I love when people ask me about tariffs. I love it even more when people say I should write about tariffs. You know why? Because I don’t know what to think, what to say or what to write.
Talk about volatility. Things change by the minute. Hold on. How is the stock market doing today? Oh look: up 459 points. A rebound? We could be down the same or more tomorrow. Who knows.
Here’s what I do know. The stock market is not the economy. But wealthy people and older people buy more flooring when their portfolio isn’t tanking. Here’s something else I know: Talk all you want about trade deficits, but I know I have a trade deficit with my grocery store. I buy food from the grocery store, but the grocery store doesn’t buy ads in FCNews. I never was upset about that. Maybe I should be.
I do understand the rationale for tariffs. Encourage more purchases of domestically made goods. I get it. But there are many things we simply don’t make here. For example, how many U.S. manufacturers are currently producing WPC? Plus, we in the United States do not have existing capacity to make everything in this country that we consume. Maybe we need to be trading aircraft parts, a large export, for WPC. Hey, it worked in colonial North America. Europeans traded a wide array of goods with Native Americans, primarily focusing on furs in exchange for manufactured items like firearms, tools and kettles. This fur trade had a significant impact on both Native American and European societies, shaping their economies, cultures and relationships. (I got that from Wikipedia; it’s been awhile since social studies class.)
I do have a question: When the stock market plummeted before rebounding somewhat, was Wall Street’s panic based on what might happen or on what is happening? Is Wall Street’s meltdown a fear of what might happen in the future? Or is it reacting to March’s latest jobs report that there were 93,000 more jobs created than predicted? Did the furor arise over the March announcement that the annualized inflation rate dipped to 2.6% per year? Is Wall Street’s worry that impending tax cuts, more deregulation, greater budget cuts and continued efforts to eliminate budget deficits and reduce national debt will stall economic growth?
See, I would have thought the stock market would have increased given the Red Sea is suddenly navigable again with the Houthis in Yemen curtailing their attacks. What do I know?
I would have also thought the stock market would have increased when 70 countries are now expressing interest in negotiating tariffs with America either down to zero or reciprocally to the same rate as ours. That’s a good thing, right? And if there soon is a rush of nations to cut a deal with the United States so as not to be left out of the American market, will there follow another hysterical Wall Street spasm to buy stocks at bargain prices?
You know who knows a thing or two? Obviously not me, but Connor Lokar, senior forecaster at ITR Economics, who weighs the prospects of a recession resulting from the Trump administration’s latest round of tariffs. Will these new tariffs bring on a recession? “Not at this point,” he said. While emphasizing the potential damage from an escalating trade war, he said “we’re OK” at the moment. “I think the economy can still grow, despite some tariff pressure.”
Lokar argues that many sectors of the U.S. economy—single-family housing, inflation-adjusted retail sales, freight volumes, logistics employment and manufacturing—were actually coming out of a recession in 2024. The advent of 2025 saw the economy gaining momentum with inflation-adjusted income levels rising at a level consistent with 10-year averages. On top of that, the economy had “started to adapt” to higher interest rates. All good things in my book.
Lokar and ITR agree that tariffs are inflationary, given they raise imported product costs, which are passed along to buyers. The question, he says, is whether additive pressure from high tariffs is enough to undermine income and consumer-buying trends. Should the year end with inflation at around 3.5%, “I don’t think that kills us.” But with a higher number, all bets could be off.
So that’s all I have to say about tariffs. Aren’t you glad you asked? Oops. Stock market only up 312 now. Just gave back 27% of today’s gain in 10 minutes. Gotta love the stability.
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