A week before what President Donald Trump has heralded as a “liberation day” for the American economy, a precise scope of his administration’s anticipated April 2 wave of tariffs remains a mystery. As of this writing, the tariffs are shaping up to be more targeted than Trump’s earlier rhetoric would suggest, potentially impacting about 15% of countries that have persistent trade imbalances with the United States, including Canada, China, Germany, the European Union, Switzerland, South Korea, Japan, Mexico, and Vietnam. The Trump administration has considered grouping trading partners into three tiers of high, medium and low tariffs, but is now leaning toward giving each nation an individualized tariff rate that takes into account any existing levies on U.S. goods as well as value-added taxes charged within its borders.
A 25% tariff on fully assembled vehicles is coming into effect April 3, taxing cars from Mexico and Canada based on the amount of their non-U.S. content and adding parts like engines and transmissions by May 3. (The UAW welcomed the tariff but dealers expect it to raise the average price of a car by $3,000 to $10,000, hitting Volvo, VW, and Hyundai-Kia the hardest.) Additional sector-specific duties could be imposed in the near future.
So far, Trump is ruling out industry exemptions (ostensibly because he thinks too many were granted in his first administration), while allowing himself “flexibility” on other aspects of his reciprocal tariff plan. Importers are responding by becoming USMCA-certified or accelerating shipments to the U.S. — causing a significant increase in shipments of autos and components from the EU (by 22%) and Japan (by 14%) compared with a year ago.
At the same time, the president has said he might soften reciprocal tariffs for specific countries, and some, like Switzerland, India, and the UK, are reportedly lobbying for a reprieve. One country unlikely to get much of a break is China, which is a top target for Trump’s 25% “secondary tariff” on countries that buy oil from Venezuela, also due April 2. For China, this could mean a combined tariff rate of 45% on top of duties imposed by the two prior U.S. administrations, plus any additional levies that could arise from an investigation into its compliance with a 2020 “phase one” trade deal, the results of which are expected by April 1.
Barring major changes, Trump’s tariff plans are slated to impact a significant portion of U.S. imports, raising consumer prices and compounding economic uncertainty. But when it comes to his stated goal of expanding domestic manufacturing, Trump’s approach is having an impact: Since November 2024, companies like Apple, Nvidia, and Hyundai have pledged at least $1 trillion combined to build manufacturing facilities across the U.S. We are curious to see how the “liberation day” plays out in practice — and how its aftermath impacts already declining public approval of Trump’s economic policies.
Democratic Party leaders in Congress and state governments are grappling with an imperative to develop a coherent counterstrategy to President Trump’s brand of authoritarian populism and strengthen the party’s political standing ahead of the 2026 midterm elections. At 27% favorable, public perceptions of the party stand at an all-time low, with the decline driven largely by independents and historically left-leaning groups among which Trump made significant gains in 2024, including Black, Latino, younger voters and immigrants. Voters in competitive House districts are skeptical that congressional Democrats have the right priorities or are looking out for the working people. Rank-and-file Democrats show profound disillusionment with the party’s direction and tactics. A plurality, 45%, want it to become more ideologically moderate, and a majority, 57%, want Democratic leaders in Congress to do more to oppose the Trump agenda, even at a cost of advancing their own legislative priorities.
To be sure, partisan soul-searching is to be expected following an electoral defeat. Prominent Democrats like Gov. Gavin Newsom of California and Gov. JB Pritzker of Illinois are testing out contrasting visions for the party’s future direction — a shift to the right on economic and cultural issues to appeal to moderates and disenchanted Trump voters, or a doubling-down on progressive messaging to energize the Democratic base. Congressional Democrats in vulnerable seats are charting their own course on the economy and trade, supporting some of Trump’s tariffs and calling for a Democratic pro-tariff agenda to win back working-class voters. In a sign that their approach has merit, Democratic incumbents in battleground districts are more popular with their electorates than their Republican counterparts are with theirs.
Overall, voters are split on whether they want Democrats or Republicans in control of Congress (48% vs. 47%), indicating a competitive electoral landscape ahead of the midterms. In this environment, Democrats’ ability to offer a compelling alternative to Trump’s policies — perhaps by addressing cost of living concerns or proposing a muscular yet balanced approach to border security — will be crucial to winning back the voters they lost last year.
Clean energy tax credits created by the Inflation Reduction Act remain a point of contention as Republicans in the House and Senate work to put together a budget resolution to advance President Trump’s policy agenda. Among House Republicans, there is a mounting push to preserve some of the incentives, including 45X (advanced manufacturing of clean energy components), 45Y (clean electricity production), 45Q (carbon sequestration), and 45Z (clean transportation fuels). Lawmakers argue that the tax breaks are critical to boosting manufacturing and energy production in their districts, meeting the growing AI power demand, and achieving Trump’s goal of “energy dominance.”
Their claims are borne out by data, which suggests that a wholesale repeal of the IRA could cut short an emerging battery and EV manufacturing boom unfolding mostly in states that voted for Trump in 2024, cause job losses of nearly 790,000 in 2030, and reduce America’s GDP by more than $160 billion. On a separate note, rolling back IRA tax incentives for EV purchases (30D), which remain unpopular with Republicans, is projected to slow America’s EV transition, leading to a 40% decrease in new light-duty EVs sold by 2030, to a total of 4.2 million compared with 7 million projected under current policies.
At this time, a full IRA repeal appears unlikely. Speaker Mike Johnson, a Republican whose district is home to several IRA-funded clean energy projects, has characterized his IRA strategy as being “between a scalpel and a sledgehammer.” The number of House lawmakers voicing support for the tax breaks is far larger than the narrow Republican majority in the chamber. But it is unclear how many of them would be willing to defend the incentives against Trump’s push to dismantle the law and their leaders’ efforts to use its clean energy tax provisions, worth an estimated $870 billion in revenue, to fund a permanent extension to the 2017 Trump tax cuts. Compounding the uncertainty for companies dependent on the IRA funds for their growth, key staff reductions at the Treasury and Energy departments could create significant delays and inefficiencies in implementing those tax incentives that remain in place, potentially deterring investors from committing to new clean energy projects.
