The economy and inflation in particular was the number one reason Trump won.

The impact of inflation on the 2024 presidential election | Hub

So of course one month into his term Trump is enacting tariffs that are guaranteed to raise household consumer prices.

His claims that he is imposing them because of fentanyl is a lie. I had hoped he was using the threat as a pretext to a new trade deal with Mexico and Canada . That was not the case. He truly believes that high tariffs is the answer to correct a trade balance ;and to bring jobs home.

He is wrong and it could cost him the ability to effectively run the county . Americans are not going to respond kindly to a $1,200 annual hit on their finances
Trump's tariffs on Canada, Mexico, and China would cost the typical US household over $1,200 a year | PIIE

Article1 sec 8 Clause 3

[The Congress shall have Power . . . ] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Congress has the power to put an end to Trump's reckless tariffs if they had the balls .

Best guess is that Trump thinks the US is such an economic power house that the countries he's imposing tariffs on will blink first. He is betting the US consumer can absorb the pain for longer gains down the road.

I have to remind him that the American consumer has had just about enough of having their buying power eroded by foolish policies.
Trump likes to use the stock market as a gage . I do too because almost all retirement funds are invested . In 2 days it shed all gains since the election. He is looking at slower growth and inflation aka stagflation.

He is taking a big risk that his “little disturbance" in the economy will not defeat his agenda. Retaliatory tariffs are coming to American export products ..... often agricultural . That means red state constituencies will take a 1-2 punch. Higher prices and loss of export business (a total of $176 billion in agricultural goods exported )
U.S. Agricultural Exports Close 2024 on a Strong Note | USDA Foreign Agricultural Service

It is a roll of the dice for sure.

Well so far the markets have given up every gain since the summer . Trump's gamble may be to fix the economy by forcing a recession to end in 2027-8 as Reagan's recession did in 1981 before the rebound in 1988 . That is a HUGE gamble . If he allows the Dems to regain control of Congress in 2026 then he is effectively a lame duck . The question will be IF DOGE found fraud then where is the prosecutions ? Unless he is willing to charge the swamp then his arguement dies and so does the country.


Stocks plunge, market closes down on recession fears amid escalating tariffs

Stocks Get Hammered After Donald Trump Refuses to Rule Out Recession

Very good post. A good start does not always lead to a good conclusion.

Peter Doocy commented yesterday before the press briefing

"And we also expect the White House to try to reassure folks who are sitting there looking at their 401(k)s going down and down and down. This is a White House that came in trying to get federal workers to retire by the hundreds of thousands, but it’s tough to make the argument that you should retire if your retirement accounts are getting throttled, which is what is happening right now. So we expect-, we hope for answers to all of these curiosities any minute."

Trump who previously used the markets to gage the economy and to adjust policies is now singing a different tune. On this issue he has pivoted . He now compared the US economic strategy to China.

In an interview with Maria Bartiromo he said

Quote:

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“You can’t really watch the stock market. “If you look at China, they have a 100-year perspective. We have a quarter. We go by quarters.”

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Trump: Don't Just Watch The Stock Market, "China Has A 100-Year Perspective, We Go By Quarters" | Video | RealClearPolitics

That's all well and good . But retires have already finished their long term strategies and now are at a point where short term disruptions ....."pain"
"adjustments "have real short term consequences . For us retires ;short term is all we have left.

Maybe if we knew what was coming we would've adjusted accordingly . For us the only income we have is the inadequate return from Social Security and whatever value our savings generated .

What we are seeing is the combination of our spending power being eroded by inflation AND NOW ; the devaluation of our savings.

For retired Trump supporters ;this is not what we signed up for.

But he does have a point. We are being silly if we expect the stock market to always go up and never down. We'll have better answers in December.

His point is well taken if that is how he conducted himself and what he campaigned on . I'm not expecting a constant rise . My strategy is conservate that factors in market adjustments

What I don't like is a plunge because of bad policy by the government , Maybe he can weather a year or two of bad times as he reimagines the economy in his thoughts of the moment. But there are real time consequences .

While he prioritizes draconian tariffs ,his tax cuts are due to expire . We will now pay for increased income taxes along with existing inflation and the added bonus of having to pay the additional costs of his tariffs.

Karoline Leavitt was plain wrong yesterday .

This was her absurd answer to an AP reporter

“He’s actually not implementing tax hikes. Tariffs are a tax hike on foreign countries that, again, have been ripping us off,” “Tariffs are a tax cut for the American people, and the president is a staunch advocate for tax cuts."

In no form are they tax cuts to the people . It is a hidden tax on the consumers who bears the brunt in higher prices. OR they cut back on spending which is not great for the economy either . Tariffs aren't paid by the foreign company. They are paid by the importer or retailer . They can't absorb the increase so they pass it on to the consumer .

In all ways he is wrong with tariffs . We are not in the 19th century. 100 % tariffs on foreign goods would not pay for the interest on the debt.

Tariffs will not reduce foreign imports . There are many commodities ;products that we can't inshore. And the double edge sword that consumers deal with are the cost of exports increase by retaliatory tariffs . It also increases the demand for domestic goods .....again increasing their costs .

And what will the Fed do ? Their goals of taming inflation is compromised so they may very well hold interest rates or increase them which impacts the cost of borrowing AND paying off the debt.

What really eats at me is that both Mexico and Canada have played under the rules of USMCA which Trump negotiated and praised as a beautiful trade treaty . Now he complains that it is a rip off . Fine ; the solution is one he loves so much . Go to the table and negotiate a new treaty . What he is screwing around with is trade with Canada alone worth$900 billion
U.S.-Canada Trade Relations | Congress.gov | Library of Congress

Maybe he thinks the US can go it alone . There was a small case for that in the 19th century ;although I might add that was when the US was most imperialist . There is no case for it today. Take the auto industry as an example . Thousands of auto parts are made and assembled in the 3 USMCA nations . The parts themselves cross the border dozens of times in the course of producing a car. Now so far the auto industry has been exempt . But his constant threats have created an uncertainty that by itself affects the market . (I spoke of it above ) His on again off again threats seemingly by the hour again is the cause of the uncertainty

For a person who built his wealth in construction he is surprising ignorant about the consequences .

It doesn’t make sense that our country allows electricity to be made in another country and sold into us,”not very smart.”

Trump Tariffs Live Updates: Europe and Canada Retaliate After Tariffs Take Effect - The New York Times

Which stupid President did that?

Ummmm that would be Trump . Electicity has flowed to the US from the Canadian Niagara river plants since 1897 . Energy trade was part of USMCA

Wonder if Trump thinks it is "not very smart " to encourage the completion of the Keystone XL pipeline to be completed to import Canadian Oil ?

Trump wants Keystone XL pipeline built 'now' | Financial Post

The Repubs yesterday slipped language into the CR bill that cements Trump's authority to continue to unconstitutionally abuse emergency powers to bypass Congresses constitutional power to tariff. Sec 19

Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day for purposes of section 202 of the National Emergencies Act with respect to a joint resolution terminating a national emergency declared by the President on February 1, 2025,
CommitteeOnRulesDraftRule118


In other words . There is no time limit in this session on Trump's abuse of emergency powers if this passes The IEEPA law says that Congress is allowed to cancel any presidential action by being directly brought to the floor without first going to committee. This negates even if Congress becomes convinced he over stepped the law.

The Dems of course were furious. But this passed on a party line vote. Only Tom Massie (R–Ky.) voted no . Dems have some more bills about this on the table that will be defeated . Trump will have the power for 2 years to jerk around the economy on a whim without the prospect of a Congressional challenge to his abuse of emergency powers .

Bad news for us who desire to have a constitutional balance of power.

Oh Canada . Some inconvenient facts for the President.

Our trade deficit with Canada is the smallest of our trading partners. There is nothing I can find that shows a $200 billion imbalance. Why do we have trade deficits ? Because we are the richest nation and we consume more than any other nation.

If you exclude energy ;we have the surplus with Canada ;and that includes the auto industry.

Quote:

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Oil, critical for fuelling refineries in the U.S. Midwest, is purchased at a substantial discount, processed and re-sold.
If you take Canadian oil out of the equation, Canada actually has a trade deficit, and the U.S. has a surplus — of $58 billion.

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Does the U.S. actually have a trade deficit with Canada? | National Post

Strategic metals .....Canada supplies the US with 50%-80% of its zinc, tellurium, nickel and vanadium .The energy and metals we purchase from Canada were the result of a conscious effort to lessen dependency on China and the Middle East

Hawley–Smoot Tariff - Ferris Bueller's Day Off. - YouTube

Countries like Singapore and South Korea have free trade deals with the US where almost all goods cross borders tariff and tax free . Where they do impose taxes on US goods they do it with their own domestic products as well in the form of sales taxes.

Yet Trump is hitting both hard . Why ? Because of a trade deficit with them . It makes no sense . They sell more to the US because US consumers buy more stuff . It is as simple as that .We are the world's largest consumer market.

The only nations we run surpluses with are Netherlands, Hong Kong, Australia, and the United Kingdom. This is due to energy exports .

my losses in the last 2 days = more than what was my annual contribution to my 401 K was while I was in the work force. He is shoving his "disruption " up my A$$ . So I lose 2 ways . My wealth declines and I will likely have to pay more for goods .

He likened it to surgery . He says now is recovery time . Surgeon Trump cut an artery to operate on a hemorrhoid .

Tax Foundation was quick to analyze the impacts of Trump's tariffs.

It doesn't look pretty especially for the folks (as Bill O'Reilly would say)
Although revenue will come in ;US GDP will shrink
The American household gets slammed with almost a 2% reduction in after tax revenue and and average tax increase of almost $2,000
And this is before they can calculate the effects of retaliatory tariffs that will be placed on US goods.

Trump Tariffs: The Economic Impact of the Trump Trade War

Threatened and imposed retaliatory tariffs affect $330 billion of US exports based on 2024 US import values; if fully imposed, we estimate they would reduce US GDP by 0.1 percent. Combined, the US-imposed tariffs and the threatened and imposed retaliatory tariffs reduce US GDP by 0.8 percent.


The only way this works is if ;as some of his allies contents ;that this is all part of the art of the deal.

Ted Cruz said on his podcast

“If we’re in a scenario 30 days from now, 60 days from now, 90 days from now with massive American tariffs and massive tariffs on American goods and every other country on earth, that is a terrible outcome,"

Tariffs, Tariffs Everywhere-Wh… - Verdict with Ted Cruz - Apple Podcasts

He called this move a long ball and if it fails we will have abig recession going into the mid-term elections.




...... "This is the biggest tax increase we have seen in a long, long time," .


Some countries look like they want to go to the negotiating table immediately . But China is ready to play hardball.

Quote:

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India has long been one of the world’s most protectionist countries, only opening up its economy in the 1990s to avert a financial crisis. In 2023, India’s average tariff (not accounting for trade deals) stood at 17 percent, nearly six times the average U.S. rate, according to the World Trade Organization…

For some economists, the U.S. pressure represents a welcome and overdue catalyst for domestic reform.

“We have to reduce tariffs,” [Shiv Nadar University economics professor Rajat Kathuria] said. “This is an opportunity for India to do something that it always wants to do, and has wanted to do, but is politically difficult to do. ”

The Modi government has signaled it is inching in this direction. In March, the Commerce Ministry urged Indian businesses to shed their “protectionist mindset.”

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Trump’s tariffs put India and its struggling economy at a crossroads - The Washington Post

Trump’s Trade War Escalates as China Retaliates With 34% Tariffs - The New York Times

He wants to be #1 . That means he is not happy with Clueless Joe being the #1 moron to ever occupy the oval office.

So last week he intentionally tanked the economy . Told us to bend over and take our medicine . Then he told us to buckle up because more was coming before he buckled up to his golf cart largely immune to the damage he is orchestrating .

Last night he causally told us to suck it up butter cup ;you aint seen nothing yet . He made it clear that this was not the art of the deal. Oh no . His plan is not only to have no trade imbalance with any country . He also plans to recoup past losses .

Is it possible ? Sure . During the depth of the Great Depression the US had a trade surplus as the world economy was rocked by protectionist policies that directly led to WWII . Other than that ;the way to bring us into trade balance is to stop being the most prosperous nation and the freest nation.

Yes if Americans buy fewer goods we will eventually be dragged down to world standards . He leaves the markets perplexed because he alternately calls the tariffs short term bargaining tools and also a long term strategy for revenue raising .

So let me be the first to say good morning to Black Monday 2.0

The one hope I have is that his strategy backfires so badly that he declares himself the winner and backs off.


After a brief foray into the tariff game in his first term he adopted a winning strategy of doing the hard work of negotiating trade deals . But who is going to buy it this time after he stabbed Canada and Mexico in the back on the deal he negotiated 4 years ago ? He talks a good game about "fair " trade . But if his marker is trade imbalance then he is using a flawed model.
As long as we are the most prosperous nation we will alway purchase more goods than any other nation. I get wanting manufacturing in the US . But do we really want to drive up the cost of buying shoes in the US because they are not made in the US;and do we really want to have our manufacturing base making sneakers or cheap pet toys ?
So who cares if Vietnam prospers because they can sell us cheap sneakers ? If they are made in the US they won't be cheap . So who wins ?

There will never be "fair "trade in Trump's world .

Look at Israel. Israel has eliminated all it's tariffs on US goods . But because we buy more goods from Israel than they buy from us ;there is still a trade deficit.
So what did Trump do?

Israeli officials reacted with shock to a 17% tariff on products exported to the U.S., having signed a directive a day earlier scrapping all remaining tariffs on American imports.
Israel Hit With 17% Tariffs Despite Saying It Would Scrap Levies on U.S. Goods

This is a larger tariff on Israel than he imposed on Iran.


The losers and worse losers of Trump’s tariffs on the Middle East and North Africa | Middle East Eye

You see ;we sanction Iran so it is hard for Americans to buy Iranian goods . So no real trade imbalance. Iran gets the base line because well ;every country is hit with the baseline for no apparent reason.

Israel is our friend . But he is treating them like an enemy. We may find we have far fewer friends in this world .

Pretty well reasoned post.

President Reagan's Radio Address on Free and Fair Trade on April 25, 1987

I basically agree with what he is trying to do and agree that it needs to be done. I have no problems with tariffs since we are subject to MANY of them with our exports. But I think Trump's approach is so insulting and confrontational that it can end up being a big negative. It all comes back to his greatest, most glaring weakness, and that is his big mouth.