Mark Cuban Lays Out a Best-Case Scenario for Tariffs and the Economy — What Americans Should Know

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The last two months have seen tariff policies changing so fast that most Americans just can’t keep up with them.

As of this writing, President Donald Trump has imposed blanket 10% tariffs on imports from most countries. China remains an exception, with tariffs at a staggering 145%. However, the president’s previously announced higher tariffs still loom, set to kick in after a 90-day negotiating window if they can’t agree to permanent trade deals with individual countries.

Given the risks of inflation, recession, antagonized military and trading allies, and countries ditching the U.S. dollar as their reserve currency, what’s the best-case scenario for the tariff turmoil kicked off by the Trump administration?

Mark Cuban’s Best-Case Scenario

Posting on Bluesky, billionaire Mark Cuban outlined his thoughts on a best-case scenario. He believes the blanket 10% tariffs are the lowest that Americans can hope for.

“Elon leaves [Department of Government Efficiency], which decides to stagger the cuts over three years, accounting for local impact,” Cuban said. “That slows the economy, reducing interest rates, reducing payments on debt to affordable levels. Then with lower rates, lower inflation, a smaller deficit and debt, the economy can start growing enough we can pay down debt.

“This assumes (President Trump) extends tax cuts, but changes nothing else. Off the top of my head this is the thread-the-needle situation.”

Cuban packed a lot of information into a few sentences, so it’s worth digging a little deeper into this best-case scenario.

The US Avoids Recession

The country could still escape a recession and enjoy that soft landing that Jerome Powell has targeted.

“Best case, countries come to the table and negotiate a reduction in tariffs and non-tariff barriers to U.S. goods,” explained Jesus M. Salas, professor of finance at Lehigh University. “This increases the demand for U.S. goods, which boosts U.S. businesses and wages.”

Still, Salas cautions that it would take time to see that increase in the demand.

Brandon Parsons, economist at Pepperdine Graziadio Business School, adds that a favorable trade deal with China would help. He noted, “China exported around $450 billion worth of goods to the U.S. in 2024.”

That makes them one of our largest trading partners, and it would wreak havoc on both of the world’s largest economies if they can’t come to a trade deal.

“It would take time and be very expensive for firms to adjust their supply chains in response to higher tariffs,” Parsons continued.

Inflation Ebbs After an Initial Shock

Cuban’s best-case scenario involves inflation easing after the initial jolt. In particular, Parsons wants to see the U.S. avoid stagflation.

“Stagflation is when an economic shock increases costs and lowers demand (economic stagnation and inflation),” he explained. “Tariffs increase costs, leading to inflation, and as prices increase, consumers buy less, leading to a stagnant economy.”

Lower Interest Rates

In fact, Cuban sees lower inflation as a necessity, because kickstarting the economy again would require lower interest rates — something the Federal Reserve would hesitate to do if inflation remained high.

Javier Palomarez, CEO of the US Hispanic Business Council, explains how lower interest rates would help. “This would help buffer the cost increases consumers are facing by making car loans and mortgages more reasonable, freeing up more dollars for everyday spending. It would also support business growth, enabling companies to invest in equipment and reconsider the broad stroke hiring freezes that have begun.”

Lower Tax Rates

Finally, Cuban mentioned lower tax rates in his equation for a best-case scenario. Lower taxes would offset some of the higher costs consumers will face under tariffs.

The president has floated several ideas, such as eliminating income taxes for households earning less than $150,000, as reported by Newsweek. For that matter, at times the president has proposed scrapping federal income taxes altogether (more at Fox Business).

Can the Trump Administration “thread the needle,” as Cuban puts it? Only time will tell.