Journalist: Is the story repeated? What is coming? Liberation Day II? Trump managed to pass his tax reduction package by Congress. And, far from staying, return to the load with the rise of tariffs. Again the same? Do you take the commercial crusade? And if so, do you do it with chances of succeeding?
Gordon Gekko: The story is repeated. This time clearly as Farsa.
Q.: The cards were seriously dispatched. And, unilaterally, the president imposes tariffs on 14 countries. To Japan and South Korea, 25%. In some cases it reaches 40%surcharge.
GG: The “Déjà Vu” is evident. It is like returning to the April Student, although at a lower tariff (and geographical) scale. And without the great banks of the ads, which the president exhibited in person, and that we will be recorded in the memory forever. In April, Trump was thoroughly. I was convinced that it was a great maneuver, a technically feasible initiative and a audacity that would remain in history books. Now it’s just a cartoon. A trapicheo – who is fully aware – with the aim of obtaining some commercial concession or an extra advantage. It is to make sure that one leaves nothing that can be taken from the negotiating table.
Q.: The reaction of the markets is a miniature replica of what we saw in April.
GG: Better like that. It is not necessary to exaggerate. It is a slight shake that remembers that Trump was wrong in April when he took this path. Before and after, it was much better.
Q.: The markets think again that Trump’s is a Bluff.
GG: It is inevitable. The writing of the cards is painful. The same for everyone. A “copy and paste” without much sense. As if there were no people who take care to follow the issues – Case -in -depth. The conclusion is that what Trump wanted already achieved it.
Q.: You want more, apparently.
GG: Trump is proud of the jump of tariff collection. They are about 20 billion dollars per month. Half are provided by China imports. Those that come from the rest of the world contribute to the remainder. It is a personal achievement.
Q.: That jump feeds on the current 10% tariff scheme for everyone except China that pays 30%.
GG: There are some sector tariffs that also add up: 50% on steel and aluminum, 25% and other miscellaneous cars. That’s where Trump wants to advance. He has just announced a 50% tariff on copper. And he has other sectors in mind. Mention a 200% tribute to pharmaceutical products, by case. But the collection jump engine is the stylized scheme you quotes.
Q.: With that Trump is satisfied, you say. And what was the idea of reindustrializing the US thanks to the erection of a tariff wall?
GG: It is easier to pay 10% tariff than moving a profitable factory. That is obvious. If Trump is also going to deport workers, if immigration stopped dry, the shortage of labor and its highest relative cost, which is already a discouragement, will be even more in the future. At least for most industrial activities. Of course, there will be more investment in certain sectors or niches. Some of them – like the semiconductors – that were already promoted for national security reasons for Biden policies. Others to have a foot in the US, with a small production, which allows you to receive a better treatment for the entire production that is imported and sells in the country. A diplomacy signal, if you want. Trump’s mandate ends in 2029, nor does it justify great strategic decisions if the rules change later.
Q.: How will the current tariff discussion be resolved? In April, the application of reciprocal taxes for 90 days froze. Will it continue to kick forward?
GG: We were going to have 90 agreements in 90 days. Finally, only two were closed. With Great Britain and Vietnam. It is evident: the ability to manage is not the height of the challenge. South Korea received a letter with a 25% tariff threat due to its unfair, tariff and para-aronclied practices. It is the same letter that Japan received. But, it turns out that South Korea has a free trade agreement with the US. In the vast majority of positions, the tax he charges is zero.
Q.: And then?
GG: What ends this? In solving the topics that work the discussion, which are not many. It is a matter of specific lobbies. Washington wants to sell more rice to Japan, for example. And so there is a long list of specific businesses that want to push.
Q.: There are many countries and many specific lobbies, it can take a long time.
GG: It is at will. An arrangement can be announced in general and leave the detail for later. As was done with China, where the agreement was already announced three times, and it was never formalized. But we know that a truce governs that Trump does not want (and does not suit him) to break. Or, alternatively, disagreements can be emphasized and writing these fuel letters. And in parallel keep running the deadlines. August 1 is the new deadline. We have come from postponement in postponement. On the other hand, there are a hundred countries, or more, who will receive the offer to pay 10% tariff and close the discussion.
Q.: How do you think markets will react to this uncertainty?
GG: It is less and less relevant. But with the bag establishing a record after record, with very marked overmark levels, if Trump insists, it could be a very good reason to correct and take a break. The markets took note of the consumer expectations survey of the Fed in New York. There, the inflation expectation was the one before Trump assumed. That is the important thing. So unlike April, the risk is not the commercial discussion but the technical conditions presented by the rally of the actions (and also of the bonds), already entered into an exaggeration zone, and therefore susceptible to stumble upon any excuse.
Source: Ambito
