Please note: This article covers a developing story. Information included is current at the time of publication but may change as new details emerge.
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On April 2, 2025, United States President Donald Trump announced a series of sweeping tariffs, collectively referred to as the "Liberation Day" tariffs. These tariff announcements, while expected, are set to significantly impact global trade relations and have profound implications for international businesses.
This article breaks down what these tariffs are all about, their specifics, and what they could mean for businesses with a global footprint.
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Tariffs are taxes imposed by a government on imported goods. These tariffs on imports are duties typically paid by the importer and can vary in rate depending on the product type, country of origin, or geopolitical context.
Governments can use and implement import tariffs for several reasons:
Liberation Day, observed on April 2, 2025, marked the day President Donald Trump announced a sweeping set of economic measures aimed at what he called “reclaiming America’s economic sovereignty.”
The name “Liberation Day” was coined by Trump himself during a live broadcast from the White House, positioning the event as a symbolic reset of America’s global trade posture.
According to the Trump administration, Liberation Day signifies:
Trump supporters hailed the day as a necessary stand against globalisation and outsourcing, while critics labeled it a dangerous escalation that could trigger widespread trade wars and harm global supply chains.
Either way, Liberation Day is poised to become a major milestone in U.S. trade policy, and its effects are already being felt across international markets.
In his announcement, President Trump declared a national economic emergency, citing a substantial U.S. trade deficit as the impetus for these tariffs.1 He introduced a two-tier tariff structure:
The rationale behind these reciprocal tariff rates provided by the administration is to rectify what it perceives as long-standing imbalances and unfair practices in international trade.
President Trump framed this initiative as a "Declaration of Economic Independence," aiming to bolster domestic manufacturing and reduce trade deficits.3
The individual country-specific tariffs vary significantly, reflecting the administration's assessment of each nation's trade practices.4 Notable examples include:
However, no additional tariffs have been announced for Canada or Mexico. Both countries were already subject to tariffs introduced in February, although these have since been partially reversed.
China, meanwhile, will now face a combined effective tariff rate of 54%, with the newly introduced 34% rate added to the existing 20%.
These tariffs have drawn swift market reaction and intense criticism from economists, trade groups, foreign governments, and even some U.S. business leaders.
While supporters praise the policy as a long-overdue correction to global trade imbalances, critics argue that the tariffs could spark a trade war, increase consumer prices, and ultimately weaken the American market and economy.
The introduction of these tariffs is set to have far-reaching effects on global businesses.
Companies importing goods from a foreign country or foreign producer into the U.S. (especially from targeted countries) face increased costs, which may be passed on to consumers through higher prices.
Businesses with complex international supply chains could be forced to reassess their operations, potentially seeking new suppliers, trading partners, or relocating production.
The announcement has already triggered volatility in global financial markets, fuelled by investor concerns over a possible trade war and tariff responses. Additionally, the risk of retaliatory tariffs from other nations for American imports threatens to further strain international trade and impact export-reliant industries.
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In light of these developments, global businesses should consider the following actions:
The "Liberation Day" tariffs represent a significant shift in U.S. trade policy with far-reaching implications for global commerce. Businesses must proactively assess and adapt to these changes to navigate the evolving international trade environment effectively.
Following the introduction of his tariffs, Donald Trump said he was open to negotiations with other countries—provided they offered something “phenomenal” in return.
Speaking to reporters aboard Air Force One, Trump reiterated his belief that other nations have taken advantage of the United States for years, and that he intends to put a stop to it.
“The tariffs give us great power to negotiate,” he said, noting that “every country has called us.”
When asked what might prompt him to ease the tariffs, Trump replied: "If somebody said that we're going to give you something that's so phenomenal, as long as they're giving us something that's good."10
This softening of tone suggests that the administration views the Liberation Day tariffs as a negotiation tool rather than a permanent policy fixture.
On April 9, 2025, President Donald Trump announced a 90-day suspension of the planned country-by-country “reciprocal” tariffs, maintaining a 10% baseline tariff. However, Trump also stated that tariffs on Chinese imports would rise to 125%, as retaliation in an escalating trade war.
Trump’s sudden U-turn on a key policy aimed at undoing decades of globalisation temporarily eased a week of market turmoil and calmed fears among U.S. investors over the impact of unilateral import tariffs on key allies.
Despite this temporary relief, the intensified trade conflict with China and the remaining tariffs continue to contribute to economic uncertainty and concerns over a potential recession.11
Please note: This article covers a developing story. Information included is current at the time of publication but may change as new details emerge.
For the latest expert insights on worldwide currency movements and their impact on FX, global businesses, and more, subscribe to our Daily Currency News reports.
Sources used in this article:
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It is recommended to seek advice from a financial advisor, expert, or other professional. We do not make any representations, warranties, or guarantees, whether expressed or implied, regarding the accuracy, or completeness of the content in the publication.
