Trump Stirs the Pot on Immigration, China, Jerome Powell
Author: Greg Valliere
February 5, 2024
THERE’S AN ARGUMENT TO BE MADE that the financial markets can live with another Donald Trump presidency — but he made it clear this weekend that investors will have to watch him warily.
TRUMP SAID HE’S PREPARED TO RAISE TARIFFS on Chinese goods coming into the U.S. to 60% — a staggering rate that would impose a de facto tax hike on the American public and invite near-certain retaliation by U.S. trading partners.
AND TRUMP SAID HE WOULD FIRE Fed Chairman Powell, who Trump slammed repeatedly in his first term. Powell’s current term doesn’t expire until 2026, but if Trump wins the presidency, it’s likely that he would call Powell and demand his resignation. If a president says he can’t work with you, you resign, even if your term hasn’t expired.
TRUMP SAID ON FRIDAY that Powell is “political” and will help Biden win another term by cutting interest rates aggressively. We believe the Fed is not political — really — and Powell hit back on 60 Minutes last night by indicating that he will go slow on rate cuts.
MOST BLATANTLY, TRUMP IS PLAYING AN ACTIVE ROLE on the border bill that may pass in the Senate this week after months of negotiations. Trump reportedly has told new House Speaker Mike Johnson to kill the bill — and sure enough, the measure apparently will be dead on arrival; Trump wants to stir the pot on immigration, keeping the issue alive for the fall campaign.
JOHNSON, WHO HAS ONLY two or three votes to spare, will do what Trump wants, thus probably dooming the immigration bill, which contains several provisions that Republicans have demanded for years.
BOTTOM LINE: Trump likes to break things — such as relations with trading partners — but he often seems incapable of fixing them. He boasts that he can fix issues like the Ukraine war in 24 hours but of course he cannot. He can sell better than any politician we’ve ever covered, and once again voters are buying.
JOE BIDEN, MEANWHILE, announced that he would not participate in the traditional presidential Super Bowl interview, amid speculation that his aides were uncomfortable with him appearing unscripted in that format. New polls show Trump moving ahead although the public is leery of both of these elderly men.
JUST WONDERING: Has Nikki Haley considered running as a third party candidate? She could win 33% of the vote, which might be just enough to win against Trump, Biden, Robert F. Kennedy Jr. and others. And would Trump or Biden agree to a debate? Their own advisers are apprehensive.
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