Payam Javan: As the Trump administration’s “Liberation Day” approaches, the world braces for a significant tariff rate announcement set for Wednesday, April 2, 2025. Economists and trade experts predict a global increase in U.S. tariffs ranging from 9% to 18%, with President Trump hinting at imposing tariffs on foreign-made vehicles starting April 3. The uncertainty surrounding the specifics has left markets and analysts on edge, with Goldman Sachs raising the odds of a U.S. recession from 20% to 35% due to the looming threat of a tariff-driven trade war. The administration has suggested that these rates are a starting point for negotiations, potentially leading to even higher initial proposals.

The “Liberation Day” plan appears to target reciprocal tariffs on a broad range of countries and industries, including automotive, pharmaceuticals, and manufacturing, with no exemptions currently outlined by the White House. Press Secretary Karoline Leavitt confirmed on April 1 that Trump will reveal plans to apply tariffs on nearly all U.S. trading partners, building on existing measures like the 20% tariffs on China and 25% on Canadian and Mexican steel. Analysts warn that, combined with new motor vehicle tariffs, the effective U.S. tariff rate could climb to 18%—the highest since the 1940s—posing risks to an already slowing economy with sticky inflation and rising consumer prices, up 5% in March, the steepest increase since November 2022.