Donald Trump's longtime trade adviser is seemingly telling Wall Street money managers that if re-elected, the Republican presidential nominee could begin implementing his sweeping tariff proposals quickly after taking office, in keeping with political analysts at Piper Sandler.
“We have heard from a number of clients that Trump's former U.S. Trade Representative Robert Lighthizer met with investor groups and told them that Trump could announce 60% Chinese tariffs and 10% general tariffs shortly after taking office,” Das wrote Trio of research analysts on the investment bank said in a note on Friday.
Asked in regards to the note, Trump campaign press secretary Karoline Leavitt didn’t deny that Lighthizer met with investors. But she warned: “No policy should be considered official unless it comes directly from President Trump.”
It was not immediately clear which groups spoke to Lighthizer, and analysts at Piper Sandler didn’t reply to a request from CNBC for further details. However, the corporate's clients are more likely to include large asset management firms that pay for the corporate's stock and economic research.
Lighthizer is Advising Trump's presidential campaign on economic topics, in keeping with Inside US Trade.
Lighthizer is and is seen as a key player in crafting and implementing Trump's first trade policy Top view for numerous senior posts in a possible Trump Cabinet, including commerce secretary and treasury secretary.
He is currently chairman of the Center for American Trade on the Trump-aligned Washington think tank America First Policy Institute. An AFPI spokesman didn’t reply to a request for comment. Lighthizer can be a director of Trump Media, the publicly traded social media company majority owned by the previous president.
Lighthizer's reported conversations and his apparent influence on Trump each underscore how central tariffs are to implementing Trump's macroeconomic vision.
Numerous Economists And Tax experts have warned of Trump's expansive tariff plans will increase pricesreduce U.S. gross domestic product and hurt employment in key industries.
Democratic presidential candidate Kamala Harris has repeatedly cited a progressive group's evaluation that Trump's tariffs could amount to a near-tariff $4,000 tax increase for the typical US family.
The Trump campaign stressed to CNBC that Trump's tariff ideas ought to be seen according to his broader plans, which include cutting regulations, expanding U.S. oil production and deporting tens of millions of illegal immigrants.
Republican National Committee spokeswoman Anna Kelly also noted that Harris and President Joe Biden have expressed their opinions in some cases reinforcedMany of the tariffs date back to 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, keep inflation low and raise real wages by cutting taxes, regulations lowers and unleashes American energy,” Kelly told CNBC in an announcement.
“Flooding the Zone”
Analysts at Piper Sandler provided their briefing on Lighthizer in Friday's note, warning investors to take seriously Trump's promise to boost tariffs to historic levels.
“We expect tariffs to come more quickly in a second Trump term than in the first,” they wrote.
Trump “has the will and the way to follow through on his commitment to impose 60% tariffs on Chinese imports.”
The analysts wrote that it will not be surprising if Trump tried to make use of force to impose a sweeping 10% tariff, although such an attempt would likely be embroiled in legal battles over his authority to accomplish that.
If that happens, they wrote, Trump could “flood” the zone with much more targeted tariffs.
These tougher tariffs might be focused on countries with which the U.S. has large trade deficits or on select industries reminiscent of the auto industry, where Trump has vowed to guard U.S. firms.
The analysts added: “There is little doubt that Trump would use the threat of higher tariffs as leverage to secure concessions on unrelated issues.”
Deterrent or money cow?
Trump's penchant for tariffs is well documented. He portrayed it through the campaign as a panacea, each a key to prosperity and a master tool for reshaping the US economy into protectionist forms.
“Tariffs are the greatest thing ever invented,” the previous president said during a September town hall meeting in Warren, Michigan.
He argues that his tariff plans will raise enough money to finance a series of massive tax cuts without requiring compromises or cuts to costly government programs like Social Security and Medicare.
At the identical time, Trump has vowed to make use of tariffs as a tool to discourage unwanted foreign competition and gain geopolitical influence over other nations.
Trump has repeatedly called for a universal base tariff of 10% on foreign imports and has floated the potential of expanding that tariff to twenty%.
He has also called for a 60% tariff on all Chinese imports and indicated that he would push for even higher tariffs in certain circumstances.
For example, in a speech Thursday on the Detroit Economic Club, Trump complained that China was constructing factories in Mexico to provide cars that might be sold within the United States
“I will impose whatever tariffs are necessary” to stop those efforts, Trump said.
“100%, 200%…1,000%,” he said. “With the factories they’re building, they’re not going to sell cars to the United States.”
He has also suggested using tariffs as a part of a carrot-and-stick approach to spice up domestic production.
“If you don’t make your product here, you have to pay a tax or a tariff when you ship your product to the United States,” he said in a campaign speech in Michigan in late September. “And we will add hundreds of billions of dollars to our treasury and use that money to benefit the American people.”
At a gathering with Republican lawmakers on Capitol Hill in June, Trump even floated the concept of eliminating the federal income tax entirely and replacing it with revenue from tariffs.
The Peterson Institute for International Economics set this concept on fireHe said it was “literally impossible for tariffs to completely replace income taxes” and warned that such a plan would cause economic damage.
At the identical time, Trump insists that his tariffs is not going to further exacerbate the already high consumer prices that he blames Biden and Harris for causing.
“You’re not going to have higher prices,” Trump said through the Sept. 10 presidential debate. “Who will have higher prices is China and all the countries that have been ripping us off for years.”
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