Tariff threats: What will happen if the other side does not play ball the way President Trump wants to? Arvind Sanger explains
Arvind Sanger, Managing Partner, Geosphere Capital Management, says Trump's threats of tariffs are just the starting point in negotiations, not the final goal. Because of this, the market continues to rise. Another interesting point is that this year's rally isn't just fueled by the Magnificent 7. It's much more widespread. This is a positive sign, indicating a general sense of economic optimism rather than just focusing on those seven companies and ignoring the rest.
What will the US President do next, no one knows. I at least do not know. Do you?
Arvind Sanger: None of us know, but the market has correctly been rising because the bet is that at the end of the day, Trump's tariff threats are a negotiating tool. They are not a tool to destroy the US economy because eventually tariffs hurt everybody. So, the market is making the bet that deregulation is coming, taxes are going to stay low. The one area where I worry is that there is a hope that maybe there will be a lot of cost savings from DOGE and Elon Musk, and I am not sure how much they will be able to extract, but there is some hope that there will be something there.
The other hope, which so far has not proved to be wrong, is that Trump's tariff threats are an opening gambit in negotiations, not an end by themselves. In that sense, the market keeps going high. And the other interesting thing, very interesting, is that this year the rally is not driven by the Mag 7 (Magnificent 7). It is much more broad-based. So that is encouraging as that suggests this is a
