Global economies prepare for Trump tariffs as deadline approaches

Global Economies on Edge as Trump’s Tariff Deadline Nears

World economies remained anxious today as they braced for U.S. President Donald Trump’s so-called "Liberation Day," when he is expected to impose sweeping tariffs on multiple countries. His move, aimed at addressing what he claims are unfair trade imbalances, risks triggering global economic upheaval.

Since taking office in January, Trump has aggressively wielded presidential powers, and on Wednesday, he is set to unveil details on which tariffs will be implemented and whether they will target entire industries. The uncertainty has already rattled markets, with the Nasdaq Composite Index—heavily weighted in technology stocks—dropping more than 2% in New York.

Trump argues that retaliatory tariffs are necessary because the U.S., the world’s largest economy, has been "ripped off by every country." However, critics warn of the potential for a full-scale trade war, as major partners like China, Canada, and the European Union prepare countermeasures. Market concerns deepened after Trump stated over the weekend that his tariffs would apply to "all countries."

According to The Wall Street Journal, advisers have discussed imposing global tariffs as high as 20%, affecting nearly all U.S. trading partners. While Trump has been vague, he suggested his tariffs would be “far more generous” than those imposed on American goods.

Fears of a U.S. recession are growing, with Goldman Sachs raising its 12-month recession probability from 20% to 35%, citing weaker growth forecasts, declining confidence, and White House signals that it is prepared to endure economic hardship. The firm also increased its inflation projections for late 2025.

In response, China and Canada have already imposed retaliatory tariffs on U.S. goods, and the EU plans to roll out countermeasures by mid-April. Further retaliatory actions could follow Wednesday’s announcement.

Ryan Sweet of Oxford Economics warned that Trump is likely to target "some of the largest offenders" and urged markets to “expect the unexpected.” The key questions, he said, are how extensive the tariffs will be and whether they are a negotiating tactic or part of a broader shift in trade policy.

Beyond country-specific tariffs, Trump may also introduce sector-specific levies on industries like pharmaceuticals and semiconductors. He has already announced auto tariffs set to take effect Thursday.

Economists predict the measures could focus on the 15% of U.S. trading partners with persistent trade imbalances, a group that Treasury Secretary Scott Bessent has dubbed the "Dirty 15." Among those with the largest deficits with the U.S. are China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada, and India.

Nations are scrambling to mitigate the impact, with reports suggesting that India may lower some duties. European Central Bank President Christine Lagarde called for Europe to move toward economic self-sufficiency, describing the situation as an “existential moment.”

Meanwhile, British Prime Minister Keir Starmer has engaged in "productive negotiations" with Trump toward a UK-U.S. trade deal, according to a Downing Street statement. German Chancellor Olaf Scholz signaled that the EU would respond firmly to Trump’s tariffs but remained open to compromise.

Despite the looming threat, there remains the possibility of de-escalation. Trade law expert Greta Peisch noted that fresh tariffs could be quickly reduced or postponed. In February, for example, steep tariffs on Mexican and Canadian imports were delayed for a month amid ongoing negotiations.

“There are multiple possible outcomes—delays as talks continue, tariff reductions, or immediate implementation,” said Peisch, a former official at the U.S. Trade Representative’s office.