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Wednesday April 02, 2025
(WASHINGTON) -- President Donald Trump unveiled sweeping new tariffs on Wednesday, which the White House dubbed "Liberation Day."
"This is one of the most important days in my opinion in American history," Trump said during a press conference at the Rose Garden, outside the White House. "It's our declaration of economic independence."
The fresh round of tariffs marked a significant escalation from previous levies slapped on some foreign goods in recent weeks.
The new tariffs feature two key policies: A uniform 10% tariff for all imports and "reciprocal" tariffs imposed on many nations that place duties on U.S. imports.
The universal 10% tariff amounts to a wide-ranging trade barrier that will touch every product that enters the U.S.
Trump said the measure would ensure foreign firms pay a price for benefits derived from the purchasing power of U.S. consumers.
"Foreign nations will finally pay for the privilege of access to our market," Trump said.
In addition to the universal tariff, Trump said, the U.S. will impose tariffs on many countries that levy U.S. goods. Trump described such duties as "reciprocal tariffs," though he noted that the U.S. would impose tariffs at half of the level of the trade barriers slapped on U.S. products.
"We will charge them approximately half of what they are and have been charging us," Trump said. "We're kind people." He added later in his remarks, "This is not full reciprocal. This is kind reciprocal."
The move departs from statements made by Trump in recent days vowing to impose reciprocal tariffs that match the trade barriers of other countries.
The reciprocal tariffs will target roughly 60 countries identified by the Trump administration as the "worst offenders," White House officials said, noting that Canada and Mexico would be excluded from the reciprocal tariffs.
The White House calculated the cumulative cost of trade barriers imposed by each of the target nations, including tariffs as well as non-monetary measures. In each case, the U.S. will impose a reciprocal tariff rate at 50% of the level attributed to a given country.
For instance, Trump said, the U.S. estimated a total trade barrier rate of 67% for China, meaning the U.S. would impose a 34% tariff in response. The U.S. assessed a European Union trade barrier rate of 39%, Trump said, adding that the U.S. reciprocal tariff would register at 20%.
The universal 10% tariff is set to take effect on the morning of April 5, and the reciprocal tariffs will hit products on the morning of April 9, White House officials said.
Economists widely expect tariffs to raise prices for U.S. consumers, since importers typically pass along a share of the tax burden in the form of higher costs.
"For decades, the U.S. slashed our trade barriers on other countries while those nations placed massive tariffs on our products," Trump said.
"This all happened with no response from the United States of America -- none whatsoever," Trump added. "But those days are over."
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(NEW YORK) -- Canada vowed to respond with retaliatory tariffs if President Donald Trump slaps additional levies on Canadian goods as part of an expected announcement of sweeping new tariffs on Wednesday.
"We will respond to additional measures," Canadian Prime Minister Mark Carney told reporters on Tuesday. "We will put in place retaliatory measures if there are additional measures put against Canada tomorrow."
Speaking to reporters minutes later, White House press secretary Karoline Leavitt reiterated Trump's plan to announce wide-ranging new tariffs on April 2, which Trump has dubbed "liberation day."
"Our country has been one of the most open economies in the world and we have the best consumer base," Leavitt said. "But too many foreign countries have their markets closed to our exports."
The details of the forthcoming U.S. tariffs remain unknown.
When asked whether Trump would be open to negotiations with target countries about the tariffs, Leavitt said, "The president is always open to taking calls."
The Trump administration last month imposed 25% tariffs on some goods from Canada. Initially, the tariffs applied to all Canadian goods, but a day later Trump issued a carve-out for goods compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement.
In response to U.S. tariffs, Canada slapped a 25% retaliatory duty on $30 billion worth of goods and pledged additional measures.
Despite the trade turbulence on Tuesday, U.S. stocks rallied.
The Dow Jones Industrial Average ticked up 30 points, or 0.1%, while the S&P 500 climbed 0.4%. The tech-heavy Nasdaq increased 0.8%.
Trump told reporters at the Oval Office on Monday that he had settled on a course of action for the fresh round of tariffs set to take effect on April 2, though he declined to offer details.
Additional U.S. tariffs could elicit countermeasures from trade partners, exacerbating global trade tensions that erupted in response to a previous set of tariffs issued by the Trump administration last month.
Europe has a "strong plan" to retaliate against Trump's planned tariffs, Ursula von der Leyen, president of the European Commission, said in a speech on Tuesday.
"We will approach these negotiations from a position of strength. Europe holds a lot of cards, from trade to technology to the size of our market,” von der Leyen said.
Days earlier, Trump told reporters over the weekend that his tariffs could affect "all the countries."
"The tariffs will be far more generous than those countries were to us, meaning they will be kinder than those countries were to the United States of America," he said.
This is a developing story. Please check back for updates.
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(NEW YORK) -- Inflation held steady in February compared to a year ago, according to a release from the Federal Reserve's preferred gauge of price increases.
The reading matched economists' expectations.
Consumer prices climbed 2.5% in February compared to a year ago, registering at a level slightly higher than the Fed’s target rate of 2%, Commerce Department data on Friday showed.
Core inflation -- a closely watched measure that strips out volatile food and energy prices -- increased 2.8% over the year ending in February, ticking lower from the previous month, data showed.
The fresh data arrives little more than a week after the Fed opted to leave interest rates unchanged.
Speaking at a press conference after the rate decision, Fed Chair Jerome Powell faulted President Donald Trump's tariffs for a "good part" of recent inflation. The central bank predicted weaker year-end economic growth and higher inflation than it had in a December forecast.
Consumer surveys show rising fears about inflation as Trump imposes tariffs on top trading partners and key industries.
Economists widely expect tariffs to raise prices because importers typically pass along a share of the tax burden to consumers in the form of higher costs.
Trump announced this week plans to slap 25% tariffs on all imported cars, escalating a global trade war and eliciting criticism from leaders in Canada and Europe. The duties came on the heels of tariffs on steel and aluminum, as well as levies on goods from China, Canada and Mexico.
The Commerce Department data for February covers a period that largely precedes Trump's tariffs, though the reading arrives amid a bout of accelerating inflation that stretches back to the final months of the Biden administration.
Prince increases fell dramatically from a peak of more than 9% in 2022, but sped up slightly at the end of last year.
This is a developing story. Please check back for updates.
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(NEW YORK) -- U.S. stocks ticked higher on Thursday in the first trading since President Donald Trump announced 25% auto tariffs.
The tariffs have escalated a global trade war and prompted forecasts of higher car prices.
The Dow Jones Industrial Average climbed 20 points, or 0.05%, while the S&P 500 increased 0.25% on Thursday morning. The tech-heavy Nasdaq jumped 0.25%.
Shares of major U.S. automakers dropped in early trading. General Motors dropped more than 6%, while Ford fell nearly 2%. Stellantis -- the parent company of Jeep and Chrysler -- declined 1%.
Tesla, the electric carmaker led by Trump-advisor Elon Musk, bucked the trend. Shares of Tesla climbed 5.5% in early trading on Thursday.
The 25% tariffs will be applied to imported passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks, according to a White House fact sheet released after Trump's Oval Office remarks on Wednesday. The tariffs will take effect on April 3.
The tariffs will also be applied to key imported auto parts, including engines, powertrain parts and electrical components.
The auto tariffs are set to target a sector that employs more than a million U.S. workers and relies on a supply chain intricately intertwined with Mexico and Canada. Tariffs placed on the auto industry risk raising car prices for U.S. consumers, experts previously told ABC News.
Ferrari may raise U.S. prices as much as 10% in response to the tariffs, the company said in a statement on Thursday. Dan Ives, a managing director of equity research at the investment firm Wedbush, predicted general tariff-related price increases of between $5,000 and $10,000 per vehicle.
Canadian Prime Minister Mark Carney on Wednesday called the measure "a direct attack on our workers." The Canadian government plans to review its trade options, Carney said.
European Commission President Ursula von der Leyen on Wednesday expressed "regret" about the decision to impose auto tariffs. "We will now assess this announcement, together with other measures the US is envisaging in the next days," von der Leyen said in a statement.
Early Thursday morning, Trump warned of retaliatory tariffs if officials in Canada and Europe move forward with countermeasures.
"If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!" Trump said in a post on Truth Social.
This is a developing story. Please check back for updates.
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(WASHINGTON) -- Republicans accused public media outlets NPR and PBS of bias at a House subcommittee hearing on Wednesday, while Democrats defended the organizations and criticized the event as a distraction from the ongoing controversy regarding the Trump administration's use the Signal messaging app for the communication of sensitive information.
PBS President and CEO Paula Kerger and NPR President and CEO Katherine Maher rebutted allegations of bias, saying the outlets abide by journalistic standards and serve a diverse audience that includes rural viewers.
The hearing, titled "Anti-American Airwaves: Holding the Heads of NPR and PBS Accountable," was held by the Delivering on Government Efficiency (DOGE) subcommittee, the name of which echoes the Department of Government Efficiency, the Trump administration’s cost-cutting initiative overseen by Elon Musk.
House Rep. Marjorie Taylor Greene, R-Ga., criticized NPR and PBS during the hearing for alleged liberal bias, pointing to federal funding for the outlets as the target of potential cuts.
“NPR and PBS have increasingly become radical, left-wing echo chambers for a narrow audience of mostly wealthy, white, urban liberals and progressives,” Greene said.
Minutes later, House Rep. Stephen Lynch, D-Ma., defended the public media outlets and criticized the hearing as a distraction for more important issues often taken up by the House Oversight Committee, the larger body to which the DOGE subcommittee belongs.
“I’m sad to see this once proud committee -- the principle investigative committee in the House of Representatives -- has now stooped to the lowest levels of partisanship and political theater to hold a hearing to go after the likes of Elmo and Cookie Monster and Arthur the aardvark,” Lynch said.
Later in the hearing, Rep. Robert Garcia, D-Ca., said sarcastically: "Is Elmo now, or has he ever been, a member of the Communist Party?"
This is a developing story. Please check back for updates.
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(NEW YORK) -- President Donald Trump has vowed to issue a fresh round of tariffs on April 2, presenting it as an inflection point for the economy weeks after a previous set of duties roiled markets and incited recession fears.
Trump has repeatedly referred to April 2 as "liberation day," saying a wide-ranging slate of reciprocal tariffs would rebalance U.S. trade relationships.
Trump's plan for reciprocal tariffs next week, however, is expected to be narrower than he previously vowed, though the plan remains under discussion, sources told ABC News this week.
The news of a potentially softer approach to forthcoming tariffs rallied U.S. stocks earlier this week, recovering some of the losses suffered earlier in March.
While key details remain unknown, new duties would ratchet up the global trade war, raising prices for an array of consumer goods and risking an economic slowdown, experts told ABC News.
"This certainly will be an escalation," Mary Lovely, a senior fellow at the Peterson Institute for International Economics who studies trade policy, told ABC News. "We know the direction of travel, if not how far this will go."
Here's what the latest round of tariffs could mean for prices and the economy, according to experts:
Will the tariffs on April 2 raise prices?
In setting tariffs for April 2, the U.S. will target countries that have major trade imbalances with the U.S., sources said.
"It's 15% of the countries, but it's a huge amount of our trading volume," Treasury Secretary Scott Bessent said last week, describing the countries as a "Dirty 15."
Last year, according to federal census data, the U.S. had its biggest trade deficits with China, the European Union, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada and India, among other nations.
Reciprocal tariffs could raise prices for imported goods from those countries, since importers typically pass along a share of the tax burden to consumers.
The tariffs could hike prices for furniture and consumer electronics from Vietnam, fresh fruits and vegetables from Mexico, and cars from South Korea, experts told ABC News.
"This is going to mean prices will ultimately go up," Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
The scale of price increases will likely depend on the tariff rate set by the Trump administration, which remains unclear, the experts said.
Speaking at the White House on Monday, Trump said the reciprocal tariffs could fall short of the rate that target countries impose on U.S. goods.
"I may give a lot of countries breaks," Trump told reporters in the Oval Office. "I'm embarrassed to charge them what they've charged us."
Kyle Handley, a professor of economics at the University of California, San Diego, said he expects consumer prices to rise enough for consumers to identify the change.
"Depending on what tariff rates they put in place, it could be pretty massive," Handley said. "It will be a non-trivial increase in the price of imports. People will notice."
What do the tariffs on April 2 mean for the economy?
Experts told ABC News the fresh tariffs would put downward pressure on U.S. economic growth, since the additional tax burden for importing businesses and uncertainty about additional duties could deter private sector investment.
"A lot of the uncertainty about tariffs very likely has firms sort of frozen in place as they're waiting to evaluate and see what happens," Miller said.
Looming tariffs also risk unease among shoppers, threatening to undermine a key engine of the U.S. economy, some experts said. Consumer attitudes worsened more than expected in March, dropping to their lowest levels since 2021, a Conference Board survey on Tuesday showed.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper sentiment sours, Bret Kenwell, U.S. investment analyst at eToro, told ABC News in a statement.
By some key measures, however, the economy remains in solid shape. A recent jobs report showed steady hiring last month and a historically low unemployment rate. Inflation stands well below a peak attained in 2022, though price increases register nearly a percentage point higher than the Fed's goal of 2%.
Still, recession fears are mounting on Wall Street as businesses and consumers weather the trade war. Goldman Sachs earlier this month hiked its odds of a recession from 15% to 20%. Moody's Analytics pegged the chances of a recession over the next year at 35%.
"These tariffs will be very detrimental for economic performance and business growth," Handley said. "It may not take long for us to start seeing some of those effects."
ABC News' Selina Wang contributed to this report.
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(NEW YORK) -- Consumer attitudes worsened in March as President Donald Trump's tariffs set off a market rout and warnings of a possible recession, Conference Board survey data on Tuesday showed. Sentiment worsened more than economists expected.
The fresh data on consumer sentiment arrives a week before the onset of additional U.S. tariffs, indicating potential fear of further escalation in an ongoing global trade war.
Trump has repeatedly referred to April 2 as "liberation day," saying a wide-ranging slate of reciprocal tariffs would rebalance U.S. trade relationships.
Trump’s plan for reciprocal tariffs next week, however, is expected to be more targeted and narrower than he previously vowed, though the plan remains under discussion, sources told ABC News on Monday. The administration is focused on trading partners who have major trade imbalances with the U.S., the sources said.
The news of a potentially softer approach to forthcoming tariffs rallied U.S. stocks on Monday, recovering some of the losses suffered earlier this month.
Consumer sentiment appears to align with dampening expectations at the Federal Reserve. Last week, the Fed predicted weaker year-end economic growth and higher inflation than it had in a December forecast.
Speaking at a press conference in Washington, D.C., last Wednesday, Fed Chair Jerome Powell faulted tariffs for a "good part" of recent inflation.
This is a developing story. Please check back for updates.
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