Nick Goold
What Is Liberation Day?
April 2, 2025, is being called “Liberation Day” by President Donald Trump. That’s the day the U.S. is set to start a major round of new tariffs — extra taxes on imports from other countries. These tariffs are meant to match what other countries charge American goods. Trump says this will help bring back U.S. manufacturing, protect jobs, and fix unfair trade deals. A press conference is planned for 4 p.m. Eastern Time in the U.S. to officially announce the new tariffs.
Supporters see this as a bold move to protect the American economy. Critics see it as a risky bet that could backfire and lead to a global trade war.
Why Tariffs — and Why Now?
Trump believes the U.S. has been treated unfairly in global trade for decades. Countries like China, Mexico, Japan, Germany, and Canada sell more to the U.S. than they buy. These trade gaps — or surpluses — make them likely targets.
Tariffs will hit major industries like cars, tech, medicine, lumber, and copper. Analysts expect average tariffs between 9% and 15%, but there’s concern that much higher rates could be used to pressure countries into making deals.
The impacts are already starting to be felt — one example is the 25% tariff on imported cars, which has hit Japanese stocks hard and caused the Nikkei 225 index to fall sharply.
What Could Tariffs Do to the U.S. Economy?
Most economists say: nothing good in the short term.
Tariffs make imported goods more expensive, and those costs usually get passed on to consumers. That means higher prices for cars, food, housing materials, electronics, and more.
Companies may earn less, hire less, and delay expansion plans. Growth could slow down. Trump says businesses will start building more in the U.S. to avoid tariffs, but that process could take years.
Global Retaliation Is a Real Risk
Countries that are hit with U.S. tariffs are already planning to strike back. The EU, China, Canada, and others are working on their own tariffs in response.
Trade wars rarely stay one-sided — once they start, they often get worse. That can create more tension in global markets and shake investor confidence.
What About the Markets?
U.S. Stocks
U.S. equities have already fallen this year due to growing fears of a trade war. But it’s important to remember that markets are still well above where they were just a few years ago. If Trump delivers a surprise — such as harsher or broader tariffs — there’s still plenty of room for deeper losses.
So far, the damage has been contained. Economists are warning about long-term risks, but if the tariffs end up being softer than expected, stocks could rebound quickly.
Japanese Stocks
The Nikkei 225 has doubled over the past five years, but it’s now showing signs of weakness. Strong resistance near 40,000 has held this year, and Japan is especially vulnerable if targeted directly by new U.S. tariffs.
The weak yen has helped support the Nikkei, but if that trend reverses, losses could deepen — especially after the 4% drop on Monday, March 31. Japanese car and tech companies depend heavily on exports to the U.S., making them highly sensitive to any trade action.
Currencies (FX)
One of the biggest questions is what happens to USD/JPY. Now that the pair has dropped back below 150, it looks increasingly vulnerable. The yen is gaining strength as traders look for safety, and 2025 has already shown a strong downtrend in USD/JPY.
The broader U.S. dollar outlook is complex. Tariffs could push inflation higher, making it harder for the Federal Reserve to cut interest rates — a factor that normally supports the dollar. But with recent economic data coming in weaker than expected, markets now expect three rate cuts this year, which could put downward pressure on the dollar in the months ahead.
Gold
Gold thrives on uncertainty — and we’ve seen that in the recent rally. While some profit-taking could happen after such a big move, the bigger trend still looks solid. As long as markets remain uneasy, gold is likely to keep climbing in the medium term.
Bitcoin
Bitcoin has been trading sideways recently, but it’s still much higher than when Trump returned to office. If global markets take a hit and risk assets sell off, Bitcoin could break below $80,000 and fall sharply. While some investors see it as a hedge, Bitcoin often moves with other high-risk assets, especially during panic selling.
Liberation Day or D-Day?
Markets are nervous — and for good reason. A trade war could slow the global economy and hurt business confidence everywhere. But there’s another side to this: Trump is a dealmaker, and tariffs are a tool to bring countries to the table. He’s already changed or delayed tariffs for certain industries and countries this year. That could happen again.
The uncertainty has already hit market sentiment. So when the tariffs are officially announced, we might see a short-term relief bounce in stocks and the U.S. dollar — just because the waiting is over. But don’t get too comfortable. Trump has hinted at more tariffs coming, and markets know that tariffs can be added or removed at any time.
Tips for Traders
Expect Big Moves
Even though the market has been bracing for this, there could still be sharp moves right after the tariffs are confirmed — especially if details are different than expected. Markets react not just to the news, but to the tone and wording. A small surprise could trigger a big move, especially in already volatile sectors.
Plan Ahead
Decide what you’ll do before the market opens — not while it’s moving. What if the market jumps on short-term relief? What if it drops on more bad news? Write down your strategy, so you're not making emotional choices in the heat of the moment. This is especially important if headlines change rapidly, as they likely will.
Stay Flexible
With Trump’s track record, things can change overnight. A country might be hit with tariffs one day and get an exemption the next. Don’t lock yourself into one opinion or bias. Be ready to pivot — up or down — based on new developments. Reacting quickly and calmly is more useful than trying to predict every twist.
Don’t Get Caught in the Noise
Not every headline means something. There will be rumors, statements, walk-backs, and spin. Try to focus on the actual policies being implemented, not just the political drama. Watch market reactions, not just news alerts — price action often tells the real story.
Survival Comes First
Your main job is to stay in the game. That means avoiding big losses and managing risk day by day. Volatile markets can offer great opportunities, but only if you're still around to take them. Sometimes the best trade is doing nothing until the setup is clear.
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