Donald Trump’s policy on tariffs is one that markets care about the most. This is due to its potential impact on equities through prices and bonds through currencies. However, with the president-elect having made many inconsistent statements on the topic, investors are left to speculate what his actual stance will be.
Trump has assembled a team of advisors who all seem to love tariffs and want to use them as leverage. These advisors include Peter Navarro, Jamieson Greer, Kevin Hassett, Jamieson Greer’s former deputy, and Robert Lighthizer’s former deputy. While they may have some differences in their approach, they are all united in their desire to negotiate with countries.
Jamieson Greer is particularly focused on China and has criticized Beijing’s trade practices. Peter Navarro also supports using reciprocal tariffs as a tactic. Kevin Hassett has been more clear that tariffs should go up all at once, but has since suggested there could be a total cap on how high tariffs would go.
In contrast to some of his advisors, Trump is not opposed to blanket tariffs applied at the same level to all countries and products at the same rate. In fact, he sometimes sounds like he wants this approach.
The market seems to think that the advisers will have an influence on Trump, who is more of a “sledgehammer” type. While they generally endorse fiddly policies, it remains to be seen how they will shape Trump’s tariff strategy.
Source: https://www.ft.com/content/9dbfc276-8cbb-4d67-ae42-cc149860d2cc