Liberation Day is here! What to watch for

At 4pm EST today in the White House Rose Garden, President Trump will unveil his “comprehensive plan for restoring fairness in US trade relationships. ” While there is still a considerable amount of uncertainty, the White House has provided some nuggets that may speak to what we can expect. Ultimately, we don’t expect to get full clarity on the specifics, but we should get more information about the general direction of trade strategy. The announcement today will likely be broad. Trump said over the weekend that tariffs will hit “essentially all” trading partners. Whether or not he should be taken seriously or literally is up for debate, but either way, these announcements will likely not be narrowly targeted. Trump views tariffs as a remedy for unfair trade practices, a source of revenue generation, and a point of leverage. Progress can be made on each of these goals, but the approach will depend on the targeted country. Today should be viewed as the opening salvo of the broader trade war. The notion of reciprocity implies that there is room to negotiate bilateral trade levies, and we think today will kickstart these talks. Ultimately, we think that tariffs will be applied broadly, but there will be plenty of room for relief depending on bilateral negotiations or carve outs. So, while today will help illuminate the broader trade strategy, the specific tactics vis-à-vis each trade partner will be just as important and will likely not be clarified soon.