UBS On-Air: Market Moves Top of the Morning: POTUS 47 - Has the worst of the tariff threat passed?
Jun 8, 2025
Kurt Reiman, Head of Fixed Income Americas at UBS, dives into the shifting landscape of U.S. trade policy and its market implications. He discusses recent tariff developments and their effects on investor sentiment, particularly regarding U.S.-China negotiations. Kurt also highlights the urgent need for Congress to address rising budget deficits and the potential economic instability ahead. As political motivations loom with midterms approaching, he explores how these dynamics could shape fiscal policy and influence voter sentiment.
AI Snips
Chapters
Transcript
Episode notes
Tariff Legal Challenges Rising
- The Court of International Trade ruled against the use of the International Emergency Economic Powers Act (IEPA) for tariffs.
- The Supreme Court will likely uphold this, requiring tariffs to be rebuilt under new authorities.
Market Reacts to Tariff Calm
- Market positivity reflects de-escalation of tariff tensions, especially with China.
- Effective tariff rates are expected to stabilize around 15%, six times higher than start of year.
US Fiscal Outlook and Tariffs
- The US will sustain high deficits over the next decade due to tax cuts and spending.
- Tariff revenue partly offsets deficits but also creates economic trade-offs.