Liberty or death?
The US, the EU, China, Myanmar, and South Africa.
The five things you need to know today:
UNITED STATES. Autarky in America.
UNITED STATES. Elon Musk is encouraged to pursue other interests.
EUROPE. CHINA. Making Eurasia great again.
MYANMAR. Beijing orders a ceasefire.
SOUTH AFRICA. A budget is passed at the expense of government unity.
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UNITED STATES. Don’t trade with me
Autarky in America.
US futures and Asian stocks tanked early Thursday after Donald Trump announced “liberation day” tariffs with a 10% floor. Trump said "it's our turn to prosper" after being "looted, pillaged, raped and plundered by nations near and far."
INTELLIGENCE. Trump called the plan, a 10% universal duty plus "reciprocal" rates for "bad actors", a "declaration of economic independence". The second part has received most notice, both for the "discounted" US rate and the alleged rate charged by the counterparty, calculated it seems by dividing the surplus by total exports (e.g., for the EU, with a $235.6 billion surplus on $605.8 billion of exports, the rate is 39%). Canada and Mexico were exempted.
FOR BUSINESS. The news is great for Canada and Mexico, whose currencies have jumped, but bad for everyone else, especially the US. Effective “stacking” rates on Chinese imports could be as high as 72% (or 97%, including "secondary" Venezuela tariffs). This risks bottlenecks and retaliation, even if they’re temporary as part of a negotiating ploy. In the long term, it could lead to stagflation, with which conventional monetary policy will struggle to cope.
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UNITED STATES. DOGEgone
Elon Musk is encouraged to pursue other interests.
The White House denied a Politico report Wednesday that Elon Musk had been asked to "step back" from advising the president. GOP insiders slammed the billionaire's role in a backfiring Wisconsin court election. Tesla’s Q1 sales fell 13%.
INTELLIGENCE. Much of the commentary around Musk and his fluctuating fortunes has been schadenfreude, but he