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As of this writing, President Donald Trump has imposed blanket 10% tariffs on imports from most countries.
China remains an exception, with tariffs at a staggering 145%.
He believes the blanket 10% tariffs are the lowest that Americans can hope for.
That slows the economy, reducing interest rates, reducing payments on debt to affordable levels.
This assumes (President Trump)extends tax cuts, but changes nothing else.
Off the top of my head this is the thread-the-needle situation.
This increases the demand for U.S. goods, which boosts U.S. businesses and wages.
Still, Salas cautions that it would take time to see that increase in the demand.
He noted, China exported around $450 billion worth of goods to the U.S. in 2024.
Inflation Ebbs After an Initial Shock
Cubans best-case scenario involves inflation easing after the initial jolt.
In particular, Parsonswants to see the U.S. avoid stagflation.
Javier Palomarez, CEO of the US Hispanic Business Council, explains how lower interest rates would help.
Lower Tax Rates
Finally, Cuban mentioned lower tax rates in his equation for a best-case scenario.
Lower taxes would offset some of the higher costs consumers will face under tariffs.
Can the Trump Administration thread the needle, as Cuban puts it?
Only time will tell.
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