Trump’s Trade Deal

When reports started coming out late last night that the first tariff/trade deal would be announced this morning, virtually every media commentator, except those on Fox, downplayed it. “This is just Donald Trump exaggerating again,” they said. 

President Trump invited the media into the Oval Office this morning for the big announcement. Again, he will take more questions from the press in one day than Biden did in a month. President Trump then announced a major new deal with the United Kingdom.

Trump invited British Prime Minister Keir Starmer to say a few words over a speakerphone. Starmer praised today’s “historic deal,” noting that it comes “80 years to the day and almost to the hour” when Winston Churchill announced the Allied victory over Nazi Germany, ending World War II in Europe.

Initially, the stock market rose and then dipped a bit. But after the president and prime minister spoke, the markets surged. One of the things announced in the deal is that England agreed to buy $10 billion in new Boeing aircraft. Boeing has had some difficulties lately, but its stock hit a high today for the year on that news.

As companies announce current earnings and earnings projections for the quarters ahead, it is becoming apparent that they are doing exactly what Trump and his team said would happen. The anti-Trump media said consumers would end up paying the tariffs in higher prices. 

Trump said that’s not how it works. He predicted companies will do everything they can to avoid charging customers more, especially customers already traumatized by four years of Bidenflation’s sticker shock.

Lo and behold, that’s exactly what many companies are telling us. They are avoiding big price increases through cost savings, greater efficiencies, or getting overseas suppliers to share the costs. Other companies are saying they will absorb the costs in order to remain competitive.