Former U.S. Trade Representative Robert Lighthizer holds a meeting with former U.S. President Donald Trump at Precision Components Group in York, Pennsylvania, U.S., Monday, August 19, 2024 Speaking at the event (not shown).
Graeme Sloan | Bloomberg | Getty Images
Donald Trump’s longtime trade adviser is apparently telling Wall Street fund managers that he may be willing to invest in the Republican presidential candidate if he is re-elected, policy analysts at Piper Sandler say After taking office, he quickly began implementing his sweeping tariff proposals.
“We have heard from some clients that Trump’s former U.S. Trade Representative, Robert Lighthizer, has been meeting with investor groups and telling them that Trump may announce an additional $600 million in tariffs on China shortly after taking office. % tariffs and an across-the-board 10% tariff increase,” three research analysts at the investment bank wrote in a report on Friday.
Asked about the note, Trump campaign press secretary Carolyn Leavitt did not deny that Lighthizer had been meeting with investors. But she warned that “no policy should be considered official policy unless it comes directly from President Trump.”
It’s unclear which groups have spoken to Lighthizer, and analysts at Piper Sandler did not respond to CNBC’s request for more details. But the company’s clients are likely to be large asset managers who pay for its equity and economic research.
Lighthizer is Advising Trump on his presidential campaign Regarding economic issues, according to “Intra-American Trade”.
Lighthizer was a key figure in formulating and implementing Trump’s first-term trade policy and is also regarded as best prospect Holds a number of senior positions in a potential Trump cabinet, including secretary of commerce and secretary of the treasury.
He currently serves as president of the U.S. Trade Center at the America First Policy Institute, a Trump-aligned Washington think tank. An AFPI spokesman did not respond to a request for comment. Lighthizer is also a director of Trump Media, a publicly traded social media company majority-owned by the former president.
Lighthizer’s remarks, and his apparent influence over Trump, reportedly underscored the central role of tariffs in achieving Trump’s overall economic vision.
A lot of economist and tax expert Warnings about Trump’s expansionary tariff plan Will increase the pricereducing U.S. gross domestic product and hurting employment in key industries.
Democratic presidential candidate Kamala Harris has repeatedly cited analyzes from progressive groups that suggest Trump’s tariffs could amount to nearly $4,000 tax increase for the average American family.
The Trump campaign stressed to CNBC that Trump’s tariff ideas should be viewed in conjunction with his broader plans, which include cutting regulations, increasing U.S. oil drilling and deporting millions of undocumented immigrants.
Republican National Committee spokesperson Anna Kelly also noted that Harris and President Joe Biden have been insistent that in some cases enhancedmany of the tariffs have been imposed since Trump’s first term.
“Harris has always opposed tariffs because she cannot be trusted to put workers first, but President Trump will keep American jobs low by lowering taxes, cutting regulations and loosening the stranglehold on American energy,” Kelly said. inflation, and raise real wages.
‘Flood the area’
Republican presidential candidate and former U.S. President Trump delivers a speech at the Detroit Economic Club on October 10, 2024 in Detroit, Michigan.
Bill Pugliano | Getty Images
Piper Sandler analysts relayed information about Lighthizer in a report on Friday, warning investors to take seriously Trump’s pledge to raise tariffs to historic levels.
“We expect tariffs to be implemented more quickly in Trump’s second term than in his first,” they wrote.
Trump “has the will and the means to fulfill his promise to impose a 60% tariff on Chinese imports.”
Analysts wrote that it would not be surprising if Trump tried to impose broad 10% tariffs by force, although such an effort would likely be mired in a court battle over his authority to do so.
If that happens, Trump could “swamp the region” with more targeted tariffs, they wrote.
These narrower tariffs are likely to focus on countries with large trade deficits with the United States, or on specific industries such as the auto industry, which Trump has vowed to protect American businesses.
The analysts added, “There is no doubt that Trump will use the threat of higher tariffs as leverage to win concessions on unrelated issues.”
Deterrence or cash cow?
Republican presidential candidate and former US President Trump speaks at a campaign rally held at Riverfront Sports in Scranton, Pennsylvania on October 9, 2024.
Michael M. Santiago | Michael M. SantiagoGetty Images
Trump’s love of tariffs is well-documented. On the campaign trail, he cast them as a panacea, both the key to prosperity and a primary tool for reshaping the U.S. economy in a protectionist model.
“Tariffs are the greatest invention ever invented,” the former president said at a town hall in Warren, Michigan, in September.
He believes that his tariff plan will raise enough money to pay for a series of large-scale tax cuts without the need for expensive government programs such as Social Security and Medicare.
At the same time, Trump has vowed to use tariffs as a tool to deter unwanted foreign competition and gain geopolitical influence over other countries.
Trump has repeatedly called for a universal baseline tariff of 10% on foreign imports and raised the possibility of expanding the tariff to 20%.
He also called for a 60% tariff on all Chinese imports and said he would push for higher tariffs under certain circumstances.
For example, during a speech at the Economic Club of Detroit on Thursday, Trump complained that China was building factories in Mexico to produce cars that would be sold in the United States.
Trump said, “I will impose any tariffs necessary” to block the effort.
“100%, 200%…1,000%,” he said. “They’re not going to sell any cars to the United States with the factories they’re building.”
He also proposed using tariffs as part of a carrot-and-stick policy to stimulate domestic manufacturing.
“If your product is not made here, then when you ship your product to the United States, you have to pay taxes or duties,” he said during a campaign speech in Michigan in late September. “We will inject hundreds of billions of dollars into our national coffers and use them to benefit American citizens.”
At a meeting with Republican lawmakers on Capitol Hill in June, Trump even floated the idea of abolishing the federal income tax entirely and replacing it with tariff revenue.
Peterson Institute for International Economics burned the ideaSaid that “it is virtually impossible for tariffs to completely replace income taxes” and warned that such a plan would cause serious economic damage.
Trump, meanwhile, insists his tariffs will not exacerbate already high consumer prices, a situation he blames Biden and Harris for.
“They’re not going to raise a higher price,” Trump said during the September 10 presidential debate. “Who’s going to get the higher price is China and all the countries that have been cheating us for years.”
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