Monday Morning Links

• When market veterans gather, the talk often turns to memorable crashes: Where they were in 2020, 2011, 2008, 1998, or for the older among them, 1987. Last week should join that list. Where were you when investors fled America? [WSJ]
• A future Trump impeachment seemed all but guaranteed by last Wednesday morning. It seems only slightly less likely now. It may even be desirable to restore America’s standing with creditors and trade partners. As sacrilegious as the comparison will seem, Mr. Trump faced a problem Abraham Lincoln and Franklin Roosevelt solved by dying once their greatest achievements were in the bag. Mr. Trump’s great achievement was his 2024 re-election, a rebuke to the injustices and insults meted out to him and his fans since 2016, some of which were even real. However, no consensus or even significant coalition exists for trying to force into existence a new American “golden age” with tariffs, which anyway is like asking a chicken to give birth to a lioness. He invented this mission out of his own confused intuition. [Holman W. Jenkins, Jr.]
  
• Time for a call. 81 days: that is how long Trump’s golden age lasted. Deportations now paused for agricultural and hotel workers. Musk’s chainsaw slashing of the federal bureaucracy replaced by departmental “scalpel”. And as of this morning, surrender in the tariff war. Trump and Musk didn’t even last as long as the 100 Days reformers, who failed to reboot Qing China. Somewhat longer-lasting than the wilting lettuce, Truss, that ran the UK into the ground in three weeks. The exemptions for iPhones and other electronics make a joke of the tariffs on China. It’s the second climb-down since Wednesday. This is before a single gesture of conciliation from China. And the week isn’t over yet. So, lessons... Trump’s mandate was an illusion. Trump, to use his own favorite expression, did not have the cards. In less than three months his approval has dropped to eight points underwater. Musk’s numbers are much worse. And this last week has displayed with fluorescent clarity: the numbers for Trump’s debt renegotiation do not work with 30-year bonds above 5%. A little reminder: China has barely played its cards yet. Tesla and Apple plants are still open. If China was behind some of last week’s sales of Treasuries, it exercised some tact. The latest unilateral trade concessions will be spun as another brilliant move by the deal artist, Trump. But Xi still has not called, despite White House pleas. So the only conclusion can be this: the Trump economic reforms are over; the dollar’s reserve currency status is already in question; and the grind you hear is of tectonic plates in motion. I don’t think China planned for 2025 to be the year. A patient approach — coordinated industrial investment and an ever-expanding trade links — was working fine. Ray Dalio notes that previous imperial transitions — from British to American, for instance — took decades. And some sectors, such as finance and culture, lag even more. With Trump, Musk and Vance as the triumvirate, China will never face opponents as easy to read, so easily tricked, so prone to make mistakes, and liable to fight among themselves. China could not contend with American soft power. Against Musk the Techbro, Vance the Hillbilly and Trump the Chud, the contest for global opinion is way easier. [Nick Denton]