‘The orange rhino’: Experts unpack the optimistic and pessimistic impacts of Trump’s tariffs

To Robert Spendlove, a former Utah legislator who’s now the senior economist at Zions Bank, the metaphor that best represents America’s current economic landscape isn’t a “black swan” event (rare, unpredictable and unknowable while it’s happening) or a “gray rhino” (obvious and coming right at you with plenty of warning signs).

His metaphor, Spendlove told attendees of a conference hosted by the tax watchdog group, the Utah Taxpayers Association, at the Grand America in Salt Lake City on Monday, is a “variation” of the gray rhino. 

“This is the orange rhino,” he said, drawing laughs when his Powerpoint presentation presented a slide of an angry, charging rhino with President Donald Trump’s signature hair style — an image Spendlove said he asked ChatGPT to help create. 

Levity aside, Spendlove — who began his presentation by saying no matter the source, economic analyses always have some level of bias, including his — said he’s heard plenty of takes about Trump’s approach, especially when it comes to tariffs. 

“I’ve heard a lot of people talking about Donald Trump saying he’s crazy, he’s stupid, he’s unpredictable,” he said. “I’m here to tell you, that he is none of those things. That his policy is founded on deep roots. Whether you agree or disagree … you need to understand that there is policy behind what they’re doing. There is a strategy. And it is very predictable.” 

In an effort to interpret Trump’s economic strategy, Spendlove said when it comes to Trump, “you should not take him literally, but you better take him seriously.” 

“And what you’ve seen over the last three months is too many people taking him literally and not taking him seriously,” Spendlove said. “And that is causing confusion. It’s causing chaos in the markets.” 

‘Economic revolution’

Many economists watching the impact of the Trump administration’s trade policies warn that tariffs and the ensuing trade wars have elevated the risk of recession, stirred uncertainty and will likely lead to increased prices for consumers and businesses.  

But Spendlove, in an analysis that was largely complimentary of what Trump is trying to accomplish, boiled down the president’s economic policy as an effort to “reindustrialize, reprivatize and refocus” the U.S. economy. 

He quoted directly from several of Trump’s posts on Truth Social, saying “he makes it really clear” what he wants to do. From one of the posts, Spendlove highlighted Trump saying “THIS IS AN ECONOMIC REVOLUTION, AND WE WILL WIN. HANG TOUGH, it won’t be easy, but the end result will be historic.” 

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Spendlove noted that Trump’s tariff proposals are constantly changing as he negotiates with other countries — pointing to the news Monday morning that the U.S. and China both agreed to slash tariffs, with the U.S. lowering them from 145% to 30% while China agreed to lower its retaliatory tariffs on U.S. goods down from 125% to 10%. In response, “the markets are rallying,” he said. 

Those negotiations, along with the president’s other tariffs that range from what he calls “reciprocal” tariffs on 75 countries and tariffs on a wide range of industries and materials, are meant to push a return to tariff rates seen more than a century ago — all to encourage increased manufacturing in the U.S., cut down on reliance on other countries, and strengthen the U.S.’s global competitiveness with other rising world powers, especially China.  

“Trump often talks about the tariffs from the 1800s. That’s where he wants to go,” Spendlove said. “This is a rewriting of the paradigm. It is an economic revolution, and they’re rejecting the globalism that has existed for the last 100 years.”

Additionally, another big goal of the Trump administration is to reduce the U.S.’s increasing trade deficit. “What they say is we’re getting a bunch of cheap crap from China, and we’re exporting our wealth, and that can only continue for so long,” Spendlove said. 

Spendlove also predicted where it will all “settle out.” 

“Maybe we settle out around 10% to 15% (tariffs), maybe even settle out around 30%,” Spendlove said. “But I’ll tell you, 10 years from now, I don’t think we’re back to 3%. I think we’re in a new era of higher tariffs moving forward.” 

Along with slashing federal spending, cutting government regulations, and lowering income taxes and encouraging more workforce participation, Spendlove said the Trump administration wants to address “some of those big issues that we haven’t been willing to address for too long.” 

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“You’ve got to take the policies together. Yes, the tariffs hurt. Yes, slowing migration hurts. Reducing government spending and support is hard for those that rely on it,” Spendlove said. “But you’re going to see dramatically lower taxes, supporting the domestic workforce (and) deregulation.” 

Spendlove also acknowledged that an economic downturn is more likely than it was at the beginning of the year. But he also said even though consumer confidence is down and “lower-income groups are getting stressed,” data isn’t showing a slowdown in the labor market or rising inflation. 

“We could see it,” he acknowledged, “but we haven’t seen it yet.” 

‘Tariffs are tax increases’

Spendlove’s presentation had an optimistic tone. But another presenter who took the podium not long after him had a more pessimistic outlook as he explained the economic implications of tariffs and the impact they’ll have on consumers and businesses. 

Jared Walczak, vice president of state projects for the Tax Foundation, which describes itself as a leading nonpartisan tax policy nonprofit, said he’s “more concerned about the economic impacts.”

“Partially because I’m not sure the (Trump) administration itself really has a consistent theory of what these tariffs are supposed to do,” Walczak said, adding that federal officials have not “put out any economic estimates whatsoever on what they expect from these tariffs.” 

The Tax Foundation has an online tracker documenting the impacts of Trump’s tariffs, which he said has become “very long and really complex because seemingly every week or so there’s a significant change in what the tariff policy is.” 

Even with the recent rollback of China’s tariffs, Walczak said, “we’re talking right now about some pretty significant tariffs.” Bottom line, he said “tariffs are tax increases” that impact businesses and consumers. 

“Fundamentally, this is one of the largest tax increases” in the U.S. in decades, perhaps even modern history, he said. 

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While he said the Trump administration is using tariffs as a tool to encourage domestic production in the U.S., “there are a lot of problems with this,” Walczak said, adding that it’s encouraging the U.S. to shift away from industries that it’s “good at” — like high-end manufacturing — in favor of “less productive things.” 

“We don’t make a lot of textiles. We make a lot of airplane parts. We don’t make a lot of low-end plastic goods, (but) we make a whole lot of information technology,” he said. 

Walczak also said many economists warn against tariffs because they have been shown to actually discourage production, not encourage it. He pointed to steel tariffs under former President George W. Bush, which he said negatively impacted jobs downstream of the steel industry that used partially imported steel. 

“You lost significant numbers of jobs, even in the targeted industry … and certainly in the broader economy because of the higher cost of the imports,” he said. 

So while Trump is characterizing his economic policy as a “win” for American consumers and businesses, Walczak said “that has not been the experience of tariffs in the past.” 

“Tariffs reduce economic outputs and income, they function like a consumption and reduction tax,” he said. 

Even by optimistic estimates, Walczak said Trump’s tariffs, as currently proposed, “would lose about 550,000 jobs, just on the U.S. side of this.” That all depends on how other countries respond and what plays out next. But retaliatory tariffs, he said, results in losses for both sides. 

“That’s the problem with tariffs. It creates this tax wedge,” he said, “where the consumer is getting less for their money, the producer is getting less value. There is a cost in the middle. And it’s a really inefficient cost. If you are going to raise taxes for some reason, this would not be how you do it. … You are discouraging capital investment. You are distorting labor markets. You are distorting production markets.” 

Walczak apologized that he brought “such a negative message” to a room that was full of many conservative lawmakers, “but this is burdensome for the U.S. consumer who will have lower purchasing power, will have lower incomes over time.” 

“It’s bad for American workers because businesses are affected by tariffs, they raise their prices or they reduce their income,” he said. “All of these effects will happen. It’s just a question of balance.” 

He said most economists widely agree that tariffs are bad economic policy. 

“The Trump administration is a little bit out on its own on these things,” he said. “So in terms of business impact, I would be concerned.”