Sonali Ray, writer
Brief news
- Robert Lighthizer, Trump’s former trade advisor, suggests that Trump may quickly implement significant tariffs, including 60% on Chinese goods, if reelected.
- Analysts warn that Trump’s tariff proposals could lead to increased prices and economic challenges for American households.
- Trump’s campaign emphasizes tariffs as part of a broader economic strategy, aiming to boost jobs and reduce regulations.
Detailed news
Donald Trump’s longstanding trade advisor is reportedly informing Wall Street financiers that, should the Republican presidential nominee be reelected, he may swiftly initiate his extensive tariff ideas upon becoming office, as indicated by policy analysts at Piper Sandler.
“Several clients have reported that Robert Lighthizer, former US Trade Representative under Trump, has been engaging with investor groups and indicating that Trump may announce 60% tariffs on Chinese goods and 10% universal tariffs soon after assuming office,” stated the trio of research analysts at the investment bank in a note on Friday.
When contacted about the memo, Trump campaign press secretary Karoline Leavitt did not refute that Lighthizer has been engaging with investors. However, she warned, “No policy should be considered official unless it is issued directly by President Trump.”
The specific entities that have engaged in discussions with Lighthizer remain unclear, and the Piper Sandler analysts did not respond to CNBC’s request for further information. However, the firm’s clientele is expected to consist mostly of substantial asset management organizations that compensate for its stock and economic research services.
Lighthizer is providing counsel on economic matters for Trump’s presidential campaign, as reported by Inside U.S. Trade.
Lighthizer, a pivotal figure in formulating and implementing Trump’s first trade policies, is regarded as a leading candidate for many high-ranking positions in a possible Trump Cabinet, such as commerce secretary and treasury secretary.
He presently holds the position of chair of the Center for American Trade under the Trump-affiliated Washington think tank, America First Policy Institute. A representative for AFPI did not respond to a request for comment. Lighthizer serves as a director of Trump Media, the publicly listed social media enterprise predominantly controlled by the former president.
Lighthizer’s documented discussions and his evident sway on Trump highlight the pivotal role tariffs play in actualizing Trump’s comprehensive economic strategy.
Many economists and tax specialists have cautioned that Trump’s extensive tariff proposals will increase prices, diminish U.S. gross domestic product, and adversely affect employment in critical sectors.
Democratic presidential contender Kamala Harris has consistently referenced a progressive organization’s report indicating that Trump’s tariffs may result in an approximate $4,000 tax hike for the average American household.
The Trump campaign emphasized to CNBC that Trump’s tariff proposals should be considered with his comprehensive strategies, which encompass reducing regulations, increasing U.S. oil drilling, and deporting millions of undocumented immigrants.
Anna Kelly, spokesperson for the Republican National Committee, also observed that Harris and President Joe Biden had upheld, and in many instances increased, several tariffs from Trump’s initial year in office.
“Harris has consistently opposed tariffs due to her lack of trustworthiness in prioritizing workers, whereas President Trump will restore American jobs, maintain low inflation, and increase real wages by reducing taxes, eliminating regulations, and liberating American energy,” Kelly stated to CNBC.
‘Saturate the area’
In a note released on Friday, Piper Sandler analysts conveyed their insights into Lighthizer while cautioning investors to regard Trump’s commitments to elevate tariffs to unprecedented heights with seriousness.
“We anticipate that the tariffs will be implemented more rapidly in a second Trump administration than in the first,” they stated.
Trump possesses both the determination and the means to fulfill his pledge to implement 60% tariffs on Chinese goods.
The experts stated that it would not be unexpected for Trump to attempt to impose a comprehensive 10% tariff by force, despite the likelihood of such an initiative becoming embroiled in legal disputes about his ability to execute it.
If that occurs, they stated, Trump might “flood the zone” with further targeted tariffs.
The narrower tariffs may target nations with significant trade deficits with the U.S. or specific sectors such as the automotive industry, which Trump has pledged to safeguard for American firms.
The analysts stated, “There is little doubt that Trump would employ the threat of increased tariffs as leverage to secure concessions on unrelated matters.”
Deterrent or revenue source?
Trump’s affinity for tariffs is well recorded. He has portrayed them on the campaign trail as a remedy, essential for prosperity and a principal instrument for transforming the U.S. economy in a protectionist framework.
The former president stated during a September town hall in Warren, Michigan, “Tariffs are the most significant invention ever.”
He contends that his tariff proposals will generate sufficient revenue to finance extensive tax reductions, without necessitating any concessions or reductions to expensive government programs such as Social Security and Medicare.
Simultaneously, Trump has pledged to employ tariffs as a mechanism to mitigate undesirable international competition and to acquire geopolitical advantage over other countries.
Trump has consistently advocated for a 10% universal baseline tax on foreign goods and has proposed the potential increase of that tariff to 20%.
He has advocated for a 60% tax on all Chinese imports and shown a willingness to pursue even higher tariffs under certain conditions.
During a speech on Thursday at the Detroit Economic Club, Trump expressed concern that China is establishing facilities in Mexico to manufacture automobiles intended for sale in the U.S.
“I will implement any necessary tariffs” to halt that initiative, Trump stated.
“One hundred percent, two hundred percent … one thousand percent,” he stated. “They will not sell any vehicles in the United States with the plants they are constructing.”
Source : CNBC News
