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TheBRRR’s Thoughts 

GM.

Trump broke markets yesterday.

He announced sweeping tariffs on imports from all of the US’ trade partners in an effort to boost US labor and manufacturing. It’s coming at the expense of global stocks and crypto as investors exit risk-on positions in favor of cash.

The Nasdaq fell 4% in yesterday’s afterhours session as the Donald spoke, and the index continued lower during today’s open hours.

Notably AAPL is seen as a big loser in the tariff shake up, having fallen 9.5% since they were announced. Most of its manufacturing infrastructure is in China - the country with the highest tariffs levied against it.

We expect many countries to make concessions in order to reduce their tariffs, but it’ll likely take weeks and months to play out.

We also expect liquidity to surge higher later this year, as the Fed starts cutting interest rates and buying treasuries, which will allow the US refinance much of its $36T debt coming due.

The odds that the Fed cuts interest rates twice over the next two meetings have nearly tripled since the announcement, surging from 6% to 17%.

When the US starts aggressively injecting liquidity via the Fed, China will begin to inject to stomp out their deflationary, flagging economy without fearing a collapse in the Yuan.

Once China starts, you’ll see the rest of the world follow suit.

Trump Admin Shocks With High Tariffs

Synopsis:

Trump has launched a sweeping new tariff regime under the banner of "reciprocal" trade fairness. The policy slaps a baseline 10% tariff on all imports and steeper penalties for nations with large trade surpluses—China facing up to 60% in effective tariffs.

This marks a stark return to protectionist policy, sending tremors across global markets. Wall Street is now bracing for tariff-induced inflation, stalled Fed rate cuts, and rising stagflation risks.

The Details:

• Tariff Breakdown:

  • 10% universal tariff on all trade partners.

  • Additional country-specific rates based on trade deficits:

    • China: 34% (total ~60%)

    • Vietnam: 46%, Taiwan: 36%, Japan: 24%

    • EU: 20%, India: 26%, UK/Australia/Brazil: 10%

    • Canada/Mexico: 25% on non-USMCA imports.

• Effective Tariff Rate:

  • Goldman estimates U.S. effective tariff rate jumps to 18.8%, highest since ~1910.

  • About 1/3 of imports exempt, reducing average impact to ~12.6%.

• Sector Fallout:

  • Autos: 25% tariff on imports disrupts supply chains.

  • Tech: Apple (AAPL), Nvidia (NVDA) face major margin hits (AAPL -9%).

  • Consumer Goods: Price hikes incoming—watch names with Asia exposure.

• China Reaction:

  • Slams U.S. "bullying"; likely to retaliate with tariffs/export controls.

  • Drop-shippers like Temu, Shein hit as de minimis exemptions revoked.

• Europe’s Angle:

  • EU weighing a €14.1B counter-tariff package; Digital Services Act may be used.

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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.