The Takeaway From Trump's "12-Hour Trade War"

Well … that was quick.

After years of debate and preamble, after all the hemming and hawing, President Trump’s first round of tariffs came and went within a matter of hours.

Mexico agreed to deploy 10,000 troops to the border, and Canada decided to honor a deal hammered out just a few months ago — appointing a new “fentanyl tsar” and agreeing to ongoing cooperation to address the drug crisis.

In both cases, President Trump agreed to postpone tariffs for 30 days while negotiations continued.

So what does all this have to do with the economy and markets? How is any of this going to impact your portfolio? Well … it’s not. At least so far. And that’s what’s so fascinating about it…

You see, while Trump’s “12-hour Trade War” played out behind closed doors on Monday, the market’s initial reaction sparked fears of another brutal Monday sell-off. But after the White House announced a pause on proposed tariffs against Mexico, investors gained confidence again.

With something as substantial as a 25% tariff looming on the horizon, you’d expect investors to start pricing that in. But that simply didn’t happen. The CBOE Volatility Index (VIX) never rose above 20.

In other words, it was just another Monday for the stock market.

That’s because Wall Street understands one critical truth about Trump:

**Take Trump Seriously (But Don’t Always Take Him Literally)**

When Trump first arrived at the White House in January 2017, he brought with him a skillset unlike anything Washington had ever seen…

He’d spent decades in the media spotlight, mastering everything from real estate investing to reality TV. Most Americans have been hearing about Trump for at least forty years now — and over the last decade, it’s a daily occurrence.

Part of this comes down to Trump’s wholly unique and unorthodox communication style.

Love him or hate him, President Trump is a master at making provocative statements and constantly staying relevant in today’s 24-hour news cycle. He’ll be interacting with world leaders one moment and pop stars the next.

Along the way, Trump makes no shortage of provocative statements. Again, that’s just part of his language. He might seem unpredictable, but in reality, that’s just another factor that he’s playing to his advantage.

So when Trump tells you he’s serious about securing America’s borders, you can trust that he’s being honest.

But when he gets into the nitty-gritty of specific policies, such as building walls or setting up tariffs, it’s best to take a “wait and see” approach. This is precisely what we saw on Wall Street yesterday.

Trump is serious about fentanyl and securing the southern border. But he’s also very serious about the economy.

That’s why he appointed billionaire hedge fund manager and former Soros apprentice Scott Bessent to run the Treasury. With Bessent there to help, investors expected Trump would hammer out a deal before going forward with tariffs, and they were correct.

The major indexes closed down slightly for the day, but there was never any indication that investors were pricing in hundreds of billions of dollars in tariffs.

Welcome to the “Art of the Deal,” as it were…

Trump threatened significant tariffs and convinced the world he was serious. He won some minor concessions and agreed to delay for 30 days. Next month, we’ll do it again, and Trump will gradually build momentum while working away at the opposition.

Which could help create a whole new type of “Trump Trade” in 2025…

Year of the “Trump & Pump”

You’ve no doubt already heard of the infamous “Pump & Dump” scheme, where nefarious types will artificially inflate a stock only to sell before share prices collapse.

The “Trump & Pump” would be the polar opposite of that process…

It starts with President Trump announcing sanctions, tariffs or government action against a foreign country or company. Investors might sell off the related assets, or we’ll at least see them trade sideways as the anxiety builds.

Then the Trump administration will announce a new deal that delays the tariffs another 30 days or de-escalates tensions with a foreign adversary, and markets will surge.

During Trump’s first administration, we saw a president continuously swinging for the fences — before getting mired in Washington gridlock.

Meanwhile, his new administration is clearly more focused on “moving the chains,” to use a football analogy … and delivering the kind of incremental gains that will keep the economy strong and keep markets happy in return.

Clearly, that’s great news for investors.

But you will still need to focus on partnering with specific, high-quality businesses to power your portfolio. 2025 is already shaping up to be a stock picker’s market, so stay tuned (and stay up to date on your Green Zone Power Ratings) for more…

To good profits,