Whatever Stocks Make of U.S. Liberation Day, Bonds May Go Higher

The markets are on tenterhooks as they await the arrival of so-called “Liberation Day”, the name that U.S. President Donald Trump has assigned to his announcement of what could be a sweeping regime of various trade barriers. “Could be,” because less than 24 hours before the plan’s arrival, its contours remain worryingly opaque.

Mr. Trump has touted “reciprocal tariffs” as the centerpiece of his logic, meaning that he would like to mirror U.S. trading partners’ policies back at them. The president has clarified that if trade barriers facing U.S. exporters are of the non-tariff variety, like punitive regulations or quotas, then his intention is to reply in kind.

How all of this might look in practice is maddeningly confusing. The Economist estimates that going tariff-for-tariff with individual trade partners would amount to 2.3 million new levy rates. Trying to offset countries’ effective average tariff rates on U.S. imports may simplify things in some ways but calculating them will be a thorny process.