Tariffs Create Serious Risks, Threat to Growth: Former Treasury Secretary Robert Rubin

Robert Rubin, Senior Counselor at Centerview Partners, and 70th US Treasury Secretary, discusses current US fiscal policy and the risks of a fragmented global financial system as China and Canada retaliate against US tariffs. He speaks with Bloomberg's Paul Sweeney and Alix Steel from the Bloomberg Invest conference in New York City.
Rubin's comments came as concerns about the impacts of a trade war on the global economy spurred a flight to short-term bonds, gold and haven currencies.
From New York to London and Tokyo, equities fell — with the S&P 500 almost erasing its $3.4 trillion post-election rally. The US imposed the largest set of new tariffs in nearly a century, slapping levies on a broad swath of goods from China, Canada and Mexico that spurred swift reprisals. The trade tension fueled worries about growth, with traders fully pricing in three quarter-point rate cuts by the Federal Reserve in 2025.
The moves — before President Donald Trump’s address Tuesday night to Congress — mark a new phase in his broadening economic and diplomatic reset of America’s place in the world. Treasury Secretary Scott Bessent projected confidence in the tariff plans — even as the stock market slumped.
If Wall Street learned one thing during Trump’s first term as president, it’s that the stock market is a way he keeps score. The theory was that the president’s penchant for using equities as a report card meant any policy that rattled markets would cause him to revise the plans. But with stocks tanking, investment pros are starting to question if there’s a “Trump Put” after all.
“Where’s the Trump Put,” said Tom Essaye at The Sevens Report. “At what level of stock market ‘pain’ would Trump and the administration reverse course? Obviously, we don’t know the exact number, but if we look back at Trade War 1.0, history implies the ‘Trump Put’ would be elected around a 10% decline in the S&P 500.”
To Nancy Tengler at Laffer Tengler Investments, while it’s “always excruciating” to be in the middle of a market correction — this is essentially what she think is currently happening. The S&P 500 has now dropped nearly 6% from its record high.
“This time, of course, it’s spurred by the tariffs,” she noted. “And I think we have to analyze not just what the tariffs will be, but how long we think they’re going to last. If it is short lived, this is just an opportunity to buy stocks for the long term.”
The S&P 500 fell 1.1%, after slumping twice as much to approach its key 200-day moving average. The “oversold bounce” from lows was led by some big techs after a rout that put the Nasdaq 100 on the brink of a “correction.” The gauge slid 0.5%. The Dow Jones Industrial Average fell 1.4%. A gauge of the Magnificent Seven megacaps sank 1.1%. The Russell 2000 dropped 1.1%.
Gauges of credit risk jumped. The yield on 10-year Treasuries rose four basis points to 4.19%. A dollar gauge slid 0.4%. Mexico’s peso and Canada’s loonie led losses in major currencies, while the Swiss franc and the Japanese yen climbed.

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