Since taking office on Jan. 20, President Donald Trump has made sweeping changes to the government. Between the dismantling of the Department of Education to the moves the Department of Government Efficiency (DOGE) has made, President Trump has made his presence felt in his first 100 days back in the Oval Office.
One element to his plan to bring America into “the golden age” is a complete overhaul of US economic policy. This means he is rethinking how the US goes about economics. This plan involved the implementation of tariffs, which are taxes placed on when they enter a different country. So if Japan for example wanted to send us new Hyundais, they would have to pay an extra tax or tariff to get them into the US.
On April 2nd, President Trump claimed the day to be “Liberation Day” for the US as he claimed that the US will be putting itself first once again. This included a sweeping wave of tariffs the President imposed on every country that does business with the US. During his speech, President Trump unveiled a list of countries and their percentage of “reciprocal tariff” they would be facing.
Among this list were many nations one would expect, China, Japan, Canada, Mexico, the EU. However, as the American people looked and noticed that the McDonald Islands were added to the list of tariffed territories. This is odd because no one lives there, it is populated by only Penguins.
After Liberation Day, the stock market went into free fall, with consistent loss for over several days. Many experts believe that Trump was mistaken for implementing these tariffs in the manner he did. Many have said this adds to the problem rather than solve them.
One nation that has been hit the hardest over the tariffs is China, the world’s largest economy. In response to Trump’s actions, Beijing placed reciprocal tariffs on the US following their own. Trump decided that after China placed their tariffs on the US that the US will add another 125% tariff on Chinese goods. This blow for blow economic practice has continued to batter the markets.
Meanwhile, the European Union, already having a shaky relationship with President Trump, considered their retaliation to the sweeping Trump tariffs. Many believe the retaliation may be similar to Beijing’s response, with reciprocal tariffs.
As the markets continued to fall throughout the following days, President Trump made uncharacteristic moves. On April 9, the President backtracked on his tariff agenda and decided to dwindle all tariffs to 10% for 90 days; what will happen after those 90 days remains to be seen. What is also important to point out about this move is that all countries received this relief, except for China, the US’s biggest economic competitor.
The Trump administration has made it clear that they intend on making several changes during the President’s 4 year term. Whether the economic policy will be viewed as good or bad remains to be the ultimate question on everyone’s minds as the market teeters towards recession.