On April 2, 2025, Anthony Pompliano – CEO of Professional Management – shared his views on President Trump's tariff strategy, emphasizing that a tariff of 5-10% is ideal, while tariffs above 30% should only be used for negotiation. This view, along with the context of the trade war between the USA and China, could significantly impact global financial markets. Let's analyze in detail.


Pompliano's View: Smart Tariffs But Need Adjustments

Pompliano assesses the tariff strategy of #USA as 'smart' in the current context, as the USA is in a strong position with the largest economy in the world (GDP $27 trillion, according to World Bank). He suggests:



  • A general tariff of 5-10% on all imports, but exempting USA goods that are encouraged (like high-tech components from Japan).


  • Tariffs above 30% are unsustainable, should only be used as a negotiating leverage and reduced within weeks.


  • Negotiating over 100 trade agreements simultaneously is unfeasible, so a new trade organization with a common set of rules is necessary.


  • The main battle is between the USA and China – two 'giants' neither side is willing to concede (USA exports $150 billion to China, China exports $450 billion to the USA, according to USTR).



#Pompliano also believes the stock market will recover if the Fed cuts interest rates 1-2 times (expected 0.25% by 05/2025, according to CME FedWatch) and there are positive announcements from Trump. He emphasizes that Bitcoin will be a notable asset if countries devalue their currencies during the trade war.


Impact On Financial Markets


  1. Stock Market: Optimistic Sentiment If Tariffs Decrease
    If Trump imposes tariffs of 5-10% as proposed by Pompliano, the stock market could recover strongly. Low tariffs will lower import costs, improving profit margins for multinational companies like Apple (which imports 60% of components from China, according to Nikkei) and Walmart (70% of goods from China). The S&P 500, which rose 8% in Q1/2025, could increase another 5-7% if the Fed cuts interest rates and Trump makes positive announcements (according to Goldman Sachs).


    However, if tariffs exceed 30% and persist, the market will face significant pressure. Increased production costs could push inflation up to 1.5% (according to Goldman Sachs), reducing corporate profits and causing pessimistic sentiment. The DAX index (Germany) has dropped 2% due to concerns about USA tariffs on European cars (according to EU Trade Commission).



  2. Forex Market: USD Highly Volatile
    Tariffs of 5-10% could weaken the USD due to increased flows of free trade, reducing domestic USD demand. The euro has risen 4% against the USD in 2025 (according to ECB), and this trend may continue if the USA and other countries reach agreements. In contrast, tariffs above 30% would increase the USD value due to reduced imports, putting pressure on other currencies like the yuan (China has decreased by 3% against the USD, according to PBOC).


    If the Fed cuts interest rates, the USD will weaken further, creating opportunities for inflation-hedging assets like gold ($3,171/oz, up 19% in Q1/2025) and Bitcoin ($84,900, down 12% but with potential for increase).



  3. Crypto Market: Bitcoin Benefits From Currency Devaluation
    Pompliano emphasizes that Bitcoin is a 'notable asset' if countries devalue their currencies during the trade war. If China devalues the yuan to increase exports (expected to drop by 5%, according to UBS), investors will turn to Bitcoin as 'digital gold'. Bitcoin could rise to $100,000 if stagflation occurs (according to Grayscale), especially when the USD weakens and inflation rises (estimated at 1.5% due to tariffs).


    However, the crypto market remains highly volatile (market capitalization fell 11.65% to $2.88 trillion in Q1/2025). Ethereum dropped 45% ($1,830), indicating pessimistic sentiment. Bitcoin needs more momentum from positive announcements to break out.



  4. Commodity Market: Downward Price Pressure
    Tariffs of 5-10% will reduce transportation and production costs, pulling commodity prices down. Crude oil fell 2% to $70/barrel (according to WTI), and industrial metals like copper fell 1.5% (according to LME). This benefits manufacturing companies but harms exporting countries like Brazil and Russia (the Bloomberg commodity index fell 3% in Q1/2025).



Long-Term Impact And Risks

In the long term, if tariffs stabilize at 5-10%, the USA could achieve Trump's goals: increasing domestic production (estimated to create 500,000 jobs, according to USTR) and reducing the trade deficit (currently $900 billion). A new trade organization with common rules will boost global trade (increasing 2.5%, according to WTO), helping global stocks recover (the MSCI World Index could rise 10% in 12 months).


However, the risks remain significant:



  • USA-China Tensions: Both countries are not backing down, and high tariffs could escalate the trade war (#China threatening a 25% tax on USA agricultural products, according to Xinhua).


  • Rapid volatility: Pompliano warns that the situation can change quickly, especially if Trump imposes tariffs above 30% (which could reduce USA GDP by 0.8%, according to Goldman Sachs).


  • Market sentiment: If there are no positive announcements, pessimistic sentiment will continue, affecting risky assets like stocks and crypto.



Conclusion: Opportunities And Challenges Go Hand In Hand

Pompliano's view on a 5-10% tariff brings hope for the financial markets: stocks could recover, the USD could weaken, and Bitcoin could benefit if currencies are devalued. However, the USA-China trade war and the risk of high tariffs (above 30%) are a major 'headwind'. Investors need to closely monitor Trump's moves and China's reactions to adjust strategies. If tariffs reach an ideal level, this would be a 'major victory' for Trump's policies, opening a new growth phase for the financial markets.


Risk warning: Financial markets are greatly affected by tariff policies and macroeconomic instability. Consider carefully before investing.