April 09, 2025 12:40 PM UTC

On, Off. On, Off. Trump Treats Economy Like Pong*

• 9 Comments
• by: Colorado Pols

UPDATE: Via David A. Graham of The Atlantic, this is even more confounding than you thought:

This afternoon, President Donald Trump announced a partial pivot on social media. On the one hand, he ratcheted up tariffs on China to 125 percent. On the other hand, he announced that he was reducing tariffs on “more than 75” other countries to 10 percent for the next 90 days. In an odd wrinkle, this appears to also mean new tariffs on Canada and Mexico, which will now be subject to a 10 percent rate, having been previously exempted from this round of tariffs—though they will still be subject to a 25 percent tariff imposed earlier.

Are you confused yet? Imagine being an importer or a manufacturer.

The simplest way to read this is that Trump has blinked. I’ve written previously that Trump, despite his obsession with strength, almost always folds. He’s actually not much of a negotiator at all, and can be induced to back down pretty easily. [Pols emphsais] Bill Ackman, the activist investor and Democrat turned Trump cheerleader, has spent the past few days freaking out on X about “a self-induced, economic nuclear winter.” Today, trying to save some dignity for himself and perhaps for the president, he posted, “This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.”

This assumes that Trump has gotten something in return. If that is true, no one seems to know what it is, and Trump is not usually shy about proclaiming his achievements. He said last night that foreign leaders “are dying to make a deal. ‘Please, please, sir, make a deal, I’ll do anything, I’ll do anything sir.’” But no new agreements have been announced yet, and Europe was on the verge of retaliation. Trump hasn’t totally given up his leverage—the 90-day pause allows him to bring the tariffs back later—but it removes a great deal of urgency for foreign negotiators…

…The greater problem for the big companies is instability. An executive can’t make a solid plan if they don’t know what sort of regime they’ll be dealing with in two months or six months. [Pols emphasis]

Making America Great…eventually?

—–

As The New York Times reports…WTF?

President Trump on Wednesday said he would pause his reciprocal tariffs for most countries for the next 90 days, backing down on his policy that had sent markets into a tailspin and threatened to upend global trade. But Mr. Trump said his break did not include China, announcing he would instead raise tariffs on its exports to 125 percent after Beijing announced a new round of retaliation.

Karoline Leavitt, the White House press secretary, said the tariff level would be brought down to a universal 10 percent — a significant reduction for many countries.

In announcing the pause, the White House repeatedly tried to suggest it was all part of a premeditated strategy. Ms. Leavitt accused reporters of having “failed to see what President Trump is doing here,” and Scott Bessent, secretary of the Treasury, said it was Mr. Trump’s “strategy all along.” [Pols emphasis]

But the abrupt change in course came amid a sell-off in U.S. bonds, which are generally safer investments, and after days of deep losses in financial markets around the globe. Economists had expressed serious concerns that the United States might be careening toward a recession of its own making.

Ah, yes: This is all part of some big genius plan that none of us are smart enough to understand. This is reminiscent of the early days of the first Donald Trump administration, when supporters claimed that Trump was playing “3-D Chess” when he was really just trying to set the board for “Candy Land.”

The bigger trouble with Trump might no longer be his tariff “policy” — whatever that might be — but the fact that nobody knows what to believe at a given moment. The uncertainty is killing the economy as much as the on-again, off-again tariffs. As Vox.com reported today:

The US stock market has lost trillions of dollars in value in the days since President Donald Trump announced major tariffs on American imports. On Tuesday afternoon, the S&P 500 was down more than 11 percent since Trump’s announcement of the tariffs. Global stock indices, such as the Japanese Nikkei and the German DAX, have also plunged as the tariffs disrupt world trade.

Stocks recovered somewhat after Trump indicated that he’s in negotiations — including with countries such as Japan and South Korea — to broker what his press secretary Karoline Leavitt called “tailor-made” trade deals. But the question is how quickly those deals can get done without wreaking further havoc on financial markets. [Pols emphasis]

Because in Trump’s burgeoning trade war, Americans with money in the stock market are proving the earliest collateral damage.

Trump backers had been saying for the last week that Trump was negotiating with different countries to lower tariffs on U.S. goods, but it’s not clear that this was ever actually happening. From POLITICO:

President Donald Trump and his top trade officials say they are negotiating with trading partners to reduce the steep tariffs scheduled to go into effect on Wednesday. But many foreign governments who want to talk are still waiting by the phone.

The Philippines is still waiting for a reply to its request for a meeting, according to one official from the country. The United Kingdom pitched the White House on a framework for a trade deal but failed to avoid the tariff increases. Another foreign diplomat said their government was reaching out to various Trump aides at all levels, but many either were not responding or were unwilling to do anything beyond listen. [Pols emphasis]

On top of that, Trump officials have not spelled out exactly what concessions the administration is seeking that could pave the way for a negotiated solution.

It’s a sign that even as the administration tries to reassure financial markets, business leaders and fellow Republicans that they have an end game for the market-shaking duties, the White House is still very far from reaching any substantive trade deals with major foreign partners. Rapid progress will be even harder because now the administration is trying to negotiate bilateral deals with nearly 100 countries simultaneously to achieve a murky set of goals.

Financial markets would probably even take a “murky set of goals” over what we actually have now: Complete and utter chaos. There are no “goals.” There is no “plan.” Trump is just making shit up as he goes along, and most Republicans are too scared of him to push back.

*P.S.: “Pong” is an old video game, kids