World economies shuddered on Monday ahead of U.S. President Donald Trump’s “Liberation Day,” when he is set to unleash tariffs against multiple countries, risking global turmoil to address what he says are unfair trade imbalances.
Trump — who has been making unprecedented use of presidential powers since taking office in January — is set to announce Wednesday exactly what tariffs will be imposed and whether they might also target entire sectors.
The Republican billionaire insists that reciprocal tariffs are needed because the world’s biggest economy has been “ripped off by every country in the world.”
Critics, however, warn that the strategy risks a global trade war, provoking a chain reaction of retaliation by major trading partners including China, Canada and the European Union.
White House Press Secretary Karoline Leavitt told reporters that the goal on Wednesday would be to announce “country-based tariffs,” but that Trump remains committed to imposing separate sector-specific charges in the future.
“Any country that has treated the American people unfairly should expect to receive a tariff in return on Wednesday,” Leavitt said.
The uncertainty was roiling markets, with the tech-focused Nasdaq Composite Index down around 0.7 percent in New York on Monday afternoon while key European and Asian indexes closed lower.
Market nervousness had intensified after Trump over the weekend said his tariffs would include “all countries.”
Leavitt said the president sees the stock market as a “snapshot of a moment in time.”
“He’s doing what’s best for Main Street and Wall Street will work out just fine,” she added.
The Wall Street Journal reported Sunday that advisers have considered imposing global tariffs of up to 20 percent, to hit almost all U.S. trading partners. Trump remained vague, saying his tariffs would be “far more generous” than ones already levied against U.S. products.
Trump’s fixation on tariffs is fanning U.S. recession fears. Goldman Sachs analysts raised their 12-month recession probability from 20 percent to 35 percent.
This reflects a “lower growth forecast, falling confidence, and statements from White House officials indicating willingness to tolerate economic pain.” Goldman Sachs also lifted its forecast for underlying inflation at end-2025.
Already, China and Canada have imposed counter-tariffs on U.S. goods, while the EU unveiled its own measures due to start in mid-April. More countermeasures could come after Wednesday.
Ryan Sweet of Oxford Economics said to “expect the unexpected,” anticipating that Trump would “take aim at some of the largest offenders.”
What matters is how broad-based Trump’s tariffs are and whether the tool is merely a negotiating tactic or part of a more major shift, he said.
Besides reciprocal country tariffs, Trump could unveil additional sector-specific levies on the likes of pharmaceuticals and semiconductors. He earlier announced auto tariffs to take effect Thursday.
Economists have expected the upcoming salvo could target the 15 percent of partners that have persistent trade imbalances with the United States, a group that U.S .Treasury Secretary Scott Bessent called a “Dirty 15.”
The United States has some of its biggest goods deficits with China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada and India.
U.S. trade partners are rushing to minimize their exposure, with reports suggesting India might lower some duties.
European Central Bank President Christine Lagarde said Monday that Europe should move towards economic independence, telling France Inter radio that Europe faces an “existential moment.”
Separately, British Prime Minister Keir Starmer spoke with Trump on “productive negotiations” towards a UK-U.S. trade deal, his Downing Street office said Sunday.
German Chancellor Olaf Scholz said the EU would respond firmly to Trump’s tariffs, although he stressed that the bloc was open to compromise.
It is “entirely possible” for fresh tariffs to be swiftly reduced or put on hold, said Greta Peisch, partner at law firm Wiley Rein.
In February, Washington paused steep levies on Mexican and Canadian imports for a month as the North American neighbors pursued negotiations.
“There are many different scenarios: delays while talks continue, potential reductions or tariffs being put in place immediately,” added Peisch, a former official at the U.S. Trade Representative’s office.
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