“Liberation Day” is coming. It probably won’t feel that way.
President Trump said April 2 will be the day he announces “reciprocal tariffs” on a host of nations that could affect hundreds of billions of dollars in imported products. Yahoo Finance’s tariff maven, Ben Werschkul, has a nice preview of what’s probably coming.
The upshot: It won’t be pretty. Trump has already rattled markets with tariffs on steel and aluminum imports, plus wide-ranging tariffs on imports from China, Canada, and Mexico. His approach so far has been more aggressive than many investors expected, triggering a 10% stock market sell-off from Feb. 19 to March 13.
That tariff turmoil may end up being a preview rather than the main feature. Trump said the April 2 reciprocal tariffs will be “the big one,” and his top aides of late have been dropping hints about what Trump might mean. Treasury Secretary Scott Bessent said recently that every country will get a “number,” or a new tariff rate. The goal is to set US tariffs that are at least as high as the duties other nations impose on imports from the United States. That’s why they’ll be “reciprocal.”
Read more: What Trump’s tariffs mean for the economy and your wallet
To suss out which countries might get the highest “numbers,” Yahoo Finance analyzed tariff data on the top 25 US trading partners, comparing the average tariff those nations impose on US imports with the US tariffs on imports from the same nations. The map below shows the tariff differential for each of those trading partners.
A few nations stand out as having higher tariff rates than their US trading partner. India, for instance, puts an average tariff of about 5.5% on products from the United States, while the average US tariff on products from India is about 3%. Other nations with a relatively high tariff differential include Japan, South Korea, Thailand, Malaysia, and Brazil. Canada and China also have higher average tariff rates than the United States, but Trump seems to be addressing trade with those nations through separate actions.
Tariff data also suggests that Americans get a pretty good deal on trade with many partners. Of the top 25, seven — Vietnam, Switzerland, France, Spain, Indonesia, the Netherlands, and the United Kingdom — tax US imports at a lower rate than vice versa. Most of the rest have tariff rates similar to the United States.
Trump sometimes cherry-picks specific product categories to make the case that other nations are ripping off America. He points out, for instance, that Europe slaps a 10% tariff on cars imported from the United States, while the US tariff on imported European cars is just 2.5%. What Trump doesn’t mention the longstanding US tariff of 25% on imported pickup trucks, which essentially keeps foreign-made pickups out of the US market.
President Trump signs an executive order in the Oval Office of the White House on March 7. (Reurters/Evelyn Hockstein/File Photo) ·Reuters / Reuters
The European Union says the effective tariff rate on US-European trade is about 1% in each direction. And it points out that the United States collects more than twice as much revenue from tariffs on European imports than the EU collects on US imports.
Europe, nonetheless, is likely to be a major target of Trump’s reciprocal tariffs. One reason the United States collects more tariff revenue than Europe on that two-way trade is that the United States imports way more. The United States ran a $236 billion trade deficit in goods with the EU in 2024 and a $1.2 trillion deficit with all trade partners combined.
Persistent trade deficits have irked Trump for years, even though economists generally say there’s nothing inherently wrong with being a net importer. Consumption drives the US economy, and the globalization of the past 40 years has created highly efficient markets that bring many products to the United States at the lowest possible price. Trump wants more of that production back in the United States, even if it means higher prices for US consumers.
Trump and his aides also claim that other nations cheat on trade in ways not reflected in tariff rates. Most advanced nations, for instance, have a value-added tax, and Trump aides have been claiming that a VAT applied to imports is a tariff in disguise.
Since the United States doesn’t have a VAT, in theory that would disadvantage US exports. But trade experts dispute that. Erica York of the Tax Foundation said currency exchange rates adjust to account for VATs and pointed out that the United States does have state and local sales taxes that apply to imports. Equating a VAT with a tariff, she said, is “a complete misunderstanding of what a VAT is and how it works.”
Some countries also have rules such as import quotas or other barriers that keep certain foreign products out, even if tariffs are low. The United States ranks sixth among 38 nations in a trade facilitation index maintained by the Organisation for Economic Co-operation and Development. By that measure, only five nations — South Korea, the Netherlands, Sweden, Norway, and Japan — are more open to trade than the United States. That’s good for US consumers, who get access to a huge array of reasonably priced imports. But Trump could flip that around to say other nations should make it just as easy for their own citizens to buy US products.
What the data says may not matter to Trump. As he ramps up his second trade war in two presidential terms, it’s apparent that Trump’s approach to trade stems more from his 20th-century America-first worldview than anything numbers or rankings reveal. That means “liberation day” will be in the eye of the beholder. Fans of free markets might find it punishing while trade gunslingers acting on their gut instincts revel in it.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman.
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