Trade Talks 207. What happened on Trump’s tariff day
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Apr 4, 2025 Soumaya Keynes, a Financial Times journalist and host of The Economics Show, joins to dissect President Trump’s April 2 tariff announcement. They explore the implications of new tariffs on imports, including a surprising 10% levy affecting various goods. The discussion highlights the controversial tariff formula aimed at reducing the trade deficit and its potential consequences for smaller nations. Insights on the legal dynamics surrounding these policies and their unexpected effects on trade with Asian countries reveal the complex nature of current trade negotiations.
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Tariff Day Announcements
- President Trump announced new tariffs, impacting various sectors and countries.
- Some sectors like pharmaceuticals and lumber were excluded, while steel and aluminum already faced 25% tariffs.
Canada & Mexico Tariff Baseline
- Canada and Mexico were initially excluded but face a new baseline tariff of 12%.
- This baseline likely aims to provide leverage in trade negotiations.
10% Tariff Increase
- Most countries will face an additional 10% tariff on top of existing rates.
- This applies even to countries with trade deals or deficits with the US.