Brad Setser on the Damage From Trump's Gigantic Tariff Shock – Odd Lots

Brad Setser on the Damage From Trump's Gigantic Tariff Shock – Odd Lots — Transcript

Market views

Bullish

MEXICO— Mexico's manufacturing sector may benefit from the new tariff structure due to its current low-tariff status under USMCA, potentially attracting manufacturing shifts.

Bearish

GLOBAL— The new tariff policy is expected to significantly disrupt global trade relationships, including with allies, at a high economic cost.
US— The new tariff policy is viewed as a deliberate choice to fundamentally change the US economy and its global relationships, potentially leading to economic contraction and restructuring of long-standing economic relationships.
CONSUMER— The arbitrary nature of the tariff policy, affecting countries that produce low-cost consumer goods for the US market, suggests potential price increases for US consumers, which could negatively impact consumer goods companies.

Not investment advice.