US Symmetrical Tariffs: What You Need to Know Before the G-Hour

The White House confirmed on April 1 that President Donald Trump would impose new tariffs on April 2, although it did not provide details on the size and scope of the tariffs, leaving businesses, consumers and investors worried about an escalating global trade war.

For weeks, US President Trump has repeatedly said April 2 is "liberation day" with the imposition of significant new tariffs that threaten to upend the global trading system.

According to CNN, White House spokeswoman Karoline Leavitt emphasized that the symmetrical tariffs are intended to retaliate against countries that have imposed tariffs on US goods. These new tariffs will take effect immediately after President Trump announced, while the 25% tariff on imported cars will take effect on April 3.

According to US Representative Kevin Hern, Treasury Secretary Scott Bessent has said that the symmetric tariffs that Mr. Trump is about to announce will be a “cap” on the highest tariffs that countries face, which can be reduced if parties meet the US administration’s demands.

President Trump has imposed tariffs on steel and aluminum imports and increased tariffs on all goods from China. However, he has also repeatedly threatened additional tariffs, only to cancel or delay them.

Ms Leavitt’s statement suggests that this time Mr Trump seems determined to carry out his plan. “The president has an outstanding team of advisers who have been working on these issues for decades, and we are focused on restoring America to its former glory,” Ms Leavitt said at a press conference.

According to Reuters, Mr. Trump's determination comes amid growing signs of instability within the US economy as the country focuses too much on tariffs. This is eroding the confidence of investors, consumers, and businesses as tariffs are slowing economic activity and pushing prices up.

Economists at the Federal Reserve Bank of Atlanta cited data from a recent survey showing that corporate chief financial officers expect tariffs to push up prices this year, while they will have to factor in job cuts and slower growth.

Characteristics of symmetric tariffs and country responses

According to the Washington Post, President Trump’s advisers are considering a plan that would raise tariffs on imported goods from almost all countries to about 20%, rather than targeting specific countries or products. The newspaper said the administration expects the new tariffs could generate more than $6 trillion in revenue that could be passed on to Americans in the form of tax refunds.

Meanwhile, the Wall Street Journal quoted informed sources as saying that the US Trade Representative is preparing a plan to impose a broad tariff on a certain group of countries, but the tax rate may not be as high as 20% as the comprehensive tax plan.

A White House adviser said any information ahead of the April 2 event was speculative. Trump’s moves have increased tensions with America’s biggest trading partners.

Canada said it would respond with tariffs of its own. "We will not let Canadian manufacturers and workers be disadvantaged at the expense of American workers," Prime Minister Mark Carney said in Winnipeg.

The Canadian Prime Minister's Office said Carney and Mexican President Claudia Sheinbaum discussed Canada's plans to "counter unreasonable trade measures" from the United States on April 1.

"In light of the challenging times ahead, Prime Minister Carney and President Sheinbaum emphasized the importance of protecting North America's competitiveness while respecting the sovereignty of individual nations," the Prime Minister's Office of Canada said in a statement.

US companies say the "Buy Canadian" movement is making it harder for their products to access the country's market.

Several other countries have also threatened to retaliate, although they are still negotiating with the White House to avoid the tariffs. It is unclear whether Trump’s announcement of reciprocal tariffs will actually materialize on April 2. However, according to a source familiar with the matter, Trump may consider withdrawing the plan in the coming weeks as more negotiations and discussions with the parties continue.

The risks and damages from symmetrical tariffs are not small.

Mr Trump argued that American workers and manufacturers had been hurt for decades by free trade agreements that had helped to remove global trade barriers and boost the growth of the US’s $3 trillion import market. But Mr Trump said that the boom in imports had also had serious consequences for the US, which had a serious trade imbalance with the world and a trade deficit of more than $1.2 trillion in goods.

Economists warn that Mr. Trump’s aggressive tariffs could raise prices both domestically and internationally and hurt the global economy. According to Yale University’s Office of the Budget, a 20% tariff on top of existing tariffs would add at least $3,400 to the average American household’s costs.

There are signs that the US economy is losing some momentum due to the instability stemming from Mr Trump's approach to economic policymaking.

A series of surveys of businesses and households show confidence in the US economic outlook is waning amid shared concerns that Mr Trump’s tariff policies could cause inflation to rise again.

Worried about the situation, investors have been selling stocks for more than a month, wiping out nearly $5 trillion in value from the U.S. stock market since mid-February. Wall Street ended the trading session on April 1 in a mixed mood as investors still waited for details on a symmetric tariff that is likely to be announced on April 2.

The risks are not limited to the United States. Factories around the world, from Japan to the United Kingdom to the United States, saw production decline in March as businesses braced for Mr. Trump’s new tariffs. But some companies saw temporary gains as they rushed to get goods to consumers before the tariffs took effect.

Manufacturing activity in Washington fell after two straight months of growth, according to the Institute for Supply Management. Goods producers also reported that input costs hit their highest level in nearly three years. Tariffs were frequently cited as a major source of concern for factory managers.

"Rising prices while business activity slows suggest the economy may be entering a period of stagflation," said Jeffrey Roach, chief economist at LPL Financial.