Increasing pressure from rising borrowing costs could soon force Washington to scale back its protectionist stance. Bank of America’s chief investment strategist Michael Hartnett predicts that tariffs will decline this quarter to avoid destabilizing the massive U.S. debt funding machine.
In a note shared Friday, Hartnett said the U.S. trade deficit hit a record $140 billion in March, highlighting decades of structural imbalances that have pushed American policymakers toward a protectionist posture.
Yet, despite that deficit, the U.S. has long benefited from a financial account surplus — meaning it has consistently attracted more foreign capital than it sends abroad.
A Tipping Point For Trade Policy?
“The flipside of big deficit… big $540 billion foreign inflows to U.S. assets past 5 years,”…
