Yeah i agree. Him and his team probably expected as stocks get whacked as there is growing uncertainty about trade and earnings, you would see outflow from stock into UST's. That's typically what happens in risk-off scenarios the 'flight to safety'. Bonds caught a bid somewhat and 10yr dropped to ~3.9% only to do a 180 and go back up to 4.4%, a huge sell off. I still don't know if that was caused by China/others selling US bonds or just general market uncertainty and everyone going into cash as a safeguard. Between business leaders probably freaking out, all the banks/analysts guiding down S&P targets, bonds selling off, he probably got talked into relaxing the tariffs.
At the end of the day, we still have 10% tariffs across the board and 125% with China. If those stick, that alone is still bringing in hundreds of billions in tariff revenue. We bring in ~3.1trillion annually, 10% of that is 300 billion, 125% on Chinese imports of ~460BN would also add a significant amount. I actually think when this is all said and done, we will still have some tariffs that remain, and we will actually bring in some revenue from that but not the 22% blended tariff rate that was initially propose, most likely be around 10% range.
I expect a global 10% tariff to remain in place, at least until the next time Democrats get into the WH. And to be honest, maintaining at least some incentive to produce domestically and not offshore over marginal cost advantages is rational policy if you ask me.
Quick summary of events:
Yesterday, a fake tweet saying that trump was gona pause the tariffs for 90 days causes a 2.3 trillion dollar pump.
20 minutes later the WH confirmed that it was fake news and the markst dumps by the same amount.
Early this morning, Trump tweets that NOW is a great time to buy
3 hours later he issues a 90 day pause on the tariffs
All the goys who listened to him went to the moon
Liberals got caught holding bags
Euros seething
China isolated
Art of the deal
The much more plausible explanation is that there were growing concerns within the administration and a pause was already discussed internally yesterday, which leaked out as a rumor. Trump, furious at the leak and the idea that he might cave, ordered a prompt denial. Then, the pressure mounted even higher today and he ultimately gave in.
Economically, this episode might turn out fine when the dust has settled, but Trump's reputation and credibility took a huge hit because of it. That's not what someone who's playing 4d chess would do, particularly not when his future policies and success hinge on his adversaries viewing him as strong and capable.
This post was edited by Black XistenZ on Apr 9 2025 05:44pm