Miran's Tariff Remarks Fail to Calm Investors

Stephen Miran, the chief economic advisor to Donald Trump, recently faced criticism and skepticism from major bond investors during a meeting aimed at calming market turbulence caused by Trump's tariff policies. The meeting, held at the Eisenhower Executive Office Building in the White House, included representatives from top hedge funds and investment firms. However, the session did not go as planned, with some attendees describing Miran's remarks on tariffs and market conditions as disorganized or incomplete. One participant even characterized Miran as being "overwhelmed" by the questions posed.

Miran's efforts to reassure investors about the administration's trade and economic policies appeared to fall short. He maintained the government's stance that tariffs would cause more harm to U.S. trading partners than to American consumers. Miran also asserted that the primary goal of tariffs was not revenue generation, although additional income could be a beneficial side effect. This stance did little to alleviate the concerns of the attendees, who remained worried about market volatility.

Miran's proposals, which include measures such as devaluing the dollar and reaching agreements with U.S. government bondholders to fund defense spending in exchange for security guarantees, have been met with resistance. These ideas, outlined in a widely circulated report last November, are based on the notion that the dollar's dominant reserve currency status is a burden. Miran's recent speech at the Hudson Institute think tank further highlighted his views on the distorted nature of currency markets and the unintended consequences of providing reserve assets.

Miran's proposals, known as the "Mar-a-Lago Accord," have faced significant pushback from bond investors. The accord aims to align global markets more closely with U.S. trade and geopolitical interests. However, the recent economic measures, including the suspension of tariffs, have added layers of complexity to the implementation of such policies. The accord's future remains uncertain as the economic and political landscape continues to evolve.

Miran's recent interactions with investors have raised questions about his commitment to the accord. Insiders report that he has distanced himself from the views presented in his 2024 report, suggesting a potential retreat from his earlier positions. This shift in stance has further complicated the situation, leaving the accord's future in limbo. As the economic environment remains volatile, it will be crucial for policymakers to carefully consider the potential implications of the accord and its impact on global markets.