Markets mexico trade Trump

‘This Is Driven By The Mood Swings Of A Single Man’: One Bank Marvels At ‘Total, Trumpian Uncertainty’

"Trumpian uncertainty is total uncertainty."

“Threats and temper tantrums are no way to negotiate foreign policy”, Nancy Pelosi said Saturday, responding to Donald Trump’s farcical “deal” with Mexico, announced on Friday evening.

“We are deeply disappointed by the Administration’s expansion of its failed Remain-in-Mexico policy, which violates the rights of asylum seekers under US law and fails to address the root causes of Central American migration”, Pelosi continued. Trump’s wielding of the tariff gun on an ally has “undermined America’s preeminent leadership role in the world”, she said.

To be clear, there is no “deal” with Mexico – not really. The joint declaration posted to the State department’s website on Friday evening was nothing more than a list of commitments. As noted shortly after it was made public, there are no definitive guidelines for measuring success and no monitoring system.

Read more: Trump Is ‘Pleased To Inform You’ He Was Just Kidding About Those Mexico Tariffs

Also missing were details about purchases of American farm and agricultural products, which Trump suggested early Friday would be carried out at “high levels”. Under pressure to explain that omission, Trump simply tweeted the promise again, this time in all caps:


He proceeded to lambast Pelosi anew.

“Nervous Nancy Pelosi & the Democrat House are getting nothing done”, the president said Saturday. “Perhaps they could lead the way with the USMCA, the spectacular & very popular new Trade Deal that replaces NAFTA, the worst Trade Deal in the history of the USA.”

As ever, it’s hard to know where to start when it comes to pointing out the myriad absurdities the president manages to cram into so few characters.

Bob Lighthizer, the man who negotiated the USMCA, was actively working with Pelosi to get the deal ratified. Lighthizer warned Trump that the tariff threat against Mexico would risk undermining the process. In other words, it is Trump who is jeopardizing the passage of the USMCA by threatening to impose precisely the same kind of duties the deal seeks to prevent on one of the parties to that same deal. It is mind-boggling that large swaths of the voting public are unable to discern these kinds of glaring contradictions in the president’s rhetoric.

Read more: How Kushner And Lighthizer Failed To Stop Trump’s ‘Beautiful’ Mexico Tariffs

Additionally, the lack of any clear metrics for success and the absence of a monitoring mechanism means Trump will invariably be at Mexico’s throat again within months. We have not heard the last of the Mexico tariff threats. Indeed, one could very easily argue that Trump was simply setting the stage for this to become standard operating procedure.

“This is an historic night!”, Chuck Schumer sarcastically tweeted on Friday. “Now that the problem is solved, I’m sure we won’t be hearing any more about it in the future.”

As Pelosi suggested on Saturday, Trump’s latest stunt has meaningfully (and irreparably) harmed America’s standing with trade partners, and it comes just weeks after the Huawei ban indicated that the US is hell-bent on blurring the line between economic policy and national security, opening a veritable Pandora’s box.

“The move against Huawei is important because besides adding the element of a tech war to a bilateral trade war, it now involves other economies and non-US firms who deal with Huawei as well”, SocGen wrote, in a note dated June 3. “In other words, the bilateral trade war has become multilateral with the US dragging friends and foes alike into the conflict.”

Indeed. And as the bank went on to lament, the Mexico situation makes this “even worse.”

“There are at least two deeply disturbing aspects to [the proposed Mexico tariffs]”, SocGen said, listing them as follows:

  1. Tariffs are being promoted as a kind of miracle cure for all possible issues that involve another country.
  2. Imposing tariffs on a country with which the US has only recently concluded a trade agreement, sets a very negative precedent in that it suggests to other countries that even if they make concessions and conclude a trade agreement, the US administration apparently does not feel bound by it. This seriously reduces the incentive for any country to negotiate with the US. Why negotiate in good faith, if the US apparently has no intention of sticking to an agreement? This could make it impossible to settle whatever trade disputes the US has with other countries. 

Those two points are absolutely critical. While Trump appears to have a sympathetic (to the point of being obsequious) partner in Shinzo Abe, Europe and China aren’t likely to yield to the US under threat of tariffs. The recent breakdown in talks with Beijing is proof of that and, as documented here extensively, talks with Brussels haven’t even begun in earnest.

For their part, SocGen strikes a decidedly dour tone in their latest quarterly global economic outlook. “It seems the rules of international relations are being successively ditched by President Trump, resulting in increasing uncertainty”, the bank writes, adding that “there is a special character to this uncertainty: it is being driven more by the mood swings of a single man than a rational pursuit of diplomacy in pursuit of the long-term interests of a country.”

That is an assessment the president’s base should carefully consider. As indicated by the most recent farmer sentiment survey conducted by Purdue University and the CME Group, American agriculture is becoming increasingly anxious about the existential crisis Trump has foisted upon them.

Meanwhile, a new NBC profile piece documents the real impact of Trump’s tax overhaul on America’s truckers. “Before the new tax law went into effect, truckers were able to deduct daily expenses like food and lodging from their taxable income”, NBC explains, before noting that “now, many have lost that ability, thanks to the bill’s elimination of a category of deductions that allowed employees of a company to deduct work expenses that the company did not reimburse.”

While all of this is packaged, pitched, presented and spun by conservative media and popular right-wing blogs as something akin to a reality show – a source of daily entertainment amenable to the tabloid treatment – there isn’t anything funny about it. It is potentially ruinous for the very same country Trump claims to be making “great again.”

“I’m willing to take a financial hit today to get on track for the outcome we need”, one reader recently declared, referencing the purported long-run benefits of the president’s policies. “Sorry, not sorry about your avocados”, that person derisively remarked, in an absurd effort to play down the Mexico tariffs, which, in addition to raising the price of avocados, would have lifted the average cost of passenger vehicles in the United States by at least $1,300.

That particular netizen’s willingness to suspend disbelief is indicative of Trump’s base, and the president relies on it when he presents lies as truth and fantasy as reality.

For anyone not caught up in the reality distortion loop, this is a continual source of consternation.

As SocGen fatalistically puts it, “Trumpian uncertainty is total uncertainty.”



5 comments on “‘This Is Driven By The Mood Swings Of A Single Man’: One Bank Marvels At ‘Total, Trumpian Uncertainty’

  1. The glaring contradictions have to be continuously brought to light. Every day. They have to be pounded into the brains of the poorly educated.

  2. Anonymous


  3. It is even simpler than we think !!!…He (Mr Genius) stacks events that create a market rally on a shelf…A sort of kinetic energy source for the times when underestimating or miscalculating a market draw down has occurred.. The easiest guaranteed source of predictable bullish equity action is undoing some stupidity that has measurable impact based on its impact in the opposite direction earlier. In other words the rock can be assumed to drop about as high as you threw it.. THIS THEORY IS DANGEROUS AND UNPREDICTABLE… Try it in real life at your own risk…lol

  4. Mt Math

    From “The Art of the Deal” the ‘great negotiator’ thinks unpredictability is his greatest asset. Maybe it is, as he doesn’t have many others.

    Also, if he can start a ‘Tariff War’ to distract everyone from the rumbling Impeachment calls (there, I said the ‘I’ word) and Congressional Committee investigations, he’s accomplished something. As Winston Churchill famously said, (I paraphrase) “talk, talk is better than shoot, shoot.”

    This Mexican tariff debacle that could have cost American workers 400,000 jobs and companies HUGE pain, while incredibly wrong-headed, was a better distraction than starting a ‘shooting war’ with Iran or starting a Tariff War against another key ally, Australia.

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