The Truth in the Fog of Tariffs
March on Wall Street is shrouded in the fog of tariff expectations.
While the market breathes a sigh of relief over rumors that "Trump may soften his stance on tariffs," Goldman Sachs economists tear off the gentle facade—those seemingly mild probes are merely smoke bombs to distract at the negotiating table.
History tends to repeat itself. The Trump administration views tariffs as a sharp weapon in economic gamesmanship, rather than a bargaining chip.
A 4% market expected tax rate feels more like a naive illusion.
Goldman Sachs' cold data models reveal a more realistic picture: the first round of tariffs may approach 18%, like a thunder hidden in the clouds, ready to split the calm of capital markets at any moment.
This is not a simple numbers game.
From steel and aluminum tariffs to the smoke of trade wars, historical experience has long proven that so-called "mild statements" are often the prelude to building momentum at the negotiating table.
As the gears of the global supply chain creak due to the pandemic and geopolitical conflicts, if a new round of tariffs lands as strongly as Goldman Sachs predicts, it will shake not only the curve of the Dow Jones Index but also the fluctuating profit and loss figures on countless corporate balance sheets.
The fragility of the market may lie in the misjudgment of "expectation deviations."
After all, in the art of political economy, "bluffing" and "real firepower" are often only a paper apart.
