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Yahoo
22-05-2025
- Business
- Yahoo
'Addictive' Trump Tariffs Are 'Here To Stay' Even If Democrats Come Back To Power, Says Wharton Professor: 'The Truth Is Governments Need Revenues'
A professor from the Wharton Business School has suggested that tariffs implemented by President Donald Trump are likely to continue despite political opposition. What Happened: Professor Joao Gomes of the Wharton Business School, in a podcast, The Trade War Playbook: Tariffs, Uncertainty, and U.S. Economic Policy, stated that both Democrats and Republicans are likely to support tariffs due to their potential to generate revenue. 'I think the end game is some tariffs are here to stay,' Gomes said, adding that they are 'addictive for every country in the world.' He further suggested that the nature and extent of these tariffs are uncertain but they are 'definitely not a thing of the past.' Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — this is your last chance to become an investor for $0.80 per share. Nancy Pelosi Invested $5 Million In An AI Company Last Year — Here's How You Can Invest In Multiple Pre-IPO AI Startups With Just $1,000. "The truth is governments need revenues and once you see the amount of revenue the tariffs bring, I think Democrats will be addicted to them as Republicans—or are as likely to be," explained Professor Gomes. While the British government has secured a 'first mover' deal with the Trump administration, Gomes stated that the number of such deals to be made remains uncertain. Why It Matters: Analysts are now exploring the potential for targeted tariffs on particular industries or products. In a recent note, UBS Group AG indicated that such measures could be implemented as soon as this summer, following trade investigations into key sectors such as pharmaceuticals, critical minerals, lumber, copper, and semiconductors. Trump's steep tariffs on countries have received widespread criticism from Democrats and major economists. On Monday, JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon cautioned the market about displaying an 'extraordinary amount of complacency' amid the risks posed by tariffs, record U.S. deficits and geopolitical tensions. However, U.S. Treasury Secretary Scott Bessent dismissed concerns over the inflationary impact of tariffs on companies such as Walmart Inc. (NYSE:WMT). Meanwhile, former PIMCO CEO and current Allianz's chief economic adviser, Mohamed El-Erian, has suggested that the era of U.S. exceptionalism is on pause due to tariff wars and economic uncertainty, but it's not over. He believes it's too early to say if the damage inflicted is irreversible. Read Next: Hasbro, MGM, and Skechers trust this AI marketing firm — Invest before it's too late. Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.30/share! Image via Shutterstock Send To MSN: Send to MSN UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article 'Addictive' Trump Tariffs Are 'Here To Stay' Even If Democrats Come Back To Power, Says Wharton Professor: 'The Truth Is Governments Need Revenues' originally appeared on Sign in to access your portfolio
Time of India
20-05-2025
- Business
- Time of India
Will the Democrats pause tariffs if they win the next election and return to power? Here's what a Wharton professor says
University of Pennsylvania professor Joao Gomes suggests tariffs are likely here to stay, becoming "addictive" for governments due to the revenue they generate. Despite political criticism, Gomes anticipates both Democrats and Republicans will find tariffs appealing. While rates may decrease, a full rollback is unlikely, with potential trade deals offering some optimism. Tired of too many ads? Remove Ads Professor Joao Gomes Says Tariffs Are Here to Stay What's the Future of US Tariff Policies? Tired of too many ads? Remove Ads The Worst May Be Over FAQs While political rhetoric on tariffs has been heated, with Democrats and at times Republicans criticizing at times US president Donald Trump's harsh tariffs, a professor pointed out that eventually both parties will want tariffs and it will continue to stay, as per a of the University of Pennsylvania 's Wharton Business School , Joao Gomes highlighted, "I think the end game is some tariffs are here to stay," adding, "I think they are addictive, they're also addictive for every country in the world," quoted mentioned in the Wharton Business Daily that, "The truth is governments need revenues and once you see the amount of revenue the tariffs bring, I think Democrats will be addicted to them as Republicans—or are as likely to be," as quoted in the READ: Japan, the U.S.'s biggest creditor, faces a Greece-like fiscal crisis as borrowing costs hit a 20-year high; here's how it ended up there While most analysts anticipate tariff rates will slowly come down, Gomes is doubtful that there will be a full rollback and he predicts that tariffs, in some form, will stay, even if the party changes next emphasized that, "So the tariffs are here to stay in some form: 5%, 10% across the board? Targeted? I don't know. But tariffs are definitely not a thing of the past, not a thing of the moment," as quoted by professor shared that, "I'm fairly comfortable that we're gonna be here two, three years out and we'll have a different regime where there's gonna be more, higher tariffs around the world," as quoted in the he also pointed out that the worst is over as countries are trying to seek a deal with the United States. He said, "There'll be some nice trade deals, possible with some of the countries that are really desperate to do business with us—I think India is a really important case in point there—so I am generally optimistic that the worst is over," quoted generate significant revenue, which makes them appealing to governments looking for according to Gomes, both Democrats and Republicans are likely to continue using tariffs due to the revenue they generate.
Yahoo
20-05-2025
- Business
- Yahoo
‘Addictive' tariffs are here to stay, warns Wharton professor, even if Democrats win the next election
Professor Joao Gomes of Wharton Business School argues that Trump's tariffs are likely to remain in place, as their revenue-generating potential makes them appealing to both Democrats and Republicans. Despite the possibility of new trade deals, he expects tariffs—both broad and targeted—to persist, with consumers ultimately shouldering the increased costs. However much politicians on either end of the political spectrum may protest against Trump's tariff policies, one economics professor says neither Democrats nor Republicans will choose to undo them in the future. President Trump's foreign policy since returning to the Oval Office in January has been somewhat unconventional. Initially, tariffs were announced on the neighboring countries of Mexico and Canada, as well as economic rival China—all to curb immigration and the flow of fentanyl into the United States. Even on the campaign trail, Trump teased further tariffs aimed at rebalancing trade with partners like the EU, Japan, Taiwan, and India. These came on Liberation Day, when Wall Street was shocked by a universal 10% tariff on every country on the planet and additional increases on nations with larger trade surpluses with the U.S. While analysts generally expect effective tariff rates to continue to come down—signaled by pauses and deals with the U.K. (and, in the early stages, China)—one economist warns these heightened rates are here to stay. "I think the end game is some tariffs are here to stay," said Professor Joao Gomes of the University of Pennsylvania's Wharton Business School. "I think they are addictive, they're also addictive for every country in the world." "The truth is governments need revenues and once you see the amount of revenue the tariffs bring, I think Democrats will be addicted to them as Republicans—or are as likely to be," Gomes added to Wharton Business Daily. "So the tariffs are here to stay in some form: 5%, 10% across the board? Targeted? I don't know. But tariffs are definitely not a thing of the past, not a thing of the moment." Analysts have begun to question the likelihood of such an event: Specialized tariffs on certain industries or products. According to UBS this could start as earlier as the summer, with chief investment officer Mark Haefele writing last week: "The Trump administration is ... preparing the groundwork for a more surgical increase in tariffs beginning this summer following trade investigations into strategic industries like pharmaceuticals, critical minerals, lumber, copper, and semiconductors." While the panic over securing a 'first mover' for a deal with the Trump administration was delivered in the form of Sir Keir Starmer's British government, Professor Gomes said the ongoing back and forth over how many deals will be made is anyone's guess. What he is confident in is that tariffs, to some extent, will still be in place come the next election: "I'm fairly comfortable that we're gonna be here two, three years out and we'll have a different regime where there's gonna be more, higher tariffs around the world. "There'll be some nice trade deals, possible with some of the countries that are really desperate to do business with us—I think India is a really important case in point there—so I am generally optimistic that the worst is over." While the worst might be over, Professor Gomes previously told Fortune that he expects the consumer to ultimately foot the bill for any tariff-related price increases. Speaking to Fortune in April following the Liberation Day announcements, Professor Gomes said any resistance by the Trump administration to admit customers would be paying higher prices would prove false: "How much ultimately gets to the consumers is questionable, but it's definitely going to be significant, at least for a year or two. How persistent that's [going to] last, how much inflation you're gonna get, for how many months, that's maybe a question to be worked out." Professor Gomes's thinking has indeed played out in reality, with the Wharton senior vice dean of research adding in his latest interview: "I think it was a useful lesson in how not to provoke the gods, the market gods." This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
