Tchir: The Risk For Stocks Is That The Administration Decides It Was Correct All Along On Tariffs

The new tax law is a big positive for the economy and markets, providing certainty for many important aspects of the economy for at least the next four years. The law gives us certainty, which is more important than the details, and some degree of uncertainty for the economy has been removed. The growth-oriented benefits of the law are front-loaded, which will help propel the economy in the near-term. The ceasefire in the Middle East and NATO increasing their spending are also positives for the economy. The Jobs Data was better than expected, and the administration seems to be doing things to reignite the "Animal Spirits" in the economy. However, there is still a risk that the administration will decide to take "another bite at the apple" on tariffs, which could be a big negative for the market. The Tariff Revenue Chart is adding real revenue for the Treasury and is not included in the CBO projections. The concept of National Production for National Security is important, and the US needs to take steps to ensure it can produce what it needs without relying on other countries. The administration should focus on deregulation and targeted spending to jumpstart efforts to produce critical materials like rare earths and critical minerals. The risk of being held hostage by processed and refined rare earths and critical minerals is a major concern, and the nation needs to take urgent steps to address this weakness.