The big day finally arrived, though it may not have been quite the degree of liberation desired by financial market participants, the domestic corporate sector, and foreign trading partners. The scale of the tariff increases was much worse than feared, with the result being a mixed approach of a baseline 10% tariff on all countries coupled with bilateral reciprocal tariffs ranging from 10% to 50% on countries deemed the most discriminatory against U.S. exports.
The baseline tariffs will begin on April 5, while the reciprocal tariffs will start on April 9. These tariffs will be in addition to existing tariffs already imposed on steel and aluminum and other tariffs already imposed. For example, China is now subjected to 34% reciprocal tariffs on top of the 20% tariffs already in place. Importantly, President Trump signed an executive order yesterday that eliminates the de minimus exemption on goods from China and Hong Kong valued at less than $800.
The message from the corporate and financial sectors has been that they can deal with tariffs as long as they know what those rates will be and for how long—as they say, it’s just the not knowing.
In this special report on tariffs, we discuss the current tariff situation, what the Trump administration is hoping to achieve, and the potential impacts on growth and inflation. We also include thoughts from our research analysts whose companies are most directly impacted by President Trump’s announcements.