The Trump administration wants more than 0% tariffs

The meaning of the word “reciprocity” is being strained by the Trump administration. Not only did the White House use a bizarre formula to determine the degree of its “reciprocal” tariffs on other countries, but it also refused to return the favor when Vietnam and the European Union offered to remove tariffs on U.S. imports.

White House trade advisor Peter Navarro said on CNBC’s “Squawk Box” that it’s Vietnam’s “nontariff cheating that matters,” citing examples such as how Chinese goods are often exported from Vietnam and intellectual property theft. This suggests that the Trump administration sees tariffs not just as a means to address U.S. trade imbalance (which, itself, is already not a good indicator of economic health), but also a way of fundamentally changing the way global trade and manufacturing are being conducted.

Business leaders, many of them steering companies that rely on — and have profited from — the current economic paradigm, are starting to voice their concerns and even vent their displeasure at Trump tariffs. Some are supporters and donors of the Republican Party. With the Trump administration’s idiosyncratic understanding of “reciprocity,” however, it seems unlikely it will repay their goodwill with its own.

Nasdaq rises and Asian shares rebound
U.S. markets mostly fell Monday. The S&P 500 lost 0.23% and was briefly in bear market territory — a 20% fall from its recent high — during the trading session. The Dow Jones Industrial Average dropped 0.91%, and swung 2,595 points from low to high, its largest intraday point swing ever recorded. But the Nasdaq Composite edged up 0.1% as investors bought some megacap tech stocks — but Apple was bludgeoned again. Asia-Pacific markets climbed Tuesday, rebounding from heavy losses the previous day. Japan’s Nikkei 225 jumped nearly 6% and Hong Kong’s Hang Seng Index added 0.3%.

China pledges to ‘fight to the end’
U.S. President Donald Trump on Monday threatened to slap additional 50% tariffs on China — which would bring total duties on Chinese imports to 104% — after Beijing retaliated with its own levies of 34% on all U.S. goods. On Tuesday, China’s Commerce Ministry said it “resolutely opposes” Trump’s additional tariffs and vowed to “fight to the end,” according to a statement translated by CNBC.

White House rejects 0% tariff deals
That said, even if China had offered concessions to the United States, the Trump administration might not have budged. White House trade advisor Peter Navarro said Monday that an offer by Vietnam to eliminate tariffs on U.S. imports “means nothing to us because it’s the nontariff cheating that matters.” Trump also rejected the European Union’s offer of “zero-for-zero” tariffs with the U.S. for industrial goods.

Growing fears and dissatisfaction
Business leaders are sounding the alarm over the potential fallout from Trump tariffs. BlackRock CEO Larry Fink said Monday that “Most CEOs I talk to would say we are probably in a recession right now.” JPMorgan Chase CEO Jamie Dimon, in his annual shareholder letter Monday, wrote that tariffs are likely to cause “inflationary outcomes” and “will slow down growth” of an “already weakening” economy. And Home Depot co-founder Ken Langone, a megadonor to the Republican Party, called the 46% import duties on Vietnam “bulls—.”

[PRO] Waiting for ‘sustained bottom’
DoubleLine Capital CEO Jeffrey Gundlach said on CNBC’s “Closing Bell” Monday that he’s concerned over the lack of bounce in the market, and would hold cash until the S&P 500 hits a “sustained bottom.” Here’s where Gundlach thinks the S&P 500 could end up before it starts to rise again.   

European and Asian defense stocks have rallied this year. A lack of trust in the U.S. could be driving those gains

While stocks have generally sold off after U.S. President Donald Trump announced his plan for “reciprocal tariffs,” European and Asian arms manufacturers are still posting respectable gains on a year-to-date basis, with some rising over 100%.

Veteran investor and strategist at Quantum Strategy David Roche told CNBC the rise in defense stocks outside of the U.S is due to the reduction in trust of the U.S. as an ally.

After the Trump administration’s rattling of long-held global alliances, countries have poured money into their own defense budgets, sending defense stocks higher. In Germany, lawmakers passed a historic debt reform, paving the way for a huge splurge on defense. U.K. Prime Minister Keir Starmer has also pledged to hike Britain’s national spending on defense.