Peter Schiff issued a dire warning on Trump’s trade deficit stance. Here’s why and how to protect yourself

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Economist Peter Schiff, renowned for predicting the financial crisis of 2008, supported Donald Trump during the election season. However, right before Trump moved back into the White House, Schiff sounded the alarm about his approach to a critical issue for America: trade.

At a press conference in Mar-a-Lago, Trump addressed trade deficits with Canada and Europe, announcing plans to impose substantial tariffs to address the imbalance. These tariffs have subsequently caused ripples through the international economy.

Schiff, the chief economist and global strategist at Euro Pacific Asset Management, strongly disagrees with the president.

“Trump’s take on trade deficits is all wrong,” he wrote on Instagram, sharing a clip from The Peter Schiff Show podcast where he elaborated on his critique.

“[Trump] said we have a huge trade deficit with Canada as if somehow that’s harming the United States — it’s actually helping the United States. It’s unfortunate that we’re not productive enough to get by without all those Canadian products,” Schiff explained.

“Donald Trump specifically said we don’t need any Canadian cars, we don’t need any Canadian timber — of course we do! I mean, we build houses, we drive cars. I mean, if we didn’t have access to Canadian lumber or Canadian cars or any of the other things that we import from Canada — America imports a lot of stuff from Canada — what does Donald Trump think would happen to the price of all that stuff? It would go way up,” he argued.

America imports a significant volume of goods from Canada — and it’s not limited to timber and cars. The list also includes crude oil, petroleum products, natural gas, and electricity, among others.

Schiff also criticized Trump’s perspective on trade deficits with Europe, pointing out that America depends on European goods as well.

Schiff didn’t mince words, asserting that by imposing tariffs, Trump “wants to add to the inflationary problem.”

He’s not alone in this critique, as economists often view tariffs as a double-edged sword. On one hand, they can protect domestic industries by making imported goods more expensive, giving local manufacturers a competitive edge. On the other hand, higher tariffs may result in increased costs for consumers, as companies pass on the extra expenses. This can lead to inflation, eroding household purchasing power and raising the cost of living.

While some economists — including Nobel laureate Paul Krugman — have claimed that the U.S. has won the war against inflation, Schiff strongly disagrees. “Inflation won the war,” he declared. “Inflation is going to keep getting worse.”

How much worse? Last year, he warned, “By 2025 inflation will likely be in double digits, and the first digit may not be a one!”

Read more: Rich, young Americans are ditching stocks — here are the alternative assets they're banking on instead

Given Schiff’s dire forecast of rising price levels, where should investors seek refuge?

His go-to answer is simple: gold.

The allure of investing in gold lies in its unique properties: the yellow metal can’t be printed in unlimited quantities by central banks like fiat money. And because its value isn’t tied to any one currency or economy, gold could provide protection during periods of economic uncertainty.

As inflation erodes the purchasing power of paper currencies, gold’s appeal as a stable store of value often grows, driving up demand. In 2024, gold prices surged by 26%, surpassing $2,600 per ounce.

Schiff believes this is just the beginning. “If gold can go from $20 an ounce to $2,600 an ounce, it can go from $2,600 to $26,000, or even to $100,000. There’s no limit because, again, gold isn’t changing — it’s the value of the dollar that’s decreasing,” he recently stated.

At today’s prices, a climb to $100,000 would represent an astounding upside of over 3,600%.

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.

To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals on qualifying purchases.

In addition to gold, real estate serves as another time-tested hedge against inflation — with the added benefit of generating passive income.

When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. This makes real estate a compelling store of value for investors looking to protect their wealth.

Moreover, real estate doesn’t just rely on appreciation for returns. Rental properties, for instance, can provide a steady stream of passive income. As inflation pushes up the cost of living, rental income typically rises alongside it, helping landlords offset the erosion of purchasing power.

Over the last five years, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has surged by more than 50%.

One way to invest in real estate is by purchasing rental properties and becoming a landlord. But for the average American who wants to avoid the need for a hefty down payment or the burden of property management, crowdfunding platforms like Arrived makes it easier to slice yourself up a piece of that pie.

With Arrived, you can invest in shares of rental homes with as little as $100 without worrying about mowing lawns, fixing leaky faucets, or handling difficult tenants. The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving rental income deposits from your investment.

Another option is First National Realty Partners (FNRP), which requires a larger minimum investment and targets necessity-based commercial real estate.

The platform lets accredited investors own a share of commercial properties leased by national brands like Whole Foods, CVS, Kroger and Walmart. The FNRP offers white-glove service to investors so you can engage with experts, explore available deals, and easily make an allocation, all in one personalized secure portal. Investors can enjoy the potential to collect stable, grocery store-anchored income every quarter.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.