Expert sounds alarm on 'depression-era level' tariffs

Here's what Trump's tariffs could mean for the economy.

Transcript

00:00So, right now, we would advise investors that now is not the time to make major moves into

00:04your portfolio other than raising safe haven plays, like the dollar, the Japanese yen,

00:10you know, long-dated U.S. treasuries, those types of moves that would behave well in a

00:14risk-off environment, at least in the short term.

00:16The lessons from past tariff implementations, we really have to go back a long time because

00:21if the full tariffs that were announced yesterday get implemented, the average effective tariff

00:27rate in the United States is going to be around 25%, so we haven't seen those levels

00:30in decades.

00:31So, you know, previous tariffs were, you know, I mean, that led us into the Great Depression,

00:36right?

00:37So, we need to make sure that we are positioned for potentially more stagflationary scenarios.

00:41Now, if you think that they're negotiating tactics and that sort of we're at a maximalist

00:46position here because Trump staked out his, you know, asked for the moon right off the

00:51bat, we could actually see a deceleration in tariff-related or trade war-related uncertainty

00:57going forward.

00:58I suspect that 6 to 12 months from now, investors are going to be feeling better about the markets

01:03than they are today.

01:04I'll tell you, before yesterday's announcement, we had recession risks in the United States

01:09pegged somewhere around 35%.

01:12After yesterday's announcement, they're closer to 50%.

01:14In fact, I think there's a good chance that the Q1 GDP number could be close to zero,

01:19perhaps even slightly negative.

01:21So, I think, you know, recession risks have certainly increased.

01:24I think we're going to see about a, you know, 1.5% to 2% increase in the overall inflation

01:29rate and a hit to consumption spending, even to the point where real consumption spending

01:34in the United States might turn negative sometime in the, you know, second to third quarter.