Trump and the ‘nasty' Taco trade
The bad news: even if the appeals court had not overturned the recent US trade court ruling declaring most of
Donald Trump
's
tariffs
illegal, Goldman Sachs expects the White House would find new ways to impose duties anyway.
The good news: investors seem unfazed either way.
The Taco trade – short for Trump Always Chickens Out – has become Wall Street's shorthand for profiting off presidential tariff tantrums. Trump announces sky-high levies, markets plunge, then he backs off and stocks soar. Repeat.
April's 'liberation day' tariffs sent the S&P 500 tumbling 12 per cent. Spooked by market turbulence, Trump paused the plan, sparking the index's best day in 17 years. A May trade truce with China lifted stocks again.
READ MORE
And the sell-off that followed Trump's recent 50 per cent tariff threat on the EU was reversed within days when Trump delayed the levy.
A sensitive soul who prides himself on being the world's great dealmaker, Trump predictably took offence about what he deemed to be a 'nasty' question about the Taco trade at a White House press conference, insisting it's just 'negotiation'.
It's tempting to mock Trump's tariff theatrics, but doing so too freely carries risks – pushing him could harden his stance and unsettle markets in ways the Taco trade doesn't fully anticipate.
As BCA Research's Peter Berezin tweeted: 'The first rule of the Taco trade is that you don't tell Trump about the Taco trade.'
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Irish Times
an hour ago
- Irish Times
Elon Musk wanted to ‘move fast and break things' in Washington. The main thing he broke was his reputation
Elon Musk came to Washington with a chainsaw and left with a black eye . Shrinking government is hard, particularly when you do it callously and carelessly – and apparently on hallucinogens. As with US president Donald Trump's tariffs , the department of government efficiency (Doge) has created more volatility than value. A guy who went bankrupt six times doesn't really care about spending. And Trump certainly didn't want to see the headline 'Trump cuts social security'. READ MORE He just wanted to get revenge on 'the bureaucracy' by deputising Musk to force out a lot of federal employees and give the impression that they were cutting all the waste. As always with Trump, the former reality star, the impression matters more than the reality, especially the reality of his own sins. This past week, Trump tried to recast the very nature of crime. As the New York Times' Glenn Thrush wrote: 'President [Donald] Trump is employing the vast power of his office to redefine criminality to suit his needs – using pardons to inoculate criminals he happens to like, downplaying corruption and fraud as crimes, and seeking to stigmatise political opponents by labelling them criminals.' It is sickening that the US department of justice is considering settling a wrongful-death lawsuit by giving $5 million (€4.4 million) to the family of Ashli Babbitt – who was shot on January 6th, 2021 , by a Capitol police officer when she ignored his warnings and tried to climb through a smashed window into the Speaker's Lobby in the Capitol. If Babbitt was trying to help Trump claw back a 'stolen' election by breaking into the Capitol, then breaking into the Capitol must be a good thing to do, and any police officer who tried to stop her and protect lawmakers cowering under desks must be in the wrong. [ Elon Musk leaves Trump's club, yet he was never quite part of it Opens in new window ] To abet Trump's fake reality, the craven House Republicans refused to put up a plaque honouring the police officers and others who defended the Capitol that awful day. I take it personally because my dad spent 20 years as a police inspector in Washington in charge of Senate security. He would run to the House whenever there was trouble. So if on January 6th Mike Dowd had been preventing insurrectionists from assaulting lawmakers, he would now be, in Trump's eyes, not a hero deserving of a plaque, but a blackguard who was thwarting 'patriots', as Trump calls the rioters he pardoned. It is a disturbing bizarro world. Trump was rewriting reality again Friday afternoon as one of the most flamboyant, destructive bromances in government history petered out in the Oval Office. It had peaked last winter when Musk posted on social platform X, 'I love @realDonaldTrump as much as a straight man can love another man', and again when Trump tried to reciprocate by hawking Teslas in the White House driveway. But Friday, even these grandmaster salesmen couldn't sell the spin that Musk had 'delivered a colossal change'. Elon Musk with US president Donald Trump during a joint news conference after Musk announced his departure from his role as a special government employee. Photograph: Haiyun Jiang/New York Times Musk has acknowledged recently that his dream of cutting $1 trillion had been a fantasy. He said changing Washington was 'an uphill battle' and complained that Trump's 'big, beautiful' budget bill, which could add more than $3 trillion in debt, undercut his Doge attempts to save money. As Trump said, Musk got a lot of 'the slings and the arrows'. His approval rating cratered and violence has been directed toward Tesla, a brand once loved by liberals and in China, which is now tarnished. Musk cut off a reporter who tried to ask about a Times article asserting that he was a habitual user of ketamine and a dabbler in ecstasy and psychedelic mushrooms even after Trump had given him enormous control over the government. That could explain the chainsaw-wielding, the jumping up and down onstage, the manic baby-making and crusading for more spreading of sperm by smart people, and the ominous Nazi-style salutes. When a reporter asked Musk why he had a black eye, he joked about the viral video of Brigitte Macron shoving her husband's face . Then he explained that while 'horsing around' with his five-year-old, X, he suggested the child punch him in the face, 'and he did'. The Trump and the Tony Stark prototype tried to convey the idea that they would remain tight, even though Musk would no longer be getting into angry altercations with Scott Bessent outside the Oval, sleeping on the floor of the Eisenhower Executive Office Building and hanging around Mar-a-Lago. (Trump wants the $100 million Musk has pledged for his political operation.) Musk, wearing a black Doge cap and black 'Dogefather' T-shirt, looked around the Oval, which Trump has tarted up to look like a Vegas gift shop, and gushed that it 'finally has the majesty that it deserves, thanks to the president'. Trump gave Musk a golden ceremonial White House key, the kind of thing small-town mayors give out, and proclaimed: 'Elon's really not leaving. He's going to be back and forth, I think.' Trump said that the father of (at least) 14 would never desert Doge completely because 'It's his baby'. Musk brought the Silicon Valley mantra 'Move fast and break things' to Washington. But the main thing he broke was his own reputation. – This article originally appeared in the New York Times .
Irish Times
4 hours ago
- Irish Times
Is South Africa's Cyril Ramaphosa running out of time?
A few hours before South Africa 's president Cyril Ramaphosa was subjected to a litany of false and embroidered charges by Donald Trump live on television in the Oval Office, back in Cape Town a more orderly but perhaps more significant debate reached a climax: the country's parliament finally passed a highly contested budget. It was the third attempt. Two previous budgets had been shot down over disagreements between the two main political parties, the African National Congress (ANC) and the Democratic Alliance (DA), in the year-old government of national unity. Each time, the financial markets were rattled over fears that the coalition might collapse – scuppering what investors see as the best chance in years for a business-leaning government. So the budget's passing was a vital moment for investor confidence. The big question is which of last week's two meetings – one in the White House; the other in parliament – will have the greater long-term impact on South Africa's trajectory. The walls are closing in on the 72-year-old Ramaphosa at home and abroad, with a hostile US, a stagnant economy and radical populist parties hovering in the wings. READ MORE Millions of South Africans watched the White House showdown live on their phones, as the US president repeated the lie, first propagated in his first term in office, that the white Afrikaner minority faces 'genocide'. Some in South Africa have suggested it was ill-advised for Cyril Ramaphosa to go to meet with US president Donald Trump in the White House earlier this month. Photograph: Eric Lee/The New York Times Members of Ramaphosa's entourage argue the visit went better than the fracas indicated. Two prominent Afrikaners, Johann Rupert, the billionaire founder of the luxury goods company Richemont, and John Steenhuisen, head of the DA party, did their best in the Oval Office to present a more accurate picture. 'I think we leave better than we came in,' Steenhuisen says. Progress was made towards a vital trade deal with America to head off the threat of 30 per cent tariffs, officials insist; with unemployment over 40 per cent, tens of thousands of jobs may depend on this. But many businesspeople are less sanguine, fearing that the spectacle did serious harm to South Africa's image, however much the claim of genocide has been debunked. 'This was awful for brand South Africa, for tourism and investment,' says a leading corporate figure. Investors were delighted last June by the formation of the unity Government and the inclusion of the market-friendly DA, ending 30 years of solo rule by the statist ANC. It was hailed as a fresh start after more than a decade in which the former liberation movement had been mired in corruption scandals and presided over an erosion of public services. One year on, with the economy growing at a little more than 1 per cent, optimism is waning. 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But he worries that other developing economies are adapting better to a fast-changing world. He goes on: 'In the White House I saw a clear understanding there are threats from the populists in South Africa which need to be dealt with and that we are starting to face up to our challenges . . . The big question is for our president: Mr President, what is the next step?' John Steenhuisen, leader of the Democratic Alliance (DA). Photograph: Waldo Swiegers/Bloomberg The ANC's critics have long argued that the party is better at promising reform than delivering it. When Ramaphosa, an anti-apartheid activist turned tycoon, took over the presidency from the discredited Jacob Zuma seven years ago, he was hailed as the man to rescue the country's fortunes. Under Zuma, the party had become engulfed in the scandal known as 'state capture' as businesspeople and politicians conspired to influence decision-making for their own financial interests. After taking office, however, Ramaphosa's reputation suffered. The economy flatlined and the supply of essential services, in particular energy, water and transport, faltered. Ever the conciliator, the president was accused by many of ducking the tough decisions needed to energise the economy and root out corruption. 'I think Ramaphosa was pretty unequivocally pro-growth when he came to power in 2018,' says Jonny Steinberg, a South African author now at Yale's Council on African Studies. 'He's subsequently learned that governing the ANC and being pro-growth are not only not the same thing, but they tug against each other.' Reform of Black Economic Empowerment regulations may be under way, driven by none other than South Africa's most famous émigré, Elon Musk Ramaphosa's ANC was punished in last year's elections. Securing just over 40 per cent of the vote, it lost its overall majority for the first time since Nelson Mandela took office in 1994 and ended white-minority rule. But the formation of the unity government, crucially without the two biggest populist parties that had broken away from the ANC – the Economic Freedom Fighters (EFF) and uMkhonto weSizwe (MK) – inspired hopes of an economic recovery. Yet a combination of the global fallout of Trump's protectionism and the government's failure to fully embrace the private sector has held back prospects for this year, analysts say. The economy is set to grow at 1.4 per cent in 2025, not nearly enough to reduce unemployment. Privately, potential investors argue the biggest disincentive is South Africa's network of quotas and regulations, which were designed to address the legacy of white rule. Many have singled out the Black Economic Empowerment (BEE) regulations for particular criticism. Introduced after the 1994 elections, they were aimed at tackling the economic injustices of apartheid, when almost all companies were white-owned and run, by creating a black business class. The key clause mandated transferring a stake to a black business entity. Ramaphosa himself was one of the ANC leaders 'deployed' by the party into business in the mid-1990s as white-run companies raced to seek a high-profile black partner. But over time, critics accused BEE of doing little more than creating a new elite, one that most black South Africans could never dream of entering. Moeletsi Mbeki, a prominent commentator and the brother of democratic South Africa's second president, Thabo Mbeki, has long been a sceptic of the project. He argues that by handing out stakes in businesses, the law stifles a sense of initiative essential to foster true entrepreneurs, and that its official mission of 'economic equality' is little more than a sideshow. European managers who tell him they want to invest in South Africa say BEE is a 'major obstacle', he adds, and they 'don't have a way round it'. While the policy has been tweaked over the decades, the ANC has seen it as a touchstone. But reform may now be under way, driven by none other than South Africa's most famous émigré, Elon Musk . The Pretoria-born billionaire adviser of Trump has in recent months launched a campaign against BEE laws, labelling them as 'openly racist'. If he has to comply with them, he will not introduce his satellite broadband network Starlink into South Africa, he has said. On the eve of the White House meeting, Maropene Ramokgopa, minister for planning, monitoring and evaluation, and one of the most senior ANC officials, told the Financial Times a compromise may be in the offing, and not just for Musk. More investors could take advantage of a 'workaround' to allow them to fund social projects instead of handing over equity, she said. Julius Malema, leader of the Economic Freedom Fighters, at a rally where he chanted 'Kill the Boer!' in the Soweto township of Johannesburg in July 2023. US president Donald Trump surprised a South African delegation with a video montage of apartheid-era chants from Malema. Photograph: Joao Silva/The New York Times 'Scrapping BEE is not a good thing,' she added, arguing it would outrage the ANC's supporters and lead to a 'revolution'. But, she added, there were 'mitigating avenues' that could facilitate investment. 'For example, you can say, 'I'll create thousands of jobs or I'll help you build schools.'' Although Musk attended the White House session with Ramaphosa, he did not speak, but was present at the subsequent private lunch. It is seen as no coincidence that two days after the talks, the government published a proposed policy change that could enable Starlink's owner to invest. This would allow people applying for a communications licence to invest in social projects instead of giving a 30 per cent stake to 'historically disadvantaged groups' – a workaround already offered to car manufacturers. Business leaders and DA insiders hope this may be the first step to a broader rethink, but they are not holding their breath. 'BEE must remain,' says a senior business figure. 'But does it have to include ownership? We should be the mining capital of the world but we're not, and a lot of that is because of the difficulties of BEE.' One of the few obvious positive outcomes of the trip for South Africa was that Trump did not scold the country over its close ties with America's rivals and enemies, nor its hostility to Israel. Democrats and Republicans alike have been irked by South Africa's uncritical stance towards Russia, China and Iran in recent years, and also by its sponsorship in 2023 of the genocide case against Israel at the International Court of Justice over its assault on Gaza. In a sign of a possible thaw in relations, Ramaphosa says Trump might after all come to the G20 summit in November, which South Africa is hosting. Trump's secretary of state, Marco Rubio, and treasury secretary, Scott Bessent, have boycotted meetings of their G20 peers this year. Diplomats argue South Africa has been far less nimble than other nonaligned states. 'South Africa has not been as agile and responsive in balancing interests [as its peers],' says Elizabeth Sidiropoulos, head of the South African Institute of International Affairs. 'We need to think how we can manage our relationship with America more effectively, and in a way that doesn't compromise our vital economic priorities.' The scale of the economic stakes is all the more apparent since Trump launched his trade wars. South Africa has benefited hugely from America's 25-year-old Africa Growth and Opportunity Act, which allows duty-free access for certain products from some African states. This is due to expire in September, and South African officials accept that it is unlikely to be renewed, with potentially devastating repercussions for South Africa's agriculture and car industry. If the government does fall, investors fear the more radical wing of the ANC might push for an alliance with parties that advocate nationalisation of industry and land redistribution of the sort Trump claims falsely is already under way Vincent Magwenya, Ramaphosa's spokesman, told the Financial Times this year that South Africa would not be bullied by Trump into dropping its nonaligned stance. 'It's going to be hard for Americans to swing us in one direction or another,' he said. 'Trump will not be president of the US forever and if we have to ride over a few years, we will ride it.' Still, Ramaphosa clearly concluded he needed to repair relations with Washington, not least after his US ambassador was expelled in March after saying Trump was 'mobilising a supremacism'. With this in mind, Ramaphosa came to Washington with a package of measures, including preferential access for US companies to South Africa's critical minerals and gas, and also easing South African restrictions on US poultry and pork. 'We need America,' said minister Ramokgopa, adding: 'They need us as well.' For decades, South Africa has lurched between optimism and pessimism – usually to undue extremes. Now, once again, it is at a critical juncture. On the more moderate end of the ANC spectrum, Ramaphosa is seen as uniquely able to hold together a coalition that spans stalwart ANC ideologues on one side and DA free-marketeers on the other. The passage of the budget – after the DA rebelled successfully against a move by the ANC finance minister to increase VAT – has underlined the ability of the coalition to weather storms. Privately DA and ANC insiders concede it is in their interests for it to endure, although it will be tested again, not least next year when the country holds local elections. Tony Leon, a former DA leader and author of a new book on the formation of the government of national unity, says it will face more strain, but that the DA has decided it is there for the long haul. 'Crises can erupt down the line, but the DA is saying that if you want to get rid of us, you need to fire us, we are not walking out.' If the government does fall, investors fear the more radical wing of the ANC might push for an alliance with the EFF, led by the demagogic Julius Malema, and Zuma's MK, which advocate nationalisation of industry and land redistribution of the sort Trump claims falsely is already under way. For now, its defeat over VAT has put the ANC on its mettle and brought a new competitive vigour to politics. 'For all its weaknesses and internal fights, the [coalition] performed better than the ANC Government in the previous five years,' says William Gumede, a prominent commentator. 'There is a sense of hope. We've seen real movement in some areas of delivery. Public servants are feeling the pressure. Up to now they were so complacent. Now ministers are being upstaged in public by the DA. The populist cause is on the back foot – but if the [unity government] collapses the populist cause would come back.' As ever in ANC politics, there is much intrigue. Behind the scenes, a succession battle has begun ahead of leadership elections in 2027. For the first time in the party's post-apartheid history there will be no liberation-era grandee contesting the top job. The future of the coalition – and the chances of the populists making a comeback – depends on the identity of the victor. Long before Ramaphosa became president, many in and outside the ANC pinned their hopes on him as a prudent helmsman. Many of his erstwhile fans have grown disappointed and now see him as too cautious. 'The country is on autopilot,' says Mbeki. Now the final chapter of Ramaphosa's long career has begun. For his allies, he has one last opportunity to prove his sceptics wrong – and grasp the nettle of reform. – Copyright The Financial Times Limited 2025
Irish Times
5 hours ago
- Irish Times
How a man described as ‘dumber than a sack of bricks' came to dominate global trade policy
Elon Musk called him 'a moron' and 'dumber than a sack of bricks' but he's probably the most consequential economist in the world right now. 75-year-old Peter Navarro is the intellectual driving force behind global tariffs and Donald Trump's attempt to rewire the global trading system. He wangled his way into Maga hearts with his 2011 book 'Death by China' (later a documentary) which paints China as the great Satan of world trade. In it, Navarro argues that Beijing engages in unfair trade practices, from intellectual property theft and currency manipulation to product dumping and abusive labour standards. READ MORE [ Donald Trump accuses China of violating US tariff truce Opens in new window ] And, more importantly, that the US worker is the chief fall guy. 'If the Chinese vampire can't suck the American blood, it's going to suck the UK blood and the EU blood,' he told the Daily Telegraph last month while accusing the UK of being a 'compliant servant of communist China'. The Massachusetts-born economist played a role in the first Trump administration but his push for a more aggressive stance on China was crowded out by free trade conservatives (the US did impose tariffs on Beijing but they were limited in scope). But Navarro is nothing but steadfast and he drinks the Maga Kool-Aid. He took part in the Rudy Giuliani-led campaign to have the 2020 US election result overturned and spent four months in prison last year for refusing to co-operate with the congressional inquiry into the January 6th attack on the US Capito l. His reward was to be appointed Trump's senior counsellor for trade and manufacturing and to have his tariff agenda elevated to the heart of US trade policy, the source of so much global turmoil at present. According to the New York Times and the Wall Street Journal, Navarro was the brains behind Trump's reciprocal tariff formula presented by the president on a cardboard chart in the White House Rose Garden. The formula, which has no precedent in economic theory, took the US goods trade deficit with a specific country, divided it by that country's exports to the US, turned it into a percentage and then cut it in half to produce the tariff rate. It generated weird outcomes. Madagascar, one of the poorest countries in the world, qualified for a punitive 47 per cent tariff on a modest $733 million of exports of vanilla, metals and clothing to the US. Navarro is spearheading this protectionist drive or at least providing an economic rationale for Trump's isolationist tendencies. His standing in academic circles took a hammering a few years back when it emerged that he had fabricated one of the people frequently quoted in his books. 'Ron Vara' is cited in several of Navarro's books mainly to make the case against China but Ron Vara was an anagram of Navarro, and was in fact Navarro citing himself. He defended the fabrication as a 'whimsical device' but it seems even his co-authors weren't in on the joke and publishing companies are now adding advisory notes to his books. Like many in the current Washington administration, Navarro was a fringe figure (he used to write get rich quick investment books) before being anointed by Trump. If his views on tariffs are in the minority, his representation of China as the chief villain of the global trading system has become more mainstream and resonates strongly with Trump's voter base. The US has lost close to 5 million manufacturing jobs since 2001, the year China joined the World Trade Organisation (WTO). The decline has been unprecedented by US standards and has created, or at least compounded, what's often referred to as a Rust Belt from the Midwest to the Great Lakes, an area that spans from western New York to Michigan and north Illinois and encompasses states like West Virginia, Ohio and Indiana. It was once the backbone of US industry, but it has now become synonymous with economic decline, population loss and urban decay. You could argue that the US backlash against globalisation and politics currently playing out in Washington is largely a product of Rust Belt economics. Navarro penned a chapter in Project 2025 (reputedly the ultraconservative blueprint for Trump's second term) called 'the case for fair trade' in which he makes the argument for action against what he describes as China's 'institutionalised aggression'. And why the US's big trade deficits (in goods) with other countries (Ireland is highlighted as having the seventh biggest) has been so damaging. 'These trade deficit statistics implicitly measure the large amounts of America's manufacturing and defense industrial base and supply chains that have been offshored to foreign lands,' he says. 'Such offshoring not only suppresses the real wages of American blue-collar workers and denies millions of Americans the opportunity to climb up the rungs of the ladder to the middle class, but also raises the spectre of a manufacturing and defense industrial base that, unlike our experience in World Wars I and II, will not be able to provide the weapons and material that would be needed should America enter another major world war or seek to assist a major ally like Europe, Japan, or Taiwan,' he says. The above passage encapsulates why many in the US see globalisation as a betrayal of the American dream and a fundamental attack on US hegemony.
