All eyes were on President Trump and his cabinet on Wednesday as pending tariffs were to be announced. We have seen what could come over the last few months, yet no analyst had an inside scoop. Just a day before ‘Liberation Day’, there were rumors that Trump was being forced to soften his tariffs due to a lack of support from Republican lawmakers.
According to the Tax Foundation, Trump’s announcement of U.S. tariffs is expected to raise them to their highest level since 1946. As one of the world’s largest markets, these tariffs could upend global commerce and free trade.
On Wednesday morning it was reported that no tariff details will be available before Trump’s press conference that will be held late Wednesday afternoon.
According to The Financial Times, the U.S. will be the most impacted by universal tariffs followed by Canada.
We saw 10% inflation after COVID-19, what will tariffs bring? We hope you have some inflation beneficiaries in your portfolio, we know we do. If you do not believe us on inflation, check this chart out:
The chart tracks consumer expectations on five-year inflation rates. Looks like that’s second wave of inflation is closer than we think. Did somebody say 1970s?
Tariffs are expected to impact every U.S. trading partner and range from 10-25% with higher rates on critical products and certain countries like those already announced for steel, aluminum, semiconductors, and pharmaceuticals.
Regardless of how you feel, if Trump is serious about making lasting economic changes to the U.S., Wednesday will set the tone for what is to come and could help us identify how the ‘world order’ could change moving forward.
Before any tariffs were announced a few major trading partners of the U.S. announced their stances. Ontario Premier Doug Ford announced the country would remove tariffs if the U.S. does not announce any for Canada. Both the Liberal and Conservative candidates for Prime Minister have similar stances in terms of protecting Canada. The Mexican President announced Mexico will not go tit-for-tat against the U.S. in response to tariffs. The EU announced they will announce emergency measures to guard their economy from tariff impact. Finally, China announced it will restrict Chinese firms from making investments in the U.S. moving forward. A wide range of responses to the unknown, a great explanation to market forecasts for the rest of 2025.
At Trump’s announcement press conference, he ignored the calls to go soft and went forward with his plan. He announced all nations will face a 10% tariff as a baseline. Some nations may face higher tariffs on specific industries, a term his administration is calling reciprocal tariffs.
According to insiders Trump’s tariffs will predominantly act as a retaliatory tariff against other nations who have placed tariffs on U.S. goods. Trump essentially wants to mirror the tariffs that other nations have used against U.S. goods in recent decades. The automobile sector will face an immediate 25% tariff on all foreign-made vehicles as will companies importing computer inputs. The tariff rates announced will go into place on top of existing tariffs for various countries. Energy products, copper, aluminum, lumber, and certain minerals are confirmed to be exempt from these new tariffs according to Trump’s administration.
Here are a few photos shared by the Trump administration that lay out each country’s tariffs against the U.S. and the U.S.’s new tariffs against them:
Nations that will face higher tariffs include the European Union (20%), China (34%), Japan (24%), India (26%), Taiwan (32%), and many others. Trump called the tariffs against China discounted as 34% is much less than the tariffs China charges on some U.S. goods. Originally, no tariff rates were announced for Canada and Mexico. Canada and Mexico will not face these retaliatory tariffs announced on Wednesday, but they will continue to face select tariffs applied last month by Trump. Goods from Mexico and Canada that comply with the USMCA trade agreement between the three countries will largely remain exempt from tariffs, except for auto exports and steel and aluminum which fall under separate tariff policies.
Mexican and Canadian politicians are probably for now sighing relief (as we are). Numerous industry experts stated that Wednesday was a win for Canada and Mexico as they were shielded from the broadest-reaching tariffs announced in decades.
Futures plunged on Wednesday evening in reaction to these numbers as the magnitude of tariffs announced by Trump surprised many. The markets’ reaction led Secretary Bessent to conduct an interview on Bloomberg where he said the tariffs are good for Americans in the long run and the equity market selloff is “a Mag-7 problem not a MAGA problem.” Quite the quote.
Trump stated that these tariffs will push Americans to buy American goods, and will bring jobs back to the U.S. After announcing his tariff plans, Trump mentioned a “big, beautiful bill in Congress that will have tax cuts.”
For now, uncertainty across markets remains present and markets will more than likely continue to struggle.
