First of all KUDOS to Chris for his appearance on BNN Bloomberg today. His voice was calm, measured and answers balanced.
A question for you. Slightly different from the usual. As everyone is talking about US Israel Iran war, the tariffs have taken a backseat! Trump Xi meeting has been postponed. Asia and many small countries in the world and European countries too have been affected by the current crisis involving oil price.
Surely they can't afford to pay the tariffs, can they? How is that going to play out ? They cut down their exports to the US? Is Global recession inevitable EVEN IF peace breaks out? Your fellow Sprott alumni, Rick Rule is fond of saying "Tariffs are taxes"! Isn't that the worst thing one can do during a recession?
My friends from South Asia and South East Asia tell me things pretty hard in their cities. Small businesses have already been shut down. This doesn't get much air time in North America.
Anyway, your take on this is welcome.
Tariffs will likely continue to have a negative economic impact (already reflected in GDP). Combined with higher oil prices, the possibility of recession is certainly high. There are some offsets, though. 1) Corporate earnings remain strong and growth in the 10%+ range is still expected. 2) AI spending helps both in driving some economic growth and lowering costs for companies. 3) The war is seen by investors as temporary, and tariffs, so far, are being managed well by most companies. Many tariffs, of course, are not as bad as initially expected. 4) Surprisingly, inflation has not picked up. Now, this might be due to slack in the system, but regardless the big fear of a spike in prices has not (yet) materialized. Markets do look forward. Things are not great right now, but most recessions are quite short. Investors seem to be of the belief that inflation and rates will be positive for the economy, over time.