Economic analyst Sam Sutton believes President Donald Trump’s tariff war "has been a brutal wake-up call for Wall Street traders who had assumed the president would defer to market forces on policy matters."
In an op-ed in Politico published Monday, Sutton said Trump never hid his plans to impose universal tariffs on major trading partners. Despite this, he said, most investors had discounted the likelihood of a full-blown trade war, and were focused "instead on whatever economic stimulus could come from deregulation, lower energy costs and tax cuts."
"Instead, they’re now grappling with a tariff regime that puts not only their bottom lines at risk but the world economic order," he wrote.
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The Politico writer said the Wall Street’s rule of thumb for Trump had been that he would curb his aggressive trade policies if they led to negative consequences for the economy. "No more," he added.
Sutton further noted in the article that JPMorgan Chase CEO Jamie Dimon on Monday cautioned investors that the trade wars could threaten economic alliances that have made the United States the world’s most powerful country.
"Goldman Sachs Chief Economist Jan Hatzius bumped up the odds of a U.S. recession to 45 percent. And even Bill Ackman — the hedge fund billionaire and one of Trump’s biggest Wall Street cheerleaders — warned that the president’s ability to navigate the trade battle will be weakened if markets continue to crater," he continued.
Sutton also quoted Stanley Druckenmiller, the former hedge fund executive and colleague of Treasury Secretary Scott Bessent, who on Sunday said he opposed any tariffs exceeding 10 percent.
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"And Clifford Asness, a longtime GOP donor and the chief of AQR Capital Management, decried the policies’ Republican defenders as 'feckless toadies willing to say the most ignorant things to please their dear leader,'" Sutton added.
Last week, Trump outlined his extensive tariff proposals. The majority of the backlash over these policies originated from Democrats, but some conservative figures who oppose Trump, such as MSNBC host Joe Scarborough and former GOP strategist Stuart Stevens, are also voicing their concerns.
Critics from both the left and right caution that these new tariffs will significantly increase the prices of various products without delivering the economic growth that Trump claims they will generate.
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