Journalist: Trump brings them. Distribute tariffs for dozens. With the discretion of April, and similar or even higher levels. At the same time, multiply the artillery against the Fed and, especially, against its headline, Jerome Powell. Even now sends government officials to punish him. And encourages rumors of his imminent resignation. What surprises most is that agitation grows and does not yield consequences. Wall Street dares to quote higher and enable new records. They are parallel stories.
GG: We have been postponed for months in terms of tariffs. It makes no sense to prolong uncertainty, but it can be done. Trump tries to charge his business partners, Mexico and Canada, and does not find a way to enter them fully. He wants to sit the Europeans to the negotiating table and does not get much. Keep up with Japan and India, and so on with two dozen countries that interest him. No tangible results.
Q.: Trump has just announced a 17% tax on fresh tomatoes from Mexico. It is in the minutia. Can you do it? Or does it prevents the treaty that he promoted in his first period?
GG: With the goods that are technically “satisfied with the treaty” he has not been able to innovate. And he doesn’t find the return.
Q.: It means that when he speaks of applying tariffs of 35% to Canada and 30% to Mexico it refers to those goods (and services) that are out.
GG: That’s how it is. But its implementation is also doubtful.
Q.: You said that Trump was satisfied with what he already got.
GG: With the collection and sound. Almost, almost US $23 billion alone in May. And in just over 68 billion in the first five months of 2025, 78% more than a year ago.
Q.: And that is the result of the 10% general tariff that imposed on all imports.
GG: Plus the sector regimes, and that miscellaneous of minutiaes that it does carry out. It is much more than the 10%universal tariff. Estimates, today, point out that the average economy tariff went from 3% to the end of last year to 20%.
Q.: Trump must be very satisfied with those figures. So much that it aspires to increase them. These are resources that partly help to wipe out the greatest deficit that promotes the fiscal package recently approved by Congress.
GG: The novelty, since the last time we speak, is that the president floated the idea of charging an indiscriminate tariff that “can be 15% or 20%.”
Q.: Neither does that take it very seriously.
GG: But that is much more feasible to specify.
Q.: Trump, on the one hand, goes to Congress, approves a controversial law and lowers taxes. And on the other pushes a formidable imposite to the external sector. Nobody explains the contradiction? Defend tax decline as a spring to boost greater growth, but does not record the opposite effect of the second initiative.
GG: In the speech, tariffs are taxes paid by foreigners.
Q.: In practice, no.
GG: Unless foreigners are willing to reduce their sale price in the same proportion in order not to lose market.
Q.: And it is so?
GG: It seems that it is the case of Japanese cars prices. But that will be the exception and not the rule. A transitory phenomenon presumably. What is believed today is that tariffs will subtract almost a point from GDP growth in 2025. And the unemployment rate will rise at half a point, although the latter, if the deportations of workers continue, may not be verified.
Q.: Nothing very encouraging, either.
GG: It is not a very constructive agenda.
Q.: What about the fierce attack on the independence of the Fed? Do you have to think that Trump wants to promote Scott Besent, the current Secretary of the Treasury, as a replacement for Jay Powell, but with the intention of fulfilling the two functions at the same time?
GG: It is nonsense. So I do not rule out that it is an idea in dance. Besent has said that he will go to the Fed if Trump needs it there. It is not the only idea in dance, because the parade of candidates is done in broad daylight. Kevin Hassett does not stop applying, although the designation is too big.
Q.: Kevin Warsh, who knew how to be governor of the Fed in the time of Ben Bernanke, and did not have a critical step, has the same enthusiasm and perhaps greater capacity. Bernanke considered that he was very helpful when Lehman Brothers’s crisis exploded.
GG: He is a man with many bank and market contacts. Although unlike Besent is not an experienced operator; Yes, rather, a wolf.
Q.: Warsh already said he has a lot of sympathy with Trump’s frustration with the Fed.
GG: There is no doubt that I crave the position. Tariffs are not inflationary, he said. And the rates have to be lower. And he already advocated a regime change in the institution. What is, according to his words, a new set of policies, a new way of thinking about economic growth and what causes inflation. Which also demands “new staff.”
Q.: Do you think there are chances that these people reach the Fed?
GG: Trump proposes, but the Senate is the one who approves. In their first presidential mandate, the candidates who had no reasonable background, did not pass that filter.
Q.: And is there someone like that in the candlestick?
GG: Governor Chris Waller, without a doubt.
Q.: How long can Wall Street hold your record of records indifferent to this sea in the background?
GG: It is a good question. While just a backdrop, it is not incompatible. But if it is intended to occupy the center of the scene, we already saw that Trump wrinkles when the masonry is coming. I see him giving more than imposing his will. And I think that, in short, is also the best for your own interest.
Source: Ambito
