Trumpty Runs, Cancels WH Presser Because He Can’t Explain Trade Balance v. Trade Barriers

This is just more grist for the Trump is lost mill. Everybody is trying to find out what the secret sauce is to Trump’s tariff plans. He keeps saying things like, “You have to take medicine to get better,” and other philosophical quips. Elon Musk was clear during the campaign, that there would be “temporary hardship.” But the end point, the “temporary hardship and then” remains a blank that is not filled out.

What is the wellness, the victory, the Big Goal that we’re all supposed to do the temporary suffering for, exactly? And so that leaves people to wonder if Trump is wrecking the economy on purpose simply because he can. Don’t rule that out. Occam’s Razor has been around for many years now simply because it is so effective.

And Hanlon’s Law works, too, “Never attribute to malice that which can be explained by sheer stupidity.” When historians examine this many years down the road, they may come up with the simple conclusion, “Trump didn’t know a tariff was a tax.”

Benjamin Netanyahu is in the White House today and the two of them were slated to give a joint press conference. The White House pressers are usually sycophantic because nobody wants to end up getting suspended. So the fact that Trump has to run from friendly turf says everything you need to know.

You can guess who the “select” will be: Brian Glenn, probably, Peter Doocy, although he’s not in as holy a place as he used to be, somebody from Brietbart, Newsmax and nobody from what the yous and mes would consider mainstream or normal media.

Trump has to hide. He did okay with the Los Angeles Dodgers in the White House this morning because that’s not politics, that’s show biz and Donald can do show biz. But he doesn’t want anybody around him who is going to ask if he fully intends to drive the United States into a recession or worse, which is what it looks like to all intents and purposes that he is doing.

We’ve now reached a point where economic details have to be discussed. The time for vague promises is over, it’s time to get down to nuts and bolts here. You remember Trump holding up his board which illustrated who was getting charged for what — including the penguins on Board and McDonald’s islands and they don’t manufacture anything, not even igloos, last we knew. But they’re there. So it’s detail time. The Devil is in the details and Trump cannot give details.

The panic stems in part from the widespread confusion over whether the so-called “reciprocal” tariffs Trump imposed—in fact, the tariff rates were calculated based on the U.S. trade balance with each country, not trade barriers—were intended to be an opening bid to negotiate more than a hundred new bilateral agreements, or rather were expressly intended to be a semi-permanent new source of revenue.

According to one prominent M&A banker, C.E.O.s are nervous, very nervous. “The concern goes beyond tariffs,” the banker said, “to our economic framework in general, and what it means to upset the world order, and what it means politically. There is a concern that not enough people in the White House understand the implications here.”

This banker gave me an example of a company that has a manufacturing plant in Wisconsin that makes products that are sold in Canada and are shipped on a daily basis across the border. He said the C.E.O.s he talks to are already thinking about closing the U.S. manufacturing plant and building a new plant in Canada to avoid the tariffs. “That’ll be a net American job loser,” he said.

The M&A banker was particularly focused on the second-order effects of the tariffs on corporate earnings. At some point, he predicted, the tariff histrionics will peter out, and the stock market will have a nice bounce back up. But then the effect of the tariffs, at whatever level they shake out, will begin to show up later this year in corporate earnings, where it really matters.

“That’s what’s going to worry the market more,” he said. “It’s hard to imagine that the downturn is not significant.” Moreover, he added, “These things take just a long time to change, and even if they do, our trading partners are going to be wary of what we’ve done here, and you’re going to see a kind of general trade shift, with the obvious beneficiary being China.”

That is what all the smart people say. That is what the Wall Street Journal took Trump to task for last week. “It was a good week for China,” they crowed in their editorial pages, and this week may end up being even better.

And regardless of whether Trump backs off some of his tariffs, the global damage will have been done. “All this stuff is playing out to the tri-polar world thesis, right?” Jay said. “Europe is integrating and becoming stronger. Asia is going to integrate and become stronger.

We’re slapping 40 percent tariffs on Vietnam and Indonesia and everyone else. Our name is going to be mud in Asia. So all that does is just integrate Asia more aggressively, more quickly, with China at the center of it. Trump is an accelerant to the tri-polar world.”

We have an idiot and a lunatic undoing the work of the past eighty years, the work put into place by the Marshall Plan and other post-WWII doctrines. And he’s just flying blind. JP Morgan Chase and Wall Street are all reasoning that since companies will face higher costs and suppressed demand, a recession is on the way. Just watch the market daily. This is not rocket science. Not when you have an orangutan throwing feces because that’s his temperament, it’s not.