"Trump Walking Back Tariffs Won’t Stop
The Coming Stock And Bond Market Collapse"
by Alex
"The illusion of control is slipping. What we’re witnessing isn’t just a market wobble. It’s the prelude to something far more disruptive. As the façade of stability continues to crack, the choices before Washington are narrowing, and none of them lead to a soft landing.
Trump’s decision to pause tariffs for 90 days on April 9 sparked a brief rally. Stocks cheered. Yields didn’t. They kept rising. Stocks dropped the next day as soaring yields stole the spotlight. That detail alone should rattle anyone still clinging to the old rulebook. When both stocks and yields surge, it’s not optimism. It’s a red flag. The bond market is flashing warnings that confidence in U.S. fiscal management is rapidly eroding.
His plan, announced Saturday, to roll back tariffs on high-tech imports from China was framed by some as a step toward de-escalation. But the deeper issue remains. Every retreat in his tariff strategy means less revenue to offset a ballooning deficit. The numbers don’t lie, and the math isn’t working.
If yields continue rising Monday as he rolls back tariffs, it will confirm our worst fears - the market is losing confidence in how America handles its debt. A big rally in stocks, widely anticipated for Monday, could fizzle out fast as the week drags on.
Trump originally claimed his tariff strategy would generate $600 billion a year. Enough to shift the balance sheet of a country hemorrhaging over $2 trillion annually. That promise is now collapsing. Walking back tariffs might buy a rally, but it sells out the long-term fiscal picture. And it’s not just the revenue that’s vanishing. The political capital is, too. He’s simultaneously pushing for more tax cuts while reaffirming that Social Security and Medicare are untouchable. That leaves almost no room to maneuver. Cuts to discretionary spending are a political landmine. Slashing military outlays is unlikely. Balancing the budget is impossible.
And now Congress is making the 2017 tax cuts permanent. Another $3.5 trillion added to the debt over a decade. The cost of political convenience is compounding faster than interest itself.
Foreign creditors see this. They’re not just selling Treasuries because of trade tensions. They’re bailing because the math no longer works. You have a $7 trillion spending plan for fiscal year 2025, with over $1 trillion of that just for interest on the existing debt. Against this stands $5 trillion in tax revenue. Every dollar borrowed is a bet that inflation doesn’t blow up. That bet is increasingly looking like a sucker’s play.
The Federal Reserve, too, is trapped. They cut rates three times late last year to breathe life into the economy. It didn’t work. Yields kept rising anyway. That’s not how it’s supposed to work. Markets are signaling that the Fed has lost credibility. Monetary easing is being drowned out by structural deficits and runaway debt issuance.
Trump’s 90-day tariff pause with every country but China gave markets the second-best rally in history. But it also gave the bond market another reason to panic. A sugar rush that ends in a crash. Every walk-back in the trade war weakens the only leverage he had to rein in the deficit without touching sacred entitlements. Now, there’s no stick left. Only carrots and IOUs.
DOGE’s original goal to slash $2 trillion from the deficit has now shrunk to a meager $150 billion in cuts projected for 2026. It’s a rounding error. And yet even with this, projections show that debt growth under Trump 2.0 may still outpace the Biden era. The difference is that Biden didn’t pretend there was a way out. Trump is still pretending.
Foreigners are not stupid. They’re watching U.S. Treasuries lose their cash equivalent status in real time. A 30-year bond yielding 5 percent today could lose 15 percent of its value in just months if the panic accelerates. High yields mean Treasury prices are falling. That means U.S. debt isn’t a safe haven anymore. It’s a trap.
And so we arrive at a moment where Trump can’t cut, can’t spend, can’t tax, and can’t borrow without consequences. The Fed can’t print without igniting more inflation. The fiscal crisis is no longer in the future. It’s here. This is the endgame of decades of kicking the can.
An international bank has now warned of a crisis of confidence in U.S. dollar assets. That’s not a small warning. That’s an alarm bell echoing through the vaults of the global monetary system. If trust goes, so goes everything. The fiat system is naked. The mask has fallen. And the world is watching."
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