In a speech that sought to portray the wealthiest country in the world as a victim of the global system of trade it created, Donald Trump proclaimed “liberation day” on Wednesday as he announced sweeping tariffs on all imports into the United States. Precisely who was being saved, and from what, was unclear. If the initial market reaction is anything to go by, many Americans may soon be liberated from their retirement savings.
“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike,” Trump said, likening the U.S. trade deficit to the Mongols’ sacking of Baghdad. The much-anticipated announcement, billed as a day to “Make America Wealthy Again,” was the culmination of a months-long cat-and-mouse game the president had played with the global economy. Economists have called it a gamble that could raise prices, cause job cuts, and start a global trade war. Trump insisted in his speech that “jobs and factories will come roaring back into our country” as he announced 10 per cent tariffs on all imports.
“It’s our declaration of economic independence,” Trump said at the event, promising a “golden age” for the United States. In a surreal scene, the president took on a role akin to a game show host as he grappled with a giant cardboard chart detailing the tariffs that would be imposed on each country, adding commentary for each as he went down the list. “You know, you think of the European Union, very friendly, they rip us off. It’s so sad to see. It’s so pathetic,” he said as he announced 20 per cent tariffs on all imports from the bloc. “Vietnam. Great negotiators, great people. They like me. I like them. The problem is they charge us 90 per cent – we’re going to charge them a 46 per cent tariff,” he went on.
“Japan, very, very tough, great people,” he continued. “And again, I don’t blame the people for doing it. I think they’re very smart. I blame the people that sat right at that Oval Office, right over there, right behind the Resolute Desk, whichever desk they chose.” No country or territory escaped the gaze of Trump’s new economic order. The uninhabited Heard and McDonald Islands, an Australian territory in the sub-Antarctic Indian Ocean, were hit by a 10 per cent tariff on all their exports. It is unclear what impact that will have on the penguins that live there.
That paled in comparison to the levy on the Falkland Islands, a British territory with a population of 3,200 in the South Atlantic, which was inexplicably hit by 41 per cent tariffs on its exports to the United States. Americans may soon be expected to pay more for their mollusks, which are the islands’ top export. It is said that a president’s words can move markets; it is likely for that reason that the White House moved the event to take place after they had closed. Nonetheless, after-hours trading gave a hint of what may come on Thursday morning. Dow futures tumbled 256 points, or 0.61 per cent. S&P 500 futures slid 1.69 per cent. Futures tied to the Nasdaq 100 fell 2.54 per cent. Trump’s decision to impose a wave of tariffs on dozens of countries fulfills one promise of his campaign, while breaking another.
The president’s pitch is that Americans will be “liberated” from an economic system that has held them back and destroyed the once-roaring U.S. manufacturing base. By imposing tariffs on imports, Trump believes he can make foreign countries pay a “tax,” which will generate income or persuade companies to build more factories and products in the U.S. But most economists contend that the cost of tariffs will be passed on to the consumer. That means higher prices on cars, homes, electrical goods and everything in between, at a time when many are already struggling to make ends meet. Long term, it means less growth and more inequality. Even the hosts of Trump’s favorite show, Fox and Friends, were sceptical as they previewed his big announcement.
“Keep in mind, this is a gigantic experiment like we’ve never seen before. On paper, it looks great to the President… But keep in mind, people have got to come over here and build factories and that takes years. And there is a lot of uncertainty,” said Steve Doocy.
In other words, it is a gamble on the economic future of the United States by a man who once bankrupted a casino. Tariffs were one part of Trump’s campaign, but that policy was far overshadowed by his promises to lower prices on everyday goods for Americans, lower inflation, and “make America affordable again.” Those promises have been abandoned in favor of a Don Quixote-like tariff adventure that broke records even before they were implemented, all in the wrong direction. The Global Economic Uncertainty Index and the U.S. trade deficit both hit record highs in the weeks and months ahead of the announcement.
The S&P 500 just recorded its worst month since 2022, shedding 5.8 per cent in March. The tech-focused Nasdaq index ended the month down 8.2 per cent. That represents a significant drop in the value of retirement funds and savings for many Americans. Trump has rejected doubts over his policy from economists and even members of his own party. Meanwhile, his administration has promoted the tariffs with an enthusiasm that would make North Korean officials blush. “This is an exciting day, Liberation Day. This is the single greatest salvation, for not just small businesses, but for America,” Kelly Loeffler, head of the Small Business Administration, told Fox News earlier in the day.
“The message is that tariffs are tax cuts, tariffs are jobs, tariffs are national security,” Peter Navarro, Trump’s senior advisor on trade and manufacturing, said on Fox News Sunday. “Tariffs are great for America. They will make America great again.” Even with that enthusiastic cheerleading, the American public remains deeply skeptical about tariffs. Some 53 per cent of voters in a Fox News poll believe they will likely cause more harm to the U.S. economy than good, while 28 per cent think they will help. If Americans are being liberated by these tariffs, it is against their will. And liberating someone against their will is just a kidnapping.
