Zerohedge

AI & Crypto Czar David Sacks warns that Elon Musk’s efforts to expose waste and abuse at the Department of Government Efficiency (DOGE) may be futile unless Congress significantly reduces federal spending.

“What we really need is for Congress to now embrace all of the corruption that Elon has found and eliminate it from the budget, because at the end of the day, in order to capture the savings here, we do need those appropriations eliminated from the budget,” Sacks said on the All-In podcast. 

.@DavidSacks: “What we really need is for Congress to now embrace all of the corruption that @elonmusk has found and eliminate it from the budget, because at the end of the day, in order to capture the savings here, we do need those appropriations eliminated from the budget.” pic.twitter.com/BJbk4GSm0A

— Josh Caplan (@joshdcaplan) April 26, 2025

Sacks warned that the real danger isn’t Musk backing down, but Congress slipping back into its entrenched pattern of reckless spending.

“These old bulls in Congress who control the appropriations process—are they going to basically backslide and just put the spending back in because it’s easier to engage in this logrolling, or do we take advantage of this?” he asked.

Sacks emphasized the immense personal cost Musk has borne to reveal systemic corruption, citing the widespread protests targeting Tesla properties.

“This has cost him enormously. One of the reasons why Tesla is down is because you’ve had crazy leftists engaging in terrorism, firebombing Tesla dealerships,” the Trump official said. “We’ve basically learned that this whole NGO thing is a giant scam where the people in government give enormous amounts of money to their friends, probably with the expectation that when they leave government, they’re going to be next in line at the trough.”

Since Musk took the helm at DOGE, Tesla has been under siege from a wave of protests and brazen acts of vandalism across the U.S. and beyond, with far-left activists resorting to arson, gunfire, and defacing dealerships, vehicles, and charging stations with hateful graffiti. The so-called “Tesla Takedown” movement has orchestrated demonstrations at hundreds of Tesla locations, pushing an anti-DOGE agenda to tank Musk’s company by calling for mass sell-offs of Tesla stock and boycotts of the brand.

Sacks then stressed that while Musk has laid bare the government’s dysfunction, without decisive action from Congress to slash spending, his efforts risk being squandered.

“Elon’s done an enormous service exposing this. But it’s not entirely up to him. In order for us to realize the benefit, we need Congress now to act on that. I’m afraid that’s not going to happen,” he warned.

In March, President Donald Trump threw his support behind a rescission package to implement major spending cuts spearheaded by DOGE. “It would be great. I think we’re going to do that,” Trump told reporters.

According to a memo from the Office of Management and Budget (OMB) obtained by the New York Post, the administration is pushing two proposals to slash $9.3 billion. “The first includes a rescission of $8.3 billion in wasteful foreign aid spending (out of $22 billion) that does not expire in Fiscal Year (FY) 2025. The second is a separate rescission of all Federal funding for the Corporation for Public Broadcasting (CPB) — which funds the politically biased public radio and public television system,” the Post said.

Update (2225ET): To the surprise of nobody (aside from a few excited folks about three hours ago), Canada’s liberal party has won Monday’s national elections – with voters electing Mark Carney to a full term as the next Prime Minister according to national broadcaster CBC/Radio Canada.

That said, as of this writing it’s too soon to say whether the Liberals will hold a minority or a majority.

The full results will be available later this evening or early Tuesday.

*  *   *

With Canada’s Atlantic polls now having closed in what will be a deeply consequential election, odds for conservative candidate Pierre Poilievre have begun spiking after conservative turnout was reportedly “larger than expected,” according to betting market Kalshi.

Update (2127ET): After some momentary excitement based on a reported ‘larger than expected’ turnout at Canadian polls, betting market odds for conservative candidate Pierre Poilievre have fallen back to the low 20% range. 

🇨🇦 New election results (15% Reported

🔴 Liberal 51%
🔵 Conservative 40%
🟠 NDP 4%

— Political Polls (@PpollingNumbers) April 29, 2025

Stay tuned for more…

 

Earlier, Polymarket odds were as high as 48% for Poilievre – dropping to a 30% chance as of this writing – but nevertheless in sharp contrast to the 20% odds he’s been hovering around all week.

Only to reverse lower (as seen on this 6h chart)…

You can track the odds in realtime below:

We’re guessing Carney takes it, but there was still money to be made for those who partake…

Poilievre may be worth a punt at 20% pic.twitter.com/9DD6mPQWvF

— zerohedge (@zerohedge) April 25, 2025

*  *   *

In late March, the Supreme Court upheld a Biden administration rule regulating so-called ghost guns — unserialized firearms — delivering what initially appeared to be a victory for billionaire-funded gun control groups, anti-Second Amendment Democrats, and their allies in the corporate media. However, the ruling has inadvertently opened a new frontier for DIY firearm kits, alleges one ghost gun maker.

The high court’s ruling in Bondi v. VanDerStok (originally Garland v. VanDerStok, but renamed after a new Attorney General was appointed) was a 7–2 decision upholding the rule issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) requiring ghost gun makers to include serial numbers on kits and conduct background checks on purchasers.

According to Defense Distributed’s Cody Wilson, the March 26th opinion, written by Justice Neil Gorsuch, was a master class in judicial hand-waving—a carefully worded evasion that accidentally set a new standard even stronger than Chevron for upholding administrative agency actions while quietly greenlighting the next evolution of DIY firearm kits.

In Wilson’s view, the high court’s ruling did not ban ghost guns but instead inadvertently provided a roadmap for how the industry can survive — and even thrive.

Parsing through Gorsuch’s opinion, Wilson cited a few lines from pages 11 and 12 that show the DIY firearm kit industry is far from dead:

On page 11:

In the same way and for the same reason, an ordinary speaker might well describe the “Buy Build Shoot” kit as a “weapon.” Yes, perhaps a half hour of work is required before anyone can fire a shot. But even as sold, the kit comes with all necessary components, and its in-tended function as an instrument of combat is obvious. Really, the kit’s name says it all: “Buy Build Shoot.”

On page 12:

That turns out to tell us all we need to know about the statute’s “ready conversion” test. As we have seen, a person without any specialized knowledge can convert a starter gun into a working firearm using everyday tools in less than an hour. Mullins, 446 F. 3d, at 755. And measured against that yardstick, the “Buy Build Shoot” kit can be “readily converted” into a firearm too, for it requires no more time, effort, expertise, or specialized tools to complete.

“Although the plain text in this opinion is intended more as an admonishment of Polymer80, which had become the ghost gun industry’s largest single success story, it also undermines the ATF’s purposely vague “tests” for determining when components have or have not become firearms,” Wilson said, adding that ghost gun kits are not dead after the ruling – just the high court saying kits must be:

1. Require more than an hour of effort and work

2. Involve uncommon tools to complete, and;

3. Lack all necessary components to be built into a functioning weapon

On Saturday, Defense Distributed debuted the next iteration of DIY firearm kits that fit the new definitions of the high court’s ruling. The new ghost gun is called the “G80.”

This kit was unveiled at the NRA Convention in Atlanta.

Meanwhile, everyone thought ghost guns were dead… 

Authored by Jeff Louderback via The Epoch Times (emphasis ours),

For avid supporters, the Make America Healthy Again (MAHA) movement itself is not new. It began long before Robert F. Kennedy Jr.’s presidential campaign and subsequent confirmation as health secretary.

“The principles of the MAHA movement were once a way of life all over the country decades ago,” Samantha Rayburn, a 40-year-old mother of two teenage sons, told The Epoch Times.

“It’s encouraging to see more people adopting those beliefs and understanding that God gave us what we need to feed our bodies and heal our bodies. With how sick and unhealthy we are as a society, this return to the basics is needed.”

Rayburn developed an interest in foraging for herbs and plants when she was a little girl and was inspired to make her first tincture when her oldest son caught whooping cough when he was 2.

She describes the MAHA movement as “a return to the basics.”

“It’s getting back to when we knew what was in our food because we grew it and got what we didn’t have from local farmers,” said Rayburn, who lives in southern Ohio.

“RFK Jr. and MAHA have made what many of us believe in more mainstream. People are now contacting me and wanting to learn more about herbs. I don’t seem so crazy anymore.”

She was referring to her business, Hadassah’s Herbs for Health and Healing.

When Kennedy delivered a speech in August 2024 announcing that he was suspending his campaign and backing then-former President Donald Trump, he said that Trump was giving him the opportunity to help make America healthy again.

What followed was a social media frenzy with “Make America Healthy Again” and “MAHA” hashtags. MAHA the acronym was born.

New Jersey-based Jacqueline Capriotti volunteered for Kennedy’s campaign and has championed gardening for food.

She now heads the Victory Garden Alliance, which encourages people, communities, and organizations to grow their own food.

“There is a revival in growing our own food, supporting local farms, and knowing what’s in our food. Bobby and the MAHA movement have catapulted that interest,” Capriotti told The Epoch Times.

* * * 

Check out our ZH x Beef Initiative MAHA pre-launch… put clean food into your body direct from the ranch 

* * *

“We need this. Our kids need this. It’s important they understand how food is grown and where it comes from. That will inspire healthier new generations because they will become smarter consumers.”

She calls what is happening with the MAHA movement a “health revolution.” She is working to educate elected officials and political candidates.

“Many of us who worked on the presidential campaign didn’t stop our objectives when it ended. That’s an example of how MAHA is a movement not tied to one person,” Capriotti said.

As health secretary, Kennedy has a mandate to fight chronic disease, improve children’s health, and address corporate influence on government agencies. He has pledged to remove toxic chemicals from the nation’s food supply, increase transparency, improve vaccine safety, and make significant changes to the Food and Drug Administration, the National Institutes of Health, and the Centers for Disease Control and Prevention—operating divisions within Health and Human Services.

These plans, along with encouraging Americans to grow their own food and buy meat and produce from farmers who do not use pesticides and toxins, are among the initiatives of the MAHA movement.

Jeffrey Rose is a New York-based sleep specialist, hypnotherapist, and addiction recovery coach who helped raise funds for American Values 2024, the Kennedy-aligned super PAC, during his presidential campaign. He said that the “passion for change” instilled during that time has motivated many volunteers to continue their efforts on MAHA issues that are important to them—himself included.

Rose is currently focused on what he calls a health issue that needs more discussion and emphasis—more sleep for high school-age children.

He is the New York state legislative coordinator for Start School Later, an organization composed of clinical professionals working to change start times in U.S. high schools.

Rose said volunteers for the Kennedy presidential campaign came from all backgrounds.

“We had Republicans, Democrats, libertarians, and independents,” he said. “We had people who are passionate about removing chemicals from our food, people who advocate for informed consent, vaccine safety, and medical freedom. We had people who embraced Kennedy’s mission to end corporate capture of government health agencies, and people who believe in holistic medicine and clean eating.”

Calley Means has advised Trump and Kennedy on health care policy and currently serves in an advisory role to Kennedy.

He said he believes that it’s the grassroots efforts of advocates and groups nationwide that will help get results.

“This movement has energy and impatience, and both are strengths,” Means said.

He is the founder of True Med, a platform that aims to enable people to use health savings accounts and flexible spending accounts for expenses related to healthy living.

“This is a long-term plan, and it will take time and persistence to keep getting wins. I believe MAHA is a sustained movement that will outlast Bobby Kennedy and President Trump” he said.

“Truly revolutionizing our agriculture system and health care system is a long-term journey.”

Del Bigtree, host of “The HighWire” and founder of the Informed Consent Action Network, served as communications director during Kennedy’s campaign. He is now CEO of the MAHA Action PAC, which advocates for policies such as vaccine safety information transparency, improved access to holistic health care, examining the food industry, and addressing corporate influence on government health agencies.

The PAC is also debuting a national directory of physicians who are pro-MAHA and prioritize lifestyle adjustments over prescription drugs.

The organization has a database that tracks proposed health-related legislation in states nationwide—as well as which legislators support it.

“There is a time we need drugs and surgery, but those times mean something went wrong,” Bigtree told The Epoch Times. “How do we prevent more people from having health conditions? How can we inspire them to change their lifestyle so they don’t have to get to the point where they need those drugs and surgeries? That is part of MAHA Action’s focus.”

“MAHA is not and should not be limited to what happens in government,” he said. “There must be public education and public pressure on the government to get long-needed results.”

Jeff Hutt, a former national field director for the Kennedy campaign, is now the outreach director for the Make America Healthy Again PAC, which was founded by a dozen former senior presidential campaign staff members.

Initially, the PAC focused on getting Kennedy confirmed by the Senate as health secretary. Hutt said the organization now concentrates on supporting candidates at the state and local levels who embrace the MAHA platform.

The work includes state-level activity to encourage the passage of MAHA-friendly bills and the election of pro-MAHA candidates.

“Americans are disillusioned with Washington, D.C., and since COVID, there has become a growing understanding that, to make substantial change, you need to think local. Take action in your own town and your state,” Hutt said.

“What’s going on in every state across the country—with no connection to Secretary Kennedy—is driving the MAHA movement outside of the Trump administration.”

During Kennedy’s confirmation process, groups such as MAHA Action, the MAHA PAC, the American Values PAC, and Stand for Health Freedom flooded senators with phone calls, emails, and letters urging them to support the nominee.

Sayer Ji, chairman and co-founder of Global Wellness Forum and founder of GreenMedInfo.com, also co-founded Stand for Health Freedom, a nonprofit that advocates for informed consent, parental rights, religious freedom, freedom of speech, and privacy.

“The grassroots movement behind Robert F. Kennedy Jr.’s confirmation fight proves that real change rises from the ground up,” Ji told The Epoch Times.

“While senators parroted pharmaceutical talking points and corporate interests worked to silence him, it was the people, the increasingly vocal, once-silent majority, who stepped up. They reminded the establishment that political survival depends not on industry dollars but on the will of the people.”

Ji said the MAHA movement has a broad focus and is here to stay.

“It’s about reclaiming medical freedom, bodily autonomy, and the right to informed choice,” he said. “It’s no longer a niche issue; it’s a demand for accountability, transparency, and an end to policies that put profit over people.

“The future of MAHA is in the hands of this awakening majority.”

A gang of car thieves — attempting to copy the Nicolas Cage film “Gone in 60 Seconds” — burglarized homes and stole luxury vehicles across the New York–New Jersey area, cramming the stolen cars into shipping containers bound for third-world West African countries.

New Jersey Attorney General Matthew Platkin charged 11 individuals with stealing 43 luxury vehicles, including Land Rovers, Mercedes-Benzes, and BMWs, valued at $3.65 million.

West African gang tied to stealing more than 40 cars in New Jersey.pic.twitter.com/3cXsn2qkt2

— DOGE News (@DOGE__news) April 28, 2025

“While car thefts in New Jersey have decreased significantly over the past year and have continued to decrease in 2025, we are committed to reducing them further. This case is about more than just the theft of vehicles, it is about stealing people’s sense of security and safety,” said Attorney General Platkin.

Division of Criminal Justice Director Theresa Hilton called the theft “a complex criminal enterprise that specifically targeted and stole high-end vehicles to be shipped to overseas buyers. Working together, we were able to charge these defendants with serious crimes carrying lengthy prison sentencing exposure.”

“This case reflects how car theft today is a global enterprise,” Bronx District Attorney Darcel D. Clark said, adding, “Millions of dollars worth of stolen vehicles—including a $475,000 Rolls Royce—were taken to a Bronx parking garage that defendants used as a showroom. The vehicles wound up in shipping containers in Elizabeth and then in West Africa. My Office, specifically, Assistant District Attorney Jessica Lupo, a Deputy Chief in the Trial Division, worked with NYPD Auto Crime and NJ Attorney General Matthew Platkin to identify and dismantle this group. We will not tolerate auto crime in the Bronx.”

“Theft crews were paid for the stolen vehicles with cash from money wired from West Africa to the mid-level and high-level fences,” Attorney General Platkin said, noting that all defendants are charged with first-degree racketeering. 

Attorney General Platkin charged the following defendants: 

Jahquil Louis, 19, and Daniel Deleon, 18, both of Newark; Jomar Ocasio, 19, of Belleville, Quadir Williams, 21, of Riverdale, Mamadou Camara, 29, Moussa Doumbia, 22, Arona Amadou, 35, Mouslim Ouedraogo, 32, Moubarak Djibril, 23, all of Bronx, New York; Issa Yara, 38, of Manhattan, and an 18-year-old from Scranton Pennsylvania who was a juvenile at the time of their arrest.

Organized criminal groups across the Mid-Atlantic and Northeast have targeted luxury cars for years, using major ports on the East Coast to ship these vehicles to West Africa.

In addition to these groups targeting cars, under the Biden-Harris regime, illegal alien criminal gangs targeted wealthy suburban neighborhoods across the country.

The Trump administration has reestablished a big focus on law and order nationwide by deporting criminal illegal aliens, while Democratic lawmakers and left-leaning judges have sought to block these deportations at every turn.

Authored by Spencer Morrison via American Greatness,

The free trade brigade obsesses over economic minutiae – they cry that tariffs will raise the cost of plastic spatulas by 50 cents! 

What a disaster!

Who cares?

The reality is that trade with China is not in America’s interests because it funds our greatest rival. 

Here’s how America funded China’s rise, and why tariffs will help keep America safe and free.

A Dragon Fed: How America Funded China’s Rise

Economists say freer trade benefits everyone—even trade with China. America gets cheap goods and China gets money. Win-win.

Even if we assume America benefits, which is a false assumption as proven in my book Reshore, China has clearly benefited more. For example, China’s economy has grown by an average of 8.12% since joining the World Trade Organization in 2001—about four times greater than America’s. China and America benefited asymmetrically from trade.

Asymmetry may not be a problem economically, but it is a problem politically. Why? Power is zero-sum. The stronger China grows, the weaker America becomes relative to China. As such, trade with China is also a political issue. The question we should be asking ourselves is whether cheap goods are worth surrendering America’s political dominance.

To be clear, trade is not the only way that America has funded China’s rise. There are three primary ways that America enriches and empowers China: investment, trade, and theft.

First, America invested directly in China by building factories—offshoring 60,000 factories does not come cheap. The total value of American investment in China is unknown. According to China’s Ministry of Commerce, cumulative foreign direct investment (“FDI”) totalled $2.7 trillion in 2023. Just 2.1% of this investment was categorized as American.

The reason that this amount is so low is because American investment is usually routed through intermediaries, mostly Hong Kong, Singapore, and the British Virgin Islands. This is why Hong Kong—a city smaller than Shanghai—owns 68% of FDI in China.

Not coincidentally, Hong Kong is a major recipient of FDI from the U.S. and from the British Virgin Islands—a tiny banking archipelago that is itself capitalized by the U.S. and the City of London. Because of this shell game, we cannot know the actual amount American companies have invested in China, but if we assume that FDI correlates with the relative size of China’s trade surpluses, then America’s investments total $972 billion.

This estimate is probably low. Why? China runs trade surpluses with countries that clearly contributed no investment, such as most countries in Africa and the Middle East. Given the level of economic integration, I would hazard an estimate that most FDI ultimately originated in America or the City of London, funneled through their banking havens.

Second, America indirectly funded China’s rise through the trade deficit, buying more Chinese goods than we sold. The cumulative trade deficit with China since 2001 is roughly $6 trillion, after accounting for inflation. 

Not only were the Chinese able to spend these profits, but they were also able to borrow against the revenue, greatly multiplying their access to capital.

Third, China has stolen an almost unquantifiable amount of American technology. In 2017, the Office of the United States Trade Representative estimated that China steals intellectual property worth between $225 and $600 billion per year, more than the value of the annual trade deficit. If we use the low estimate and do not adjust for inflation, the value of stolen technology would be at least $5.4 trillion.

Interestingly, the above numbers actually undervalue the quantity of this theft. Why?

Because most of the technological and IP outflows are not stolen in a traditional sense. For example, the main vector of technological transfer is via Chinese companies using their profits from the trade deficit to buy shares in American companies, at which point they own the technology. Currently, foreigners own 17% of American equities, and the number is growing.

The other vector is through Sino-American corporate partnerships. Basically, American companies that build factories in China are forced to partner with a local Chinese company, a corporate clone. The plant is staffed by Chinese workers, who are taught America’s industrial processes and how to replicate American technology.

Providing China access to American technology is actually the price to enter China’s market—American companies cannot operate in China without giving up their technological and industrial secrets. Yet they do it anyways because the Chinese make it worth their while.

In my view, the value of America’s stolen technology was priceless.

Remember, mainland China’s economy was largely preindustrial—about as productive and technologically advanced as the Thirteen Colonies during the American Revolution. Now, China has reached technological parity with the U.S. Theft allowed China to skip 200 years of technological and economic development.

America funded China’s rise. This has not only impoverished America, but it has also ended America’s superpower era. We now live in a multipolar world, bought and paid for by America’s corrupt politicians and Wall Street.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

With Canada’s Atlantic polls now having closed in what will be a deeply consequential election, odds for conservative candidate Pierre Poilievre have begun spiking after conservative turnout was reportedly “larger than expected,” according to betting market Kalshi.

Earlier, Polymarket odds were as high as 48% for Poilievre – dropping to a 30% chance as of this writing – but nevertheless in sharp contrast to the 20% odds he’s been hovering around all week.

You can track the odds in realtime below:

Poilievre may be worth a punt at 20% pic.twitter.com/9DD6mPQWvF

— zerohedge (@zerohedge) April 25, 2025

Stay tuned for updates…

Authored by Victor Davis Hanson via American Greatness,

After only a hundred days, the Trump counterrevolution has made quite miraculous progress on the border, illegal immigration, cost-cutting, curbing the DEI/woke revolution, and a historic Ukrainian War settlement.

The pushback to this multifront effort from the left has been formidable, if not hysterical. The greatest fury mostly centers around Trump’s efforts to force U.S. trading partners to adopt either reciprocal or no tariffs while obeying international trading norms—an effort aimed at vastly reducing the U.S. trade deficit.

If Trump could cut a proverbial deal in the next 100 days that, say, cut the annual $1.2 trillion trade deficit in half, coupled with multitrillion-dollar foreign investments, then stocks and bonds would settle down.

Wall Street would go back to its traditional platitudes that the trade deficit then would be no higher than the 3-percent-of-GDP red line.

Stocks would then soar in anticipation of the other news of a continuation of tax cuts, more budgetary reductions, robust energy development, and further deregulation.

The U.S. has run a half-century of trade deficits. And now the red ink has climbed to nearly $1.2 trillion, the largest in history. 

Yet for all practical purposes, only a few entities account for most of an astronomical sum. And they all have corollary concerns to the U.S. that make their surpluses part of larger problems.

The administration can accurately talk about “70 nations wanting to deal.” But, in truth, if Trump were to settle with just China, Mexico, Canada, the EU, and the ten-nation Southeast Asian trading bloc (ASEAN), then the so-called trade wars would be over.

Start with our North American partners Mexico ($171.9 trillion surplus) and Canada ($63 trillion surplus) that alone account for over 20 percent of the U.S. trade deficit.

Canada’s surplus is almost entirely attributable to its vast oil and gas sales to the U.S. Almost all its daily oil exports go to the U.S., some four million barrels—as well as half its natural gas shipments.

Canada claims that it sells oil and power at a discount to the northern U.S. It also boasts that its asymmetrical sky-high tariffs on American dairy products and poultry are rarely used if the American exports just stay below certain thresholds. But aren’t thresholds themselves a form of tariff?

Canadian oil deposits are landlocked and far from ports. Canadian crude is heavy, sulfurous, and difficult to refine for many nations’ refineries. In contrast, the huge U.S. market right across the border and the ability of American refineries to handle Canadian crude explain the “discount” better than simple Canadian magnanimity.

Moreover, Canada is one of the stingiest of NATO partners. It is underinvesting in military readiness at only 1.37 percent of its GDP on defense, stonewalling its 2 percent commitment for over a decade.

Should the Trump administration prompt Canada to invest 2 percent in defense—about $41 billion extra—and buy enough U.S. products to cut its surpluses, say, by $10-20 billion of its current $63 billion, a deal could and should be easily reached.

Mexico’s surplus is huge and growing at $171 billion. It is largely created by assembling cars, electronic goods, and appliances sent to it from other countries to enter the U.S. market with reduced taxes.

Trump could ask Mexico to cut that $171 billion in half, particularly given that Mexican cartels funnel an estimated $10 billion to $20 billion annually into the U.S. through drug smuggling. Their drug factories are designed for U.S. export and contribute to the deaths of 60,000 to 100,000 Americans through opioid overdoses.

Add in the $63 billion in untaxed remittances that Mexico’s expatriates send home. Most senders are illegally residing in the U.S. Additionally, many are subsidized by local, state, and federal American entitlements to free up their cash to be sent home.

In other words, like Canada, there are other issues with Mexico transcending trade alone. To even the playing field, Trump could either focus on the cartels, tax remittances, or urge Mexico to buy more U.S. goods in a tripartite effort to reduce the outflow by half.

China’s surplus with the U.S. is the largest at $300 billion. And it is the most difficult to address, given that Chinese global tentacles have compromised dozens of nations. Still, we retain far greater leverage on Beijing than Beijing has on us. But to use such levers—stopping visas to 300,000 students, delisting Chinese out-of-compliance companies from our stock exchanges, curbing all technological transfers that have military applications and key spare parts for their imported goods—we would then enter a veritable Cold War.

Instead, China should use its over $1 trillion trade surplus to raise the standard of living for its own 1.4 billion consumers. But redirecting its export economy would cut back on its geostatic initiatives of massively rearming, the Belt and Road imperialist adventure, and spreading billions of dollars around in the Western world to influence universities and buying up strategic property.

Unless Trump wishes an all-out trade war, he, for now, should aim at reducing the Chinese surplus by $300-500 billion and seek some trade reforms, given Chinese violations of every international commercial canon.

The EU runs up a $235 billion surplus with America—mostly from the surpluses incurred by Germany, Ireland, Switzerland, France, and Italy, which export massive amounts of pharmaceuticals, chemicals, cars, and machinery.

The EU’s socialist and highly regulated member economies grant direct subsidies to industry and agriculture and rely on contorted uses of the VAT tax and asymmetrical tariffs to gain an advantage over U.S. goods. As a rule, the EU ministers despise Trump, are closely allied with the kindred American left, and would likely do nothing to help Trump unless pressured.

In somewhat ironic fashion, the EU suffers a $315 trade deficit with China but then turns around to run up a $235 surplus with the U.S. That circular strategy helps to ensure the EU can still rely on an aggregate $171 billion surplus with the world, again largely due to the U.S.

In the EU’s case, its $235 billion surplus with the U.S. is an inseparable issue from its assumption that the United States’s strategic arsenal and oversized NATO presence have always ensured European continental security.

The U.S. spends the most of the NATO membership on defense and is largely responsible for prodding 24 of the 32 NATO members finally to meet their 2-percent obligations, and timely so given the subsequent Russian invasion of Ukraine.

Unlike the ASEAN countries that are trying to reach Western standards of prosperity by piling up trade surpluses, the EU is struggling to maintain its own wobbling prosperity. Its disastrous energy policies, wide-open borders, massive Islamic immigration, and political paranoia about the rise of populist conservative parties have impoverished Europe materially and culturally.

What can we conclude from this global labyrinth of trade?

Most nations see the U.S. market and its reserve currency as critical to their export industries. They believe America is wedded to libertarian economics and would never impose tariffs similar to their own.

They understand, as do Americans, that a $37 trillion national debt, a $1.2 trillion trade deficit, and a $2 trillion budget deficit are force multipliers of each other and not sustainable. But until those numbers hit critical mass, most nations will remain as eager to keep running up surpluses as Americans have been to borrow and spend.

So, what is the logic behind Trump’s loud art-of-the-deal trade gambits?

He wants our “friends” and “allies” to seek reciprocity defined either as symmetrical or no tariffs, some reductions in their trade surpluses, and greater investment in the U.S.—in preference, of course, to a trade war.

For belligerents like China, Trump seeks to coerce it to follow global rules of commerce that it flaunts with impunity to run a global mercantile system based on technology theft, asymmetrical tariffs, espionage, and its loan-sharking Belt and Road initiatives designed to pry away nations from the Western orbit.

Will the Trump trade and tariff strategy work?

It can if it follows some simple dos and don’ts.

1.  Trump knows that other nations privately concede they are taking advantage of the U.S. and are willing to renegotiate – if Trump shows them some deference, cools somewhat the “rip-off” language, and settles for gradualism. He has the moral high ground. 

To win his current tariff standoffs, he needs not achieve instant trade parity, but perhaps instead only prod nations to cut their particular deficits with the U.S. in half, with a schedule of more parity and further surplus reductions to come.

2.  The U.S. economy is not in recession. Job growth, stable prices, increased energy production and low prices, and corporate profits were all encouraging in March and April. News of an impending budget bill that extends tax cuts and deregulates, along with trillions of dollars in new foreign investments and budget discipline, will all fuel stock markets.

And what a funny stock market cohort—the 10 percent who own 93 percent of the nation’s stock market capitalization! From May through August of last year, investors boasted that they had hit 40,000 in the Dow Jones.

Now, less than a year later, their portfolios are back at 40,000. And yet still they moan that they lost trillions of dollars in March. These strange people apparently believe that the highest stock market peak is encased in amber as their God-given permanent profit. (They should try farming where commodity prices remain volatile and can wipe out a grower in a season if prices collapse and often do—and sometimes do not return to previous highs for years on end.)

3.  The world may fear China, but it hates it even more, given its commercial bullying, trade mercantilism, autocracy, and military buildup. 

For all their double-dealing, the Europeans and our Asian partners will come to appreciate that someone is finally risking it all to bridle China into following global rules while deterring its expanding military.

4.  Trump might wish to pivot to a “tragic” style of discourse. He can remind the world he inherited a $3-billion-a-day interest tab on a growing $37-trillion national debt, fueled by $2-trillion budget deficits, which are all force multipliers of the effects of an annual $1-trillion trade deficit.

In other words, he did not want to lay off employees at home, slash programs, or badger and provoke our friends abroad. But at least in the past quarter-century, no president has made any progress on any deficit and debt front. So, Trump can admit he had no choice given the magnitude and variety of the red ink and America’s impending rendezvous with financial Armageddon.

5.  There may be one important taboo.

Trump might curb talk of “revenue,” as if we can return to the pre-income tax age, prior to 1913, when federal revenue came largely from tariffs.

Today’s tariffs prior to 2025 account for only $77 billion of the total annual revenue of $5.27 trillion. Even the most optimistic estimates suggest $1-3 trillion in new Trump tariff income over the next decade, with the new proposed trade policies. That might mean some $100-300 billion more per year—a fraction of our current aggregate annual income.

But far more importantly, the American people will stick with Trump if they believe we are victimized by predatory nations whose asymmetrical tariffs deliberately run up surpluses with the U.S.

They want to see the Trump trade war as an effort to obtain either similar or no tariffs with trade partners and reduce trade deficits. But if the U.S. preempts and raises higher tariffs on those with whom we now run surpluses (like the U.K. and Australia) or brags that we can become rich from tariffs (at other nations’ expense), then the administration will lose the moral high ground, and the people will not support his cause.

In sum, Trump will win this tariff spat if he sticks to “parity” and “fairness” and downplays talking about gargantuan “profits.”

A $60 million fighter jet has been “lost” at sea at a moment American naval assets under US Central Command have been conducting bombing campaigns against Yemen’s Houthis since March 15.

But as far as what’s being reported from the Pentagon, the jet wasn’t shot out of the sky during operations – it apparently rolled off an aircraft carrier. 

The US Navy F/A-18 Super Hornet fighter jet “fell overboard from the USS Harry S. Truman aircraft carrier while it was being towed on board, the Navy said in a statement on Monday,” CNN reports.

Initial reports strongly suggest the mishap was caused due to the Truman carrier having to take sudden evasive action to avoid inbound Houthi fire:

A US official said that initial reports from the scene indicated that the Truman made a hard turn to evade Houthi fire, which contributed to the fighter jet falling overboard. The Houthi rebel group claimed on Monday to have launched a drone and missile attack on the aircraft carrier, which is in the Red Sea as part of the US military’s major anti-Houthi operation.

A naval crew member had been able to jump off the jet at the last minute when the accident occurred as it was being towed out of the hanger bay. One sailor reportedly sustained minor injury.

The Houthis said Monday they launched a fresh attack targeting the Truman carrier, following many other such claimed attacks. This appears to be the first time the US Navy has linked damage aboard a warship with an inbound Houthi assault (albeit somewhat indirectly). A prior incident involving ‘friendly fire’ against a US jet also resulted in the aircraft’s loss (see below).

“The F/A-18E was actively under tow in the hangar bay when the move crew lost control of the aircraft. The aircraft and tow tractor were lost overboard,” a US military statement said. “Sailors towing the aircraft took immediate action to move clear of the aircraft before it fell overboard. An investigation is underway.”

Suggests Truman carrier group is under Houthi fire more frequently (and with a greater impact) than is being publicly acknowledged. https://t.co/Vs2MZYRzJt

— Gregory Brew (@gbrew24) April 28, 2025

The aircraft has sunk in the Red Sea, at a loss of at least $60 million. The US Navy sought to emphasize Monday that the strike group and its air wing “remain fully mission capable.”

This is the second known F-18 jet lost at sea related to the US patrolling regional waters in the wake of the Gaza War:

The Truman has repeatedly been targeted in attacks by the Iran-backed Houthis in Yemen. It made headlines in February when it collided with a merchant ship near Egypt; no injuries were reported. Another F/A-18 from the Truman was also “mistakenly fired” upon and shot down by the USS Gettysburg in the Red Sea in December ; both pilots ejected safely.

All of this brings up the possibility that US warships have suffered direct hits in the past, but the Pentagon has kept it quiet…

Amid news that an F/A-18E fighter jet made a hard turn to evade Houthi fire and fell overboard, worth noting: the Houthis have claimed direct hits on the USS Truman aircraft carrier, and Hezbollah’s Al-Manar aired footage it claims shows parts of the ship damaged and draped over. https://t.co/sbTUQLpoAp pic.twitter.com/OIOKpbYseS

— Sina Toossi (@SinaToossi) April 28, 2025

Given these ‘close-calls’ and mishaps due to the chaos of the fight with the Houthis – which it should be noted is military action still not approved by Congress – it is perhaps only a matter of time until a bigger, more direct clash and incident. Thankfully, no US aviators or sailors have been killed or seriously wounded so far.

In our preview of today’s Treasury borrowing estimate release, we said that we expect the Treasury to announce $507bn in Q2 borrowing, a “figure much higher than Treasury’s estimate of $123bn in February” and entirely due to a lower starting cash balance, which as regular readers know, has collapsed due to the debt ceiling impasse that has forced the Treasury to draw down on its TGA (cash) balance as well as use various extraordinary measures.

We were off by a tiny $7 billion, $507BN vs $514BN as per the table below:

At 3pm ET, ahead of Wednesday’s Refunding statement, the Treasury published its debt borrowing estimates for calendar Q2 and Q3 and it was just as expected:

• During the April – June 2025 quarter, Treasury expects to borrow $514 billion in privately-held net marketable debt, assuming an end-of-June cash balance of $850 billion. The borrowing estimate is $391 billion higher than announced in February 2025, primarily due to the lower beginning-of-quarter cash balance and projected lower net cash flows, partially offset by lower QT (i.e. debt redemptions) to the tune of $60 billion. 

The above was completely expected, which means it is completely distorted due to the ongoing debt ceiling standoff. This is what we said earlier:

Treasury issuance in Q2 will most likely end up short of the estimate if the debt ceiling remains unresolved this quarter. Similarly, Q3 estimate will assume a normal beginning-of-quarter cash balance, but actual issuance could end up materially higher once the debt ceiling constraint is lifted during the quarter and Treasury begins to rebuild its cash balance (and if it isn’t, and the US begins to default, there will be much bigger problems at hand than termed-out debt issuance).

Translation: the Treasury drew down its cash by $444BN from $850BN to $406BN, also as we said in our preview.

What we didn’t say, because we didn’t know it (and neither did anyone else), is what the Treasury reported as an endnote to its borrowing needs paragraph, namely that “the current quarter borrowing estimate is $53 billion lower than announced in February” which indicates that DOGE is indeed working and the US funding needs are actually declining. 

To be sure, this also should not be a huge surprise, because as we also reported just before the Treasury press release, “fiscal flows year-to-date are coming in better than expected (thank you DOGE). Gross receipts are tracking slightly above prior-year levels (adjusted for CBO forecasts for 2025), while outlays are closer to the bottom of the historical range, although sadly nowhere near enough to make a notable impression over the long-term.”

And while fiscal flows could deteriorate in the coming quarters – especially if there is a sharp recession – that risk is largely viewed as relatively low, for now. Meanwhile, DB economists estimate the deficit impact from TCJA extension and other Trump proposals could be largely offset by higher tariff revenues this year, before the deficit widens out more substantially relative to the CBO baseline next year and onward.

Looking ahead to calendar Q3, or the July – September 2025 quarter, the Treasury now expects to borrow $554 billion in privately-held net marketable debt, assuming an end-of-September cash balance of $850 billion. It remains unclear if the Treasury will be able to restore cash to its “runrate” balance of $850BN, as that will depend entirely on when the debt ceiling deal will be concluded. As a reminder, earlier we highlighted the thoughts of DB’s Steven Zeng who moved
his x-date estimate from late July to mid-August, indicating that there is a modest buffer, but not enough to push the debt ceiling date into Q4 without major damage.

Finally, looking at the historical data, during calendar Q1 which ended March 31, 2025 quarter, the treasury borrowed $369 billion in privately-held  net marketable debt and ended the quarter with a cash balance of $406 billion. In February 2025, Treasury estimated borrowing of $815 billion and assumed an end-of-March cash balance of $850 billion. The $446 billion difference in privately-held net market borrowing resulted primarily from the lower end-of-quarter cash balance. However, excluding the lower than assumed end-of-quarter cash balance, actual borrowing was $2 billion lower than announced in February.

In other words, DOGE is working: in Q1, US debt funding needs were $2BN less than the Treasury forecast in February, and in Q2 the Treasury is expected to need $53 billion less than it forecast 3 months ago.

This unexpected drop in pro forma debt issuance (because one way or another, the debt ceiling constraint will go away), may be the reason why yields have been sliding all day, and at 4.21% are at session lows.

Source: US Treasury