Global Trade is not just about governments and tariffs. Its about what individuals want to buy and how businesses set about selling their products. How these micro components of the global economy are responding to the “challenges” of Trump v.2 will determine the future.

Trump blinked. 42 days after “Liberation Day” China gets a 10% base tariff level, putting it on better trade terms than the EU?  It was a ramble of conflicting narratives, but the reality is the US may just have averted a catastrophic trade induced crash – it will likely still experience a stagflationary shock.

Blains Morning Porridge May 9th 2025 – UK / US [...]

This morning’s Porridge is given over to what my chum Rob Hillman’s modelling of the Pandemic economy teaches us about the unpredictable consequences of Trump’s Tariffs. Chaotic, but we are more resilient than we might expect. And very likely to backfire on Trump!

Scott Bessent shocked the World Bank gathering this week with his rambling demands for fealty to an American led financial system. But what was really asking for? A time machine to take America back to the 1950s?

The UK faces a tough choice: a trade deal with the US or re-engagement with Europe. In Trump world these are mutually exclusive outcomes. Trump wants to boast about the trade deals he’s signing. Its time the Sir Keir Starmer got a bit UK First in how we respond. Too many strings could be attached to a US deal.

Trump’s supporters think he just played a blinder of masterstroke reversing tariffs. Those of us with clearer minds and an understanding of finance know the truth – Trump lost. The bond market punched him hard between the eyes.

Global Trade is enormously complex. Trump has put 104% tariffs on China – which will directly impact US consumers. Shutting the door on global trade will inevitably trigger consequences. The biggest risk is to the bond market – and a stressed Treasury market when the US has $15 trillion to refinance in next 20 months is a really, really bad idea.

Up, down, shake it all about. Current markets are driven by short-term rumour and sigh about what Trump might do or say next on tariffs. However, the real threats are longer-term – how the global economy is increasingly vulnerable not just to trade and economics, but also the growing weakness and unravelling of US military might. The implications for global security could change everything.

In times of financial stress, the market tends to take on a momentum all of its own. We may be in for further shocks, instabilities and dreadful No-See-Ums as investors try to discern what comes next following Trump’s tariffs. Interesting times to come…