April Fool’s Day was on 1 April, but the next day, US President Trump unleashed Liberation Day, imposing tariff rates of 10 per cent on UK, Australia and Singapore, 20 per cent on EU and 54 per cent on China. Market analysts called it obliteration day, since the US stock market fell 4 per cent the next day, wiping $9 trillion of global stock market capitalization in the next two working days. JPMorgan estimated that the tariff rate level was upped to roughly 22 per cent, higher than the infamous Smoot-Hawley tariffs that sparked the 1930s Great Recession. This is equivalent to a 2.4 per cent tax increase on Americans, the largest hike since 1968, lifting the chances of recession this year from 40 to 60 per cent. How significant is Liberation Day on the global economy, the dollar and global markets? JPMorgan economists estimated that a 20 per cent increase in US tariffs, including retaliation from China and the Euro area may reduce US GDP by 2 percentage points and global GDP, including EU and China, by 1 percentage point.

That would put the US into recession territory, Europe to zero or negative growth, and Emerging Market and Developing Economies (EMDEs) to just over 3 per cent growth, the slowest for years except for the 2020 pandemic shock. Fast-growing economies like Bangladesh and Vietnam would be hit badly as tariff increases for them are at 37 and 46 per cent respectively. US Council of Economic Advisers Chairman, Stephen Miran, laid out three key tariff objectives on the future of global trade and dollar: a negotiating........

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