Commerce Secretary Lutnick Says US Markets Will Perform 'Extremely Well' Long Term Despite Trump Tariff Selloff

Commerce Secretary Howard Lutnick believes the Trump Administration’s reciprocal tariffs will cause some short-term pain, but ultimately result in medium- and longer-term gain.

What To Know: President Donald Trump announced sweeping reciprocal tariffs on numerous countries across the world Wednesday in what he called “Liberation Day” for America.

The tariff announcement sent markets into a tailspin with the SPDR S&P 500 SPY last down about 3.85%, per Benzinga Pro. Economists fear the tariffs will spark a U.S. recession and global trade war.

Thursday on CNBC’s “Squawk Box,” Lutnick suggested that the stock market reaction will be short-lived as the tariff adjustments will spur other countries to reconsider trade policies.

“I think the long term or even the medium term, you’ve got to expect the United States of America markets are going to do extremely, extremely well,” the Commerce Secretary said.

See Also: Trump’s Reciprocal Tariffs On India Exempt Pharma, Easing Mark Cuban’s Price Hike Concerns

Lutnick told CNBC he expects the tariffs to result in a “reordering of fair trade.” The move from the Trump Administration is not just in response to tariffs, it’s also in response to “non-tariff trade barriers.”

“I expect most countries to start to really examine their trade policy towards the United States of America and stop picking on us,” he said.

The Trump administration believes it has leverage to push other countries to reconsider trade policies with the U.S. Global investors fear potential retaliatory tactics that could significantly impact global economies.

“We’re talking to all the major countries of the world and we’ve been talking to them for more than a month,” Lutnick said.

“Will they treat us fairly? Can they treat us fairly? And the answer is, over time, that is going to be yes.”

The Commerce Secretary said America is going to become the producer of a lot more goods it consumes, interest rates will be much lower and the American economy will be much stronger over the longer term.

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• Trump’s Tariffs Prompt China To Vow ‘Countermeasures’: Experts See Retaliation Likely

Photo: Joshua Sukoff/Shutterstock.