Steve Miran stated that the burden of tariffs is shouldered by the countries imposed upon. He mentioned that American consumers have the ability to shift demand to other nations.
Miran also suggested that there is a need to lessen regulations to expedite factory construction. Moreover, he pointed out the President’s reputation for strong negotiating tactics.
Upcoming Negotiations With China
His remarks may point towards upcoming negotiations with China, a topic already hinted at by Trump.
Miran’s comments draw attention to how tariffs tend to affect the exporting nation, rather than the one applying them. In practice, this means that when higher duties are introduced, companies in the affected country often absorb part of the cost, either through lower profit margins or by reducing prices to retain competitiveness. This, according to Miran, plays into the hands of the US, which, due to its vast consumer base, can re-route demand elsewhere. Essentially, when goods get more expensive from one location, buyers simply switch—provided options exist.
He went further by identifying a need to quicken the process of domestic factory setups through easing regulation. The emphasis here, plainly, is on reducing red tape rather than eliminating it altogether. That matters, particularly in sectors such as semiconductors or rare earths, where the lead-time between approval and output stretches into years. If that friction is lowered, the time between policy intention and economic impact can be narrowed considerably.
Potential Strategy Based On Leverage
The reference to the President’s style hints at a potential strategy built around leverage. His preference for placing pressure first—followed, if necessary, by compromise—is well documented. If the approach holds true for trade discussions, then it would be reasonable to forecast a rise in pressure tactics before anything like formal talks with Beijing might begin.
For those of us dealing in derivatives, this setup creates a fresh batch of near-term risks and opportunities. When policy appears to tilt towards tougher trade actions, the natural reaction is a shift towards dollar strength and increased volatility in equity indices—especially those weighted towards multinational earnings or reliant on global supply chains. Equities tied to domestic production may respond differently, particularly if incentives for local manufacturing begin to show up in data.
On the regulatory comment, we interpret that as a loosely-timed indicator that domestic capex-related sectors could benefit—though the timeline risks remain long and subject to legislative delays. Nonetheless, it helps in forming a thesis around industrials and certain commodity suppliers. Keeping trades ranged and tight over the coming weeks would serve us given these signals haven’t translated into policy just yet, but show early markers of planned moves.
From a rates perspective, any perception that capacity restrictions will be addressed faster than expected may dampen inflation expectations slightly. However, if tariffs amplify instead, that argument weakens. So the balance between easing regulation and raising trade barriers plays directly into inflation-linked products that are sensitive around the front end.
Options vols may inch upwards if talk increases before action settles. For now, we prefer smaller notional positions with layered protection, allowing re-entry as actions get confirmed. The tone from Miran, while polished, reads as preparatory rather than reactive—which suggests a timeline measured over weeks, not days.
Keeping track of back-end guidance from similar officials and tying that against timing clues from the administration helps us refine calibration. Trading too early on positioning before policy is set remains a trap. So we watch, recheck driver weightings, and tilt exposure only when the moves match the messaging.
