April 2, which President Donald Trump has repeatedly called “Liberation Day,” is expected to mark the introduction of significant reciprocal tariffs on multiple countries.
According to Barclays (LON:BARC), the administration will act swiftly, imposing tariffs on 15-25 nations under either Section 338 of the Tariff Act of 1930 or the International Emergency Economic Powers Act (IEEPA).
“We think President Trump will likely implement ’reciprocal’ tariffs on a group of 15-25 countries, taking effect almost immediately,” Barclays said.
The bank explained that the Section 338 law grants the president the ability to impose tariffs of up to 50% on nations deemed to discriminate against U.S. commerce.
They noted: “Section 338 has never been used to impose tariffs on another country.”
Instead, it has historically served as a negotiating tool, making its potential use a legal first.
However, Barclays suggested the Trump administration might feel emboldened given the lack of legal challenges to previous tariff actions under IEEPA.
The tariffs are expected to target countries with the largest trade deficits with the U.S. and those maintaining high tariffs or non-tariff trade barriers.
Among the potential targets are China, the European Union, India, Canada, and Japan.
“We expect the countries with the largest trade deficits in goods with the U.S. and with the highest tariffs and non-tariff trade barriers could potentially be the target of the reciprocal tariffs,” Barclays said.
Despite recent diplomatic efforts from countries like the UK and India to avoid inclusion, Barclays believes the real negotiations will start after April 2.
“Markets should read flexibility as uncertainty,” Barclays warned, suggesting an extended period of trade tensions could follow.
