Investing.com - Investors gazes are becoming increasingly fixed on an approaching April 2 deadline for the imposition of the Trump administration's sweeping new tariffs.
Reciprocal levies could apply to every country in the world that day, while a separate measure may target industries spanning semiconductors, autos and pharmaceuticals.
Earlier this month, the White House has moved to reinforce expectations that it will enact the duties on April 2, although Treasury Secretary Scott Bessent has appeared to suggest that countries may still be able to negotiate a deal to avert the trade taxes.
The reciprocal tariffs would come after Trump allowed 25% tariffs on steel and aluminum imports into the U.S. to go into effect, sparking promised retaliations from the EU and Canada.
The EU, in particular, has proposed two-pronged countermeasures on 26 billion euros worth of goods. Last week, the bloc delayed the first tranche of these tariffs, which were due to especially impact American whiskey, in a bid to buy more time for discussions with Trump administration officials.
In a note to clients on Thursday, analysts at Raymond (NSE:RYMD) James said they are "skeptical that all" of Trump's planned tariffs come into force on April 2.
"We have consistently highlighted the legal/logistical challenges associated with imposing all the tariffs on April 2, and our recent conversations with expert contacts further support this outlook," the analysts wrote.
Instead, they expect the reciprocal tariffs will likely be confined to a limited group of countries -- "likely [...] China, the EU, Mexico, Vietnam, Ireland, Germany, Taiwan, Japan, South Korea, Canada, India, Thailand, Italy, Switzerland, and Malaysia."
The sector-specific duties, meanwhile, are not anticipated to go into effect on April 2, the analysts said, adding that Trump may rather initiate trade investigations into goods relevant to these industries.
"The driver of the uncertainty around the April 2 announcements is internal debates inside the Trump administration and the reality that the final decision rests with President Trump -- who can change his decision at any time. The legality of different approaches, which will impact the timing and scope of tariffs, is also part of the internal debate," the analysts noted.
Murky outlook ahead
Trump's levies, which have been accompanied by threats of escalation or last-minute delays, have fueled murkiness in the broader economic outlook, with economists flagging the potential for a refueling in inflationary pressures that could weigh on growth.
These fears contributed to stock market declines that have briefly pulled the benchmark S&P 500 down into correction territory -- generally defined as a 10% or more fall from a recent peak.
Stocks have shown signs of stablizing in recent days thanks to bargain-hunting investors, although worries around the impact of Trump's tariff plans will likely cap any bounce, according to analysts at Barclays (LON:BARC).
"With Trump dubbing the April 2 deadline as a 'liberation day', it is hard to ignore the downside risks, especially if a worst case scenario of 25% blanket tariffs materializes," the brokerage wrote in a note on Friday.