Ken Langone

“I know what the hell I’m doing,” Trump tells Republicans, as trillions in stock values evaporate.

by

Heather Cox Richardson | Letters from an American

Heather Cox Richardson

April 12, 2025

It was just 20 days ago—on March 24—that editor in chief of The Atlantic Jeffrey Goldberg reported that the most senior members of the Trump administration discussed a military strike on the Houthis in Yemen on an unsecure commercial messaging app and that they included him on the chat.

Their Signal chat, which Goldberg published later in response to the administration’s insistence that there was nothing classified in the chat, showed that Secretary of Defense Pete Hegseth had posted precise details of the munitions and planes involved in the strikes. It showed that neither President Donald Trump nor the acting chairman of the Joint Chiefs of Staff—a Biden appointee—was on the chat, and that White House deputy chief of staff Stephen Miller apparently made the decision to strike based on his interpretation of what President Donald Trump wanted. In violation of the Presidential Records Act, the app was set to delete the messages. There was apparently no larger strategy or diplomatic plan other than to strike, and participants greeted news of the collapse of an apartment building into which a Houthi leader had allegedly walked with emojis of fists, fire, and a U.S. flag.

This extraordinary lapse in national security protections would normally have defined an administration and caused a number of resignations, but the White House called the case “closed” on March 31. And there was more: On April 2, Dasha Burns of Politico reported that the team working with national security advisor Mike Waltz regularly used the unsecure Signal app to communicate about issues involving Ukraine, China, Gaza, the Middle East, the U.S., and Europe. The officials to whom Burns spoke said they had personal knowledge of at least 20 such chats.

That story has been almost completely driven out of the news by President Donald Trump’s tariff machinations since April 2. On that day, after teasing the idea of what he called “Liberation Day,” Trump announced that at 12:01 a.m. on Wednesday, April 9, he would be imposing a 10% tariff on all imports to the United States, with significantly higher rates on countries he claims engage in unfair trade practices. By the next day it had been established that his team, led by trade advisor Peter Navarro, arrived at the tariff rates with a nonsensical formula that simply took the U.S. trade deficit with a country, divided it by the value of that country’s exports to the U.S., and cut the resulting number in half.

For the next week, the stock market plummeted, jumping only with rumors that Trump would back off on the tariffs, while economists and financial analysts revised the chances of inflation and recession upward, and economic growth downward. News coming out of the White House was contradictory: one advisor would say that Trump would not negotiate over tariffs and they were here to stay, while another would say he intended to negotiate and they were just starting points.

Meanwhile, as predicted, other countries began to put tariffs on goods from the United States or pause exports, and global markets fell. Americans from business leaders to small business owners to consumers and wage workers called out the “stupidity” of Trump’s trade war. Others noted that the tariffs appeared to be intended as a shakedown as countries or businesses who offered Trump the right price could get exemptions.

As trillions of dollars in stock values evaporated, Trump insisted the tariffs were here to stay. “I know what the hell I’m doing,” Trump told Republicans on Tuesday, April 8. He boasted that global leaders were “kissing my ass.” On Wednesday, April 9, at 9:33 a.m, he posted: “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!” At 9:37, he posted “THIS IS A GREAT TIME TO BUY!!! DJT”

But, as Tyler Pager, Maggie Haberman, Ana Swanson, and Jonathan Swan of the New York Times reported, Trump’s team, led by Treasury Secretary Scott Bessent, was worried about setting off a financial panic that could not be stopped. Driving their concern was a broad sell-off of U.S. government bonds, which in the past investors had seen as a safe haven during times of market turmoil, and the rise in popularity of the government bonds of other countries.

Former treasury secretary Lawrence Summers noted that global financial markets were backing away from U.S. assets. Fund manager at Penn Mutual Asset Management George Cipolloni told Bernard Condon and Stan Choe of the Associated Press: “The fear is the U.S. is losing its standing as the safe haven. Our bond market is the biggest and most stable in the world, but when you add instability, bad things can happen.”

On April 8, U.S. Trade Representative Jamieson Greer defended Trump’s tariffs to the Senate Finance Committee. He was offering similar testimony before the House Ways and Means Committee at 1:18 p.m. the following day when a social media post from Trump pulled the rug out from under him. Trump paused most of the highest tariffs for 90 days and instituted an across-the-board tariff of 10% in their place. But, perhaps unwilling to look weak, he announced that he was raising tariffs on goods from China to 125% effective immediately, “[b]ased on the lack of respect that China has shown to the World’s Markets.”

With Trump’s tariff pause, stocks jumped upward in one of the biggest single-day gains since World War II. Hedge fund manager Spencer Hakimian posted a graph showing that Nasdaq call volume—bets that stock values would rise—spiked minutes before Trump’s announcement. He commented: “Not a good look at all.” Representative Alexandria Ocasio-Cortez (D-NY) reposted Hakimian’s post and added: “Any member of Congress who purchased stocks in the last 48 hours should probably disclose that now. I’ve been hearing some interesting chatter on the floor. Disclosure deadline is May 15th. We’re about to learn a few things. It’s time to ban insider trading in Congress.”

David Smith of The Guardian noted that the juxtaposition of Trump golfing, dining with donors, and meeting with race car drivers even as economic chaos tanked people’s retirement accounts prompted accusations that he has lost touch with reality. A widely circulated video that appears to be Trump bragging to NASCAR drivers visiting the White House that investor Charles Schwab made $2.5 billion on Wednesday and that another investor made $900 million has fed anger at Trump’s economic chaos. On Friday the University of Michigan released its well-respected consumer-sentiment index, showing that consumer sentiment about the economy and personal finances fell for the fourth straight month, dropping 11% from March. Consumers from all political affiliations fear recession, inflation, and unemployment.

This level of consumer sentiment is the second lowest since the index began in 1952. Chief U.S. economist at Pantheon Macroeconomics Samuel Tombs told the Wall Street Journal’s Harriet Torry: “Consumers have spiraled from anxious to petrified.” James Knightley, the chief international economist at the multinational banking and financial services company ING, noted that consumers appear to blame Trump for their concerns. While in January 44% of respondents told researchers that the government was doing a poor job of managing inflation and unemployment, now 67% say so.

The tariff change happened so quickly that White House officials could not tell reporters what the actual tariff rates were for different countries. When more information was available, Kevin Schaul of the Washington Post noted that Trump’s new tariff levies had actually increased tariffs rather than lowered them because he had dropped rates only on goods from countries that don’t export much to the U.S. He had raised them significantly—not just to 125% but to 145%—on China, a major trading partner.

On Friday, China imposed 125% tariffs on goods from the U.S. A spokesperson for the Chinese Finance Ministry said that Trump’s tariff machinations “will become a joke in the history of the world economy.” At 9:20 a.m. President Trump posted: “We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly. DJT.” The new tariffs had badly threatened Apple Inc., and at 10:36 p.m. the U.S. Customs and Border Protection posted a notice that various electronics, including smartphone and computer monitors, are exempt from the tariffs.

When economist Justin Wolfers commented: “I just want to tip my hat to the crack team of White House economists who were able to discover—in just a few short days—that the U.S. is dependent on China for smartphones, computers and semiconductors,” Dr. Soumya Rangarajan noted that “a basic medicine we use 1000x per day in the hospital, heparin, is also dependent on China, and people will die without it.” As Sabrina Malhi of the Washington Post explained, about 12 million people hospitalized in the U.S. need heparin every year, and it is only one of the many medications that will be affected by Trump’s tariffs on goods from China.

Josh Marshall of Talking Points Memo posted that a “[g]ood way to see the current tariffs, as of literally today, is no tariffs on high value add manufactured goods marketed to middle and upper middle classes. Massive tariffs for cheap consumer items” that benefit those lower on the economic ladder.

While the damage from the tariffs both to the domestic and global economy, as well as the USA’s standing in the world, is not yet clear—all the chaos has been about the prospect of Trump’s high tariff rates, not their actual effect—Trump appears to be trying to downplay that story in favor of demonstrating his power.

As the tariff saga played out on Wednesday, Trump signed a memorandum for the heads of executive departments and agencies informing them that they no longer need to let the public know when they get rid of regulations that they determine are obviously unlawful. Kate Riga of Talking Points Memo notes that “unlawful” appears to mean anything Trump doesn’t like.

In a breathtaking violation of the Constitution, on Wednesday Trump also went after two individuals: Christopher Krebs and Miles Taylor. Trump appointed Krebs to head the Cybersecurity and Infrastructure Security Agency (CISA), where in 2020 Krebs assured the American people that the presidential election had not been stolen. Trump now claims Krebs thus censored the speech of Trump loyalists.

As a Department of Homeland Security staffer, Taylor wrote an op-ed under the pseudonym “Anonymous” saying that members of the first Trump administration were pushing back against the president’s policies. Taylor later wrote a book about his time in the White House that Trump claims was “designed to sow chaos and distrust in Government” and thus “could properly be characterized as treasonous and as possibly violating the Espionage Act.” A grand jury believed Trump himself violated the Espionage Act by retaining classified documents.

Trump stripped security clearances from Krebs and Taylor and also from their employers. He ordered government officials to investigate the two men and to recommend “appropriate remedial or preventative actions to be taken to protect America’s interests.” Employees at CISA told Kevin Collier of NBC News they were disheartened by the attack on Krebs and noted that staffing cuts at CISA had “already severely degraded our capacity to defend critical infrastructure.”

Home Depot founder: “I don’t understand the goddamn formula.”

by

Heather Cox Richardson | Letters from an American

Heather Cox Richardson

April 7, 2025

Major indexes on the stock market began down more than 3% today when, as Allison Morrow of CNN reported, a rumor that Trump was considering delaying his tariffs by three months sent stocks surging upward by almost 8%. The rumor was unfounded—it appeared to begin from a small account on X—but it indicated how desperate traders are to see an end to President Donald J. Trump’s trade war.

As soon as the rumor was discredited, the market began to fall again, although Treasury Secretary Scott Bessent’s announcement that he is opening trade negotiations with Japan and looking forward to talks with other countries appeared to reassure some traders that Trump’s tariffs will not last. The wild swings made the day one of the most volatile in stock market history. It ended with the Dow Jones Industrial Average down by 349 points and the S&P 500 and the Nasdaq Composite staying relatively flat. Futures for tomorrow are up slightly.

Foreign markets fared badly today, suggesting that the reality of Trump’s tariffs is beginning to sink in. Sam Goldfarb of the Wall Street Journal notes that Hong Kong’s Hang Seng took its biggest dive since the 1997 Asian financial crisis, losing 13%, and that other markets also fell today.

Goldfarb reports that in the U.S., traders are deeply worried about losses but also anxious about missing a rebound if the administration changes its policies. Hence the extreme volatility of the market. Generally, values over 30 are considered indicators of increased risk and uncertainty in the Chicago Board Options Exchange (CBOE) Volatility Index, the so-called fear gauge. Today, it spiked to 60.

Business leaders are speaking out publicly against Trump’s tariffs. Today, Ken Langone, the co-founder of Home Depot and a major Republican donor, told the Financial Times: “I don’t understand the goddamn formula.”

Senate Republicans are also starting to push back. Seven Republican senators have now signed onto a bill that would limit Trump’s ability to impose tariffs. The power to levy tariffs belongs to Congress, but Congress has permitted a president to adjust tariffs on an emergency basis. Trump declared an emergency, and it is on that ground that he has upended more than 90 years of global economic policy.

Trump has threatened to veto any such legislation, but he will not need to if Senate majority leader John Thune (R-SD) and House speaker Mike Johnson (R-LA) refuse to bring the measure to a vote. Jordain Carney and Meredith Lee Hill of Politico report that while Republicans express concern about the tariffs in private, leaders will stand with the president because they must have the votes of MAGA lawmakers to pass any of their legislative agenda through Congress, and to get that they will need Trump’s support. Others are worried about incurring Trump’s wrath and, with it, a primary challenger.

“People are skittish. They’re all worried about it,” Senator Rand Paul (R-KY) told Carney and Hill. “But they are putting on a stiff upper lip to act as though nothing is happening and hoping it goes away.”

But so far, it does not look as if it’s going to go away. Today the European Commission has announced 25% countertariffs in retaliation for Trump’s tariffs.

Trump’s response to the crisis has been to double down on his tariff plan. This morning he wrote on his social media network that he will impose additional 50% tariffs on China effective on Wednesday unless it drops the retaliatory tariffs it has placed on U.S. products. Rather than backing down, China said it would “fight to the end.”

Today, in a press conference convened in the Oval Office, Trump explained his thinking behind why he has begun a global tariff war. “You know, our country was the strongest, believe it or not, from 1870 to 1913. You know why? It was all tariff based. We had no income tax,” he said. “Then in 1913, some genius came up with the idea of let’s charge the people of our country, not foreign countries that are ripping off our country, and the country was never, relatively, was never that kind of wealth. We had so much wealth we didn’t know what to do with our money. We had meetings, we had committees, and these committees worked tirelessly to study one subject: we have so much money, what are going to do with it, who are we going to give it to? And I hope we’re going to be in that position again.”

Aside from this complete misreading of American history—Civil War income taxes lasted until 1875, for example, tariffs are paid by consumers, the Panics of 1873 and 1893 devastated the economy, few Americans at the time thought the Gilded Age was a golden age, and I have no clue what he’s referring to with the talk about committees—Trump’s larger motivation is clear: he wants to get rid of income taxes.

Congress passed the 1913 Revenue Act imposing income taxes to shift the cost of supporting the government from ordinary Americans, especially the women who by then made up a significant portion of household consumers, to men of wealth. Tariffs were regressive because they fell disproportionately on working-class Americans through their everyday purchases. Income taxes spread costs more evenly, according to a man’s ability to pay. The switch from tariffs to income taxes helped to break the power of the so-called robber barons, the powerful industrialists who controlled the U.S. economy and government in the late nineteenth century.

To get rid of income taxes, Trump and his Republicans have backed the decimation of the government services that support ordinary Americans.

Today, in the Oval Office press conference, Trump and Defense Secretary Pete Hegseth suggested where they intend to put government money, promising a defense budget of $1 trillion, a significant jump from the current $892 defense budget. “[W]e have to be strong because you’ve got a lot of bad forces out there now,” Trump said.

Allison McCann, Alexandra Berzon, and Hamed Aleaziz of the New York Times reported today that the administration also intends to spend as much as $45 billion over the next two years on new detention facilities for immigrants. In the last fiscal year, the total amount of federal money allocated to the Immigration and Customs Enforcement was about $3.4 billion. The new facilities will be in private hands and will operate with lower standards and less oversight than current detention facilities.