"Tariff" is famously Donald Trump's favorite word, and the U.S. president's continued use of it unleashed fear across markets last year as his administration unilaterally imposed the most protectionist set of trade policies since the 1930s. But the bark was far worse than the bite. It's been just over a year since Trump's "Liberation Day," and the average U.S. tariff rate is lower than many feared in April 2025.
But at just under 10%, the daily effective pre-substitution rate is still four times its level at the end of 2024 and, excluding last year, the highest since the early 1940s. Yet tariffs barely register in financial markets today.
