Trump ENDS *TACO* — Worse than Feared

Hey, so it's possible the end of taco

could be here or this is a symptom of

Trump not actually being able to

negotiate trade deals. I'm not exactly

sure which is worse. So in the end of

taco scenario, we have this potential

we've been talking about on this channel

of Trump getting encouraged by a high

stock market. In other words, when the

stock market crashes and bonds skyrocket

and everything feels like it's going to

end in the financial world, Donald Trump

ends up chilling out like what we saw in

April. Jamie Diamonds blowing up his

phone saying, "Hey, you know, you're

about to blow up the financial system."

Donald Trump quote unquote chickens out

or essentially imposes a 90-day pause.

Markets recover, go to all-time highs.

The the great thing about that is we

recover to alltime highs. The downside

of that is the risk that what we do is

we license to Donald Trump this hey you

have a lot of leeway here if the market

falls 10% who cares we're still higher

than the lows since you know we shot up

what 25 26% on some of the indices like

especially the Russells uh Russell 2000

uh up to uh up to the levels where we

are now. Unfortunately, now we're

getting these new uh tariff in positions

that are higher than what we were

hoping. Uh with the UK, a trade neutral

country, more like a trade surplus

country depending on how you look at it.

Uh they ended up getting a 10% tariff.

Uh but what we got with uh a Vietnam was

a 20% tariff and we're like, "Huh, okay.

So, it sounds like the 10% during the

90-day pause was indeed a floor. 20% for

Vietnam. Can it get worse? Well, uh, yes

it can because remember we've still

settled at about 55% total for China. We

now have the extra potential threat of

10% more if you support bricks which is

basically a direct threat um not an

imposition to uh Brazil, India, China,

South Africa. Less so mentioning Russia

here because even though Putin wants

bricks, less worried about what Putin

wants. Uh, Japan just got imposed at

25%. Kazakhstan 25%. Why you got to do

that to Borat? Uh, Laos 40%, Malaysia

25%, Myanmar 40%, South Africa 30%,

South Korea 25%. Uh, Myanmar down from

44 on Liberation Day to just 40. So,

they only got four points off from

Liberation Day. Laos goes from 48 to 40.

only down eight points from liberation

day. Uh Kazakhstan only down two points

from liberation day. South Africa stays

at its liberation day numbers and

Malaysia actually goes up 1% from

liberation day where Japan uh stays the

same at about 25% though. Japanese

tariffs have been really blurry. So uh

I'm just here

following Jack and Max. Uh but anyway,

um the the thing about this is if

scenario number so now we know the

imposition details. Scenario number one

is Trump is just being more aggressive

because he can. And because these

tariffs aren't going into place until

August 1, maybe it doesn't really matter

and it's really just another big

cardboard that's like, "All right, I

told you we're going to go dirty." And

he's holding up the card of dirty, so to

speak. Scenario number two is that

countries are like, "Nah, man. F you."

So, this is obviously the worst case of

any negotiation that you end up getting

strong armed and you lose. So, the only

way America loses, and I'm I'm really

pro America, but the way we can lose,

and we should be realistic about it, is

by other countries

forming coalitions against us. This

morning, we talked about the potential

of a coalition of China with the EU. But

what we also have to consider is the

potential for a coalition of Japan uh

Vietnam. Vietnam already made an

agreement so less so Japan, South Korea,

China and the EU and then South American

friends and otherwise all of them

coalescing together. So it's unclear

right now where we are again the two

potentials. Potential number one is this

is Donald Trump going ah markets are

alltime highs. We can afford to be a

little aggressive. Potential number two

is

this isn't working out. We're gonna lash

out.

Hopefully, this is just potential number

one because potential number one

again, you know, we kind of lie and wait

until August. We'll see where the buy

the dippers are. I'm surprised the dip

buying hasn't happened yet already since

people have been so desperate to buy the

dip. Uh, and I get it. You know, so far

buy the dip has been rewarded really

since co and you know, I was one of the

big proponents of buy the dip during

COVID and and even afterwards with our

Nike swoosh recovery. Uh I'm not

personally the biggest fan of valuations

where they are right now, but then

again, I also have other opportunities.

So maybe I'm just in a different

position. Like I see what we're doing

with house hack and AI and I'm like why

would I why would I buy a public

company? I'd rather just buy more of my

own stock. Again, I I'm biased, right?

Uh so so just consider that. But

broadly, those are the two things that I

would be paying attention to. Now, what

does this mean over the next 30 days?

Well, again, we're not going to see hard

data impacts here for months. And that's

unfortunately the downside of this kick

the can down the road stuff. When we

first got liberated, we were supposed to

have data in June, July, and August, but

we got a pause of 3 months. So, it just

kicks all the data down the road. So

really, you kind of look at Powell who's

in this place of like, bro, I'm waiting

for the hard data, but y'all keep

pausing and creating exemptions or

whatever. We'll see. But I do think we

got a little bit of a taste of of the

frustration this morning when when in

France, uh, you know, the French were

like, "Hey, um, yeah, we're we'll we'll

do slightly higher tariffs, but you

know, only if you exempt all of our

major industries." And it's like, oo,

doesn't sound like it's going very well.

So, um I'm I'm hopeful that this is just

all yapping. We'll get extensions and

we'll be able to negotiate something.

But I would say uh so far these letters

are a little worse than what we were

expecting this morning.