The Trump Trade Files

I’m sure you’ve heard by now about the historically massive day in the stock markets yesterday. $SPY ( ▲ 1.22% ) was up 10.5%, $QQQ ( ▲ 0.32% ) up 12%, and $DIA ( ▲ 1.1% ) ended the day up 7.86% But before anyone gets too excited, when you scour the record books for biggest gains in a day you will see that almost all of the record setting days happened in late-2000, early 2001, 2008, and early 2020. So, not exactly a great omen.

But hey, a win is a win if… you keep it.

Then again, markets have given up a significant portion of those gains today as I am about to publish this post.

The catalyst for yesterday’s record setting day was of course the 90-day tariff extension for negotiations to all countries except for China who now has a cumulative rate of 125%.

One of the more interesting aspects about yesterday was that Trump himself basically gave us a heads up when he posted this gem on his social media platform, Truth Social.

To be fair, the administration has been giving out the playbook in advance throughout the tariff saga so far. This post was just another example.

Unfortunately, much of the rest of their communication around tariffs has been chaotic and often times conflicts or outright contradicts what they had stated previously.

So, why not break it all down so that we can see if what the administration delivers is on par with what is being sold by using their own words and messaging? They are warning us about “short term pain” after all, so best to keep their feet close to the fire as best as possible. Especially with something as controversial and historically economically devastating as tariffs.

If you haven’t yet, go ahead and read about the history of tariffs and the initial reaction to the tariff rollout so that you are all caught up.

This will be a multi-post piece, so this first post will focus on the:

1. Premise of the tariffs.

2. The stated goals.

3. The “Sales Team” in charge of selling the to the public.

The Premise:

President Trump's main premise with tariffs is to address trade imbalances and protect American industries by imposing taxes on imported goods. He argues that these measures will encourage domestic manufacturing, create jobs, and reduce the U.S. trade deficit, which he views as a threat to economic security.

To accomplish this, he’s proposed two types of tariffs:

1. Universal tariffs: 10% tariff applied to all imports.

2. Reciprocal tariffs: matching or exceeding the tariffs and “non-tariff barriers” which other countries place on American exports in addition to the 10% universal tariffs

By making foreign goods more expensive, Trump aims to incentivize consumers and businesses to prioritize American-made products. However, as discussed here, these policies have led to higher prices for consumers and economic disruptions when they have been instituted since the USA became a developed nation.

The Stated Goals:

1. Shrink the Trade Deficit
   Trump aims to address the U.S.'s trade imbalance, which he views as detrimental to the economy and national security

2. Protect American Industries
   Certain sectors which are vital to National Defense, such as steel and aluminum, struggle to compete with cheaper foreign products due to higher cost of living averages in the US. Shielding American manufacturers from foreign competition can also encourage domestic production.

3. Gain Leverage in Trade Deals
   Tariffs can also be used as a bargaining tool to pressure trading partners into revising trade agreements and reducing barriers to U.S. exports. While this is clearly one purpose of the tariffs, the administration has also repeatedly stated that the tariffs are not a negotiating tool.

4. Raise Money for the Government
   Taxing imports can theoretically generate funds which could be used to offset a tax cut extension or reduce the national debt.

5. Promote Economic Independence
   Another aim of tariffs is to get companies to move production back to the U.S., which is called “reshoring.” The idea is to bring factories and jobs home, making the country less dependent on global supply chains and strengthen the industrial base in the US.

US industries which appear to be main focuses:

• Autos

• Pharmaceuticals

• Steel

• Aluminum

• Agriculture (Specifically Beef and Corn)

The Tariff Sales Team

President Donald J. Trump:

Look, if you don’t know anything about Trump at this point, this probably isn’t for you. However, I am open to tips on how you stay so far out of main stream news and pop culture.

With that being said, Trump has been on the tariff crusade for decades. While a primary aim today is China, at one point Japan had his ire. And the result can help shed some light on his predictions and complaints today.

Trump made bold claims about the United States’ economic relationship with trading partners and U.S. and trade policies for decades. Many of which haven’t aged well. Back in 1988, during an appearance on The Oprah Winfrey Show, he criticized Japan for what he saw as unfair trade practices. He said, “I’d make our allies pay their fair share… Something’s going to happen over the next number of years with this country because you can’t lose $200B. And yet we let Japan come in and dump everything right into our markets. It’s not free trade… They are beating the hell out of this country… It’s a joke.”

A year earlier, in a full-page New York Times ad on September 2, 1987, he declared, “It’s time for us to end our vast deficits by making Japan, and others who can afford it, pay.”

The result? Japan’s economy did not continue to dominate. On the contrary, it collapsed. Starting in December 1989, the Japanese asset bubble burst, triggering what's now known as the "Lost Decade," a long period of stagnation and deflation. Far from continuing to “beat the hell out of” the U.S., Japan entered a multi-decade economic slump.

In hindsight, Trump’s warnings about Japan weren’t just off, they missed the larger forces at play in Japan’s overheated financial system and the US economy’s strength. A good reminder that bold rhetoric doesn’t always translate to accurate forecasting.

Peter Navarro: Senior Counselor to the President for Trade and Manufacturing

Peter Navarro is an economist with a Ph.D. from Harvard and spent over 25 years as a professor at the University of California, Irvine. He became a key figure in U.S. economic policy during the first Trump administration. Originally an academic who specialized in economics, energy policy, and environmental issues, he also made several unsuccessful attempts to enter politics, including five failed campaigns for Mayor of San Diego as a Democrat. Navarro has authored multiple books critical of China’s trade practices, most notably Death by China, which later became a documentary. That documentary reportedly caught the attention of Jared Kushner, Trump’s son-in-law, while he was browsing Amazon. According to Vanity Fair, Kushner cold-called Navarro, which led to Navarro joining the 2016 Trump campaign. While Vanity Fair isn't always the most neutral or accurate source, the basic story has been widely circulated since 2019 and has not been disputed.

Once in the administration, Navarro was appointed Director of the Office of Trade and Manufacturing Policy. He played a major role in shaping Trump's trade agenda, especially the push for tariffs and a tougher stance on China. He also served as the Defense Production Act policy coordinator during the COVID-19 pandemic, where he pushed for reshoring manufacturing and strengthening U.S. supply chains. His aggressive tariff proposals were reportedly reined in at times by Gary Cohn, then Director of the National Economic Council.

Despite his influence, Navarro has faced criticism on several fronts. He appears to have no hands-on business experience and has spent nearly his entire career either in academia or running unsuccessful political campaigns. More importantly, he also damaged his credibility by fabricating a fictional expert named “Ron Vara” and quoting him in his own books to support his views. His first book, The Policy Game (1984), claimed that America was at a turning point where growth and prosperity were no longer possible. A dire prediction that hasn’t held up well over time. Navarro was released from prison in July 2024 after serving four months for defying a congressional subpoena related to the January 6th investigation.

Howard Lutnick: United States Secretary of Commerce

Howard Lutnick is a prominent businessman best known for his long leadership at financial services firm Cantor Fitzgerald, where he began his career in 1983 under the mentorship of founder B. Gerald Cantor. He quickly rose through the ranks and became President and CEO in 1991, later taking on the role of Chairman in 1996 after Cantor’s death. His succession came after a legal dispute with the Cantor family, following changes Lutnick implemented while Cantor was hospitalized.

Under Lutnick’s leadership, Cantor Fitzgerald expanded significantly. He oversaw the creation of BGC Partners and Newmark Group, which grew into major players in financial technology and real estate services. He is also widely recognized for guiding the firm through its darkest chapter, rebuilding it after the September 11 attacks, in which 658 Cantor employees were killed, including his brother.

In 2025, after decades in the private sector, Lutnick stepped down from his corporate roles to become the 41st U.S. Secretary of Commerce under President Donald Trump.

Scott Bessent: United States Secretary of the Treasury

Scott Bessent is a veteran investor and hedge fund manager with a long track record in global finance. After graduating from Yale University in 1984, he began his career at firms like Brown Brothers Harriman and Kynikos Associates. In 1991, he joined Soros Fund Management and quickly rose to lead its London office. He played a key role in the firm's famous 1992 bet against the British pound. A trade that earned over $1 billion and became one of the most legendary/infamous moves in hedge fund history.

Bessent later launched his own hedge fund, Bessent Capital, and later returned to Soros Fund Management as Chief Investment Officer from 2011 to 2015. After which he founded Key Square Group, a macro-focused investment firm backed by George Soros.

In 2025, Bessent shifted from finance to public service, becoming the 79th U.S. Secretary of the Treasury under President Donald Trump. Bringing with him deep experience in currency markets, macroeconomics, and global capital flows.

This is the sales team Trump has appointed to sell the tariffs to the public, so we will use their sales pitch(es) to track if the administration is delivering what it claims.

Honestly, just watch a few minutes of an interview with each in which they have time to state the goals and answer a few questions. Most come away with a pretty clear idea of who knows what they are talking about and who the charlatans are, even if you do not know much about finance. If you have issues with this, just ask yourself at the end of each answer they provided if the question was answered with specifics or dodged with low intelligence sayings like “not fair.”

The good news at the moment is that it now appears as though Bessent is taking on more of a leadership role in communicating and negotiating tariffs. Based on upon how he, Lutnick, and Navarro have performed up to this point, this is the best possible outcome.

The more Navarro and Lutnick are sidelined, the better. This is especially true of Navarro.

In the next post we will dive into the claims being made to justify the tariffs, and what each has said success will look like.

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