Trump’s “Liberation Day” was more aggressive than markets had expected, with a 10% baseline tariff on imports and an additional reciprocal tariff (11-50%) based on the country’s existing trade relationship with the U.S.

While Canada and Mexico were excluded from the announced measures, the existing tariffs (steel, aluminum, autos, etc.) remain in place.

When the new tariffs are put into effect, the average tariff rate on U.S. imports sits at ~22%, the highest level in over a century.

As we’ve said previously, we believe that the aggressive stance taken by Trump here is a negotiating tactic and that the most important variable is duration, now that we have magnitude.

Markets rocked, stagflation concerns rise

Markets were volatile in the week leading up to the announcement and sold off aggressively after it, with big tech leading the way.

Apple (AAPL) led the group lower, down >9% on the day. Interestingly, Trump referenced the company’s plan to invest $500B in the U.S. economy in his address. We think the tariffs are a forcing function on increasing corporate domestic investment as much as they are on renegotiating global trade.

If you want to know what The White House thinks of the tech selloff, here’s the Secretary of the U.S. Treasury:

The drawdown extended through most global equity baskets and government yields, indicating investors expect lower growth and monetary easing in the future.

The inflation backdrop is a bit less clear though, with a number of opposing forces at play beyond just tariffs:

Where do we go from here?

To be clear, we’re in uncharted territory and no one knows for sure. If we had to guess though, we’d expect deals to be made in relatively short order. It seems that’s the goal of Trump’s camp too.

With an April 9^th deadline before the tariffs take effect, we expect countries to negotiate down, or at least find a pathway to a resolution.

Should we not get a significantly reduced version of the initial measures, global trade as we’ve come to know it will change, destabilizing the global economy as it has markets.

For more of our work on potential tariff impacts, check out the below:

• Auto tariff impact isn’t as bad as headlines read

• Primary metals (steel & aluminum) tariff could hurt some and help others

• Trade war: a framework for thinking about the volatile road ahead

• Copper tariffs could come soon

• With tariffs paused, Canada needs to avoid this fight