'Liberation Day' tariffs set the stage for 'chaos' as countries react: Expert

My fellow Americans, this is Liberation Day, waiting for a long time

Liberation Day marked the launch of sweeping tariff policies that will reshape global trade

The day has come and gone, but the aftermath is leaving nations scrambling and economists

warning of chaos. April 2nd, 2025 will forever be remembered as the day American industry was

reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy

again. I think a better name for this day would be Watch Your Wallet Day, and I think Americans

better start watching their wallets right away. I'm Mary Lovely. I'm an international trade

economist. I am a senior fellow at the Peterson Institute for International Economics. I believe

There's going to be a lot of chaos around this, especially because at the same time

they revoked the so-called de minimis provision, which allowed packages under $800 to come in

without the real fancy kind of customs treatment. President Donald Trump's latest tariff campaign received a quick rebuke from nations on the

receiving end of those penalties. As U.S. Commerce Secretary Howard Lutnick made the media rounds

Thursday morning, he pointed out the latest tariffs are a jumping off point for the greatest

dealmaker in the world. We're talking with all of the major countries of the world, and we've been

talking to them for more than a month. This is this has been coming. We've said it's been coming

The key is, will they take our agricultural products? Will they treat us fairly? Can they

treat us fairly And the answer is over time that is going to be yes I think for me the greatest thing for me is that Donald Trump is sitting behind the Resolute desk in the Oval Office and he is the greatest dealmaker and he will decide how he wants to play his hand

Japanese Trade Minister Yoji Muto said he will urge the U.S. to exempt Japan from these tariffs

Japan faces 24 percent tariffs in Liberation Day's wake. I think that countries are trying to figure out what Trump would want in a deal for these to reduce these tariffs

But we have to realize that if he does, that goes against two of his stated objectives, which is one, to reshore activity to the United States

He's definitely been way out front promising Americans that. And if he rolls back the tariffs, well, doesn't that cancel that out

That's the incentive right there. And secondly, he doesn't get the tariff revenue that he needs to not explode the budget deficit

I worry about, you know, what kind of deals other countries hope to hope to cut with the trade team

Will these be transparent? How do they relate to U.S. law? One of the problems with arbitrary trade policy is that there is a lot of room for, if not the actual corruption, for the appearance of corruption

And the belief by foreigners that the U.S. trade policy, commercial policy, no longer operates according to law

Mary Lovely also cast doubt on countries following through with their deals. Are they worth the paper that they're written on

We didn't see China really following through. Part of that was the pandemic. It was problems that Boeing had for idiosyncratic reasons, because, you know, in China, buy some aircraft

That a big number But overall what is sustained power sustainability of these personalized types of promises While the negotiating door certainly opened to the president behind the art of the deal some nations are immediately choosing a retaliatory path China which faces

a 34% tariff on top of an existing 20% rate, called on the U.S. to immediately lift its

unilateral tariff measures and properly resolve differences with trading partners through equal

dialogue. The EU is also vowing to react. President Trump's announcement of universal

tariffs on the whole world, including the European Union, is a major blow to the world economy

At the same time, we are prepared to respond. We are already finalizing the first package of

countermeasures in response to tariffs on steel. And we're now preparing for further countermeasures

to protect our interests and our businesses if negotiations fail. So this is a different opponent, right

This is a very large economy with a complicated political economy, right

They have the member states. Trade policy is an EU competency, means that it's set for the whole membership

Their tariff rates are tied to the EU overall. The EU has been a fairly steadfast advocate of the World Trade Organization

This is a major change for them to just lower rates on the United States, violate some of the main tenants of the World Trade Organization

You don't discriminate among your among the members. I think it's going to be very hard for them just to say I'm going to make a lot of purchases

The EU may be in a unique spot, but their response is not unique

We're going to fight these tariffs with countermeasures. We are going to protect our workers And we are going to build the strongest economy in the G7 Retaliation is a huge risk I

think we're seeing a lot of countries choosing depending on their own political economy. So for

example, in Canada, with an election coming, we've seen Mark Carney say that he will respond

Other countries are saying, well, that's not perhaps in our own interest

Overall, it's going to depend, again, on what is the election cycle

How do people feel about their leaders, their country being, in a sense, bullied by the United States

Do they demand action? Would they like to see the government be more conciliatory because there's a lot at risk

If the tariff rates stand, Lovely says this will kick off a global trade war that will be much different from Trump's first term

They say the last time that they did this, you know, we didn't see a gigantic spike in the CPI

We didn't see the economy slowing. I think we're at a very different place in the business cycle this time

Going after all of our trading partners is very different because, among other reasons, China was able to reroute

Other countries were able to partly, not entirely, partly with the help of Chinese investment into their manufacturing sector, were able to provide untaxed substitutes

And that basically made the burden on Americans smaller. Here, it's very difficult to see what this complicated web of tariffs is leading to in terms of how multinationals will rearrange their supply chains

However that sorts out on a global scale, Lovely predicts Americans will see those price spikes in time for back-to-school shopping

For SIN, I'm Simone Del Rosario