Tariff Shock Incoming – April 2nd Looms as 'Liberation Day'
Article published on April 1st, 2025 1:00AM UK Time
Markets are bracing for a potential reignition of trade tensions, with a flurry of US tariff actions set to take effect on April 2nd, marking a critical turning point in global trade dynamics. On April 2nd investors should prepare for heightened volatility, particularly in FX, equities, commodities, and emerging markets exposed to global supply chains.
Key Dates to Watch: April 1 & April 2
📅 April 1st – Trade Policy Reviews Due
All US federal agencies are required to submit trade policy assessments and tariff recommendations to President Trump. The focus will be on Mexico, Canada, and China, with particular scrutiny on trade imbalances and market access
📅 April 2nd – ‘Liberation Day’ Tariff Blitz
President Trump has labeled April 2nd as “Liberation Day,” signaling a major reset in US trade policy. The day is set to unleash a multi-front tariff package, including:
- 🚗 Auto Tariffs (~25%) – Expected to hit a broad range of imported vehicles, raising costs across global automakers.
- 🌾 Agricultural Tariffs – New duties on “external” agricultural products to protect US farmers.
- 🇨🇦🇲🇽 End of Temporary Relief for Canada and Mexico – The expiration of tariff suspensions will reignite cross-border trade friction under the USMCA framework.
- 🔁 Reciprocal Tariffs – Targeted measures designed to mirror foreign tariffs imposed on US goods. Full details are due to be unveiled on the day.
Behind the Curtain: What to Expect?
While Trump has promised “substantial tariffs”, reports suggest the final rollout may be more selective with the FT signalling that a two-phase strategy is possible—immediate tariffs via emergency powers, followed by longer-term investigations under Section 301.
This structured approach could mitigate some of the short-term damage, but the messaging remains aggressive—and that alone may fuel a risk-off tone.Expect volatility and the market to quickly assess the reality of the announcement.