Donald Trump’s trade roller coaster is now set for its next chapter, with a two-week wait ahead of a coming deadline around reciprocal tariffs.
But that doesn’t mean there won’t be plenty of opportunities for economic uncertainty in the interim as markets try to guess how far the White House may go.
Trump has given himself an extraordinary amount of leeway ahead of that April 2 date, raising the question of whether markets and economic observers are grasping what he actually aims to impose.
At least one observer said markets perhaps aren’t ready, with an administration investigation set to include the development of a so-called “effective tariff rate” that combines all the factors Trump deems as fodder for retaliation.
The result could be an eye-popping number — perhaps 50% in some cases, Yardeni Research president Edward Yardeni pointed out this week.
“That could be a shocker” for corners of the market still inclined to downplay Trump’s overall tariff plans, he said.
“I won’t be breathing easy until this whole issue is resolved, and I guess I’m not going to be breathing easy for a while,” he added.
President Donald Trump during a tour the John F. Kennedy Center for the Performing Arts in Washington on March 17. (JIM WATSON/AFP via Getty Images) ·JIM WATSON via Getty Images
The latest round of waiting comes after a start to Trump’s administration that has seen him create new tariff deadlines nearly every week, launch a range of new investigations, and also impose duties on China, Canada, and Mexico, as well as on steel and aluminum.
Read more: What Trump’s tariffs mean for the economy and your wallet
Those deadlines have slipped and changed many times, but Trump has already surpassed the potential economic toll of his entire first term while upending markets.
And — as Trump has taken to saying — April 2 is “the big one,” even as some signs emerge that his administration is hoping to impose a more orderly rollout this time around.
Either way, a heated debate within the administration about how to proceed is ongoing. On Tuesday, the Wall Street Journal reported on an idea that was recently weighed — but then discarded — that would have sorted countries into tiers, with each level getting a different tariff level.
The administration’s investigation — overseen by the Commerce secretary, the US trade representative, and the Treasury secretary — is set to deliver Trump a verdict on April 1.
Trump could then act immediately but has said he plans to wait until April Fools’ Day has passed, joking he’s “a little superstitious.”
What he has said again and again is that the coming duties will be sizable and will not just equalize foreign tariff levels — which could lead to tariffs being reduced in many cases — but will also take into account other so-called non-tariff barriers that Trump opposes, like value-added taxes and other factors, in a plan unveiled in February.
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“What’s going to happen on April 2 — each country will receive a number that we believe … represents their tariffs,” Treasury Secretary Scott Bessent said Tuesday on Fox Business. “For some countries, it could be quite low. For some countries, it could be quite high.”
Trump has also made clear that reciprocation, in his mind, doesn’t necessarily mean equal duties.
He recently said he plans to retaliate against a 50% European Union tariff on whiskey with a 200% tariff on European wine, champagne, and other alcoholic products.
The president has also downplayed the chances of exemptions, telling both reporters and CEOs that there will be no way for many companies to dodge tariffs after April 2 — even after offering short-term delays in recent weeks on things like autos and also longer-term waivers in his first term.
In one recent comment on Monday, Trump rebuffed the idea that there could be exemptions to his recently imposed metals duties.
Markets experienced a 3% bump in recent days after a 10% drop but began to slide again Tuesday morning, with many on Wall Street suggesting the recent uptick is not a sign that the market has bottomed.
Deutsche Bank chief strategist Bankim Chadha even wrote Sunday in a note to clients that he expects some selling to continue but added that if the president’s tariff messaging features a “credible plan to resolve tariff uncertainty, it will allow the business cycle to continue.”
And while Trump has slowed the pace of new tariff threats recently — at least since a promise of 200% duties on European spirits last Thursday — he has continued to hype what will be coming.
“April 2nd is Liberation Day for America, because we will start taking back some of the vast wealth that has been taken from us,” he posted on Monday.
The White House is not ruling out surprises from Trump before then.
“I think the president would tell you that all options are always on the table, and he’s always ready to respond if he feels the United States is being unfairly treated,” White House press secretary Karoline Leavitt recently told reporters.
Until then, the best markets may be hoping for is a break in tariff talk, with Yardeni quipping to clients in a recent note that “any day without a Trump tariff comment is a good day for the market.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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