The White House is adjusting its approach to tariffs set to take effect on April 2, likely omitting industry-specific tariffs while applying reciprocal tariffs aimed at countries with significant trade ties to the United States (US), according to the Wall Street Journal.
US President Donald Trump has declared April 2 to be "Liberation Day" for the US, when he will implement so-called reciprocal tariffs to equalize US tariffs with those charged by trading partners. Tariffs on sectors like automobiles, pharmaceuticals, and semiconductors, repeatedly stated to be enacted on that day, are also expected.
Market Reaction
As of the time of press, the US Dollar Index was up 0.01% on the day, at 104.15.
Tariffs FAQs
What are tariffs?
Tariffs are customs duties levied on certain merchandise imports or product categories. They help local producers and manufacturers be more competitive by providing a price advantage over similar imported goods. Tariffs are tools of protectionism, used alongside trade barriers and import quotas.
What is the difference between taxes and tariffs?
Both generate government revenue, but tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on taxpayers and businesses, while tariffs are paid by importers.
Are tariffs good or bad?
Economists have differing views. Some argue tariffs protect domestic industries and address trade imbalances, while others see them as harmful, potentially driving prices higher and leading to damaging trade wars through retaliatory tariffs.
What is US President Donald Trump’s tariff plan?
During the run-up to the November 2024 presidential election, Donald Trump stated his intention to use tariffs to support the US economy and American producers. In 2024, Mexico, China, and Canada accounted for 42% of total US imports. Mexico was the top exporter, with $466.6 billion, according to the US Census Bureau. Trump intends to focus on these nations when imposing tariffs and plans to use the revenue generated to lower personal income taxes.
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