Trade Tensions Persist as Trump’s ‘Liberation Day’ Falls Flat with Businesses

Donald Trump has billed his upcoming tariff announcement, set for Wednesday, as a “Liberation Day” for the United States. Despite this claim, American businesses and financial markets are unlikely to feel liberated from the uncertainty that has accompanied his unpredictable trade policy.

The announcement is expected to clarify some significant points, specifically regarding reciprocal tariffs that would match the import duties imposed by other countries on U.S. goods. Companies will soon have a clearer sense of which nations will be affected and how steep the new tariffs might be. Yet economists caution that numerous unresolved issues will persist for months, as additional tariffs targeting specific sectors such as pharmaceuticals, copper, and lumber may be introduced. Moreover, potential trade deals with other nations could further complicate matters, prolonging uncertainty.

“April 2 is when this all kicks off, it’s not when all of this ends,” explains Kelly Ann Shaw, a former senior White House trade adviser during Trump’s first term. “At some point, things will settle, but because we’re just at the beginning of a fundamental rethink of global trade, there will be far more questions than answers in the near term.”

This lingering uncertainty is measurable. According to Stanford economist Nicholas Bloom, who tracks economic policy uncertainty, the current level – excluding the pandemic period – is the highest since the index began in 1985. Bloom notes that when businesses face unclear economic policies, they typically delay significant investments and hiring decisions. Likewise, consumers tend to become more cautious about their spending habits. “April 2 could reduce uncertainty if this were truly a one-and-done announcement,” Bloom says. “But I suspect it will be one of a series of ongoing announcements.”

The administration’s justification for tariffs has been consistent. White House spokesman Kush Desai emphasizes Trump’s longstanding goal of revitalizing American manufacturing, stating, “America cannot just be an assembler of foreign-made parts – we must dominate every step of the supply chain critical for our national security and economic interests.”

However, companies like World Emblem are already bracing for immediate impacts. Randy Carr, CEO of the company – which produces badges, patches, and labels in Mexico and Canada – expects his products will soon face a 25% tariff. Carr has informed customers of an 8% price increase and has slowed a $9 million investment plan, which would have gone toward artificial intelligence and online commerce. “We don’t know if we’ll need that money for tariffs,” he says, illustrating the uncertainty many companies face.

Similarly, companies such as Emerald Packaging, which provides packaging for produce sold by major retailers like Walmart and Kroger, have paused spending. CEO Kevin Kelly explained that the company learned valuable lessons from pandemic-era supply chain disruptions, which depleted its cash reserves. “We’re not spending any money right now,” Kelly notes. “We’re trying to build cash because we need a cushion.”

Part of the sustained uncertainty may be deliberate, experts say. Shaw explains that Trump’s intentional ambiguity is a strategic element in trade negotiations, designed to maintain leverage. Future negotiations following Wednesday’s announcement will likely take months, prolonging the uncertainty. Meanwhile, Trump is expected to review further reports on international trade practices – including subsidies, currency manipulation, and tax policies – which could trigger additional tariff actions.

Complicating matters further is Trump’s open enthusiasm for using tariffs beyond traditional economic policy, employing them as tools to address issues from fentanyl trafficking to reshoring manufacturing. For instance, the administration has indicated it will impose a 25% tariff on countries importing oil from Venezuela, a policy that includes the United States itself.

“Given that tariffs seem to be the administration’s answer for virtually every challenge, it’s difficult to predict what might prompt another round,” observes Marc Busch, professor of international business diplomacy at Georgetown University.

Economists warn that continued uncertainty could have long lasting economic effects. Matthew Luzzetti, an economist at Deutsche Bank, estimates that even if Wednesday’s announcement were definitive, the accumulated uncertainty from the administration’s tariff policies could reduce economic growth by around 1% over several quarters. “If uncertainty extends further or stays elevated longer, the negative impact will only amplify,” he warns.

Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, acknowledges the value of clarity but emphasizes the broader economic damage tariffs create. “To the extent that April 2 provides clarity, businesses can at least start planning,” Bradley says. “But having certainty about economically harmful policies is hardly positive.”