Trade Squashing – Fat Tail Daily | Australian Markets

The headline news this morning. Bloomberg:

Trump eyes tariffs of 10% to fifteen% for 150 international locations

Over many centuries people realized to trade with each other, peacefully, to get what they needed. Trade with household, trade with associates, trade with the subsequent city…with a overseas nation…with people you by no means met in locations you by no means heard of.

As civilization expanded, so did trade. The most profitable empires expanded the trading space and financed themselves largely on trading wealth — Carthage, Rome, the Mongols, Venice, Holland, England and America.

But now we’re going within the different direction…squeezing off trade as if we had been kinking a garden hose. And for causes that always have little to do with trade itself.

— To combat the movement of medication. The New York Times (additionally this morning):

Trump Has Promised More Tariffs on Mexico.

President Trump has threatened to increase Mexico’s tariff fee to 30 p.c beginning Aug. 1, claiming the nation hasn’t sufficiently tackled drug cartels.

— To punish worldwide judges after they don’t see issues your means. POTUS:

By the authority vested in me as President by the Constitution and the legal guidelines of the United States of America… I, DONALD J. TRUMP, President of the United States of America, discover that the International Criminal Court (ICC), as established by the Rome Statute, has engaged in illegitimate and baseless actions focusing on America and our close ally Israel.

— To suborn a overseas nation’s inner justice system. CBS News:

Trump threatens Brazil with 50% tariff, citing “Witch Hunt” in opposition to Bolsonaro

— To reward a massive marketing campaign donor. Embraer is Brazil’s greatest airplane producer. And its main competitor — Boeing — is one of Trump’s greatest supporters. Business Insider:

Around three-quarters of Embraer’s business jets and practically half of its regional airliners are delivered to US purchasers.

“Given the relevance of this market, we estimate that if this [Trump’s tariff plan] moves on at this magnitude, we will have an impact similar to that of COVID-19 in terms of the decline in the company’s revenue,” CEO Francisco Gomes Neto mentioned, per Reuters.

— And of course, to drive Americans to pay more for imports whereas rewarding associates with contracts. Times Now:

President Donald Trump introduced a landmark trade settlement with Indonesia on July 15, 2025, through Truth Social, opening the Southeast Asian nation’s market to U.S. items for the primary time. The deal contains Indonesia shopping for $15 billion in U.S. vitality, $4.5 billion in agricultural merchandise, and 50 Boeing jets, whereas paying a 19% tariff on exports to the US.

— Or how about this? The US greenback has misplaced 10% of its worth, worldwide, thus far this yr. And US insurance policies (BBBA, tariffs, deportations…) are virtually sure to imply even better losses for greenback holders. But don’t even suppose of diversifying. Fortune:

Donald Trump threatens 100% tariff on international locations that flip away from the greenback

— And how’s this for successful associates and influencing people? BBC:

Trump threatens further 10% tariff on nations that facet with Brics

“Any country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% tariff. There will be no exceptions to this policy,” Trump posted on his Truth Social platform on Sunday.

What are the implications of all this trade squashing?

Money Talks:

U.S. Trade Drops Second Straight Month As Tariff Effects Emerge

…uncertainty drives shifts in international commerce patterns and gold trading reaches historic ranges.

The Daily Mail:

Americans felt a sting on the grocery store final month.

Overall inflation hit 2.7 p.c in June in comparison with a yr earlier, the Labor Department mentioned Tuesday.

That is 0.3 p.c greater than final month’s 2.4 p.c studying.

And The Wall Street Journal:

A chaotic rollout of tariffs is beginning to filter by to price tags on store cabinets. An immigration crackdown is starting to weigh on jobs growth, measured by federal surveys. Taken collectively, the affect of President Trump’s whirlwind six months back in workplace is displaying up within the economic system.

Stay tuned…

Regards,

Bill Bonner,
For The Daily Reckoning Australia

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