Market strategist says Trump's tariffs are a "step back" and don't make "economic sense"
The opinions expressed below are Jon Keller's, not those of WBZ, CBS News or Paramount Global.
President Trump unveiled his tariff policy Wednesday afternoon, starting with a minimum 10% tariff on all imports. He also announced higher percentage tariffs against the "worst offenders."
"This is one of the most important days in my opinion in American history," said President Trump as he rolled out his long-awaited tariff plan. "It's our declaration of economic independence."
Fifty-six men from all 13 colonies signed onto the original Declaration in 1776. How many Americans will sign on to this version?
Trump's tariff announcement
No question, the stemwinder Trump delivered will excite much of his political base. His depiction how our global trading partners have "looted, pillaged, raped, plundered" America will resonate with those who thrilled to his rhetoric about illegal immigrants wreaking havoc.
But for the majority of Americans who are not Trumpers - and a political establishment nervous about what impact his plans will have on the economy - excitement is likely on hold.
"For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense, but now it's our turn to prosper," the president said. (Fact check: the U.S. has 30.8% of the world's total wealth. China has 18.6%. No one else is in double digits.)
But will his plan make us prosper? Businesses and markets hate uncertainty, and B.Riley Wealth Chief Market Strategist Art Hogan notes, "with this announcement and the first quarter earnings season coming up in two weeks, it's going to be very difficult for companies that are announcing their earnings to give you any semblance of what their guidance is for the future. That causes in and of itself another flavor of uncertainty."
Timeline to see benefits
The president brought onstage an auto worker from Michigan he spotted applauding his announcement of a 25% tariff on foreign vehicles, and the man - identified only as "Brian" - claimed everyone will love that tax six months or so down the road when we start to see the benefits, and not just higher vehicle prices.
But Hogan says that's a wildly unrealistic timeline.
"The benefits - if any - are out a lot further than six months," he says. "So, if in fact the auto industry, which has a very complex supply chain, wanted to bring auto manufacturing back to the U.S., that will take five or six years, and by the way with higher prices for automobiles."
Nonetheless, Trump's tariff obsession is clearly appealing to people whose jobs were displaced by the rise of the global economy and free trade since the 1990s. There's a reason why Trump performed so well in the Rust Belt states in two of his three campaigns.
But Hogan suggests nostalgia for a bygone era when so many Americans punched timecards at huge factories is like telling people - wouldn't it be great if no one had smartphones anymore?
"Do we want to take a step back and go back to being a manufacturing economy? We don't want to manufacture everything that we need," said Hogan. "As a matter of fact, developed economies want to be able to have other people manufacture lower value items and continue up the value chain [for their own careers]. So, I don't believe that that's possible. It's romantic in it's term of we're going to reindustrialize U.S. manufacturing, but it doesn't make a great deal of economic sense and that's where that falls apart."
