‘Liberation Day’ or Economic Turmoil? Trump’s Tariff Plan Raises Concerns

At 4:00 p.m. US ET today, American President Donald Trump is set to announce his long-anticipated tariff plan, a move that could have significant economic consequences. The announcement, dubbed “Liberation Day” by his administration, is expected to outline broad-based import taxes on a wide range of goods, with potential tariffs as high as 20%.

Economists warn that such sweeping tariffs could have a serious impact on the U.S. economy. Countries affected by the tariffs are likely to retaliate, leading to a global trade conflict.

“Needless to say, it would result in a significant recession,” said Mark Zandi, chief economist at Moody’s, as per a report from Axios. 

The consumer impact could also be severe. A study by the Yale Budget Lab estimates that a 20% tariff—if met with retaliation—could reduce the average American household’s purchasing power by as much as $4,200 annually.

Economic Concerns Grow

The uncertainty surrounding Trump’s tariff plans has already shaken business and consumer confidence. Experts fear this could lead to reduced spending, slowing economic growth.

Even the manufacturing sector, which Trump’s tariffs are intended to protect, appears to be struggling. Bill Adams, chief economist at Comerica, noted that “manufacturers are reacting poorly to higher tariffs,” pointing to recent weak economic data.

The impact on jobs could also be significant. Zandi projects that the unemployment rate could rise from its current 4.1% to 5.5% by the end of 2025, potentially surpassing 7% by 2027!

Political Fallout

Some analysts suggest this could be the first time a president’s policies directly trigger a recession. Economist Kathryn Edwards, writing for Bloomberg, noted that a downturn caused by these tariffs would be unprecedented.

Michael Strain, a conservative economist, echoed these concerns, writing in Project Syndicate: “Previously, it would have been unfathomable for a president—including Trump during his first term—to inflict so much harm on the economy deliberately.” However, he expressed hope that “political gravity” would eventually push Trump to reconsider.

White House Defends Strategy

Despite the criticism, the Trump administration insists that tariffs are only part of a larger economic strategy, which also includes deregulation and government spending cuts.

“Any reporting on this subject that does not make it abundantly clear that tariffs are just one part of our economic agenda is flawed and does not provide an accurate picture,” a White House official said. 

What’s Next?

Trump’s tariffs have been a recurring theme throughout his presidency, with some previous rounds of import taxes being implemented and later rolled back. Whether this latest announcement marks a long-term shift or another short-term negotiation tactic remains to be seen.

For now, businesses, economists, and consumers are bracing for what could be a major shakeup in the U.S. economy.