Jeremy Siegel, a renowned finance professor, offered a sharp critique of President Donald Trump's trade policies in a recent interview, characterizing the administration's approach to tariff exemptions as antithetical to free-market principles.
Siegel Slams Trump’s Tariff Policy
Speaking on the Icons and Ideas podcast with Peter Mallouk, Siegel, who is also dubbed the “Wizard of Wharton,” argued that forcing businesses to petition the White House for relief creates a centralized system of favoritism rather than an open market.
“I don’t particularly like [that] you have to go to the court of Donald Trump to get [exemptions]… that’s not good capitalism,” Siegel stated. “That’s not good free markets as far as I’m concerned.”
Siegel explained that while he advocates for a consumption tax, such as a Value Added Tax (VAT), to replace income taxes, he views Trump's tariffs as a “discriminatory” and “very imperfect” version of such a system.
He was blunt in his assessment of their standalone impact, labeling the tariffs “net a negative” for both the U.S. economy and the stock market.
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Other Fiscal Agendas Offset Tariff Risks
Despite this criticism, Siegel remains bullish on the broader financial landscape. He emphasized that other aspects of the Trump agenda are currently outweighing the negative drag of protectionist trade policies.
Specifically, Siegel pointed to deregulation, the extension of tax cuts—particularly the immediate expensing of capital expenditures—and a shift away from the “crazy antitrust” policies of the Joe Biden administration.
“The deregulation… the less fervent anti-merger movement… that offsets, more than offsets, the negative of the tariffs,” Siegel explained.
Tariffs Used As Negotiation Tool
Siegel also noted that his initial fears of a spiraling trade war have subsided.
He cited the administration’s willingness to negotiate lower rates, as seen in interactions with foreign trade representatives, as evidence that the tariffs are often used as leverage rather than permanent barriers.
However, he maintained that a system where economic viability depends on specific exemptions from the President remains a flaw in the current economic structure.
On Wednesday, the futures of the S&P 500, Nasdaq 100, and Dow Jones indices were trading higher after a positive close on Tuesday.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and the Nasdaq 100 index, respectively, ended higher on Tuesday. The SPY was up 0.94% at $675.02, while the QQQ advanced 0.62% to $608.89, according to Benzinga Pro data.
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