In chess, a gambit is an aggressive opening with a series of moves intended to give the player an advantage later in the game. Early in his second term, President Trump is enacting a plan he has been talking about for forty years. Using his executive authority, he has implemented reciprocal tariffs on dozens of countries that have put up trade barriers to their own markets and gotten wealthy off American consumers, all while our working class languished. Post NAFTA, and China joining the WTO, Americans saw 90,000 factories close as those jobs moved overseas. Middle America has never recovered.
The media would have you believe that this week, in a fit of egotism, Trump tipped over the harmonious applecart of global free trade, but nothing could be further from the truth. Against the US, our trading partners have engaged in asymmetrical tariffs, intellectual property theft, currency manipulation, and prohibitive regulations for decades. Over the same time, America has given the globe near free access to our 350M consumers and contributed more to global defense than all other nations combined. Trump has long believed America should not be taken advantage of in this way, and wishes to renegotiate our trade deals as well as defense funding. Tariffs are clearly a means to that end, but there is more to Trump’s gambit.
This year, over $9T in US Debt will mature and need to be refinanced through treasury bond issuance. Paying the interest on our $37T in debt is now over $1T per year, our third largest budget item. This was far less of an issue when our debt was lower and interest rates were near zero. However, due to inflation from reckless government spending, interest rates became high. Now, Trump’s tariffs, while causing temporary havoc in the stock market, have also caused treasury rates to plummet. This phenomenon translates to a $500B dollar savings in interest payments over the next decade for every half point we can take off the rate. The ten-year bond has dropped by more than that since Jan 1st. With Sec. Bessent at the helm of the Treasury, you can be assured this is not a coincidence.
Of course, that’s great for existing debt, but we do ourselves no favors if we just keep running up our nation’s credit card bill. That’s where Elon Musk and DOGE come in. Making systems more efficient and rooting out fraud and waste is what Musk’s team does, and they have been doing a bang up job. DOGE is approaching $300B in savings for US taxpayers. The thanks Musk has received so far for his volunteer waste-cutting has come in the form of leftist terrorists, who pay zero taxes, keying and torching his cars.
What is important to understand about the tariffs is they are meant to bring industry back to the US. The tariffs are individualized per country to allow for greater negotiation and maximum investment in America. Renegotiation talks are already being held and the President’s message is simple. Move your factories here, create American jobs, pay no tariffs. This won’t happen overnight, and tariffs will likely increase costs for US consumers. To offset this, Congress can use the estimated $600B in tariff revenue to fund tax cuts for hard working Americans and small businesses. The results of this plan should be America getting her middle class groove back. Imagine an America that builds stuff again, not just imports cheap plastic crap from China. Bringing manufacturing home would revitalize our ignored middle class, but it would also onshore critical supply lines, strengthening our national security. Many people seem to have already forgotten the painful realization of our supply chain vulnerabilities experienced during Covid. Trump didn’t forget, and he decided to act. But his plan is not without risks.
An economic reordering such as this will always cause pain. The stock market is selling off over recession fears. Economists worry about inflation. Even if successful, the media will try to crucify Trump over even the slightest negative effects, but Trump seems unaffected by the political risk. He knows America needs change if our nation is to be prosperous long term. Our economy is not as multidimensional as it should be. Our stock market is propped up by government spending and Asian slave labor. The fact that we don’t make anything here puts us at the mercy of global adversaries who supply us with critical materials and medicine. Our country is going insolvent with thoughtless spending, corruption, fraud, and inefficiency. We need a course correction or we will no longer be the world’s superpower.
It has been astonishing to observe just how many Americans are either oblivious or indifferent to this reality. Our elites in government and business are furiously upset that Trump has shaken things up the way he has. Our top 1% were very comfortable enjoying America’s smooth and steady ride towards the edge of the cliff, taking for granted each day the great nation they inherited, with all of her freedoms, wealth, and opportunity. They paid no mind to the responsibility every citizen has to protect our country’s blessings for future generations. Instead, they allowed ladders to be pulled up one at a time until we were left with a narrow service-based economy. Now their pockets are fat with the profits of seven stocks while middle class America can’t find a job, struggles with addiction, and cannot afford a home. These elites, having gorged themselves on America’s prosperity, now wipe their mouths with the American flag and stand up just long enough to scream how unfair Trump’s actions are.
It was the policies of Trump’s most vocal critics that gutted our middle class and created a cavernous wealth gap. Looking at their results, and witnessing the petulant egocentricity they are displaying now makes me think the President’s plan deserves a little time and patience to work. The top complaints citizens have about DC is that no one there remembers the common man, or has the balls to affect real change. We finally have someone. Let’s give his plan a chance.
