Market manipulation. 1. Sell. 2. Threaten tariffs. 3. Buy. 4. Walk back tariffs threats. 5. Repeat.
With the secret step 0: Pay enough of an Indulgence to get in the loop of when those are going to happen, and to stay in their good graces so the DoJ doesn't hit you for insider trading.
I'm coming to the conclusion that the tariffs are a distraction. The 10% across the board appears more like a tax hike without calling it one while the focus on China is just the same old trade war from the first term with louder chest-beating.
This is like shooting yourself in the foot to splatter blood on your opponent. It "works" in a sense, but is about the stupidest approach possible.
There's a reason the dollar weakened in this crisis instead of strengthening like usual. Everyone can see that the US will be hurt far more by this idiocy than other countries will.
The US has crashed its own stock market, tanked its own government's approval ratings, and had its own business leaders speak out against the government. This definitely does not increase leverage.
Was the plan to incentivise Korea, China and Japan to work together? You know you've screwed up when bitter rivals decide to cooperate together.
Every government that has to do something undesirable to their citizens have been given something to blame: a beautiful excuse that will be milked relentlessly to the disadvantage of the US.
Businesses get screwed by flaky management - and now we get to see the US get screwed by its unreliable self-centered Prez.
Even countries like Singapore, hit with a 10% tariff (marginal, and far lower than most countries) absolutely panicked.
Interestingly, I looked up the size of consumer markets - the US is twice the size of the next biggest market, the EU.
So I don’t blame countries for panicking.
And if you’re really conspiratorial, one could question whether the push for free trade was really an attempt to put the US into a situation where it had leverage against most of the globe.
With the bounce back the Dow Jones lost 400 points. For comparison, the German DAX lost 900 points, but is only half the size. It is a reckless and probably counter-productive strategy, but I do think Trump will be able to extract short-term benefits from a number of countries. I just hope the EU will finally decrease reliance on the US going forward. Our extreme reliance on US tech and defense makes us easy marks.
"I bought $200 worth of stuff from your store and the store bought $0 worth of stuff from me. To punish them, I'm going to pay myself $100 every time I buy anything from the store in the future - that will show them!"
He only has political leverage over Congress. If they chose to act, they could stop him. Seems weird to kick off negotiations with them by inflicting damage on their constituents.
But a distraction from what? There doesn't seem to be any kind of obvious other thing they're trying to do with the cover. They're not exactly being secretive with ICE arrests, the mass layoffs from the federal government, or their weird campaign against DEI that the administration seems to have all but forgotten about.
They literally have no idea what they doing from one moment to the next. Obviously they are making up facts and strategies on the fly maybe minutes before press conferences. Just look all the math errors, irrational formulas and tariffing penguins. The malevolent incompetence is staggering.
I think they're distracting from the fact that it's a huge tax on the general public. You might say it's obvious, but people just don't process it the same way even though that's what a tariff is.
You know how in a game of Risk, at the early stages you form strategic alliances, but toward the end you inevitably have to break them because eventually someone has to win?
That's a little like what's going on now.
Pissing off your allies is good because if they're happy, that means you didn't squeeze them enough.
And it may hurt us and our companies more than theirs, but it doesn't hurt Trump personally, and that's all he cares about. He's going to be fine, so he's more than happy to cause us pain if it cause them pain as well.
I of course believe that. But Trump does not. Trump believes a good deal is one in which he gets everything he wants, and the opposing party gets nothing. It's a philosophy of domination and control.
It's the reason a "trade deficit" is seen as a bad thing by him. Trade deficits are the result of a mutually beneficial transaction, but that's not enough for Trump. It can't just be mutually beneficial, it has to be beneficial more in our direction than theirs.
Or look at how he treats contractors. He hires a person to do a job, they agree and deliver the work, and that should be the end of the mutually beneficial deal.
But not for Trump, his MO is to stiff contractors, force them to sue, mire them in a legal quagmire, and get them to settle at a loss. This is the kind of deal Trump likes because it's a win for him -- he gets the contracted work at a fraction of the price; and a loss for them -- they probably wouldn't have agreed to do the work had they known what they were in for upfront.
Is this a great way to run the largest economy in the world? Of course not! But that's how it's happening now because that's the kind of guy who is in charge.
Trump thinks of himself as a powerful, insightful deal-maker. He pathologically needs to feel like he is doing something and his comfort zone for what kinds of things to do is "stuff that feels like business deals".
He knows very little about government and policy, but tariffs and dollars and percentages feels familiar to him. He's got a lever, and he can't resist yanking on it to show that he's in charge.
Whether yanking on the lever actually benefits the country or him is entirely besides the point. He's a narcissist and narcissists can't let go.
The reason they have reduced all tariffs back down to 10% even for the countries that were obviously transshipping (Vietnam, Myanmar, Thailand, Cambodia) is that they need time to negotiate with those countries, to make sure these countries now put similarly high tariffs (100%+) on China, so that transshipping is reduced to nothing
If China doesn’t counter whatever the F we “counter” that would significantly weaken its position with every other country… and the wheel turns with this line of thinking…
except of course Trump brought a knife to a gunfight :)
Only, China isn't actively negotiating tariffs with every other country right now, so whether they retaliate won't impact their situation the same as it does from the US's point of view.
I really hope you are joking thinking China isn’t negotiating everything with everyone other than USA right now, starting with the very today publicly EU…
If it wasn't happening before, it certainly will be now.
What's actually wrong with them.