“Discounted” reciprocal tariffs applied to on Liberation Day

President Trump announced reciprocal tariffs on trading partners that apply higher tariffs on the US and a universal tariff on most other countries. The stated tariffs are more aggressive than most had been expecting, but these should also be viewed as an opening salvo for negotiations and indeed, Trump signaled a willingness to reduce tariff rates if trading partners did the same. While Trump loves to strike a deal, he also highlighted t hat foreign manufacturers can avoid the tariffs by setting up operations onshore and has touted the revenue raising power of tariffs. We do think that there will be room for relief, but Trump does appear to be upping the ante and risking US growth prospects at the same time.