President Donald Trump declared his plans for “economic independence” in the U.S. on Wednesday, April 2, in what he referred to as “Liberation Day.” These historic plans may mark the beginning of a period of economic uncertainty across the country.
The main objective of Trump’s proposals was a massive hike in tariffs, including a blanket 10% tariff on all imports coming into the U.S., and even higher tariffs on goods from countries or trading blocs that hold a deficit trade relationship with the U.S. This means the U.S. imports more from a country than it exports to it — including China, who will now be taxed at an additional 34% on top of the previously existing 20%, and the European Union at 20%, among others.
However, Trump paused the reciprocal tariffs on Wednesday for 90 days.
In the executive order issued last Wednesday, Trump stated that his plans are in response to the “unusual and extraordinary threat to the national security and economy of the United States” posed by the habits of the country’s trading partners.
Tariff escalations of this level are the first of their kind since the 1930 Smoot-Hawley Act, and could potentially pose great risks for the health of the American economy in the coming months, including pushback from the countries Trump intends to tax at these record high levels.
The universal 10% tariffs were put into motion on Saturday, but adverse effects were felt even before they had officially taken action.
In the days immediately following Trump’s illustrious “Liberation Day,” the stock market suffered its worst days since June of 2020 in the height of the pandemic, raising severe concerns about the blowback the country will face as a result of these tariffs.
Trump’s response to the growing sense of panic in regard to our economy was posted to social media, stating “ONLY THE WEAK WILL FAIL” on Friday, followed by “HANG TOUGH, it won’t be easy but the end result will be historic” on Saturday morning.
Economists predict that these tariffs will only increase prices domestically and damage our economy, despite Trump’s insistence that they will do the opposite. Economic downturns are likely to face the U.S. as countries retaliate against the increased tariffs imposed on them by the Trump administration. China has already responded with a reciprocal tariff of 34%, with other countries expected to follow.
While the repercussions are not yet known in certainty, Chair of the Federal Reserve Jerome Powell warned that the effects “could be more persistent” than just temporary inflation.
A bipartisan initiative started by members of the Senate aims to limit Trump’s power to enact further tariffs due to fears of how much damage will be done to the economy, especially with countries like China enacting retaliatory measures. A similar bill was introduced in the House by a Republican representative, attempting to slow Trump’s tariff-enacting powers by requiring that the White House seek Congressional approval prior to enacting a new tariff, but it is unlikely to garner support from enough Republicans in the House to actually pass.
Trump remains steadfast in his visions for the American economy as told by the “Liberation Day” proclamations despite growing concerns for how the economy will actually fare.
mkane10@ramapo.edu
Featured photo courtesy of @potus, Instagram
