A bump from Donald Trump’s thump on Mexico’s head is causing the US stock market to swell this week. Trump tariffied the market last week because his new threat against all things Mexican seemed to say Trump might use tariffs as leverage to get anything he wants. Agent Orange apparently got what he wanted — though it remains unclear whether he got anything that wasn’t already in the offing, but he says he did — so the market’s knock on the head is healing this week.
All par for the course in a market that is smoking rope anyway. Soon enough, however, we return to the market thinking it is all about China, and China is an entirely different syndrome than a Mexican border problem that Mexico was already helping with. It’s also a different tariff war than one in which tariffs have already been implemented, negotiated and removed months ago.
It may have been a bit nerve-wracking to some that Trump was willing to risk blowing that up; but I suspect it was just a case of the president pulling out his new favorite trump card. It was a safe bluff. How hard would it be to wring enough out of Mexico to say he got what he wanted, regardless of how little he got, when he never stated specifically what he wanted in the first place? A reasonable question, I think, given that the president has also been unwilling so far to state what it was he got that was any different than things that had already been largely agreed to.
Perhaps time will tell that he got something seriously worth the threat, but by then the newsfeed will have moved on down the ticker tape anyway.
Read the rest here: The Great Recession