James Pethokoukis, American Enterprise Institute senior fellow, joins 'The Exchange' to discuss Trump's tariff threats and trade policy.

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

James Pethokoukis, a senior fellow at the American Enterprise Institute, stated that tariffs are expected to remain a central feature of US trade policy. He emphasized that the current administration views tariffs as a versatile policy tool and is likely to continue using them, despite concerns about market reactions and economic uncertainty.

Pethokoukis noted that the unpredictability surrounding tariff announcements has led to varying market responses. He suggested that discussions about tariffs will persist in the coming months and that tariffs could potentially expand to affect more countries, regardless of existing trade balances.

Tariffs are here to stay, says AEI's James Pethokoukis

James, welcome to you in the market, finally putting all this together and saying maybe it's time to kind of move to the sidelines for the weekend, if nothing else, and kind of see where we are next week on all of these fronts. Um, yeah, but I think if you're expecting the president not to be tariff man on Monday, I think he's going to be, uh, I mean, I mean, he's tariff man, he's also stock market man. So like, which, which is he more of? And I think the president, uh, loves tariffs, views those as kind of an all purpose, like pocket knife of policy, but he wants to be able to use it without freaking out the markets. So I think that's kind of the way to look at what he's doing. You know, he's, we had the big, the kind of the shock and awe of liberation day. Uh, we had market reaction. So now maybe the idea is here, they're a little of uncertainty, you know, this tariff pull back the other one and try to get these tariffs through, which I think he absolutely wants without freaking out investors in the, in the, in a kind of a huge way. And also in a way that, you know, it could really mean bad things for the economy. Why is it that, you know, tariff announcements on April 2nd were down thousands of points, you know, tariff announcements on July 10th and eh, not much reaction. Yeah, well, I think it'd be sort of, there's, we talk a lot about uncertainty, the uncertainty created by tariffs and now, but the uncertainty also cuts both ways that you're just sort of not certain, uh, you know, what the president is going to do, how seriously he is going to sort of weather any sort of market or economic storm caused by the tariffs. I think that, I think that's really the wrong way to look at it. I think what you need to do is understand that this man has been for tariffs for 40 years. He thinks they work. He thinks they can use in lots of ways. He doesn't want to spook markets, but I would guess that like six months from now and a year from now, we'll still be having a lot of the same conversations about this tariff announcement. And tariffs, I think are going to be here to stay, maybe higher, maybe more expansive and maybe, and maybe hitting countries that seem utterly illogical because maybe they have trade. No, we have a trade surplus with them, so it's not predictable.

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Tariffs are here to stay, says AEI's James Pethokoukis

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