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Let's understand these tariffs
DESCRIPTIVE - obvious stuff, what has happened, just requesting the news
Trump’s new tariffs are the first move in a full-spectrum reset.
$9.2T in debt matures in 2025. Inflation is stubborn.
Start with the debt: $9.2T must be refinanced in 2025. That's massive, and it's all because of the debt taken 5 years ago today - COVID!!
Governments need to raise capital quickly, as people state home, they need to provide income to this sitting at home, so they buried massively, and sold 5 year Bond
The day has come to pay for those bonds,
But, because of Biden and Period raising rates in 2022, it hurt the homeowner and consumers
They are now rolling 5 year Bond to 10 year Bond coming due in 2035
If rolled into 10-yr bonds, every 1 basis point drop in rates saves approx $1B/year; so a 0.5% drop would save $500B over a decade.
Lower yields free up fiscal room—without them, core spending gets crowded out.
How to push yields down with sticky inflation and cautious Fed?
Manufacture uncertainty.
Sweep in with tariffs, spook the markets, trigger risk-off.
Money exits stocks, floods into long-term Treasuries.
A deliberate “detox” to cool the economy and cut refinancing costs.
-PREDICTIVE - what will happen and why with reason, show your work,
But cheap refinancing isn’t enough on its own. Even at lower rates, the debt remains enormous.
That’s where the next lever comes in: cutting the deficit.
DOGE is showing cutting $4B per day. At that pace, they’d shave off $1 trillion by end of Sep 25 (if not May).
With these savings, the big economic pillar to successfully deliver on Scott Bessent's 3-3-3 plan is to get growth UP.
Tariffs come in as a trigger for domestic industrial revival. The thinking is: by making imports expensive, you create room for U.S. producers to step in
But here’s the problem: American factories can’t scale up overnight.
So in the short term, consumers will face higher prices.
The administration knows this. They also know consumers are smart, they can choose to change their spending
That’s why they’re front-loading the pain now, betting that by 2026, the benefits will be visible.
In the meantime, they’re offering some near-term relief.
Tax cuts have already been floated to help offset the cost burden on households.
And while risky, currency devaluation may follow later to make imports cheaper without lifting tariffs.
Don’t forget: tariffs also bring in revenue.
Estimates suggest they could raise over $700 million within the first year.
That’s not a game-changer on its own, but it gives the Treasury a bit more room to maneuver—especially if paired with deficit cuts.
Still, this approach isn’t without risks.
If domestic supply chains can’t catch up, or if global retaliation kicks in, inflation could rise again.
And if that happens, the Fed may be forced to raise rates—which would blow a hole in the low-yield plan. That’s the tightrope.
But, the Trump team has asked OPEC to lose oil prices, which has happened
A common critique is: why impose tariffs before building out the capacity to replace imports?
But that assumes tariffs are the end goal. They’re not.
They’re the starting gun—a way to force movement both inside the U.S. and around the world.
Which brings us to geopolitics.
Before tariffs, Trump’s team signaled a global order reset: pulling back from NATO, cooling EU ties, and opening diplomatic space with Russia, Saudi Arabia, etc. This is also about saving money
Tariffs now serve as leverage to renegotiate terms based on America-First policy.
Expect a lot of bilateral deals in the coming months.
Tariffs will be lowered for countries that offer strategic concessions—on trade, security, or industrial policy.
Those that resist? They'll pay higher costs until they decide to come to the table.
China is the focal point.
Observers have long argued: China isn’t a poor country.
It’s a wealthy, high-capacity state that floods markets with exports its currency artificially low.
Tariffs could be used to force big moves like currency appreciation by China.
Lines will be redrawn with other allies too.
Europe may be pushed to cut exposure to China or negotiate on Ukraine.
India may be forced to cut tarriffs and move closer to U.S. alignment.
Mexico and Canada could face demands to crack down on fentanyl trafficking routes.
So here’s the big picture:
→ Lower yields ease the debt wall
→ Spending cuts restore fiscal discipline
→ Tariffs jumpstart domestic growth
→ And geopolitics gets rewritten in America’s favor
It’s disruption by design—with enormous stakes.
If it works, it’s a defining success:
→ Debt under control
→ Manufacturing reborn
→ Global leverage restored
→ Trumpism vindicated in 2026
If it fails:
→ Inflation
→ Retaliation
→ Lost midterms
→ Strategic drift
-PRESCRIPTIVE - which is what to do
In the US economy there will be clear winners and losers.
Steel, autos, and textiles are likely to benefit—industries that form Trump’s political base. UAW now loves Trump
But retail, and construction—sectors more reliant on imports—could take a hit, especially in swing states.
Tech (especially Software, streaming and Search) is not in involved in tariffs, you still need cloud, data Centres, you still need AI, you need them more now.
That’s the political gamble.
If jobs return fast enough in key states, and inflation remains under control, the tariffs may look like a bold but effective move.
But if prices spike and job creation lags, the strategy could backfire by November 2026.
The Wisconsin seat loss was a warning
Less than 18 months to show results for midterms.
Voters don’t respond to strategies—they respond to prices, jobs and narratives.
FDR had fireside chats, Reagan had Morning in America
Trump needs a similar consistent messaging to Americans
18 months to find out if the gamble pays off.
These are buy points, these events do end, but they'll text you. Just focus on your business
