Under ‘stable genius’ Trump, boardrooms don’t know whether to sh*t or go blind

(Originally published May 13 in “What in the World“) Markets are celebrating the China deal as a painful moment of clarity for Trump.

Stocks soared after the White House said it would lower tariffs on imports from China from 145% to a mere 30%. Trump blinked. China called his bluff. What Treasury Secretary Scott Bessent admitted was a virtual embargo on Chinese goods proved too painful for U.S. businesses and consumers to bear. So Bessent and U.S. Trade Representative Jamieson Greer flew to Geneva to capitulate to Beijing. With the S&P500 rising 3.3% (now only 2.5% lower than before Trump took office) and the Nasdaq 4.4% on the news, surrender never felt so good.

Or was this just part of the master plan? Will Trump be able to declare victory with the benefit of 20/20 hindsight? Is the self-proclaimed Artist of the Deal merely following Stanford Professor Niall Ferguson’s advice to push China’s beleaguered economy to the brink before yanking it from the precipice to negotiate a modus vivendi—a “Mar-a-Lago” accord?

We may never know for sure. According to the Financial Times, the Geneva deal was the culmination of a secret meeting between Chinese and U.S. officials in the basement of the International Monetary Fund’s Washington headquarters during the IMF’s spring meetings last month. That means it was Beijing, not Trump, that lied about the two sides negotiating. Trump was merely breaking the secret Beijing was trying vainly to keep.

What’s clear is that Trump’s deal with Beijing, while as positive as his tariffs were negative, only heightens the devastating unpredictability he has unleashed on American businesses and the economy. The schizophrenic policies Bessent has defended as “strategic uncertainty” aren’t just pushing Washington’s adversaries to the table—to paraphrase Trump—to kiss the President’s ass, they’re crippling the ability of boardrooms to plan investments. Importers don’t know, to borrow quote Randle Patrick McMurphy in One Flew Over the Cuckoo’s Nest, whether to shit or go blind.

After all, the latest tariff reprieve is—like the pause Trump declared April 9 on his “Liberation Day” reciprocal tariffs on every country but China—a temporary, 90-day shore pass while the two sides negotiate. Tariffs on goods imported from China are still at least triple what they were when Trump took office.

China now joins the ranks of countries supposedly puckering up to placate POTUS. That could spark a fresh stampede for China imports like the pre-tariff rush for Irish-made pharmaceuticals that helped pull GDP growth into negative territory in the first quarter. But it certainly doesn’t strengthen the case for moving manufacturing back to the U.S., as Trump and his cronies have variously insisted his vacillating whirligig of tariffs is meant to do. It thus by no means removes the risk of stagflation and economic shock the economy faces, as Chicago Fed President Austan Goolsbee said Monday.

On the contrary, with Trump once again demonstrating his penchant for bluffing and leaking in his chaotic quest for empty deals, global investors may prove once bitten, twice shy about holding U.S. assets and its dollar.

In Congress, meanwhile, Republicans on the House of Representatives’ Ways and Means Committee on Monday unveiled plans to end subsidies for renewable energy and tax incentives for purchases of electric vehicles.