Lock the White House Watch Newsletter for free
Your Guide to What Trump’s Second Season Means Washington, Business and World
The Trump administration’s early trade deals could trigger a binary response from financial markets and determine how investors view White House tariffs, said John Waldron, President Goldman Sachs.
Wall Street endures a volatile month, with investors split between those who argue that tariffs will help support the transformation of the US economy and those who fear a recession.
“Whatever comes out of these trade negotiations, we hope, will be what we want. It may or may not be bullish, but it could serve as a template,” Waldron said in an interview with the Financial Times.
Comments from Waldron, widely regarded as the successor to CEO David Solomon, reflect Wall Street’s unease about the administration’s progress in finding trade deals with dozens of countries.
President Donald Trump is in the early stages of a 90-day suspension on many of the massive tariffs he announced on April 2 to allow Washington and other global capitals time to negotiate new trade deals.
“The market is focused on these early trade transactions,” Waldron said.
“The bull incident means there is no need to discuss trade after Labor Day, and we are reducing the overall low mutual tariffs and non-trade barriers,” he added, referring to the US public holidays on September 1.
Waldron said he expects the market focus to shift from trade to “what will the fiscal situation and budget settlement look like?”
Congress will negotiate detailed budgets in the coming months after recently agreeing to a budget resolution.
Recommended
These first months of this year are very different to early expectations for the Trump administration on Wall Street. Many executives hope that Trump will pursue widespread deregulation and tax cuts to boost the US economy, with some Wall Street leaders talking in January about the “animal spirit” that stimulates investment banking activities.
Instead, financial markets have been overthrown by Trump’s sweeping tariffs, which have prioritized most other policies. The bank’s trading sector has made significant profits from market volatility, but uncertainty has reduced trading.
Waldron said after a desperate April-April start before Trump announced his suspension at most tariffs, financial markets “will normalize more concerns about growth forecasts.” He said the company is refraining from making major changes to its business until it can see what the outcome will be from the ongoing trade negotiations.
“Most people haven’t made any changes because they’re thinking about it. You’ll find out more in 90 days,” Waldron said.
