David Rosenberg: Will Tariff Trauma Trigger A Recession?

**David Rosenberg** (0:00)
Be liquid. Be liquid.
If I'm right that we're finally going to get the recession that never came in 2022 and 2023, the financial markets across the board are only priced, they've done some work, but they're only priced 25 percent of the way for a recession. And I think that we're going to be getting an economic recession. I know that it's the boy who cried wolf, but remember that the wolf shows up at the end of the story. Have the liquidity, have the liquidity so that when the assets get transferred from the weak hands to the strong hands, that you're one of the ones that has the strong hands.

**Adam Taggart** (0:51)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. As worldwide tariff uncertainty persists and U.S.-China tensions continue to escalate, are President Trump's trade policies speeding the economy into recession? For guidance, we turned to highly respected economist and award-winning researcher, David Rosenberg, founder and president of Rosenberg Research. David, thank you so much for joining us today.

**David Rosenberg** (1:16)
Pleasure, and thanks for having me on.

**Adam Taggart** (1:19)
David, it's always a pleasure. This is an important day to have you on for a whole variety of reasons, but first and foremost, it is election day in Canada, and I very much appreciate you taking yourself away from monitoring those results to speak with us live.

**David Rosenberg** (1:34)
Well, it's a good thing that I pre-voted, so you have my full attention.

**Adam Taggart** (1:40)
I appreciate that. And look, I do want to get to this whole topic about the Trump tariffs and all the knock-on effects of that, but I guess very quickly, any key thoughts about Canada before we know the outcome of today's election?

**David Rosenberg** (1:53)
Well, you know, it was a dramatic turnaround, because it was just a few months ago that the Conservatives had something like a 25 percentage point lead over the Liberals, and going into the election, in fact, for the better part of the past month or two, really since Mark Carney got the Liberal nomination, the polls have been consistent with the Liberals with a modest call of three to five percentage point lead. But you know, in Canada, being a parliamentary system, the Liberal vote, writing by writing, is just more efficient than the Conservatives. So it looks as though, and we'll get the results tonight, obviously, that the Liberals are going to emerge with a majority government. I guess that if you're looking for stability, you know, better a majority liberal government than what we had in the last go-around where the Liberals had a minority and were supported by the left-leaning New Democratic Party. So it looks as though that's what we're gonna get.
And I guess the good news is that a liberal majority is already priced into the market. So we're in this phase globally where no surprise is a good surprise.

**Adam Taggart** (3:17)
Look, let me know if it's unfair to ask you political questions here because you're an economic researcher, not necessarily a political one. But I'm curious because those of us watching from the cheap seats here in the US did see that big shift in probability of who was going to win the election, that after Trudeau announced he was going to step down, Poliev really had a kind of a commanding lead in the polls. Is the swing back to the Liberals because Carney is such an appealing candidate to them? Is it because Trump drove the Canadian populace into the Liberals arms by his comments about the 51st state and the trade tensions between our countries? Because Poliev was sort of looked at as having a similar sort of candidate first platform like Trump's America first platform. And I'm just wondering, just as Trump may have really shaken up the chessboard geopolitically, did he actually shake up the chessboard at all in the actual Canadian elections?

**SPEAKER_2** (4:27)
100%.

**David Rosenberg** (4:28)
I think there were two really big events. The first, of course, in December, when Justin Trudeau resigned, I think that you're right about Mark Carney flashing those credentials as being a central banker, and not just a central banker, but also really a global policymaker, and is viewed by a lot of folks as having the gravita and the panache to top trade and economics with the administration. Now, I think that a good part of this is that the New Democratic Party, which is the Socialist Party in Canada, the big move has been in their support. Their support has nosedived. It's gone on the pole from their traditional 20 percent to something closer to seven or eight. They might not even be an official party after today.