WASHINGTON (TNND) — An asset management firm’s chief economist suggested the possibility this past weekend the Trump administration outsmarted the public with its tariffs.
Torsten Slok, chief economist and partner at Apollo Global Management, wrote in a blog post that one of the administration’s possible trade strategies could increase U.S. tax revenue while pleasing the country’s trading partners.
The administration, Slok explained, might try to impose a 30% tariff on China and a 10% duty on all other countries. President Donald Trump could then give every country a year to lower “non-tariff barriers” and open their economies to trade, the economist said.
Slok noted a one-year deadline would give countries and American businesses time to adjust to the “new world” of permanently higher tariffs and result in an immediate shrinkage of uncertainty in the economy. Stability would be positive for financial markets, employment and business planning, according to the economist.
“This would seem like a victory for the world and yet would produce $400 billion of annual revenue for US taxpayers. Trade partners will be happy with only 10% tariffs and US tax revenue will go up,” Slok wrote. “Maybe the administration has outsmarted all of us.”
Trump has said U.S. tariffs imposed on countries across the world have rebalanced trade. Nations have harmed the U.S. with both tariff and non-tariff “barriers,” he says, and should negotiate trade deals to reach a fair agreement.
On April 2, which the president named “Liberation Day,” he imposed what he called reciprocal tariffs that would earn trillions of dollars for the U.S.
“We are finally going to be able to make America great again, greater than ever before. Jobs and factories will come roaring back into our country, and you see it happening already,” Trump claimed. “We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers, and ultimately more production at home will mean stronger competition and lower prices for consumers.”
China has since imposed what it called reciprocal tariffs on the U.S. in response to Trump’s actions, and President Xi Jinping said last month that countries can protect “global peace and stability” and promote “global development and prosperity” only through cooperation and unity, according to the Chinese government’s transcript of his remarks.
“There are no winners in tariff wars or trade wars. Bullying or hegemonism only leads to self-isolation,” the transcript quoted Jinping as saying.
Have questions, concerns or tips? Send them to Ray at rjlewis@sbgtv.com.
