Squawk on the Street SOTS 2nd Hour: Trump’s Tariff Sell-off: Key Laggards & How To Trade it – Plus: Former Treasury Sec. Steven Mnuchin 4/3/25
Apr 3, 2025
Steven Mnuchin, the former U.S. Treasury Secretary and founder of Liberty Strategic Capital, joins the discussion amid a tumultuous market fallout from President Trump’s tariffs. He shares insights on the economic implications of these high tariffs, particularly affecting trade with China and the EU. The group examines the erasure of nearly a trillion dollars in market value, critiques the simplistic tariff calculations, and discusses crucial sectors like retail and auto facing significant challenges. They also touch on trade negotiations and the complexities surrounding TikTok's ownership.
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Tariff Calculation Formula
- The administration calculated tariffs using a flawed formula.
- They divided the trade deficit by imports, assuming balanced trade without "cheating."
Policy Credibility Concerns
- Deutsche Bank worries about the administration's lowered policy credibility.
- The market may question the planning process for major economic decisions like this trade policy shift.
Investment Barriers
- Companies need investment incentives to manufacture in the US.
- Increased supply chain costs and policy uncertainty discourage US investments.