Trade Wars & Tax Cuts: Is Your Savings Safe? | Saturday Extra

Summary

Morning Wire Podcast Summary Episode: Trade Wars & Tax Cuts: Is Your Savings Safe? | Saturday Extra
Release Date: March 22, 2025
Hosts: Georgia Howe and John Bickley
Guest: Mark Tepper, CEO of Strategic Wealth Partners

---

Introduction

In this episode of Morning Wire, host Georgia Howe welcomes Mark Tepper, CEO of Strategic Wealth Partners, to discuss the current economic landscape influenced by President Trump's trade wars and tax policies. The conversation delves into stock market volatility, the impact of tariffs, and the potential benefits of Trump's pro-growth initiatives.

---

Stock Market Volatility and Trade Wars

Georgia Howe opens the discussion by addressing recent stock market fluctuations attributed to fears over Trump's trade wars and tariffs.

Key Points:

• Historical Context: Mark Tepper references the first wave of Trump's tariffs in late 2018, noting a 19.9% drop in stocks followed by a significant rebound in 2019, with the S&P 500 gaining approximately 30%.
• Policy Uncertainty: Tepper highlights that current policy uncertainty is the second highest on record, which he believes creates buying opportunities rather than cause for alarm.

Notable Quote:

“Whenever you have a policy uncertainty this high forward looking returns in the stock market over the next three, six and 12 months are substantially above average.”
— Mark Tepper (01:27)

---

Media vs. Trump’s Narrative on Tariffs

The discussion shifts to the contrasting perspectives between the legacy media and Trump's administration regarding the efficacy of tariffs.

Key Points:

• Media Criticism: Howe points out that traditional media outlets have portrayed tariffs negatively, suggesting they will exacerbate economic issues.
• Trump’s Stance: Tepper counters this by supporting Trump's view that tariffs, when combined with tax cuts and deregulation, can positively influence the economy and benefit American taxpayers.

Notable Quote:

“I think this is actually going to be good for the economy, good for the American taxpayers, good for consumers, and ultimately beneficial for the stock market.”
— Mark Tepper (02:51)

---

Impact of Trump's Tariffs on Economy and Consumers

Tepper provides an analysis of how tariffs could affect personal income and consumer taxes, arguing that the impact may be less severe than feared.

Key Points:

• Tariff Impact Calculation: A universal 25% tariff on imported goods could translate to approximately a 3% income tax on American taxpayers.
• Complementary Policies: When combined with Trump's tax cuts and deregulation, the net effect could be favorable for economic growth.
• Tax Reduction Examples: Tepper mentions specific tax cuts, such as lowering the highest tax bracket from 39.6% to 37% and proposing no taxes on various income streams for individuals earning up to $150,000 annually.

Notable Quote:

“So look, at the end of the day, I think this is actually going to be good for the economy, good for the American taxpayers, good for consumers, and ultimately beneficial for the stock market.”
— Mark Tepper (02:51)

---

Prospects of Trump's Tax Reform Proposals

The conversation explores the feasibility and potential economic benefits of Trump's proposal to eliminate federal income tax for individuals earning under $150,000.

Key Points:

• Legislative Challenges: Tepper acknowledges the difficulty in passing such a significant tax overhaul but remains optimistic if the benefits to average Americans are clearly articulated.
• Historical Comparison: He draws parallels to pre-Civil War America, where tariffs were the primary source of government revenue before the establishment of a permanent income tax in 1913.
• Economic Incentives: Transitioning from income taxes to consumption taxes via tariffs could incentivize saving, fostering long-term economic growth.

Notable Quote:

“If you do that, you incentivize saving. And when you save, that grows the economy much, much faster.”
— Mark Tepper (04:37)

---

Short-term Pain vs. Long-term Benefits

Georgia Howe inquires about the potential short-term hardships for consumers as the economy adjusts to new policies and continues to manage national debt.

Key Points:

• Timing of Economic Adjustment: Tepper suggests that current uncertainty is causing temporary delays in consumer spending and business investments, which are expected to resume in subsequent quarters.
• Importance of Policy Stability: Extending Trump's tax cuts by mid-July is crucial to maintaining consumer confidence and preventing a pullback in spending during key shopping seasons.
• Long-term Outlook: Despite short-term challenges, Tepper believes that sustained economic policies will lead to a more robust and debt-managed economy by Q3 of the following year.

Notable Quote:

“I'm talking about a timing event whereby demand gets pushed out of quarter or two.”
— Mark Tepper (06:10)

---

Conclusion

Georgia Howe wraps up the episode by expressing optimism based on Tepper's insights, highlighting the potential for economic stability and growth through Trump's trade and tax policies. The discussion underscores the importance of policy continuity and consumer confidence in navigating the current economic uncertainties.

Closing Remarks:

“I do believe it will be made clear by Q3 or so of this year, yes, I do think the economy can be on solid ground.”
— Mark Tepper (06:10)

---

This episode of Morning Wire provides a comprehensive analysis of the interplay between trade wars, tax cuts, and their combined effect on the U.S. economy. Mark Tepper offers a nuanced perspective that challenges mainstream media narratives, emphasizing the potential long-term benefits of current policies despite short-term uncertainties.

Transcript

[Mark Tepper]

Fears of Trump's trade wars and tariffs.

[Georgia Howe]

Have sparked stock market volatility and raised.

[Mark Tepper]

Concerns over the future of the US Economy.

[Georgia Howe]

We speak to a Wall street veteran about why he says Americans should not be worried about the economy. He believes Trump's pro growth policies like tax cuts and deregulation could ultimately benefit the economy and the American taxpayer. I'm Georgia Howe with Daily Wire Editor in Chief John Bickley. It's Saturday, March 22nd and this is a weekend ed of Morning Wire.

[John Bickley]

Are you looking for a better quality meat? Good ranchers delivers 100% American beef, chicken and wild caught seafood straight to your door. Every cut is steakhouse grade with no antibiotics or hormones. Subscribe now using code Daily Wire to get your free bacon, ground beef seed oil, free chicken nuggets or salmon in every order for an entire year plus $40 off. That's goodranchers.com promo code dailywire Good Ranchers, American meat delivered.

[Georgia Howe]

Joining us to discuss what we can expect for the economy is CEO of Strategic Wealth Partners, Mark Tepper. Mark, thanks so much for coming on.

[Mark Tepper]

Thank you, Georgia. I appreciate it. Looking forward to this.

[Georgia Howe]

So let's just start with some recent stock market volatility. Just in the past month there's been not a catastrophic dip, but a significant dip that's caused a lot of fear around Trump's so called trade wars. How spooked should we be about the stock market?

[Mark Tepper]

Well, look, I think if you rewind back to Trump tariffs 1.0 fourth quarter of 2018, top to bottom, the stocks fell about 19.9% and right before they hit 20% they started to reverse course. And then you Fast forward to 2019, the S&P was up around 30%. So what I would say is that when you look at what's going on with tariffs, obviously it's creating a lot of uncertainty which is causing a lot of fantastic stocks to pull back or that's presenting good buying opportunities. Because when you look at policy uncertainty, which is at its second highest level on record, second to only the lockdowns of 2020, whenever you have a policy uncertainty this high forward looking returns in the stock market over the next three, six and 12 months are substantially above average. So look, I'm viewing this as a buying opportunity. I'm trying to pick off my favorite high conviction names and add to them appropriate.

[Georgia Howe]

Now the legacy media though, has been kind of pounding this message that this is because the tariffs are bad and that it's only going to get worse. That's obviously the opposite of what we're hearing from Trump and his Treasury Secretary.

[Mark Tepper]

Yeah.

[Georgia Howe]

What are your thoughts on Trump's use of tariffs and how do you expect them to impact one, the stock market and two, consumers?

[Mark Tepper]

So if we look at kind of worst case scenario for tariffs as a country, we have about $25 trillion of total personal income. Ann, we import about $3.3 trillion of goods. If there was a universal 25% tariff on every single good we import, that would equate to roughly a 3% income tax on the American taxpayer. Not fun, not great, but not the end of the world. But that's only if you're looking at tariffs in a vacuum. If then you start to pair it with the other pro growth initiatives, lower taxes, less regulation, it actually seems pretty decent. So, I mean, you look at the extension of the Trump tax cuts, just using the highest tax bracket, that went from 39.6 down to 37. I don't have a PhD in mathematics, but that's pretty close to 3%. And I also look at the fact that, you know, one of the latest things President Trump has talked about is potentially no tax up to $150,000 of income. He's talked about no tax on Social Security. He's talked about no tax on tips, no tax on overtime. The effective tax rate for someone making 150 grand a year is 15%. Right now, their federal income tax rate, if what President Trump wants to do happens, that goes down to zero. But then there's that extra 3% from tariffs. So look, at the end of the day, I think this is actually going to be good for the economy, good for the American taxpayers, good for consumers, and ultimately beneficial for the stock market.

[Georgia Howe]

Now, how likely is it that Trump could pass something like no federal income tax under 150,000? Is that a pipe dream or is that something he could actually get votes for?

[Mark Tepper]

That sounds like quite the challenge. But I think if he can make the case and he can get a lot of the Democrats to buy into helping average Joe and Jane on Main Street, I think there could be a chance. I mean, you rewind back to pre Civil War and tariffs generated roughly 90% of the government's revenues back at that point in time. We didn't have a permanent income tax until I think it was 1913. So there's certainly a case to be made. I don't think it's the most likely outcome, but I think it would be great for the economy because at that point, what we're doing is via tariffs. We are taxing on consumption rather than income. And when you do that, you incentivize saving. And when you save, that grows the economy much, much faster. And as we all know, look, we have a crushing fiscal deficit. Obviously, Doge is trying to chip away at. But you know, no amount of spending cuts from Doge are going to completely balance the budget. So the only way we can balance the budget in the long run and start to chisel away at the debt is a combination of what Doge is doing in cutting spending. But we need to grow. And if we can incentivize saving over consuming, we can do that, we can achieve that. And it's going to take, you know, 10, 20 years for us to make good progress, but we can do it.

[Georgia Howe]

Now, will there be a painful short term for citizens and consumers while the markets are getting used to what this new terrain looks like and while we're still paying down this massive debt? In other words, are we in for a rocky road?

[Mark Tepper]

I mean, as long as the uncertainty exists, that's what is causing the most heartache right now. But what I can tell you, Georgia, is that we're not talking about demand destruction. We're just talking about a timing event whereby demand gets pushed out of quarter or two. So any of those growth initiatives that small businesses were thinking about putting in place this quarter, those move to quarter two, quarter three, quarter four of this year, they still happen, but they just happen later. I would think that by Q3 of this year, you will start to see a big turnaround. I do think, Georgia, that getting the Trump tax cuts extended by somewhere around July 1st through 15th is incredibly important for consumers. If it doesn't happen by then, you've got back to school shopping season really about a few weeks after that, and you might see consumers pull back. So consumers need to feel like those Trump tax cuts are going to stay in place, that it's helping them, that tariffs have not raised the price of all the goods that they want to buy to astronomical levels. And when they see that, and I do believe it will be made clear by Q3 or so of this year, yes, I do think the economy can be on solid ground.

[Georgia Howe]

All right. Well, Mark, I hope you're right about this. Thanks so much for coming on.

[Mark Tepper]

Thanks, George. I appreciate it.

[Georgia Howe]

That was Mark Tepper, CEO of Strategic Wealth Partners, and this has been a weekend edition of MORNING Wire.