A prominent Wall Street economist who previously criticized President Trump’s tariffs now suggests that the president’s trade policies may have “overturned us all.”
Torsten Sløk, the chief economist at Apollo Global Management, believes that the uncertainty around these policies has already begun to negatively impact the economy. However, he also noted that Trump could potentially lower tariffs for many U.S. trading partners while still using tax strategies to enhance federal revenue.
In a recent analysis, Sløk indicates that the trade strategy might actually be more calculated than what was previously understood.
This more positive perspective stands in sharp contrast to his earlier warnings.
Back in April, Sløk cautioned that Trump’s tariffs could lead to a recession by summer, particularly harming small businesses that rely on imports from China, possibly resulting in layoffs and a broader economic downturn.
Now, he suggests one approach might be to implement a 10% tariff on all other countries while keeping a 30% tariff on Chinese imports.
“Extending the deadline for an additional year would give U.S. companies time to adapt to a new reality with permanent tariffs,” Sløk stated. “This could also ease positive uncertainty for business operations, employment, and financial markets.”
Besides helping calm a turbulent market, Sløk believes this tactic could significantly raise U.S. government revenues, estimating it could generate $400 billion annually, potentially alleviating the fiscal deficit without increasing taxes domestically.
“This appears to be a victory for the world market while contributing $400 billion in revenue for American taxpayers,” he commented.
“Trade partners seem to be content with just a 10% tariff, and U.S. tax revenues are likely to increase. Perhaps the administration is fooling us all.”
A White House representative, Kush Desai, reacted to this perspective, noting, “Was President Trump always right? In many instances, yes!”
Trump recently announced that the U.S. has established a new trade agreement with China, though the contract’s specifics have not yet been disclosed.
Simultaneously, the administration is approaching a July deadline as a 90-day suspension on tariffs with several global partners is set to expire.
Discussions are active with 18 countries, including the European Union, Japan, India, Vietnam, and Malaysia. While some progress has been made, including a framework agreement with the UK and initial talks with Vietnam and India, many deals remain unfinalized.
If talks fall through, the U.S. is prepared to reimpose or increase tariffs. Analysts express skepticism about the feasibility of concluding significant agreements within the aggressive timeline, noting that most trade negotiations generally require a longer duration.
With rising uncertainty, the administration might consider extending discussions beyond the July deadline, possibly into early September, as it seeks to stabilize global trade relationships.
