Markets are reacting too strongly to the proposed steel and aluminum tariffs by President Donald Trump, according to former White House communications director Anthony Scaramucci.
"I would say market participants are overreacting right now because, by and large, [Trump] has proven over the last 13 months that he's a common-sense person on the economy, a common-sense person on economic growth and American prosperity," Scaramucci told CNBC's "Halftime Report." He also said investors are reacting too much to the "shock of the idea of potential tariffs."
"I would caution people not to overreact here," he said.
Trump announced last week that he wanted to implement tariffs on steel and aluminum imports. The announcement created friction between Trump and his chief economic advisor, Gary Cohn, who resigned from his post Tuesday night. Cohn opposed the implementation of tariffs.
Cohn's resignation increased worries that a trade war could take place in the near future, putting investors on edge. On Wednesday, the Dow Jones industrial average fell more than 200 points while the 10-year Treasury yield dropped.
But Scaramucci said he doesn't think the president will lead the U.S. into a trade war. "Yesterday from the Oval, he basically said that there won't be a trade war," he said. Trump "doesn't see a need for a trade war."
"I think we've got to give him some credit. He's a very good negotiator. I think he's looking out for the interest of the American people, the American workers."
Scaramucci worked last year in the Trump White House as communications director. However, he was fired after just 10 days.