Businesses and consumers are eagerly awaiting the outcome of President Donald Trump's tariff policies, but a prominent economist suggests a scenario that could benefit the world while generating significant revenue for the U.S.

In a recent analysis titled 'Has Trump Outsmarted Everyone on Tariffs?', Apollo Global Management Chief Economist Torsten Sløk proposed a strategy that involves maintaining tariffs at lower rates than initially proposed. This approach aims to alleviate uncertainty and prevent adverse economic consequences.

Sløk speculated that the U.S. could sustain 30% tariffs on China and 10% tariffs on other countries, allowing a year for nations to reduce non-tariff barriers and enhance trade openness. This proposal comes as the 90-day pause on reciprocal tariffs imposed by Trump is set to expire soon.

The temporary halt was intended to facilitate negotiations with trade partners, resulting in limited agreements with the U.K. and China. Despite ongoing discussions with other major trading allies, final deals remain pending.

Extending the tariff deadline by a year, according to Sløk, would offer businesses and countries more time to adapt to a scenario with permanently higher tariffs. This extension could reduce uncertainty, fostering better business planning, employment stability, and market confidence.

Sløk's analysis, which contrasts his previous warnings about tariff repercussions, suggests that maintaining 10% tariffs could be beneficial for both the U.S. and its trade partners. He estimates that this strategy could generate $400 billion in annual revenue for American taxpayers.

The economist's speculation raises questions about the potential impact of Trump's tariffs on the economy and financial markets. While some experts anticipate minimal effects from tariffs settling at 10%-12%, others emphasize the importance of securing trade agreements with major economies like India, Japan, and the EU.

Overall, the outlook on tariffs influences the Federal Reserve's stance on inflation and interest rates. While some policymakers foresee a need for rate cuts to counteract tariff effects, others believe the impact will be temporary or justify a delayed response.