Trump administration fails to intimidate Canada, goes Galt and ends trade talks

 

Trump ends all U.S. trade talks with Canada over digital services tax

 

 

 

 

 

 

... The first payments from Canada’s digital services tax, which was enacted last year and applies retroactively to 2022, are set to be collected Monday. The tax would hit both domestic and foreign tech companies, including U.S. giants such as Amazon, Google and Meta.

Canadian officials said this month that they would not pause the digital services tax, despite ferocious opposition from the United States.

“Obviously, we think it’s patently unfair to do it retroactively,” Treasury Secretary Scott Bessent said later Friday on CNBC’s “Closing Bell: Overtime.”

Bessent said the Trump administration was hoping that Carney’s government would “put a brake on” the tax “as a sign of goodwill.” ...

 

Trump's idea of good will is 50% tariffs on Canadian steel and aluminum, 25% tariffs on autos, an overall 10% tariff on most everything else, and a 25% "fentanyl" tariff.

 

 

1Q2025 real GDP revised down 0.3 to -0.5 in third and final estimate on an increase in imports front-loaded into 1Q to avoid Trump's tariffs

 Real gross domestic product (GDP) decreased at an annual rate of 0.5 percent in the first quarter of 2025 (January, February, and March), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4 percent.

 

The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment and consumer spending.

 

Real GDP was revised down 0.3 percentage point from the second estimate, primarily reflecting downward revisions to consumer spending and exports that were partly offset by a downward revision to imports. ...

More.

Sounds like Howard Lutnick gobbledygook at the end there. Paragraph two speaks of an increase in imports. Paragraph three of a downward revision to imports. 

Which is it lol? 

Nominal 1Q2025 GDP clocks in at $29.962 trillion in the third estimate. SPX was at 5612 on Mar 31, yielding a crazy high stock market valuation of 187.  

TACO Trump is negative for long term investment, 1Q2025 exports were the worst on record for their positive contribution to GDP

Does anybody ever talk about exports anymore? You know, from domestic production? 

... In recent years, a cautious optimism had returned, as supply chain shocks from the pandemic pushed some companies to bring production back to the US. 

But frequent changes and uncertainty around where Trump's tariff policy is headed has 'got people spooked,' Andrew Anagnost, CEO of Autodesk, told the outlet.

The company sells software used by manufacturers to design factories and improve processes. 

'The current operating mode is just the death to long-term investment,' he said. 

While construction projects that were already underway are still going ahead, he added, confusion about the future is stalling new work. ...

More. 

Exports are a " + " when calculating GDP. Imports are a " - " when calculating it.

Exports' contribution to GDP in 1Q2025 is THE WORST ON RECORD.

No wonder GDP was negative. Outside the pandemic soaring imports had their worst negative impact on GDP on record in 1Q2025.

It's a terrible time to be introducing new huge taxes on imports needed by domestic manufacturers, but that's what Trump is doing. 

 

 

 

TACO Trump chickens out on more than just tariffs, calls off the ICE raids on agriculture, restaurant, and hotel jobs to quell heartland rebellion

Stephen Miller most hurt.

On Wednesday morning, President Trump took a call from Brooke Rollins, his secretary of agriculture, who relayed a growing sense of alarm from the heartland.

Farmers and agriculture groups, she said, were increasingly uneasy about his immigration crackdown. Federal agents had begun to aggressively target work sites in recent weeks, with the goal of sharply bolstering the number of arrests and deportations of undocumented immigrants. ... 

 

Inside the West Wing, top White House officials were caught off guard — and furious at Ms. Rollins. ... 

But the decision had been made. Later on Thursday, a senior official with Immigration and Customs Enforcement, Tatum King, sent an email to regional leaders at the agency informing them of new guidance. Agents were to “hold on all work site enforcement investigations/operations on agriculture (including aquaculture and meat packing plants), restaurants and operating hotels.” ...

More. 

Observe again how quickly Trump is to turn on a dime. The policy changed in less than 48 hours. The last person he talked to can be the most influential, which is not what you want from the leader of the free world. Sometimes he stumbles into the right decision, to be sure, but he can always stumble the wrong way. The tyrant's soul resembles the state which he rules, full of chaos and conflicting desires which he is utterly unable to satisfy.

Taco, taco, taco man . . .

 

 Most retail execs expect Trump to walk back ‘reciprocal’ tariffs, survey says

"Liberation Day" was just a trial balloon. 

Stocks are up, yields are down lol

 

 Bessent floats extending tariff pause for countries in ‘good faith’ trade talks

GM will not produce EVs at Orion Assembly Plant in suburban Detroit as the company moves production of gasoline vehicles to the US from Mexico to avoid 25% tariffs

 GM to invest $4 billion in U.S. plants amid tariffs for Mexican-produced vehicles

... GM said the investment will add assembly of the gas-powered Chevrolet Blazer and Chevrolet Equinox that are currently produced in Mexico to two other plants in the U.S. and convert a large idled plant in Michigan — formerly expected to build all-electric trucks — to make gas-powered SUVs and trucks in 2027. ...

 

TACO Trump strikes again

 Trump always chickens out, aka paper tiger, etc.

(June 2) Trump administration pauses Social Security benefit cuts over defaulted student loans

 Social Security recipients do not need to worry about their benefits being garnished due to their defaulted student loans, at least for now. The development is an abrupt change in policy by the administration, which had announced in April that it would be resuming collection activity on defaulted student loan borrowers. The Education Dept. had said that Social Security benefit offsets could begin as early as June.

(June 3) Deutsche Bank raises S&P 500 forecast on ‘TACO’ theory: ‘We will get further relents’

(May 29) 10 times Trump has threatened, then backtracked on, tariffs as 'TACO trade' jab gains traction

(May 31) Trump Raises Steel Tariffs To 50%—Here Are The 21 Times He’s Changed His Mind

(May 28) Trump was asked about the "TACO" trade and called it a "nasty question." Here's what it means.

(The guy who started TACO May 2) The US market’s surprise comeback, and the rise of the ‘Taco’ trade theory

... the US administration does not have a very high tolerance for market and economic pressure, and will be quick to back off when tariffs cause pain. This is the Taco theory: Trump Always Chickens Out. ...     

(June 2):

US extends tariff pause on some Chinese goods through to August 31

 

Trump lays tariff egg with new "Chicken Do"

 

We've been liberated from Liberation Day by two Republicans (one appointed by Trump) and one Democrat on a court handpicked by Trump to adjudicate his tariffs lol

 

Federal trade court strikes down Trump’s reciprocal tariffs

The U.S. Court of International Trade on Wednesday blocked steep reciprocal tariffs unilaterally imposed by President Donald Trump on scores of countries in April to correct what he said were persistent trade imbalances. ...

In its ruling, a three-judge panel on the Court of International Trade said that the International Emergency Economic Powers Act, which Trump invoked to impose the tariffs, does not authorize a president to levy universal duties on imports.

 

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the judges wrote.

And separate, specific tariffs on Canada, Mexico and China related to drug trafficking “fail because they do not deal with the threats set forth in those orders,” the panel wrote.

Implementing tariffs typically requires congressional approval.

But Trump chose to bypass Congress by declaring a national economic emergency under IEEPA, which became law in 1977, and then using the purported emergency as justification for cutting Congress out of the process.

The panel not only ordered a permanent halt to the tariffs at issue in the case, but it also barred any future modifications to them.

The Trump administration was given 10 days to make the necessary changes to carry out the judges’ orders. ...

 

The funniest thing that's happening to Donald Trump right now is that while he tries to intimidate the Fed to reduce interest rates and they do nothing, yields are soaring all by themselves

 The bond market is issuing a vote of no confidence in our elected leadership.

One branch of Republican government thinks this is the 19th century with a robust manufacturing base it needs to protect with crazy wild tariffs, and another branch of Republican government thinks it's just fine to go on spending like drunken sailors and not raise taxes to pay for any of it.

Interest payments alone on the national debt in fiscal year 2024 soared to $1.1 trillion against revenues of $4.9 trillion.

Meanwhile the most powerful military in the world can't stop a bunch of rag-headed heathen bastards from launching missiles at Israel.

These people are crackerdog.

US Treasury yields are now up a net 2.37% across the curve since last Friday.

 

Long duration is very unhappy: 10Y at 4.53 at the close yesterday, 20Y at 5.00, 30Y at 4.97.

 

VUSTX ytd total return: -0.53%.

 

 

No DOGE savings show up in April US Treasury Statement of Receipts and Outlays of the Federal Government, but higher deficits sure do, $194 billion higher year to date than last year

Fiscal 2025 deficit, October-April: $1.049 trillion

Fiscal 2024 deficit, October-April: $0.855 trillion

Increase in the deficit in 2025 Oct-Apr: $194 billion 

 

Meanwhile CNBC blows smoke up your ass:

Tariff receipts topped $16 billion in April, a record that helped cut the budget deficit

 

 

Trump's phony Liberation Day for working Americans evaporates into thin air, new 90-day pause brings 145% reciprocal tariffs on China, which tanked markets in early April, down to 30%

Stock futures surge. Crude oil surges. US Treasury yields surge.

U.S. and China agree to slash tariffs for 90 days in major trade breakthrough

 

... The trade agreement means that “reciprocal” tariffs between both countries will be cut from 125% to 10%. The U.S.′ 20% duties on Chinese imports relating to fentanyl will remain in place, meaning total tariffs on China stand at 30%. ...

Trump had imposed tariffs of up to 145% on Chinese imports, prompting Beijing to respond with retaliatory curbs of its own, including restrictions on some rare earth elements. ...

Only Trump can do it

 hehe

No One Person Can Pull Dems Out of the Ditch

Michael Goodwin, New York Post

 

... Although there’s obvious appeal to finding a star headliner, no one person can pull the Dems out of the ditch. ...

 

  

 

Trade tariff manipulation is a stock-trading racket for them

Tariffs were enacted April 2, then suspended April 9.

 

One month ago:

 

 

 

 

 

 

 Yesterday:

 

This morning.

Trump's tariffs will bankrupt thousands of American businesses and millions will be unemployed as a result

 So says Ryan Petersen, founder and CEO of Flexport, in The Wall Street Journal, here:

... If the tariffs on Chinese goods continue at this rate, he says, thousands of American companies will fail and millions of employees will lose their jobs. ...

When the pandemic clogged up supply chains, he rented a boat so he could tour the Port of Long Beach, Calif., and see the bottlenecks for himself.

When he’s not cruising around ports for information, he’s getting it directly from his company’s 13,000 customers. They are companies that sell electronics, furniture, clothing, toys, diapers, pet feeders—basically everything. He makes it a priority to talk with as many of them as he possibly can. ...

This past week, he traveled from San Francisco to Washington, D.C., where he spent two days meeting with government officials to make the case that tariffs pose an existential threat to his customers. ...

Resolution by Senators Ron Wyden and Rand Paul to scrap Trump's craziest tariffs fails 49-49

 Senate resolution to scrap Trump’s ‘Liberation Day’ tariffs fails despite some GOP support 

A Senate vote to scrap President Trump’s wide-ranging “Liberation Day” tariffs narrowly failed on Wednesday, sparing Republicans a second consecutive blow as the president’s trade policy continues to face opposition. 

Three Republicans — Sens. Susan Collins (Maine), Lisa Murkowski (Alaska) and Rand Paul (Ky.) — voted in favor of the resolution alongside every present Senate Democrat. 

But Democrats ran into attendance problems. Sen. Sheldon Whitehouse (D-R.I.) was absent, along with Sen. Mitch McConnell (R-Ky.), who had voted in favor of a similar bill reversing tariffs on Canada earlier this month.

The final tally was 49-49.

McConnell and Whitehouse had both missed the two votes earlier in the day. One Senate GOP member told The Hill that McConnell was sick and unable to vote. ...

Ding dong Howard Lutnick says we're going to be training all those new factory workers how to spy lol

And Elon Musk wanted this guy to be Treasury Secretary instead of Bessent, which is even funnier.

 

 

This number seems wei tu lo

 

IMF Warns Trump Could Cost the World a Trillion Dollars

The Guardian

 

Is that all?

 

World GDP in 2023 was $106.2 trillion according to the World Bank, whose graph shows that the 2009 Great Recession contraction was $3.34 trillion. The Grauniad is worried that the Trump trade war will cost a third of the 2009 contraction, based on an analysis by the IMF, "the most sober of global institutions" lol.

 

Meanwhile there was a 2015 contraction in global GDP which was much larger, $4.55 trillion. That was much worse than the so-called Great Recession. And much worse than the global impact of COVID in 2020, which was $2.39 trillion according to the World Bank's data.

 

Why isn't this popularly discussed?

 

AI laughably tells me "global GDP did not actually contract in 2015".

 

 

 

 

 

But the World Bank itself traces the 2015 global GDP hit to a massive contraction in trade, at the heart of which was the forced restructuring of the Chinese economy under Xi Jinping, who is a communist reactionary.

 

The sizes of the tariffs of Donald Trump, which far exceed those of the Smoot-Hawley era, especially with trade hegemon China, seem uniquely poised to wreak havoc on a world whose experts today can't draw the obvious parallel to the right year.

Chicoms tell Trump to go pound sand

 China says no ongoing trade talks with the U.S., calls for canceling ‘unilateral’ tariffs

"At present there are absolutely no negotiations on the economy and trade between China and the U.S.,” said Ministry of Commerce Spokesperson He Yadong. ... "If the U.S. really wants to resolve the problem ... it should cancel all the unilateral measures on China,” He said.