The underpants gnomes (vid) had a great plan:
1. Steal underpants, 2. …, 3. Profit
bigger
The Trump administration seems to think likewise:
1. Impose tariffs, 2. …, 3. Profit
There was already some struggle while implementing phase 1.
Phase 2 seems to create even more serious problems:
Charles Gasparino @CGasparino – 16:42 UTC · Apr 21, 2025
BREAKING: Japanese negotiators are complaining that the problem with the trade negotiations with the White House, what's delaying concrete progress and a real deal, is that US keeps changing its ask in terms of exactly what it wants, said one financial CEO who speaks regularly to country officials. Maybe it's a negotiating tactic. But the lack of publicly announced deal progress is depressing the dollar, spiking bond yields and leading to a flight to quality to gold and now Bitcoin. Developing
Gregg Carlstrom @glcarlstrom – 17:38 UTC · Apr 21, 2025
Not just Japan. Every diplomat I've asked about tariffs in the Middle East has told a similar story: they don't know how to engage with the Trump administration because everyone makes different demands
Also, we are really in trouble if Bitcoin is now a "flight to quality"
Every single person who works for the White House on trade seems to have a different idea of how to (ab)use the tariffs. There seems to be no big common plan to which they are all aligned to. This won't work.
Markets need rules and assurances that the rules will be adhered to. Any factor that increase insecurity will require additional security margins within each deal. When all this gets too expensive, unpredictable and complicate people will simply bail out. Money is leaving the U.S. dollar denominated markets. This creates the unusual case where share prices, treasuries and the dollar conjointly decline.
But "trust us" some pro tariff folks might say. "Phase 3 will soon come and its gonna be huge."
May be. I for one am not yet convinced.