trump tariff drama worsens with threat

Markets are on edge as Donald Trump is

expected to announce several trade deals

or at least send several trade letters

this week. You've got researchers coming

up with scenarios across the board on in

terms of what kind of sectoral tariffs

and baseline tariffs to expect. Some

people think baseline tariffs will be

10% on top of sectoral tariffs. Other

people think we'll have baseline tariffs

of around 15 to 20% kind of thanks to

the Vietnam president of 20% plus

sectoral tariffs. Uh then the New York

Times is reporting that people or uh you

know people from countries like France

are saying they are willing to accept a

quote small increase in baseline par

tariffs if and only if some of their

biggest industries in France are

excluded like aeronautics, wine,

spirits, cosmetics getting exemptions

for these. The European Union is

prepared with $72 billion of counter

tariffs if they don't like what what

they see from the Trump administration.

On top of that, you've now got uh BRICS

countries starting to sort of lash out

against Trump. Uh BRICS leaders, so that

would be uh Brazil, China, India,

Russia, and South Africa. Not exactly in

that order, calling out the United

States, saying there are serious

concerns about the rise of unilateral

tariffs and non-tariff measures, which

distort trade and are inconsistent with

the World Trade Organization's rules.

They also warn about the proliferation

of trade restrictive actions that could

disrupt the economy. So very much back

to kind of like the March and April

drama that we heard about. Mind you,

also markets are essentially at all-time

high right now. So a little bit of give

back in this sort of slight period of

uncertainty makes sense. Uh Donald Trump

to this responds and says any country

aligning themselves with anti-American

policies or the anti-American policies

of bricks will be charged an additional

10% tariff. uh and there will be no

exceptions to this policy. So this is

kind of where we have to like remember

that there are the Trump priorities and

sort of the way Trump negotiates as well

as what other countries say. So the

biggest risk is that other countries

coales together and fight the United

States not only the EU but maybe EU plus

China or EU plus bricks, right? That's

when we actually get real damage from

tariffs. If countries roll over, much

like uh Vietnam or UK, which honestly UK

probably benefited from the deal, but if

countries just roll over, it's really

not that big of a deal that we end up

having these tariffs and manufacturers

end up eating a lot of the margins

because I don't think consumer prices

can really go up a lot and we'll end up

just sort of kicking down the can of

tariffs. But markets today, I think, are

more nervous about this idea of, oh no,

what if Donald Trump's letters that are

being sent out this week are really

aggressive and they call for 20 to 30%

tariffs and this is some kind of new

liberation day announcement where uh,

you know, all of a sudden we're going to

get some crazy retaliation in response

to some initial crazy letter and we're

back to sort of negotiating and

deadlines and all this disaster, right?

Bloomberg is taking an interesting point

right now. of the doomers are saying

that right now it makes sense to pick up

some cheap protection and maybe that's a

little bit of what we're seeing in the

stock market right now. They're

suggesting volatility is relatively low

and therefore the premium for picking up

protection right now might pay off well

especially if people get nervous over

the next few weeks about some of these

tariff issues and that maybe there would

be a blessing to pick up some

protection. It's also possible that uh

you know people are looking at us going

you know we've done really well maybe

it's time to take a little bit of money

off the table and just have some extra

cash sitting on the sidelines. Bloomberg

says markets do not expect meaningful

moves in the next few weeks as we have

now extended de facto extended the

deadline to August 1st. However, there

could be a quote unquote shock absorber

dynamic that suppresses realized

volatility and invites systemic V

selling strategies to increase exposure

blah blah blah blah blah. Okay, this is

basically just a fancy way of saying

cheap cheap equity downside could be a

good thing to pick up. So outside of all

the finance uh you know jargon or

legalies, something to consider is the

cues usually recover when when we have

these sort of red moments. We typically

see buy the dip because buy the dip has

done so well. In my opinion, I think the

Trump administration and Bessant will

broadly take a very optimistic approach

towards tariffs because they realize

that's what's what basically brought

markets to all-time highs in the first

place. So, they'll continue their

optimistic tone while at the same time

other countries, I think, will quietly

murmur over how they're frustrated by

these tariffs. But if things continue,

they wave they've continued the last

three or four months,

we'll just end up being in a kick the

can down the road place. We don't really

have any catalyst this week other than

this July 9th catalyst of letters going

out. Uh and again, tariffs aren't even

being assessed until August 1st. And I

don't really think the FOMC minutes that

we get this week are going to be a big

burger. In other words, I think they'll

be a nothing burger. So really, you're

somewhat in a low catalyst week with no

catalyst really today. Consumer credit

at 9:00 a.m. tomorrow, California time.

Wholesale trade inventories at 7:00 a.m.

on Wednesday. FOMC minutes on Wednesday.

initial claims on Thursday and that's

it. Then it's mostly just focused on

tariff policy. You know, Iran mostly

quiet, although some people are saying

Iran's going to want nukes again.

They're going to go back for nukes.

Who knows? This is all just conjecture

at this point. Obviously Tesla has its

own issues, which we talked about in a

separate Tesla video. But the market

broadly, I don't see huge big negative

catalysts here that would suggest that

it's going to be an easy play to go, oh

yeah, buy puts on everything. Who knows?

Maybe we'll end up getting a Trump lash

out because he feels confident because

the market is higher. That is possible.

It would just be unlike what we've seen

over the last 3 months. So, that said,

nothing really to say why the market is

so negative now. And maybe after these

letters go out, we'll be right back to

sort of buy the dipping. We'll see.

Anyway, that's that's my take on what's

going on right now. And it's probably

Trump's lash out on bricks that has the

market a little bit uneasy. But beyond

that, doesn't seem to be much going on

in the market today. 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 Praath

there, financial analyst and YouTuber.

Meet Kevin. Always great to get your

take.