The European Union (EU) announced retaliatory duties on $28 billion in US goods following the implementation of President Trump's 25% tariff on all steel and aluminum imports into the US.
Signum Global Advisors partner and senior analyst Rob Casey joins Morning Brief hosts Brad Smith and Madison Mills to discuss the tension between President Trump’s long-term economic vision and the uncertainty CEOs are facing as they navigate current market conditions and the political environment.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
What is the, the overall kind of relationship and the reaction that we're seeing between Trump's defensive tariffs versus what CEOs are navigating right now?
Yeah. Well, I think you just heard it from Keith in, in the last clip. And first of all, Bret, it's, it's great to be with you. Um, CEOs today are navigating uncertainty. And as much as President Trump would like to, you know, convince us all of a longer term story of, of strengthening the U.S. economy, in particular, strengthening U.S. manufacturing, uh, in the short term, right? We are uncertain as to what the market is going to look like. There are certainly, you know, calls for a recession now that there weren't maybe a month or two ago. Um, and so I do think President Trump is trying to sell a long term story. Uh, the rest of us are trying to stay above water in the short term.
And this also comes after we heard from Goldman Sachs CEO David Solomon this morning, reiterating this idea that CEOs do want clarity on policy from the White House and that that would allow for more capital investment and more growth. I wonder then, Rob, based on your sourcing, your conversations in D.C. with folks, what might push the Trump administration to capitulate to some of these executives and provide a little bit of that clarity? Would anything?
Well, you know, there's been a lot of conversation about where the Trump put is, right? How much pain is the Trump administration willing to take in the markets, uh, to reverse course? We're certainly not there yet, right? Maybe it's, it's a 10 or 15% correction and we're getting there. Um, but honestly I think that the, the more important reaction function that we have to think about in the short term, is not an economic one, it's a political one. And that's Republicans in Congress going to the president and saying, listen, you don't have to run for reelection again in four years, but we do, right? And many of us, everybody in the house, has to run again in less than two years. So if we're thinking about what is going to force President Trump to either reverse course on some of the tariffs that he's already implemented, although he hasn't implemented all that many so far, or at least provide some clearer certainty over the medium term, I think it's going to be that political reaction function of Speaker Johnson, Majority Leader John Dune in the Senate saying, listen, President Trump, we understand what you're trying to do. We also want to rebuild manufacturing in the U.S., but you have to give us a chance in the midterms.
But does Trump, I mean, Trump by his own admission doesn't care what the market is doing. He's not watching it. And then even for these politicians that you mentioned, the majority of their constituents are not even invested. So is that going to actually motivate them to go to the president and try to move the needle on these policies?
Well, it's, you know, it's true that the majority of constituents aren't looking at the markets quite as closely as we are, right? But if we're thinking about agricultural states, in particular, if we're thinking about farmers, they are represented by Republicans. You know, the middle of this country is driven by agriculture, the middle of this country also votes for Republicans. So as we're talking about, uh, you know, reciprocal or responsive tariffs coming from the EU, coming from China, potentially coming from Canada and Mexico, I do think that even if constituents aren't looking at markets, they're looking at, right, their day-to-day operations. The tariffs are something, not only are they hitting Wall Street, they're hitting Main Streets and they're hitting farmers. And so everybody's worried about the impact of these tariffs.
