Economics and International Affairs Blog

Sunday, April 6, 2025

Corporate America Finds it Hard to Deal with an Erratic and Petulant Trump

Apple bet on Trump, but he burned it anyway
https://www.telegraph.co.uk/business/2025/04/06/apple-bet-on-trump-but-he-burned-it-anyway/
The big tech giant’s cosy relationship with the president has failed to protect it from trade war chaos.

Corporate America fears wrath of Trump as it mulls tariffs response
https://www.ft.com/content/ce9559c0-039a-4e83-98dc-a087be8051ba
Executives unsure how far to go in re-engineering their businesses and hope they can lobby US president to ease policies.

US Stock Market Wipes Out Over $5 Trillion on Trump’s Tariff War
https://finance.yahoo.com/news/us-stock-market-wipes-over-202632831.html
The S&P 500 Index declined to the lowest level in 11 months, slashing $5.4 trillion in market value in just two sessions as Federal Reserve Chairman Jerome Powell said the Trump administration's tariffs “could have a persistent impact on inflation.”

Saturday, April 5, 2025

Trump's Tariff Formula - Embarrassingly Dumb

This would be hilarious if it wasn’t threatening a global recession (and if it hadn’t caused $5.4 trillion of stock market losses in just two trading sessions in the U.S. alone):
The bizarre way Trump’s team calculated reciprocal tariffs
https://youtu.be/PWhv-06DNjE

Evidence of Market Inefficiency?

Wall Street Blew It
https://www.msn.com/en-us/money/markets/wall-street-blew-it/ar-AA1CjVeE
Investors discounted everything Trump has ever said about trade and tariffs. We’re all going to pay for that mistake.

Why the markets keep getting Trump wrong
https://www.atlanticcouncil.org/content-series/inflection-points/why-the-markets-keep-getting-trump-wrong/

Brainwashing and Political Polarization

It’s Always the Other Side That’s Been Brainwashed
https://www.newyorker.com/magazine/2025/04/07/its-always-the-other-side-thats-been-brainwashed
What talk of brainwashing helps us not to talk about.

Elon Musk's Motives

The Failed Ideas That Drive Elon Musk
https://www.nytimes.com/2025/04/04/opinion/elon-musk-doge-technocracy.html
His belief that liberal democracy has failed and that technologists should lead can be traced to the unusual life of his grandfather.

Inside Elon Musk’s Shock-and-Awe Months in the White House
https://www.wsj.com/politics/policy/elon-musk-trump-white-house-doge-43c4d404

President Trump directed his chief of staff to better manage the billionaire adviser after complaints arose from his cabinet and staff.

From 2021:
Elon Musk Is Building a Sci-Fi World, and the Rest of Us Are Trapped in It
https://www.nytimes.com/2021/11/04/opinion/elon-musk-capitalism.html

Globalization and Geoeconomics

How to make sense of Donald Trump’s tariffs
https://www.ft.com/content/3436cd20-f09f-46dd-9e94-ba10b86de83f
The new field of ‘geoeconomics’ offers a guide for the perplexed.

Putting Economics Back into Geoeconomics
https://globalcapitalallocation.s3.us-east-2.amazonaws.com/NBER_MacroAnnual_Geoeconomics.pdf

Geopolitical Fragmentation
https://youtu.be/gYpVaLdzI6g

Globalization Is Collapsing. Brace Yourselves.
https://www.nytimes.com/2025/04/05/opinion/globalization-collapse.html

Trump’s aggressive push to roll back globalization
https://www.ft.com/content/ed994477-a23a-4f48-9019-917b5dc51041

Trump Tariffs Aim to Bring Down Curtain on Era of Globalization
https://www.wsj.com/economy/trade/trump-tariffs-us-global-manufacturing-294b0f55
President Trump is sending a clear message to U.S. and foreign companies alike: The era of globalization is over. But while he wants companies to return production to the U.S., it won’t be easy.

The global victory of capitalism has turned it into something dark
https://www.telegraph.co.uk/news/2025/04/05/global-capitalism-victory-trump-tariffs-chinese-belt-road/
Does Trump truly believe that wealthy, powerful America has been ‘robbed’ or ‘pillaged’ by the poorest nations on Earth?

Trump’s wrecking ball will force the world to wake up and act
https://www.telegraph.co.uk/business/2025/04/05/trumps-wrecking-ball-will-force-world-to-wake-up-act/
The realization that we are no longer dealing with a rational force presents opportunities for new trade alliances.

Trump's Tariffs and the Future of Globalization

https://vivekjayakumar.blogspot.com/2025/04/end-of-era.html

Friday, April 4, 2025

Fed Chair Powell's Take

The Fed Isn’t Rushing to Save the Markets This Time
https://www.nytimes.com/2025/04/05/business/tariffs-stock-market-fed-inflation.html
With stocks in a steep decline and tariffs inducing recession jitters, the patience of investors may be tested.

Jerome Powell’s Take:
https://www.federalreserve.gov/newsevents/speech/files/powell20250404a.pdf
The limited hard data are consistent with a slower but still solid growth outlook. At the same time, surveys of households and businesses report dimming expectations and higher uncertainty about the outlook. Survey respondents point to the effects of new federal policies, especially related to trade. We are closely watching this tension between the hard and soft data. As the new policies and their likely economic effects become clearer, we will have a better sense of their implications for the economy and for monetary policy…
Turning to monetary policy, we face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation. The new Administration is in the process of implementing substantial policy changes in four distinct areas: trade, immigration, fiscal policy, and regulation. Our monetary policy stance is well positioned to deal with the risks and uncertainties we face as we gain a better understanding of the policy changes and their likely effects on the economy. It is not our role to comment on those policies. Rather, we make an assessment of their likely effects, observe the behavior of the economy, and set monetary policy in a way that best achieves our dual-mandate goals.
We have stressed that it will be very difficult to assess the likely economic effects of higher tariffs until there is greater certainty about the details, such as what will be tariffed, at what level and for what duration, and the extent of retaliation from our trading partners. While uncertainty remains elevated, it is now becoming clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth.

The Global Consequences of Trump's 'Little Disturbance'

Trump and His ‘Little Disturbance’ From Tariffs
https://www.wsj.com/opinion/donald-trump-tariffs-disturbance-markets-trade-243b36ef

A US tariff pathology is unleashed upon the world
https://www.ft.com/content/47c267fd-e981-4c4d-985a-e0934483f1f9
There can be no logic-washing of Donald Trump’s tariffs. This isn’t part of a carefully-designed industrial policy or a cunning strategy to induce compliance among trading partners or a choreographed appearance of chaos to scare other governments into obedience. It’s wildly destructive stupidity, and the generations of American, and particularly Republican politicians, who allowed things to slide to this point are collectively to blame.

A Market-Rattling Attempt to Make the American Economy Trump Always Wanted
https://www.wsj.com/economy/trump-economic-vision-tariff-manufacturing-262180a4
The president dreams of factories reopened and towns revitalized by tariffs, but stocks plunged on fears economic growth will suffer.

What the Trump Dollar Plunge Means
https://www.wsj.com/opinion/donald-trump-tariffs-investors-dollar-trade-economy-stephen-miran-d27a670a

Trump’s chaos-inducing global tariffs, explained in charts

https://www.theguardian.com/us-news/2025/apr/03/trump-global-tariffs-charts

Trump’s Tariffs Are Designed to Backfire

https://www.msn.com/en-us/money/markets/the-tariff-to-end-all-tariffs/ar-AA1CezLk

Instead of leading to reduced trade barriers, the new global tariff plan is all but guaranteed to raise them.

Trump’s tariffs are designed to extend American power

https://www.newstatesman.com/international-politics/2025/04/trump-tariffs-american-power-liberation-day

Republicans Like to Cut Taxes. With Tariffs, Trump Is Raising Them.

https://www.nytimes.com/2025/04/05/business/economy/republicans-tax-cuts-tariffs-trump.html

President Trump’s tariffs are scrambling the Republican plan for the economy, long centered on tax cuts and growth.

Trump's Tariffs and the Future of Globalization

https://vivekjayakumar.blogspot.com/2025/04/end-of-era.html

Thursday, April 3, 2025

The Stock Market Selloff

Why a stock market selloff may trigger a US recession by VIVEKANAND JAYAKUMAR, The Hill - 04/03/25
https://thehill.com/opinion/5229397-wealth-inequality-consumption/

Gap, Nike and Levi’s took years to diversify from China. Now sky-high tariffs on nations like Vietnam are ruining plans and tanking their stocks
https://www.yahoo.com/finance/news/gap-nike-levi-took-years-160843472.html

Trade War Sets Off ‘Max Pessimism’ in Global Markets as Stocks Plunge
https://www.nytimes.com/2025/04/02/business/trump-tariffs-global-stock-markets.html

In Worst Stock Market in Years, Slow and Boring Has Eased the Pain
https://www.nytimes.com/2025/04/03/business/stock-market-investing-retirement-pain-stocks-bonds.html
People have avoided huge losses by holding old-fashioned, well-balanced investments, an approach our columnist is banking on for the future.

History Lesson: The Gilded Age

The Story of the Gilded Age Wasn’t Wealth. It Was Corruption.
https://www.theatlantic.com/ideas/archive/2025/04/history-rich-influence-government/682266/
Richard White, the historian and author of The Republic for Which It Stands, explains what made the late 19th century gilded.