America First Trade Policy: What to expect from next week's tariff announcement 🔎📄

The week that many investors have been waiting for is coming. Next week, the market will definitely focus on new tariffs that the US administration is expected to announce on Wednesday, April 2. Additionally, the tariffs on vehicles and auto parts announced on March 26 will go into effect on the same day. In the following post, we will summarize what to watch for and how markets may react.

Reciprocal tariffs, April 2

There is currently some confusion about the potential tariff rates and the scope of the planned tariffs. However, we know from recent statements that the initial plans for broad, universal tariffs have been replaced with a more selective strategy. The trade imbalances and trade deficits with the US are to determine which countries will be included on the tariff list. These tariffs are intended to reflect the tariff rates and trade barriers imposed by other countries on US exports, addressing perceived imbalances in global trade.

Countries that have significant trade surpluses with the United States or have alternative non-tariff systems such as subsidies, value-added taxes, or currency differentials may be particularly vulnerable. This group is likely to include major partners such as Canada, Mexico, the European Union, China, and India, although the exact list remains unconfirmed.

List of countries by trade balance with the US. China, the Eurozone, Mexico, Germany, and Canada remain most at risk, but Germany and South Korea are also likely to be affected. Source: xStation 5

Scale of trade restrictions yet to be seen

The tariffs are expected to affect billions of dollars of imports, building on previous tariffs imposed on Canada, Mexico, and China (e.g. 25% on most Canadian and Mexican goods, 20% on Chinese imports from March 4, 2025). However, recent reports suggest that the April 2 tariffs may not apply to broad sector tariffs (e.g., autos, pharmaceuticals, or semiconductors), and instead prioritize cross-border tariffs tailored to specific countries and products.

Room for negotiation

The White House has indicated that some countries are already offering to lower their tariffs to avoid U.S. retaliation. As such, the announced tariffs may already include previously negotiated levels. For example, recent reports from India and the U.S. suggest that the two countries have already begun talks to strike a quick trade deal and resolve the tariff impasse.

Market impact

It is difficult to pinpoint the direction at the moment. However, it is worth noting the enormous uncertainty that remains among investors. This in turn is driving up gold prices and selling off stocks and cryptocurrencies. It is possible that the new tariffs will add fuel to the fire and stoke international tensions with the U.S. On the other hand, it may turn out that the April 2 tariff announcement will mark the peak of Trump's tariff policy, and the next step will be negotiating better terms of trade cooperation, which should improve investor sentiment.