Tariff talks may drag on, but no US recession in sight: Ned Davis strategist

Ed Clissold, Chief US Strategist at Ned Davis Research, said the Trump administration appears to have backed itself into a corner by first announcing a 90-day pause on trade decisions, then extending it by 30 days, and now leaving it open-ended.“If the countries they are negotiating with don’t like the deal, then they can stand firm,” he said. He believes this approach is likely to continue for a while and added, “This is probably going to be a story that’s going to be with us for months and months to come.” The delay in India’s case also reflects this wider pattern.

Clissold thinks the economic impact of these trade moves will be small for now. “I think it will be a slight negative, but probably not enough to cause a recession in the US,” he said. However, if talks drag on for six to twelve months, they could start affecting real business data. Companies may avoid starting new projects due to a lack of clarity on trade rules, which could hinder capital expenditure and slow growth.Also Read: Higher US tariffs may stay, but inflation fears overdone: Milken economist

Despite global uncertainties, Clissold said India remains a strong long-term pick among emerging markets, thanks to favourable demographics and global sector alignment. His team maintains at least a market weight, if not slightly overweight, on India.

The US economy, in his view, is still on solid ground in the short term, supported by strong earnings and job creation. But he warned of longer-term risks from tariffs. “There’s no such thing as a free lunch,” Clissold said, stating that protectionist policies could make the US economy less competitive over time, much like what was seen in the 1970s.

Also Read: Trade tensions persist, but markets seek stability: Standard Chartered

For the entire interview, watch the accompanying video

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