‘Liberation Day:’ What The Trump Tariffs Are About?

 

April 2, 2025, another day, another flurry of activity coming from the Oval Office. Yet, it wasn’t like any other day. After signing yet another Executive Order, US President Donald Trump declared it ‘Liberation Day.’ On paper, he had ordered ten per cent tariffs across the board on countries worldwide, friend and foe alike. In reality, he is shaking up the world's economic and political order, deliberately.

Initially, there was great consternation around the world. The stock market and, more worryingly, the bond market dived. Dozens of nations queued up to negotiate a bilateral trade agreement with the American administration. Then, Trump announced a 90-day freeze on tariffs for those countries that had reached out to the Americans. Both stock and bond markets recovered; a correction came to what was overvalued, and life calmed down for the moment.

While critics derisively called the ‘tariff freeze’ a ‘backflip,’ it was actually part of the plan all along. Liberation Day spawned the response of seventy-five countries coming to the negotiating table. The one country that furiously balked at Trump’s tariffs was China, and it was slapped with 145% tariffs.

We need to understand the times so we can know what to do (1 Chronicles 12:32). What is happening and why it is paramount. We will take a look at tariffs, why Trump called it liberation day, the role of China, and how America’s actions affect the world.

Background

Tariffs are a surcharge or tax on countries when they import their commodities into another country; it’s the price they pay for the privilege of accessing a foreign market. Tariffs are meant to protect local farms, jobs, industries and businesses from too much foreign competition.

Amazing as it sounds now, from 1776 to 1913, the American federal government did not charge personal income tax on its citizens. It was considered the enslavement of an otherwise free people. The Supreme Court considered the income tax unconstitutional.

Then, how did the national government fund itself? By tariffs and land sales in the ‘Wild West.’ Only during the American Civil War was income tax charged on a short-term emergency basis to pay for military expenses. After the war, the tax was dropped. 

So, how did the Americans end up having a national income administered by a behemoth called the IRS (the Internal Revenue Service)? U.S. presidents like Teddy Roosevelt and William Howard Taft subscribed to progressivism, which believes that to handle future challenges, you need to have a big government with bureaucrats, technocrats, and ‘experts.’ How do you pay for this? By personal income tax. How did they get around the US Constitution? Congress passed the Sixteenth Amendment (ratified in 1913) to allow it to tax Americans without apportioning the states on the basis of population. The American people at the time approved this amendment since it only taxed the top 1% of Americans, who were levied a tax of 1% of their income. How this seemingly harmless move has morphed into a crushing tax burden today, led by a massive bureaucracy, on top of county and state taxes, too, is an epic story in itself.

In 1944, near the end of the Second World War, the Bretton Woods Agreement came into effect. It created an international system of monetary management and laid out the rules for business between the 44 nations that were a part of this meeting. 

The legacy of Bretton Woods was that all foreign currencies would be pegged to the US dollar, which was backed by gold. It also created the International Monetary Fund (IMF) and the World Bank. The goal was to promote international economic growth while avoiding a shock devaluation of national currencies due to strong competition. When US President Richard Nixon took the American dollar off the gold standard in 1971, that effectively ended Bretton Woods, however, the work of the IMF and World Bank continues to this day. The legacy of Bretton Woods has been called the liberal world order.

While there is a Western element to this political and economic order, there is another major factor: China. Though run by the communist party to this day, China went through market economic reforms under the guidance of paramount leader Deng Xiaoping (1904-1997), who was at the helm from 1978 to 1989. Though he was a card-carrying communist, he opened up to capitalism without saying so. His maxim: It doesn’t matter whether the cat is white or black, as long as it catches the mouse. China’s economy grew, and it started to have a middle class and a fabulously wealthy upper class. 

The West saw an opportunity to steer China into political liberalisation through economic liberalisation; they facilitated its admission into the World Trade Organisation. They also targeted the Chinese market with over a billion potential customers. The nation became richer, but money was spent on its military, missiles, drones, and carriers. Why this arms race and militarisation? Against whom? In addition, there were complaints about currency manipulation, stealing intellectual property, not playing by the WTO rules, protectionism and mercantilism. One commentator said free trade (cheap goods) is fine among nations that share values, but where that’s not the case, it can be a disaster.

China resisted the Trump tariffs and imposed some of its own. The President then imposed a new tariff percentage: the previously mentioned 145%. As of this writing, China is defiant, but behind the scenes, it is quietly negotiating with the Trump Administration and may have come to a (semi) permanent agreement.

Donald Trump

Then there is the man, Donald Trump. What is he doing? While his critics say he is an unpredictable madman, he is actually very is very focused and consistent. Like Ronald Reagan, who had been a single-minded anti-Communist crusader for almost forty years before becoming US President, for at least thirty years, Trump has been complaining about unfair trade practices, the exporting of American jobs, the gutting of America’s manufacturing sector, and its increasing subservience to globalist goals.

While there is no space to elaborate on Trump’s complaints, two authors from Frontpage Magazine give a good summary in their article titles. Joseph Klein (May 6, 2025) speaks of ‘Trump Takes on a Globalist Trading System Rigged Against the U.S. Other nations use non-tariff trade barriers as weapons to choke off American exports.’ Robert Spencer (May 6, 2025) writes: ‘ Tariffs Bring Prosperity, Not Disaster. Trump is right, and his critics are wrong — again.’

As the author of the best-selling book, The Art of the Deal, Trump believes in making deals. Like a Middle Eastern bizarre, he starts tough, gets a response, then settles down to negotiate from a more moderate position in deal-making. 

And what are his goals? Why did he call the 2nd of April ‘Liberation Day?

1. Liberation Day, from his perspective, was the beginning of the end of unfair trade practices for the United States - instead of conducting trade through a global organisation, it was doing bilateral trade agreements directly between sovereign states.

1. Liberation Day means, in the words of US Treasury Secretary Scott Bessent, to put focus from Wall Street to Main Street, the forgotten middle class, by driving investment, providing jobs, the fostering of fair trade practices, permanent tax cuts and put the ‘American Dream’ within reach of anyone prepared to work hard and play by the rules.

1. Like in the early years of American history, tariffs can be used to funnel more money into the US government while offering tax relief to hardworking Americans. The end-game ideal is to either eliminate personal income taxes or, at a minimum, reduce them

In short, Trump sees his tariffs as a protection of American jobs, industries, and ultimately, sovereignty.

Are there risks in this tariff campaign? Of course, and the stakes are high. Achieving anything worthwhile in life is a risky proposition. But ask yourself: Is the status quo good? Or is its abolition and replacement better? In Trump’s case, the stakes are very high: if he fails, his entire agenda - and legacy - are in peril. But if he succeeds, it would be a consequential, world-altering win. 

Watch this space.