President-elect Donald Trump denies claims from the Washington Post that his tariff policy will be pared back.

The market's reaction to Trump's statement has sparked a conversation about realistic expectations regarding tariffs and tax policy challenges under the new administration. Henrietta Treyz, Veda Partners director of economic policy, joins Seana Smith and Madison Mills on Catalysts to weigh in.

Treyz explains that the market's reaction signals Trump's campaign promises are being taken seriously, but also that "there's not a lot of detailed trade knowledge on the street right now."

These tariffs are intended to generate revenue for the cost of Trump's massive tax bill, but doing so will be complicated. Treyz elucidates, "Right now, we generate about $74 billion per year on tariffs. We need to fill a $2.5 trillion gap, so the tariff rates need to rise substantially, and that's going to come from the president."

She warns, "All expectations about massive tax cuts, limited tariffs, easy passage of any of this should be pared back."