Trump’s Tariffs Change World Trading System

(just a quick note 4-4-2025) 

Trump announced his tariffs plan on April 2 after the market closed. It caused a big shock wave around the world. On April 3, the US stock market dropped big. I decided to write a short note. 

First, this was largely planned. Former Treasury Sec. Steve Mnuchin [1] said such tariffs had been studied in Trump 1.0 although the current one was broader and bigger than contemplated before. Second, present Treasury Sec. Scott Bessent in an earlier interview used the term detox (detoxic). What he meant is that the previous administration printed so much money that the US economy acts like a drinkard. I mentioned the US government debt problem before [2-4]. I also agree with Bessent that detox is needed. The stock market gyration is part of this detox. 

What is Trump going after? See [5] for some hints. His selection of JD Vance also offers some clues [6]. Yesterday, JD Vance’s talk on something different showed the market reaction was anticipated [7]. 

Will it work? As several Trump Administration key officials indicated that this is a starting point and they wish not a trade war but they would respond if needed [8-10]. One thing for sure is that most countries will hurt more (sometimes much more, such as China) than the US. It is hard to say at this point how it will hurt the US.  

On the other hand, these new Trump tariffs completely upend the world trade system. Thomas Sowell strongly disapproves of these tariffs [11]. I have great respect for Thomas Sowell, although I need more study. I prefer a controlled approach [12]. But you play with the cards you have, not the ones you wish to have. I like Sen. Kennedy’s assessment, short, clear, sound [13]. 

About trading strategy or strategies, I am working on it. The related references may serve a starting place. 

References: 

[1] *Former Treasury Sec. Steve Mnuchin: Trump is not looking to create a recession (4-3)

[2] US Government Debt and Deficit

[3] Potential Financial Crisis? 

[4] Inflation, Tariffs, and Bitcoin  

[5] Trump as US President? (jiahan1.wixsite.com)

[6] Implications of Trump-Vance Ticket (jiahan1.wixsite.com)

[7] JD Vance hits back at critics of 'Liberation Day' tariffs: 'Something has finally shifted' (4-4) 

[8] CNBC's full interview with Commerce Secretary Howard Lutnick (4-3) 

[9] White House Sr. Trade Counselor Peter Navarro: Tariffs are not negotiable (4-4) 

[10] Kudlow breaks down the impact of Trump’s tariff agenda (4-3) 

[11] Watch Host's Face as Thomas Sowell Exposes the Real Effect of Trump’s Tariffs (4-4) 

[12] Solution: Controlled Globalization 

[13] Sen. Kennedy reveals how long it will take to know if Trump's tariffs are working (4-4) 

Addition

• Chamath's Three Takeaways from Liberation Day 🇺🇸 (4-11)

• *How the U.S. Could Trigger China’s Economic Collapse & Egg Price | April 9, 2025 

• Kevin O'Leary calls for 400% tariffs on China (4-10) 

• *Jamie Dimon: a recession is a ‘likely outcome’ as economists sound alarm on slow down (4-10)  

• Trump ‘blanket’ tariff on China is wrong strategy: Rep. Krishnamoorthi | The Hill (4-11) 

• *Bret Baier: This is the 'real question' now (4-11)  

• Wharton's Siegel on markets: Won't challenge February highs for quite some time (4-11)  

• Ives: Buckle up—Tech is heading into a period of major volatility (4-11)  

• Peter Doocy: This could have been a huge crisis (4-11)  

• BlackRock Co-Founder Ralph Schlosstein: Treasury yields up, dollar weakening is an alarming trend (4-11) 

• Watch CNBC's full interview with National Economic Council Director Kevin Hassett (4-11) 

• Xi Jinping has 'boxed himself in' with this move, China expert says (4-11)  

• *Trump Escalates Tariff Threat to China & Elon Musk vs. Peter Navarro | April 8, 2025 BOR

• Larry Kudlow: Let's make some good trade deals (4-9) 

• **China’s escalation toolbox ultimately limited, China Beige Book’s Shehzad Qazi says (4-9) 

• *This is the 'single best foot forward' to countering China,' expert says (4-9) 

• The faster US decouples from China, the 'better it is for us in long haul': GOP rep says (4-9) 

• EU offers 'zero-for-zero' tariffs with US as countries 'line up' to begin negotiations (4-9) 

• NYU's Aswath Damodaran: This looks more like a markdown of equities than panic selling (4-9) 

Related: 

• *US in best possible position to negotiate trade, 'Big Short' trader Steve Eisman (4-8) % 

• I'm worried earnings guidance will be bad, says Trivariate’s Adam Parker (4-8) 

• Most CEOs Think US Is in Recession, Says Larry Fink (4-8) 

• Blackrock's Larry Fink: We are probably in a recession right now (4-8) 

• Wharton’s Jeremy Siegel: The Fed will likely have to cut rates due to tariffs (4-8) 

• 'MOVING PARTS': Kevin O'Leary breaks down two key parts of cutting tariff deals (4-8) 

• Trump gave himself maximum negotiating leverage, US Treasury secretary (4-8) 

• Gundlach: When you have these types of market moves someone goes bankrupt (4-8)(overval) 

• 'NUCLEAR ASSAULT': CEO sounds off on Trump's tariff strategy (4-8) (Brad Gerstner) 

• Navarro: Vietnam’s 0% tariff offer not enough, 'non-tariff cheating that matters’ (4-7) 

• *Investors Are Worried, With No Relief In Sight: Mohamed El-Erian (4-7)  

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• *Investors Are Worried, With No Relief In Sight: Mohamed El-Erian (4-7) 

• **Mark Levin: We've never seen anything like this (4-6)

• *Monday's probably not the market bottom, waiting for Europe's next move, Jim Cramer (4-7)

• Jim Paulsen says market is close to a bottom, Fed will be forced to ease (4-5)  

• *The Tariffs That Shocked the World (4-5) BOR 

• Haven't Seen Full Retaliation from Tariffs Yet: JPMorgan's Meera Pandit (4-6) 

• Mohamed El-Erian Says Markets Haven’t Priced a 50-50 Tariff Destination (4-3) 

• Hayman Capital Kyle Bass: Tariffs will work in long-term (4-5)  

• Trump's Tariffs: The Fallout and the Media's Overreaction (4-5) BOR (Auto, etc) 

• *Victor Davis Hanson: Donald Trump’s Trade Parity ‘Golden Age’ Explained (4-5)

• Scott Bessent Breaks Down Trump's Tariff Plan and Its Impact on the Middle Class (4-5) 

• *Trump's Tariffs and the Great Depression VDH (4-5)  

• ========

• Altimeter CEO Brad Gerstner is buying Nvidia (4-4) 

• *Altimeter CEO Brad Gerstner on Trump's tariffs (4-4) 

• Brad Gerstner explains his Tesla position (4-4) 

• Steven Mnuchin says he likes incentivizing people to build in America (4-4) 

• This is an emergency for the country, US trade rep warns (4-4)  

• Watch Host's Face as Thomas Sowell Exposes the Real Effect of Trump’s Tariffs (4-4) 

• *Sen. Kennedy reveals how long it will take to know if Trump's tariffs are working (4-4) 

• White House Sr. Trade Counselor Peter Navarro: Tariffs are not negotiable (4-4) 

• Trump's Tariffs Explained + Is Elon Musk Out? | April 3, 2025

• Tariff sell-off similar to the 2000 dot-com bubble bursting, says Jim Cramer (4-4) 

• You have to buy domestic companies with pricing power in a slowdown, Jim Cramer (4-4)  (his suggestions are worthy consideration) 

• Jim Cramer: Here's how different sectors are positioned to withstand tariffs (4-3)  

• The Trump tariff fallout: Here's what you need to know (4-4) Josh Brown & …. 

• *Former Treasury Sec. Steve Mnuchin: Trump is not looking to create a recession (4-3) 

• CNBC's full interview with Commerce Secretary Howard Lutnick (4-3) 

• JD Vance hits back at critics of 'Liberation Day' tariffs: 'Something has finally shifted' (4-4) 

• Geraldo Rivera, Bill O'Reilly debate Trump’s new tariffs | CUOMO (4-3) 

• Kudlow breaks down the impact of Trump’s tariff agenda (4-3) 

• Tariff sell-off similar to the 2000 dot-com bubble bursting, says Jim Cramer (4-4) 

• Trivariate Research CEO Adam Parker: It’s too early to take a ton of risks right now (4-4) (some good points) 

• Geraldo Rivera, Bill O'Reilly debate Trump’s new tariffs | CUOMO (4-3)