What's the Deal with the Tariffs?

I'm leaning heavily on the acumen of Secretary Bessent, I still find it hard to believe that Trump is instituting anything other than initial ideas like his knuckle dragging appreciation for tariffs.

As the global economy adjusts to another year of uncertainty, I expect most of the newly proposed tariffs to be wiped out—not through multilateral policy shifts, but via a series of bilateral deals quietly inked behind closed doors. It’s already happening. And the emerging paradigm is striking: wealthy nations are increasingly services-based, while less developed countries remain anchored in the export of hard goods. There are no tariffs on services.

That structural reality undermines the long-term effectiveness of tariffs in a modern economy. If the U.S. imposes broad levies on manufactured goods, it risks targeting only a narrow slice of global commerce—one already fading into the background for developed markets. Services, by contrast, flow freely, largely untouched by these barriers.

On the surface, there are positives. In an odd twist, the national debt is effectively being refinanced as real rates shift and global capital rotates. Market valuations for the "Magnificent 7" are being reset—not crashed, but recalibrated. Meanwhile, Secretary Bessent—arguably one of the most talented financiers of his generation, globally—is steering a high-stakes rebalancing act. His structural knowledge remains the most encouraging signal coming out of this mess. If you believe in American dynamism, watch his role closely. He’s not just along for the ride—he’s helping craft the strategy.

But make no mistake: the negatives are real, and they’re dangerous. The uncertainty alone is enough to rattle financial markets. Not knowing if tariffs will exist in six months—or which sectors will be granted carveouts—paralyzes corporate planning and spooks investors. That kind of fog breeds volatility. And volatility erodes trust.

At the heart of it, this looks like a souped-up negotiation tactic—an escalation from the usual bargaining chips (temporary tariffs, regulatory threats) to the more ominous “permanent tariffs.” But even then, the signal is clear: countries are being nudged toward bespoke, deal-by-deal arrangements. This isn’t about ideology—it’s a power play. Trump’s world thrives not on doctrine but on leverage, the handshake deal, the headline announcing another country “coming to him” to make things right. It’s all very primal—like a power move plucked from the steel-trap fantasies of his boardroom brain.

As for the deeper machinery behind the scenes, it’s more nuanced. I remain deeply skeptical of Trump’s economic instincts—his near-caveman fondness for blunt tools like tariffs—but I do have faith in the competence orbiting him. Bessent’s presence is vital. Without him, this would read more like theater than policy. God help us if we were instead watching someone like Lutnick run the Treasury—a far more chaotic proposition.

In the end, tariffs in 2025 aren’t really about trade. They’re about positioning, pressure, and perception. Watch the deals, not the headlines.