The Compound: Former Trump Trade Official on What’s Really Happening

Markets have now had over a week to digest President Trump’s tariff plans. It’s clear that Wall Street is highly uncertain, as evidenced by declining markets, wild swings, and high volatility.

However, as odd as it may seem, there is a plan out of Washington D.C. that suggests the tariff pain will prove short-lived. And once it’s over, better trade deals and tariff rates could expand, not reduce, global trade.

The latest tariff fears are simply a beefed-up version of the 2018 tariffs.

There’s a heavy emphasis on hitting hard against China. The country’s low-cost manufacturing has benefited Americans as consumers. But it has arguably also been the biggest beneficiary of America’s collapsing factory jobs.

The reciprocal tariffs ensure that all trading partners feel some pain. And that they can and should propose better trade deals. That could include a flat tariff rate between countries. Or it could mean a removal of trade barriers.

That’s in contrast to the current system. The U.S. has low to no tariffs on imported goods while paying much higher tariffs on average for exports. The jump in rates still leaves the U.S. charging less than what other countries charge for American goods.

For now, the tariff situation is putting Washington policy in charge of the financial markets. Until that changes, economic uncertainty and wild market swings are likely.

To see the full interview, click here.