Andrzej Skiba, Head of BlueBay U.S. Fixed Income at RBC Global Asset Management, joined Forbes Newsroom to discuss how the U.S. economy will react to the rollout of President Trump's tariffs.
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NewsTranscript
00:00So no matter what negotiations happen going forward, we're still looking at, I believe
00:06you had put out a 10%, oh, 10% tariffs are likely to be an inflationary, we'll get to
00:13inflation.
00:14Let's go back to the piecemeal comment that you made, because we've been talking a lot
00:18about the tariffs that could affect the auto industry.
00:22But as you look at what was announced yesterday, what do you see as the economic sectors in
00:27the US that are most vulnerable right now?
00:31So the market was focusing attention on a pretty short list of sectors that are most
00:38vulnerable in the context of a trade escalation.
00:42As you correctly mentioned, auto parts were one of the clear examples.
00:49But it's not the only one.
00:51We're seeing a meaningful hit to sectors like discretionary consumer goods, where you
00:58import a lot of those goods.
01:00And those prices will be impacted by the tariffs that were announced.
01:05Similarly, within the industrial complex, quite a number of, for example, chemical products
01:13could be imported into the US.
01:16Also we're seeing pressure on companies where supply chains are international in nature,
01:22and they can be impacted quite hard by what's been announced yesterday.
01:28So there are clearly a number of sectors that have been disproportionately hit.
01:35But we also know that these sectors were pretty well telegraphed.
01:39So when we're looking at the performance of fixed income instruments from those sectors
01:47in recent months, we've already seen underperformance of those trade sensitive sectors manifesting
01:55itself in anticipation of the announcements that we've seen yesterday.
02:00So as far as we're concerned, actually, in case of those most impacted sectors, probably
02:06most of the price adjustment has already occurred.
02:10And our attention is actually switching to other topics, like, for example, the overall
02:16strength and resiliency of the US consumer, whether that will remain in place.