Exactly one year ago, President Donald Trump walked into the White House Rose Garden and announced the most sweeping tariff policy since the Great Depression — a moment his administration dubbed "Liberation Day." The announcement triggered the largest global market decline since the COVID-19 pandemic crash of 2020. Twelve months later, markets have recovered, but investors have fundamentally changed how they think about American assets.
What Happened on April 2, 2025
Trump imposed a 10% baseline tariff on all imports, along with higher "reciprocal tariffs" on dozens of countries: 34% on Chinese goods, 20% on EU products, 46% on Vietnam. Within days, China announced retaliatory tariffs of 34% and suspended imports from select American companies. Global stock markets entered freefall. The S&P 500 plunged as bond yields spiked in a scenario analysts called "bond vigilantism" — investors simultaneously selling US stocks, bonds, and the dollar.
On April 9, Trump paused the reciprocal tariffs for 90 days (except for China, whose minimum rate was raised to 145%), triggering a 9.52% single-day S&P 500 rally — its largest gain since 2008. By mid-May 2025, the index had turned positive for the year.
Where Things Stand Now
The picture today is more complex. The average effective US tariff rate, which hit an estimated 27% at its peak, has settled at 13.7% following trade deals with the EU, UK, India, and Switzerland, and a February 2026 Supreme Court ruling invalidating some tariffs. New Section 301 investigations against a dozen trading partners, including China and Japan, have been launched, meaning further tariff escalation remains possible.
For companies, the impacts have been uneven. General Motors says its net tariff burden in 2026 will be lower than 2025's $3.1 billion hit. Procter & Gamble CFO called tariffs "a 5-point headwind to core EPS growth." Dollar Tree and Gap are managing inventory carefully. Toyota, Nissan, and Honda have all accelerated US manufacturing plans.