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Many people discuss the pros and cons of definitions this year after President Donald Trump made them the cornerstone of his economic policy.
Those who prefer definitions argue that they are the best way to encourage companies to build new American factories and enhance manufacturing functions. Those who suffer from customs tariffs claim that they are a possibility of an inflationary consumption that is likely to send the economy to an unspecified.
To date, the stock market reaction to the definitions has been.
S&P 500 was sharply sold after Trump put a 25 % tariff on Canada and Mexico in February and unveiled global mutual definitions worse than April 2. Then he gathered it sharply after Trump stopped this mutual tariff in the hope that the commercial negotiations will significantly remove or reduce it.
The reason for the contempt of investors for definitions is clear and direct.
The shares historically follow the growth of sales and profits over time, so they are better when policies indicate that corporate revenues and profit will climb them. Definitions, however, do the opposite. Import taxes create inflation, as companies seek to cross higher costs and sales growth. It causes a lower profit margin if the entire cost that cannot be transferred to its customers increases.
This dynamic is not lost on Ken Fisher, the founder of the billionaire of Fisher Investments, which has $ 295 billion of management assets. Fischer has been traveling in the markets since the 1970s, and saw his share of economic mutations and bust.
This week, Fisher was weighing with the possibility of definitions created manufacturing jobs, and responded with a sharp answer from one word that might surprise many.
Photo and colon source; Michael M & period; Santiago & Sol; Getty Images
The economy faces an arduous rise
The economy grew by 3 % last summer, but growth was difficult to get it recently. In the fourth quarter, gross domestic product grew by 2.4 %, and the pre -appreciation of the pre -GDE GDP -0.3 % for the first quarter.
This decline in concern has increased that the economy could be at a turning point, especially given that we have not yet tested the possible withdrawal process caused by the problems of the supply chain and the high import costs associated with President Trump’s strategy.
Related: The federal reserve official sends a strong message about inflation and jobs
The economic background is mysterious because although unemployment is historically low, it increased, with 4.2 % last month, up from 3.4 % in 2023.
Other signs include twice the job market 900,000 declines in unpaved jobs in March, according to the last Jolts report, and 602,000 workers’ demobilization has been announced so far this year, according to Challenger, Gray & Christmas, an increase of 87 % year on year.
It also does not help in matters that these job numbers be despite the shift in federal monetary policy to reduce prices in the past year from high interest rates in 2022 and 2023.
The cuts in interest rates in the Federal Reserve in September, November and December do not seem to have shocked job opportunities, yet it may have caused inflation’s progress.
Last month, CPI enlarged 2.4 %, matching the amount reported last September.
The economy is not in a stagnation, but it may suffer from stagnation.
Fischer screams the White House tariff strategy
Few money managers were vocal as Kane Fisher in terms of definitions associated with the dangers.
Fischer soon criticized the customs duties after announcing it in early April, referring to it in the name of stupid and Destroyed. It was bombing the cylinder that the customs tariff hurts the country, and imposed it more than the countries they imposed on.
Related: Goldman Sachs reveals the prediction of definitions and recession expectations
Looking at Fischer’s criticism, it is possible that his recent comments will not be described as the idea that the customs tariff will revive the manufacturing industry.
Over the past few decades, companies have increased to low -cost production abroad to provide consumers with inexpensive tools ranging from games to clothes to computers. The transformation is accelerated with technology that improves inventory management and supply chain.
As a result, the activity increased in American ports. Los Angeles Port dealt with 10.3 million containers in 2024, up from 1.6 million in 2000.
In a modern publication xFisher was asked if the definitions would restore manufacturing functions.
He answered frankly, “No.”
“I understand why many people think they will do. They will not do it,” Fischer explained. “We have a very long history of customs tariffs in this country and all over the world. They do not do it … It is a little dream … it is often just taking a tube to America.”
Fischer said: “The definitions are always worse for the company it imposes.” “Contrary to what President Trump said, we are not the largest economy … the euro area is one economic bloc … it’s greater than we are. We are 25 % of global gross domestic product … the other three quarter can trade with each other … they will take away from us anywhere they can to everything that is cheaper for them.”
More economic analysis:
- The Federal Reserve’s inflation scale puts the risk of stagnation as the bite of tariff policies
- American recession jumps with a decrease in gross domestic product
- Like or not, the bond market rules everything
Fisher is skeptical of the possibility of keeping manufacturing promises of companies.
“President Trump will get all these verbal agreements … but there is no confirmation that they can build these plants,” Fischer said. “If the company will start today in a large factory in America … it will take five years to operate and operate it … within five years from now, there is a good opportunity for you do not have the Trump administration … you may have a democratic management.”
“If they knew that it takes 5 years to build a factory, but they know that before the five years, there is a good opportunity to reflect the definitions. Why do they want to do this?” Fischer added.
Instead of transferring production to the United States, Fischer believes that some players will resort to an old practice of cheating.
“The private sector was really good, forever, to evade customs tariffs.” “You will see the biggest increase in … the black market.”
Related: The Veteran Fund Director reveals the prediction of the S&P 500
