president Trump has announced tariffs of at least 10% on all us Imports with rates even higher for 60 countries including 34% tariffs on all imports from China 26% on India 24% for Japan and 20% on the UK now the markets reacted dramatically this morning with the Dow S&P and Nasdaq all dropping and Global markets also saw their indexes tumble some economists say we're headed toward a global recession others say it's all part of president Trump's strategic plan to bring manufacturing back to the US I'm joined Now by Peru Jane associate professor of finance and economics at Rucker's business school and Michael bustler professor of Finance at Stockton University Peru Michael great to have you both with us again um as you you both saw this morning the Dow was down by about 1,00 points the S&P headed for its worst drop in about two years Peru I want to start with you what does this Market reaction signal to you about how you know about the Trump tariffs well I think the tariffs prove to be much more aggressive than expected and Wall Street uh is looking at this the street is looking at this as very negatively because it's going to massively dampen economic growth while ratcheting up uh US inflation and also raising the unemployment rate quite substantially Michael I want to ask you do you have a different take on the market volatility we have seen seen some some Global volatility as well although that seems to have leveled out a bit um but what's your take so I think the uh stock market is seeing a lot of uncertainty they don't know what's going to happen and whenever there's uncertainty in the stock market everybody says uh sell so I think this is an over uh reaction to What Trump did if you took a look at yesterday when he listed all the countries tariffs uh that they have placed on us goods are all 10 20 30 50 100% and ours were at um 2 and a half% so I want to emphasize there will be some shortterm pain in the long term this will be very beneficial to the US economy in terms of uh job growth uh us growth and keeping inflation down Peru to that point when do you believe uh us customers will start to feel that pain feel the impact of the tariffs being passed on I think the impact is going to be pretty much immediate and I don't share Michael's utopic view that this is all going to be uh hunky dory in a few years it takes a long time for some of the uh uh firms to come back into the United States and what I'm hearing is that there a lot of them are planning to Outsource their production to other countries also find newer markets and the net result of all of this is that China may be one of the beneficial iies of these high tariff rates Michael Peru raises an interesting point this doesn't happen quickly usually and we're looking at one more we believe Trump term uh as per the Constitution so is it possible to see a major shift in the market in manufacturing coming here to the US in this short period of time that the president has yeah it'll even be shorter shorter than than that a lot of us manufacturing is operating at less than full capacity to avoid a 25% tariff they'll start shifting production that may have been outside of the country back to the US and they have this uh idle capacity to take care of that they can also add a second or third shift I think we're only looking at a matter of a few months and until things start to turn around you'll see Manufacturing in the US go up substantially and because president Trump will reduce the price of energy the overall inflation rate will fall not not rise you see that happening quickly um as probably within six months as I said before I think you're looking at about Midsummer until you start to see some very positive effects of what Trump's policies are and going into the future we've locked our future in now making uh manufacturing Goods here um especially vital Goods like steel and aluminum and copper and medical uh supplies those products are vital to National Security long term this is an excellent policy Peru uh we talked just a little bit about timing but you know viewers want to know when is this going to hit their wallets right we saw a lot of people rushing out to get cars before the the Tariff on vehicles was um was implemented what will this mean for them what could price indexes excuse me what could price increases look like price increases could look quite substantially uh higher and as a matter of fact there's been some preemptive buying also automakers uh auto sellers they've been trying to stock up on their inventory levels so we've got a 60 to 90day maybe a period in which you know uh the price increases are not passed on as as dramatically but after that we're looking at anywhere from 5 to $155,000 increase in cars and I regret to inform you that you know we we're looking at much higher rates of inflation in the vicinity of 4 and a half to 5% and so what what Michael is saying is just doesn't J with what the majority of forecaster have been looking at and we're looking at a highly stagflationary situation down the line Michael isn't it true that once prices go up they very rarely come down you're talking about manufacturing coming back to the US but does that actually mean prices coming down for consumers I don't know if necessarily they'll come down but they'll stop going up as fast as they have been um in the past four four years first of all uh we um import about $1.2 trillion do worth of goods you're going to put a tariff on that and raise the price we have a sun 26 trillion economy that'll have less than a half a percent uh increase in the inflation rate on the other hand when Energy prices come down and the President says by the end of the year he's trying to cut them in half very aggressive but if he gets anywhere near that energy accounts for 7% of the Consumer Price Index directly 30% indirectly because it affects manufacturing looking at lower inflation in future sorry to interrupt you we are out of time Peru Jean professor at Rucker business school and Michael bustler professor at Stockton University thank you both appreciate your insights thank you [Music]