This letter isn’t from me, but it’s a great read. I found it on X.
Open Letter by Shay Boloor
The frustrating part is that I was on board for a reset. Truly. I’ve said it publicly. I’ve written about it in this very feed. I understood the need for a detox. For decades, the U.S. economy played the part of the rich guy at the table — picking up the check for a global order that no longer worked in our favor. We hollowed out our industrial base. We enabled unfair trade imbalances under the illusion of diplomacy. We subsidized demand for cheap imports while outsourcing the hard questions about how our domestic workforce would adapt.
Eventually, that had to stop. It was unsustainable — financially, politically, and morally. We couldn’t keep pretending that a consumption-led economy held together by zero-interest rates and global fragility was a long-term solution. I wanted a rebalancing. I welcomed the idea of a harder, smarter America-first policy that pushed for fair treatment, reciprocal agreements, and a real industrial strategy rooted in technological superiority, national security, and capital formation. That would’ve been leadership.
But that’s not what this is.
What you’ve rolled out isn’t detox — it’s whiplash. This isn’t strategic decoupling. It’s scattershot retaliation dressed up as reform. There’s no roadmap. No operational playbook. No clear articulation of where this ends or what the metrics of success even are. It’s not an attempt to responsibly unwind America’s role as the global shock absorber — it’s a brute-force attempt to disorder the existing system with no viable alternative in place.
You can’t replace a fragile supply chain with chaos and call it resilience. You can’t build American industry by torching the scaffolding that underpins capital flows, labor mobility, and global coordination — especially when the U.S. itself no longer has the domestic capacity to meet its own industrial needs. You talk about bringing jobs home, but the U.S. doesn’t have the labor force, permitting structure, or wage flexibility to stand up full-scale manufacturing at speed. And now — after years of deportation policies and underinvestment in vocational training — you’ve made the labor gap even wider.
Capital isn’t going to rush to fill that void just because you raised tariffs. It’s going to wait. It’s going to sit on the sidelines and preserve optionality. Because right now, no CEO can confidently model a five-year capex plan. No board can greenlight supply chain onshoring when they don’t know whether a tariff rate will double next quarter based on your Twitter account or some arbitrary trade deficit formula.
That’s the issue. This wasn’t rolled out as part of a comprehensive American renewal strategy. It wasn’t coordinated with the Fed. It wasn’t communicated clearly to Treasury. It wasn’t backed by a labor reskilling program or any form of public-private manufacturing incentive beyond empty slogans. It was dropped like a bomb — seemingly designed more to shock than to build.
And in the absence of credible structure, capital is retreating — not realigning.
I was ready to endure the pain of a thoughtful, structured reset. Most long-term investors were. We’ve lived through tightening cycles. We understood that globalization, as it stood, had reached a breaking point. But this isn’t a correction of imbalances. This is a rupture without scaffolding.
What you’ve created isn’t reindustrialization. It’s an intentional sabotage of capital planning. No executive is going to build a factory with four-year political horizon risk, a floating tariff regime, and no labor certainty. No investor is going to fund expansion in a market where the basic cost of imports can change weekly based on what country has a current account surplus that week. The system you’ve launched isn’t designed for certainty. It’s designed for control.
And the irony is — we’re not even punishing bad actors. We’re punishing everyone. Allies. Poor countries. Longstanding partners. Israel gets slapped with 17% tariffs while dismantling their own to support American imports. Vietnam gets hit with 46% because it’s become too productive. Lesotho, one of the poorest countries on Earth, faces a 50% tariff because it doesn’t buy enough U.S. goods — as if that were a sign of unfairness rather than poverty. It’s incoherent. It’s cruel. And it undermines any claim to moral high ground.
You say this is about protecting American workers. But no worker is helped by policy so erratic that no employer wants to hire. No consumer is helped when import costs rise and domestic capacity doesn’t exist to replace them. No investor is helped when the cost of capital spikes in the face of weaponized uncertainty.
This is not a plan to make America stronger. It’s a gamble that markets and allies will blink first. It’s brinkmanship with no floor.
And the most maddening part? There was a path. A real one. A version of this policy that could’ve worked — not in headlines or soundbites, but in practice. A path that applied pressure with purpose, that aligned economic force with long-term national interest, that sent a clear message to adversaries and partners alike without destabilizing global commerce or blindsiding capital allocators.
You could’ve gone after China — hard — and had the backing of nearly every serious investor and strategist on the Street. Not just because of trade deficits or currency suppression, but because China has been actively undermining our economy and our people. I would’ve supported a four-year plan to end all dependence on Chinese manufacturing unless they stopped stealing American IP (DeepSeek). No more games. Make it explicit: if they don’t comply, we’ll back Taiwanese independence and bring the entire global semiconductor economy with us. No ambiguity. No half-threats. As I see it, China is at war with us — and our policy should reflect that.
With the EU, you could’ve played it clean. Match auto tariffs percent-for-percent. That’s fair. And then leave the rest alone — especially goods and services. We run a huge surplus on services with the EU. It props up some of our biggest competitive advantages — enterprise software, consulting, cloud, defense tech, streaming, media IP. Tariffing the EU outside of autos would be like shooting your own foot for balance. We’re not in a trade war with Europe. We’re in a competition for global enterprise dominance — and right now, the U.S. is winning.
That’s what real strength would’ve looked like. That’s what an America-first trade doctrine could’ve achieved. You’d be rebuilding the system from the inside out — not just throwing bricks through the windows and calling it a redesign. Investors would’ve backed it. CEOs would’ve planned around it. Global partners would’ve respected it — even if they didn’t like it. And capital would’ve flowed toward American resilience instead of retreating from American unpredictability.
But instead of that, you went with chaos. And now, confidence is shattered. Not because the numbers are bad — but because no one knows what the numbers mean anymore.
That’s the cost of burning down the rules without building new ones.
So no, this is not the detox we needed. It’s not strategic decoupling. It’s not a path to renewal. It’s a slow, loud dismantling of the very foundation that has allowed American capital, innovation, and enterprise to dominate for decades. And it didn’t have to be this way.
But now we’re here. And the market is reacting accordingly — not to the fundamentals, but to the sense that the future may no longer be modelable. That’s not a trade. That’s an exit.
I don’t want this post to be hyper-political. This isn’t about red or blue. It’s not about the 2024 election cycle. It’s not about ideology. It’s about strategy. It’s about execution.
It’s about understanding that when you’re the United States — when you sit at the helm of the global economic engine — every policy you roll out reverberates through capital markets, supply chains, boardrooms, and governments. Words become signals. Signals become pricing. Pricing becomes pain — or progress.
And I hope — for the sake of the markets, for the sake of businesses trying to plan, and for the future we’re all investing into — that it’s not too late to recalibrate. Because we don’t need more noise.
Here’s a link to Shay Boloor’s post.
Trust and Other Things
I don’t agree with all of what Shay said but I certainly agree with much of it.
For starters Trump has no roadmap. He has nonsensical formulas that most economists find laughable.
The sorry aspect is Trump could easily have gotten much of the world to act against China. As it stands now, China could easily be the big winner in this.
Shay did not mention trust.
How can anyone believe Trump will honor any deal he makes when he breaks treaties at will? USMCA was ratified by the Senate 89-10.
Everyone knows there is no national emergency. Seven Republican Senators are willing to stand up against this.
The risk of giving any concessions to Trump is that he will just demand more.
Trump in No Mood to Deal
“What’s going to happen to the markets, I can’t tell you,” Trump said late Sunday. “I don’t want anything to go down. But sometimes you have to take medicine to fix something.”
“I spoke to a lot of Europeans, Asians, all over the world. They’re dying to make a deal,” he said. Trump called on China and other countries to address trade deficits. “Unless we solve that problem, I’m not going to make a deal,” he said.
So here we are. The beatings will continue until morale improves.
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April 5, 2025: Seven Senate Republicans Now Back a Bill to Rein in Trump’s Tariffs
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April 5, 2025: Senator Cruz Warns Tariffs Risk Sparking GOP Wipeout in 2026 Elections
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April 6, 2025: Trump Sets a Huge Tariff Sucker Trap for Taiwan and its Chip Industry
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Example 1: The Success of the 2018 Washing Machine Tariffs – Jeff Ferry
Consumer Prices
The greatest myth about tariffs is that they lead directly to a one-for-one increase in consumer prices of the tariffed goods. The price effect of tariffs depends on the competitive dynamics of the industry that is tariffed, the weight of the level of imports in domestic consumption, and other variables. The U.S. International Trade Commission found in a detailed study published last year that across a range of industries, the various tariffs imposed by the Trump administration led to price increases in the domestic market for the tariffed goods worth between 10% and 20% of the headline rate of tariff. In other words, a 25% tariff would lead to U.S. price increases in the tariffed sector of between 2.5% to 5%.
Key Points
Counterargument Supporting Trump TariffsWhile Boloor’s “critique” raises valid concerns about the implementation and impacts of Trump’s tariffs, there are strong arguments supporting their effectiveness and strategic value:
1. Strengthening Domestic Manufacturing and Reshoring Jobs
Trump’s tariffs have successfully incentivized reshoring in key industries such as steel and manufacturing. A 2024 study found that these measures strengthened the U.S. economy, leading to significant investment in domestic production facilities. For example, U.S. steel producers announced over $15.7 billion in new or upgraded facilities, creating thousands of new jobs. This demonstrates that tariffs can serve as a catalyst for rebuilding critical industrial capacity.
2. Minor Impact on Consumer Prices
Contrary to fears of skyrocketing costs, studies have shown that Trump’s tariffs had only minor effects on downstream prices. The Economic Policy Institute noted that there was no clear correlation between tariffs and inflation, with price increases being fleeting and manageable. This suggests that tariffs did not impose undue burdens on American consumers while promoting domestic production.
3. Strategic Economic Leverage
The tariffs were designed to reduce dependence on foreign imports, particularly from China, and stimulate U.S.-based production. The U.S. International Trade Commission found that Section 232 and 301 tariffs effectively reduced imports from China while increasing domestic output of affected goods. This aligns with broader goals of economic security and reducing vulnerabilities in global supply chains.
4. Encouraging Investment in U.S.-Made Products
Economic analyses have shown that tariffs create incentives for consumers to buy American-made products, fostering local industries and reducing reliance on imports. This shift supports long-term economic resilience by prioritizing domestic production over cheaper foreign alternatives.
5. National Security Benefits
The tariffs were framed as a tool to protect U.S. sovereignty and national security by addressing unfair trade practices and reducing threats posed by foreign economic dominance. By penalizing nations with restrictive trade policies, the U.S. sought to level the playing field and ensure fair competition.
6. Positive Macroeconomic Projections
A 2024 analysis projected that a global tariff of 10% could grow the U.S. economy by $728 billion, create 2.8 million jobs, and increase real household incomes by 5.7%. These figures underscore the potential for tariffs to drive economic growth when implemented strategically.
ConclusionWhile Trump’s tariff policies may appear abrupt or scattershot, evidence shows they have delivered tangible benefits in terms of job creation, domestic investment, and reduced import reliance. These measures represent a bold attempt to recalibrate America’s economic priorities toward self-reliance and industrial revitalization—critical steps for long-term resilience in a competitive global economy.
George Gammon, in his Rebel Capitalist Podcast this week, made the point that we import nearly 100,000 Containers into America per Month (not sure if this was not per DAY). Let’s go with a Month.
OK, now imagine EVERY SINGLE CONTAINER will be inspected and then they will apply the tariffs. This is a logistical nightmare.
I did get to the third paragraph, but it is more than obvious that you aren’t listening to anyone but Hillary and Barack. You’re just too much your home Chicago in the bias to corrupt fascism in the team of the state, elites and big business saving US. A lot of US was pretty alarmed over the media lies and the corrupt puppet President of the last four years.
It’s time for a little more to main street.
US is a tiktok based economy, it can handle trade wars with BRICs
Most other countries need us more than we need them. If Americans buy less due to tariffs then the other countries will be hurt more.
Of course not. The US are not the universe of international trade, but a minor part of it. Guess what, the most important country in international trade is the one exporting more stuff, which is both the destination of materials ands parts and source of finished products. That country ain’t the US, but countries like China and Germany.
You obviously have no knowledge of history, so I’ll be happy to educate you a bit.
Tariffs are disinflationary. The last time the U.S formally used them was in the Harding presidency. He was hated by the progressives as well as the Hooverites on the GOP side (sound familiar?). He was elected by a populace suffering from 11.7% unemployment, a minus 7% GNP, high income taxes & the CPI at +17%. Hoover became Sec’y of Commerce under Harding and was an agitator for aggressive gov’t intervention in the economy. Harding ignored him and Hoover did what he could to undermine the Adm. Nevertheless, Harding got legislation passed to reduce the 73% max income tax rate to 25%, he cut the budget in half from $6Billion to $3Billion and implemented the Emergency Tariff of 1921 to protect the ag sector and later in 1922 signed the Fordney-McCumber Tariff Act of 1922 which had rates up to 400% on some goods. The results were that by the time he died in the summer of 1923, his budget cuts, tax reductions & tariffs took GNP to plus 12.9%, inflation fell to 1.7% & unemployment was at 2.4%. From then to 1929, when Hoover was perpetrated on the public, the economy grew by 47% and wage growth was +25%. When Hoover came into office, he supported the Smoot Hawley tariff which was passed in 1930. Even he, though an avowed protectionist, was not happy as that bill put levies on over 20,000 products but he signed it anyway and it was a tariff too far as it helped bring on the recession that began after the October 1929 market crash. He went on to increase regulations dramatically after he came into office and regulations increased dramatically. Between he & FDR they worked their tinkering regulatory magic to take a normal, cyclical recession into a major depression that only ended due to WWII.
During Trump 1, inflation averaged 1.87%, almost 60% lower than the 3.3% average inflation since the Fed was created in 1913. But the major point is that we have reached a stage in our economy which mirrors every previous financial collapse in history from Rome through to the USSR. When the producers who sustain the economy with goods, services and taxes are regulated to the point where their livelihoods are destroyed and the bureaucratic class, AKA tax eaters, take control, the debt piles up to the point where it’s unpayable, production is destroyed and the economy fails.
In January, Yellen released her “Final Report of the U.S. Government” for fiscal year 2024. In it she makes several attempts to warn readers that current U.S. fiscal policy is “unsustainable” (see below). She also reports that our combination of current Federal debt plus unfunded liabilities amount to $143 Trillion through the end of this century. She goes on to suggest that to break even by that time we will be required to increase GDP by 4.3% every year. As a point of perspective, the entire wealth created in the U.S over the past 150 years was $160 Trillion and current GDP is at 2.5%, so we have to improve that by 192% per year for 75 years. Trump is attempting to reverse 60 years of financialization of the economy which has led to a massive misallocation of investments, where Fed & Treasury have materialized cash & debt that goes into the asset classes rather than the productive side of the economy, they’ve manipulated interest rates and the financial destruction of savers and those living on fixed incomes instead of producing jobs that help the middle class and produce actual tax revenue and a stronger GDP which actually drives economic growth. Instead we see speculative bubbles leaving the middle class & working poor with a gig economy
You seem to offer complaints without alternative or viable solutions, an attitude which has become epidemic among the chattering classes. Trump is at least attempting to fix it but at the expense of their comfort zones and core beliefs which also got us into this mess. https://www.fiscal.treasury.gov/files/reports-statements/financial-report/2024/01-16-2025-FR-(Final).pdf
Thumbs up
Amen brother!
After WWI the US hit a deep recession, but Ford sold over a million car in 1921 and 1.5 millio in 2022. Farmers used Ford trucks to send their products to RR hubs. Cars replaces horses and buggies. Traveling by cars became popular. Ford doubled his workers wages. Aviation took off. Lindberg flew to Paris. Giant vacuum tubes radios in every house, GE megaphone and power generators. The influenza pushed toilets in public places and houses. Coolidge followed Harding creed. With Andrew Mellon and general Herbert Lord they cut the budget deficit and WWI debt. The private sector took over, protected by tariffs, They invested and speculated in stocks, bonds and in Fl RE. Speculations were out of control. NY Fed Ben Strong was a useless Anglophile. The 90 days Good Notes were phased out. The Weimar hyperinflation. Kellogg Briand was signed. Hoover was next. The seeds to 1929 collapse and WWII were sowed.
yes Mish still thinks it was a drunken ukrainian on a boat that blew up NORDSTREAM 2. lol
You’re assigning rather moral aspirations to the mostly amoral Trump.
Thank trump for destroying $6 trillion in market equity in the U.S. alone so he can collect $500 billion in tariffs. Because of the covid supply disruptions American businesses were investing in domestic production. The notion that he is driving production is silly because it was already happening as part of the previous administrations actions.
Instead of an orderly on-shoring trump has now alienated our allies and driven our former allies into our competitors open arms.
Where is his plan? Why has Fox removed the ticker from their news feed?
Bottom line is that tariffs destroy profit margins, increase inflation and cause retaliation.
How many billionaires would both invest in America and permanently immigrate here if their purchasing power was immediately and continuously doubled by a 50% Discount/Rebate policy at retail sale?????????????????
Hey Donald! You’re puny $5billion could all of a sudden purchase $10 billion! Better than that Bitcoin ponzi scheam.
In one sentence: Revolutions are ALLWAYS dreamed up by philosophers, and carried out by bandits.
Expect the market to keep falling until it gets to around 3600 S&P500. You have been warned. It may take a few months, but it will get there.
Unfortunately you may be correct. Trump is clueless as to how to build our economy and how to prepare industry and labor for on-shoring manufacturing. Unemployment was below 4% when Biden was in office and now it is already showing signs of increasing (despite the deportations). Why should the Fed bail trump out with lowering interest? He dove head first into the shallow end of the pool without thinking first. Not the Fed’s job to save trump from his stupidity.
There are ways to go about transitioning manufacturing back to the US and it was working. The chaos created by trump is an economic disaster and the markets are reflecting his lack of even a basic understanding of manufacturing.
Perhaps he thinks the world is a McDonalds where you get what you want in two minutes. Clearly no C-Suite corporation executive or foreign leader should trust trump for anything.
Trump is a liar and scam artist at best.
“Trump is clueless as to how to build our economy…”
I keep hearing that narrative, but that is all it is, a narrative.The 2010’s didn’t achieve 3% GDP until after Trump took office.
That’s exceptionally funny! Only after the covid disaster did any growth occur! The markets were down 20% heading into covid because of trump.
You seem to be forgetting his first tariff disaster. Is that selective amnesia?
It is amazing what trump finally accomplished with the Fed pouring $5 trillion into the crashing economy and zero percent interest rates. ;-)))
A clown would have grown the economy during that bubble blowing exercise. Oh wait an orange haired clown?
Hope you’re right.
Somebody below referenced the Tucker Carlson interview of Scott Bessent. You really need to watch this. It will make you second-guess your whining. If you’re a fan of going back to the way things were under Biden, you are severely misguided.
Bessent is clueless he blamed the selloff on Deepseek and said gold has gone up because Chinese citizens are scared about inflation.
Free trade for thee, but not for me.
Mish, the hypocrisy is beyond beyond.
https://images.mktw.net/im-87459767?width=700&size=1.396039603960396&pixel_ratio=1.5
Amen.
Not sure what caused my last post to get flagged for approval.
No worries.
It is amazing how many people are clueless about global economics.
The problem we have is gov’ts are financing trade deficits!!!! This means they are taking other countries profits!!! Trade deficits should be in expressed in terms of profits!!!! A dollar of trade surplus means you took a dollar of profits from another country. This is a fact not a theory. It is an accounting equation. This is global economics 101!!!
So a foreign gov’t want reserves to reduce the volatility of your exchange rate (Triffen Dilemma). OK. They look to the US to be the reserve currency. OK. Now if you are the leader of your country, and your people and businesses want profits, but you recognize that you need to be the reserve currency, HOW MUCH OF YOUR PROFITS ARE YOU WILLING TO LET THE OTHER COUNTRIES TAKE!!!!
I say let them take 10-20% of our profits. We are still a reserve currency, they can build reserves to reduce the fx volatility but also standing up for ourselves.
But that is not happening!!! Margaret Thatcher said the problem with socialism is eventually you run out of other peoples’ money. Well the socialists figured out that they could steal US profits to support their socialism. To steal profits they must finance trade deficits. So today they are stealing 70% of our sustainable after-tax profits!!!!
I couldn’t care less what their tariffs are or other barriers. BUT I CAN THAT THEY ARE FINANCING TRADE DEFICITS to promote their socialism.
This is at the heart of what Trump is trying to accomplish. Do not take more than 10-20% of our profits. It has nothing to do with coordinating with the Fed or a plan. They don’t care about your whining and begging. So now the tariffs adjust their exchange rate for them. Now they are less likely to finance a trade deficit. USA wins.
Get a clue about global economics.
Wrong:
https://images.mktw.net/im-87459767?width=700&size=1.396039603960396&pixel_ratio=1.5
So what. If tariffs are reduced to zero but they still finance trade deficits we still lose. Do not expect a socialist to care about you, behave, and cooperate. They only care about power and keeping their socialism going. You can judge success by how much the trade deficit declined. That is the only measurement stick that matters.
I meant that it’s tariff rates and foreign protectionist policies that we’re up against.
The rates are taking up the headlines, but as BofA Global Research shows, it’s just part of the story.
Show up with moose antlers to deliver the letter in person – that will attract attention.
In case you were wondering what kind of kooks are running the US right now, the story of Ron Vara is instructive:
https://www.yahoo.com/news/rachel-maddow-explains-ridiculous-true-175426436.html
Wait, are you telling us Rachel Maddow isn’t part of the kookoo crowd?
Trump doesn’t listen to anyone, at least those with a brain.
Tariffs are still a tax on the American consumer. To pay a debt off for an irresponsible congress. While they are still giving beaks to the wealthily who have benefited from the system.
Unless you work in an industry making things. Which clearly you do not, nor ever have, so you don’t understand.
American industry is alive and well. Sure we have outsourced some of our industry that was extremely dated and required extensive re-investment at a time when adequate pollution control was non-existent. Now we have far better technology to move things back home again and we were in the process of on-shoring large amounts of manufacturing with robotic technology.
The huge problem is that trump had no plan and does not have a plan to create the infrastructure to carry his demands forward. Additionally he has lost the trust of our allies and no one can rely on anything he says!
The world economy plays multi dimensional chess and trump could barely win a game of checkers with a fourth grader.
You are wrong about this. Luke Gromen does a great job of describing what’s happening. We are extremely vulnerable to other countries in the production of defense components and in areas like pharmaceutical production. I’m sure that there are a number of other strategically important products the making of which we have outsourced. In a perfect world, where everyone is at peace with no prospect of conflict ever, this would be ok (but why would we need defense production?). The truth is that the Chinese are a big threat to us and our allies. Their mercantilism has upended any type of equilibrium in world trade, and they appear to be doubling down. The kumbaya ship has sailed.
China wants it empire back. It was learning algebra before the US was born. The US is a great threat to the Chinese and just about every other country on the planet. I cannot see the US winning anything ever more because your method of going about things is pure shite.
The wealthy seem to be doing most of the crying at the moment.
“top-down forecasts for S&P 500 earnings to $262 per share” times a sane 16 times valuation is 4192. It’s still over 5000.
The market got really overblown. Take 10% off of the earnings and use ‘good time to buy’ 14 times valuation and you get 3300 for a bottom.
Tariffs come in as a trigger for domestic industrial revival. The thinking is: by making imports expensive, you create room for U.S. producers to step in
But here’s the problem: American factories can’t scale up overnight.
So in the short term, consumers will face higher prices.
The administration knows this.
That’s why they’re front-loading the pain now, betting that by 2026, the benefits will be visible.
In the meantime, they’re offering some near-term relief.
Tax cuts have already been floated to help offset the cost burden on households.
And while risky, currency devaluation may follow later to make imports cheaper without lifting tariffs.
How about the people & industries that feel hard done by foreign competition up their game & become more competitive?
The top 10 percent own 93% of the stocks. Cry me a river.
the top 10% account for 50% of spending. if they stop spending the whole economy goes whoosh!
It’s time for the top 10%’s wealth effect to drop off. Their unfettered spending is part of the reason inflation hasn’t been tamed.
Black Monday it is.
Please sell everything and hide.
Minus 8 points on the S&P is not very black so far.
We’ll see what happens in the last three hours.
Maybe trumps real plan is to sow chaos and start a civil war for the far right. Or at least enough so he can seat himself in power.
That’s it for sure. Barron will be heir to the throne and everybody will have to wear their underwear on the outside. All the trannies will be put in camps and women will have to wear those Handmaid’s Tale bonnets. The QAnon Shaman will be made Chief Justice of the Supreme Court. Veganism will be outlawed.
he doesn’t have a plan. he never plans. he gets angry and reacts.
No way Trump could turn the world against China. China is the major trade partner and foreign investor in dozens of countries. Whereas the US have nothing to offer, except threats, sanctions and tariffs. Let’s face it, the US are a fallen empire in its past legs, grasping for a past that is no more, squirming and shaking.
Sure and then along came reciprocal tariffs.
Paid for by the US consumers. MAGA! 🤣
Tariffs affect four groups:
Producers
Exporters
Importers
Consumers
In most cases, all four are going to take a hit with Trump new tariffs. Time will tell how much consumers are hit, but almost NONE of these tariffs are going to be passed on the consumer exclusively.
And the only countries that really matter are China, India, CA, MX & a handful of European countries.
I could honestly care less if a pair of Air Jordans that cost $400 go to $546. Moreover, I could care less if a $1000 iphone costs $1,340 nowadays.
What I’m REALLY excited about is seeing the Fed GDPNow forecast shoot higher from its current massive trade deficit induced -2.8% once we start importing less from China, et al.
Now that’s something to get excited about.
MAGA!!!
51% of Americans didn’t vote for this nonsense and yet their lives are being impacted because the orange man child has been let loose to destroy things. When will enough be enough?
They didn’t vote to de-industrialize either. Funny that.
Right! It just happened over many decades. At least with Trump, he’s ripping off the band-aid and making his intentions crystal clear.
They had the opportunity to vote for Perot in 1992, but the corporate media persuaded the American public to do the bidding of corporations and vote for either Bush or Clinton to offshore the USA’s industry. American voters got what they wanted.
Even fewer voted for the status quo under Harris.
Thank you for posting this interesting letter.
I agree that “capital” in the U.S. may start looking for a new home.
“if they don’t comply, we’ll back Taiwanese independence”.
Another person with delusions of American military supremacy. Even though Bongbong Marcos will betray the Philippines by making it a forward base (and target) in a war with China, the US cannot match China logistically in a war over Taiwan. We’re on the other side of the globe and aircraft carriers are vulnerable. China would have Russia electronic weaponry against planes – as Russia recently used against French planes over the Baltic Sea, disabling their navigation.
Excellent and thoughtful post Mish.
It is true that manufacturing was moving back to the U.S. as a result of the supply disruptions from covid. The notion that the infrastructure and labor base can be built quickly is simply out of touch with reality.
In many ways, Americans need to ask if Trump is competent to lead the nation. He has surrounded himself with an echo chamber of yes men without the knowledge to build a new economy. His Fox News propaganda machine is a well documented spreader of disinformation and outright false statements.
There is no way I would consider investing in the USD or a new plant as long as this administration is in power. Trump has stranded our nation in economic limbo for the next four years or, until Congress takes command from this incompetent pretend dictator..
Remove trump from office ASAP
Exactly how many new plant investments have you made in last couple of years?
Just checking to see they will be missed.
Europe ready to negotiate 0 for 0 tariffs. SO much for not working. Jeez. Impatient fools.
Zero tariff is not enough.
https://www.cnbc.com/2025/04/07/peter-navarro-says-vietnams-0percent-tariff-offer-is-not-enough-its-the-non-tariff-cheating-that-matters.html
For Vietnam this is true.
04/02/2025 to 04/07/2025 and the sky has fallen.
People should put down their mouse before they injure themselves.
That’ll do nothing to zero the trade deficit between the parties or to attract industries stateside, the alleged goal of the tariffs
Europe’s average tariff on US goods is like 2%. You’re a fool if you think taking that down to 0% is going to somehow cause an explosion of US exports to the EU.
Ha! I dare the US to drop its decades-long 25% tariff on trucks from the EU.
Bessent: “It would have been easy to keep pumping up the economy, borrowing a lot of money, creating a lot of government jobs,” explained Treasury Secretary Bessent to Tucker Carlson, defending the administration’s policies, while describing the extent to which Biden juiced up the US economy, like a body builder on steroids, appearing strong while destroying his internal organs.
“There was no controversy when we were doing all that, but you would have ended up in a calamity,” he said. “If you go back and look at the financial crisis in 2007-08, the economy looked great right up until then. You go back to the end of the dotcom bubble, and the whole credit problem, fraud at Enron and some other companies, the economy looked great until it didn’t.”
I know. That’s the one Mish should be commenting on but it doesn’t fit his worldview so crickets.
I voted for Trump because of Bessent.
Putting on tariffs without warning absolutely kills the profit margins of domestic companies dependent on international supply chains. How are they supposed to invest in local production if they have no profits?
A rational person would have announced a plan to ramp up tariffs over time and wouldn’t have 5 different administration proxies declaring different strategies (they are negotiable – they are non-negotiable – they are permanent – they might change etc etc)
Do you realize that you are saying that a JPY/USD exchange rate of 115-120 (150*.8) means American companies cannot make a profit? If China does export bans it would have happened whenever we stood up for ourselves whether ramped or not.
Markets higher as weak limp hands lose again
OH NO. The reddit cat lady crowd still selling
For anyone who said or thought Trump was the better candidate for president, we told you so. When you support a chaotic candidate, you get a chaotic president.
Great to have a border again. Thanks
There have been no good candidates on the ballot for several decades. I’m with the majority that has consistently voted neither by staying at home.
Trump was obviously the better candidate. All Harris had was mindless word salads.
Astronomical global debt is causing chaos. Astronomical government corruption is causing chaos. Also, remember it was Obama who said he was going to fundamentally change America.
“it’s a brute-force attempt to disorder the existing system with no viable alternative in place.”
What is the WEF’s Great Reset? Imagine it is 2030 and you own nothing, and are happy.
Would you be happy owning nothing? The WEF page included, “even your clothes.”
What is the Great Reset, other than a brute force attempt to disorder the current system? Who attends the WEF? The hoi poloi of globalist elitists.
Who needs the WEF when you have MAGA or the DNC? Pick a reset, but not it matters, since it’s not your decision.
“Because right now, no CEO can confidently model a five-year capex plan.”
more than anything this is the fundamental issue. He went after Canada for the so-called dairy tariffs HE negotiated his first term (so-called because they kick in only after certain level of imports are reached and they never have been). you can’t believe anything he says, or signs.
no sane CEO is committing billions to building factories, equipment based on so-called policies of a man driven purely by hate, retribution who loves to make life miserable for everyone so they crawl to him to stop it. Plus he’s old and fat and may well not be around in 5 years. he’s a twisted man, and anyone who doesn’t see that is delusional.
If only Trump had told us who he was before the election.
He did. Loud and clear.
I’ll be “Dictator On Day One” was not clear?
Mentioned 54 times in the Epstein report? Not Clear?
“You Can Grab Her By The Pussy” Was not clear?
What planet is this?
He had me at pussy-grabbing.
He certainly did.
“take hm seriously not literally” . looks liek for the second term erople should have taken him literally.
Here for your consideration is an excellent interview on Adam Taggart’s youtube channel. He interviews financial analyst & author, Lawrence Lepard. Lepard goes into great detail discussing the problem with our current monetary system. To me, Lepard expounds on the root causes and the possible, but painful fixes.
Yes, the stock market is getting crushed, but it’s my humble opinion only, the fuel for the fire has been there since the FED has juiced the market multiple times. Trump has just added the spark to the fire with the tariff wars. This was inevitable no matter who was in office. The math cannot be denied. The interview is quite interesting, even though some may disagree with Lepard’s opinions. He’s no dummy…quite well spoken.
https://www.youtube.com/watch?v=UTL97hlC3A8&ab_channel=AdamTaggart%7CThoughtfulMoney%C2%AE
Juiced & inevitable…
with the final squeeze now in play: panic buying.
A controlled burn was desired…
but an incendiary explosion is what we got.
Perhaps a prolific liar in a leadership role is detrimental to all…
and maybe, just maybe, words do matter.
“The Baby Boomers have gone especially psychotic. That’s why there are so many old folks waving those Soros-made placards in the astroturfed crowds of the “Hands-off” protests. After an eighty-year run of the most mind-blowing comfort and convenience enjoyed by any generation in world history, America’s Boomers stare into the abyss of their fading Fugazy fortunes as their stock portfolios tank. Kind of too bad. Maybe you shouldn’t have gone along for the ride. Maybe you should have cared for your country a bit more.”
“That process starts with deploying real capital — as opposed to Fugazy capital — to re-start businesses and industries. That will take money away from hedge funds and other rackets that exist to play games with evermore abstract layers of things that only pretend to represent money. As that occurs, a lot of pretend money will vanish. Don’t be too shocked by this. That’s what happens when a society bends back toward reality: you start sorting out the real money from the fake money. That’s why the price of gold keeps marching up.”
https://www.kunstler.com/p/farewell-fugazy
well this whole thing… i mean isn’t that how the dollar works? you import goods from all over the world and export the green back in exchange. if you are not running a trade deficit, how is everyone else gonna get that dollar? how are you even able to keep that as the global reserve currency?
Boloor’s open letter lays out some sensible, organized steps that could’ve been taken to avoid upsetting the apple cart… but do any of us really believe that the ‘powers that be’ would’ve allowed those changes to be made? I don’t. Too many rich interests, too many far too powerful political interests are at play; too many stand to lose too much to allow changes to the existing system. It (the system) has been reinforcing and corrupting itself far too long to support any reversion to a morally based economic reality. Too many oxen would be gored. What’s happening is what has to happen to effect real changes.
– We hollowed out our industrial base. We enabled unfair trade imbalances under the illusion of democracy.
> Thankfully we finally got a Leader who understands that!
– Eventually, that had to stop. It was unsustainable — I welcomed the idea of a harder, smarter America-first policy that pushed for fair treatment, reciprocal agreements, and a real industrial strategy rooted in technological superiority, national security, and capital formation.
> Exactly what you asked for and received. Don’t be so shallow about it. America First Agenda in spades! Smarter Policies in spades! Reciprocal (Tariffs) Agreements in spades! A blazing industrial policy, and better than we have seen in most people’s lifetimes, in spades. National Security like never before, in spades!
>> But that’s not what the elite wanted. They didn’t want the punchbowl removed. They liked the Free Money, and boy did they get off, on the Power & Control!!! They told and showed us everything we needed to hear and see, to guarantee they won’t be still getting what they want! Time for “The People” to start seeing something for their efforts and hard work! This is wonderfully Amazing!!!
– We need a plan.
> We have a Dynamite Plan, and It’s Working! Move aside, and out of the way, as we “Citizens of America“ have united!!!
spelling out hte problems doesn’t make his idiocy a solution.
Karl Marx was great at describing the ills of society, his railing at the elites controlling the working man etc… was spot on and still resonate today.
his prescribed solution however, wasn’t a solution. Neither is Trump’s prescription a solution to anything.
Also, we’ve hollowed out the industrial base… yeah and then innovated something called computers, the internet, smartphones. which i think created a couple of jobs in the USA.
talk about glass half empty, your problem is you don’t know what bad looks like, so you think, hey it can’t be any worse why not try this.
I had a friend who always drove luxury cars, BMWs and Audis, and for one model Audi he was so disappointed he was constantly complaining about everything and what a horrible car it was, and as a passenger who’s only ever bought 7+ year old cheap cars, i thought the car was awesome.
you and MAGA are basically my friend who think it can’t get any worse so let’s blow it all up, and are trading down to a Ford from 1982
“An open letter to Trump”….. bla, bla, bla…. “we could of had a plan…. we could have got together…. Mr. President, this isn’t a plan”…. bla, bla,bla…. I’ve listened to this crap all my life from Losers. The central planners and bureaucracy and Jamie Diamonds of the world always have a plan, but the plan always screws Americans.
Now we have a war. A mother loving trade war…Trump’s War. And maybe it gets something done and maybe it doesn’t. But at least Americans aren’t going to have to wait 20 years to find out like they did with all of those collectivist trade plans that screwed the average Joe.
Shove your trade plans. Time for action.
And I’m buying gold, silver, platinum and real assets all the way down, because not even Trump is going to stop the Gigantic Sovereign Debt Bubble from bursting. And when that Mother goes, look out!
The author lost me with this statement:
More of the same racist anti-China nonsense. There is zero evidence that the Chinese “stole” IP related to AI. This is Sam Altman’s whining over his sand castle getting hit with a wave.
Besides, I thought OpenAI was non-profit and for “the good of humanity.” As such, even if someone got their hands on the code, why not share it? Oh wait, that was always a lie.
The rest of the article is debate-able, but seeing such a blatant lie makes me suspicious.
Most of the 5G patents are owned by Chinese companies. Those are patents, that is, the result of R&D of the past decade. This trope about IP stealing, which is common to industrializing countries (eg DuPont), is way out of its past due date.
America has never stolen anything – other than people and land.
And the occasional innocent life here and there.
Send in the Apache gunships.
EU, South Korea, India, Mexico, Japan, Canada are worse enemies than China. Profit is the roadmap in a free market economy. Millions of entrepreneurs and individual decisions solve problems that an ignorant aristocratic socialist dictatorship cannot hope to address. Any business waiting four to twelve years to sell expensive imported widgets is going bankrupt. Nattering Nabobs of Negatism can lead, follow, or get out of the way.
No way. I’d be bankrupt if I hadn’t been in South Korea when I had surgeries. The worst enemy of the USA is the corporate oligarchs like the one Luigi dusted.
Either all the world’s economist’s know as much about the markets as is contained in a three page pamphlet and Trump is the biggest genius ever, or BOHICA. Where are you placing your money bets? Forget your empty rhetoric.
“you have to take medicine to fix something.”
Except this “medicine” is being forced on everyone kinda like the Covid vax. Ironic isn’t it? Where is RonJ to chime in and be outraged!?!? Suddenly everyone is ok with forced medicine down their throats.
While you’re taking your medicine the Trumpocolypse™ takes your job, house, auto, 401k and marriage while he plays golf.
But at least you trumpers can say you owned the libs while living under the overpass!
What happens to parabolic moves? They invert in a mirror image. The Nasdaq 76% crashed was forced on everyone by ramping it to a 5,000 point parabolic. The boom causes the bust, not the bust. The bust is the reaction to the boom. When, not if, MPO. How is it that there are 4 turnings? 4 seasons to the Kondratieff wave? A cycle always completes itself. WW 2 was 80 years ago. Here we are, talking about WW3, after the invasion of Ukraine. The phase of the cycle comes back around again. Global debt is astronomical. WEF talked of the Great Reset. Webb talks of the Great Taking. Sovereign debt default happened in 1931. He we are facing it again.
People have been living under bridges in L.A. under California Democrats.
Take your [COVID] medicine and like it! -Sincerely Don Trump.
Aren’t you the one who is always bragging about your stock picks? The smart money has been short the last several weeks. The medicine has been delicious for them.
What is the end result of astronomical global debt? Medicine was coming well before Trump took office.
You don’t have to take the medicine, just buy American.
Have you seen the prices of American medicine compared to foreign-made medicine?
Trump for a second, I mean 3rd, term!
He screwed up his first term and is doing it again the\is time.
All the reasons we didn’t re-elect him in 2020 are now becoming obvious.
This will be the worst economic environment of our lives.
I’m guessing the true goal is to have a war, declare martial law and retain the office of the presidency for life. But that implies some plan ….
Yes, many of us have a vague unease about the near future……..I worry about not being able to cross state lines, or travel freely.
Dogs and cats living together. Real wrath of God stuff.
So more people down voted than up voted and I realize that I cannot tell if they are down voting that the ideas presented are unappealing or if they are down voting offering the ideas as real possibility.
I am choosing to interpret the down votes as angst with having martial law. If you down voted meaning to imply that this wont be the worst economic environment of our lives – jokes on you 😀 😀
Anyone want to start a pool fro when martial law will be declared? 😀 😀
I read this yesterday. Fact is Mish you would be against tariffs no matter how much or how they were introduced. You’ve made that clear, and that’s fine. Until we see what changes and deals get made based on the tariffs everyone is guessing. The 2018 tariffs were going to crash the economy according to many. Quite wrong. The stock market isn’t the economy. You said yourself it was overvalued greatly.
What you should post about also is Bessent’s interview with Tucker. Well reasoned and thoughtful. Bessent isn’t being dragged into this. He knows the system currently is broken and our debt will swallow us without change…And change is hard but necessary.
He is amazing!
You’re still not getting it. Re-read Mish’s post, better yet read the following:
“I spoke to a lot of Europeans, Asians, all over the world. They’re dying to make a deal,” he said. Trump called on China and other countries to address trade deficits. “Unless we solve that problem, I’m not going to make a deal,” he said.
So now this is about trade deficits? I thought it was about fentanyl? or was it about manufacturing? or jobs? what will it be about next week Taiwan?
Trump keeps moving the goal posts like some 3rd rate mobster. You can’t trust he will honor ANY deal he makes. You need proof of that re-read the USMCA posts Mish keeps referencing. Wake the f*#@k up already Midnight. Can’t believe you’re really this dense.
“So now this is about trade deficits? I thought it was about fentanyl? or was it about manufacturing? or jobs?”
All are intertwined. How dense are you?
So China is now supposed to solve ALL of OUR problems? Is that it? Tell me when you raise that Chinese flag over your home Ron.
I missed the part where China was holding a gun to our head and making us buy their stuff. How dare they!
Then you should be buying Euros as trade differences are irreconcilable and Europe will be going into Deflation without any markets to sell product into.
no, they’re not intertwined, the goals are compeltely at odds.
if it’s about deficits caused by tariffs other countries have that can be resolved relatively quickly with an agreement where they remove their tariffs. it may lead to us selling more stuff, but that’s not bringing all the jobs back here.
To create manufacturing jobs, you can’t make a deal, you need to keep the US tariffs in place to force companies to build factories … this will take years. you have to keep the tariffs forever.
Fentanyl doesn’t figure in the trade war, it’s due to the fact we have thousands of miles of border with Canada and Mexico and apparently insatiable demand in the US for drugs.
It was about grabbing headlines and saying hey “Look at Me”.
Boot Trump and send him to “Narcissists Anonymous”…
The guy is vicious!
right, exacltu, his narcissism is pathological, roabky in a clinical sense, he gets off on making headlines, causing everyone problems so they can crawl to him and kiss the ring, then use X and his other captive media to issue headlines like “canadian PM bends to Trump” etc… He’s sick
He wants a spot on a late-night comedy show.