I just watched the show and Lance is way off base on the tariffs. Trump was always going to pull back to negotiate, however he did it sooner than planned for 2 reasons: 1. the credit markets seizing up would have forced everybody else into a wait and see approach because none of the foreign governments would have been willing to go back to their constituents with a painful deal in the face of a global recession and 2. the break was happening in Treasuries which he needs intact in the short term to refinance all the short term debt Biden piled on. A 90-day pause will both allow the bulk of the deals to be made and allow the Treasury market to stabilize and lower the leverage risk removing both constraints.
As for tariff levels, 10% should be seen as the floor, not the ceiling as Lance proposed. Trump has been very open that he has big tax cut plans (no tax on tips, Social Security payments, and the talk about eliminating federal income taxes below $150K) that he is looking at tariffs to pay for. A 10% across the board tariff only produces $400B/yr, which both doesn't come close to paying for all of that and also assumes total imports don't decline. He'll need to raise tariffs, likely selectively on certain countries, to raise the revenue he'll need. Both China and Europe as a whole (except maybe Poland and a few other Eastern Euros) are definitely in the cross hairs. The Market is in denial and anger stages of grief around this. Wait until they realize what's to come and hit bargaining and depression. It's going to get nasty until acceptance, and the market's denial (as Lance is demonstrating) is the next structural event that risks a bear market.
I just watched the show and Lance is way off base on the tariffs. Trump was always going to pull back to negotiate, however he did it sooner than planned for 2 reasons: 1. the credit markets seizing up would have forced everybody else into a wait and see approach because none of the foreign governments would have been willing to go back to their constituents with a painful deal in the face of a global recession and 2. the break was happening in Treasuries which he needs intact in the short term to refinance all the short term debt Biden piled on. A 90-day pause will both allow the bulk of the deals to be made and allow the Treasury market to stabilize and lower the leverage risk removing both constraints.
As for tariff levels, 10% should be seen as the floor, not the ceiling as Lance proposed. Trump has been very open that he has big tax cut plans (no tax on tips, Social Security payments, and the talk about eliminating federal income taxes below $150K) that he is looking at tariffs to pay for. A 10% across the board tariff only produces $400B/yr, which both doesn't come close to paying for all of that and also assumes total imports don't decline. He'll need to raise tariffs, likely selectively on certain countries, to raise the revenue he'll need. Both China and Europe as a whole (except maybe Poland and a few other Eastern Euros) are definitely in the cross hairs. The Market is in denial and anger stages of grief around this. Wait until they realize what's to come and hit bargaining and depression. It's going to get nasty until acceptance, and the market's denial (as Lance is demonstrating) is the next structural event that risks a bear market.