Podcast Summary: Notes on the Week Ahead – "The Receding Tariff Tide" (March 30, 2026)

Host: Dr. David Kelly, Chief Global Strategist, J.P. Morgan Asset Management

Overview of the Episode

In this episode, Dr. David Kelly explores the shifting landscape of U.S. trade tariffs, analyzing a year’s worth of economic and market data since the administration’s imposition of broad, reciprocal tariffs. With recent judicial setbacks to these policies and changing political winds, Kelly argues that the “tariff tide is receding” and forecasts possible impacts on inflation, Federal Reserve policy, jobs, inequality, and broader market trends as America steps back from protectionism.

Key Discussion Points & Insights

1. Background: The Tariff Surge & Its Aftermath

A year ago, the U.S. President unveiled wide-ranging reciprocal tariffs, unexpected in both scale and scope.
Immediate market response: “an immediate and sharp decline in stock prices” [00:45].
Over the past year, tariffs’ negative economic effects have been largely confirmed, despite muddled data from overlapping factors—tax breaks, advances in AI, an immigration crackdown, and the war with Iran.

2. Tariffs’ Impact on Prices and Inflation

Main finding: Tariffs have directly raised U.S. consumer prices.
- “One analysis conducted by the Yale Budget Lab suggests that between 40% and 76% of tariff revenues have fed through to higher consumer prices” [03:20].
- According to the New York Fed, about 90% of tariff costs are borne by U.S. importers and consumers, not foreign exporters.
Import price data support the finding that foreign exporters have not meaningfully lowered prices to compensate.
Key statistic: U.S. goods import prices rose 1.3% (overall) and 3.0% (excluding food and fuels) in the year ending Feb 2026.
Goods inflation rose, even as overall CPI inflation moderated due to falling services inflation, driven by shelter, not tariffs.
Anticipation: Higher energy prices (due to the Iran war) could boost headline inflation in coming months.

Notable Quote

“The evidence indicates that higher tariffs have increased US Prices.” — Dr. David Kelly [02:54]

3. Economic Growth, Trade, & Manufacturing

Real GDP growth slowed marginally: 2.0% in Q4 2025 vs. 2.4% a year earlier.
Real exports grew (+1%), imports dropped (–2%); trade deficit narrowed.
Manufacturing employment: down 98,000 jobs (–0.8%) year-over-year.
Main causes of weak job growth: sharp drop in net immigration, not solely tariffs.

Notable Quote

“What is clear is the tariffs did not boost economic growth in the way that their proponents advertised.” [08:18]

4. Tariff Revenue, Corporate Profits & Refunds

$295 billion collected in tariffs between March 2025–Feb 2026.
Striking down of IPA tariffs means $175 billion likely must be refunded.
Companies initially shouldered costs, later passing them to consumers; profits largely unaffected in the first year.

5. Unemployment Trends

Unemployment edged up: 4.44% (Feb 2026) from 4.17% a year earlier—a moderate rise.
“The most dominant theme in the labor market… has been a very sharp drop in net immigration” [10:50].
Tariffs contributed to job losses in manufacturing, but labor market contraction owed more to decreased immigration.

6. Effects on Inequality

Tariffs hit lower and middle income households harder:
- Top 10% of households spend just 13% of pretax income on goods, vs. 28% for rest of population.
- “Tariffs… tend to fall much more heavily on poorer and middle income households…” [12:10].
This regressive impact unchanged over the year.

7. Productivity & Innovation

U.S. productivity grew robustly (2.5% in nonfarm business sector), outpacing the long-term average.
Likely due to tight labor supply and AI, not tariff policy.
Kelly maintains that tariffs inhibit productivity over the long term by dulling competition but admits these effects would take time to materialize.

8. Global Response & Reputation

U.S. and trading partners’ average tariff rates rose sharply: from 2.4% to 9.6%.
Retaliation by trade partners was muted—average tariffs imposed on U.S. exports increased by less than 1 percentage point.
However, U.S. global favorability fell in 17 out of 23 countries (biggest decline: Mexico, Canada, Japan, South Korea, Europe).
Declining U.S. popularity hurt the economy—tourist and student visas dropped 13% in six months, shrinking key revenues.

Memorable Moment

“While it’s nice to be liked, falling popularity has direct economic consequences.” [17:44]

9. The Recending Tariff Tide: Political & Economic Outlook

Tariffs already eased prior to Supreme Court ruling thanks to a trade truce with China and other deals.
Political opposition to tariffs is intensifying:
- 60% of Americans disapprove of tariffs (Pew poll, Jan 2026).
- Rising energy-driven inflation may make voters even more sensitive.
- Democrats expected to win House majority, may push back on administration’s trade stance.
Rebuke of protectionism could bring the U.S. back toward more open trade—potentially benefiting the economy and markets.

10. Investor Implications

Lower tariffs = potential for further inflation decline in late 2026/early 2027
If the Iran conflict stabilizes and energy prices fall, CPI inflation could drop below 2% in 2027.
Slowing inflation may allow the Fed, under new leadership, to cut rates—supporting asset prices.
Dismal results from tariffs may encourage bipartisan dismantling of trade barriers in the future.

Memorable Quote

“There is a tide to economic nationalism like other political ideas… The public will swing in the other direction, a change that should benefit both the economy and financial markets.” [22:42]

Notable Quotes – With Timestamps & Attribution

On inflation:
“The evidence indicates that higher tariffs have increased US Prices.” — Dr. David Kelly [02:54]
On tariff impact:
“What is clear is the tariffs did not boost economic growth in the way that their proponents advertised.” — Dr. David Kelly [08:18]
On inequality:
“Tariffs… tend to fall much more heavily on poorer and middle income households than their richer counterparts.” — Dr. David Kelly [12:10]
On global popularity:
“While it’s nice to be liked, falling popularity has direct economic consequences.” — Dr. David Kelly [17:44]
On political tides:
“There is a tide to economic nationalism like other political ideas… The public will swing in the other direction, a change that should benefit both the economy and financial markets.” — Dr. David Kelly [22:42]

Important Timestamps

[01:10] — Summary of 2025 tariff announcement and initial predictions
[03:20] — Research on tariff pass-through to U.S. prices
[05:30] — Inflation data and breakdown: goods vs. services
[08:18] — Analysis of GDP, exports, imports, and manufacturing jobs
[10:50] — Impact of immigration crackdown on the labor market
[12:10] — Tariffs and inequality data
[13:30] — Productivity growth and discussion of innovation
[16:20] — Global tariff rates; retaliation
[17:44] — Pew Research data on U.S. global favorability
[19:20] — Political pressure and public opinion on tariffs
[20:30] — Prospects for inflation, Fed policy, and investment outlook
[22:42] — Reflections on economic nationalism and future policy directions

Podcast Tone & Style

Dr. Kelly’s delivery is measured, data-driven, and wryly pragmatic, with clarity and a readiness to confront both economic and political realities in plain language. He consistently ties market impacts to broader policy themes, ending on a cautiously optimistic note for investors.

Summary prepared for listeners who want to understand how the retreat from tariff-heavy trade policy may affect markets, inflation, and U.S. economic prospects in the coming year.

Podcast Summary: Notes on the Week Ahead – "The Receding Tariff Tide" (March 30, 2026)

Host: Dr. David Kelly, Chief Global Strategist, J.P. Morgan Asset Management

Overview of the Episode

Key Discussion Points & Insights

1. Background: The Tariff Surge & Its Aftermath

A year ago, the U.S. President unveiled wide-ranging reciprocal tariffs, unexpected in both scale and scope.
Immediate market response: “an immediate and sharp decline in stock prices” [00:45].
Over the past year, tariffs’ negative economic effects have been largely confirmed, despite muddled data from overlapping factors—tax breaks, advances in AI, an immigration crackdown, and the war with Iran.

2. Tariffs’ Impact on Prices and Inflation

Main finding: Tariffs have directly raised U.S. consumer prices.
- “One analysis conducted by the Yale Budget Lab suggests that between 40% and 76% of tariff revenues have fed through to higher consumer prices” [03:20].
- According to the New York Fed, about 90% of tariff costs are borne by U.S. importers and consumers, not foreign exporters.
Import price data support the finding that foreign exporters have not meaningfully lowered prices to compensate.
Key statistic: U.S. goods import prices rose 1.3% (overall) and 3.0% (excluding food and fuels) in the year ending Feb 2026.
Goods inflation rose, even as overall CPI inflation moderated due to falling services inflation, driven by shelter, not tariffs.
Anticipation: Higher energy prices (due to the Iran war) could boost headline inflation in coming months.

Notable Quote

“The evidence indicates that higher tariffs have increased US Prices.” — Dr. David Kelly [02:54]

3. Economic Growth, Trade, & Manufacturing

Real GDP growth slowed marginally: 2.0% in Q4 2025 vs. 2.4% a year earlier.
Real exports grew (+1%), imports dropped (–2%); trade deficit narrowed.
Manufacturing employment: down 98,000 jobs (–0.8%) year-over-year.
Main causes of weak job growth: sharp drop in net immigration, not solely tariffs.

Notable Quote

“What is clear is the tariffs did not boost economic growth in the way that their proponents advertised.” [08:18]

4. Tariff Revenue, Corporate Profits & Refunds

$295 billion collected in tariffs between March 2025–Feb 2026.
Striking down of IPA tariffs means $175 billion likely must be refunded.
Companies initially shouldered costs, later passing them to consumers; profits largely unaffected in the first year.

5. Unemployment Trends

Unemployment edged up: 4.44% (Feb 2026) from 4.17% a year earlier—a moderate rise.
“The most dominant theme in the labor market… has been a very sharp drop in net immigration” [10:50].
Tariffs contributed to job losses in manufacturing, but labor market contraction owed more to decreased immigration.

6. Effects on Inequality

Tariffs hit lower and middle income households harder:
- Top 10% of households spend just 13% of pretax income on goods, vs. 28% for rest of population.
- “Tariffs… tend to fall much more heavily on poorer and middle income households…” [12:10].
This regressive impact unchanged over the year.

7. Productivity & Innovation

U.S. productivity grew robustly (2.5% in nonfarm business sector), outpacing the long-term average.
Likely due to tight labor supply and AI, not tariff policy.
Kelly maintains that tariffs inhibit productivity over the long term by dulling competition but admits these effects would take time to materialize.

8. Global Response & Reputation

U.S. and trading partners’ average tariff rates rose sharply: from 2.4% to 9.6%.
Retaliation by trade partners was muted—average tariffs imposed on U.S. exports increased by less than 1 percentage point.
However, U.S. global favorability fell in 17 out of 23 countries (biggest decline: Mexico, Canada, Japan, South Korea, Europe).
Declining U.S. popularity hurt the economy—tourist and student visas dropped 13% in six months, shrinking key revenues.

Memorable Moment

“While it’s nice to be liked, falling popularity has direct economic consequences.” [17:44]

9. The Recending Tariff Tide: Political & Economic Outlook

Tariffs already eased prior to Supreme Court ruling thanks to a trade truce with China and other deals.
Political opposition to tariffs is intensifying:
- 60% of Americans disapprove of tariffs (Pew poll, Jan 2026).
- Rising energy-driven inflation may make voters even more sensitive.
- Democrats expected to win House majority, may push back on administration’s trade stance.
Rebuke of protectionism could bring the U.S. back toward more open trade—potentially benefiting the economy and markets.

10. Investor Implications

Lower tariffs = potential for further inflation decline in late 2026/early 2027
If the Iran conflict stabilizes and energy prices fall, CPI inflation could drop below 2% in 2027.
Slowing inflation may allow the Fed, under new leadership, to cut rates—supporting asset prices.
Dismal results from tariffs may encourage bipartisan dismantling of trade barriers in the future.

Memorable Quote

“There is a tide to economic nationalism like other political ideas… The public will swing in the other direction, a change that should benefit both the economy and financial markets.” [22:42]

Notable Quotes – With Timestamps & Attribution

On inflation:
“The evidence indicates that higher tariffs have increased US Prices.” — Dr. David Kelly [02:54]
On tariff impact:
“What is clear is the tariffs did not boost economic growth in the way that their proponents advertised.” — Dr. David Kelly [08:18]
On inequality:
“Tariffs… tend to fall much more heavily on poorer and middle income households than their richer counterparts.” — Dr. David Kelly [12:10]
On global popularity:
“While it’s nice to be liked, falling popularity has direct economic consequences.” — Dr. David Kelly [17:44]
On political tides:
“There is a tide to economic nationalism like other political ideas… The public will swing in the other direction, a change that should benefit both the economy and financial markets.” — Dr. David Kelly [22:42]

Important Timestamps

[01:10] — Summary of 2025 tariff announcement and initial predictions
[03:20] — Research on tariff pass-through to U.S. prices
[05:30] — Inflation data and breakdown: goods vs. services
[08:18] — Analysis of GDP, exports, imports, and manufacturing jobs
[10:50] — Impact of immigration crackdown on the labor market
[12:10] — Tariffs and inequality data
[13:30] — Productivity growth and discussion of innovation
[16:20] — Global tariff rates; retaliation
[17:44] — Pew Research data on U.S. global favorability
[19:20] — Political pressure and public opinion on tariffs
[20:30] — Prospects for inflation, Fed policy, and investment outlook
[22:42] — Reflections on economic nationalism and future policy directions

Podcast Tone & Style

Summary prepared for listeners who want to understand how the retreat from tariff-heavy trade policy may affect markets, inflation, and U.S. economic prospects in the coming year.