Trump's promised 'Liberation Day' of tariffs is coming. Here's what it
could mean for you
[March 31, 2025] By
JOSH BOAK
WASHINGTON (AP) — President Donald Trump says Wednesday will be
“Liberation Day" — a moment when he plans to roll out a set of tariffs
that he promises will free the United States from foreign goods.
The details of Trump's next round of import taxes are still sketchy.
Most economic analyses say average U.S. families would have to absorb
the cost of his tariffs in the form of higher prices and lower incomes.
But an undeterred Trump is inviting CEOs to the White House to say they
are investing hundreds of billions of dollars in new projects to avoid
the import taxes.
It is also possible that the tariffs are short-lived if Trump feels he
can cut a deal after imposing them.
“I’m certainly open to it, if we can do something," Trump told
reporters. "We’ll get something for it.”
At stake are family budgets, America's prominence as the world's leading
financial power and the structure of the global economy.
Here's what you should know about the impending trade penalties:
What exactly does Trump plan to do?
He wants to announce import taxes, including “reciprocal” tariffs that
would match the rates charged by other countries and account for other
subsidies. Trump has talked about taxing the European Union, South
Korea, Brazil and India, among other countries.
As he announced 25% auto tariffs last week, he alleged that America has
been ripped off because it imports more goods than it exports.
“This is the beginning of Liberation Day in America,” Trump said. “We’re
going to charge countries for doing business in our country and taking
our jobs, taking our wealth, taking a lot of things that they’ve been
taking over the years. They’ve taken so much out of our country, friend
and foe. And, frankly, friend has been oftentimes much worse than foe.”
In an interview Saturday with NBC News, Trump said it did not bother him
if tariffs caused vehicle prices to rise because autos with more U.S.
content could possibly be more competitively priced.
"I hope they raise their prices, because if they do, people are gonna
buy American-made cars," Trump said. “I couldn’t care less because if
the prices on foreign cars go up, they’re going to buy American cars.”
Trump has also suggested that he will be flexible with his tariffs,
saying he will treat other nations better than they treated the United
States. But he still has plenty of other taxes coming on imports.
The Republican president plans to tax imported pharmaceutical drugs,
copper and lumber. He has put forth a 25% tariff on any country that
imports oil from Venezuela, even though the United States also does so.
Imports from China are being charged an additional 20% tax because of
its role in fentanyl production. Trump has imposed separate tariffs on
goods from Canada and Mexico for the stated reason of stopping drug
smuggling and illegal immigration. Trump also expanded his 2018 steel
and aluminum tariffs to 25% on all imports.
Some aides suggest the tariffs are tools for negotiation on trade and
border security; others say the revenues will help reduce the federal
budget deficit. Commerce Secretary Howard Lutnick says they will force
other nations to show Trump “respect.”
What could tariffs do to the US economy?
Nothing good, according to most economists. They say the tariffs would
get passed along to consumers in the form of higher prices for autos,
groceries, housing and other goods. Corporate profits could be lower and
growth more sluggish. Trump maintains that more companies would open
factories to avoid the taxes, though that process could take three years
or more.
Economist Art Laffer estimates the tariffs on autos, if fully
implemented, could increase per vehicle costs by $4,711, though he said
he views Trump as a smart and savvy negotiator. The investment bank
Goldman Sachs estimates the economy will grow this quarter at an annual
rate of just 0.6%, down from a rate of 2.4% at the end of last year.
Mayor Andrew Ginther of Columbus, Ohio, said on Friday that tariffs
could increase the median cost of a home by $21,000, making
affordability more of an obstacle because building materials would cost
more.
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A person looks at a new vehicle at a Toyota dealership in El Monte,
Calif., Thursday, March 27, 2025. (AP Photo/Jae C. Hong)
 White House trade adviser Peter
Navarro told “Fox News Sunday” that the auto tariffs would raise
$100 billion annually and the other tariffs would bring in about
$600 billion per year, or about $6 trillion over 10 years. As a
share of the economy, that would be the largest tax increase since
World War II, according to Jessica Riedl, a senior fellow at the
Manhattan Institute, a conservative think tank.
Treasury Secretary Scott Bessent has suggested that
tariffs would be a one-time price adjustment, rather than the start
of an inflationary spiral. But Bessent's conclusion rests on tariffs
being brief or contained, rather than leading other countries to
retaliate with their own tariffs or seeping into other sectors of
the economy.
“There is a chance tariffs on goods begin to filter through to the
pricing of services,” said Samuel Rines, a strategist at WisdomTree.
“Auto parts get move expensive, then auto repair gets more
expensive, then auto insurance feels the pressure. While goods are
the focus, tariffs could have a longer-term effect on inflation.”
How are other nations thinking about the new tariffs?
Most foreign leaders see the tariffs as destructive for the global
economy, even if they are prepared to impose their own
countermeasures.
Canadian Prime Minister Mark Carney said Trump's tariff threats had
ended the partnership between his country and the United States,
even as the president on Friday talked about his phone call with
Carney in relatively positive terms. Canada already has announced
retaliatory tariffs.
French President Emmanuel Macron said the tariffs were “not
coherent” and would mean "breaking value chains, creating inflation
in the short term and destroying jobs. It’s not good for the
American economy, nor for the European, Canadian or Mexican
economies.” Yet Macron said his nation would defend itself with the
goal of dismantling the tariffs.
Mexican President Claudia Sheinbaum has avoided the tit-for-tat
responses on tariffs, but she sees it as critical to defend jobs in
her country.
The Chinese government said Trump's tariffs would harm the global
trading system and would not fix the economic challenges identified
by Trump.
“There are no winners in trade wars or tariff wars, and no country’s
development and prosperity are achieved through imposing tariffs,”
Foreign Ministry spokesperson Guo Jiakun said.
How did Trump land on it being called ‘Liberation Day’?
Based off Trump's public statements, April 2 is at least the third
“liberation day” that he has identified.
At a rally last year in Nevada, he said the day of the presidential
election, Nov. 5, would be “Liberation Day in America.” He later
gave his inauguration the same label, declaring in his address: “For
American citizens, Jan. 20, 2025, is Liberation Day.”
His repeated designation of the term is a sign of just how much
importance Trump places on tariffs, an obsession of his since the
1980s. Dozens of other countries recognize their own form of
liberation days to recognize events such as overcoming Nazi Germany
or the end of a previous political regime deemed oppressive.
Trump sees his tariffs as providing national redemption, but the
slumping consumer confidence and stock market indicate that much of
the public believes the U.S. economy will pay the price for his
ambitions.
“I don’t see anything positive about Liberation Day," said Phillip
Braun, a finance professor at Northwestern University's Kellogg
School of Management. “It’s going to hurt the U.S. economy. Other
countries are going to retaliate.”
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