Economist Changes Tune on Trump Tariffs: Outsmarted Us All

A prominent Wall Street economist said that President Donald Trump's tariff policies, which he initially warned would trigger a recession by the summer, were more strategic than he believed.

Torsten Sløk, chief economist at Apollo Global Management, wrote in a recent analysis that although the uncertainty surrounding U.S. trade policy has started to weigh on the economy, Trump could lower tariffs on most of the U.S. trading partners while using the levies to boost federal revenue, the New York Post reported Friday.

Sløk's analysis came before the U.S. and China announced Friday they reached the framework of a trade agreement, including a commitment from China to deliver rare-earth minerals. Trump imposed a July 9 deadline on reciprocal tariffs on a host of nations, hoping to secure better trade deals, but White House press secretary Karoline Leavitt told reporters Thursday the deadline could be extended.

"The deadline is not critical," Leavitt said during a press briefing that aired live on Newsmax and the Newsmax2 online streaming platform. "The president can simply provide these countries with a deal if they refuse to make us one by the deadline. And that means the president can pick a reciprocal tariff rate that he believes is advantageous for the United States and for the American worker. And he will continue to do that."

Sløk suggested in his analysis that extending the deadline by a year would give countries and U.S. domestic businesses "time to adjust to the new world with permanently higher tariffs, and it would also result in an immediate decline in uncertainty, which would be positive for business planning, employment, and financial markets."

"This would seem like a victory for the world and yet would produce $400 billion of annual revenue for U.S. taxpayers," Sløk wrote. "Trade partners will be happy with only 10% tariffs, and U.S. tax revenue will go up. Maybe the administration has outsmarted all of us."

In April, Sløk warned that Trump's tariffs policy could trigger a recession by the summer, particularly harming American small businesses and potentially halting the flow of goods from China to the U.S., leading to layoffs and a broader economic slowdown, the Post reported.