After spending more than two years teasing tariffs, Wednesday is the big reveal: the moment U.S. President Donald Trump unveils the full scope of his protectionist trade policy.
He’s calling it Liberation Day and he’s planning to celebrate it Wednesday afternoon in a splashy 4 p.m. ET event in the White House Rose Garden.
“[This] will go down as one of the most important days in modern American history,” White House press secretary Karoline Leavitt said.
To skeptics, it’s making history for all the wrong reasons.
The global economy, already jittery, will be on a knife’s edge awaiting specifics of this plan, which could impose broader U.S. tariffs than anytime since the Great Depression.
The White House boldly insists these tariffs will achieve several simultaneous goals: raise revenues, pay for tax cuts and force companies to build in the U.S.
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The stock market isn’t convinced — it’s lost all its gains since the election. Consumer sentiment has plunged. And Capitol Hill is getting anxious.
Here’s one reason for the consternation: The most elemental details of Trump’s plan are still in flux. On the very eve of the announcement, there were contradictory leaks in U.S. media.
Will this be a global tariff of 20 per cent? Or will it be several smaller tariffs that penalize specific actions of different countries? Members of Trump’s team were still debating the details this week.
Then there’s the question of what happens to previously announced tariffs — will they disappear, or be stacked onto these, meaning a tariff atop a tariff?
Whatever happens, the auto industry already faces a crisis, according to one representative. Flavio Volpe, head of Canada’s main auto-parts lobby group, says the industry’s profit margins would be wiped out, several times over, by tariffs already scheduled to take effect Wednesday, apart from any new ones Trump plans to announce.
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“It will shut down the industry within a week. On both sides of the border,” said Volpe, president of the Automotive Parts Manufacturers’ Association.
“The math doesn’t work. That’s why it’s all going to shut down.… We may need to prove that the math doesn’t work, for the White House to reverse course.”
For those keeping score, Trump has already imposed duties of 25 per cent on many Canadian and Mexican products; of 10 per cent on energy; 25 per cent on steel and aluminum — used by manufacturers, including car companies — and now a 25 per cent duty on vehicles assembled outside the U.S., plus duties on some parts, with the threat of more parts being added later.
In the face of this, Democrats are looking to deliver a political black eye for Trump’s big day. They will force several hours of debate, followed by a vote, on Senate Resolution 37.
That motion would terminate Trump’s national-security justification for the tariffs on Canada, specifically for the initial 25 per cent duty imposed supposedly because of Canada’s role in the fentanyl trade.
It would be mainly symbolic. The bill’s sponsor, Sen. Tim Kaine, says he’s close to locking up the necessary votes to pass it, and already has support from some Republicans.
“Our constituents are hopping mad about this,” the Virginia Democrat told CBC News. “My… constituents are furious about this. They’re pro-Canada, they’re pro-trade with Canada, and they are anti-higher prices on building supplies, groceries, fertilizer, aluminum and steel.”
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If the resolution gets “a good, solid bipartisan vote in the Senate, that’s going to be a powerful message to Donald Trump and his economic advisers: ‘You are playing with fire. Don’t raise taxes on Americans on their groceries and building supplies at a time when the economy is softening,'” Kaine said.
If it passes, it would be an embarrassing message for Trump on his big tariff day — a rejection from the Senate, which his party controls.
However, substantively, it might mean very little. The bill will almost certainly not be brought for a vote in the House. Even if it did somehow pass the House, Trump could still veto it anyway.
In any case, this would only undo one set of tariffs, the ones supposedly about fentanyl. Still, it’s an early test of the politics of Trump tariffs.
Democrats increasingly see tariffs as a winner for them and a loser for Trump — especially those on Canada. Some of the biggest figures in the party joined Kaine for a news conference outside the Capitol on Tuesday.
They previewed a message they’re likely to carry into the midterms: that Trump is effectively taxing ordinary Americans, collecting duties on goods they use, in order to pay for tax cuts for billionaires.
They’ve been assisted in that messaging from Trump himself — who just said he doesn’t care if prices go up for goods in the short term.
“The Republicans are squirming,” said the Democrats’ Senate leader, Chuck Schumer.
Trump is now working to stiffen their spines. He’s promising a new golden age of American manufacturing, if the party can tough out the initial storm.
In danger of being repudiated by Congress, in that vote expected Wednesday, Trump has issued a warning to his party: Support my Canada tariffs.
“Don’t let the Democrats have a Victory,” Trump posted, referring to the Senate vote. “It would be devastating for the Republican Party and, far more importantly, for the United States. MAKE AMERICA GREAT AGAIN!”
The pressure on Republicans is real. One that Kaine had listed as a supporter of his bill, Thom Tillis, of North Carolina, clarified later Tuesday that he won’t vote for it, despite his concerns about tariffs.
It’s worth noting Tillis’s own predicament: he’s up for re-election next year and faces a primary challenge, making it risky for him to anger Trump. Other Republicans — Rand Paul and Susan Collins — still support the bill, and Kaine said he’s optimistic he can get a couple more to reach a majority.
Now Washington watches the White House.
Not only Washington, but also Wall Street’s traders, and Windsor, Ont.’s auto workers, and anyone else with a stake in trade with the U.S.
The biggest unknown is whether Trump will announce one flat global tariff, or a bunch of tit-for-tat so-called reciprocal measures.
The White House isn’t saying. Media reports suggest it’s still being debated internally — despite Trump having spent two years campaigning on this idea.
Each approach comes with challenges.
The first idea, the global tariff, is a blunt instrument that could more easily clobber the U.S. into a recession. The latter is painfully complex; trade experts have been saying for weeks that there’s no way Trump’s team could create this system by April.
At an event in February, at the conservative American Enterprise Institute, one trade-policy expert said unflinchingly that April 2 would be a mess. There’s just no way, he said, to properly design country-by-country reciprocal tariffs this fast.
“They won’t get close,” Derek Scissors said, over a month ago.
“We’re going to get either a big pullback, which would be sensible, or we’re going to get utter nonsense.”
