'How Disastrous Will This Be?'
PMG reporters engage in a roundtable discussion about the potential direction of Trump’s tariffs.
TroibNews 
President Donald Trump is moving forward with his robust new tariff strategy, unsettling markets and prompting foreign governments to seek solutions.
Businesses of all sizes are closely monitoring the situation, hoping for a reprieve before the full duties take effect on Wednesday. However, the president has offered little in terms of hope.
To better understand the current state of affairs—economically, politically, and diplomatically—a roundtable discussion was held with PMG reporters from around the world.
The panel included White House reporter Megan Messerly, Morning Money author Sam Sutton, senior U.K. trade reporter Graham Lanktree, and Ottawa bureau chief Nick Taylor-Vaisey, moderated by PMG's economics correspondent.
Amid significant uncertainty, one consensus emerged: the intensity of this situation is unlikely to dissipate soon.
This conversation has been edited for length and clarity.
The markets saw significant volatility today, with the S&P 500 briefly dipping into bear market territory. A false report claiming Trump would pause tariffs for 90 days caused a sharp surge, followed by a downturn when the story was debunked.
Stocks generally ended the day flat. What was your biggest takeaway regarding Wall Street's response to the tariffs?
Sutton: This illustrates the immense demand for both clarity and relief. The prospect of a break from the “reciprocal” tariffs caused markets to rise because it would mitigate potential damage from new import duties and provide insight into Trump's endgame.
Although today’s losses were less severe than anticipated—the Nasdaq actually saw a slight increase—the fluctuations suggest a period of heightened volatility is ahead.
Even Trump’s staunchest business allies are displaying signs of concern. Bill Ackman, a notable hedge fund manager who has been vocal in his support for Trump, has criticized the methodology behind the tariffs.
Elon Musk also took to Twitter (now known as X) over the weekend to critique White House trade adviser Peter Navarro. Megan, are there signs of discord within the administration?
Messerly: Definitely. While the White House portrays itself as united, there are two clear factions: the staunch protectionists and those advocating for “fair trade.” So far, the protectionist faction, including Navarro and U.S. Trade Representative Jamieson Greer, has held the upper hand. However, today we noted some success for the other group as the president shifted his rhetoric toward dealmaking.
This might be disappointing for true believers like Navarro, but many close to the White House anticipated some level of dealmaking, although Trump indicated that not every country will be included.
What is the administration’s stance right now? Are they signaling a desire to negotiate?
Sutton: The president mentioned this afternoon that tariffs could be permanent, with some possibly open to negotiation. It's quite a Rorschach test for investors on edge.
Messerly: To add onto that, Trump explicitly used the term “negotiate” in a conversation in the Oval Office with Israeli Prime Minister Benjamin Netanyahu. Interestingly, just Friday, the White House was adamant that tariffs were “not a negotiation.”
Nonetheless, Trump has reiterated that some tariffs will indeed be permanent. The key takeaway is negotiations are on the table, but it remains unclear how many of the over 50 countries that have reached out will secure deals versus being stuck with permanent tariffs.
Got it. So it's still up in the air.
Nick, foreign governments are clearly grappling with the same questions. In Canada, Prime Minister Mark Carney has retaliated against new U.S. auto tariffs, particularly with an election approaching. The Canadian economy faces significant threats, yet Canada and Mexico are the only countries maintaining a free trade agreement with the U.S. How is Carney navigating this?
Taylor-Vaisey: Every day Carney can wear his “prime minister” hat is a win over his Conservative rival, Pierre Poilievre, who aims to undermine Carney's credibility. Polls suggest that voters believe Carney, a former central banker, is best equipped to protect Canada from Trump.
Today, amid news of steep lumber tariffs, Carney met with British Columbia Premier David Eby to discuss support for forestry workers, generating headlines about his stand against Trump.
I anticipate Carney will wear that metaphorical PM hat for the remaining three weeks of the election campaign.
Graham, what’s happening in the United Kingdom? Is Prime Minister Keir Starmer still optimistic about a free trade deal?
Lanktree: Prior to Trump's tariff announcement, Starmer’s government had laid the groundwork for an agreement that could lift tariffs on the U.K., but it remains with Trump’s Resolute desk.
It's also becoming increasingly clear to the British public that the deal might come with concessions, such as a review of a new Online Safety law and greater market access for U.S. beef. While the U.K. could potentially strike a deal, it may come at a significant political cost.
This shift in U.S. trade relations bears a resemblance to Brexit, doesn't it?
Lanktree: It does parallel Brexit in that the U.S. has now increased trade barriers with nearly all countries globally rather than just the 27 in the EU. Brexit has substantially impacted the U.K. economy, creating a drag on GDP and foreign investment, notably due to uncertainty and new barriers. Similar effects will likely ripple worldwide, suggesting a sort of global Brexit as the U.S. withdraws from the global economy.
A trade lawyer in London remarked that Trump’s tariffs could be “worse than Brexit," citing the rapidly changing trade rules. It's not just the tariffs, but also the retaliation they will trigger.
In the U.S., this seems likely to complicate messaging, especially when the tangible economic effects start to materialize; layoffs and rising prices are anticipated.
So far, the administration’s position has been that there will be short-term pain for long-term gain. Megan, do you foresee any change in policy or messaging when that pain impacts everyday Americans?
Messerly: That's the million-dollar question. Currently, much of this feels abstract to the average American. When layoffs, price hikes, and other tangible effects emerge, the situation transforms completely.
It’s still uncertain how the White House will respond. Recent developments have been unpredictable. Today’s shift in messaging from "just bear it" to a renewed focus on negotiations seems specifically aimed at calming market concerns. However, it will become a political issue once the public begins to feel real effects, complicating matters for the White House and Republicans as they approach midterm elections.
Sutton: Public opinion surveys already show a decline in support for the president. He’s facing negative numbers regarding the economy, according to Gallup and others. Households and businesses are becoming increasingly pessimistic about labor market conditions, inflation, and overall business prospects. This doesn't bode well for the GOP as the trade war's impacts become evident in the coming months.
Recession fears are prevalent, especially with corporate earnings season approaching at the end of the week, when companies will report both their first-quarter performance and forecasts.
How severe is this likely to be?
Sutton: Analysts have been lowering expectations for a strong first quarter. But this doesn't necessarily indicate widespread negative results when companies report their earnings later this week.
What I’m particularly interested in is any forward-looking guidance regarding future hiring, growth, mergers, and investments. There’s already been a plethora of “soft data” suggesting these plans are being curtailed. It’s one thing to read a survey; it’s another to hear a CEO declare, “We were going to build this factory, but now we can’t due to uncertainty over input costs.”
That's likely to serve as a significant political test for the Trump administration.
Nick or Graham, do you think there will be any coordinated response from other governments to these tariffs if they are implemented as proposed? Will this lead other countries to strengthen ties with one another at the U.S.'s expense?
Taylor-Vaisey: Canada is currently navigating uncharted waters. Not long ago, Ottawa felt antagonized by Trump. More recently, the president has taken a surprisingly amicable tone towards Carney. After largely escaping the fallout from "Liberation Day," Carney's team is aiming to project strength without provoking Trump too much or resorting to retaliatory tariffs that could harm Canadian workers.
Canada recognizes the need to reduce its reliance on U.S. markets. This sentiment appears uniform across all parties in the election. Foreign Minister Mélanie Joly has mentioned coordinating tariff responses with allies in Europe and Asia, focusing on building alliances without escalating tensions with Trump, hoping he directs his frustrations elsewhere.
At the same time, the Liberals stand to gain politically from Trump's antagonism, so they likely wouldn’t desire for the tensions to vanish completely.
Lanktree: When Carney visited London recently, he stated that there was no coordinated plan for retaliation against Trump. While I can’t confirm this for Canada and the EU, the U.K. currently has no retaliation plans. Some businesses are urging the Starmer government to collaborate with G6 partners to create an economic alliance. There's also been some movement among CPTPP members, including Canada, the U.K., Japan, and Mexico, to establish stronger trade ties as a response to Trump's tariffs.
Both London and Ottawa have indicated a desire to enhance their trade collaborations amid Trump's threats, though the specifics remain uncertain.
The TPP sounds familiar! It was a trade agreement initially championed by the U.S. that never came to fruition—Trump ran on an anti-TPP platform in 2016. It would be ironic if its successor, excluding the U.S., became a tool for countering that same country.
Lanktree: The TPP was originally conceived by the Obama administration to counterbalance China, which indeed adds another layer of irony.
Taylor-Vaisey: For the past couple of years, Canada has been sending numerous ministers to Indo-Pacific countries in search of enhanced trade relations. They view the region as a logical partner but likely didn’t anticipate the current motivating factors for such cooperation.
Finally, what has been the most surprising aspect of this entire tariff saga?
Messerly: Honestly, it's surprising how little Trump has publicly concerned himself with market reactions. This marks a significant departure from how he approached markets during his previous administration. It highlights a certain bravado in his stance, suggesting, “I alone can fix this,” especially since he’s not currently facing reelection.
Taylor-Vaisey: I suppose I shouldn’t be surprised, but Trump’s tempered rhetoric towards Carney amid trade tensions left many around here taken aback. After their first discussion, a Liberal candidate and I were out canvassing, and we agreed that the prime minister couldn’t have scripted a better scenario.
Carney, characterized as a dry-witted figure who speaks measuredly, contrasts sharply with Justin Trudeau, suggesting the president may simply appreciate a different approach. Nevertheless, Carney has not shied away from criticizing Trump—no annexation threats, for instance, is quite notable.
“Not even one annexation threat” vividly illustrates the current state of U.S.-Canada relations.
Taylor-Vaisey: This is just the beginning.
Sutton: The scale of this strategy is indeed astonishing. Given that this was a campaign promise for Trump, it shouldn't have caught anyone off guard. However, even during the campaign, the full ramifications of his trade agenda and the pain it could unleash were likely underestimated. It's easy to conceptualize the potential effects, but truly grasping them requires witnessing them firsthand.
It appears that markets were becoming accustomed to a 10 or 20 percent tariff, but anticipated that as a ceiling, not a baseline.
Lanktree: From my perspective, what surprised me is how certain economists who were once advocates of free markets are now arguing that these tariffs are necessary to facilitate the return of manufacturing to the United States.
Also, the administration's decision to inflate the cost of consumer electronics for everyday users by imposing tariffs on the entire supply chain for companies like Apple and Google, whose mobile phones drive Silicon Valley's social media landscape, is notable. Trump's tariffs impact the entire supply chain—from assembly in China, where he has suggested he might impose 100 percent tariffs if they retaliate, to places like Vietnam and Taiwan for chip production, and India, where Foxconn is establishing new iPhone manufacturing facilities.
Sutton: To reiterate Nick's earlier point, it’s indeed still early.
Before we conclude, does anyone have any bold predictions?
Taylor-Vaisey: While Ovechkin may have surpassed Gretzky’s goal-scoring record, he’ll never catch up in terms of total points. Just make sure not to cheer for Gretzky too loudly in certain parts of Canada at this moment.
Lanktree: My prediction is that this will become the new normal throughout Trump’s presidency. Without this approach, I’m unsure how they’d plan to attract manufacturing back to the U.S. or finance their desired tax cuts.
Messerly: I don’t see this as particularly bold, but even if negotiations with other countries begin, I expect Trump to continue treating China distinctly.
Sutton: Ongoing market volatility may lead some investors to reconsider their perspectives on the dollar. The recent dip of the dollar alongside market declines following the "Liberation Day" announcement is unusual and suggests potential trouble if uncertainty continues to loom.
Sophie Wagner for TROIB News
Businesses of all sizes are closely monitoring the situation, hoping for a reprieve before the full duties take effect on Wednesday. However, the president has offered little in terms of hope.
To better understand the current state of affairs—economically, politically, and diplomatically—a roundtable discussion was held with PMG reporters from around the world.
The panel included White House reporter Megan Messerly, Morning Money author Sam Sutton, senior U.K. trade reporter Graham Lanktree, and Ottawa bureau chief Nick Taylor-Vaisey, moderated by PMG's economics correspondent.
Amid significant uncertainty, one consensus emerged: the intensity of this situation is unlikely to dissipate soon.
This conversation has been edited for length and clarity.
The markets saw significant volatility today, with the S&P 500 briefly dipping into bear market territory. A false report claiming Trump would pause tariffs for 90 days caused a sharp surge, followed by a downturn when the story was debunked.
Stocks generally ended the day flat. What was your biggest takeaway regarding Wall Street's response to the tariffs?
Sutton: This illustrates the immense demand for both clarity and relief. The prospect of a break from the “reciprocal” tariffs caused markets to rise because it would mitigate potential damage from new import duties and provide insight into Trump's endgame.
Although today’s losses were less severe than anticipated—the Nasdaq actually saw a slight increase—the fluctuations suggest a period of heightened volatility is ahead.
Even Trump’s staunchest business allies are displaying signs of concern. Bill Ackman, a notable hedge fund manager who has been vocal in his support for Trump, has criticized the methodology behind the tariffs.
Elon Musk also took to Twitter (now known as X) over the weekend to critique White House trade adviser Peter Navarro. Megan, are there signs of discord within the administration?
Messerly: Definitely. While the White House portrays itself as united, there are two clear factions: the staunch protectionists and those advocating for “fair trade.” So far, the protectionist faction, including Navarro and U.S. Trade Representative Jamieson Greer, has held the upper hand. However, today we noted some success for the other group as the president shifted his rhetoric toward dealmaking.
This might be disappointing for true believers like Navarro, but many close to the White House anticipated some level of dealmaking, although Trump indicated that not every country will be included.
What is the administration’s stance right now? Are they signaling a desire to negotiate?
Sutton: The president mentioned this afternoon that tariffs could be permanent, with some possibly open to negotiation. It's quite a Rorschach test for investors on edge.
Messerly: To add onto that, Trump explicitly used the term “negotiate” in a conversation in the Oval Office with Israeli Prime Minister Benjamin Netanyahu. Interestingly, just Friday, the White House was adamant that tariffs were “not a negotiation.”
Nonetheless, Trump has reiterated that some tariffs will indeed be permanent. The key takeaway is negotiations are on the table, but it remains unclear how many of the over 50 countries that have reached out will secure deals versus being stuck with permanent tariffs.
Got it. So it's still up in the air.
Nick, foreign governments are clearly grappling with the same questions. In Canada, Prime Minister Mark Carney has retaliated against new U.S. auto tariffs, particularly with an election approaching. The Canadian economy faces significant threats, yet Canada and Mexico are the only countries maintaining a free trade agreement with the U.S. How is Carney navigating this?
Taylor-Vaisey: Every day Carney can wear his “prime minister” hat is a win over his Conservative rival, Pierre Poilievre, who aims to undermine Carney's credibility. Polls suggest that voters believe Carney, a former central banker, is best equipped to protect Canada from Trump.
Today, amid news of steep lumber tariffs, Carney met with British Columbia Premier David Eby to discuss support for forestry workers, generating headlines about his stand against Trump.
I anticipate Carney will wear that metaphorical PM hat for the remaining three weeks of the election campaign.
Graham, what’s happening in the United Kingdom? Is Prime Minister Keir Starmer still optimistic about a free trade deal?
Lanktree: Prior to Trump's tariff announcement, Starmer’s government had laid the groundwork for an agreement that could lift tariffs on the U.K., but it remains with Trump’s Resolute desk.
It's also becoming increasingly clear to the British public that the deal might come with concessions, such as a review of a new Online Safety law and greater market access for U.S. beef. While the U.K. could potentially strike a deal, it may come at a significant political cost.
This shift in U.S. trade relations bears a resemblance to Brexit, doesn't it?
Lanktree: It does parallel Brexit in that the U.S. has now increased trade barriers with nearly all countries globally rather than just the 27 in the EU. Brexit has substantially impacted the U.K. economy, creating a drag on GDP and foreign investment, notably due to uncertainty and new barriers. Similar effects will likely ripple worldwide, suggesting a sort of global Brexit as the U.S. withdraws from the global economy.
A trade lawyer in London remarked that Trump’s tariffs could be “worse than Brexit," citing the rapidly changing trade rules. It's not just the tariffs, but also the retaliation they will trigger.
In the U.S., this seems likely to complicate messaging, especially when the tangible economic effects start to materialize; layoffs and rising prices are anticipated.
So far, the administration’s position has been that there will be short-term pain for long-term gain. Megan, do you foresee any change in policy or messaging when that pain impacts everyday Americans?
Messerly: That's the million-dollar question. Currently, much of this feels abstract to the average American. When layoffs, price hikes, and other tangible effects emerge, the situation transforms completely.
It’s still uncertain how the White House will respond. Recent developments have been unpredictable. Today’s shift in messaging from "just bear it" to a renewed focus on negotiations seems specifically aimed at calming market concerns. However, it will become a political issue once the public begins to feel real effects, complicating matters for the White House and Republicans as they approach midterm elections.
Sutton: Public opinion surveys already show a decline in support for the president. He’s facing negative numbers regarding the economy, according to Gallup and others. Households and businesses are becoming increasingly pessimistic about labor market conditions, inflation, and overall business prospects. This doesn't bode well for the GOP as the trade war's impacts become evident in the coming months.
Recession fears are prevalent, especially with corporate earnings season approaching at the end of the week, when companies will report both their first-quarter performance and forecasts.
How severe is this likely to be?
Sutton: Analysts have been lowering expectations for a strong first quarter. But this doesn't necessarily indicate widespread negative results when companies report their earnings later this week.
What I’m particularly interested in is any forward-looking guidance regarding future hiring, growth, mergers, and investments. There’s already been a plethora of “soft data” suggesting these plans are being curtailed. It’s one thing to read a survey; it’s another to hear a CEO declare, “We were going to build this factory, but now we can’t due to uncertainty over input costs.”
That's likely to serve as a significant political test for the Trump administration.
Nick or Graham, do you think there will be any coordinated response from other governments to these tariffs if they are implemented as proposed? Will this lead other countries to strengthen ties with one another at the U.S.'s expense?
Taylor-Vaisey: Canada is currently navigating uncharted waters. Not long ago, Ottawa felt antagonized by Trump. More recently, the president has taken a surprisingly amicable tone towards Carney. After largely escaping the fallout from "Liberation Day," Carney's team is aiming to project strength without provoking Trump too much or resorting to retaliatory tariffs that could harm Canadian workers.
Canada recognizes the need to reduce its reliance on U.S. markets. This sentiment appears uniform across all parties in the election. Foreign Minister Mélanie Joly has mentioned coordinating tariff responses with allies in Europe and Asia, focusing on building alliances without escalating tensions with Trump, hoping he directs his frustrations elsewhere.
At the same time, the Liberals stand to gain politically from Trump's antagonism, so they likely wouldn’t desire for the tensions to vanish completely.
Lanktree: When Carney visited London recently, he stated that there was no coordinated plan for retaliation against Trump. While I can’t confirm this for Canada and the EU, the U.K. currently has no retaliation plans. Some businesses are urging the Starmer government to collaborate with G6 partners to create an economic alliance. There's also been some movement among CPTPP members, including Canada, the U.K., Japan, and Mexico, to establish stronger trade ties as a response to Trump's tariffs.
Both London and Ottawa have indicated a desire to enhance their trade collaborations amid Trump's threats, though the specifics remain uncertain.
The TPP sounds familiar! It was a trade agreement initially championed by the U.S. that never came to fruition—Trump ran on an anti-TPP platform in 2016. It would be ironic if its successor, excluding the U.S., became a tool for countering that same country.
Lanktree: The TPP was originally conceived by the Obama administration to counterbalance China, which indeed adds another layer of irony.
Taylor-Vaisey: For the past couple of years, Canada has been sending numerous ministers to Indo-Pacific countries in search of enhanced trade relations. They view the region as a logical partner but likely didn’t anticipate the current motivating factors for such cooperation.
Finally, what has been the most surprising aspect of this entire tariff saga?
Messerly: Honestly, it's surprising how little Trump has publicly concerned himself with market reactions. This marks a significant departure from how he approached markets during his previous administration. It highlights a certain bravado in his stance, suggesting, “I alone can fix this,” especially since he’s not currently facing reelection.
Taylor-Vaisey: I suppose I shouldn’t be surprised, but Trump’s tempered rhetoric towards Carney amid trade tensions left many around here taken aback. After their first discussion, a Liberal candidate and I were out canvassing, and we agreed that the prime minister couldn’t have scripted a better scenario.
Carney, characterized as a dry-witted figure who speaks measuredly, contrasts sharply with Justin Trudeau, suggesting the president may simply appreciate a different approach. Nevertheless, Carney has not shied away from criticizing Trump—no annexation threats, for instance, is quite notable.
“Not even one annexation threat” vividly illustrates the current state of U.S.-Canada relations.
Taylor-Vaisey: This is just the beginning.
Sutton: The scale of this strategy is indeed astonishing. Given that this was a campaign promise for Trump, it shouldn't have caught anyone off guard. However, even during the campaign, the full ramifications of his trade agenda and the pain it could unleash were likely underestimated. It's easy to conceptualize the potential effects, but truly grasping them requires witnessing them firsthand.
It appears that markets were becoming accustomed to a 10 or 20 percent tariff, but anticipated that as a ceiling, not a baseline.
Lanktree: From my perspective, what surprised me is how certain economists who were once advocates of free markets are now arguing that these tariffs are necessary to facilitate the return of manufacturing to the United States.
Also, the administration's decision to inflate the cost of consumer electronics for everyday users by imposing tariffs on the entire supply chain for companies like Apple and Google, whose mobile phones drive Silicon Valley's social media landscape, is notable. Trump's tariffs impact the entire supply chain—from assembly in China, where he has suggested he might impose 100 percent tariffs if they retaliate, to places like Vietnam and Taiwan for chip production, and India, where Foxconn is establishing new iPhone manufacturing facilities.
Sutton: To reiterate Nick's earlier point, it’s indeed still early.
Before we conclude, does anyone have any bold predictions?
Taylor-Vaisey: While Ovechkin may have surpassed Gretzky’s goal-scoring record, he’ll never catch up in terms of total points. Just make sure not to cheer for Gretzky too loudly in certain parts of Canada at this moment.
Lanktree: My prediction is that this will become the new normal throughout Trump’s presidency. Without this approach, I’m unsure how they’d plan to attract manufacturing back to the U.S. or finance their desired tax cuts.
Messerly: I don’t see this as particularly bold, but even if negotiations with other countries begin, I expect Trump to continue treating China distinctly.
Sutton: Ongoing market volatility may lead some investors to reconsider their perspectives on the dollar. The recent dip of the dollar alongside market declines following the "Liberation Day" announcement is unusual and suggests potential trouble if uncertainty continues to loom.
Sophie Wagner for TROIB News
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