Businesses and consumers stay in trouble with what will happen next for President Donald Trump’s tariffs, but one top economist has seen a way to keep them in place and still bring “world victory.”
exist Please note Saturday Torsten Sløk, chief economist at Apollo Global Management, titled “Did Trump surpass all tariffs?”, laying out a scenario that puts tariffs far below Trump’s most aggressive tax rates, enough to alleviate uncertainty and avoid the ensuing economic damage.
“Perhaps the strategy is to maintain 30% tariffs in China and impose 10% tariffs in all other countries, then provide all countries with 12 months of reducing non-tariff barriers and opening up their trade economies,” he speculated.
This is because Trump’s 90-day pause in “reciprocity tariffs” triggered a massive sell-off in global markets in early April, which is about to end early next month.
The temporary probation is intended to give the United States and its trading partners time to negotiate a deal. However, there are no other high tariffs announced except for an agreement with the UK and another short-term agreement with China.
Meanwhile, negotiations are held with other top trading partners. Trump administration officials have said in a few weeks that the U.S. is about to reach a deal.
Sløk said on Saturday that the one-year extension of the deadline would give other countries and U.S. businesses more time to adapt to the “new world of permanent tariffs.” The expansion will also immediately reduce uncertainty, thereby facilitating business planning, employment and financial markets.
“It seems like a victory for the world, but it will bring $400 billion in annual revenue for U.S. taxpayers,” he added. “Trading partners can only be satisfied with 10% tariffs, and U.S. tax revenue will increase. Perhaps the government has brought us all over us.”
Sloke’s speculation is noteworthy because he previously alerted Trump’s tariffs. He warned in April that tariffs could trigger a The recession this summer.
Also in April, he said the trade war between the two countries before the U.S. and China reached a deal to temporarily halt triple-digit tariffs Pummel US Small Business.
More certainty about tariffs will give the Fed a clearer view of inflation as well. Currently, most policy makers are in a waiting mode because tariffs are expected to have a stagnant effect. But there was a split.
Federal Reserve Gov. Christopher Waller said Friday that economic data could justify Reduce interest rates Back in the next month, tariffs are expected to have only one-time impact. But San Francisco Fed President Mary Daly also said Friday Reduce the rate in autumn It looks more appropriate than the July cut.
Still, Sloke is not alone in wondering if Trump’s tariffs are less harmful to the economy and financial markets than to worry.
Chris Harvey, Wells Fargo Securities’ equity strategy manager, Tariffs are expected to reach the range of 10%-12%.low enough to have minimal impact and see the S&P 500 soar to 7,007, making him The biggest bull on Wall Street.
He added that trade progress remains necessary and agreements with large economies such as India, Japan and the EU. In this way, the market can focus on next year, rather than the impact of near-term tariffs.
“Then you can start to infer,” He told CNBC last month. “Then the market starts browsing things. They start browsing any kind of slowdown or weakness, and then we start looking for 25-year-olds who are 26.”
