Trump’s Reality-Driven U-Turn

. . .Last week, President Trump dropped an economic neutron bomb by declaring tariffs on virtually every country on the planet – tariffs based not on reciprocal tariff rates, but on trade deficits. After an initial stock dump of approximately 10% and then days of the markets bouncing up and down like a hyperactive corgi, President Trump finally announced that he would be undoing his threatened tariff regime with regard to our allies.

In a statement posted to TruthSocial, he said:

Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.

Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!

This was reality setting in, and President Trump respecting it. As I wrote last week, “Now, Trump is unlikely to carry his policies to their full fruition if markets respond as expected. He is too canny a politician for that.”

(Read more from “Trump’s Reality-Driven U-Turn” HERE)

Photo credit: Gage Skidmore via Flickr