Zerohedge

President Donald Trump doubled down Sunday on his plan to use tariff revenue to slash – and possibly eliminate – income taxes for millions of Americans.

The former president took to Truth Social to tout his vision, claiming that his sweeping tariffs could lead to big tax breaks for workers making under $200,000 a year.

“When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year,” Trump wrote.

The bold pledge comes as public anxiety grows over the economic fallout from Trump’s aggressive trade policies, which have rattled global markets and fueled fears of higher prices at home.

In the weeks since Trump slapped so-called reciprocal tariffs on dozens of countries – including a staggering 145% levy on Chinese goods, economists have sounded the alarm that the tariffs could backfire, hurting American consumers more than foreign rivals.

That said – not everyone’s excited after Trump told TIME Magazine in the April 25 edition that he “love[s] the concept” of raising taxes on millionaires as a means of paying for an extension of the 2017 tax cuts.

“I certainly don’t mind having a tax increase,” Trump told TIME. 

“I would be honored to pay more, but I don’t want to be in a position where we lose an election because I was generous, but me, as a rich person, would not mind paying and you know, we’re talking about very little.”

He said it would involve raising taxes on the wealthy to “take care of [the] middle class.”

“But I don’t want it to be used against me politically, because I’ve seen people lose elections for less, especially with the fake news.”

Former White House strategist Steve Bannon told News Nation’s “CUOMO” on Friday that he supported the idea.

“This is being fought behind closed doors right now, and I’m telling you, with the massive tax cut, in addition, he’s going to give the working class and the middle class, the math only works out if you actually increase taxes on the wealthy,” Bannon said.

The former White House strategist said it could help Trump politically if he decided to run again in 2028, despite the Constitution preventing a third term in the Oval Office.

However, on April 23, the day after he sat down with TIME, Trump told reporters at the White House that raising taxes on the wealthy could be “very disruptive” and could lead to a loss of money for the United States.

House Speaker Mike Johnson dismissed the idea in an interview with Fox News.

“I’m not in favor of raising the tax rates because our party is the party that stands against that,” Johnson said on April 23.

He acknowledged that the proposal had been discussed as one of many possible ways to permanently implement personal income tax cuts in the Republicans’ final funding package.

“There were lots of ideas thrown out on the table along this process over the last year, but I would just say for everybody, just wait and see,” Johnson said.

A CBS News poll released Sunday found 69% of Americans believe the Trump administration isn’t focused enough on lowering prices. Approval of Trump’s handling of the economy dropped to 42%, down from 51% in early March, Bloomberg reports.

Still, Trump’s team insists their strategy will pay off – eventually.

Treasury Secretary Scott Bessent, appearing on ABC’s “This Week,” defended the president’s approach, saying consumers are still spending and talks are underway with 17 key trading partners to hammer out bilateral deals.

“We have a process in place, over the next 90 days, to negotiate with them,” Bessent said. “Some of those are moving along very well, especially with the Asian countries.”

Bessent also insisted China would have no choice but to return to the negotiating table under pressure from Trump’s new tariff wall.

“Their business model is predicated on selling cheap, subsidized goods to the US,” Bessent said. “And if there’s a sudden stop in that, they will have a sudden stop in the economy, so they will negotiate.”

Treasury Sec. Scott Bessent on China: “Their business model is predicated on selling cheap, subsidized goods to the U.S., and if there is a sudden stop in that, they will have a sudden stop in the economy. So they will negotiate.” https://t.co/DDuPIh4dI1 pic.twitter.com/VZ8WvUno91

— This Week (@ThisWeekABC) April 27, 2025

Bessent also explained America’s “barbell” economy – in which there is a “financial system and tech sector that is the envy of the world” on one hand, and “a natural resource-economy led by energy” on the other end.

The U.S. has a barbell economy.

On one end, we have a financial system and tech sector that is the envy of the world.

On the other end, we have a natural resource-economy led by energy.

In between is where working-class Americans have lost out—and we want to fix that. pic.twitter.com/ysVxibNIQ7

— Treasury Secretary Scott Bessent (@SecScottBessent) April 27, 2025

Trump has claimed that talks with China are ongoing – a claim Beijing has flatly denied. Bessent admitted he didn’t know if Trump and Chinese President Xi Jinping had spoken directly, noting that Chinese officials he saw during a global finance summit last week stuck to safer topics like “financial stability” and “early warnings.”

Despite the rocky start, Bessent said he’s optimistic that a path forward could emerge, starting with a “de-escalation” and leading to an “agreement in principle” – even if a full trade deal takes longer.

Meanwhile, Trump is eyeing sweeping tax changes at home. His 2017 tax cuts are set to expire at the end of 2025, and he has vowed to not only extend them but expand them, exempting workers’ tips, slashing the corporate tax rate to 15%, and possibly wiping out income taxes for working-class Americans.

The House GOP’s early-April framework allows for up to $5.3 trillion in tax cuts over the next decade. Trade adviser Peter Navarro has suggested tariff revenue could more than cover that – a claim most economists dismiss as wildly optimistic.

Reports already show that Trump’s tariffs are expected to hit lower-income Americans harder than the wealthy, potentially complicating the president’s pitch to working families.

But Trump, undeterred, appears ready to bet that tariff-fueled tax cuts will give him a powerful message heading into the 2026 midterms, even if voters are feeling the pinch now.

Authored by Jacob Burg via The Epoch Times,

President Donald Trump said on April 26 that America’s military and commercial ships should be allowed to pass through the Panama and Suez canals “free of charge.”

“Those Canals would not exist without the United States of America,” Trump wrote on his Truth Social platform.

“I’ve asked Secretary of State Marco Rubio to immediately take care of, and memorialize, this situation!”

Stretching across the isthmus that connects North to South America, the Panama Canal allows ships to quickly traverse between the Atlantic and Pacific oceans, carrying roughly 40 percent of U.S. container traffic yearly.

American and British leaders and businessmen discussed plans for building the canal throughout the 1800s as a way to quickly and cheaply transport goods without having to travel around the southern tip of South America to get between the Pacific and Atlantic oceans. The United States built the canal between 1903 and 1914.

President Jimmy Carter negotiated the Torrijos-Carter Treaties, ratified by the Senate in 1978, that would set in motion the relinquishing of control of the canal to Panama. 

That finally came to fruition in 1999.

Trump has previously said that he wants to “take back” the canal and bring it under U.S. control, suggesting that he would not exclude economic or military force from regaining the shipping passageway.

Earlier this month, Defense Secretary Pete Hegseth said the United States was partnering with Panama to secure the Panama Canal while countering China’s “malign influence.”

“The Panama Canal is key terrain that must be secured by Panama, with America and not China,” Hegseth said at a joint press conference with Panamanian Public Security Minister Frank Abrego.

The two nations signed a memorandum of understanding on bilateral security matters in the region that will see an expansion of joint training exercises between the United States and Panama while improving interoperability between their militaries, the secretary said.

The Suez Canal, which connects the Mediterranean to the Red Sea, was constructed in the late 1800s after plans to build the shipping corridor had been discussed since the time of Ancient Egypt.

However, recent military conflicts and terrorist attacks in the area have disrupted shipping traffic moving through the Suez Canal, forcing some ships to reroute around Africa’s southern Cape of Good Hope instead of using the corridor.

The Houthi terrorist group, backed by Iran, have caused repeated shipping disruptions in the area, according to the Atlantic Council, which estimates that the canal generated roughly $9.4 billion in revenue for Egypt in 2022–2023.

The Trump administration has approved multiple targeted strikes on the Houthis this year. Trump said the strikes would continue until the group no longer disrupts shipping between the Mediterranean and the Red Sea.

Indian and Pakistani relations are once again in full crisis mode, and Sunday marks the third day of reports of sporadic border fire at army outposts between the nuclear-armed neighbors and historic enemies, following last Tuesday’s terror attack in India-administrated Kashmir, which killed 26 Indian tourists in the mountainous, remote region.

Indian Prime Minister Narendra Modi has issued a new statement vowing that the terrorists widely being referred to as Pahalgam attackers “will be served with the harshest response” and that India will seek justice “to the ends of the earth”. 

The Indian army over the weekend announced there has been “unprovoked” firing “initiated by Pakistan” along the Line of Control (LOC)_ which divides Kashmir into two. Pakistan in the aftermath of the accusation neither confirmed nor denied.

The New York Times described Saturday that “Pakistani solders fired at an Indian position first and India responded in kind, according to local news reports, which said that “the exchange was brief and that there were no casualties.” Precise locations of these live fire incidents have not been disclosed.

Days into the crisis and land borders have been shut, visas and military exchange programs mutually canceled, and a landmark water treaty has been suspended.

Pakistan’s PM Sharif meanwhile said his country is ready to defend its sovereignty but offered willingness to establish a “neutral” international investigation into the attack.

Sharif is further scrambling to get major global powers in Pakistan’s corner, as he calls for the independent investigation. He has welcomed China and Russia’s participation, as well as Iran.

Pakistani Defence Minister Khawaja Asif has told RIA Novosti “I think that Russia or China or even Western countries can play a very positive role in this crisis, and they can even create an investigation team … to investigate whether India is lying or Modi is telling the truth.” He added, “Let the international team find out.”

Shariff’s office also issued the following: “The prime minister of Pakistan said that his country seeks peace in the region and that if Iran wishes to play a role in this regard, Islamabad will welcome it.”

Pakistani Kashmiris play cricket unfazed by gunfire echoing from the India-Pakistan Line of Control pic.twitter.com/A376w9qGKZ

— RT (@RT_com) April 27, 2025

But if gunfire continues to be exchanged between the two militaries, also amid reports that Pakistani visa holders are being promptly booted from the country amid the diplomatic crisis – clashes could accelerate toward open war. The two rivals are one more major incident away, after India accused Pakistan of harboring the terrorists that massacred the civilians in Kashmir last week.

Chief Minister of Jammu and Kashmir Omar Abdullah has meanwhile said there must be a “decisive fight against terrorism and its origin.”

Unverified videos of gunfire along disputed Line of Control have been widely circulating…

Video circulating of gunfire reportedly heard between India and Pakistan: pic.twitter.com/ML0pGbaiLS

— BRICS News (@BRICSinfo) April 26, 2025

“People of Kashmir have come out openly against terrorism and the murder of innocent people, they did this freely & spontaneously. It’s time to build on this support and avoid any misplaced action that alienates people,” Abdullah wrote on X.

“Punish the guilty, show them no mercy but don’t let innocent people become collateral damage,” he added, voicing fears that the local population is being subject to brutal tactics by India’s police and military as they hunt for the culprits of Tuesday’s attack. Will this crisis explode? The United Nations and international countries are urging both sides to walk back from the brink.

Authored by Matt Margolis via PJMedia.com,

Once again, the failing New York Times is running interference and burying the real story to protect their preferred narrative. 

An article headlined “Missteps, Equipment Problems and a Common but Risky Practice Led to a Fatal Crash,” which is about January’s devastating crash at Reagan National Airport, is a textbook example of mainstream media malpractice.

An honest headline would have read, “Helicopter Pilot Ignored Multiple Safety Warnings Before Fatal Crash.”

The liberal paper of record spent roughly a thousand words dancing around the obvious truth: a helicopter pilot directly caused this tragedy by ignoring multiple explicit warnings.

But that wouldn’t fit their preferred story about “systemic failures,” would it?

Let me spell out what the Times buried deep in their article: The Black Hawk pilot received clear, explicit warnings about altitude from their co-pilot. 

The co-pilot explicitly instructed them to turn away from the passenger jet. And what did they do? They ignored those warnings and flew straight into the path of an American Airlines flight carrying 64 innocent people.

The Black Hawk was 15 seconds away from crossing paths with the jet. Warrant Officer Eaves then turned his attention to Captain Lobach.

He told her he believed that air traffic control wanted them to turn left, toward the east river bank.

Turning left would have opened up more space between the helicopter and Flight 5342, which was heading for Runway 33 at an altitude of roughly 300 feet.

She did not turn left.

But instead of leading with these crucial facts, the Times gives us a meandering story about “visual separation procedures” and “aviation practices.” Classic mainstream media sleight-of-hand — when the facts don’t fit your preferred narrative, bury them under a mountain of context and systemic analysis.

Here’s what the Times doesn’t want you to focus on: This wasn’t some complex system failure that Democrats can use to blame the Trump administration for.

This wasn’t about equipment problems or procedural issues. 

This was about a pilot who ignored basic safety protocols and clear warnings from their co-pilot. Full stop.

As we know, the liberal media and the Democratic Party immediately sought to blame the Trump administration for the crash, claiming that FAA cuts created the environment for the crash to happen. 

The Army Black Hawk was flying well above its approved altitude. 

The co-pilot knew it. 

Air traffic control knew it. 

The families of the 64 people who lost their lives in this entirely preventable tragedy deserve better than the Times’ narrative manipulation. 

They deserve the truth, plainly stated: Their loved ones died because a pilot ignored multiple explicit warnings and violated basic safety protocols. 

They don’t want us focusing on the pilot because then some uncomfortable questions have to be asked.

Remember this the next time the mainstream media tries to lecture us about “speaking truth to power” or “holding people accountable.” Their idea of accountability apparently depends entirely on whether the truth fits their preferred narrative.

In the meantime, I’ll keep doing their job for them — telling the truths they won’t tell, and calling out their propaganda for what it is.

While the nevertrump world, which includes the entire US mainstream media, and a sizable portion of the US population are rooting for China in the ongoing transpacific trade war, China quietly seized a disputed reef just miles away from the Philippines’ most important military outpost in the South China Sea, in a sharp escalation of a regional dispute with the Philippines, raising the risk of a new military stand-off between the two rival claimants.

According to the FT, the China Coast Guard “implemented maritime control and exercised sovereign jurisdiction” over Sandy Cay this month, the military channel of state broadcaster CCTV reported on Saturday. It released images of four officers, wearing all black and holding the Chinese flag, declaring sovereignty over the reef in the Spratly Islands.

Sandy Cay is near a Philippine military outpost on Thitu Island, which Manila reportedly uses to track Chinese movements in the area.

The move marks the first time in many years that Beijing, which claims the South China Sea almost in its entirety, has officially planted its flag on another previously unoccupied land feature.

It comes as the Philippines and its ally the US are conducting Balikatan, their largest annual military exercise, which will include coastal defense and island seizure drills. They will be held from next week on the Philippine territory closest to the Spratlys.

Although just a sand bank measuring little more than 200 square metres, Sandy Cay has strategic value for China because international law grants it a territorial sea. That 12-nautical-mile radius overlaps with Thitu Island, the South China Sea reef the Philippines uses to track Chinese moves in the area.

The Philippine government has yet to formally respond. Both China and the Philippines have staked their claims on various islands and zones. Their dispute has been escalating, with frequent confrontations including vessels colliding and scuffles.

The White House said the reports of China seizing Sandy Cay were “deeply concerning if true”.

“Actions like these threaten regional stability and violate international law,” said James Hewitt, National Security Council spokesperson. “We are consulting closely with our own partners and remain committed to a free and open Indo-Pacific.”  

Beijing’s official declaration of sovereignty over Sandy Cay will raise fears that Beijing intends to build up unoccupied reefs and banks. Over the past two years, Manila has increased coastguard patrols and sent scientific teams to investigate reports of Chinese reclamation activity at Sandy Cay and three other reefs further south.

Some maritime experts argue new Chinese reclamation is unlikely because artificial islands built and militarized by Beijing over the past decade have given its military and coastguard sufficient presence and reach.

There is so far no sign of a permanent Chinese occupation of Sandy Cay or construction on it. A Philippine maritime security official said on Saturday that the Chinese coastguard had left after unfurling the flag.

But the official declaration of sovereignty indicated China could “increase their harassment against us at Pag-Asa”, he added, using the Philippine name for Thitu.  

The Philippine coastguard has been operating a monitoring base on Thitu since late 2023, but Manila is now upgrading a runway and other infrastructure on the island. The building is part of efforts to make its South China Sea reefs more habitable and push back against increasingly aggressive Chinese activity.

Lyle Morris, a former Pentagon China expert now at the Asia Society Policy Institute, said Sandy Cay had been a source of tension for years between China and the Philippines.

“China has established a near constant presence around Sandy Cay for years, mostly using their maritime militia vessels to surround nearby waters,” said Morris. “They have stepped up their presence ever since the Philippines began to fortify Pagasa island [Thitu] and its runway.”

Morris said the Chinese action did not pose a test for the US, saying it was more a “tactical move” targeting the Philippines.

“This puts more pressure on the Philippines to respond in some way,” Morris added. “If China were ever to physically occupy the feature, the Philippines would likely feel compelled to respond. What kind of response is unclear.”

The Chinese move also comes as Washington and Beijing are mired in a deepening trade war. US allies are also watching closely to see how the Trump administration will deal with Chinese actions in the South China Sea.

“The People’s Republic of China has been increasing its pressure on Philippines outposts for years. But it’s notable that this action comes amidst an escalating US-China trade war and is exactly the sort of action that is hard for the US to respond to, while spooking its Philippines ally,” said Mira Rapp-Hooper, former National Security Council senior director for east Asia in the Biden administration.

China’s law gives its coastguard a mandate to board and inspect foreign vessels “intruding” into waters claimed by Beijing and detain their crews. That raises the risk of clashes with Philippine military and coastguard at Thitu, in waters China now treats as its territorial sea.

China’s military assets are far stronger than the Thitu outpost. Its installations on nearby Subi Reef include surface-to-air missiles, hangars, a runway, radar and a deepwater shelter port. But because it is categorized only as a low tide elevation, Subi lacks a territorial sea under international law.

By Peter Tchir of Academy Securities

Deep Breaths – What’s Next?

Markets got a reprieve this week, as the administration seemed to back off the idea (which was supposedly never an idea) to fire Powell. There were also more statements about backing off on some of the tariffs already in place.

Beyond that and more importantly, there seemed to be some progress on deals. We discussed the possibility last weekend in Dealpalooza. What we are hearing is that “term sheets” are being circulated. Fairly basic outlines of deals, similar to what China seemed to agree to during Trump 1.0, but failed to consummate or live up to. I am even hearing that the U.S. might just attempt to negotiate memorandums of understanding. Basically, an agreement to work on an agreement with some parameters outlined. The good news is that it seems like the administration is shifting away from harsh, possible lose-lose negotiations. The bad news is that the market may be expecting more.

• Getting tariff reductions will be easy! Getting reductions in tariffs will be easy and always would have been.
• Import quota agreements. It will be easier for some countries than others. Easier for some products than others (commodities versus finished goods). Some will be able to be included in commitments for military purchases. I expect some success here, but it won’t be overwhelming and will be clouded by some questions on enforcement.
• Restricting trade with China. I’m not sure if this is being included, but at this point it is unlikely to get much traction given the actions, geopolitically and economically. See If We Could Turn Back Time, for thoughts on how prior actions are impacting future deals.
• Non-tariff barriers. Very real, but very difficult to calculate an exact figure. Despite their importance, it doesn’t seem like the term sheets will focus on them (which leaves a major obstacle to trade in place).

What I also liked was a lot more focus on taxes and some sort of “big deal” via Congress. We have argued about the need for a Policy Pivot for the prior few weeks. Policies that can achieve our goals of domestic production without creating an explicit zero-sum game with other countries.

There is so much that can be done domestically, that backing off of tariffs to focus on other things makes sense (Peter Navarro, a key advocate for the tariff policies, has taken a greatly reduced role, at least in terms of public facing announcements).

India First?

Based on the latest chatter (which can change at a moment’s notice), it looks like India will be the first to strike a deal.

• According to Grok, India’s tariff rate on the U.S. was about 12%, versus 2% the other way. Given India’s per capita income of about $3,000, it would seem that India can lower many tariffs, and it might not change the trade dynamic very much.
• India has relatively strict currency controls. That should be part of a broad trade agreement as it can act as a non-tariff barrier, but my understanding is that it won’t be addressed (making a deal more likely).
• India can buy military equipment from the U.S. That will help solidify a deal.
• Apple announced moving production of phones for sale in the U.S. to India from China. It seems likely that this announcement provided some insight into how the deal with India was progressing.

Markets are likely to respond positively to any deal, though a lot is already priced in, and the actual terms and conditions will matter (especially as stocks surged with the U.S. de-emphasizing tariffs).

It is unclear how a tariff deal will impact revenue generation from tariffs (it won’t, but not sure that was ever a real thing) or how many jobs will be brought to the U.S. (presumably some, but if the deal primarily encourages manufacturers to move from China to India, it hasn’t accomplished much).

Freight Slowdowns and Inventory Concerns

I’ve seen a lot of charts showing slowdowns in shipping and domestic freight. I’ve seen so many of them that I have to assume you have too, so I won’t try to recreate the charts (but just in case, here is one).

The big question, like everything else, is how quickly can those flows be reversed?

As deals are announced, will this reverse course, or have we already set in motion a chain of events that might be difficult to reverse?

Ultimately, a lot comes down to what is agreed to with China. While I want to bask, for a moment, in the sun of deals and a pivot, it is time to at least start considering that there is a lot more to think about on the tariff and trade front.

More Tariff Complexities

As deals are negotiated, corporations will be looking to optimize the amount of tariffs they pay.
One common example, which will likely gain traction once there is some certainty of deals, will likely be exploited (as it is incredibly difficult to verify).

• ABC Corp has two parts manufactured in Country X.
• Those two parts get shipped from Country X to Country Y. Any tariff between country X and Y would be paid.
• ABC Corp makes a part in Country Y and then assembles the 3 parts into a finished product that gets shipped to the U.S. to be sold.
• With strict country of origin policies in place (which is likely to be the case), ABC Corp, when it imports the finished good, will pay tariffs on Country X’s rate for the two parts, and Country Y’s tariffs on the residual amount.

If Country X is a high tariff country with the U.S. then ABC Corp is highly incentivized to reduce the value of the two parts coming from country X. If the finished good is worth $10, the overall tariff paid will be lower if the value is largely ascribed to part C and the “finishing process.”

Even with efforts to ascribe “appropriate” values it is extremely difficult to do for 1,000s of goods, with 100s of parts, and a myriad of “processing” steps.

We will see how the deals come out, but there are so many workarounds that even good deals might take a long time to have the desired effects (better than no deals, but again, I’m not sure the process we’ve gone through was the most efficient way to get to this point).

Smartphones, the U.S., China, and India

We have already mentioned the announcement that Apple will move production for phones destined for the U.S. market from China to India.

Seems good for India.

Seems bad for China.

But I spent some time with my good friend Grok on smartphones:

• Apple sold 43 million iPhones in China in 2024. I have no idea what the margin is on these sales. They don’t count as U.S. exports to China as they were made in China (presumably), but an American company benefited from these sales. I haven’t heard if China has agreed not to retaliate against companies moving production out of China, but that does seem to be a risk.
• Chinese brands sell very few phones in the U.S.A.
• In 2024, according to Grok, Apple had about a 28% share of the global market. Samsung came in at 23%. But Xiaomi, Vivo, and OPPO combined for a 33% share of the global market. Primarily in China, India, and Emerging Markets, with some penetration into Western Europe. Huawei has also apparently being growing. By all indications, the Chinese phones serve the lower to (at best) mid-price markets and presumably are less profitable than what high end companies like Apple and Samsung can generate.
• I find it at least curious that 2 companies, with 18% share of the global smart phone market, probably need to be searched for by many people reading this. I had to double check this and only vaguely remembered Vivo and OPPO from work I had done on Chinese phone sales in India.

It is very easy to say, “they need us more than we need them,” and it may be completely true, but every time I dig into the details, it doesn’t seem as clear cut as you would expect.

The U.S. is by far the biggest, richest market in the world. Companies can generate the most profits by tapping into U.S. demand for the highest quality items and our ability to afford them.

The U.S. Consumer

Let’s repeat the last sentence from the prior paragraph. The U.S. is by far the biggest, richest market in the world. Companies can generate the most profits by tapping into U.S. demand for the highest quality items and our ability to afford them.

Maybe that will be enough to win the trade war?

Credit card debt outstanding has been spiking much higher in the U.S. Delinquency rates are rising to normal, or worse than normal, in virtually every category of debt that I checked out.

Can the U.S. consumer “win” the trade war?

We have all learned never to bet against America’s desire to consume, but it seems stretched at the moment – which is why I think it is so important to pivot to policies that focus on domestic growth. Yes, we will get some “wins” in trade deals, but if that is the primary source of job creation in the U.S., I think we will all be sadly very disappointed.

Bottom Line

A lot to cheer about! Whether markets have already cheered too loudly or not will be determined as details start emerging.

On Google trends, searches for the U.S. deficit recently increased.

For all of the wild gyrations hitting the Treasury market in the past few weeks, the deficit has been low on the list. With DOGE receding from the headlines, with what looks like less than $150 billion of savings found (as opposed to the trillions hoped for), and focus shifting to some “grand deal” or “big package” (which I think is good), we could see yields pressured higher on debt and deficit concerns.

I remain extremely concerned about the American Brand and the damage done to U.S. business interests across the globe, even as we get deals announced.

I expect the hard data to start reflecting the damage done to corporate spending/orders/responses to tariffs in the coming weeks.

Can that be reversed by good deals? Sure. 

Is it possible that the market has been so focused on the domestic back-and-forth in terms of policy that we haven’t noticed shifts that will impact us negatively down the road? I think so.

The administration seems to have reversed course on many things that I (and many others) didn’t think would work. That is great! The ability to pivot and shift away from losing strategies is powerful and as I’ve argued, I think it dramatically reduces the scale and scope of any recession we get (which I still think is coming).

But as we all get some relief from the headlines we will need to realistically digest what impact there has been that will be felt in the coming months. Each headline seems to have less influence, as negative headlines get dismissed since the view is that we will backtrack from them anyways and at current levels, positive headlines help less than when the market was much cheaper.

Beyond that, we will need to start assessing deals and the likely path of future policy (which is harder than it has ever been, since things like “It is Time for Main Street versus Wall Street” seem incredibly well messaged, but lasted less than a month, at least in its initial form).

Many people will argue that the worst of the policy risk is behind us, which seems valid.

That does not mean the worst of the economic or market risk is behind us, as markets seem to have priced in a lot of optimistic outcomes at this stage.

Hopefully things remain quiet and positive, but I think we are stuck trying to sell big moves to the upside and buy big moves to the downside, because things are never as good or bad as they seem with an administration that has some aggressive goals (rebuilding the middle class) and seems quite willing to be aggressive, even if they shift course when it is clear that it isn’t working smoothly.

Kind of a long bottom line, but it is difficult to have conviction with so many moving parts, and a market where 1% in stocks or 5 bps in bonds seem like normal intraday moves, let alone over a week’s worth of trading.

I guess my single biggest fear is that we are playing to a narrative, and the details won’t support that narrative. Take the recent reprieve as an opportunity to take some deep breaths and prepare for the next round of tough decisions that we will likely face on the investing and corporate fronts!

American ranchers have been battered by multinational corporations flooding the food supply chain with cheap beef imports from third-world countries, much of it ending up in supermarkets without consumers ever realizing it. Now, in a move to protect both consumers from flesh-eating parasites and support mom-and-pop ranchers, the Department of Agriculture warned Mexico on Saturday that the U.S. will cease imports of live animals — including cattle and bison — unless Mexico steps up efforts to combat pests. 

Fox News first reported that U.S. Agriculture Secretary Brooke Rollins wrote a scathing letter to Mexican Secretary of Agriculture Julio Antonio Berdegué Sacristán, threatening to restrict US livestock imports from Mexico if its government does not urgently address the New World Screwworm by the middle of next week. 

“I must inform you that if these issues are not resolved by Wednesday, April 30, USDA will restrict the importation of animal commodities, which consist of live cattle, bison, and equine originating from or transporting to Mexico to protect the interest of the agriculture industry in the United States,” Rollins wrote in the letter, obtained by Fox.

She said, “We are now at a critical inflection point in our shared campaign against this pest, and I am very concerned about our collaboration.” 

“The outbreak in southern Mexico continues to expand, and every day that passes without full deployment of sterile insect technique (SIT) operations represents a lost opportunity to contain this pest and prevent its spread beyond the Isthmus of Tehuantepecm,” Rollins noted.

According to the Centers for Disease Control and Prevention, the New World Screwworm targets open wounds in warm-blooded animals, including birds, deer, and humans, laying hundreds of eggs that hatch into flesh-eating maggots. 

Rollins’ message is very clear: Move quickly on combating the screwworm fly by:

• Secure a one-year or indefinite operational clearance for Dynamic Aviation.

• Waive import duties for NWS-related materials.

• Appoint a high-level contact to resolve bureaucratic obstacles.

… or face trade restrictions on live cattle, bison, and equine entering the U.S. 

Unbeknownst to consumers, the U.S. imported 3.7 billion pounds of beef in 2023, accounting for 15% of the total U.S. beef consumption. This volume increased to record highs due to a collapsing U.S. cattle herd, pushing supermarket prices to new highs. 

At the start of the year, the U.S. Department of Agriculture’s annual Cattle Inventory report revealed that the nation’s cattle supply had fallen to a 73-year low, totaling about 86.6 million head.

At the supermarket, USDA data from the end of March showed the average price for a pound of ground beef reached yet another record high of $5.79.

Years of multinationals flooding America with cheap beef imports from third-world countries have financially wrecked mom-and-pop ranchers. This creates a serious national security threat, as foreign nations and multinational corporations have increasingly gained control over critical segments of the U.S. food supply chain. For a country to thrive, control of the food supply should remain with local ranchers and farmers, rather than distant megacorporations with little interest in the community. 

“For decades, America outsourced its food production under the illusion of efficiency. Now a single screwworm threat exposes how fragile and foolish that model really is. If you don’t control your own cattle, you don’t control your own future—and that’s exactly where we are,” clean beef think tank Beef Initiative wrote in a statement.

ZeroHedge, in collaboration with the Beef Initiative, is committed to supporting the “Make America Healthy Again” movement by restoring control of the food supply chain—currently dominated by corrupt multinational corporations within the processed foods industrial complex—to local, family-owned ranchers and farmers.

We’re calling this effort “Rancher-Direct Clean Food“…

The countdown for Zerohedge/MAHA begins next week… 

YOU’RE DANG RIGHT 😎 pic.twitter.com/s5sRdD3rkB

— Declaration of Memes (@LibertyCappy) April 26, 2025

Consumers don’t have to worry about New World Screwworm if they purchase directly from mom-and-pop ranchers based in the United States. 

.  .  . 

Authored by Kenin M. Spivak via RealClearPolitics,

Canada has one of the most protectionist economies among developed nations. It particularly targets American farmers, media, and manufacturers. That may be why Donald Trump launched his counterattack on trade offenders with a 25% tariff on many imports from Canada and Mexico, and 10% on Canadian energy.

Unhelpfully, Trump claimed authority to do so under the International Emergency Economic Powers Act because of an “extraordinary threat” posed by “unchecked drug trafficking.” The White House failed to explain how this applied to Canada. And, while his goals are entirely correct, his April 2 “Liberation Day” global strike, imposing 10% baseline tariffs on almost all nations, and so-called reciprocal tariffs on friends and foes alike, roiled markets and aligned the world against us. That’s why Trump rapidly retreated, suspending reciprocal tariffs, except for China.

Clever countries are waging trade war on us. Despite this, America has the world’s strongest economy. Except where there are national security considerations that mandate pulling our punches, the U.S. can win every time – if we play chess, not Rock ‘Em Sock ‘Em Robots. When it comes to using tariffs as a weapon, Trump should focus on two or three targets at a time, take them down, and then move on to the next. I nominate China, the European Union (see here) and Canada.

Canada is our largest individual export market, and while it may not be a threat to American health, it is an adept abuser of free trade. According to the U.S. Census Bureau, exports of goods to Canada in 2024 were about $350 billion, and imports about $413 billion, for a deficit of $63 billion, though U.S. services reduce the deficit by about $10 billion. In January, the goods deficit grew to an annualized rate exceeding $140 billion.

When Trump met with Canadian prime minister Mark Carney a few weeks ago, he avoided the undignified trolling to which he had subjected Justin Trudeau, and observed that “I think things will work out very well between Canada and the United States.” Still, Trump singled out Canada on Liberation Day, criticizing its tariffs on agriculture, and claiming that the U.S. subsidizes our neighbor by almost $200 billion a year. Nonetheless, Trump imposed no additional tariffs on Canada.

Canada will shroud itself in this miasma and continue to play the victim. It’s an act. Canada takes care of Canada.

While Canada’s businesses and citizens benefit from almost unfettered access to the United States, it limits our access through “made-in-Canada” requirements, standards that generally can be met only by natural resources in Canada, and financial support available only to Canadians. Even its offer last week to rescind tariffs on U.S. automakers was conditioned on further investment in Canada. Canada looks out for Canada.

One of the most enduring trade disputes involves subsidies Canada provides to its softwood lumber industry. Last year, the Biden administration raised tariffs on imports of Canadian softwood lumber from 8.05% to 14.54%.

Recently, Canada banned most foreigners from purchasing Canadian residential property. Numerous provinces also impose additional property taxes on foreign property owners.

The U.S. Trade Representative’s report on Foreign Trade Barriers and the International Trade Administration website cite numerous obstacles imposed by Canada, including:

• The Investment Canada Act has regulated foreign investment in Canada since 1985. National security and a more nebulous standard of “economic net benefits” for Canada is a determining factor in reviews of foreign investments. Canada also restricts foreign ownership and board positions in many industries.
• In 2024, Canada began taxing online sales, advertising, and social media, singling out S. companies for taxation while effectively excluding Canadian firms in similar businesses. The tax is retroactive to 2022.
• Canada’s regulation of the dairy, chicken, turkey, and egg industries “severely limits” S. imports. Canada also limits U.S. imports of seeds, cheese, fresh fruits, vegetables, and electricity.
• Most Canadian provinces “greatly hamper” U.S. imports of wine, beer, and spirits.
• More than 50% of TV channels, and at least 35% of popular music broadcast on radio, must be Canadian, and the “needs and interests” of Canadians must be prioritized in video, music, and digital media.
• Canadian cable and satellite suppliers rebroadcast U.S. border stations without consent, while denying tax deductions to Canadian businesses that advertise on these stations.

Canada also offers tax credits, loans, and subsidies to companies and projects owned by and hiring Canadians. For example, subsidies for film and television production utilizing Canadian directors, writers, and actors have allowed Vancouver and Toronto to challenge Los Angeles and New York, and pull ahead of Atlanta, while providing Canadian actors life-long advantages.

By contrast, the U.S. has long been hospitable to Canadian investment, goods, and people. Canadian headquartered or owned businesses that are well known in the U.S. include Burger King, Lululemon, Canada Goose, TD Bank, MAC Cosmetics (until being sold), Saks Fifth Avenue (spun off in 2024), Shopify, Rumble, and Pornhub. The Wikipedia list of prominent Canadian-Americans is 35 pages. Most spent their lives in the United States, which accorded them the economic opportunities available to all Americans.

Canada’s trade barriers reduce our GDP by less than 1% but boost Canada’s economy by considerably more. The challenge is to work with Canada to eliminate its barriers over a period that won’t rock the Canadian economy. But if that effort hits a wall, the administration would be obligated to protect Americans by rolling out properly computed and targeted reciprocal tariffs and non-tariff measures.

Canada may be able to beat the U.S. in hockey, but despite its bellicose tone, it can’t win a well-fought trade war.

Kenin M. Spivak is founder and chairman of SMI Group LLC, an international consulting firm and investment bank. He is the author of fiction and non-fiction books and a frequent speaker and contributor to media, including RealClearPolitics, The American Mind, National Review, television, radio, and podcasts.

Hostilities between India and Pakistan have intensified after a deadly militant attack in the contested Kashmir region killed twenty-six people. New Delhi has blamed its neighbor for the attack, but Islamabad has denied any involvement.  The incident has sparked a series of smaller military engagements along the Indian border and the Indian government has ordered all Pakistani visitors in India to leave by April 29th.  It has also threatened to block or divert water supplies from the Indus River system, which support 80% of Pakistan’s agriculture.  

The Indus Water Treaty – which was brokered by the World Bank in September 1960 – determined the rights and obligations of Pakistan and India concerning the use of waters of the Indus River system. The agreement has stood the test of time and has long been hailed as a rare example of cooperation between the two ideologically opposed nations.  India’s unilateral suspension of the treaty is being called an “act of war” by Pakistan. 

Geopolitical strategists say the move “calculated” – Any diversion of Pakistan’s water supply could trigger famine and civil unrest in the already unstable region.  Internal strife has been simmering after Pakistan’s current government arrested former Prime Minister Imran Khan on charges of corruption.  The arrest, perhaps not coincidentally, was executed not long after Khan accused a high-ranking Inter Service Intelligence official of planning an assassination attempt

Khan’s arrest led to 2023 Pakistani protests by his supporters throughout the country.  The nation has been in political turmoil ever since, on top of an already crushing inflation crisis.  Loss of water resources would likely send the country into immediate collapse.  While India does not have the infrastructure to block the rivers completely, they do have the ability to greatly reduce the flows to Pakistan, or divert much of the water to storage areas.  They have also threatened to stop sharing vital flow data that could lead to a lack of flood warnings, thus destroying large swaths of farmland.

The existential threat this development represents to the Pakistani government opens the door to otherwise unthinkable retaliation.  Nukes are indeed on the table.  Analysts say Pakistan’s use of phrase “complete spectrum of national power means Pakistan can go to any limit, including the use of nuclear weapons.”

At the very least, Pakistan’s military will not hesitate to strike any infrastructure used by India to stem the water from the Indus rivers.  Another factor that does not bode well is India’s overt superiority in terms of military power.  India’s active military and reserve forces are twice the size of Pakistan’s.  They have twice the air power, twice the tanks, a far larger navy which boasts a number of nuclear submarines. 

The strength difference might compel Pakistan to use nukes immediately as a way to even the fight, or ensure the mutual destruction of India in a war Pakistan knows it will lose.  In other words, the risk of a nuclear exchange is extraordinarily high. 

Pakistan is estimate to control at least 170 nuclear weapons of various yields.  All of them have a range of under 2000 miles, but they are more than enough to wipe out all of India’s major population centers.  Pakistan also has a “first use” policy; they hold that any war with a nuclear armed opponent means they have the option to fire nukes first.

India’s arsenal is comparable, with at least 164 nuclear weapons, though many have a larger yield and greater range. 

A nuclear exchange or full blown war also risks the potential involvement of nuclear armed China.  China and Pakistan have increased defense ties over the years.  In February, China “reiterated its firm support for Pakistan in defending its national sovereignty, independence, and territorial integrity, and its support for Pakistan’s efforts to safeguard national security, stability, development and prosperity”. 

The three countries together represent around half the human population of the Earth.  Radioactive fallout would do damage to the majority of the South Pacific.  While theories of a “nuclear winter” are overblown and radioactive fallout from weapons generally dissipates to safe levels within three weeks according to US military studies, the effects on the global economy and food supplies in the East would be devastating, leading to a long term international crisis.

Authored by Steve Watson via Modernity.news,

Armies of TDS riddled leftists whinged, moaned and cried online Saturday because President Trump wore a navy blue suit to the Pope’s funeral.

Oh my God, Orange man so bad.

Is there any facet of Trump’s existence that doesn’t send these deranged individuals into meltdown?

One guy shows up in a blue suit to the Pope’s funeral. You will never guess who. pic.twitter.com/3zBJlc792l

— Ron Filipkowski (@RonFilipkowski) April 26, 2025

A blue suit?

Donald Trump couldn’t even be respectful and wear a black suit to Pope Francis’ funeral like the rest of world leaders.

He always has to stick out and try and be the center of attention.

🙄 pic.twitter.com/SxiYiV9W7s

— Art Candee 🍿🥤 (@ArtCandee) April 26, 2025

Of course Trump is the only jackass wearing a blue suit and blue tie to a funeral….such an embarrassment pic.twitter.com/fLg81YhN3t

— Wu Tang is for the Children (@WUTangKids) April 26, 2025

And here’s trump in his ill-fitting blue suit (the tent company he buys his suits from must only make them in blue) shitposting on his phone during the Pope’s funeral. Of… course he is. Disrespectful sack of dogshit. pic.twitter.com/auL5D2NbYc

— 😱 Scary Larry 😱 🇺🇦✊🏻🇺🇸🗽 (@aintscarylarry) April 26, 2025

NEW HOAX JUST DROPPED

“Trump broke the rules and stood out by wearing a blue suit to Pope Francis’ funeral!”

Reality: pic.twitter.com/7gKaBHqe4a

— Libs of TikTok (@libsoftiktok) April 27, 2025

Firstly, no he wasn’t the only person wearing a blue suit.

You all look more pathetic the harder you try. pic.twitter.com/zZbhplx1KB

— Emory (@Emory0819) April 27, 2025

Oh. Prince William, what have you done?

pic.twitter.com/YGSUZQqEWV

— jhawk4life 🇺🇸 (@jhawk4life) April 26, 2025

And every single pall bearer was also wearing a blue suit.

Literally watching it now and numerous men are in navy or blue as well as some women .. even some white..

What’s your point?

Vatican funeral apparel guidelines are dark suits- while black is preferred and often dominates funeral attire , it is not mandatory.

Hope this…

— ✌🏼🌻 (@honeyybomb) April 26, 2025

Practically fifty percent of people there were in blue, because it’s literally a thing to wear a navy blue suit to a funeral.

Why, look at all these guys in blue suits. (You’re such a hateful liar.) pic.twitter.com/sDZnBoD5t0

— SteveSPS (@sSchlotz24) April 27, 2025

Everyone bitching about what color of suit Trump wore to the Pope’s funeral. Blue is also accepted. As long as it’s not bright or pastel. So to you, it’s acceptable to everyone, except Trump. pic.twitter.com/vUtLDXTh8v

— Sha Me (@Sha_queen_meani) April 26, 2025

Biden wore a blue suit.

HOAX: If you heard anything about the Pope’s funeral from the drive-by media you heard that Trump thumbed his nose at the Vatican by wearing a blue and not a black suit. Everyone from the Prince of Wales to Joe Biden wore a blue suit – the only way I know this is because of 𝕏. pic.twitter.com/NbPRPOARGU

— @amuse (@amuse) April 27, 2025

🇺🇸🇺🇦🇻🇦 The media is showing its insane hypocrisy again:

1) Biden wears blue suit – all good
2) Trump wears blue – meltdown
3) Zelensky does not wear a suit – ignore it at any cost

We havent seen such idiotic hypocrisy for a while. pic.twitter.com/oUHYo45LSB

— Lord Bebo (@MyLordBebo) April 27, 2025

Today it’s a blue suit, tomorrow it’s death camps, right?

This is all you have? A blue suit isn’t “dark?” It must be painful. By now, you should be on your 8th story of the new Comedian Concentration Camp and noting the latests journalists arrested by Orange Dread.

And all you got is a suit.

— Anna K. Gorisch (@AnnaGorisch) April 26, 2025

They’re mentally destroyed.

Imagine being so obsessed with criticizing Trump that you embarrass yourself like this.

I see at least four other blue suits in the photo. But this nutjob only sees Trump.

It’s a mental illness at this point. https://t.co/GvQa8jYqll

— RBe (@RBPundit) April 26, 2025

I think we literally had five Trump hoaxes in one day at the pope’s funeral. Let see here..

1) The blue suit hoax (many wore blue suits)
2) The Biden got the front row over Trump hoax (Biden was a few rows back)
3) The Trump was sleeping hoax (Looked more like he was praying but… pic.twitter.com/gG8IEEmgrd

— Deon Joseph (@ofcrdeonjoseph) April 27, 2025

At least Trump wore a suit.

A black flannel? pic.twitter.com/vA9DeVFobK

— Ex-Journalist (@exlibjourno) April 26, 2025

I’m seeing posts like “Trump wore a blue suit…omg” and yet I see a sea of blue suits….. Meanwhile, Zelenskyy didn’t even wear a suit. pic.twitter.com/DWYZid9nYt

— Natalie F Danelishen (@Chesschick01) April 26, 2025

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