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Investing.com - U.S. President Donald Trump is due to reveal a fresh batch of tariffs at a White House Rose Garden event at 16:00 ET (20:00 GMT) on Wednesday, which some believe could upend the longstanding rules-based international trade order and escalate global trade tensions.
A White House spokesperson has said the duties would come into effect immediately after Trump unveils them, followed by new 25% automotive tariffs -- which were announced last week -- on April 3. The levies would stack on top of previous trade taxes placed on steel and aluminum and on Chinese goods.
Many of the details of the pronouncements remain largely unknown, with Trump administration officials working to finalize the tariff plans, Reuters has reported.
A separate report from the Washington Post said Trump was considering imposing duties on roughly 20% of imports coming into the country, while CNBC reported that Treasury Secretary Scott Bessent told lawmakers that the president will impose the highest possible reciprocal tariffs on major trading partners.
Trump has made tariffs a centerpiece of his second term in office, arguing that these moves are necessary to correct trade imbalances, lift government revenues, and reshore lost manufacturing jobs. Trump has previously backed so-called "reciprocal" tariffs that would match foreign charges and non-trade barriers on U.S. exports.
However, many economists have warned the actions could push inflation higher and weigh on growth, potentially sending the U.S. economy into a recession.
Despite ongoing hopes that the duties will be used as a negotiating ploy by the White House, the European Union, Canada and Mexico -- all traditionally close trading partners with the U.S. -- have all pledged to respond to the tariffs with retaliatory countermeasures.
The EU, a frequent target of Trump’s trade-related ire, has previously said it "will continue to seek negotiated solutions, while safeguaridng its economic interests." On Tuesday, Canadian Prime Minister Mark Carney’s office said that Carney and Mexican President Claudia Sheinbaum had spoken about Ottawa’s plan to "fight unjustified trade actions" by the U.S.
Businesses have also flagged worries over widespread uncertainty around the policy changes, noting that the murky outlook may affect spending and hiring plans. Data points on Tuesday showed that U.S. manufacturing activity contracted in March, while job openings inched down slightly — but were broadly steady — on the last day of February.
"U.S. manufacturers are increasingly nervous about President Trump’s tariffs. They’re already disrupting supply chains, and the threat of still more next month looks to be hitting both confidence and future growth," analysts at ING said in a note to clients.
Some analysts have suggested that today’s tariff event, which Trump has deemed "Liberation Day," will provide much-needed clarity for markets -- although more bearish observers have countered that the latest slew of levies could still be harsher than many anticipate.
U.S. stock futures hovered just below the flatline on Wednesday, in a note of caution ahead of Trump’s announcements. By 03:41 ET, the Dow futures contract had inched down by 64 points or 0.2%, S&P 500 futures had slipped by 14 points or 0.2%, and Nasdaq 100 futures had dropped by 62 points or 0.3%.
"This moment could place markets at a crossroads in the short to medium term. Optimists anticipate smaller, targeted levies that might pave the way for a stock rebound, while pessimists foresee a sharper selloff if escalating costs undermine corporate profits and hamper economic growth," said Russell Shor, Senior Market Specialist at Tradu.com.
Meanwhile, gold prices eased slightly but did not stray too far from recent record peaks, as ongoing safe-haven demand lingered with investors awaiting specific details on Trump’s tariffs.