It's hard not to wade into politics because the same political leaders who verbally advocate policies that most economists agree would lead to higher inflation and a recession are the political leaders who have in the past compromised their policy goals, rolled back their own policy goals, made "deals", and executed their bold statements with symbolic gestures.
So yes, if the U.S. enacted a stable multi-year policy of 25% tariffs on all other countries in the world, and maybe 60% against China in particular, stagflation would be the result. This would have significant implications for today's inflated stock values, for bonds and banks, and for alternative investments like precious metals and other commodities. I.e. if I knew this would be the future, I would drastically alter my asset allocation.
Yet, many analysts are calling Trump's bluff, and their arguments make a point. The Mexico and Canada tariffs were put on hold after less than one business day, and we all know what will happen next. After some groveling and compliment gifting, a "deal" will be made and our focus will be shifted to the next villain or the next category of goods. We literally went through this just a few years ago. GDP took a hit, but Trump knew better than to actually enact his promises and tank the economy. What matters in politics is looking like you're doing big things, while not actually pissing off your constituents. Based on these arguments, we can expect tariffs to be an on-again, off-again news frenzy with minor impacts. I am not drastically altering my asset allocation.
Yet there is a counterargument too. Trump does not face the same constraints as a lame-duck president, in a country where the opposition party has been all but vanquished from the federal government, and in a world where the ruling party has a tighter control over media than in 2016-2020. So if we're ever heading toward the fever dreams of libertarian economic policy wonks who dream of ending the income tax, now it the time. And that would mean owning the S&P500 at a PE of 30 might be dangerous.