By coinnews 
00:00 Speaker A
President Trump’s hawkish tariff policy took Wall Street by surprise. Nearly 80% of investors surveyed by Wolf Research said the tariffs were more severe than they had anticipated. How did investors get yesterday so wrong? Joining us now, Tobin Marcus, Wolf Research head of US policy and politics. Tobin, why were why was everyone so taken off guard here?
00:34 Tobin Marcus
I think the scale of the tariffs that ended up being announced, uh, is a little hard to believe even after it’s happened. And so it’s not terribly shocking to me that investors had a hard time getting their head around the possible scale of this, uh, in advance. Our, uh, low end of our range of estimates of what this might look like was higher than some of the other point estimates we saw elsewhere on the street. And this came in higher than the high end of our range. So I think it is definitely an adverse surprise even to our relatively hawkish expectations. Not, um, I think shocking that that caught some investors, uh, flat-footed.
01:24 Speaker A
And about half the folks you surveyed think that there’s still negotiation hope here moving forward. What are you telling clients about the likelihood of these tariffs being negotiated downward?
01:42 Tobin Marcus
So I am somewhat pessimistic about the prospects for negotiation here. I think when you look at the structure of these tariffs, on the one hand, you have the 10% floor, which limits how much relief most countries are realistically going to be able to hope for. And then the way that these reciprocal tariffs were set, these ostensibly reciprocal tariffs was based on an imputation of the value of the total trade barriers from any given country based on the scale of our trade deficits with that country. So we’re essentially treating bilateral trade deficits as a big problem per se, as a national emergency, in the president’s words. And that’s going to be a really challenging thing for countries to change overnight. You know, no matter what policy concessions they’re offering, whether it’s lowering tariffs, lowering non-tariff barriers, it’s going to be really hard for any of those policy shifts to make a dent in actual trade deficits. And so insofar as that’s been the president’s target, uh, I think that’s going to be a hard thing to move the needle on.