Liberation Day 2025: what to expect as countries brace for impact

As the world braces for April 2, all eyes are on the United States, where President Donald Trump is set to announce the implementation of “reciprocal tariffs“, a move poised to redefine global trade dynamics.

Dubbed “Liberation Day” by the administration, this initiative aims to address perceived trade imbalances and protect American industries.​

The announcement, scheduled to take place in the Rose Garden on Wednesday, marks the administration’s most extensive tariff initiative to date.

The Trump administration has previously imposed a 25% tariff on imported steel and aluminum, as well as on goods from Mexico and Canada.

Additionally, a 25% tariff on all imported automobiles and automobile parts has been enacted.

President Trump has also threatened several other countries, including traditional allies in the European Union, with steep tariffs on various products, such as European wine.

Over the weekend, he suggested that the forthcoming tariffs would apply to all countries, not just those with significant trade imbalances with the US. ​

President Trump emphasized that these measures are necessary to address longstanding trade disparities and to promote fair competition for American businesses. ​

In anticipation of the US tariffs, countries around the world are taking steps to mitigate potential economic impacts. Invezz takes a look at how the world is bracing for impact:

European Union

European Commission President Ursula von der Leyen warned on Tuesday that the European Union is prepared to take strong countermeasures if the United States imposes new tariffs on EU goods.

While stressing that the EU prefers dialogue and a negotiated settlement, von der Leyen made it clear that Brussels will act decisively to protect European businesses and consumers if an agreement cannot be reached.

Von Der Leyen also said that the EU doesn’t want to fight back with its own taxes. However, if it becomes necessary, they have a strong plan to do so and they will use it.

Last week Bloomberg reported that the European Union is exploring potential concessions to ease US trade tensions and secure the partial rollback of tariffs already affecting EU exports.

The European Commission is reportedly drafting a “term sheet” outlining negotiation areas, including tariff reductions, joint investments, and regulatory adjustments.

So far, Brussels has responded to US tariffs with equivalent levies on American goods such as Harley-Davidson motorcycles, following a traditional tit-for-tat trade strategy.

However, with Washington threatening further penalties—not only on tariffs but also on non-tariff barriers like EU tech regulations—the bloc is preparing for a broader response.

According to Politico, Brussels is weighing the possibility of targeting American services and intellectual property rights.

This could involve major financial institutions like JP Morgan and Bank of America or tech giants such as Elon Musk’s social media platform X, Google, and Amazon.

“We are certainly not excluding a bigger, better, and more creative response,” a senior EU official said in mid-March. “All options are on the table.”

United Kingdom

The UK government anticipates being affected by the new US tariffs.

The UK PM Keir Starmer told Sky News Tuesday morning that progress was being made towards a deal that would help Britain avoid new US tariffs.

“We are discussing economic deals. These would normally take months or years, and in a matter of weeks, we’ve got well advanced in those discussions.”

Business Secretary Jonathan Reynolds expressed hope that any new tariffs imposed on British goods would be removed promptly following a new business deal focused on technology.

​The Office for Budget Responsibility (OBR) has issued a warning that a reciprocal trade war could significantly diminish the UK’s economic growth, potentially eliminating the fiscal headroom available to Chancellor Rachel Reeves for adhering to her self-imposed spending and borrowing rules. ​

In its latest economic forecast, the OBR projects that, under a severe scenario where the UK and other nations retaliate against US tariffs, the UK’s GDP could be reduced by 0.6% this year and by 1% the following year.

Alternatively, if the UK chooses not to retaliate, the OBR forecasts a smaller contraction, with GDP decreasing by 0.4% this year and 0.6% next year.

Japan, South Korea and China

Japan’s Prime Minister Shigeru Ishiba has expressed a willingness to travel to Washington to negotiate directly with President Trump to prevent the imposition of new tariffs on Japanese car imports.

Further, China, Japan, and South Korea have agreed to jointly respond to the US tariffs, according to a post shared on a social media account linked to Chinese state broadcaster CCTV on Monday.

The three countries have agreed to enhance regional trade cooperation and the consensus was reached during their first economic dialogue in five years, held in Seoul on March 30, 2025.

The trade ministers from the three nations committed to accelerating negotiations for a comprehensive, high-level free trade agreement (FTA) that would benefit all parties involved.

The ministers also agreed to enhance supply chain collaboration and increase dialogue on export controls.

Japan and South Korea expressed interest in importing semiconductor raw materials from China, while China showed interest in purchasing semiconductor products from Japan and South Korea.

They plan to hold their next ministerial meeting in Japan, continuing their efforts to strengthen economic ties and mitigate the effects of protectionist policies.

India

India is reportedly offering significant cuts on a range of US imports, with a focus on agricultural products such as almonds, cranberries, and bourbon whiskey—items that are central to ongoing trade negotiations.

Reuters reports that India has proposed lowering tariffs on over half of US imports, totalling approximately $23 billion, marking the country’s largest concession in years.

This strategy positions India among the few nations actively working to reduce tariffs in an effort to avert potential US retaliation.

Already, India has reduced its tariff on bourbon whiskey from 150% to 100%, a move that benefits major US brands like Suntory’s Jim Beam.

Additionally, India’s February 1 budget introduced cuts in customs duties on luxury cars, solar cells, and machinery, which lowered its peak import tariff from 150% to 70% and brought average tariffs down from 13% to below 11%.

Although these reductions are partially influenced by the Agriculture Infrastructure Development Cess (AIDC), India has promised to remove this levy as trade discussions progress.

In a further attempt to ease trade tensions, India plans to eliminate a 6% tax on digital advertisements beginning April 1.

This measure is intended to lower costs for major US tech companies such as Google, Meta, and Amazon, addressing some of the concerns about trade imbalances.

In addition, India has committed to increasing its energy purchases from the US, with projections indicating an increase from $15 billion last year to $25 billion in the near future.

Alongside these initiatives, President Trump has signalled efforts to supply F-35 stealth fighters to India, further deepening the bilateral trade relationship.

In an interview with Invezz last week, Dr Devendra Pant, chief economist at India Ratings and Research, Pant said that if the US decides to bring the tariff differential between the US and India to zero, the impact on Indian exports could be around $3-5 billion.

This may translate to approximately 10 basis points (bps) of GDP growth.

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