Are More US-China Tariffs Ahead?
Ken Fisher analyzes the potential for renewed US-China tariffs, arguing that while Trump may re-engage in tariff conflicts, the market impact will be limited. He cites 2025 data showing that despite initial market shocks from Trump's reciprocal tariffs, actual tariff collection was only a third of projections due to widespread workarounds and gaming of the system.
Summary
Ken Fisher examines the likelihood and potential impact of renewed US-China tariff conflicts under President Trump's administration. He begins by setting the context of current 10% tariffs for 150 days and Trump's expressed hostility toward China as America's major economic rival. Fisher then draws on lessons from Trump's April 2025 'reciprocal tariffs' introduced on Liberation Day, which shocked markets with their magnitude and scope, causing significant initial market declines. However, the market quickly recovered as investors realized the tariffs' impact would be limited due to various workarounds. Fisher provides concrete evidence that the 2025 tariff implementation was largely ineffective, with actual revenue collection reaching only about one-third of original projections. He attributes this to numerous legal avoidances including importing through Mexico or Canada, minimal enforcement (fewer than 500 physical examinations out of millions of imports), and China's strategy of routing exports through other Asian countries for repackaging before shipping to America at lower tariff rates. Fisher concludes that any future tariff war with China will have minimal market impact because businesses and countries have learned to game the system effectively, and the market has become accustomed to these dynamics. He predicts that while initial volatility may occur, stocks would adjust quickly, unlike other potential market disruptions such as escalation in the Iran conflict.
Key Insights
- Fisher reveals that Trump's April 2025 reciprocal tariffs collected only about a third of projected revenue due to widespread workarounds and avoidance strategies
- Fisher reports that border protection agencies conducted fewer than 500 physical examinations out of millions of imports during the 2025 tariff period, showing minimal enforcement
- Fisher observes that China adapted to tariffs by increasing exports to other Asian countries that then repackaged and shipped goods to America at lower tariff rates
- Fisher argues that the market has become accustomed to tariff gaming and will adjust quickly to future tariff wars, unlike the initial shock experienced in early 2025
- Fisher contends that global trade actually rose during 2025 despite tariff expectations, contrary to predictions
Topics
Transcript
[0:03] [music] >> Behind all of the angst and concerns that naturally bubble up about Iranian war, another under the surface bubbling feature is what ends up happening in the year ahead with tariffs. And particularly in the continued hostility that the president expresses toward China as America's major economic rival in the world. [0:37] Will tariffs, after we get past this period of 10% tariffs for 150 days, and President Trump figures ways legally, he presumes, although not certainly, still to be determined, to impose specific tariffs on specific countries, largely at his whim, will he re-engage in a more hostile uh conflict on tariffs with China? [1:08] And will that have big market impact, big economic impact? Now,…
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