, and disinformation peddled by conservative media outlets. We aim to use facts, data, and science to inform our point-of-view. We wear our complicated love/WTF relationship with rural America on our sleeve.