Kiddar Capital CEO Todd Hitt on Cheddar: 
If You Have Good Trade Policy In Place, You Don't Need Tariffs


March 7, 2018


Kiddar Capital CEO Todd Hitt discusses on Cheddar Gary Cohn's resignation and how the announced steel and aluminum tariffs are expected to impact the U.S. economy.


Smith: Todd let’s start with you. How big of a deal is it that Cohn resigned amid this push towards tariffs? And how will his resignation impact the policies rollout as well?

Hitt: First off I’d say that Gary’s a great guy, a tremendous American Patriot, and a great businessman. Having him in the White House, from a business perspective, was great for American business.

I do think though, when you look at Gary’s chops and what he’s really good at, Gary got tax reform done, he took the lead on that, then he got to tariffs — you know what’s going to happen with that — clearly lost that battle internally in the White House. I think in terms of Gary’s expertise, he’s sort of done.

So Gary moving on doesn’t really surprise me. I’m not sure if I can believe all the stories about exactly why. I doubt there was a big fight in the White House. It’s not Gary’s style. My guess is he said, okay, I’ve done what I can do here, I got tax reform. That was historic, that was a big thing for him, and he took a lead on that. And you know the tariff battle is over, and clearly the President is going to start initiating some of these tariffs.

Machado: Right. And it seems like, as the reports are coming out that everybody in the White House keeps calling Gary a globalist, they might have very different economic views once tax reform is passed on where to go from here.

Eric, let’s bring you into the picture. How big of a loss is this for the White House? So many people on Wall Street are saying Gary Cohn was their one way to keep this economic growth to keep going.

Boehm: It's a big loss for the White House losing Gary Cohn, and I think tariffs are going to be a big loss for the White House in the long run, too. Cohn, as you said, is the first victim of this, and he won't be the last. American workers, American manufacturers, American companies, American consumers are all going to lose if these tariffs go through. The only question that I have about the whole Gary Cohn leaving the White House narrative that we're reading in the press and that we're hearing right now is, if he was going to lose this battle on tariffs, why walk away there? Why not stay and try to prevent who-knows-what the next economic protectionist policy that the President wants to implement could be? I think that you're right that after getting tax reform through, there was obviously a bit of a divergence between what most of this administration wants to pursue in terms of economic policy, and what Gary Cohn and Wall Street want to see. But I think not having him in that room, not having him part of that conversation, is probably bad news over the long run — not just for this tariff issue.

Smith: We’ve been following this as more details emerge, of course, from the breakout of the tariffs. For some of our viewers, though, let’s just recap very quickly. Todd, what exactly does this mean for some of the industries that it will impact — and those particular percentages, is there a way that we came to those percentages? Is there any thought process behind it?

Machado: Right, 10 and 25 percent? Yeah.

Hitt: There’s not necessarily any rhyme or reason to all of it. I think there’s a few things going on here.

One is, this shouldn’t be a big surprise to any of us.  He ran on this when he won the presidency.

Two is, he’s negotiating. It’s a long game for him on what I would say is "free trade equals fair trade." He talked about this all throughout his election cycle. That’s his goal, is to get to that.

Three, tariffs are bad. Tariffs are a tax. If you have good trade policy and good trade agreements in place, you don’t need tariffs. So clearly, the president thinks we need tariffs as a marker to lay down there. I don’t think these steel tariffs and aluminum tariffs are going to amount to much in terms of the entire economic picture that we have in this country right now. I don’t think this is going to knock Wall Street down today or over the next two weeks. I don’t think this is going to put the American worker or the American steel industry out of business in any way, shape, or form. But it’s certainly going to cost the consumer more for steel and aluminum.

Let’s hope these things go away. Let’s hope these tariffs go away. Let’s hope the president’s negotiating tactic works. Let’s hope the tariffs then go away and we’ve got some decent trade policies in place across the board.

Then, we’ve got bigger fish to fry. We’ve got a huge labor shortage, we need immigration reform, we need to rebuild our infrastructure that’s what, sixteenth in the world right now? It’s an embarrassment. There’s lots of stuff we need to do here that can really drive this economy, the pillars of the economy. Tariffs aren’t one of them.

Machado: Yeah. And Eric, you know the President knows he's in the minority position on this. A lot of Republicans have come out chastising this move — Paul Ryan, and Mitch McConnell as well. Goldman Sachs actually just released a report saying that the tariffs could have a significant negative effect on the economy. Paul Ryan has been really pushing the President to change his mind, and we know Gary Cohn tried to do that as well. At this point, do you feel like the President doesn't care. Has already made up his mind on this?

Boehm: It does kind of seem that way.... I hope this is just a negotiating tactic. I hope my colleague here is right that this is just a step towards getting us something else, because as it stands right now this would be a disastrous policy for the country.

Machado: Right, and Jonathan Swan over at Axios was recording just a few moments ago, according to two senior administration officials, the President wants to sign a proclamation on the steel and aluminum tariffs tomorrow. So, this might actually be coming a lot sooner than we think.

Smith: Absolutely. We’ll see if the negotiation tactic actually does pay off, but we’ll have to continue to track it very closely. The DOW has now dipped below 300, again, 300 point mark. Todd Hitt, CEO of Kiddar Capital, and Eric Boehm, reporter at Thank you both for joining us here today on Cheddar.

Hitt: Great to be here.

Boehm: Thank you.

This video was first featured on Cheddar on March 7, 2018.