[ROLLING ANALYSIS] Tariff update: US "Liberation Day"; US President Trump to announce reciprocal tariffs at 16:00EDT/21:00BST on Wednesday

"LIBERATION DAY": What we know

ANNOUNCEMENT TIMINGS

White House said US President Trump to deliver remarks in Rose Garden at 21:00BST/16:00EDT on Wednesday.

POTENTIAL TARIFF OPTIONS

CNBC's Casella said there are three main options that US President Trump is looking at:

1) Blanket 20% tariffs
2) tiered system of three different rates
3) country-by-country rates.

One official cited by CNBC said the first option was "less likely than the other two". CNBC also said the 'goal' is country-based tariffs.

Pharma, semiconductor and other tariffs would be announced later.
Canada/Mexico fentanyl tariffs expected to be lifted.
Secondary tariffs on Venezuela to go into effect. Auto tariffs scheduled to go into effect.
CNBC said there could be some tariffs that take effect later and she believes Trump will leave room for negotiating.
CNBC believes it will be a mix of policies and that there will be some off-ramps.

TARIFF IMPLEMENTATION DATES

White House Press Secretary Leavitt said US President Trump was with the trade and tariff team, while she added that car tariffs go into effect on April 3rd and that Trump has made up his mind on tariffs.
Leavitt also said reciprocal tariffs will take effect immediately after the announcement and that a few countries have called to discuss tariffs.

OTHER REPORTS

USTR reportedly prepares a new tariff option for US President Trump which is "an across-the-board tariff on a subset of nations that likely would not be as high as the 20% universal tariff option", according to WSJ.
US President Trump's tariff plans are "coming down to the wire" with his team reportedly still finalising the size and scope of the new levies, according to Bloomberg.
US Treasury Secretary Bessent told lawmakers that Wednesday's tariffs are a 'cap', according to a CNBC reporter cited by Reuters.

REMINDER:

Weekend reports suggested US President Trump is said to be pushing senior advisers to go bigger on tariff policy as they prepare for ‘Liberation Day’ on April 2nd and reportedly revived the idea of a flat universal tariff single rate on most imports, according to Washington Post.

JPM TARIFF SCENARIO ANALYSIS

BROAD BASED SCENARIOS:

10% tariff - assuming a blanket 10% that also cancels/replaces Canada/Mexico tariffs but not China... SPX +2-2.5%, 10y yield higher by ~10bps, EUR/USD falls to 106-107 (currently 1.08).
25% tariff - SPX declines 1.25-1.75%, 10y yield falls 12-14bps, EUR/USD and falling to 1.03-1.05, as USD behaves as a safety haven
35% tariff - SPX declines 2-3%, 10y yield falls 20bps, EUR/USD falls to 1.01-1.03

On EU sectors vs. tariffs, JPM expect:

EU Pharma: Potential US tariffs expected to have a manageable impact, though many questions remain unanswered around key details.
Global Spirits: Financial impact likely to be substantial, ranging JPME 8-48% on annual EBIT. Believe mitigation through pricing will be limited, given sector has already derated YTD < asymmetric risk rewards if tariffs delayed/scrapped.
EU Autos: If tariffs go ahead, on avg. c. 25% earnings cut to its FY25 estimates for German OEMs and Stellantis. JPM add this is the lower bound of impact.

Overall, JPM remain tactically bearish.

Notes a "good" outcome looks like a low (10% or less) blanket tariff does not include VAT with a stated willingness to discuss sectoral tariffs which include 25% on aluminium/steel, 25% on autos, 200% on champagne/wine from EU, and potentially 25% on chips and pharmas. Moreover, avoiding tariffs on shipping vessels would be a positive.
A "bad" outcome sees a higher than expected blanket tariff, which includes VAT, plus additional sectoral tariffs. Further, any bans on sales or the implementation of fines/tariffs on shipping vessels would be a materially worse outcome, for example a full ban on chip sales to China. Reports suggest NVDA received c. 17% of its FY24 rev. from China.

TARIFF TIMELINE

February 1st - Trump signed an executive order to impose 10% tariffs on all imports from China and 25% on imports from Mexico and Canada starting Feb 4th.
February 3rd - Trump agreed to a 30-day pause on tariffs against Canada and Mexico.
February 4th - US additional 10% tariff on China on top of existing levies came into effect. Chinese export controls on tungsten, tellurium, bismuth, molybdenum and indium took effect (no specific countries mentioned).
February 10th - Chinese tariffs against the US took effect (15% tariffs on US coal & LNG, 10% tariffs on US oil).
February 13th - Trump signed his plan for reciprocal tariffs, albeit delayed the implementation.
March 4th - Tariff pause on Mexico and Canada expired; Additional 10% tariffs on China went into effect on top of Feb 4th tariffs. Canada announced retaliatory tariffs over 21 days, Mexico said it will also respond with retaliatory tariffs.
March 5th - Trump allowed a one-month exemption on Mexico and Canada tariffs of US automakers following talks with Ford (F), General Motors (GM) and Stellantis (STLAM IM/STLAP FP)
March 6th - Trump postponed the initial 25% tariffs on several imports from Mexico and some imports from Canada for a month. In response, Canada suspended its second wave of retaliatory tariffs.
March 10th - China's retaliatory tariffs on certain US agricultural imports (15% on US chicken, wheat, corn, and cotton; 10% on US soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables, and dairy products) went into effect; announced on March 4th in response to the extra 10% US tariff on top of Feb 4th tariffs.
March 11th - Trump threatened 50% tariffs on Canada, although he later backed down from this threat after Ontario's Premier announced they are suspending the 25% surcharge on exports of electricity. Trump separately suggested tariffs may go higher than 25% but did not specify which tariffs.
March 12th - 25% tariff on steel and aluminium imports came into effect, with "no exceptions or exemptions"; European Commission launched countermeasures on US imports while it is putting forward a package of new countermeasures.
April 1st - Completion of the US trade policy review.
April 2nd - US Liberation Day; 1) Auto tariffs "in the neighbourhood of 25%" comes into effect, 2) US tariffs on "external" agricultural products to go into effect, 3) Temporary tariff relief for Canada and Mexico expires. 4) Reciprocal tariffs kick in - details to be unveiled on the day; US President Trump to announce reciprocal tariffs at 16:00EDT/21:00BST.
April 3rd - Mexico President Sheinbaum says response to US tariffs will be on April 3rd.
April 5th - Deadline for TikTok deal.
April 13th - EU countermeasures against 25% steel and aluminium tariff to be fully in place.
TBC - pharma and semiconductors tariffs.