• President Donald Trump’s trade policies typically evolve before being implemented, and wide-ranging reciprocal tariffs are expected to be no exception.
• Investors think that tariffs could be softer than previously expected, as the administration has worked to walk back some of the initial threats.
• However, Goldman Sachs economists said that the rate at which reciprocal tariffs are implemented could surprise the market.

The back and forth of trade policy has left investors and economy watchers unsure of what to expect on President Donald Trump’s Wednesday tariff deadline.

This week’s main event is the scheduled announcement of reciprocal tariffs, in which the U.S. will mirror import taxes on American-made goods. If the requested comments from the U.S. Trade Representative’s office are any indication, it would be the farthest-reaching policy implemented so far, affecting nearly 90% of U.S. imports. Initially, Trump said the broad import taxes would be tit-for-tat, but he has since walked back his threat.

It’s not the only tariff announcement expected on Wednesday. Changes to temporary exemptions given to Canada and Mexico and tariffs on countries that import Venezuelan oil could also be implemented. Keep up with all trade policy announcements on our tariff tracker here.

The on-again-off-again nature of Trump’s trade announcements has left investors, analysts, and economists unsure what to expect this week.

“All eyes will be on the upcoming April 2 Tariff Day, which represents the next significant event risk for investors,” wrote Dan Siluk, head of Global Short Duration & Liquidity and portfolio manager at Janus Henderson Friday. “Even then, it is anticipated that this will likely pose more questions than provide answers, adding another layer of uncertainty in an already complex economic environment.”

A survey from Deutsche Bank conducted in mid-March showed that 62% of investors still believe the tariffs Trump implements will be softer than his campaign pledges. Investors are “probably feeling that any short-term tariffs will get negotiated away in time,” the report found.

“Markets are not yet fully convinced of a game-changing trade regime,” wrote Jim Reid, head of Global Economics and Thematic Research at Deutsche Bank.

In a similar survey from Goldman Sachs, investors said they think reciprocal tariffs would result in an average tariff rate of 9.3%. The average tariff rate across all U.S. goods imports was 2.3% in 2023, Fitch Ratings found earlier this year.

Ahead of the deadline, 58% of investors reported cutting their risk exposure in anticipation of the tariff announcements, investors told Goldman.

However, Goldman Sachs economists in their own report warned investors not to get too comfortable. Because the tariffs are for negotiation purposes, the initial rates are likely to be high, potentially double what investors expect on average, they wrote.

“While it seems likely that reciprocal tariffs will cover the vast majority of imports, the rate likely to be imposed on trading partners is less clear. We believe the risks lean toward an initial tariff announcement that negatively surprises markets,” they wrote last week.