President Trump shocked investors on what he labeled as "Liberation Day" with the announcement of significant tax increases on Americans, the largest since the 1940s. The unexpected unveiling of a broad set of import taxes on April 2 caught many off guard, as Trump had previously hinted at tariffs but had not implemented such drastic measures until now.

The tax announcements revealed two types of tariffs – a new "universal" tax on imports from all countries and "reciprocal" tariffs targeting nations with stricter import barriers on US products. This move would substantially raise average tariff rates, potentially to the highest levels seen since the 1940s.

For instance, Trump aimed to increase tariffs on Chinese imports from 3% to 34%, on Japanese imports from 1.6% to 24%, and on European products from around 2% to 20%. The universal 10% tariff was set to begin on April 5, while reciprocal tariffs were scheduled for April 9. These actions are within the president's authority, unlike changes to income taxes that require congressional approval.

The new tariffs introduced by Trump could result in a significant tax burden for American businesses and consumers. With the potential tariff rate increasing to around 29%, the tax bill on imports might surge to approximately $960 billion. This could translate to an $880 billion tax hike on products imported into the country.