The USD is sharply lower vs the EURUSD, USDJPY and GBPUSD after the "Liberation Day" tariffs. As a review, below are the current new tariff view for the EU, JPY and GBP

European Union (EU):

• Baseline Tariff: A 10% tariff was imposed on all foreign imports

• Reciprocal Tariff:An additional 20% tariff was applied specifically to EU imports, bringing the total to 30%.

• Steel and Aluminum: A 25% tariff on steel and aluminum imports from the EU took effect on March 12, 2025. ​

Tariffs on Japanese Imports:

• Baseline Tariff: A universal 10% tariff on all imports was introduced, effective April 5, 2025.

• Reciprocal Tariff: An additional 24% tariff was imposed specifically on Japanese imports, bringing the total to 34%. This higher rate was scheduled to take effect on April 9, 2025.

• Automobile Imports:Separately, a 25% tariff on all automobile imports, including those from Japan, took effect on April 3, 2025.

United Kingdom (UK):

• Baseline Tariff: The UK faced the general 10% tariff on all imports.​

• Reciprocal Tariff:Unlike the EU, the UK was spared additional reciprocal tariffs due to strategic negotiations post-Brexit.

• Steel and Aluminum: Despite previous exemptions, a 25% tariff on UK steel and aluminum imports was imposed, effective March 12, 2025.

FYI, the top 10 trading partners with the US:

• Mexico: 14.5%​

• Canada: 13.5%​

• China: 10.7%​

• Switzerland: 5.3%​

• Germany: 4.1%​

• Japan: 3.9%​

• South Korea: 3.3%​

• Ireland: 3.1%​

• Taiwan: 3.0%​

• Vietnam: 2.9%

The market has reacted with a sharp fall in US stocks, lower yield and the lower dollar (which makes US exports cheaper abroad while making trading partners goods more expensive)

At the end of the day, what are the options?

• Trading partners can reduce trade barriers (tariffs, subsidies). Presumingly the US would not impose tariffs
• Trading partners can produce in the US and sell those products in the US. No tariffs on US produced goods. I wonder what happens if Toyota makes Rav4 in US, but Prius in Japan. What does the tariff structure do then?

Also, if the Prius (made in Japan) price goes up 25%, and I want a car similar from a domestic producer, will that price of the US built equivalent be 25% lower (or something like that), OR will the US producer raise the price to be "competitive" (on the topside) with the higher Prius price? Is there a comparison to the Prius?

Here's a direct comparison between the Toyota Prius and a close U.S. equivalent: the Ford Escape Hybrid. While not an exact match in size or shape (Prius is a hatchback, Escape is a compact SUV), they are both hybrids focused on fuel efficiency, affordability, and mainstream appeal.

Toyota Prius (2023)

• Type: Compact hatchback

• Fuel Economy:

  • FWD: 57 mpg city / 56 mpg highway

  • AWD: 53 mpg city / 54 mpg highway

• Horsepower: 194 hp (FWD), 196 hp (AWD)

• Price Range: $27,450 – $35,865

• Drive Options: FWD standard; AWD optional

• Key Strengths: Industry-leading fuel economy, iconic hybrid nameplate, sleek redesign, reliability

Ford Escape Hybrid (2023)

• Type: Compact SUV

• Fuel Economy:

  • FWD: 42 mpg city / 37 mpg highway

  • AWD: ~39 mpg combined (varies by trim)

• Horsepower: 192 hp (combined)

• Price Range: $29,495 – $40,955

• Drive Options: FWD standard; AWD optional

• Key Strengths: More space & utility (SUV format), good hybrid efficiency, American brand appeal, available plug-in version

✅ Summary:

• Fuel Economy Winner: Prius – by a wide margin

• Practicality/Space Winner: Escape Hybrid – SUV layout gives it more cargo and passenger flexibility

• American-Made Equivalent: Ford Escape Hybrid – similar mission, slightly different form factor

There’s currently no American hybrid sedan or hatchback that competes directly with the Prius in size and mileage. U.S. automakers have focused more on hybrid SUVs and trucks (like the Escape and Maverick), while Toyota has stayed dominant in the compact hybrid space.

So in Europe, will the US made cars translate to the demands of the consumer there given narrow streets, parking limitations, price of petrol/gas? The US car companies focus on SUVs and trucks which are not practical in Europe.

The calculus is full of many variables. This will take a long, long time to figure out. And that is something more than what was announced yesterday.

What may be most obvious is if imported goods are 25% higher, that means the price is 25% higher for consumers for that good. That is a burden on consumers if they want that good.

Anyway, in the video above, I outline the technicals that will now drive the major currencies as the US session begins and given the sharp moves.