Thoughts on the Trump presidency

[OhNoAPacer]

A good, mutually beneficial, trade in goods agreement increases exports and growth on both sides, leaves the balance roughly where it is now, and does not increase the tariff.

But the real opportunities, and risks, are in trade in services. Trump is much less worried about big tech doing research and development in Cambridge and Oxford than he is about Nike making shoes in Vietnam or Apple making phones in India, and the UK needs to keep it that way.

The problem is that what normal governments may see as good mutually beneficial trade is not what Trump is interested in.

 

[brad465]

Asian and European markets down even more today so far, so expect the US markets to continue a crash too. I expect the floor is far from reached and would not be surprised if further falls result from April 9th when the higher level tariffs come into effect. China's retaliation certainly means US tariffs on their imports are not being universally dropped before coming into effect.

 

[Annetts key]

As part of a share market value is about confidence, and part is about what investors expect in the future (say 6 months to a year), if we disregard any dead cat bounces that may be seen, I'm fully expecting a lot of sharp falls continuing, with the overall trend being negative for the foreseeable future.

Trump and his team have indicated these changes are permanent and such a big change will reduce the profits of companies that import into the U.S.A., increase the inflation level in the U.S.A. plus it's very likely to cause a recession.

And the U.S.A. being in recession will cause a worldwide recession.

Already the price of crude oil is falling... A recession means the oil price will fall as demand falls away.

It's going to be very hard for U.K. companies to expand their markets in a U.S.A. that is in or on the path to recession.

And with companies elsewhere around the world also trying to find other markets, U.K. companies to expand their markets anywhere is not going to be easy.

 

[Nicholas Lewis]

The point about potential growth EUvUS also applies to different sectors within the US exports, the biggest potential for growth is in sectors not in this list.

Maybe but only today JCB have announced they will double the size of their US manufacturing operation. That will help the owners of JCB any maybe raise a bit more corporation tax but not British jobs and thus growth.

You are right that this is the big "first round" macro impact of the tariffs. However, the US consumers buying Rolls Royces and Aston Martins are not going to be amongst those tightening their belts.

Have you seen the stock market carnage that will feed through into peoples 401A (private pensions) and impact spending

Pharma is the trickiest area because the US is about half of the global market and the UK has the NHS as a near monopoly consumer. In the US drugs are going to get more expensive, in the UK it might mean the NHS not being able to afford to buy more of the most expensive drugs.

UK isn't imposing higher tariffs so how do our drugs go up in price

 

[brad465]

Asian and European markets down even more today so far, so expect the US markets to continue a crash too. I expect the floor is far from reached and would not be surprised if further falls result from April 9th when the higher level tariffs come into effect. China's retaliation certainly means US tariffs on their imports are not being universally dropped before coming into effect.

US markets have opened and are now down 4-5%:

Trump tariffs latest: US stock markets drop sharply on opening as European and Asian indexes plunge

Turmoil caused by Donald Trump's tariffs continue - but the president urges people not to be "weak" or "stupid".

www.bbc.co.uk

US stocks slide further
​

Back in New York, the main US indexes have slid further in the first few minutes of trade.

The Dow Jones is now down 4.4%, the S&P 500 has lost 4.7% while the Nasdaq has fallen 5%.

 

[Magdalia]

Maybe but only today JCB have announced they will double the size of their US manufacturing operation. That will help the owners of JCB any maybe raise a bit more corporation tax but not British jobs and thus growth.

You are right, but, although a US JCB owner won't care much where their JCB was made, a US Rolls Royce owner is going to want their car to be made in the UK not the US.

Have you seen the stock market carnage that will feed through into peoples 401A (private pensions) and impact spending

The people most impacted by this hopefully already have their Rolls Royce!

UK isn't imposing higher tariffs so how do our drugs go up in price

The US is half of the global drugs market. What happens there will inevitably have an impact on supply to the other half of the market.

 

[edwin_m]

The US is half of the global drugs market. What happens there will inevitably have an impact on supply to the other half of the market.

Did I hear that pharmaceuticals are exempt for the time being?

One way or the other the US health system will find a way of gouging those who have to participate in it, either by passing on tariffs, increased cost for manufacture in the US, or some other reason. I don't see it making much different to medical supplies in other countries.

 

[sor]

He's (possibly) going full Kim:

Trump Will Get His Showy (And Likely Expensive) Military Parade in D.C.

Trump’s 2018 plans for a parade of military tanks and planes down Pennsylvania Avenue NW were scuttled. But this year no one will stop him.

washingtoncitypaper.com

According to a D.C. source with knowledge of the plan that’s still being developed, Trump has commandeered Saturday, June 14—the 250th anniversary of the U.S. Army and, as it happens, Trump’s 79th birthday—for his military parade. It would stretch almost four miles from the Pentagon in Arlington to the White House, according to the source, who stressed that local officials are just learning of it.


Arlington County Board Chair Takis Karantonis, who describes Arlington as a “9/11 city” that is proud of being home to the Pentagon, tells City Paper that no formal request for assistance has been made to the county. Karantonis says the county was given a “heads up” about the parade on Friday by the White House, but with no firm details.

 

[YorkshireBear]

He's (possibly) going full Kim:

Trump Will Get His Showy (And Likely Expensive) Military Parade in D.C.

Trump’s 2018 plans for a parade of military tanks and planes down Pennsylvania Avenue NW were scuttled. But this year no one will stop him.

washingtoncitypaper.com

Got to respect the sheer lack of subtlety.

 

[jon0844]

How do you propose we actually do that? You can make all the speeches you like, but Trump’s tariffs are on imports, so it’s up to them what they do. Or should we start trying to smuggle Land Rovers into the US?
As far as I can tell, Reform sit rather more on the free trade side of the argument, reducing tariffs by doing trade deals is their bag. If you want a party that wants to protect UK industries by putting up barriers to trade, the Green Party would be more like it.

From what I read elsewhere, JLR shipped a large amount of cars to the USA ahead of the tariffs so now have a large inventory there - but what happens beyond that I do not know.

Maybe JLR will need to make more cars that are appealing to UK customers, including more affordable models (after all, rich people can afford luxury cars but the market is always going to be fairly niche).

That's what Stellantis and Renault are doing, VW is about to do, and Ford and others will likely be forced to do. It would be a good time for Ford US to allow Ford Europe to do its thing again, building cars for a European market. Oh and then there's China doing cheap cars, but I won't mention that here!

We are going to see changes. I am not saying we'll never work with the USA again, but for the time being it is better for us to stand up to Trump as others are doing than capitulate like Farage and others are suggesting.

 

[Cloud Strife]

Trump and his team have indicated these changes are permanent and such a big change will reduce the profits of companies that import into the U.S.A., increase the inflation level in the U.S.A. plus it's very likely to cause a recession.

I think Trump doesn't quite understand just how much money some of these companies pump into R&D as well. Take Canon and Nikon, who both spend a huge amount of cash on R&D. I'm looking now, and Canon spent over $2bn on R&D, something that a domestic American manufacturer cannot compete with. There are no factories in the US producing lenses, no domestic know-how, and any attempt to enter the market would require a monumental marketing budget just to convince consumers that they're on a par with Japanese lenses.

We are going to see changes. I am not saying we'll never work with the USA again, but for the time being it is better for us to stand up to Trump as others are doing than capitulate like Farage and others are suggesting.

I think the simple and best bet is to stand up to him and let the Americans feel the pain. The Chinese have stood right up to him and given him a hard punch on the nose, and we should be doing likewise. For example, Boeing now have serious problems in China, and while Airbus can't really pick up the slack there, COMAC will be ready and waiting. Likewise, the Chinese will find new sources of food, and they won't go back to America once Trump goes.

Still, I think the best bet right now is to inform the American defence contractors that there will be a united European effort to reduce their role to the minimum possible. By going after those defence contractors and techbro companies, the middle classes in the US will really feel the pain.

 

[trainswitheddy]

Anyone have any investments that are plummeting? Wonder when it'll be great again.

 

[Russel]

Anyone have any investments that are plummeting? Wonder when it'll be great again.

On a similar note, anyone checked their pension over the last couple of days?

 

[najaB]

On a similar note, anyone checked their pension over the last couple of days?

I wish I hadn't. One is down 7% compared to a month ago, the other is down almost 13% compared to January.

 

[Ted633]

On a similar note, anyone checked their pension over the last couple of days?

Another that wishes they hadn't checked it. Down 10% since January

 

[sannox]

Down 7% since January. Painful for the old pension!

 

[Annetts key]

I have a pension that is a defined benefits type, but I have been paying extra via an additional voluntary contribution (AVC). That's based on investments and I made a final large payment last year. I am resisting the urge to look... I also have some share based ISAs that I'm not rushing to look at...

Anyway, yesterday, Channel 4 News in their evening programme showed a clip of an interview that they had with Trump from when he was a lot younger. He had a thing about the U.S.A. being treated unfairly back then, so tariffs as the "solution" is not a new or recent idea for him. The clips is on YouTube as part of a longer piece. This video:

The auto-generated transcript has some errors.Here's my best go at correcting it:

35:58 Matt: Trump's moves on tariffs shouldn't really have come as a surprise to anyone, since his days as a New York real estate magnet Mr trump the self-appointed artist of the deal, had a very clear view on whether America was being treated like a loser when it came to foreign trade.
Trump: But we don't have free trade right now because if you want to go to Japan or if you want to go to Saudi Arabia or various other countries it's virtually impossible for an American to do business in those countries, virtually impossible.
36:24 Matt: Mr Trump, hello, Matt Frei. Two and a half decades later in 2013, still refusing to confirm whether he was planning to run for president, we locked horns over global trade again.
36:38 Trump: China has been eating our lunch china has taken the United States for a ride like nobody other than perhaps OPEC has done.
36:46 Matt: But Donald they're not just eating your lunch they're paying for your lunch they are your banker and you don't pick a fight with your banker.
40:42 Trump: You don't understand economics. China is taking advantage of this country like nobody has ever taken advantage of the United States, and you look at what's going on in this country, we are not making our product now china and other countries are making our product.
37:06: Matt: But I mean we live off Chinese manufacturing whether we like it or not.
37:09 Trump: That's because when you say we, you are stupid, you're stupid.
37:14 Matt: You called me a bad economist, I'm stupid, What else are you going to do? I've been very civil to you.
37:19 Trump: You're not a good economist, no you haven't, you're not a good economist at all uh, you don't understand business and you don't understand what I'm saying with China ,you think it's a joke.
Matt: So I'm fired?
Trump: It's not a joke, you're not fired.

 

[brad465]

On a similar note, anyone checked their pension over the last couple of days?

I wish I hadn't. One is down 7% compared to a month ago, the other is down almost 13% compared to January.

401k pension accounts in the US are the key ones to watch, as these impact the sort of folk who could cause Trump to have to change course (or get him ousted).

 

[Russel]

I wish I hadn't. One is down 7% compared to a month ago, the other is down almost 13% compared to January.

Another that wishes they hadn't checked it. Down 10% since January

Being in my 30's, I've got plenty of time for it to recover, but it's still depressing to look at how much it's decreased by!

 

[najaB]

Being in my 30's, I've got plenty of time for it to recover, but it's still depressing to look at how much it's decreased by!

Yeah. It's still 18 years until I hit retirement age, but equally depressing.

 

[Yew]

There may be a silver lining if you're looking to remortgage though:

Mortgage rates set to drop after tariff turmoil

Interest rates are forecast to fall further as Donald Trump's trade taxes fuel economic uncertainty.

www.bbc.co.uk

Some lenders are set to cut rates on mortgages after turmoil from US President Donald Trump's tariff policy raised expectations that UK interest rates could be cut further this year.

TSB Bank said it will reduce some two-year fixed rate mortgages by up to 0.25 percentage points on Tuesday, following MPowered Mortgages which trimmed rates across a number of its deals.

Financial markets and economists are predicting that the Bank of England will cut interest rates by more than expected this year to avoid an economic downturn.

Mortgage brokers told the BBC that if so-called swap rates, which lenders use to price loans, stay as they are then some mortgage rates may fall to as low as 3.79% in the coming weeks.

 

[baz962]

Just watching the news and the US just announced tariffs of upto 104% on China. It's going to get bumpy.

Trump tariffs updates: Higher rates paused for most but China tariffs now 125%

Trump says countries who were facing higher tariffs will now fall to the "baseline" tariff of 10% for at least 90 days.

www.bbc.co.uk

Now 125% on China

 

[Cloud Strife]

Just watching the news and the US just announced tariffs of upto 104% on China. It's going to get bumpy.

I have the feeling that Trump thinks that China will blink, but they have absolutely no reason to do so. They still have plenty of markets that they can sell to, and unlike the Americans, they haven't burnt bridges with most of the world.

The real question is: where are the investments going to come from that Trump keeps talking about? Apple is cash rich and can afford to spend big in the US, but how many other companies can say the same?

 

[brad465]

I have the feeling that Trump thinks that China will blink, but they have absolutely no reason to do so. They still have plenty of markets that they can sell to, and unlike the Americans, they haven't burnt bridges with most of the world.

The real question is: where are the investments going to come from that Trump keeps talking about? Apple is cash rich and can afford to spend big in the US, but how many other companies can say the same?

Bullies keep going harder and further until they meet their match/superior. This is China and Trump's probably signed the surrender notice in his trade war in picking a fight with them.

 

[Cloud Strife]

Bullies keep going harder and further until they meet their match/superior. This is China and Trump's probably signed the surrender notice in his trade war in picking a fight with them.

I'm personally just wondering when China will squeeze Tesla, to be honest. It's such an easy target, and the Chinese don't need Tesla. But losing China as a market will really hurt Tesla and cause even more investors to bail out.

 

[Gloster]

Everything presumes that it is all part of a planned programme by Trump et al. and his inconsistent explanations are merely due to an inability to explain things clearly. What about the possibility that he really hasn’t got a clue and is either making it up on a whim or doing the bidding of others who have ulterior motives? He could be so busy getting his petty revenge on anyone who he thinks is agin him to concentrate on anything else (other than playing golf at his resorts).

I have also been wondering if some people (genuinely, no hidden suggestions as to who here) did some quiet selling and buying before the tariffs were announced. This being not merely using inside information, but causing the whole thing for personal profit.

 

[brad465]

US stock markets joined in with the rebounds seen elsewhere in the world, then the 104% tariff confirmation contributed to a reversal and now US markets are all down on where they started today. The European and Asian markets closed before this occurred, so were up by the end of the day, but will probably open down tomorrow morning.

 

[Annetts key]

Everything presumes that it is all part of a planned programme by Trump et al. and his inconsistent explanations are merely due to an inability to explain things clearly. What about the possibility that he really hasn’t got a clue and is either making it up on a whim or doing the bidding of others who have ulterior motives? He could be so busy getting his petty revenge on anyone who he thinks is agin him to concentrate on anything else (other than playing golf at his resorts).

I have also been wondering if some people (genuinely, no hidden suggestions as to who here) did some quiet selling and buying before the tariffs were announced. This being not merely using inside information, but causing the whole thing for personal profit.

Trump has a plan. It's likely not a very good or a very detailed plan though...

If you were a wanting to cash in some investments soon, it was blindingly obvious that as soon as Trump said that he would be introducing a list of countries that would be subject to tariffs, you should have acted immediately. Now, well, unless you are willing to take a hit, it's currently not such a good time...

If however, you are investing for a longer term, it's normally better to keep them where they are rather than panicking now and maybe not getting as much as you expected. But if you are making new investments, do it via a regular add weekly/ four weekly / monthly payment.

The real problem is that some people, may not have much choice when they can take their pension. If you have a choice, you may wish to defer taking your pension.

Note: none of the above is financial advice. It's just my own uneducated thoughts.

US stock markets joined in with the rebounds seen elsewhere in the world, then the 104% tariff confirmation contributed to a reversal and now US markets are all down on where they started today. The European and Asian markets closed before this occurred, so were up by the end of the day, but will probably open down tomorrow morning.

Yep, with all the uncertainty, there will be rather a lot of market thrashing with potentially some more big dips ahead. And oil falling in price may have a big effect as well...

No one really knows where the end game is or what it looks like. There are far too many variables in play.
As an example, China may be unconcerned with Trump upping the % rate of U.S. tariffs if the value of their currency falls, making exports less expensive before the tariff rate is applied.

My personal thought is that somewhere, at some time, the pressure on Trump will get to a point where he has to back down. China doesn’t have democratic elections. The U.S.A. (currently) does. Trumps core supporters (MAGA) may stick with him, but other voters who feel the pain may not. If the polls indicate that Americans have switched to hating Trump, the Republicans could be in deep trouble in the mid term elections in less than two years time. And that's assuming that he can keep all the current Republicans in line in congress until then.

 

[brad465]

Yep, with all the uncertainty, there will be rather a lot of market thrashing with potentially some more big dips ahead. And oil falling in price may have a big effect as well...

No one really knows where the end game is or what it looks like. There are far too many variables in play.
As an example, China may be unconcerned with Trump upping the % rate of U.S. tariffs if the value of their currency falls, making exports less expensive before the tariff rate is applied.

My personal thought is that somewhere, at some time, the pressure on Trump will get to a point where he has to back down. China doesn’t have democratic elections. The U.S.A. (currently) does. Trumps core supporters (MAGA) may stick with him, but other voters who feel the pain may not. If the polls indicate that Americans have switched to hating Trump, the Republicans could be in deep trouble in the mid term elections in less than two years time. And that's assuming that he can keep all the current Republicans in line in congress until then.

I wouldn't be surprised if Trump starts a war with Iran to try and distract from all this, specifically striking the nuclear enrichment sites. There have been reports the US and Israel have been planning it, and both countries have leaders in charge in some form of trouble that war would spare them from (Netanyahu is facing corruption charges):

US ‘moves advanced missile system to Israel’ as Iran war fears grow

Delivery of weapons comes ahead of Benjamin Netanyahu’s visit to Washington to discuss attacking Tehran

www.telegraph.co.uk

America is understood to have delivered an advanced missile defence system to Israel ahead of Benjamin Netanyahu’s visit to Washington to discuss attacking Iran.

Flight-tracking websites showed a C-5M Super Galaxy, the US’s largest transport aircraft and capable of carrying the Terminal High Altitude Area Defense (Thaad) system, land at Nevatim air base in southern Israel on Saturday and wait about eight hours before leaving.

US media reported last month that defence officials had approved moving the system to the Middle East. If confirmed, it would mark the second Thaad system sent to Israel by America, the first having been put in place last year.

It comes amid a rush of US military assets to the Middle East amid hostile rhetoric on Tehran from the White House. One carrier strike group is already operating in the region, while another is en route from Asia.

A number of B-2 Spirit bombers, which can be armed with nuclear weapons, have also been sent to the Indian Ocean base of Diego Garcia, which is in range of Iran.

Preventing Iran from obtaining a nuclear weapon is Israel’s number one strategic priority, as well as being a key foreign policy aim for the Trump administration.

Last week, Donald Trump threatened to bomb Iran and impose secondary tariffs if Tehran did not reach an agreement with Washington over its nuclear programme.

Iran said on Sunday that talks would be “meaningless” if Mr Trump continued to threaten them.

The theocracy, which claims its nuclear programme is for non-military use, is believed to have increased enrichment of uranium to 60 per cent purity, the only country in the world without a nuclear weapon to have done so.

Behind the scenes in Israel there is concern among security officials of a deal that looks significant but does not, in reality, prevent Iran from obtaining a bomb – a so-called Singapore scenario, a reference to Mr Trump’s high-profile, first-term summit with Kim Jong-un, after which North Korea retained its nuclear bombs.

Israeli chiefs are said to be wary of allowing Iran to build up its capability while the US issues threats but takes no action.

Mr Trump campaigned on a platform of ending wars, rather than starting them, and commentators believe JD Vance, his powerful vice-president, is instinctively opposed to striking Iran, as evidenced by the recent leaked Telegram messages in relation to strikes on the Houthis.

Meanwhile, it has been reported for months now that Israeli military chiefs believe they have the capability to destroy Iran’s nuclear enrichment facilities and deal a devastating blow to its stockpiles.

 

[Annetts key]

Oh, one other thing. As I understand it, these Trump tariffs are being enacted via "emergency" powers.

Well, not everyone agrees:

Link to The Guardian article

Rightwing group backed by Koch and Leo sues to stop Trump tariffs​

New Civil Liberties Alliance says president’s invocation of emergency powers to impose tariffs is unlawful

Robert Tait in Washington
Mon 7 Apr 2025 21.46 BST
Last modified on Tue 8 Apr 2025 16.48 BST

A libertarian group that has been funded by Leonard Leo and Charles Koch has mounted a legal challenge against Donald Trump’s tariff regime, in a sign of spreading rightwing opposition to a policy that has sent international markets plummeting.

The New Civil Liberties Alliance filed a suit against Trump’s imposition of import tariffs on exports from China, arguing that doing so under the International Emergency Economic Powers Act (IEEPA) – which the president has invoked to justify the duties on nearly all countries – is unlawful.

The group’s actions echo support given by four Republican senators last week for a Democratic amendment calling for the reversal of 25% tariffs imposed on Canada.

Last Wednesday’s amendment passed with the support of Mitch McConnell, the former Republican Senate majority leader, and his fellow GOP members Rand Paul, Susan Collins and Lisa Murkowski, who argued that tariffs on Canada would be economically harmful.

The action from the alliance has the potential to be even more emblematic, given its past backing from Koch, a billionaire industrialist, and Leo, a wealthy legal activist who advised Trump on the nomination of three conservative supreme court justices during his first presidency, which has given the court a 6-3 rightwing majority. The group received money from organisations affiliated with Leo and Koch in 2022. A spokesperson for Stand Together, a group partially funded by Koch and that has supported the alliance, said it was not involved in the legal case.

The alliance has tabled its action on behalf of Simplified, a Florida-based home goods company whose business is heavily reliant on imports from China. It argues that the president has exceeded his powers in invoking the IEEPA to justify tariffs.

“This statute authorizes specific emergency actions like imposing sanctions or freezing assets to protect the United States from foreign threats,” the alliance said in a statement. “It does not authorize the president to impose tariffs. In its nearly 50-year history, no other president – including President Trump in his first term – has ever tried to use the IEEPA to impose tariffs.”

The alliance also argues that power to impose tariffs lies not with a sitting president, but with Congress, and warns that those imposed by Trump could run afoul of US supreme court rulings.

“His attempt to use the IEEPA this way not only violates the law as written, but it also invites application of the supreme court’s major questions doctrine, which tells courts not to discern policies of ‘vast economic and political significance’ in a law without explicit congressional authorization,” its statement said.

Mark Chenoweth, the alliance’s president, said the court in Pensacola – where the suit has been filed – would have to observe this legal precedent.

“Reading this law [IEEPA] broadly enough to uphold the China tariff would transfer core legislative power,” he said. “To avoid that non-delegation pitfall, the court must construe the statute consistent with nearly 50 years of unbroken practice and decide it does not permit tariff setting.”

The suit argues that there is no connection between the fentanyl epidemic – which Trump has cited as a reason for invoking the emergency powers – and the tariffs.

“The means of an across-the-board tariff does not fit the end of stopping an influx of opioids, and is in no sense ‘necessary’ to that stated purpose,” the complaint filed on behalf of Simplified argues.

“In fact, President Trump’s own statements reveal the real reason for the China tariff, which is to reduce American trade deficits while raising federal revenue.”

The legal case adds to rumbling disquiet on tariffs among some of Trump’s usually vocal supporters, including the billionaire hedge fund manager Bill Ackman.

Paul, a senator from Kentucky who has been one of the most consistent congressional anti-tariff voices, told the Washington Post that other Capitol Hill Republicans shared his concern.

“They all see the stock market, and they’re all worried about it,” Paul said. “But they are putting on a stiff upper lip to try to act as if nothing’s happening and hoping it goes away.”

Speaking in support of last week’s Democratic amendment, sponsored by the Virginia senator Tim Kaine, Paul said: “I don’t care if the president is a Republican or a Democrat. I don’t want to live under emergency rule. I don’t want to live where my representatives cannot speak for me and have a check and balance on power.”

Trump attacked Paul and the three other Republican senators who backed the amendment and suggested they were driven by “Trump derangement syndrome”.

In another sign of Republican concern, the GOP senator from Iowa Chuck Grassley – along with a Washington Democrat, Maria Cantwell – introduced a bill that would limit Trump’s ability to impose or increase tariffs by requiring Congress to approve them within 60 days. The White House budget office said on Monday that Trump would veto the bill.

This article was amended on 8 April 2025 to correct the spelling of Maria Cantwell’s surname.