Will Trump impose large tariffs in his first 6 months?

The prediction market focuses on whether Donald Trump will impose "large tariffs" (defined as raising the U.S. weighted average tariff above 5%) during Q1 or Q2 of 2025, if elected president. Recent statements by Trump and his advisors indicate strong intentions to implement significant tariffs, particularly targeting China (60%), Mexico (25%), and Canada (25%) immediately upon taking office through executive orders. Based on extensive analysis of economic reports, expert opinions, and historical data, there is compelling evidence that Trump would move quickly to implement substantial tariffs. However, the market appears to be underpricing the likelihood of this outcome at 39.5%, given Trump's clear statements, past behavior, and the ability to impose tariffs via executive action without congressional approval. The key uncertainty lies not in Trump's intentions but in potential economic and political headwinds that could delay or moderate implementation.

Economic Background

• Current U.S. weighted average tariff rates are below historical norms
• Federal Reserve data indicates sensitivity to inflationary pressures from tariffs
• Economy showing mixed signals heading into 2024-2025 period

Outcome Analysis

YES Scenario (>5% weighted average tariff)

Supportive factors:

• Trump's explicit promises to impose 10-60% tariffs immediately via executive order
• Historical precedent of following through on tariff threats
• Strong political incentives to act quickly on campaign promises
• Ability to implement without congressional approval

Challenges:

• Potential economic fallout and inflation concerns
• Legal challenges and WTO disputes
• Business community opposition

NO Scenario (<5% weighted average tariff)

Supportive factors:

• Economic advisors may counsel moderation
• Implementation logistics could delay effects
• International pressure and retaliation threats
• Inflation concerns could force compromise

Challenges:

• Trump's consistent messaging on tariffs
• Executive authority makes implementation straightforward
• Political base expects action on trade

Key Factors to Watch

1. Election outcome and transition period statements
2. Economic indicators (inflation, growth)
3. International reactions and potential counter-measures
4. Appointments to key trade positions
5. Business community response

Recent Developments

• Trump announced specific tariff plans (25% on Mexico/Canada, 10%+ on China)
• Economic analysis shows significant GDP impact from proposed tariffs
• International partners signaling potential retaliation
• Business groups mobilizing opposition