Tariffs Are Coming
Author: Greg Valliere
November 20, 2024
WISHFUL THINKING: There seems to be a bad case of denial over what’s about to come from Donald Trump. He’s determined to impose tariffs, deport illegal immigrants, and crack down on U.S. trading partners. He’s deadly serious.
WE REFER TO AN ARTICLE THIS MORNING in the Wall Street Journal that describes stockpiling by U.S. firms that are facing major new tariffs.
ANOTHER ARTICLE, IN MSN THIS MORNING, quotes a Wall Street veteran who worries about looming inflation.
Donald Trump’s proposed tariffs will throw the U.S. economy into chaos by 2026, Morgan Stanley’s chief global economist, Seth Carpenter, says. These tariffs are a “surefire way to drive up inflation and tank growth.”
THE PLAN is to slap a 10% to 20% tariff on all imports and hike up to 100% on goods coming in from China. Trump says it’s all about “extracting funds” from other countries. Trump says the tariffs will pay for tax cuts.
CARPENTER PREDICTS a “big negative shock” if these tariffs hit all at once. Speaking at Morgan Stanley’s Asia Pacific Summit, he warned that even a gradual rollout would choke the economy over time.
“Tariffs are a drag on growth for the U.S., not just the countries targeted, Carpenter says. He thinks 2025 will see the start of the fallout, but by 2026, the damage will be impossible to reverse, he says.
IF TRUMP ADDS HIS TARIFFS to the ones Joe Biden already has in place, the U.S. economy will be hit on multiple fronts. Industries like cars, consumer electronics, machinery, construction, and retail will see prices surge.
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