President Donald Trump is set to fire ahead with his proclaimed ‘Liberation Day’ for the United States by announcing sweeping tariffs on Wednesday which will take place with immediate effect initiating, the White House suggested, “one of the most important days in modern American history.”
European shares fell on Wednesday, weighed by losses in healthcare stocks, while investors were on edge ahead of reciprocal tariffs from the United States that are feared to herald an era of slow global growth and higher inflation.
The pan-European STOXX 600 index was down 0.7 per cent, with Germany’s trade-sensitive DAX falling 1.2 per cent in morning trading.
White House press secretary Karoline Leavitt told reporters on Tuesday Mr. Trump was spending the day with his economic team fine-tuning the announcement.
While she did not offer any specifics, she anticipated that the measures will take effect immediately. The scope and severity of the tariffs have been a closely guarded secret and the general mystification has led to lurching market prices and widespread foreboding among the United States’ trading partners, including Ireland.
The announcement has been scheduled to take place in the Rose Garden of the White House at 4pm (9pm Irish time).
“Our country has been one of the most open economies in the world and we have the best consumer base hands down,” Ms Leavitt said.
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“But too many foreign countries have their markets closed to our exports. This is fundamentally unfair. The lack of reciprocity contributes to our large and consistent trade deficits that have gutted our industries and hollowed out key work forces. But those days of America, beginning tomorrow, being ripped off, are over.”
She said that while Mr Trump is always open to taking a phone call- “always up for a good negotiation”- from countries seeking to discuss their individual trade imbalance with the United States, the overarching ambition of the programme is to redefine America as a manufacturing superpower.
“The president will be addressing the decades of unfair trade practices that have ripped our country off and American workers off. It has hollowed out our middle class, it has destroyed our heartland and the president is focused on reshaping our global economy to make sure that America is once again a manufacturing superpower.”
Europe will respond to the likely implementation of tariffs by Mr Trump in a proportionate manner but will not escalate tensions under any circumstances, French industry minister Marc Ferracci said.
“Ahead of today’s announcement, fears about stagflation in financial markets continued to mount,” Deutsche Bank strategist Jim Reid said.
“The other big unknown from here is how other countries might retaliate, even though we have a pretty good sense that they’re likely to do so.”
The lack of advance clarity about the administration plans have contributed to market turbulence. Several strategies, including a flat 20 per cent tariff on all imports to the United States, has been under discussion, with internal speculation that the measure could raise around $6 trillion (€5.5 trillion) in revenue even as economists warn the measures will push up prices in the US.
There has also been speculation that the tariffs will be tailored according to the trade barriers placed by given countries on US goods.
Acknowledging the unease and uncertainty among American consumers since the tariff impositions, Ms Leavitt had this to say when asked what if Trump’s advisers turn out to be wrong about the consequences of their plan.
“They’re not going to be wrong. It is going to work. The president has a brilliant team of advisers who have been studying these issues for decades. We are focused on restoring the golden age of America.” - Additional reporting Reuters
