Stock Market Today: Dow, S&P 500, Nasdaq Fall as Trump Tariff Threats Roar Back, US Deficit Anxiety Deepens

Stocks

Political

Summary:

The Dow Jones Industrial Average (^DJI) sank 0.6%. The S&P 500 (^GSPC) also fell roughly 0.7%. The tech-heavy Nasdaq Composite (^IXIC) backed off about 1%.

US stocks fell on Friday to register weekly losses as investors assessed President Trump's latest tariff threats and the potential impact of his massive tax bill on the deficit and the economy.

The Dow Jones Industrial Average (^DJI) sank 0.6%. The S&P 500 (^GSPC) also fell roughly 0.7%. The tech-heavy Nasdaq Composite (^IXIC) backed off about 1%.

All three major averages fell more than 2% for the week.

The three indexes trimmed steeper losses that followed Trump's comment on Friday that Apple (AAPL) must pay a 25% tariff on iPhones sold but not made in the US. The tech giant has begun shifting some manufacturing to India, with China, home to its key suppliers, locked in a trade war with the US. Apple shares fell about 3%.

On Friday afternoon, Trump implied the tariffs would apply to other cell phone manufacturers.

"It would be more, it would be also Samsung and anybody that makes that product, otherwise it wouldn't be fair," Trump told reporters on Friday afternoon. "Again, when they build their plant here there's no tariffs. So they're going to be building plants here."

At the same time, Trump threatened to hike the tariff on EU imports to "a straight 50%" beginning June 1 as trade talks with the bloc have stalled.

The president's warnings shattered a more muted mood on Wall Street as investors wound down to the Memorial Day trading break on Monday.

His comments also created another supply chain complication for companies that are already worried about the potential hit to the economy from Trump's tariff blitz. Earnings season has seen several companies hold off from providing full annual guidance due to uncertainty around tariffs.

Stocks have suffered this week as deficit worries pushed up Treasury yields, which intensified as Trump's tax bill forged ahead. Wall Street is still weighing the economic impact of Trump's revised bill, which cleared a key hurdle in the House vote for approval.

Fears that the legislation could boost the US deficit by trillions have stoked a surge in longer-dated Treasury yields, which were already in focus after a Moody's downgrade. The 30-year yield (^TYX) eased but held above the key level of 5% on Friday after recently reaching highs not seen since the financial crisis.

Wall Street's attention has also begun to turn to Nvidia (NVDA) earnings, due Wednesday after the bell.

This year, the chip giant has found itself in the crosshairs of Trump's fast-moving trade policy as well as debates in Big Tech over costly AI investments. Nevertheless, options traders expect a lower level of volatility in Nvidia's stock after its results next week, compared with recent quarters.

Source: Yahoo Finance

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Manuel

Commodity

Political

U.S. President Donald Trump appeared to give his approval to Nippon Steel's (5401.T), opens new tab $14.9 billion bid for U.S. Steel (X.N), on Friday, saying the "planned partnership" between the two would create jobs and help the American economy.

Shares of U.S. Steel soared 21% as investors interpreted the post on Truth Social to mean Nippon Steel's takeover of U.S. Steel was nearing completion, having cleared the last major hurdle with Trump's apparent approval.

"This will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy," Trump said in a post on Truth Social.

Trump added that the bulk of that investment would occur in the next 14 months and said he would hold a rally at U.S. Steel in Pittsburgh next Friday.

The two companies did not immediately respond to a request for comment. The White House did not immediately reply to questions about the announcement.

Pennsylvania Senator Dave McCormick, who also called the deal a "partnership," said it was a "huge victory for America and the U.S. Steel Corporation," that will protect more than 11,000 Pennsylvania jobs, and support the creation of at least 14,000 more.

The Committee on Foreign Investment in the U.S., which reviews deals for national security risks, told the White House earlier this week that the security risks posed by the deal can be addressed, Reuters reported, moving the final decision on the merger to Trump's desk.

Reuters had reported this week that if the merger is approved, Nippon Steel has said it would invest $14 billion into U.S. Steel's operations including up to $4 billion in a new steel mill.

Talks with the U.S. government about the merger were in the final stages, Nippon Steel's president Tadashi Imai told reporters in Tokyo earlier this week, declining to provide details but saying the company is awaiting Trump's decision.

Following an earlier CFIUS-led review, former President Joe Biden blocked the deal in January on national security grounds.

The companies sued, arguing they did not receive a fair review process. The Biden White House rejected that view.

Source: Reuters

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Manuel

Middle East Situation

Energy

Iranian and U.S. delegations wrapped up a fifth round of talks in Rome on Friday and signs of some limited progress emerged in the negotiations aimed at resolving a decades-long dispute over Tehran's nuclear ambitions.

Despite both Washington and Tehran taking a tough stance in public ahead of the talks on Iran's uranium enrichment, Iranian Foreign Minister Abbas Araqchi said there was potential for progress after Oman made several proposals during the talks.

"We have just completed one of the most professional rounds of talks ... We firmly stated Iran's position ... The fact that we are now on a reasonable path, in my view, is itself a sign of progress," Araqchi told state TV.

"The proposals and solutions will be reviewed in respective capitals ... and the next round of talks will be scheduled accordingly."

A senior U.S. official said the talks lasted more than two hours and were both direct and indirect with Omani mediators.

"The talks continue to be constructive – we made further progress, but there is still work to be done. Both sides agreed to meet again in the near future. We are grateful to our Omani partners for their continued facilitation," the official said.

The stakes are high for both sides. President Donald Trump wants to curtail Tehran's potential to produce a nuclear weapon that could trigger a regional nuclear arms race and perhaps threaten Israel. The Islamic Republic, for its part, wants to be rid of devastating sanctions on its oil-based economy.

Omani Foreign Minister Badr Albusaidi said on X the talks between Araqchi and Trump's Middle East envoy Steve Witkoff had ended "with some but not conclusive progress".

Ahead of the talks, Araqchi wrote on X: "Zero nuclear weapons = we Do have a deal. Zero enrichment = we do NOT have a deal. Time to decide."

Among remaining stumbling blocks are Tehran's refusal to ship abroad its entire stockpile of highly enriched uranium - possible raw material for nuclear bombs - or engage in discussions over its ballistic missile programme.

Diplomats have said reaching a concrete deal before the summer would technically be impossible given the complexities of an accord. In the meantime, a senior Iranian official involved in nuclear talks with the U.S. said "if Washington drops its 'zero enrichment' demand, a political agreement is feasible."

STUMBLING BLOCKS

U.S. Secretary of State Marco Rubio said on Tuesday that Washington was working to reach an accord that would allow Iran to have a civil nuclear energy programme but not enrich uranium, while acknowledging that this "will not be easy".

Iranian Supreme Leader Ayatollah Ali Khamenei, who has the last say on matters of state, rejected demands to stop refining uranium as "excessive and outrageous", warning that such talks were unlikely to yield results.

Iran says it is ready to accept some limits on enrichment, but needs watertight guarantees that Washington would not renege on a future nuclear accord.

Trump in his first term in 2018 ditched a 2015 nuclear pact between major powers and Iran. Since returning to office this year, he has restored a "maximum pressure" campaign on Tehran and reimposed sweeping U.S. sanctions that continue to hobble the Iranian economy.

Iran responded by escalating enrichment far beyond the 2015 pact's limits.

Wendy Sherman, a former U.S. undersecretary who led the U.S. negotiating team that reached the 2015 agreement, earlier said that Tehran presents enrichment as a matter of sovereignty.

"I don't think it is possible to get a deal with Iran where they literally dismantle their programme, give up their enrichment, even though that would be ideal," she told Reuters.

The cost of failure of the talks could be high. Iran's arch-foe Israel sees Iran's nuclear programme as an existential threat and says it would never allow the clerical establishment to obtain nuclear weapons. Tehran says it has no such ambitions and the purposes are purely civilian.

Israel's strategic affairs minister and the head of its foreign intelligence service, Mossad, were also due to be in Rome for talks with the U.S. negotiators, a source aware of the matter told Reuters.

Araqchi said on Thursday that Washington would bear legal responsibility if Israel attacked Iranian nuclear installations, following a CNN report that Israel might be preparing strikes.

Source: Reuters

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Manuel

Economic

Political

President Donald Trump dug in on his threat to impose a 50% tariff on the European Union and said a potential 25% charge on smartphones would apply to all foreign-made devices, in the latest escalation of a trade war that is rattling markets and confusing businesses.

Trump on Friday reiterated his complaints about the EU, accusing the bloc of slow-walking negotiations and unfairly targeting US companies with lawsuits and regulations. The president downplayed the ability of the EU to broker a lower tariff rate, which he said would hit June 1. “We’ve set the deal. It’s at 50%,” he said.

“They don’t go about it right,” Trump told reporters in the Oval Office. “I just said, it’s time that we play the game the way I know how to play the game.”

Separately, the president said that a potential 25% tariff he threatened in a social media post Friday morning against Apple Inc. smartphones would also apply to devices from Samsung Electronics Co. “and anybody that makes that product,” and that his administration was moving to impose the levy by the end of June.

“Otherwise it wouldn’t be fair,” Trump said.

Taken together, the threats — which could dramatically reshape US trade on key consumer products — delivered a fresh shock for investors.

Equities held losses after Trump said he was “not looking for a deal” with Brussels. Earlier, losses were nearly erased after US Treasury Secretary Scott Bessent said several trade deals may be struck in the coming weeks. Apple led a selloff in tech, falling more than 3%.

The president’s missives, first posted early Friday, represented a fresh round of trade brinkmanship after previously indicating he was looking to wind down talks with partners over his April 2 duties, which he paused for 90 days to allow for negotiations.

Trump’s attention this week has mostly been focused on a massive tax and spending package currently being considered by the US Congress.

Trump dismissed concerns that his moves could result in higher prices for Americans, predicting that foreign countries and companies could absorb the cost of the tariffs — or would move manufacturing to the US. Still, he acknowledged that some costs could be passed on to consumers.

“Sometimes the country will eat it. Sometimes Walmart will eat it, and sometimes it’ll be something to be paid, something extra,” Trump said.

The defiant tone came despite top administration officials saying earlier Friday that Trump was primarily seeking to drive US trading partners and international corporations to strike better deals.

“The president was getting frustrated with the EU,” Bessent said on Bloomberg Television earlier Friday. In a previous interview on Fox News, Bessent expressed hope “this would light a fire under the EU.”

The pivot was a notable change in tone from a Group of Seven finance ministers’ meeting earlier this week, where the US Treasury secretary appeared keen on improving relations with Europe, according to a person familiar with the discussions.

Separately, Trump posted to social media that he already told Apple the company’s popular smartphones should be made in the US and that he was nonplussed by its effort to partially move production from China to India. The comments came days after a meeting between the president and Apple Chief Executive Officer Tim Cook, which was disclosed by a White House official.

“I had an understanding with Tim that he wouldn’t be doing this. He said he’s going to India to build plants. I said, ‘that’s OK to go to India, but you’re not going to sell into here without tariffs.’”

Trump’s latest posturing comes after the EU earlier this week shared a revived trade proposal with the US in a bid to jump-start talks. The EU’s trade chief, Maros Sefcovic, is planning to hold a call with Jamieson Greer, his US counterpart, on Friday to take stock of negotiations, a European Commission spokesperson said before Trump’s post.

A spokesperson for the commission declined to comment on the president’s threat ahead of the discussion.

Irish Prime Minister Micheal Martin called Trump’s suggestion “enormously disappointing.”

“Tariffs are damaging to all sides,” Martin posted on X. “A negotiated outcome is the best possible result for both sides, as well as for global trade.”

Trump’s latest tariff threat would hit $321 billion worth of US-EU goods trade, lowering US gross domestic product by close to 0.6% and boosting prices by more than 0.3%, according to Bloomberg Economics calculations.

The new EU framework covers tariff and non-tariff barriers, as well as ways to enhance economic security, mutual investments, strategic purchases and cooperation on global challenges, according to people familiar with the matter who requested anonymity to discuss the terms, which are not public.

The aim of the paper, which was sent to the White House earlier this week, was to jump-start formal trade negotiations.

Others in Europe saw Trump’s threats as an attempt to gain leverage on the bloc rather than an ironclad directive.

“This is all part of the negotiation; we will look calmly at the proposals and respond robustly and firmly,” Dutch Prime Minister Dick Schoof said Friday during a weekly press conference.

But there were signals the negotiations were not proceeding well. One EU official described a prior US proposal as a wish list of unrealistic and unilateral demands, Bloomberg reported earlier. The EU is aiming to cooperate with the US, and is seeking a balanced and mutually beneficial deal. EU officials and many member states remain skeptical that the Trump administration is driven by similar goals.

US Commerce Secretary Howard Lutnick on Wednesday said at an Axios event that some trade negotiations had proved “impossible.”

“Like the European Union — it’s just very difficult because, you know, Germany would like to make a deal, but they’re not allowed,” Lutnick said.

The EU plans to move forward with preparing countermeasures if negotiations fail to produce a satisfactory outcome. The trade bloc has put together plans to hit €95 billion of US exports ($107 billion) with additional tariffs in response to Trump’s “reciprocal” levies and 25% tariffs on cars and some parts.

European nations agreed earlier this month to delay for 90 days the implementation of a separate set of retaliatory duties against the US over 25% levies Trump imposed on the bloc’s steel and aluminum exports. That move came after Trump lowered his so-called reciprocal rate on most EU exports to 10% from 20% for the same amount of time.

“We are maintaining the same line: de-escalation, but we are ready to respond,” French trade minister Laurent Saint-Martin posted Friday on X.

Source: Bloomberg

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Manuel

Economic

Political

Chances of a close brush with a US payment default are growing as the Senate plans for time-consuming revisions to President Donald Trump’s sprawling, multi-trillion-dollar tax and spending package.

Republican congressional leaders attached an increase in the US legal debt limit to the president’s signature economic legislation. That gambit adds urgency to the enactment of a top-priority bill, but could put averting a default at the mercy of the complex legislative obstacle course that lies ahead.

Not only does the tax bill face a protracted process in the Senate, but Republican members have indicated that they expect to make extensive changes on the way to passage. That could provoke further problems when the revised measure is returned to the House for approval, given it only passed on Thursday by a single vote after tortuous negotiations among warring GOP factions.

The drama and delay could prompt market jitters as a possible default date nears.

Treasury bill investors have already started maneuvering around securities maturing in August after Secretary Scott Bessent told lawmakers that the US was likely to exhaust its borrowing authority that month if the debt ceiling isn’t raised or suspended by then. Bills maturing in August are cheapening relative to the rest of the curve — with Aug. 21 maturities yielding 4.34%.

Wall Street analysts and private forecasters, however, see the debt ceiling deadline, known as the X date, falling sometime between late August and mid-October.

If the US runs out of borrowing capacity, investors who hold debt that’s due to be repaid shortly afterward are among those most immediately exposed. That’s because the government won’t be able to sell fresh securities to provide the necessary cash for repaying holders.

Republicans have no ready backup plan for raising the debt ceiling besides the Trump tax measure. They need the the cuts in safety-net spending and enhanced border enforcement funding in the legislation to persuade ultraconservatives who have never voted for a debt increase to pass the bill. If they turn instead to the opposition party to avert a default, Democrats are expected to demand spending increases and other policy concessions that Republicans are loathe to make.

That means the debt ceiling increase depends on resolving GOP differences on the tax package.

Senate Republican leader John Thune said that a goal of enacting the tax bill by July 4 is tenuous given the need to find a majority to approve it.

“Obviously that’s the goal and aspiration. We’ll see how it goes. What does it take to get to 51 votes?” Thune told reporters Thursday. “They give us a good product to work with but we have senators who want to write our own bill.”

Thune will have to strike a delicate balance in revising the House’s $4 trillion tax cut package to get it through the Senate.

Bessent in an interview with Bloomberg Television on Friday said that the tax bill will do a “great job” of growing the economy and bringing down the debt-to-GDP ration.

He added that he is not expecting to see big changes to the legislation once the Senate picks up the bill, counter to Thune’s view.

A group of Republicans wants to increase the price-tag of the bill by making temporary business tax breaks in the House legislation permanent. At the same time, deficit hawks like Senator Ron Johnson of Wisconsin are demanding larger spending cuts that moderates in the party oppose.

And some senators object to provisions in the House bill that quickly end clean energy tax breaks, a rollback that hurts not only renewable energy companies but the banks backing current projects.

“I think we’re going to be looking to how we can perhaps have more realistic phase-out” of clean electricity credits, said Senator Lisa Murkowski, an Alaska Republican.

The Senate is using a budget gimmick to allow $1.3 trillion more in tax cuts than the House bill. That could antagonize fiscal hawks in the House already upset by the extra debt burden in the bill they just approved.

Other senators like West Virginia’s Jim Justice want a permanent tax cut on tips and overtime, which only lasts four years in the bill now, while scaling back changes to the Medicaid provider tax that could hurt his state’s budget.

“I’m sure a lot of stuff will change,” said Senator Josh Hawley of Missouri. “I know a lot of my colleagues have a lot of ideas about things to change.”

Hawley told reporters he would push to include a provision increasing taxes on carried interest which is used by private equity, venture capitalists and real estate partners.

Hawley also wants a higher child tax credit than the $2,500 maximum in the House bill.

That change will cost money, which in turn will escalate demands for more spending cuts.

Johnson, the Wisconsin deficit hawk, also wants to pick a fight with a group of House Republicans from high-tax states such as New York, New Jersey and California, who only agreed to support the tax bill after winning a higher limit on the deduction for state and local taxes. The SALT lawmakers had otherwise threatened to block the legislation.

Johnson has vowed to strip out the concession they won, which raises the SALT limit to $40,000 from the current $10,000. House leaders have said the SALT provision is crucial to getting the bill through their chamber.

Asked if he is likely to be ignored by his party’s Senate leaders, Johnson said he doubted they would have the votes to pass the bill without him. “If they got them, God bless them,” he said.

Democrats will be largely sidelined in the Republican-only budget bill process. Nonetheless they will have the ability to use the Senate rules to strike non-fiscal provisions from the bill. These likely include provisions like the deregulation of gun silencers and a block on state regulation of artificial intelligence in the House bill. The litigation of those provisions will likely take weeks.

“We are pulling out all the stops,” said Senator Ron Wyden, an Oregon Democrat. “That bill is stuffed full of policy which is not allowed under the rules.”

Source: Bloomberg

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Adam

Economic

President Trump threatened Apple (AAPL) on Friday with 25% duties on overseas-made iPhones, the latest entry in a long list of company-specific tariff threats from the president stretching back to his first term in office.

He also has a history of not following through on these warnings, often ending them with a claim of victory or by simply dropping the issue.

Trump himself alluded to the frequency of his threats, writing Friday that he "long ago informed [Apple CEO] Tim Cook" of his position and his focus on iPhone manufacturing in India. The president added that not complying would take the form of a tariff that "must be paid by Apple to the U.S."

The companies that Trump has singled out in a similar manner since his first administration range from John Deere (DE) to General Motors (GM) and others. He has also made previous threats against Apple dating back to 2016, even before he took office.

"Companies like Apple will start making their iPhones and other products inside the United States," Trump promised that year when part of his first campaign's platform was 35% tariffs on companies if they move overseas.

In recent weeks, Trump has also called out at least four other companies by name — Walmart (WMT), Amazon (AMZN), Ford (F), and Mattel (MAT) — over the possibility that they could raise prices due to tariffs.

The threats from Trump do have the ability to affect investor sentiment. Apple's stock fell more than 2% on Friday morning following Trump's warning, issued on Truth Social.

In Apple’s case, in spite of Trump’s years of threats and the recent opening of new US Apple manufacturing facilities around AI and silicon engineering, no iPhones are currently made in the United States now, as in 2016, and that isn’t seen as likely to change anytime soon.

Wedbush analyst Dan Ives quickly reacted to Trump’s threat by posting that a scenario of Apple acceding to Trump “would result in an iPhone price point [of ~$3,500 and] that is a non-starter for Cupertino."

He offered more details as to why in a note to investors, citing an “upside down cost model and Herculean-like supply chain logistics needed for such an initiative.”

Also Friday morning, Trump announced he was "recommending" a 50% tariff on the European Union in a separate post that quickly drove down broader markets alongside the Apple broadside.

An array of company threats

Another company often in focus for Trump during his most recent presidential campaign was John Deere, with Trump last September promising a 200% tariff on the company over "everything that you want to sell into the United States" amid concerns that the company would move operations to Mexico.

Trump relented and suggested his threats had worked in claims that John Deere at the time dismissed as fictional.

Something similar happened to other manufacturers in 2017 when Trump threatened both Toyota and GM with a "big border tax" over production facilities in Mexico.

Since those auto threats were issued, there have not been significant shifts in auto company production. These companies continue to split between various countries, with both continuing to operate manufacturing facilities in both Mexico and the US today.

The number of companies Trump has threatened over the years grows much longer when threats over non-tariff issues are included.

That is a list that stretches to dozens or perhaps hundreds of companies and has been a mainstay of the president's time in public life, even down to a threat of prosecution during the last campaign against Google (GOOG) for "only revealing and displaying bad stories about Donald J. Trump."

Trump’s new move against Apple appears to be in reaction to news earlier this week that Foxconn will invest an additional $1.5 billion in factories in India as part of a larger shift out of China.

What’s also unclear is what action Trump could take if he looks to target this facility and iPhone production more generally.

The tools Trump has relied on tariff authority for so far in his second term give him wide latitude to impose tariffs on entire nations, with his "Liberation Day" actions drawing on a 1977 law called the International Emergency Economic Powers Act (IEEPA).

Other powers let him target sectors like steel or semiconductors, but they can require investigations and have not historically been aimed at specific companies.

Source: finance.yahoo

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Devin

Economic

On Friday, President Donald Trump warned that goods from the European Union would attract a 50% tariff from next month and Apple Inc. may be hit with special levies of “at least” 25% if it doesn’t manufacture iPhones in the US. This episode comes at a uniquely bad time for the economy: borrowing costs are even more elevated than they were before, consumption strength is flagging and the labor market is adrift.

Let’s start with borrowing costs. Yields on 30-year Treasury bonds entered this bout of volatility about half a percentage point higher than they were before the April 2 “Liberation Day” trade shock, a reflection of markets jitters about persistently high fiscal deficits. Senate Republicans are now taking their first crack at a sweeping tax and spending plan from the House, which — at least in its current form — would worsen the already unsustainable fiscal trajectory. Adding to the signs of agita, Moody’s Ratings downgraded the US by one notch last week, the last of the big three credit assessors to do so. The negative sentiment in the market was reflected in this week’s sub-par auction of 20-year bonds. None of this means that yields can’t drop from their current levels, but lower borrowing costs may not be quite the release valve for the economy that they’ve been in the past.

The Federal Reserve is another factor here. Trump has been actively campaigning for lower policy rates on social media, and Governor Christopher Waller on Thursday outlined a path for the president to get his wish. “If we can get the tariffs down closer to 10% and then that’s all sealed, done and delivered somewhere by July, then we’re in good shape for the second half of the year,” Waller told Fox Business in reference to rate cuts. Unfortunately, Trump seems intent on pursuing policies that prevent that from happening.

The president’s latest salvo ratchets up the uncertainty. If the administration thinks the pressure campaign will speed up a deal, there’s also a non-negligible chance that it forestalls one, forcing the Fed to stay on hold for longer. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, told CNBC on Friday after the tariff news that the ever-shifting environment could prevent him from advocating for cuts. “In the short run, we gotta just wait for the dust to come out of the air,” he said, adding: “I feel like the bar for me is a little higher for action in any direction while we’re waiting to get some clarity.”

The combination of higher borrowing costs and tariff uncertainty is, of course, likely to weigh on the economy, but how bad it gets depends to a great degree on our interpretation of the underlying economic momentum. The decent consumption growth of the first quarter was somewhat flattered by tariff front-running that began cooling in April. A report from Bank of America Institute showed that credit and debit card spending was essentially flat in the first half of May from a year ago. To the extent that consumers brought forward purchases of big-ticket items such as autos, the report suggested that boost has faded. The labor market is, similarly, a mixed picture. While layoff and unemployment data seem generally benign, hiring has been extremely slow and continuing jobless claims have crept back up to near the highest since 2021.

On the bright side, Treasury Secretary Scott Bessent told Bloomberg on Friday that he expects “several large deals” with trading partners over the next couple of weeks and potentially more in-person meetings with China. He was also on Fox News earlier, just as the cash equities market was opening, with similarly soothing rhetoric to help pare earlier declines in US stock futures. At the time of writing, the S&P 500 Index was down about 0.8%, but still about 2.9% above its April 1 close pre-Liberation Day.

With regard to the EU specifically, the market is right to be skeptical that substantially higher tariffs are inevitable: after all, Trump has now walked back or delayed tariffs on most of the world, including a massive (but fragile and temporary) detente with China. The glass-half-empty interpretation is that, if talks have gone this poorly with the EU, they’re probably going to get rocky again with China, a trade partner and global adversary with whom America has much deeper issues.

At the end of the day, the administration is gambling on how much uncertainty this economy can withstand — and for how long. In remarks to Bloomberg’s Saleha Mohsin, White House Council of Economic Advisers Chairman Stephen Miran acknowledged that the outstanding trade and tax questions may cause companies to delay investments and hiring. “But waiting for the resolution, dealing with the uncertainty, that doesn’t cause a recession,” Miran said. “That just pushes activity from one time period to another.” That’s plausible, but it implicitly assumes that the uncertainty will abate eventually — and not just get replaced by new types of economic uncertainty. President Trump has now been slinging tariff threats for four months, and there’s still no guarantee that policy will ultimately land in a sane place.