Trump Will Blink First to Stop Financial Markets and Treasuries From Hemorrhaging Further

[RSD1]

There are so many opinions floating around right now about Trump's self inflicted trade war, mostly about Trump’s intentions, what he understands and what he doesn’t, what he’s trying to achieve, how much of it is ego, bullying, bravado, and so on. But at the end of the day, the only thing that really matters is: when and how does this end?

 

I think the simple answer is that it ends very soon, probably next week, because both the US financial markets and the US government’s sovereign debt markets (Treasuries) are now hemorrhaging and are in free fall, and that’s just not sustainable for more than a minute. If it’s allowed to fester for too long, it could become genuinely malignant.

 

As for how it ends, I suspect Trump blinks first. The Chinese are in a stronger position financially and economically. They aren't facing the same financial markets carnage and can wait this out far longer than Trump or the US can, plus the Chinese are used to economic pain, whereas the US isn't.

 

So what I think happens is Trump, pretending to be the great dealmaker, offers China an olive branch next week by announcing a 60 or 90-day pause on the tariffs, giving both sides time to negotiate a deal. Most likely, it’ll just be him kicking the can down the road with no real agreement ever to follow. But in the meantime, the markets will rally, treasury yields will settle, and he’ll be seen as being sensible, at least in the moment.

 

As for the tariffs themselves, it buys him time to spin the narrative, confuse the American public to the point where no one really understands what’s going on anymore, eventually Americans move onto the next big news cycle topic and the whole situation fades away, more or less back to where things were before he started this trade war that he can’t possibly win. Just political theatre and market pain for nothing, but no real progress is ever made on the large trade deficit between the US and China.

 

And the biggest losers in all this? All the investors who panicked and sold out and liquidated their financial positions, thinking the American economy was about to collapse.

 

One other possibility is: Trump has repeatedly expressed his strong desire for the Fed to cut interest rates now, ideally by at least another full percentage point. So far, the Fed has largely ignored those signals, and there’s not much Trump can do about it legally, unless he’s willing to cross more legal lines.

 

But if the stock market continues to tank and the sell-off in treasuries intensifies as a result of Trump’s trade war, it could eventually corner the Fed into action. If things spiral far enough, the Fed might feel compelled to step in and cut rates, effectively reviving what’s known as "The Fed Put", like what happened during the COVID crash, when emergency rate cuts turned the markets around almost overnight.

 

That could be Trump’s hidden play in all this. Knowing he can't win a trade war with China, but if he drags this out long enough and triggers a rate cut, he could then swoop in, end the trade war, and claim victory, thus restoring confidence to the US financial markets, and inflation expectations become re-anchored again, just as rates fall. It’s speculative, but not outside the realm of possibility. If he pushes things far enough, it just might work for his agenda on cutting interest rates and perhaps he's merely using his illusive trade war with China as the red herring to do it. 

[save the frogs]

you're obviously put a lot of thought into this

 

[blaze master]

39 minutes ago, save the frogs said:

you're obviously put a lot of thought into this

 

 

Just like the other 8 thousand trump threads.

[LosLobo]

I appreciate your analysis on the potential for Trump to offer a 90-day pause on tariffs with China. However, I wanted to add a perspective that Larry Fink, CEO of BlackRock, recently shared. He suggested that such a pause might actually create more uncertainty rather than resolving the economic challenges posed by the trade war.
 

While a temporary halt in tariffs could provide some immediate relief to financial markets, it doesn't necessarily address the underlying issues driving economic instability. The uncertainty could lead to a general slowdown in economic activity as businesses and investors wait for more clarity on the future of trade relations between the U.S. and China.

Furthermore, Fink's concerns about the U.S. being close to or already in a recession highlight the need for more substantial actions to stabilize markets. A pause in tariffs might be seen as a political move to stabilize public perception, but it doesn't offer a long-term solution to the trade tensions.
 

I agree that Trump might use this pause as a way to kick the can down the road, but it's crucial to consider how this strategy affects global economic stability and investor confidence.

https://nypost.com/2025/04/11/business/larry-fink-says-trump-tariffs-beyond-anything-i-could-have-imagined/

[LosLobo]

Trump just blinked.....
 

Trump exempts phones, computers and other electronics from his tariffs on Chinese goods!
 

So what happens now?
 

If China wanted to retaliate cleverly—without appearing too aggressive—it could spitefully impose export taxes or tighten export controls on key components or finished goods like smartphones, lithium batteries, or rare earths.
 

Not as a tariff per se (that’s more an import-side move), but as a strategic throttle on U.S. access to essential tech.

https://www.msn.com/en-au/news/other/trump-exempts-phones-computers-and-other-electronics-from-his-tariffs-on-chinese-goods/ar-AA1CNuGb

[SunnyinBangrak]

3 hours ago, LosLobo said:

I appreciate your analysis on the potential for Trump to offer a 90-day pause on tariffs with China. However, I wanted to add a perspective that Larry Fink, CEO of BlackRock, recently shared. He suggested that such a pause might actually create more uncertainty rather than resolving the economic challenges posed by the trade war.
 

While a temporary halt in tariffs could provide some immediate relief to financial markets, it doesn't necessarily address the underlying issues driving economic instability. The uncertainty could lead to a general slowdown in economic activity as businesses and investors wait for more clarity on the future of trade relations between the U.S. and China.

Furthermore, Fink's concerns about the U.S. being close to or already in a recession highlight the need for more substantial actions to stabilize markets. A pause in tariffs might be seen as a political move to stabilize public perception, but it doesn't offer a long-term solution to the trade tensions.
 

I agree that Trump might use this pause as a way to kick the can down the road, but it's crucial to consider how this strategy affects global economic stability and investor confidence.

https://nypost.com/2025/04/11/business/larry-fink-says-trump-tariffs-beyond-anything-i-could-have-imagined/

Whatever Mr Fink says, do/think the opposite. Black Rock is not your friend. 

[CallumWK]

3 hours ago, LosLobo said:

However, I wanted to add a perspective that Larry Fink, CEO of BlackRock, recently shared. He suggested that such a pause might actually create more uncertainty rather than resolving the economic challenges posed by the trade war.

 

I agree, a temporary pause will make things worse for the US, and gives the other players time to stack their cards.

They know now what Trump is capable of, and his numerous flip flops have proven he is unstable, and has no plan. So they will look for alternatives for their exports and imports, because they don't want to risk that he change his mind again next week or next month.

Uncertainty is the last thing economies are interested, and it is clear that developed countries are not gonna kiss the ring.

[Enoon]

 

 

Folded?:

 

Trump exempts smartphones and computers from new tariffs

 

https://www.bbc.co.uk/news/articles/c20xn626y81o

 

 

 

 

[SunnyinBangrak]

27 minutes ago, SunnyinBangrak said:

Whatever Mr Fink says, do/think the opposite. Black Rock is not your friend. 

Why are forum left laughing at this? Am I wrong? Does Larry Fink - the guy who did more than anyone to replace meritocracy with DEI - have profit or our best interests at heart? Sad to see the hivemind go down the Blackrock is good rabbithole. 

[still kicking]

11 minutes ago, SunnyinBangrak said:

Why are forum left laughing at this? Am I wrong? Does Larry Fink - the guy who did more than anyone to replace meritocracy with DEI - have profit or our best interests at heart? Sad to see the hivemind go down the Blackrock is good rabbithole. 

You must be rich 

US inflation has increased since Trump took office – why prices are unlikely to come down soon

[Enoon]

11 minutes ago, SunnyinBangrak said:

Why are forum left laughing at this? Am I wrong? Does Larry Fink - the guy who did more than anyone to replace meritocracy with DEI - have profit or our best interests at heart? Sad to see the hivemind go down the Blackrock is good rabbithole. 

 

Because you are so predictable?......with your oafish, simple minded, ignorant, unsophisticated, repetetive and irrelevant use of the word "left".

 

I consider you worth nothing more than to be laughed at.

 

I know one is not supposed to laugh at the mentally impaired.......but sometimes one just cannot help it.

 

 

[FritsSikkink]

7 hours ago, RSD1 said:

There are so many opinions floating around right now about Trump's self inflicted trade war, mostly about Trump’s intentions, what he understands and what he doesn’t, what he’s trying to achieve, how much of it is ego, bullying, bravado, and so on. But at the end of the day, the only thing that really matters is: when and how does this end?

 

I think the simple answer is that it ends very soon, probably next week, because both the US financial markets and the US government’s sovereign debt markets (Treasuries) are now hemorrhaging and are in free fall, and that’s just not sustainable for more than a minute. If it’s allowed to fester for too long, it could become genuinely malignant.

 

As for how it ends, I suspect Trump blinks first. The Chinese are in a stronger position financially and economically. They aren't facing the same financial markets carnage and can wait this out far longer than Trump or the US can, plus the Chinese are used to economic pain, whereas the US isn't.

 

So what I think happens is Trump, pretending to be the great dealmaker, offers China an olive branch next week by announcing a 60 or 90-day pause on the tariffs, giving both sides time to negotiate a deal. Most likely, it’ll just be him kicking the can down the road with no real agreement ever to follow. But in the meantime, the markets will rally, treasury yields will settle, and he’ll be seen as being sensible, at least in the moment.

 

As for the tariffs themselves, it buys him time to spin the narrative, confuse the American public to the point where no one really understands what’s going on anymore, eventually Americans move onto the next big news cycle topic and the whole situation fades away, more or less back to where things were before he started this trade war that he can’t possibly win. Just political theatre and market pain for nothing, but no real progress is ever made on the large trade deficit between the US and China.

 

And the biggest losers in all this? All the investors who panicked and sold out and liquidated their financial positions, thinking the American economy was about to collapse.

 

One other possibility is: Trump has repeatedly expressed his strong desire for the Fed to cut interest rates now, ideally by at least another full percentage point. So far, the Fed has largely ignored those signals, and there’s not much Trump can do about it legally, unless he’s willing to cross more legal lines.

 

But if the stock market continues to tank and the sell-off in treasuries intensifies as a result of Trump’s trade war, it could eventually corner the Fed into action. If things spiral far enough, the Fed might feel compelled to step in and cut rates, effectively reviving what’s known as "The Fed Put", like what happened during the COVID crash, when emergency rate cuts turned the markets around almost overnight.

 

That could be Trump’s hidden play in all this. Knowing he can't win a trade war with China, but if he drags this out long enough and triggers a rate cut, he could then swoop in, end the trade war, and claim victory, thus restoring confidence to the US financial markets, and inflation expectations become re-anchored again, just as rates fall. It’s speculative, but not outside the realm of possibility. If he pushes things far enough, it just might work for his agenda on cutting interest rates and perhaps he's merely using his illusive trade war with China as the red herring to do it. 

He has no chance at all: China has just shown it can defeat America in a trade war

[FritsSikkink]

42 minutes ago, SunnyinBangrak said:

Why are forum left laughing at this? Am I wrong? 

Like most MAGA people , you don't have a clue about world economics.

[SunnyinBangrak]

1 hour ago, Enoon said:

 

Because you are so predictable?......with your oafish, simple minded, ignorant, unsophisticated, repetetive and irrelevant use of the word "left".

 

I consider you worth nothing more than to be laughed at.

 

I know one is not supposed to laugh at the mentally impaired.......but sometimes one just cannot help it.

 

 

You cheer DEI over meritocracy. No sneering required. I do not judge.

[ThreeCardMonte]

2 hours ago, LosLobo said:

Trump just blinked.....
 

Trump exempts phones, computers and other electronics from his tariffs on Chinese goods!
 

So what happens now?
 

If China wanted to retaliate cleverly—without appearing too aggressive—it could spitefully impose export taxes or tighten export controls on key components or finished goods like smartphones, lithium batteries, or rare earths.
 

Not as a tariff per se (that’s more an import-side move), but as a strategic throttle on U.S. access to essential tech.

https://www.msn.com/en-au/news/other/trump-exempts-phones-computers-and-other-electronics-from-his-tariffs-on-chinese-goods/ar-AA1CNuGb

American products.  Assembly in China.

[FriscoKid]

China’s export restrictions on rare earth elements (REEs) to the U.S., announced in early April 2025, target critical materials like samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, which are vital for avionics in advanced military systems, including the sixth-generation F-47 fighter jet. These elements are used in high-performance magnets, radar systems, actuators, and jet engine coatings, with the F-47 heavily reliant on them for its stealth and operational capabilities. China produces about 90% of global REEs and dominates processing, giving it significant leverage. 
 

 

[FriscoKid]

https://www.bbc.com/news/articles/c20xn626y81o
 

Trump is going to exempt all the imported parts Tesla needs to build their cars, as well as all the components required to make iPhones. He’s going to carve out a lot of exemptions. Musk and Cook have handed him millions, he has to throw them a lifeline in return.