How Trump Could Outmaneuver Economists: Insights from a Leading Expert on Tariffs

Businesses and consumers are feeling uncertain about President Trump’s tariffs and their future. But a prominent economist has a thought-provoking idea on how to keep these tariffs while still benefiting everyone.

In a recent note, Torsten Sløk, Chief Economist at Apollo Global Management, suggested a strategy that could ease fears about tariffs and stimulate the economy. He proposes maintaining a 30% tariff on China and a 10% tariff on other countries. This plan would give countries a full year to lower their own trade barriers. This approach aims to create a more open trading environment.

The timing of this idea is crucial. A 90-day pause on some of Trump’s tariffs will end soon. This pause was designed for the U.S. and its trade partners to negotiate new deals. However, so far, only a handful of agreements have been made, including a deal with the U.K. and a temporary arrangement with China.

Sløk believes that by extending the tariff deadline, businesses would have more time to adapt to the “new normal” of higher tariffs. This shift could lead to more stable business planning and help improve job growth. An estimated $400 billion in annual revenue for U.S. taxpayers could arise from this strategy, according to Sløk. He emphasized that this might seem like a win for everyone, including trade partners who would appreciate the reduced tariffs.

Interestingly, Sløk previously warned that Trump’s tariffs could hurt the economy and lead to a recession. His change in perspective shows a significant shift in thinking about the long-term effects of these tariffs.

Current discussions among Federal Reserve officials reflect a mix of views on how tariffs may affect inflation and interest rates. Fed Governor Christopher Waller suggests that economic data might allow for interest rate cuts soon, while others, like San Francisco Fed President Mary Daly, think it may be wiser to wait for a fall rate cut. This diverse opinion shows how complex the situation is.

Chris Harvey from Wells Fargo Securities believes that if tariffs stabilize in a reasonable range (around 10% to 12%), they won’t significantly harm the economy. He recently predicted that the S&P 500 could reach 7,000, illustrating a generally optimistic outlook on the market’s future. However, he stressed the importance of making progress in trade agreements with major economies like India and Japan to build a more balanced market.

This conversation about tariffs and their implications is ongoing and ever-evolving. As businesses and politicians navigate this landscape, insights from experts could provide clarity and direction in these uncertain times.

For more insights on international trade and economic policies, refer to the [World Trade Organization](https://www.wto.org) for reliable data and updates.

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Donald Trump,Revenue,Tariffs and trade