As global trade tensions continue to test investor’s patience, uncertainty is set to move up a notch as we approach what Donald Trump has christened ‘Liberation Day’ on 2 April.

‘April 2nd is going to be liberation day for America. We’ve been ripped off by every country in the world, friend and foe,’ said Trump speaking from the Oval office on Friday (20 March).

Trump is planning to impose reciprocal tariffs which he believes will generate tens of billions of dollars.

Arguing Trump’s case, Stephen Miran, chair of the Council of Economic Affairs, said: ‘I do think it’s perfectly reasonable to expect that we could raise trillions of dollars from tariffs over a 10-year budget, using those revenues to finance lower rates on American workers, on American businesses.’

The latest salvo represents a retreat from Trump’s original idea to impose a flat rate global tariff across the board.

As ever with Trump, the situation remains ‘fluid’, with uncertainty around how the current programme might be implemented. It is also not clear which countries will be targeted although the usual suspects include the EU, Mexico, Japan, South Korea, India and China.

These form part of a group of the worst-offending nations, according to Treasury secretary Scott Bessent who has branded them the ‘Dirty 15’. ‘It’s 15% of the countries, but it’s a huge amount of our trading volume,’ said Bessent.

It’s likely the hardest tariffs will be aimed at these countries with more modest tariffs applied elsewhere. The only countries likely to escape tariffs are those which do not impose tariffs on the US and those which run a trade deficit with the US.

The White House had previously considered a three-tier system of high, low and medium tariffs before rejecting the idea according to the Wall Street Journal.

A more focused approach appears to have initially calmed investor nerves with US stock markets gapping higher on Monday (24 March), helped by confirmation from the administration that separate tariffs on specific industries like autos and semiconductors would not be announced on 2 April.

Economists have questioned the assumption that tariffs would meaningfully impact the deficit, especially given the risks of higher inflation and slower economic growth.

A flash reading of the S&P Global US PMI (Purchasing Managers index) data on Monday showed a revival of growth in March with the composite index rising to 53.5 from 51.6, driven by a marked upturn in services.

However, business expectations for the year ahead fell to their second lowest since October 2022 as companies grew increasingly cautious about the economic outlook.