US President Donald Trump announced he will place a "baseline" 10% tariff as well as country-specific reciprocal tariffs at midnight. Yahoo Finance Senior Columnist Rick Newman sits down with Josh Lipton to share his instant reaction to Trump's "Liberation Day" announcement.
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repeated by the way he'll impose 25% tariffs on all foreign autos at midnight. But what do you make of it?
Uh I think it's pretty bad news for markets. Uh so uh when we got the first part of that, which is the universal tariff of 10%, that means all imports to United States will now get this additional 10% tariff. Uh regardless of what they are where they come from. That didn't sound that bad, but then the reciprocal tariffs came on and those numbers are very high. So uh I I can just sort of spitball one case study here with China. So Trump is saying that all imports from China will now face this 34% tariff. So just here's here's some context for that. So when Trump imposed tariffs on Chinese imports in 2018 and 2019, the tariff rate was between 5% and 25% and that was only on about half of all imports to United States. So middle range there 15% and only on half. The new tariff rate on Chinese imports is going to be 34% plus 10% on all Chinese imports. So that to my mind is three to four times uh higher tariff rates just on one country and then I think it's going to be worse for other countries because Trump did not in his first term put any tariffs on Vietnam, for example, wasn't really on his radar. Uh there were uh only products specific categories on imports from the European Union and now it's going to be all imports from the European Union. We are still trying to sort out what you might call like the stacking scheme here. So Right for example, we don't know, here's what we don't know right now. So Trump has already said there will be new 25% uh imports on all cars that come into United States. So what we don't know is that does that mean is it 25% plus the 10% baseline, plus if it comes from one of whatever they reciprocal. We we just don't know this yet. Um thank god markets are not open because this is massively confusing right now. But um I think this is a negative surprise for markets and it's not the baseline, it's those reciprocal numbers.
Was it more aggressive than you would have imagined?
Uh yeah. Um I I think it's more aggressive than let me put it this way. Um Trump means it. I mean when he says he wants to remake the US economy and he doesn't really care about the collateral damage. I think he means it. And this is uh this is evidence that he means, you know, since Trump took office in January, uh the sort of prevailing narrative in markets has been he's going to threaten tariffs, but they're not going to end up that bad in the end. He's going he's going to back off. Um he he has now imposed I think far steeper tariffs than anybody guessed. And I'm not sure he is going to back off. Now we talked about this before, there for sure are going to be exemptions. There will be negotiations. Some some countries might make concessions which in which case Trump will lower those numbers. Um but I think they're already starting out a lot higher than people anticipated.
