Trump JUST Lashed Out | Promises WORSE

Donald Trump might be pissed because a

lot of people this morning are assuming

that Donald Trump is just going to taco.

In other words, Trump always chickens

out when it comes to new tariffs. Part

of this is because yesterday at the

dinner with BB, Donald Trump suggested

that the hard deadline for these new

tariffs that are being implemented that

are somewhat similar to liberation day

tariffs will be August 1st.

Unless somebody has a better idea, which

that opened the door to people saying,

"Ah, Taco Man is back. He's going to

check it out. He's not actually going to

try to collect these tariffs." He's

already de facto delayed the tariffs

another 3 weeks beyond the July 9th

tariff deadline that he told us we would

have 90 deals by him. So far, instead of

getting 90 deals in 90 days, we've

gotten two deals. One of which with a

deficit surplus or a trade surplus

country rather than a deficit. And then

of course, Vietnam being the deficit

country. That said, Donald Trump appears

to be seeing a lot of the potential

headlines calling him taco. Uh, and

Donald Trump is trying to be clear that

he's not a flip-flopper today. He says,

"As per letters sent to various

countries yesterday, this just moments

ago, in addition to letters that will be

sent today, tomorrow, and for the next

period of time, tariffs will start being

paid on August 1st. There has been no

change to this date, and there will be

no change. Notice how now he's

clarifying, we're not changing the

date." In other words, all money will be

due and payable starting August 1st. No

extensions will be granted. Thank you

for your attention to this matter. This

is again because people are anticipating

that Donald Trump is just going to

somehow weasel out of these liberation

day level tariffs. I think when we talk

about liberation day, we remember the

market was very frustrated uh with some

of the tariffs that we saw imposed on

liberation day because they not only

seemed to not be backed by any kind of

reason or math rather than some or

rather just simply some funky uh

calculus in terms of how much of a

deficit countries have uh and then

somehow dividing that into our trade uh

to come up with a tariff figure. But

when we look at liberation day tariffs

versus some of the tariffs that we're

getting now, Laos got a discount from

48% on liberation day to 40%. Myanmar

from 44% to 40%. But more importantly,

countries like Japan and South Korea

with whom we have a lot more trade with

pretty much right at their liberation

day tariff levels. And so this is where

a lot of people are wondering, wait a

second, this isn't great. Now could it

be? Could we end up using this sort of

threat to coax countries into making a

deal? Well, that's the hope. The hope is

that these now returns to liberation day

levels on some of our larger trading

partners will force them to negotiate a

deal. The biggest concern obviously is

that we don't end up getting a deal and

instead we end up actually getting the

true pain of liberation date. Now, that

has been substantially kicked down the

road. See, in April, we thought, "Oh my

gosh, if we end up having these tariffs,

we're going to be in a recession by the

third quarter." Well, we're now in the

third quarter, and frankly, we haven't

seen not only recessionary numbers, but

we also haven't seen the tariff impos

tariffs imposed at levels that would

actually induce a recession. In fact, if

you take a look at liberation day, we

went from before the Trump

administration of an effective trade

weighted tariff level of 2.4% 4%. All

the way up to almost 28% on a trade

weighted effective uh sort of tariff

rate. Since then, we paused a lot of our

tariffs and we reduced a lot of our

tariffs going all the way back down to a

May 29th low of under 7%. Currently

sitting at about 15%. So we're still off

liberation day tariff levels. But now

with these new tariff level, these new

letters going out, we would expect

August 1st, some of these levels to go

back up, which means we basically kicked

the can down the road four months from

liberation day to August. So start of

April to August, we basically kicked

everything down the road four months,

which means it's possible you don't

actually start seeing some of the damage

of tariffs start showing up. Assuming

there are not further extensions and

assuming that Donald Trump is not

flip-flopping on us again,

you actually wouldn't really expect to

see broad-based tariff impacts until

maybe Q4 or Q1. And maybe they're

purposefully trying to kick the can down

the road because they're trying to get

to a new Fed chair. Now, that's not even

to mention the flip-flop of uh Donald

Trump. I'm actually thinking about, you

know, we we made these little flip-flops

for House Hack because everybody loves

Kevin and flip-flops. So, I was thinking

about changing these to MAGA as I feel

like it'd be more appropriate, you know,

little flip-flops here. So, it's kind of

cool. You know what hasn't been

flip-flopping? Gold prices holding

stable so far all year and they're

coming off a tear. So, what's next for

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description down below. Uh so, but

anyway, take a look at some of the

commentary that we're getting. So, this

is the editorial board of the Wall

Street Journal. Uh they call Trump

tariff man. He's back to being tariff

man. And the concern that they have uh

is that a lot of our cars come from

Japan and South Korea as do our washing

machines and some of our appliances. You

know, think Samsung products. Uh you

know, think the Toyota vehicles. The

this is a lot. Onethird of our vehicles

come from these countries. And so we're

looking at about a 50% tax increase on

the taxes that are already implemented

on some of these these these vehicle

companies. Now I think there's a limit

to how much consumers can really pay

anymore. In fact, somebody in the chat

here just mentioned that Bloomberg is

now reporting that so far Amazon Prime

Day sales are declining year-over-year.

Now to be determined because Prime Day

is just getting started or Prime week is

just getting started, so to speak. But

it does seem like we keep extending how

long these sort of sale periods are to

where, you know, one day is turning into

many different days and a week or a day

is now turning into a week. You're kind

of killing some of the urgency, but

there's also possibly just consumer

fatigue that consumers are saying, you

know what, it's it's time to start

scaling back. So, I don't think

consumers can really pay these prices.

And so this actually adds more of a

delay to tariff impacts because you have

to wait for them to show up in company

earnings which company earnings are

always delayed and then you forecast and

it really it could take it could take

years to get through all this tariff

stuff. So any of this hope that these

tariffs are going to cause a really

rapid recession for the bears probably

not likely. Remember the Chinese tariff

negotiations in 2018? We negotiated for

two and a half years with China and and

then COVID hit and that was the only

thing that delayed or or sort of

temporarily shelved tariff negotiations.

But anyway, uh Donald Trump yesterday

said he he'll consider an adjustment to

the letter, which is the opposite of

what he just twe, you know, truth,

saying there won't be any extensions.

Although he could also theoretically say

that, you know, we're not extending

your, you know, your uh requirement to

pay tariffs on August 1st, but we're

going to negotiate a deal with you

before then, maybe. But we've heard his

talk about negotiating deals. It hasn't

been working. Here are some of the

imports and exports uh from Japan and

South Korea. Uh included uh billions of

dollars in industrial machinery,

pharmaceutical preparations, medicinal

equipment, computer accessories,

household appliances, semiconductors.

You can see some of the numbers here. Uh

total trade between South Korea and

Japan works out to about 8.6% of total

US imports. Still more of our imports

obviously coming from Canada, Mexico,

and China. these countries each

individually getting their own trade

negotiations and so far we're pretty

quiet on what we're seeing with

negotiations with the European Union

which is good because the European Union

is also threatening counter tariffs or

reciprocal tariffs in the amount of

about $72 billion though so far we're

not seeing that yet some of the comments

that you see uh I thought this one from

John C not sure if that is John Cena or

who it is but uh I thought it was an

interesting comment because It relates

to something we've been talking about on

the channel that you have to really

worry about the coalition like larger

groups of of countries banding together

against us. Someone needs to explain to

Taco that all of our allies will

eventually team up against us in this

dumb trade war. An effective bully works

in the corner of the playground or by

cornering someone in the bathroom. But a

bully who goes to the cafeteria at

lunchtime and tries to shake down

everyone at once gets a beatdown. dumb

behavior driven by madeup economic

theories that have been repeatedly shown

to be wrong. And then they reference the

Smooth Harley tariffs uh Holly tariffs

of the 1930s. Keep in mind with Taco, we

are actually seeing way less of a Smooth

Holly tariff style impact because quite

frankly markets are under the impression

that no matter what Trump says,

we're going to end up getting some kind

of chicken out on the ultimate

resolution of tariffs. I think that's

why we're holding on to roughly this

550280 line right now in the cues. Now,

we've lost a lot of momentum that the

market had at the beginning of the day

in pre-market possibly because of

Trump's reiteration that oh no, no, no,

we're going to be aggressive this time.

We're not going to check it out. Of

course, the economist, which doesn't

really like Donald Trump, so let's be

clear, they say the great dealmaker is

conspicuously short of trade deals. they

kind of, you know, slam him for this 90

deals in 90 days not really going

anywhere. Uh, and reiterate some of the

other aspects we've been talking about.

And yes, there are non-trade barriers

that we should be thinking about, but I

mean, do also consider that we kind of

flip-flopped on uh on Ukraine. You know,

Trump all of a sudden pledging to send

more weapons to Ukraine. He told, you

know, the Pentagon last week said, "Hey,

we're not going to send more weapons to

Ukraine. we're pausing some of our

weapon shipments, which was basically a

campaign promise of Trump that, hey, you

know, we're not going to keep supporting

this war. In fact, we're going to end

the war within 24 hours. Well, that war

didn't get ended within 24 hours. Of

course, now Trump is branding that as

sarcasm, which we all know it wasn't

sarcastic when he said it during the

campaign, but he also publicly spat with

Zalinski, you know, saying Zillinsky

doesn't hold the cards. But then

privately when he talks to Zalinsky, he

says, uh, you know, hey, we had a very

important and fruitful conversation. I'm

not happy with Putin. I'm disappointed

with Putin that he keeps attacking, uh,

Ukraine. And Donald Trump ends up

saying, "Hey, I had no idea that the

Pentagon stopped weapon shipments to

you. We'll make sure you keep getting

weapons." So, it's kind of like

it comes across as a little weak where

in private Trump will be your best

friend. He'll give you your weapons.

He'll give you exemptions. He'll give

you good deals. If you call him and beg

him, he'll roll on his tariff policies

for Jamie Diamond. He'll make exemptions

for companies or whatever as long as

they promise potential future

investments. But publicly, he talks a

big talk. But we're not seeing that

right now. Uh which is why people are

frustrated. Now markets

make the bet that Donald Trump is going

to keep doing this. That privately

companies and markets will basically

always be able to come out and say,

"Hey, don't worry. It's all going to

work out privately. It's fine." And

that's probably why when you zoom out,

markets are at all-time highs because

we're essentially convinced. In fact, we

can honestly extend this trend line

right here as it's roughly where we're

getting ready to, you know, sort of move

along here, which is up and to the

right, which is fantastic. But what

you're finding is a market that says,

hey, you know, Trump is going to butter

out these tariffs. He's going to fold to

phone calls. He's going to fold to

market panic. So, why not buy the dip?

Which is great. And frankly, because we

keep buttering out the impact of

tariffs, it's likely the impact of

tariffs. So we we butter out the actual

imposition of tariffs, right? Which

butters out the impact of tariffs. And

if you butter out the impact of tariffs,

you actually give more time for

companies to, you know, streamline their

work forces without sudden uh shocks to

the labor force. uh you don't

necessarily see a massive skyrocketing

in layoffs because you get buttered out

impacts. You don't necessarily see a

massive impact suddenly to consumers

because you get this buttered out

building up of inventories and and sort

of trickling out of inventories to your

customers. In fact, if you want a good

example, look at Restoration Hardware

for example. So, Restoration Hardware,

it did spike a little bit on this news

about a deal with Vietnam because I want

to say about 30% of their inventory

comes from uh Vietnam. But if you go to

Restoration Hardware's last earnings

report, there's something really

interesting that happened. So, in Q1,

they started building up their inventory

uh for uh you know, in preparation of

tariffs. they went very very low uh in

their cash positioning was actually

technically their Q4. Uh and then in

then their calendar Q4 we would have

expected to see some inventory start

getting burned all the way through May.

But what you actually saw is inventory

stayed high. Look at this right here.

Between Feb 1 and May one, their cash

position stayed really low between 30

and $46 million which is very very low.

and their inventory of furniture stayed

at about a billion bucks. In other

words, they kept building inventory. So

this inventory buildup that people say,

oh, the pull forward was just basically

March and some of April is actually

probably just the first half of the

year, maybe even all the way through

August 1st, which if you think about it

that way, you know, now you've got

really a pull forward period of time.

Let's go zoom out on this. So, if I zoom

out, let's go to

uh making a little chart here.

Inventory buildup time frame is probably

most realistically now March 2025

through August 1, 2025. You know, that

works out to 3 to 3 to 7 a 4 month

period, right? All of March, all of

April, all of May, all of June, all of

July. It's five months. five months of

inventory buildup

uh during taco phase, right? This really

delays even if

uh we end up getting uh you know the

actual imposition, even if tariffs

actually hit

AUG one.

you know, we've built inventories now

for five months,

uh, or we've spent five months building

inventories,

uh, which makes which really I would say

delays the corporate impact, uh, and

pricing impact quite a bit.

Now, if you delay all this impact

through to

uh early 2026,

markets start pricing in uh a new Fed

chair

uh willing to coax uh the rest of the

board members who vote to go for cuts,

right? Uh and then markets get

enthusiastic about that. The only reason

you end up being bearish is if we're

cutting because the labor market rolls

over. And so far we've got no data of

that. You know, yes, has the labor

market been weakening? Are we in a weak

weakening path? Yes. But are we, you

know, expecting rapid cuts because the

economy is falling off a cliff anytime

soon? No. And I think that's exactly why

when you look at the 10-year Treasury

yield, it's it's up so aggressively

right now back up to 44 because the the

potential for a near-term shock seems to

be relatively low. And that's why we've

basically consolidated on the 10-year. I

mean, look at this. This consolidation

that's been going on for what, over a

year now. you sort of drew a box from I

mean you could even say right here

October of 22 to now you put a box

around this area you're coming up on a

3year consolidation on the 10-year

Treasury

probably because markets

just price in that markets are going to

keep going stable butter out the tariff

impacts so that doesn't mean that

tariffs aren't bad it just means the

impacts are being so spread out You

might see them in smaller misses but not

necessarily in big consolidated lumps of

layoffs which is actually good for

markets. Probably why there's no

liberation day style selloff even though

we might be somewhat taking a little bit

of a a pause here in the near term uh

yesterday and today. We'll see. But

that's my take on what's going on with

the Trump pack. Why not advertise these

things that you told us here? I feel

like nobody else knows about this.

We'll we'll try a little advertising and

see how it goes. Congratulations, man.

You have done so much. People love you.

People look up to you.

Kevin Pra there, financial analyst and

YouTuber. Meet Kevin. Always great to

get your take.