By Saqib Iqbal Ahmed
NEW YORK (Reuters) – Global investors are close to getting some clarity on the Trump administration’s tariff plans on Wednesday, but with little detail on what to expect, financial markets remain on edge.
U.S. President Donald Trump has for weeks pegged April 2 as “Liberation Day”, when he plans to impose an array of new tariffs that could upend the global trade system.
Tariffs could have big implications for corporate earnings, global growth, inflation and Federal Reserve interest rate policy.
Investors had kicked off the year with high hopes for pro-growth policies from the Trump administration but have been spooked by a barrage of tariff-related headlines.
While investors broadly agree that Wednesday’s long-awaited announcement could be pivotal for the near-term outlook for global financial markets, they are unsure about which way prices will swing and what will come next as negotiations could be protracted.
“I can’t recall a situation where the stakes were this high and yet the outcome was so unpredictable,” said Steve Sosnick, chief strategist at Interactive Brokers. “The devil is going to be in the details and nobody knows the details.”
Safe-haven gold held near record highs and European shares fell on Wednesday, with the STOXX 600 benchmark down 0.9% as of 11:50 GMT. Futures on the S&P and Nasdaq and were down about 0.6% to 0.8%.
In Asia, Japan’s blue-chip Nikkei stock index to its lowest since September.
The White House said on Tuesday that Trump will impose new tariffs on Wednesday, without providing details about the size and scope of trade barriers that have businesses, consumers and investors fretting about an intensifying global trade war.
White House spokesperson Karoline Leavitt said reciprocal tariffs on countries that impose duties on U.S. goods would take effect once Trump announces them, while a 25% tariff on auto imports will take effect on April 3.
Lack of clarity on whether there will be one flat tariff rate for all imports or whether the administration takes a more fragmented approach has made modeling the ultimate impact of the tariffs on earnings, growth and inflation a daunting challenge.
“Ideally, we just get one number and then we can figure out the downstream impact,” said Sonu Varghese, global macro strategist at Carson Group.
“But my fear is that we won’t get that, or even if we get one number that will be subject to negotiations,” he said.
Wednesday’s announcement feels particularly crucial after the S&P 500 confirmed a correction, a drop of 10% from a recent high, in mid-March. The index was last down about 8% from its February record high.
