If you’re already feeling overwhelmed by the sheer amount of news to ingest on Donald Trump’s tariffs plans in recent weeks, well, you’re not alone.
One measure of “policy uncertainty”, which measures how much certain issues are dominating news coverage, shows that the uncertainty levels over trade are currently higher than they’ve been in decades.
But even that index struggles to capture the extent of uncertainty.
Will the on-again off-again tariffs on Canada and Mexico actually be implemented? What about the tariffs on steel and aluminium, due to be implemented this week? So far, the only tariffs that have actually taken effect are the extra 10% levies imposed on China a few weeks ago.
But then Donald Trump has since talked about an extra 10% on top of that, not to mention a set of “reciprocal tariffs” intended mostly to hit the European Union. It’s very hard to keep pace with it all.
However, one of the impacts of all this uncertainty is that US share prices have been performing far worse than their international counterparts.
Many had assumed, based on his behaviour last time around, that Donald Trump would shy away from any decisions causing long-term damage to share prices, but the S&P 500 index is down over 6% since the inauguration, compared to a 12% rise in Germany‘s currency-adjusted index. Some are calling it the “Trump Slump”.
Markets don’t like uncertainty; nor do they like inflation, especially the kind caused by tariffs, which impose an extra cost on all imported items. Whether this is a price worth paying rather depends on what the White House intends to achieve from this.
The ostensible goal – beyond extracting something from countries like China and Canada – is to seek to reindustrialise the US by preventing manufactured goods from entering quite so easily. But is that likely to happen?
For some evidence, look no further than the last time Donald Trump imposed tariffs on metals, back in 2018. The levies on aluminium (then a “mere” 10%) certainly caused a slight rise in domestic production as more smelting capacity was brought back online.
But that bump was short-lived. By the end of his first term, production was back, more or less, to where it was before the tariffs. In the intervening period, aluminium production has dropped to unprecedented lows.
The White House’s argument is that this is down in part to the fact that a) some countries, notably Canada, were excluded from the tariffs and b) the level of tariff was too low. Hence why it’s been raised to 25%. But the aluminium industry itself has said that Canada really needs to be excluded from this round of levies. Will those appeals bear fruit? Again, no-one really knows.
What we do know is that many parts of American industry, from high tech producers of planes and cars, all the way down to soft drinks can manufacturers, rely on imported aluminium. In the very long run, some companies might get old smelters up and running, or build new ones. But it takes years to do so.
In other words, in the intervening period there is likely to be some significant economic pain as the cost of all that metal goes sharply higher.
Nor is it altogether clear whether a rational investor would really put the necessary funds into building a new smelter.
The numbers might add up if the tariffs stay in place. But what guarantee do they have that they will stay in place? Since no-one really knows, the chances of anyone putting their money into that industry are more constrained than usual.
What we do know is that in the meantime, other countries are retaliating with other trade weapons.
China has imposed limits on exports of key metals like tungsten and molybdenum – in both cases it is the world’s biggest producer. That, in turn, will further raise costs for American producers.
The upshot is the coming months and years will be bumpy and tough for the American economy. Then again, trying to re-industrialise a country like America – or for that matter the UK – is no mean feat. Trying to do it at breakneck speed using a set of blunt tariffs is all the harder.
Elon Musk has claimed that the Democratic party organized recent protests at Tesla locations worldwide. As he usually does with his wild claims lately, he hasn’t offered any proof whatsoever.
Over the last few weeks, there have been growing protests at Tesla locations around the word.
It started small with just a few locations in the US, but it has since grown to now dozens of locations every weekend, with sometimes hundreds of people at some locations.
Protestors have different reasons for wanting to disrupt Tesla, but they are mostly centered around seeing the company as Elon Musk’s piggybank and they are upset at his involvement in the government through his financial contribution to Trump’s election and his role at the Department of Government Efficiency (DOGE).
Musk took to X today to comment on the situation, and he made the claim that the protests at Tesla locations are funded by ActBlue:
An investigation has found 5 ActBlue-funded groups responsible for Tesla “protests”: Troublemakers, Disruption Project, Rise & Resist, Indivisible Project and Democratic Socialists of America. ActBlue funders include George Soros, Reid Hoffman, Herbert Sandler, Patricia Bauman, and Leah Hunt-Hendrix. ActBlue is currently under investigation for allowing foreign and illegal donations in criminal violation of campaign finance regulations. This week, 7 ActBlue senior officials resigned, including the associate general counsel.
ActBlue is a political action committee (PAC) used by the Democratic Party.
Musk did not elaborate on what “investigation” he was referring to nor did he provide any proof to back up his claim. In fact, he even asked for people to help provide information:
“If you know anything about this, please post in replies.”
Musk directly named Reid Hoffman, his former Paypal Mafia friend turned foe due to political differences, who was quick to deny any involvement:
Just one more of Elon’s false claims about me: I never funded anyone for Tesla protests. I don’t condone violence. But it’s clear Americans are angry at him – it’s easier to explain away their anger, than to accept that actions have consequences.
While the Democratic Party could be sympathetic to the Tesla protestors, there’s no evidence that they started the “Tesla Takedown” movement or have any significant involvement.
As we previously reported, it started as a grassroots movement with some posts on BlueSky, an X competitor, last month.
It has since gained considerable momentum, and they are now using Action Network, an open platform, to organize. As it grew, some groups have gotten involved to organize local protests, like The Disruption Project, which claims to stand “against the unjust systems of racial capitalism, the hetero-patriarchy, white supremacy and settler colonialism.”
In Seattle, The Troublemakers, a local environmentalist group, has also been helping organize.
The biggest blow to Musk’s claim is that there have also been protests outside the US, including in Canada and Europe. It’s unlikely that the US Democratic party would be involved in those.
There are currently six protests planned in Europe by the “Tesla Takedown” in the coming weeks:
Musk has also been involved in European politics, promoting far-right parties throughout Europe.
Along with the claims about the Tesla protests, Musk also retweeted someone linking several Cybertrucks burning down at a Tesla location in Seattle to “Democrat NGOs”:
Again, this claim is without evidence. In fact, the fires are still under investigation and it hasn’t yet been confirmed if it was arson.
Electrek’s Take
Could the Democratic Party be involved in some of the protests? It wouldn’t shock me, but you can claim that without proof.
I think most people involved in the protests are just mad at Elon for any of the hundreds of stupid things he has done or said in the last few months, including doing a couple of Nazi salutes at Trump’s inauguration.
He prefers to think that there’s some grand conspiracy against him because that’s easier to swallow than people hating home for being a compulsive liar, oligarch dork with the sense of humor of a maladjusted 13-year-old.
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