Originally published at: Trump may take softer approach on April 2 ‘reciprocal’ tariffs - FreightWaves
President Donald Trump said Monday he may give countries “breaks” on tariffs, but imports of autos and pharmaceuticals will be targeted.
Trumps tariffs are good; and smart for US (see Robert Lighthizer, former USTR, on Tucker Carlson… very in depth “why must tariff”). However, Trump can’t ramp up all these necessary tariffs; without off-setting this inflationary effect on US economy. Trump succeeded with tariffs last term, via having Saudi’s and Russia dump oil onto globe; energy got CHEAP; causing deflation and therefore rate cuts. Last term, Trump more than balanced the inflationary tariffs via VERY cheap energy, which was deflationary. So far, IMO Trump’s ceasefire deals, both Ukraine and Gaza; are insufficient, more than less. Therefore, Putin and MBS will not cooperate with Trump’s desired economic goals… no flooding globe yet. Consider that MBS doesn’t want today’s Turkey civil war (due to lack of support for Palestinian side; and the vast majority of Saudi citizens sympathize with the Palestinians). IMO, Trump/ Wifkoff are going to have to do non-biased ceasefires; in order to get Saudi’s and Russia on board with cheap oil for globe. Not happening so far; and wrong direction via Trump on this. Not saying this as a critic of Trump; he’s vastly better for US vs last administration; due to his business knowledge. When I suggested “buy Wabash” etc stock, couple weeks ago; I assumed that cease-fires were legitimate. Now I realize , they are too biased; and not taking into consideration the non-US perspectives. Interesting times. I think Trump had anticipated deals that resulted in sanctions dropped on Russian oil, by now; and this has not happened; nor does it look like it will; in near future. Keep in mind, our US oil producers LIKE the sanctions; as this is yet another gov’t created artificial bubble for oil prices… Our producers have been selling for very lucrative prices to Europe; due to sanctions (blocked access) to cheaper Russian oil . So, Trump has to deal with all these forces. IMO, it would be better, net, to drop the sanctions; which allow full tariffs and rate cuts and hottest broad US economy, incl trucking; even if this means less profit for our oil producers. But Big Oil has LOTS of lobbying power that Trump must check. The 1Q 25 reports, due out next month; will be dismal. Until cheap energy happens (which = deflation, then rate cuts, then super hot economy), there is nothing rosy to follow bleak 1Q reports… just more of the 3 year downturn, con’t. @Freightalley
BTW, anyone who thinks tariffs alone will = good US economy: consider 1970’s stagflation. Back then, this was pre-NAFTA and pre-China WTO; we made in US the majority of what we buy. So, just going back to “made in USA” will not undo current stagflation. For growth / hot Econ, the recipe = cheap energy; which leads to deflation, which leads to cheap money (rate cuts). Then you have both cheap money AND cheap energy; and the economy skyrockets; like it did during Trump’s last term, before Covid wrecked it.
Per previous: Now that Putin/ Russia saw how fraudulent (biased towards Israel) the Witkoff / Trump “ceasefire.” that looked so good at first? Putin is ignoring his supposed agreements with Witkoff/ Trump regarding Ukraine; and solving it militarily. Russia is winning; so why distract from its victory? With current news ; zero chance we’ll have cheap , deflationary energy, any time soon. Look for gold to keep going up, the dollar to keep going down; along with stocks & US Econ. Signs of more inflation: Donald Trump says he is ‘very angry’ with Vladimir Putin over Ukraine | Donald Trump | The Guardian