Tariff threats vexing investors, but don’t worry just yet: Mohamed El-Erian

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Treasury Secretary Mnuchin says tariffs haven’t hurt US economy

Allianz chief economic adviser Mohamed El-Erian on Treasury Secretary Steven Mnuchin’s comments about how President Trump’s tariffs have impacted the U.S. economy and Trump’s trade spat with China.

The U.S. might be engaged in a tit-for-tat trade war with the European Union, China and Mexico, but global stock investors appear to be less worried about an economic fallout as a result.

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On Thursday, the Nasdaq Composite closed at a record high, and the Dow Jones Industrial Average is marching back toward 25,000 – sitting about 75 points shy of the key psychological level.

“I think the market is right in assuming this is part of a process, and that ultimately, because all parties have so much to lose from this, is going to focus minds and you will get a better outcome,” said Allianz SE Chief Economic Adviser Mohamed El-Erian during an interview with FOX Business’ Liz Claman on Thursday.

The U.S. is pursuing another round of tariffs on China that would target $200 billion in goods, according to senior administration officials. Already, President Trump has imposed a 25% tariff on Chinese products worth $34 billion. China responded in kind, levying tariffs on $34 billion worth of U.S. products, including pork and whiskey.

The U.S. is pursuing another round of tariffs on China that would target $200 billion in goods, according to senior administration officials. Already, President Trump has imposed a 25% tariff on Chinese products worth $34 billion. China responded in kind, levying tariffs on $34 billion worth of U.S. products, including pork and whiskey.

Trump -- and his advisers -- have repeatedly said the goal of tariffs is to establish a fair-trade system, but won’t go as far to say that they’re a negotiating tactic to gain leverage for free, global trade. Even with this messaging, El-Erian does not see a trade war on the horizon just yet.

“Is the current stage of trade tension a means to a better end, and that better end is still free, but fairer trade? Or instead is it an end in itself, are we simply going to see more and more trade tension, which means a full-blown trade war? I think it’s the former so far,” he said.

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