Former U.S. Trade Representative Robert Lighthizer speaks at an event with former President Donald Trump (not pictured) at Precision Components Group in York, Pennsylvania, on Monday, August 19, 2024.
Graham Sloan | Bloomberg | Getty Images
President Donald Trump’s longtime trade adviser could begin implementing sweeping tariffs soon after taking office if the Republican presidential nominee is re-elected, according to policy analysts at Piper Sandler. It appears that they have informed Wall Street money managers.
“Many customers have expressed concerns that President Trump’s former U.S. Trade Representative Robert Lighthizer will meet with investor groups and that President Trump may announce 60% tariffs on China and 10% across-the-board tariffs immediately after taking office. ”, three research analysts at the investment bank wrote in a note Friday.
Asked about the memo, Trump campaign spokeswoman Caroline Leavitt did not deny that Mr. Lighthizer was meeting with investors. But she cautioned that “no policy should be considered official unless it comes directly from President Trump.”
It was not immediately clear which groups had spoken with Mr. Lighthizer, and Piper Sandler analysts did not respond to requests for details from CNBC. But its customers are likely to be large asset management firms that pay for equity and economic research.
lighthizer is Advice to President Trump’s campaign On economic issues, according to Inside US Trade.
Lighthizer is also seen as a key figure in the formulation and implementation of President Trump’s first-term trade policy. Most likely candidate He fills a number of potential senior positions in Trump’s cabinet, including secretary of commerce and secretary of the treasury.
He is currently director of the Center on American Trade at the America First Policy Institute, a Washington think tank affiliated with Trump. An AFPI spokesperson did not respond to a request for comment. Mr. Lighthizer is also a director of Trump Media, a publicly traded social media company majority-owned by the former president.
Mr. Lighthizer’s reported conversations and his apparent influence over Mr. Trump both highlight how central tariffs are to carrying out Mr. Trump’s overall economic vision.
numerous economist and tax expert warned of President Trump’s expansive tariff plans will raise the pricelowering U.S. gross domestic product and negatively impacting employment in major industries.
Democratic presidential candidate Kamala Harris has repeatedly cited analysis from progressive groups that President Trump’s tariffs could amount to nearly the entire amount. $4,000 tax increase For the average American family.
The Trump campaign told CNBC that Trump’s tariff proposals should be considered in conjunction with his broader plan to cut regulations, ramp up U.S. oil drilling and deport millions of illegal immigrants. He emphasized that.
Republican National Committee spokeswoman Anna Kelly also maintained that Harris and President Joe Biden boostedmany of the tariffs from President Trump’s first term.
“Harris has always opposed tariffs because she cannot be trusted to put workers first, but President Trump will restore American jobs by cutting taxes, cutting regulations, and untying American energy. It will keep inflation low and raise real wages,” Kelly said. he told CNBC in a statement.
“Flood the zone”
Republican presidential candidate and former U.S. President Donald Trump speaks at the Detroit Economic Club in Detroit, Michigan on October 10, 2024.
Bill Priano | Getty Images
Analysts at Piper Sandler shared the information about Mr. Lighthizer in a note Friday, warning investors to take President Trump’s promise to raise tariffs to historic levels seriously.
“We expect tariffs to be implemented sooner in President Trump’s second term than in his first term,” they wrote.
President Trump “has the will and the means to follow through on his promise to impose 60% tariffs on imports from China.”
Analysts say it would not be surprising if President Trump tried to enact sweeping 10% tariffs by force, even though such an effort would likely end in a legal battle over its authority. I wrote that it’s not surprising.
If that happens, they write, President Trump could “flood the region” with even more targeted tariffs.
These targeted tariffs could target countries with which the United States has large trade deficits or specific industries, such as the auto industry, where President Trump has vowed to protect American companies.
“There is little doubt that Trump will use the threat of higher tariffs as leverage to win concessions on unrelated issues,” the analysts added.
Deterrent or cash cow?
Republican presidential candidate and former President Donald Trump speaks at a campaign rally at Riverfront Sports on October 9, 2024 in Scranton, Pennsylvania.
Michael M. Santiago | Getty Images
Trump’s preference for tariffs is well documented. He has presented them on the campaign trail as a panacea, a key to prosperity and a master tool for rebuilding the U.S. economy in a protectionist mold.
“Tariffs are the greatest thing ever invented,” the former president said at a town hall in Warren, Michigan, in September.
He argues that his tariff plan would rake in enough money to pay for a series of massive tax cuts without requiring compromises or cuts to expensive government programs, such as: Social Security and Medicare.
At the same time, President Trump has vowed to use tariffs as a means to deter unwanted foreign competition and gain geopolitical influence over other countries.
President Trump has repeatedly called for a flat 10% basic tariff on foreign imports, and has indicated the possibility of increasing the tariff to 20%.
He also called for a 60% tariff on all imports from China and suggested he would impose even higher tariffs in certain circumstances.
For example, in a speech at the Detroit Economic Club on Thursday, President Trump complained that China was building factories in Mexico to produce cars sold in the United States.
President Trump said he would “impose whatever tariffs are necessary” to stop the effort.
“100%, 200%…1000%,” he said. “They’re not going to sell cars to the United States with the factory they’re building.”
He also suggests using tariffs as part of a carrot-and-stick approach to boost domestic manufacturing.
“If we don’t make the product here, we have to pay taxes or duties when we send it to the United States,” he said in a campaign speech in Michigan in late September. “And we’re going to put hundreds of billions of dollars into the Treasury and use that money to benefit the American people.”
When President Trump met with Republican lawmakers on Capitol Hill in June, he even floated the idea of completely abolishing the federal income tax and replacing it with customs revenue.
Peterson Institute for International Economics ignited the idea“It is literally impossible to completely replace income taxes with tariffs,” he said, warning that such a plan would wreak havoc on the economy.
Meanwhile, President Trump has insisted that his tariffs will not worsen already high consumer prices, blaming Biden and Harris for it.
“Prices are not going to go up,” President Trump said during the September 10 presidential debate. “The higher prices are set by China and the countries that have been defrauding us for years.”
