I don't expect any surrender by President Trump on April 9th. Barring that the full 25% rate of Tariffs announced on April 2 will be implemented. In comments made yesterday the President emphasised that his priority is to "address" the US current account deficit. He will probably succeed temporarily by throwing the economy into deep recession which will be caused by precautionary savings sky rocketing and imports collapsing. The President does not connect the dots that if tariffs are to cure the trade deficit by reducing imports then imports will not be there to generate the tariff funds to cut the budget deficit and pay for tax cuts. Consistency as my mother used to say is the virtue of clerks and i am not President.
Then these observations:
Tariffs and retaliations
1. The UK is going to try and get a free trade agreement with the US by offering a zero digital taxation regime.
2. the EU may retaliate against US Tariffs by taxing US digital and other services. They think this will remind the Trump administration that US - EU relations are wider than manufactured trade and EU has lots of options.
1+ 2 promises sparks. 2 will fail abd could goad President Trump into further sanctions against the EU. .
. 3. The US aim in ME is to increase pressure on the Iranians by economic means and by wiping out the Houthis as Iran’s last functioning proxy.
So far things are not going to badly militarily: Centacom has sunk 2 of 3 Iranian spy ship in the Red Sea that were used for Houthis targeting. Iranian IRGC personnel imlpanted with the Houthis are reportedly being repatriated.
The build up of military assets in Diego de St Garcia and UAE serves both purposes: kinetic action in the Red Sea & increasing pressur on the mullahs. BUT President Trump is not yet willing to attack Iran directly.
4. Capital controls: my idea is that the fragmentation of global political alliances and trade (Globalisation) could be matched by dislocation of global capital flows including capital controls. The incoming Merz government is discussing the reaptriation of Bundebank gold holding held in Fort Knox - previously cosnidered quite a safe place.
Don't forget if you need further advice i am there 24/24 to help - mobile is +852 98809831....or email me: David.Roche@QuantumStrategy.org