Donald Trump’s in the process of trying to fix what he broke.
Over the weekend, market observers chewed over tariff exemptions for key consumer electronics items, including pretty much everything Apple sells. iPhones, iPads, Macs, the Watch — more or less all of it — are exempted from the “Liberation Day” reciprocal tariffs. The order’s effective eight days ago, which is to say it’s retroactive.
In addition to smartphones and laptops, hard drives are exempted, so are processors, memory chips and, of course, flatscreens, because God knows the mobile home crowd can’t be expected to watch NASCAR on anything smaller than a 60″ television, and it can’t cost more than $399.
It’s funny: I remember just a few days ago hearing from a market commentator whose missives often read like tastefully subtle attempts to justify the unjustifiable using the old, “Trump told us he was going to do this, so no one should be surprised” excuse (and, as a quick aside, it’s never been obvious to me why or how that’s exculpatory), insisting there wouldn’t be any exemptions for Apple. Not this time. This Trump is principled. This Trump is disciplined.
As it turns out, this Trump is the same as any other Trump, which is to say he’s an unprincipled, undisciplined child. And he’s in the process of folding up under pressure after just 10 days, because he can’t stand the bad press and the embarrassment that goes along with falling stock prices and a deep recession.
The drawdown for Apple stood at 33% (a little more, but let’s call it a third) on April 8. Notwithstanding the fact that even at its worst levels this month, Apple was up 210% from the March 2020 lows, it’s not a great idea to trigger an overnight crisis for your national corporate champion, particularly when what you’re implicitly demanding (in this case moving final assembly of iPhones to America) is impossible. (Obviously, Jensen Huang played a part in winning these exemptions too.)
If you want to see what discipline and principle looks like, pull up a chart of the Hang Seng Tech Index and observe the price action from the highs in February of 2021 through September of 2024. That’s discipline. That’s principle, misguided as it most assuredly is. Xi Jinping deliberately visited upon China’s homegrown tech champions an ~80% haircut in the interest of promoting his social engineering project, dubbed “common prosperity.” He stuck with it for three years. Trump couldn’t stomach a 30% US tech drawdown for three days.
For the umpteenth time: Donald Trump doesn’t have a credo. “Make America Great Again” is just a nebulous marketing slogan. Sure, he has a long history of railing against foreigners and their alleged penchant for “ripping off” America through trade, but his history’s also replete with allegations of unwanted advances on women. His fans and apologists accept the former as proof of his bona fides when it comes to being a dedicated crusader for equitable trade, but steadfastly refuse to concede the latter might be evidence that he’s a sexual predator. Hmm.
A month ago, tariffs weren’t going to be inflationary and the administration was going to live with some stock losses because that’s a small price to pay for the re-industrialization of America. One week after the “Liberation Day” unveil — and just a few hours after those tariffs went into effect — Trump was on TruthSocial front-running his own tariff pause, and by that afternoon (the afternoon of April 9), he was standing around outside The White House bragging, out loud, that he’d just engineered the biggest one-day point increase ever for the Dow. By Friday evening, he was announcing exemptions for consumer electronics so Apple’s stock can recover, but also so Americans wouldn’t be left with a bill he and Howard Lutnick previously insisted US consumers somehow wouldn’t have to pay.
I mean, Jesus Christ, how much evidence do we need? Trump’s just a carnival-barking grifter. Generously, the administration’s trade policy is “evolving” from day to day. Another, not so generous, way to describe it is to say Trump’s making this up as he goes along, hour by hour.
As the figure above shows, the consumer electronics exemptions, when considered with carveouts for semis, cover more than 20% of America’s imports from China.
On Sunday, Beijing called the decision “a small step by the US toward correcting its wrongful action,” but warned Trump that he needs to “take a big stride in completely abolishing” the tariffs “and return to the correct path of resolving differences through equal dialogue based on mutual respect.”
Folks, I despise the CCP with a holy ideological passion, and Trump’s right to say China has the weaker hand. However, it’s important to bear in mind that if he wants to, Xi can do this all day. He doesn’t have to be concerned with popular opinion in China. Protesting over there can get you killed. And if you’re a top Party official, you’d sooner put a bullet in your own head (literally) than you would question him. Xi’s a dictator. A real one.
He won’t, because unlike Trump, he’s not a silly idiot, but Xi could hike tariffs on the US to 5,000% and tell everybody in China — from the peasants to the Politburo — that that’s just the way it’s going to be, and nobody could do a single thing about it.
The sheer, blatant inanity on display here from Trump’s White House is difficult to fathom. On April 2, he promised to blow up the world seven days hence. Just a few hours into D-Day on April 9, he “paused” the whole project on everyone but China, because he was rattled by a market reaction he swore up and down he didn’t care about. Then, a little over 48 hours after that, he exempted one out of every five dollars of trade with Beijing, because he was terrified of price increases he swore up and down weren’t coming.
“Art of the deal” my ass. Once a coward, once an imbecile and once a charlatan, always a coward, an imbecile and a charlatan.
Trump don’t care about the future. If the aquifers run dry he thinks that lots of bottled water’s all we’d need to just get by. It takes lots of water pressure to help pressure wash a pig, and the glutton in the White House, I’ll admit, is pretty big. I don’t know what Trump’s been flushing, but he says it’s awful hard, to flush down what’s been ejected from his buttocks made of lard. When the chicken nuggets back up
in his colon, I suppose, Herman Melville might be moved to comment, “Lookout, thar she blows!”
The other moron Lutnick is out there saying this is only temporary. Very coherent policy. I’d hate to be anyone trying to do logistics on supply chain for the rest of the year (and perhaps the next 1,375 or so days).
Yeah, and already on Sunday, there are some Wall Street folks claiming that’s proof Trump still means business and, more to the point, that this is all going according to plan.
The willingness among otherwise smart people to suspend disbelief and in the process make utter fools of themselves, is absolutely incredible.
Like, “Oh no, there’s no way these exemptions had anything to do with the market reaction, or any lobbying from Apple and Nvidia. Trump was planning on these exemptions all along, and it’s just a clarification process on the way to semiconductor-specific tariffs two months from now, which Trump’s highly-qualified USTR needs a little more time to ‘study.”
Imagine being so shameless and so determined not to say what needs to be said — i.e., that this man, Donald Trump, is plainly a charlatan and this process is pure, seat-of-the-pants farce — that you’ll demean yourself in notes to clients who, by virtue of having eyes and ears, know goddamn well this is a circus.
And it’ll be the same thing two months from now. Trump will roll out the semi tariffs and if the market crashes, he’ll announce some other “pause” or exemption, and Lutnick will explain that away, and the same shameless people will say that was part of the plan too.
The willingness to ignore the reality of this is just un-f-ckin believable. But I guess I shouldn’t be surprised. A lot of these analysts and “strategists” voted for this guy even after seeing him lead a redneck coup at the Capitol.
The Trump leopards didn’t just change their spots, they’ve done this their whole career just not on such a big stage.
Appreciate your candour, you’re one of the mighty few not to try to out lipstick on these pigs.
put
I have been wondering since Trump 1.0 what will lift the veil and force people to reconcile with supporting someone so obviously awful and anti-human as Trump. I have come to the conclusion that nothing will as long as people continue to consider propaganda to be “news”. The views that drive people to support a man like Trump are not views a humanist would ever naturally conclude on their own.
The infection of propaganda and its addictive properties are how we got Trump and how millions keep supporting Trump and the right wing party with no ideology.
The only way this ends is with pain and destruction that forcefully lifts the veil of propaganda.
I fed some of Lutnick’s most-recent statements into ChatGPT and asked ChatGPT “is Howard Lutnick an idiot?”. The ChatGPT response was all I hoped for and more:
“Ah, got it — these kinds of comments definitely raise eyebrows, especially in the context of broader conversations about the future of American manufacturing. Howard Lutnick’s comments might strike people as:
– Oversimplified: High-tech manufacturing involves far more than just basic assembly tasks.
– Tone-deaf: It could come off as dismissive of the complex skills needed in modern manufacturing or as underestimating the kind of jobs people want and need.
– A PR stretch: Some may interpret it as a way to spin minimal job creation as a larger economic success.”
I don’t think ChatGPT was hallucinating on this one…
the emperor wears no clothes.
A couple of points-
1. Melania is no Melinda. And there is absolutely a reason why the Jeffrey Epstein papers have not been and will never be released.
2. I knew Lutnick was a blowhard, and so did the creators of the All-in podcast, after listening to their “interview” with Lutnick.
3. In a weird way, I feel relieved. Even if US voters, Congress and Scotus are too weak to do their job, it turns out that the world can “vote” in US policy, as well.
It should be a little concerning that these exemptions or “reclassifications” were in response to domestic pressure. Xie did not have to make or hint at any concessions. None.
Trump may be the guy at the table who doesn’t “have the cards”?
The guy who thought he could just buy the pot, he didn’t really have to play the game.
well, certainly he is not playing with a full deck
The Atlantic published an article Saturday entitled, “Trump Brings Britain’s ‘Moron Premium’ to the U.S. Economy.” It highlights a number of lessons Trump should have learned from Liz Truss’ stellar management of the British bond crisis she single-handedly conjured in 2022, but unsurprisingly didn’t. Truss and Trump remind me of each other in a lot of ways. Although when speaking publicly she sounded more intelligent and his boobs appear to be bigger, they otherwise seem remarkably similar, conducting their economic revival shows with absolutely no hint of self-awareness, sounding simultaneously bold and brain-dead.
“Gee, Boss, we have made all these changes. Everything is now so different. What is the plan for tomorrow?”
“Let’s just see what happens.”
I could feel and hear the keystrokes on that last sentence, H.
My father works as the Mexico/LATAM GM for a company headquartered in Germany, w/ manufacturing there, Canada and Malaysia. They have subsidiaries in Spain and another that spans North America. They have 30 minute daily meetings at every global office (about 20 or so), once in the AM and another mid-afternoon (in their respective time zones) because of the recklessness that’s been transpiring this month.
In the 23 years he’s been there, he actually called me for the first time last Monday to ask wtf was going on. It’s exhausting chaos everywhere you look and everyone is over it. To your point, no one wants to exhaust resources and manpower to address any of this stupidity because you cannot put any semblance of a ‘strategy’ together for more than a day, let alone a week.