The Compound and Friends Former Trump Trade Official Steve Pavlick on Tariffs, Negative Wealth Shock, Pulled Earnings Guidance
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Apr 9, 2025 
Steve Pavlick, Principal at Mindset and former Trump trade official, joins to shed light on the intricacies of current tariffs and their impact on the stock market. He discusses the volatility faced by major companies like Apple amidst trade negotiations and the implications of financial policies. Pavlick critiques the disconnect between economic narratives and real challenges, highlighting concerns over recession and its effects on investor strategies. He provides listeners with a forward-looking perspective on navigating today’s turbulent economic landscape.
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Tariff Uncertainty
- Tariffs are causing uncertainty for trading partners, making it difficult to predict whether they'll negotiate or retaliate.
- This uncertainty is fueled by the changing justifications for the tariffs, hindering business decisions and potentially increasing recession odds.
Market Reactions Weaken US Position
- The falling Dow weakens the US negotiating position, contrary to some beliefs.
- The 10-year Treasury yield's rise indicates a loss of confidence or margin calls, not the intended effect.
Trump's Perspective on Tariffs
- Trump may not be as bound by political pressures in his second term and might misinterpret his re-election as a mandate for tariffs.
- He views the US as having more leverage in bilateral negotiations due to its large consumer base.