My Prediction on Inflation Consequences (Uncut) 02-18-2025

Trump’s Reciprocal Tariffs are NOT a Bluff – My Prediction on Inflation Consequences

President Trump’s reciprocal tariffs are not a bluff. I want to explain to you what’s going on and then I’ll give you my prediction. So here’s what President Trump posted last week on Truth Social.

So he said that on trade I’ve decided for the purpose of fairness that I will charge a reciprocal tariff meaning whatever countries charge the United States of America we will charge them no more no less. So in other words it’s basically if you tariff us we’ll tariff you back. So I want to show you the video clip of President Trump what he said last week.

Again whatever they charge us we’re charging them so it works out very well it’s very it’s a beautiful simple system and we don’t have to worry about gee we’re charging too much or too little. Now here’s the official White House memo on February 13th regarding reciprocal tariffs. The United States imposes few barriers to imports than other major world economies.

For many years the United States has been treated unfairly by trading partners both friends and foe. So essentially Trump is saying that it is unfair because other countries tariff our goods more than we tariff their goods. Therefore the U.S. will counter with reciprocal tariffs.

Okay so here’s what it says. Under the plan my administration will work strenuously to counter non-reciprocal trading arrangements with trading partners. So essentially Trump’s team will be looking for trading agreements that are unfair and then Trump will make it fair by adding new tariffs basically leveling the playing field.

So this will be a country by country case by case review. Now a very good question is will there be exemptions or waivers or exceptions? President Trump says no that everything’s going to be fair game so please take a look. Do you expect any exemptions or waivers? I don’t expect that no this is a simple system I mean there wouldn’t be any and uh.

Now a very good question is is this a negotiating tactic? I want to show you president Trump says and then I’ll give you my prediction. Thank you Mr. President. Is it your expectation that partners will offer major concessions and that you actually don’t end up applying those tariffs? No I think that a lot of them will stay the same and whatever they pay I’ll pay.

I mean well we’ll we’ll have a lot of them stay the same. I think some look I heard they as an example EU lowered their tax on cars down to the exact same amount that they were much higher. They were approximately five times higher and they lowered them down to the exact tax that we’re charging.

That took place like yesterday the day before. Is that a correct statement? I think so yeah. Now I want to give you my opinion this is my prediction.

So these reciprocal tariffs they are negotiating tactic. However president Trump is not bluffing. That’s my opinion.

If other countries don’t give concessions then Trump’s really going to go through with this. But again this is going to be a country by country and case by case scenario. I believe that most countries will lower their tariffs on American products.

In which case there’s going to be no escalation in a trade war. So you just heard about Europe and I’ll tell you about India in a minute. But certain countries will not budge and the situation will escalate.

Now I want to clarify the status of where we are in this process of reciprocal tariffs. So no reciprocal tariffs have been issued yet. The commerce department is currently reviewing trading agreements.

So their findings will be reported to president Trump by April 1st. I want to show you the video clip. The timeline here sir there’s a period of time for a review a report 180 days.

What’s the earliest date that you think tariffs will actually be implemented? Well I would say maybe I’ll ask Howard to answer that because he’s going to be the one that’s implementing. What do you think? Our studies should be all complete by April 1st. So we’ll hand the president the opportunity to start on April 2nd if he wants.

So I think we’ll be ready to go on April 1st and we’ll hand it to the president and he’ll make his decisions. But remember if they drop their tariffs prices for Americans are coming down. Our production’s going up and our costs are going down.

Remember it’s a two-way street that’s why it’s called reciprocal. Okay so if we’re talking about April 1st, April 2nd that’s about six weeks from now right? The reason why the reports will not be issued sooner is because the analysis it’s not going to be so straightforward. It’s not going to be simply oh they have more tariffs on us than we have on them so let’s tariff them.

No it’s not going to work like that. So they’re going to be taking into account multiple factors such as taxes, regulations that make American products less competitive in the global markets. So some of the factors that they’re going to be scrutinizing they’re actually explicitly stated in the White House memo.

So here are a few of them. Unfair, discriminatory, or extraterritorial taxes. So that includes a VAT or value-added tax.

And then you have non-tariff measures, subsidies, regulatory requirements, even policies that affect exchange rates. So as you can see there are multiple factors and this can be very broad. Now another very good question is which countries will be most affected? It’s going to be the countries that have the largest trade surpluses with the U.S. So in other words Trump will target reciprocal tariffs on countries where we buy more of their goods and services than they do from us.

Like these countries that are listed. Now I want to clarify this. Didn’t Trump just impose a 10% tariff on Chinese imports? And the answer is yes they’ve gone into effect.

However these reciprocal tariffs they’re going to be on top of those so it would be in addition. And then you have Mexico and Canada. So I want to clarify.

Didn’t Trump postpone the 25% tariffs on Mexico and Canada? And the answer is yes. And most likely they’re going to continue to get postponed. But these reciprocal tariffs they are a separate issue completely.

So new tariffs can be created against Mexico and Canada. Tariffs on specific goods and services. But of course if that happens that’s not going to be as bad as a blanket 25% tariff on all Mexican and Canadian imports.

And for the rest of these countries I mean it’s going to be negotiate or get tariffed. And this will give you an idea of which countries will become targets or primary targets. It’s going to be the countries that we have a big trade imbalance with.

So look at South Korea. Look at India. So this threat of reciprocal tariffs has already gotten countries coming to the negotiating table.

India’s Prime Minister went to see Trump. And then India agreed to resolve the standoff by promising to buy more American products. U.S. oil, gas, and military equipments.

And I do want to point out that that is another acceptable concession for Trump. So Trump wants other countries to lower their tariffs on American goods and services or import more American goods and services. So regardless the end goal is to level the playing field and decrease trade deficits.

Now another very good question that people will ask is how is this going to affect inflation. So I want to show you the video clip from President Trump. He’ll give his answer and then I’ll give you my opinion.

There could be some short-term disturbance but long-term it’s going to it’s going to make our country a fortune. So Americans should prepare for some short-term pain. You said that I didn’t say that.

Let’s see what happens. Nobody really knows what is going to happen other than we know the jobs are going to be produced at levels that we haven’t seen before. We know that we think interest rates are going to ultimately be coming down because of things that happen and they go hand in hand with the tariffs.

But we think that we think that the prices for some things many things it could be all things will go down ultimately will go down. Now I want to give you my prediction on how this is going to affect inflation. So I’ll tell you that there’s going to be many more negotiations country by country.

Most countries will negotiate which means that there’s not going to be a significant amount of new tariffs in terms of dollar value which means that reciprocal tariffs will not meaningfully affect inflation. Therefore I’m telling you you shouldn’t be concerned. There’s no need to worry.

But listen I don’t want you to misunderstand me so I’m going to clarify this. I am not saying that inflation will stop. That’s very unlikely to happen.

What I’m saying is that if inflation starts accelerating it’s not going to be because of these reciprocal tariffs. Because again most countries will negotiate therefore there there’s not going to be a radical amount of new tariffs. But listen that’s just my opinion that’s the way I see it.

But please let me know yours. I look forward to reading your comments. Please subscribe.

I’ll keep you updated. Thank you for the support and wish you a very nice day. Take care.