No Deals In Nearly 90 Days.
Trump is going to send memos to trade partners about the tariffs he will impose.
The Senate narrowly passed the One Big Ugly Cruel Budget-Busting Bill. And now it’s on to the House for a vote. I won’t hold my breath that it won’t pass because House Republicans have less of a conscience than Senate Republicans - and that’s already a bar set low. There is scant resistance in Congress to Trump’s urges. The US Congress has become more like a Russian Politburo than anything resembling a Congress that knows anything about or cares to govern. There will be more to say about it in another commentary.
As a human being, Trump is a failure. As a businessman, he doesn’t fare much better. As a grifter, he’s first-rate. He has the gift of grift. He’s broken every campaign promise he made to his gullible MAGA base. Challenge him, and the answer is something akin to “I’ll tell you in two weeks.” He’s given up on his promise of 90 deals in 90 days.
That being stated, let’s step back to see the bigger picture of Trump’s failed economic foreign policy and where things are headed. Welcome to my kitchen table. Conversations start here. Have a seat; the coffee’s fresh. No smoking.
It’s about a week until Trump’s “Liberation Day” (April 2nd) tariffs again take effect. 90 days is just about up. No deals. The world is moving on without the USA, with new trade pacts and defense treaties as fast as possible. Once the USA is excluded, it will be beyond difficult to regain the true superpower status that was the world order before Trump 2.0 upended it.
Trump imposed crushing tariffs on goods coming from our biggest and most important trading partners. Tariffs, as you, dear reader, should know by now, are a cost (tax) that is passed on from the importer down the supply chain to the consumer. Consumers will pay most of the tariffs, whatever corporations won’t absorb. It will be substantial. I wrote about the economic impact on jobs, GDP, and inflation in numerous commentaries, and how if these tariffs stay in place for any length of time, it will likely lead to stagflation. It’s why Fed Chairman Jerome Powell refuses to lower interest rates.
Trump has given up on making trade deals. The self-described greatest negotiator that ever lived has failed to deliver on new trade deals and failed to bring good-paying manufacturing jobs to America. Trump’s new plan is to send written memos to nations informing them of their new tariff rate. I kid you not - I wish I weren’t.
Trump still claims he made many deals, but now has decided he wants to send letters to foreign leaders. He said, “We made deals, but I’d rather just send them a letter. A very fair letter saying, “Congratulations, we’re going to allow you to trade in the USA.” You are going to pay a 25% tariff, or 30%, or 40%, or 50%. I would rather do that… I’m going to send letters. That’s the end of the trade deal.”
Trump went, in what I can only assume is further off script, to say, “Dear Mr. Japan, Here’s the story: You’re going to pay a 25% tariff on your cars, you know. So we give Japan no cars. They won’t take our cars.” OMFG. He actually said it. Dear Mr. Japan. AYFKM?
Again, importers pay the tariff and pass the increased cost down the supply chain to consumers. Anyone saying/writing otherwise is wrong or lying to you. Fun fact: Mr Japan makes most of the Japanese vehicles sold in the USA in the USA.
Trump attempted to justify his new strategy by saying that it’s too hard to negotiate with 200 countries. Not even the island inhabited solely by penguins wanted to make a deal with Trump. He couldn’t point to one deal out of the 90 promised.
Desperately needing to change the subject, Trump trumpeted a forthcoming deal by a group of investors to buy TikTok. Remember when that was a thing? Remember when SCOTUS said it had to be sold, and Trump ignored the ruling? When pressed on the names of investors, he didn’t say. He did manage to spew, “We have a buyer for TikTok, by the way. I think I’ll need, probably, China approval.”
Any astute journalist would follow up with a desire to know the details. Trump said, “I’ll tell you in about two weeks.” Yes. He said that. For those who still don’t know, two weeks is a euphemism for never.
Trump introduced more uncertainty into the markets. And one thing we know for sure is that markets hate uncertainty.
That’s my take. You’re welcome.
Hope for the best, but plan for the worst.
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