Washington, D.C. — With President Donald Trump’s tariffs continuing to weigh on the minds of both businesses and consumers, a prominent economist has proposed a strategy that could ease these tensions while still keeping tariffs in place. Torsten Sløk, the Chief Economist at Apollo Global Management, suggests that maintaining certain tariff rates could allow for a global trade “victory” and help mitigate economic uncertainty.

In a recent analysis, Sløk speculated that the U.S. could keep tariffs at 30% on Chinese goods and 10% on all other imports while allowing countries a one-year period to reduce non-tariff barriers to trade. This approach aims to provide the market with stability while fostering negotiations with trade partners.

As the 90-day suspension of Trump’s previously imposed tariffs approaches its deadline next month, expectations of renewed trade negotiations are building. Although a few agreements have been reached, including a temporary deal with China and one with the U.K., significant uncertainty remains regarding ongoing discussions with other trading nations. U.S. officials have indicated that they are close to finalizing new deals.

Sløk emphasized that extending the tariff timeline could benefit both the American economy and its trading partners by creating a clearer business environment. “This would provide $400 billion in annual revenue for the U.S., while trading partners might view the reduced tariffs positively,” he noted. Such a scenario could ultimately bolster employment and support financial markets by lessening the fear surrounding trade tensions.

In the past, Sløk has raised alarms about the potential negative impacts of tariffs, previously warning that they might lead the economy toward recession. Nonetheless, his current outlook reflects a shift in perspective as he explores solutions that could stabilize the strained trade landscape.

The Federal Reserve’s officials are carefully monitoring how tariffs will influence economic conditions, particularly in regard to inflation. Recent statements from Fed members indicate a divide in opinions on potential interest rate adjustments, with some suggesting immediate cuts, while others advocate for a more cautious approach. The uncertainty surrounding tariffs complicates policy decisions as officials consider the broader economic implications.

Others in the financial sector have echoed Sløk’s sentiments, speculating that tariffs may ultimately settle at lower levels, estimated between 10% and 12%. Chris Harvey, the head of equity strategy at Wells Fargo Securities, believes this range would minimize economic disruption and support market growth. He foresees a potential rise in the S&P 500 index to impressive heights, despite reservations about current trade dynamics.

For markets and businesses, progress in reaching agreements with major economies, notably India, Japan, and the European Union, will prove vital in addressing long-term trade concerns. The industry’s focus is increasingly shifting to broader economic forecasts, looking beyond immediate tariff impacts as they strategize for the coming years.

As discussions continue, the potential for new arrangements promises to reshape the landscape of international trade, delivering crucial insights and possibilities for economic recovery in a post-tariff world.