The Inevitable, Just Sooner

Maybe President Trump’s tariffs will cause a prolonged trade war and a Great Depression in the United States the likes of which we’ve never seen before, sending the nation into a spiral of chaos and hell on earth.

But walking around outside today, three days after the tariffs were announced and barely a day after many of the minimum tariffs went into effect, life seems oddly normal.

I’m in In New York City this morning, so I took a walk around Central Park. Despite the cool, rainy weather, the park was littered with tourists taking photos, New Yorkers playing with their dogs, couples holding hands, and joggers getting in their workout for the day. Yesterday, as I went on my own run up Park Ave. at lunchtime, I watched junior bankers pour out of J.P. Morgan’s office by Grand Central Station, joking with each other, smiling and happily ordering their lunches.

If we’re in the midst of armageddon, it sure doesn’t seem like it.

So imagine my surprise today when I read that the Wall Street Journal editorial board had declared China’s Xi Jinping as the person emerging as the “winner” from President Trump’s tariffs.

President Trump’s across-the-board tariffs will change the world order in many ways, and one winner is already emerging: Xi Jinping. The Chinese President has had an excellent week.

Putting aside whether you think tariffs are a good idea or not, to me it just seems stunning to declare a “winner” barely a day after the 10% minimum tariff has gone into effect. What if China came to the table tomorrow and wanted to strike some type of deal? I’m not saying this is going to happen, but if it did, it would immediately render such a headline completely erroneous.

I don’t want to argue the merits of whether or not Trump’s tariff policy is going to yield results. I did that all day yesterday and I feel like I understand clearly the argument against his policy and how he arrived at it. We will know at some point in the future just how effective or ineffective they are going to be.

If it turns out to be a horrific idea, I will admit as much and, as I have done many times before in the past, simply state that I got it wrong. My take isn’t consequential. I’m not advising the President on trade. But just hours after these policies have gone into effect seems like an awfully minuscule amount of time to be declaring winners and losers.

Let’s get one thing straight. The vicious pushback on these tariffs is, in my opinion, completely being driven by the move in the stock market. People were marching around waving Jeremy Siegel’s quote from yesterday that the tariffs are the ‘biggest policy mistake in 95 years’ like it was handed down from God himself.

Mind you, this is the economist who, in a sheer panic 8 months ago, called for an emergency 75 basis point rate cut during the yen carry trade sell off…

…then was promptly neutered by analyst and trader Guy Adami on-air that same night, and then immediately issued a mea culpa two days later when the market didn’t crash as he thought it would.

He’s throwing around 75bps rate cuts — which in the balance hangs the homeostasis of the entire $100 trillion global economy — like he’s daytrading a memecoin.

I believe the impetus for his reactionary response is the same now as it was back in August: “the stock market is going down, and I don’t like the way that makes me feel". I also believe that...(READ THIS FULL ARTICLE 100% FREE HERE).

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