Trump pushes for tariff escalation ahead of ‘Liberation Day’

The US president plans new tariffs on 2 April, challenging allies and investors, and revives his trade strategy to bring jobs back to the US

Donald Trump is pushing his advisers to further tighten tariff policy ahead of 2 April, which he has dubbed ‘Liberation Day’, a day on which he foresees a significant escalation in the global trade war. Despite many allies on Wall Street and in Congress suggesting a more cautious approach, the US President is determined to continue with aggressive measures to transform the US economy.

His advisors are considering the extent of new tariffs, with the most likely scenario involving tariffs on products from 15% of the countries considered the US’s worst trading partners, responsible for nearly 90% of imports. Trump has already imposed 25% tariffs on all automobile imports and suggested similar measures for the pharmaceutical and timber sectors, causing a drop in stock markets and increasing the risk of recession, according to economists.

The president, however, seems to be pondering the introduction of a universal tariff on most imports, believing that tariffs are a win-win for the US, as they will bring back manufacturing jobs and generate revenue for the federal government. According to reports in the Washington Post, Trump regretted not imposing higher tariffs during his first term.

Trump’s public statements show the importance of tariffs in his political strategy: he called them the ‘most beautiful word’ in the dictionary and pointed out that in the 19th century, tariffs led the country to maximum prosperity. Some of his allies have proposed turning 2 April into a national holiday, replacing Trump’s birthday with ‘Liberation Day’ to honour the jobs that have returned to America.

However, there is no shortage of concern among Republicans in Congress, international allies and investors. The internal divisions within the administration are evident: conservative Republicans see tariffs as a temporary tool to gain concessions from trading partners, while other Trump advisers see them as a permanent means to boost production in the US. In the election campaign, Trump had been vague, but now the differences are emerging more clearly.

Some Republicans fear that the duties could undermine the extension of the 2017 tax cuts, a priority for the party. ‘We are trying to dissuade Trump from these protectionist tariffs,’ said Stephen Moore, a long-time Trump ally. ‘The risk is that the tariffs will overshadow the tax issue.’ Other Republican Congressmen, such as Senator John Hoeven, expressed concerns about the impact on agricultural producers, while Senator Ron Johnson warned that the tariffs could have ‘very damaging effects’.

Despite the criticism, Trump remains firm on his strategy. Some groups sceptical of free trade, such as the Coalition for a Prosperous America, are pushing for permanent tariffs of 18% on all imports, arguing that ‘a reciprocal tariff used only as a negotiating tool contradicts the president’s desire to rebuild American industry’. Trump seems to partially agree and has reiterated that the tariffs will bring ‘short-term pain’ to the US economy, but will not be easily lifted. ‘Liberation Day is coming to America, soon,’ he wrote on Truth Social. ‘For years we have been robbed by almost every country in the world, friend or foe. But those days are over.’

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(Photo: © AndKronos)