Liberation Day, Circa 2025

Trump's big tariff announcement... 'Discounted reciprocal' tariffs... A speculative day... Getting the word out... Bull and bear cases... Protect yourself from a 'violent shift' in the market...

Today was 'Liberation Day'...

Late this afternoon, President Donald Trump stood in the White House Rose Garden to announce his new tariff plans. Giant American flags surrounding Trump set the mood. So did the audience of invited trade workers. The event was dubbed "Liberation Day" or "Make America Wealthy Again."

Investors and folks on Main Street have been speculating for months on what Liberation Day 2025 – rather than the one that marked the end of World War II in Europe on May 8, 1945 – might look like, especially regarding details about Trump's tariff policy.

Finally, we got some answers...

A few hours before the press conference, the White House put out a video celebrating recent investments in American manufacturing (from the likes of Apple, SoftBank, and various automakers) plus trade commitments, totaling what it said are $5 trillion in investments since Trump returned for a second term.

A little after 4 p.m. Eastern time, Trump began his speech by saying that this "Liberation Day" would be remembered as "the day America's destiny was reclaimed." Trump went on to say he would be signing an executive order imposing reciprocal tariffs on imports from "countries throughout the world," effective at midnight Eastern time.

"They do it to us, and we do it to them," Trump said. He later explained that these are not "full reciprocal" but "kind" reciprocal tariffs, specifically tariffs on imports at roughly half the rate of what other nations charge on their U.S. imports. He continued...

For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers, and other forms of cheating and because we are being very kind... we will charge them approximately half of what they are and have been charging us...

I could have done [full reciprocal], but it would have been tough for a lot of countries. We didn't want to do that.

Trump then held up a chart listing foreign nations and the associated numbers involved.

He began with China: "67% tariffs charged to the USA, including currency manipulation and trade barriers... We're going to be charging a discounted reciprocal tariff of 34%. In other words, they charge us, we charge them. We charge them less, so how can anybody be upset?"

Trump also announced a 20% tariff on the European Union... a 46% tariff on Vietnam... a 32% tariff on Taiwan... a 24% tariff on Japan... 10% on the United Kingdom... and on and on… Roughly 60 countries are in play for new tariffs, the White House said.

Trump also said there will be a "minimum baseline [tariff] of 10%," a 25% tariff on all foreign-made automobiles, and that "if you want your tariff rate to be zero, you build your product right here in America."

Tomorrow, we'll see how the market digests these details since the announcement came after the U.S. markets closed. In after-hours trading, it didn't look good, though. The S&P 500 Index was more than 2% lower as of about 5 p.m. Eastern time.

The after-market timing made for a trading day of speculation...

All the major U.S. indexes moved higher starting mid-morning as possible details about the tariffs potentially being effective immediately leaked out. The benchmark S&P 500 Index was up almost 1% intraday and finished roughly 0.7% higher.

The market reacted more to meetings between U.S. Secretary of the Treasury Scott Bessent and Congressional members and staff yesterday. The meetings were reportedly for Bessent to provide some certainty for Washington and Wall Street ahead of today's press conference.

As the Wall Street Journal and CNBC reported, Bessent reportedly told lawmakers that today's tariffs would be intended to be a ceiling, not a floor, for tariffs during the Trump administration. It made for a "not as bad as it could be" kind of message. As the Journal wrote...

The tariffs President Trump announces today likely won't be raised further, but could be negotiated downward, Treasury Secretary Scott Bessent told lawmakers during a meeting, according to a participant.

Anxiety has risen on Capitol Hill about how aggressive Trump would be on tariffs. Some vulnerable Republicans are concerned that higher prices could threaten their reelection campaigns.

It is unclear if Trump will align with his Treasury secretary's position. The president has repeatedly said he would escalate tariffs on countries that retaliate against the U.S., and recently threatened to do so for Canada and the European Union.

In other words, Bessent said that the tariffs announced today, in addition to the ones previously in place, are intended to be the maximum level other nations would face during the Trump administration. That could mean that additional retaliatory tariffs from the U.S. – which have created a lot of market volatility this year – might be off the table, although Trump may deviate from this idea.

I (Corey McLaughlin) suspect we haven't heard the last of the trade war with respect to China. And, just the other day, Trump threatened to use tariffs on Russian oil and any country that bought Russian oil in an effort to negotiate an end to the war in Ukraine.

Bull and bear arguments...

In any case, Bessent's reported point is important, even if it has been frequently buried in all the tariff fear over the past two months.

That is, Trump's "reciprocal" tariffs – if they indeed level the playing field with trading partners – could conceivably cost some businesses less if other nations decide to lower their tariff rates and then the U.S. does the same.

This may be hard to conceive with a slew of new tariffs just announced, but a few weeks ago, Bessent said in a CNBC interview that...

It could go the other way, too. That's the nature of these reciprocal tariffs. All President Trump is asking is for countries to take theirs off.

That's the bullish case. And over the past few days, we've seen some nations taking preemptive steps that would back up this point. As our friend Marko Papic of BCA Research, a regular speaker at our annual Stansberry Research conference, wrote on social media platform X yesterday...

Vietnam and Israel are front-running LIBERATION DAY by slashing tariffs on US products. It will be important to watch if the administration acknowledges any such acts in its April 2 announcement or subsequent messaging. That will let everyone know the point of all of this.

Of course, Vietnam and Israel doing this is one thing. But U.S. trade relationships with China, India, Mexico, Canada, and the European Union matter a bit more to the global and U.S. economies and markets.

And the bullish case is far from a certain outcome. There are a lot of "ifs."

On the other hand, the bearish case is that if today's new tariffs lead to more escalation, they could cost businesses additional potential profits and likely lead to more inflation for consumers in the short term, regardless of whatever the longer-term impacts are, positive or negative, on the U.S. economy.

We'll dive into the subject some more tomorrow, but for today, we wanted to share the nuts and bolts of Liberation Day, circa 2025, as we go to press.

In the meantime, uncertainty still abounds...

There's a lot we don't know about how "Trade War, Part II" will play out. While sentiment may have gotten a lift on purposeful messaging to Wall Street today, tomorrow's reaction could be much different... much less the weeks and months ahead.

We don't have a crystal ball. But as we've been writing this week, some sectors and stocks have been "working" while others aren't, notably the Magnificent Seven. We saw the trend continue today...

Ten of 11 S&P 500 sectors closed higher. Consumer discretionary stocks were up roughly 2%, leading all sectors. Meanwhile, defensive consumer staples stocks were the biggest loser, down slightly. The CBOE Volatility Index ("VIX") was down slightly to around 21.

Bitcoin moved more than 1% higher this afternoon to around $87,000, just above its 200-day moving average. The world's largest crypto is still down around 20% from its all-time high in January but is up more than 10% since a low early in March.

The volatile pattern we've seen in stocks so far this year could continue. So some sectors and stocks are set to outperform others. As our friend Marc Chaikin, founder of our corporate affiliate Chaikin Analytics, said in a note to Stansberry Research readers today...

Sharp, short-term drawdowns could become our new normal. Just like we saw during the Trade War in 2018.

Marc says what we've seen so far this year could just be the start of a "violent shift" that rips its way through the stock market. And while this volatility could spell financial disaster for millions of Americans, it doesn't have to be that way.

Last week, Marc debuted a brand-new free presentation sharing how you can protect and grow your wealth in the volatile weeks that could be ahead. The response to this event has been overwhelmingly positive. You can watch a replay of the event right here.

You'll also hear about a special report Marc has put together specifically for Stansberry Research subscribers that he says is "the No. 1 move I recommend you make with your money this Liberation Day." Click here now to learn more.

New 52-week highs (as of 4/1/25): Alamos Gold (AGI), Alpha Architect 1-3 Month Box Fund (BOXX), Chevron (CVX), Fidelity National Financial (FNF), Franco-Nevada (FNV), Paychex (PAYX), Sprott Physical Gold Trust (PHYS), Royal Gold (RGLD), Republic Services (RSG), Torex Gold Resources (TORXF), United States Commodity Index Fund (USCI), and VeriSign (VRSN).

In today's mailbag, a reply to a note in Monday's mail... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Loved subscriber Gary S's comment in [Monday's] Digest.

"Now it's my turn... how about we all quit eating in order to crater demand for food, and therefore lower grocery prices?" – Stansberry Alliance member G.F.

All the best,

Corey McLaughlin with Nick Koziol
Baltimore, Maryland
April 2, 2025