Monetary Matters with Jack Farley

Tariffs Aren’t Going Away | PIMCO’s Policy Head Libby Cantrill on Trade and Tax Environment In New U.S. Administration

Apr 23, 2025

Libby Cantrill, Managing Director and Head of Public Policy at PIMCO, shares her insights on the complexities of U.S. trade and tax policy. She predicts that while some tariffs may decrease, the 10% tariff will remain a baseline, especially regarding China. Cantrill discusses the challenges of trade negotiations, the risks of stagflation on the economy, and the interplay between tariffs and tax policies. She also touches on the legal implications of President Trump's use of tariff powers, emphasizing the ongoing significance of these trade dynamics.

55:18

Episode guests

Libby Cantrill

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Episode notes

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Quick takeaways

Libby Cantrill emphasizes that while U.S. tariffs on most countries are prominent, those on China are notably severe and likely to stay high.

The podcast discusses how the Trump administration's tariff strategy is intended to negotiate concessions from trading partners, influencing agricultural trade dynamics.

Concerns over inflation and economic growth arise from high tariffs, indicating a delicate balance for domestic markets and investment strategies.

Deep dives

The Persistence of Tariffs

The current tariff landscape is marked by a significant divide, with a 10% tariff applied to most countries and a staggering 145% tariff on China. This reflects a consistent belief by the Trump administration in tariffs as a tool to balance trade, a stance the president has maintained for decades. Historical context reveals that President Trump has viewed tariffs not only as a means to negotiate concessions but as a necessary instrument to address what he perceives as unfair trading practices. The expectation is that these high tariffs will persist into the foreseeable future, with limited flexibility from the administration around rolling them back.

Intro

5min

tariff Dynamics and Trade Negotiations

23min

Navigating Economic Challenges and Political Tensions at the Federal Reserve

4min

The Tariff Tangle: Trump's IEEPA Approach

12min

Economic Policy Interplay: Tariffs, Taxes, and Regulation

6min

Navigating Bond Market Dynamics in Changing Fiscal Policies

4min

Libby Cantrill, Managing Director and Head of Public Policy at PIMCO, joins Monetary Matters to explain her outlook on U.S. trade and tax policy. Cantrill argues that while Trump administration has flexibility in tariff negotiations and that the China tariffs are likely headed much lower (a prediction that already looks like it will come true), tariffs are not going away anytime soon and she views the 10% tariffs on the world as a floor, with reciprocal tariffs on top of that floor especially on China being elevated. Cantrill also shares her views on sectoral tariffs, the rumored “Mar-a-Lago Accord” (she doesn’t think it has traction), and tax cuts. Recorded the afternoon of April 22, 2025.

Follow Libby Cantrill on LinkedIn https://www.linkedin.com/in/libby-cantrill-cfa-17162513b/

Most recent piece, “Overall U.S. Tariff Level Still High Despite Exemptions”:

https://www.pimco.com/us/en/insights/overall-us-tariff-level-still-high-despite-exemptions

Cantrill’s profile on PIMCO: https://www.pimco.com/us/en/experts/libby-cantrill

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