Memo From the Chief Economist

Memo From the Chief Economist

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Memo From the Chief Economist
Memo From the Chief Economist
This is Where the Narrative Gets Dangerous

This is Where the Narrative Gets Dangerous

David Rosenberg's avatar
David Rosenberg
Jul 24, 2025
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Memo From the Chief Economist
Memo From the Chief Economist
This is Where the Narrative Gets Dangerous
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Look, we have not seen an average tariff rate of 20%+ in over a century… having soared from 2.5%. I would consider that a shock yet to play out. There is no doubt that the markets have adopted an optimistic scenario, that there are only positives coming out of these deals, and the rest of the world has refrained from retaliating (except China and Canada for now), thereby averting a global trade war (though I thought this got priced out two months ago). The benefits I see are expanded opportunities for American business; for the rest of the world, I suppose this massive reaction in Japanese, European, and most Asian equities, is a case of pricing out a worst-case scenario of going back to the April 2nd tariff list. But it’s still a massive overreaction because if America comes out a winner in absolute terms, how does the rest of the world come out a winner too?

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