Trump Considers Two-Step Tariffs Ahead of "Liberation Day," Potential Relief for Stocks
1min read President Trump is considering a two-step rollout for his new tariff regime, exploring emergency powers to impose immediate duties while investigations into trading partners unfold, according to FT.
The strategy aims to establish a stronger legal foundation for Trump's "reciprocal" tariffs while generating revenue for planned tax cuts. Trump has pledged to announce the new measures on April 2, calling it "Liberation Day," sparking a diplomatic scramble as foreign governments lobby for exemptions.
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On Monday, Trump doubled down on his plan, vowing "substantial" tariffs on U.S. trading partners but leaving room for exceptions. "They've charged us so much that I'm embarrassed to charge them what they've charged us, but it'll be substantial," he said, hours after unveiling new sanctions on Venezuelan oil buyers, including China.
When pressed for clarification on whether sectoral tariffs would also start that day, Trump initially said, "Yeah, it's going to be everything," but later added that not all tariffs would take effect immediately.
His administration remains divided on the specifics of enforcement. Among the options under consideration is invoking Section 301 investigations into trading partners while using rarely deployed emergency powers to impose immediate tariffs. Legal tools on the table include the International Emergency Economic Powers Act and Section 338 of the Tariff Act of 1930, which could enable tariffs of up to 50% on targeted nations.
Trump has also hinted at potential tariffs on auto imports, possibly reviving a national security probe into the global car industry from his first term. "Over the next few days, you'll be hearing about cars," he said.
While Trump has long framed tariffs as a response to unfair trade practices, insiders suggest his team is more focused on using them to fund tax cuts rather than leverage foreign negotiations. As a result, officials are searching for legally tested mechanisms to impose sweeping tariffs on multiple countries as quickly as possible.
Kush Desai, a White House spokesperson, maintained that Trump's team remains unified: "Although the final reciprocal tariff plan for April 2 has yet to be unveiled by President Trump, every member of the Trump administration is aligned on finally leveling the playing field for american industries and workers."
With the April 2 deadline looming, foreign governments are scrambling to make concessions. The UK is reportedly considering adjustments to its tax on U.S. tech firms in hopes of securing a favorable outcome.
Trump's trade policies have been marked by unpredictability, with previous sweeping tariffs on allies such as Mexico and Canada sometimes reversed within hours under pressure from businesses.
