The art of the pivot

“THIS IS A GREAT TIME TO BUY!!!” President Donald Trump wrote on his Truth Social account yesterday morning. With trillions of dollars wiped off stock market value since his tariff announcements last week, this appeared to be an attempt to manufacture a silver lining. It also happened to be a literal statement. Within a few hours, the stock market was surging as Trump announced a 90-day pause on the higher “reciprocal” tariffs for most countries, while hiking the tariff on Chinese goods to 125 percent.

Was this careless? Intentional? Insider trading? According to the White House, it had been the strategy all along. The President told reporters it had been “the biggest day in financial history.” Speaking to his aides beforehand, Trump noted the market was rallying. “Nobody has ever heard of it. Gotta be a record.”

That’s how you do it in the MAGA world: forget who started the chaos, then take credit for calming it. “No other president would have done what I did,” Trump boasted after announcing his significant pivot. That’s almost certainly true – and indeed the lament of investors, economists and world leaders over the past week, who have been genuinely baffled by the self-imposed nature of this latest market turmoil. “LET HIM COOK!” has been the response from the White House, which also shared a 2014 tweet from Trump: “Deals are my art form. Other people paint beautifully or write poetry. I like making deals, preferably big deals. That’s how I get my kicks.”

What kicks they’ve been. If this is the “art of the deal,” what would “no deal” have looked like? “President Trump created maximum negotiations leverage,” said Treasury Secretary Scott Bessent in the hours after the U-turn. No negotiations have taken place yet. No trade deals have been secured, no new agreements have been struck. But Bessent, who is credited for almost single-handedly convincing the President to water down the tariffs over the weekend, remains extremely loyal to Trump and supportive of his tactics for bringing countries to the table. He was “overwhelmed,” he said, “by the response from mostly our allies who want to come and negotiate in good faith.”

But surely this is the art of the pivot, rather than the deal? So many outstanding questions hang over every aspect of the tariff mayhem that has transpired over the past week. This includes the puzzling sums, as trade deficit figures were converted into “tariffs.” No one on Wall Street – or anywhere else – saw that coming.

Not even Trump’s inner circle knows quite what position to take. “In two weeks we may be like ‘remember when we all thought that Trump had nuked the economy?”’ says one MAGA insider. “But as someone who wants this administration to succeed I don’t [know] whether I am meant to take part in the pantomime of freaking out. Either I should act like they are serious because that’s part of the plan, or I should act like they are serious because they actually are – and it’s going to kill us all.”

It’s hard to avoid that existential dread, especially when definitive statements are being upended days after they’re made. Having insisted at the start of the week that there would be no negotiations with any countries, now the aim seems to be explicitly to strike deals with allies. No one knew yesterday afternoon whether the higher tariffs on Canada and Mexico were still in place. None of this screams forward planning, yet the Democrats are trying to make out that there was a deliberate strategy yesterday, when Trump tweeted that it was a great time to buy. It’s an ugly, yet generous interpretation: it suggests that there was a plan.

Moreover, the pivot makes it even less clear what the real intention behind these tariffs is. If they were to really stage an overhaul of the free trade order – to force countries to buy American, to return manufacturing to the United States – this latest update undermines that effort. Yet Howard Lutnick – the US Commerce Secretary and a true believer in tariffs – is out on the airwaves applauding the U-turn. Perhaps, as is so often the case, the goal is to ‘own’ someone, anyone. Or for the Trump administration to push its luck: the Wall Street Journal reported today that an aide close to Trump understands the President was ready to take on some pain, but wanted to avoid an economic depression.

That’s a relief. A depression makes it hard to “BE COOL!” as the President has called on us patriots to do. But for all the mess and the MAGA talk, there is one consistency in the President’s actions that should inform what happens next. As Freddy Gray notes in his cover piece for the magazine this week, China is, and remains, America’s chief enemy. “Trump 2.0, scarred by the memory of Covid, is ever more radical when it comes to decoupling from Beijing,” he writes. “It’s pointing a bazooka at the financial world and asking everyone to pick a side.”

How the world responds to this ultimatum may well determine whether this 90-day pause is extended further – or whether higher tariffs are reinstated. In the meantime, the world is still reeling from the 10 percent baseline tariff, which will keep markets in flux, despite the good news. After the most economically tumultuous week since the pandemic, no one can feel too confident about what comes next. But that’s the art of it all – don’t you see?

The above is taken from the weekly Americano newsletter. To subscribe click here.