Apollo CEO: Tariffs Goal Right, Tactics Questionable

In Brief:

Apollo CEO Marc Rowan, speaking exclusively to CNBC, defended the Trump administration's aim to reset U.S. trade policy while criticizing its implementation. Interviewed as markets dropped on news of Chinese retaliation to sweeping U.S. tariffs, Rowan maintained that America's position as the world's "freest trading market" should be reconsidered but questioned the administration's decision to target multiple countries simultaneously. Despite market uncertainty, he predicted most countries would reach deals within 90 days and dismissed immediate recession concerns despite acknowledging economic slowdown signs.

Big Picture Drivers:

• Trade Reset: U.S. needs to reconsider its position as the freest trading market in the world

• Implementation Concerns: "Everything Everywhere All at Once" approach creating unnecessary uncertainty

• Market Correction: S&P 500 PE ratio of 21 vs. long-term median of 16 suggests needed adjustment

• Deal Potential: Expects countries to begin negotiating agreements within 90 days

Key Topics Covered:

• U.S.-Mexico Relations: Mexican business leaders surprisingly supportive of tariffs to resolve key issues

• Strategic Sequencing: Would have prioritized deals with Mexico and Canada before addressing China and Europe

• Brand Damage: Concerns about impact on U.S. credibility regarding long-term agreements and security pacts

• Recession Risk: Currently low but could increase if uncertainty persists

Key Insights:

• Administrative Sequence: Better approach would address budget issues and key trading partners one at a time

• Market Position: Short-term uncertainty arising from solid economic footing (4% unemployment, job growth)

• Deal Timeline: Purely financial agreements should come quickly; non-tariff barriers will take longer

• Economic Outlook: Seeing slowdown from uncertainty but not yet recession conditions

By The Numbers:

• 21 vs. 16: Current S&P 500 PE ratio compared to long-term median

• 4%: Current unemployment rate Rowan cited as sign of economic strength

• 200,000+: Monthly job additions maintaining resilient labor market

• 90 Days: Expected timeframe to see countries beginning to make deals

Memorable Quotes:

• "The goal of what this administration wants to do is the right goal. The way they're going about it has three negatives." - Marc Rowan

• "If it takes tariffs to make Mexico great again, so be it." - Mexican business leader quoted by Rowan

• "The policies that have been in place since the end of World War II are not fit for today." - Marc Rowan

The Wrap:

While acknowledging legitimate reasons to reset U.S. trade policy, Rowan suggests the administration's sweeping approach creates unnecessary risks to market stability and America's global reputation. His optimism about quick deals contrasts with concerns about potential economic damage if uncertainty persists, reflecting the delicate balance between pursuing strategic trade reforms and maintaining business confidence during a period of significant policy shifts.