Halls of Shrewd'm / US Policy❤
No. of Recommendations: 9
https://fortune.com/2025/04/09/trump-didnt-care-th...Trump didn’t care that the stock market was crashing. Bond yields were the ‘pain point’ that finally got him to pause tariffs Gifted NYT link
https://www.nytimes.com/2025/04/09/us/politics/tru...The economic turmoil, particularly a rapid rise in government bond yields, caused Mr. Trump to blink on Wednesday afternoon and pause his “reciprocal” tariffs for most countries for the next 90 days, according to four people with direct knowledge of the president’s decision.
Asked to explain the decision, Mr. Trump told reporters: “Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid.”
Behind the scenes, senior members of Mr. Trump’s team had feared a financial panic that could spiral out of control and potentially devastate the economy. Treasury Secretary Scott Bessent and others on the president’s team, including Vice President JD Vance, had been pushing for a more structured approach to the trade conflict that would focus on isolating China as the worst actor while still sending a broader message that Mr. Trump was serious about cracking down on trade imbalances.
After his reversal on social media, Mr. Trump’s team was put in the unenviable position of trying to spin the media that this was the plan all along, a brilliant strategy straight out of the pages of the president’s best-selling book, “The Art of the Deal.” Mr. Bessent went so far as to deny that the bond market had driven the change.
No. of Recommendations: 0
"Are you telling me, that my re-election depends on a bunch of f*cking bond traders"?
William Jefferson Blythe Clinton during his first term :)
No. of Recommendations: 1
Did Vice President Harris win the election? Or did Don the Con win?
And are you pleased with the results?
No. of Recommendations: 5
So, has Forest Trump removed or lowered the tariffs on China overnight ?
Hard to keep up with all the whiplash.
And for the rest of the world, we get to do this all over again in 90 days.
Wow, what a great victory Forest Trump achieved.
I'm sure the Titans of Industry are now saying that: "OK, here we go, the tariff
policy is settled, let's start our $Billion investments in reshaping America's
manufacturing facilities, now that we have a rock-solid plan from which
we will never waver. LET'S GOOOOOOO !!!!!!!"
#sarcasm
No. of Recommendations: 24
Bond yields were the ‘pain point’ that finally got him to pause tariffs
Which is (yet another) reason why it's so counterproductive to have people that don't really understand trade economics drafting your trade policy.
This is not an unexpected outcome if you do what Trump was trying to do. The bond markets and international trade flows are related. Because international currency flows have to balance, as a practical matter any time you have a trade deficit, you also have an "investment surplus." The dollars that flow out to other countries through purchases of goods and services have to be matched by dollars flowing back in through purchase of investments.
Indeed, part of the reason we have a trade deficit is because the U.S. is such an amazing place to invest money, and because U.S. Treasuries are seen as such a safe investment. A rules-based, stable, economic powerhouse like the U.S. is a great place to place money. In essence, the U.S. is extremely efficient at creating desirable investment products, which we then export.
Anyway, the upshot of all of this is that if you introduce a massive "every country on earth" exogenous shock to imports (ie. the beautiful tariffs), you're going to put downward pressure on bond prices. If every country on earth starts exporting less to the U.S., then every country on earth is going to start ending up with fewer surplus dollars (other things being equal) - and since one of the main things those countries do with surplus dollars is buy U.S. bonds, that's going to drive down prices and drive up yields.
Which is why it will be fascinating to see if Trump can actually get anything material out of the supposed flurry of bilateral trade negotiations over the next 90 days. Because our largest trading partners (China, Europe, Mexico, and Canada) weren't on that "fly-in" list, and now they all know that Trump can't withstand the 'pain point' that comes with a massive restructuring of global trade flows. So now that Trump has revealed himself to not have as strong of cards as he (or Navarro) were bluffing at, there's a very clear path for them to push Trump off his position. The bond markets know that high tariffs = fewer foreign purchases of bonds going forwards, so Trump probably isn't going to be willing to land on super-high tariffs for 50% or so of U.S. imports; and now the countries we're negotiating with know that, too.
Trump has a lot of experience negotiating deals where he completely dominates the other party; we're about to see how he does when he has to handle a negotiation where that's not the case.
No. of Recommendations: 4
"Trump has a lot of experience negotiating deals where he completely dominates the other party; we're about to see how he does when he has to handle a negotiation where that's not the case."
great post.
I think that yesterday's huge bounce was short sellers covering. I looked earlier today, and
market is down broadly, so it appears that the majority of investors are realizing that
nothing has been solved in regards to the tariffs. And actually, by the selloff, I'd say more
investors are pretty leery of trusting anything that comes out of Trump's mouth.
Trump and his team are not helping their cause by trying to propagandize that the 90 day tariff
delay is some kind of victory for them. Virtually everybody I know watched that BS, and
thought that these are very ill-prepared, rash and reckless people. But I'm sure Fox and
Newsmax aren't spinning it that way, Art of the Deal BS.
I'm not religious, but God help us all if we're reliant on Trump to handle negotiations
in which he can't just bully a far weaker party.
No. of Recommendations: 3
I'm not religious, but God help us all if we're reliant on Trump to handle negotiations
in which he can't just bully a far weaker party.
<cough>Putin</cough>
No. of Recommendations: 2
Trump has a lot of experience negotiating deals where he completely dominates the other party; we're about to see how he does when he has to handle a negotiation where that's not the case.That doesn't mean he's any good at it. After all, he went bankrupt 4 times, and could make a casino profitable.
I'm eager to see how he deals with the penguins on Norfolk Island...
https://www.theguardian.com/us-news/2025/apr/03/do...
No. of Recommendations: 2
well, it seems sometimes the market does believe trump spills the truth in a broader sense :
Asked on Wednesday how he would decide on any further exemptions, Mr. Trump said: “Instinctively, more than anything else. I mean, you almost can’t take a pencil to paper. It’s really more of an instinct, I think, than anything else.”the amount of sane-washing the rightwing media is giving bessent and lutnick on economic strategy is laughable.
just because these 2 may have once opined something logical in a prior career, is not exclusive to currently being fully indoctrinated in the MAGA cult.
Speaking with reporters soon after Mr. Trump announced the reversal...“This was his strategy all along,” Mr. Bessent said.https://www.nytimes.com/2025/04/09/us/politics/tru...hey scott, you come across supremely confident even in topics with no expertise. you would fit right in our special signalgate club.
https://americanoversight.org/newsletter/newslette...
No. of Recommendations: 13
"Trump has a lot of experience negotiating deals where he completely dominates the other party; we're about to see how he does when he has to handle a negotiation where that's not the case."
We have already seen the results of Trump negotiation when he doesn't already have a dominating position. Look at healthcare as a replacement for Obamacare. Look at the Iran nuclear mess. Look at his negotiations to end the Russian invasion of Ukraine.
In each of these situations he didn't have an already dominating position so he wasn't able to negotiate anything.
No. of Recommendations: 3
Asked on Wednesday how he would decide on any further exemptions, Mr. Trump said: “Instinctively, more than anything else. I mean, you almost can’t take a pencil to paper. It’s really more of an instinct, I think, than anything else.”
Classic Trump!
Ever the egomaniacal narcissist who knows more about everything than anybody else (as he has stated).
Shooting from the hip, thinking with his bloated gut, is never going to work out well.
You have to be a fool to trust Trump.
No. of Recommendations: 5
Trump has a lot of experience negotiating deals where he completely dominates the other party;
But if you completely dominate the other party, it's not a negotiation. Its dictating the terms of the deal on a take it or leave it basis.
There are very few opportunities for that kind of situation in politics. Unless Congress and the Courts cave to your every whim.
Uh oh.
--Peter
