Trump’s Remarks Send Dow Futures Plunging 360 Points Last Night

By Pam Martens and Russ Martens: April 6, 2018

Donald Trump, Republican Presidential Candidate

Donald Trump

If you have ever watched the past Chairs of the Federal Reserve give their semi-annual testimony before the U.S. House and Senate, you are aware of how carefully they parse their words to avoid rattling the stock or bond markets. That’s how people in high places in government with insider information behave.

But now we have Rambo in the Oval Office, randomly throwing grenades into already wildly fluctuating markets. This leads foreign investors as well as U.S. investors to question if they want their life savings to be invested in this carnival barker-like circus. Bloomberg News underscores this reality with an article today about a $60 billion money manager who is considering selling all of his U.S. assets because of the political risk.

At around 8:40 p.m. last eve, we settled in to watch the news. We learned that President Trump had released a statement indicating a plan to impose “$100 billion of additional tariffs” on China. The U.S. had already announced tariffs on $50 billion of Chinese products and China had responded in kind. The stock market has been fluctuating wildly in recent days on fears of a prolonged trade war.

We checked to see how futures on the Dow Jones Industrial Average were responding to this news. As expected, they were showing a big downdraft of minus 360 points. (The SEC should investigate to see if anyone had outsized negative bets on U.S. index futures last night.)

The plunge in markets came in response to this official statement from the President:

“I have instructed the USTR [U.S. Trade Representative] to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs. I have also instructed the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests.

“Notwithstanding these actions, the United States is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people. Trade barriers must be taken down to enhance economic growth in America and around the world. I am committed to enabling American companies and workers to compete on a level playing field around the world, and I will never allow unfair trade practices to undermine American interests.”

The Chinese Commerce Ministry shot back with this:

“If the United States disregards the opposition of China and the international community, and insists on unilateralist and protectionist trade practices, the Chinese side will follow through to the end and will not hesitate to fight back at any cost. We will take new comprehensive measures to respond and resolutely defend the interests of the country and the people.”

The outcry against the President’s sudden action was quick. The National Retail Federation released a statement telling the President to “Stop Playing Chicken With the Economy.” The statement read in part:

“These tit-for-tat trade actions could spell disaster for the U.S. economy and make it harder for Americans across the country to afford everyday products and basic necessities. It is inevitable that China will respond with more retaliatory actions that cause even further harm to American farmers, businesses and consumers. We urge the administration to change course and stop playing a game of chicken with the nation’s economy.”

Republicans, particularly those in midwest states whose agricultural products stand to be hurt by retaliatory Chinese tariffs on U.S. farm exports, are quietly fingering their worry beads and having nightmares about the potential for a Blue Wave to sweep the nation in the midterm elections in November.

Senator Ben Sasse, the junior Senator from Nebraska, released a statement on his Twitter page, saying “Hopefully the President is just blowing off steam, but setting Amer agriculture on fire is not a plan.” Sasse was quickly assailed on Twitter by his followers. Paul McHenry wrote: “…if Nebraskans know what is good for them, they’ll vote you out. You’re willing to sell out the main part of your voting base (rural Nebraskans) just to be Trump’s lap dog.” Debbie Lefkowitz weighed in with this: “Trump is corrupt and a threat to the future of our democracy. You said nothing for a year and now you are whining about tariffs? Sit down son. Your 15 minutes was up after Charlottesville.”

The endless chaos of the Trump presidency continues to be chronicled on the front pages of U.S. newspapers, which increasingly have a surreal quality as depictions of a different country in a different time. In an OpEd in today’s New York Times, Madeleine Albright, the controversial former U.N. Ambassador and Secretary of State in the Bill Clinton administration, suggests what is happening today should remind us of April 28, 1945 when “Italians hung the corpse of their former dictator Benito Mussolini upside down next to a gas station in Milan. Two days later, Adolf Hitler committed suicide in his bunker beneath the streets of war-ravaged Berlin.”

Albright writes further that “fascism — and the tendencies that lead toward fascism — pose a more serious threat now than at any time since the end of World War II” and blames Trump for playing a major role, writing:

“Instead of mobilizing international coalitions to take on world problems, he touts the doctrine of ‘every nation for itself’ and has led America into isolated positions on trade, climate change and Middle East peace. Instead of engaging in creative diplomacy, he has insulted United States neighbors and allies, walked away from key international agreements, mocked multilateral organizations and stripped the State Department of its resources and role. Instead of standing up for the values of a free society, his oft-vented scorn for democracy’s building blocks has strengthened the hands of dictators. No longer need they fear United States criticism regarding human rights or civil liberties. On the contrary, they can and do point to Trump’s own words to justify their repressive actions.”

Albright is perhaps not the best figure to be wagging her finger at Trump in the New York Times. In 1996, while Albright was U.N. Ambassador, the CBS program, 60 Minutes, aired an interview by Leslie Stahl with Albright. Stahl asked Albright about the sanctions imposed against Iraq: “We have heard that a half-million children have died. I mean, that’s more children than died in Hiroshima. And, you know, is the price worth it?” Albright responded: “I think this is a very hard choice, but the price — we think the price is worth it.”

While Albright has since called the remark “stupid” and repeatedly said she regretted it, she is still regarded by many as cold-hearted and/or a facilitator of genocide. That doesn’t mean, however, that she is wrong about Trump.

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