US President Donald Trump yesterday made some bold comments surrounding Russia. One, he said he is disappointed with Russian President Putin. And he also said that if they do not come out with a deal over the next 50 days, then severe tariffs could be imposed. How do you read this and do you expect the dust to settle down over a period of time?Peter Cardillo: Well, obviously President Trump is imposing steep tariffs, not only is he indicating to Russia that if a deal is not made within 50 days that tariffs will be 100%, but he is doing it with most other countries that letters were sent out. It is just a bargaining point. And of course, in the case of Russia, it might be a little bit different because we are not talking about tariffs on imported goods, but rather on the war factor.
So, it is a question now whether or not Russia begins to think seriously on ending the war in Ukraine. And so, the more pressure that Trump puts on Russia along with other European nations, the greater the chances of some sort of a truce may happen. And let us not forget something very important that the Russian economy is in dire straits, so he really cannot afford steep tariffs nor can he afford more sanctions. So, there is a possibility that some sort of a truce could happen within the next 50 days.I wanted to understand your view on the tariffs that will be imposed starting August 1st on EU and Mexico as well. You did previously say that tariffs at these levels are unlikely to be implemented, but that August one deadline is looming. So, do you believe a resolution will be out before that or do you think these tariffs will be implemented at these levels?Peter Cardillo: Well, again, if I heard the question correctly because the audio is not that great, the situation with Mexico is like every other nation. However, Mexico did say that they have a contra plan and, of course, we have to see what this contra plan is all about and whether or not the administration accepts it.
I believe there will be a deal with Mexico along with other major nations. It is just a question of what type of a deal. Do I believe that these steep tariffs that President Trump suggests that will be implemented on August 1st go through? I do not think so. They will be much less and then, of course there is the question of whether or not they will be met with a surge in tariff inflation. In fact, today we will be getting some inflation news that is the CPI and there could very well be some hint of whether or not inflation is beginning to emerge from some of the tariffs.But he has also made some comments on tariff on Russia and secondary tariffs on all those countries who buy Russian energy. Do you think that this is merely a threat and Trump is using it as a negotiating tool or perhaps could it translate into something concrete?Peter Cardillo: Well, it is a combination. It is a negotiating tool and it is also a way of Trump trying to bring together this trade war and lessen its burdens and this burden that could have on the global economy. So far, we have not seen any evidence of inflation popping up anywhere. We saw numbers out of India which suggest inflation continues to move lower and it all depends how steep these tariffs are going to be. So, so far, the higher end of the tariff scale is just a threat and we just have to wait and see whether or not they will be imposed or whether or not they will have an inflationary impact. But again, they are just negotiating starts and that most nations will work out a deal and whether or not we get 10% or 6% in tariff implementation of tariffs is yet to be seen but some sort of a deal will be worked out. I do not think that Trump will go ahead with these steep tariffs.
