Zuma Global President Heather Zumarraga appeared on Varney & Co. to discuss the short-term implications of tariffs on the stock market. President Donald Trump is scheduled to reveal his new tariff plan on Wednesday afternoon during an event in the White House Rose Garden. The announcement, referred to as “Liberation Day,” is set to occur after U.S. financial markets close, as they have experienced volatility due to recent uncertainties over tariffs. The S&P 500 index has declined approximately 3.9% this year, with the gains made since Trump’s election in November having been negated by concerns of an escalating trade war.
On Sunday, President Trump commented that the proposed tariffs would be more generous than the ones imposed on the U.S. by other countries, which he claimed had been unfair to the U.S. for decades. He emphasized that the U.S. would be “kinder” in its approach. Wall Street firms have raised concerns about the rising recession risk due to the ongoing trade tensions.
The exact details of the tariffs remain unclear in the lead-up to the announcement. However, President Trump has expressed a desire for “reciprocal” tariffs that would align U.S. import tariffs with those levied by foreign governments on American products, although he mentioned the tariffs would still be “generous” by charging less. Alternatives under discussion include a flat tariff of up to 20% and a targeted approach focusing on countries with significant trade volumes with the U.S.
White House Press Secretary Karoline Leavitt stated that there would be no exemptions to the tariffs, including for farmers, who were notably impacted by retaliatory measures in Trump’s previous term. Additionally, the administration plans to launch the “External Revenue Service,” transferring tariff collection responsibilities from the U.S. Customs and Border Protection to this new entity within the Commerce Department, although there is agreement among economists that the importing companies, typically U.S. firms, bear the cost of tariffs.
Currently, President Trump has implemented a 25% tariff on imports from Canada and Mexico, with a lower 10% rate applied to Canadian energy products. These tariffs on goods under the U.S.-Mexico-Canada Agreement were postponed until April 2, upon which new tariffs will take effect. Other tariffs implemented include a 25% levy on auto imports effective April 3, as well as on steel and aluminum imports. Additional plans affecting sectors such as copper, semiconductors, pharmaceuticals, and lumber are being considered.
The administration’s “Tariff Team,” comprising President Trump and key officials, has been negotiating with other countries regarding the specifics of the tariff structure. Press Secretary Leavitt mentioned that several countries have begun discussions with the administration to explore lowering tariffs. The tariffs, which are essentially taxes on imports, could serve various proposed purposes, including boosting federal revenues, encouraging manufacturing reshoring, or reducing foreign trade barriers through negotiations.
These goals present certain contradictions; for instance, lifting tariffs as a result of successful negotiations would not generate tax revenue and might not incentivize reshoring. Furthermore, if companies opted to relocate operations to the U.S. to avoid tariffs, the expected tax revenue from imports would decrease.
The forthcoming announcement from President Trump may provide further insights into the administration’s ultimate objectives with its tariff strategy, as well as the current status of talks with international trade partners. This report was contributed to by FOX Business’ Edward Lawrence and Christina Wurm. The story is developing, and updates are anticipated.
