Apr.08

electoral-vote.com

Dem 47

   

GOP 53

The Trade War Continues

Donald Trump's tariffs continue to dominate the news. Here are the biggest storylines from the last 24 hours or so:

• Another Bad Day: We're getting dangerously close to broken-record territory here, in that every day we're talking about another drop in the markets. Yesterday, the Dow Jones dropped a bunch, but then rebounded some, ultimately closing down 349.26 points (-0.91%). The S&P dropped 11.83 points (-0.23%). The Nasdaq was up, but only very slightly, by 15.48 points (+0.10%).
  
  
• It's a Record!: And speaking of broken records, Trump has actually managed to break several in the past few days. Here is a list of what are, since 1950, the five quickest 10% drops in stock-market value following a 52-week high, and the president who was in office for them:
  
  
  1. Feb. 19, 2020 to Feb. 27, 2020 (8 calendar days)—Donald Trump
  2. Jan. 26, 2018 to Feb. 8, 2018 (13 calendar days)—Donald Trump
  3. June 12, 1950 to June 29, 1950 (17 calendar days)—Harry S. Truman
  4. Sept. 23, 1955 to Oct. 11, 1955 (18 calendar days)—Dwight D. Eisenhower
  5. Feb. 19, 2025 to March 11, 2025 (20 calendar days)—Donald Trump
  
  Trump is now the only president to have three such drops in fewer than 30 days. He also has the quickest 10% drop by duration (the one in 2020 that took just 8 days) and the quickest 10% drop after taking office (the current one, which crossed the 10% line between his 30th and his 50th days in office). He wanted to be a historic president, and now he definitely is.
  
  
• The Dope Show: Folks continue to crunch the numbers used/published by the White House, and the story just keeps getting dumber. Recall that the administration unveiled a fancy formula, which purported to be a somewhat sophisticated method for calculating tariff rates:
  
  
  
  According to a White House spokesperson, (ε) stands for "elasticity of import demand" and (φ) stands for "elasticity of import prices." However, the same spokesperson advised that the White House deemed (ε) to be a constant value of 4, and (φ) to be a constant value of ¼ Consequently, those two things would cancel each other out.
  
  However, the libertarian/conservative American Enterprise Institute, which employs actual professional economists, said yesterday that the White House appears to have gotten its constants wrong. In fact, ¼ is the elasticity of retail prices. The elasticity of imports is actually closer to 1 (0.945, if you want the exact number). If the correct number had been used, the tariff rates would all have been between 10% and 14%, as opposed to the crazypants numbers that were slapped on many, many nations.
  
  
• Pushback from Wall Street: We are not quite sure how JPMorgan CEO Jamie Dimon became the go-to spokesperson for Wall Street, but apparently he is. When he shares his opinion on the economy, it's apparently big news. When he chooses not to share his opinion on the economy, it's apparently big news. Dimon spent some time pandering to Trump by keeping his mouth shut, but he's not keeping quiet anymore. He sent out his annual letter to shareholders yesterday, and warned that "The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession."
  
  
• Pushback from the Donor Class: Jamie Dimon is not Trumpy, and so did not donate to Trump's campaign. On the other hand, Home Depot founder Ken Langone is very Trumpy, and in an interview with Financial Times, he characterized the tariffs as "bull**it," and said he didn't understand the formula used to calculate them. Billionaire investor Stanley Druckenmiller, also very Trumpy, said "I do not support tariffs exceeding 10%." And Bill Ackman, another billionaire Trump supporter, described the tariffs as "a major policy error."
  
  In addition to all of these men, THE donor is also unhappy. That, of course, is Elon Musk, who tried to convince Trump not to impose the tariffs, and then publicly opposed the plan once it was announced. Musk is largely not targeting his co-president right now, but he IS enmeshed in a bitter war of words with trade adviser and tariff lover Peter Navarro, with Musk denigrating Navarro for having a Harvard Ph.D., and Navarro dismissing Musk as a "car salesman." Reportedly, all of this has increased Trump's unhappiness with Musk, and there is much scuttlebutt that the South African's departure from DOGE is going to be sped up.
  
  
• Pushback from the Senate: Assuming that the Senate's Democrats and independents remain unified in an anti-tariff posture, then it will take 13 Republicans to overcome a filibuster of a bill taking away Trump's tariff authority, and another 7 Republicans to overcome a presidential veto. The GOP anti-tariff forces aren't there yet, but their ranks are swelling. The Trade Review Act of 2025, which would subject all new tariffs to review by Congress, now has seven Republican co-sponsors: Susan Collins (ME), Chuck Grassley (IA), Mitch McConnell (KY), Jerry Moran (KS), Lisa Murkowski (AK), Thom Tillis (NC) and Todd Young (IN). Rand Paul (KY) hates tariffs, so you can probably add him to the list, and Ted Cruz (TX) has been telling anyone who will listen that he's anti-trade war, so he would probably be a "yea" vote, too. Other than the markets tanking, the pinch of the trade war hasn't even been felt yet, and the Senate may be on the cusp of double-digit Republican rebels. How many more will there be if the tariffs really start to wreck the economy?
  
  
• Let's Make a Deal?: Yesterday morning, a rumor circulated on eX-Twitter that Trump was planning to pause the tariffs for 90 days on all nations except China, so that there would be time to negotiate. In response to this rumor, the Dow Jones jumped about 1,000 points in less than 10 minutes. Once it became clear the report was incorrect, however, the quick gain was quickly lost.
  
  There were quite a few think pieces yesterday that described this as an "offramp" for Trump. He doesn't want to "surrender" on tariffs, but he presumably also doesn't want to be embarrassed by Congress or to have his approval rating drop into the 20s or the 10s. If he announces that "deals" are being made, he can save face, declare victory, and potentially avoid these fates. There is no way to know if this is the thought process the White House went through, or even if there are ANY thought processes going on in the White House, but it is the case that Trump made something of an opening bid yesterday, announcing that he's open to modifying the tariffs on the EU, assuming the member nations commit to $350 billion of American energy. Nobody, not even the Trump administration, has any idea as to how that would work, but it's still "negotiating." So, we could be on the cusp of yet another trade war ending quickly after limited concessions from "the enemy."
  
  But while Trump is apparently willing to talk to the Europeans, he's not willing to talk to China. In fact, yesterday he threatened to increase rates on China by another 50%.
  
  
• Great Messaging: While the stock market was busy melting down at the end of last week, Donald Trump was busy... golfing. Not only did he golf, he played in a tournament at Mar-a-Lago. And not only did he play in that tournament, he won it, and then bragged to reporters afterward. Undoubtedly, everyone is deeply impressed that Trump won his own tournament, at his own club. Totally legit.
  
  After spending the weekend not only playing golf, but making a point of letting everyone know what he was doing, Trump got on his one-man social media platform to rally the troops:

  The United States has a chance to do something that should have been done DECADES AGO. Don't be Weak! Don't be Stupid! Don't be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!

  It's always so hard to tell when an uplifting message was written by Franklin D. Roosevelt, and when it was written by Donald J. Trump.

And that's the latest salvos in the trade war. Dow futures are up, as of 3:00 a.m. PT, so maybe it won't be another bad day for the markets. On the other hand, they were up at the same time 24 hours ago, and that didn't work out so well. (Z)