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A mistake by the White House

  • Writer: Christopher Lakian
    Christopher Lakian
  • Apr 7
  • 2 min read

1966,President Lydon Johnson retaliated in a protectionist move against German pickup trucks entering the United States. This retaliation was for a tariff on all chickens from cheap US labor, crushing German farming.It was called the Chicken Tax, and we do not have German pickup trucks sold in the United States because It's not profitable! Volkswagen and Mercedes-Benz continue to sell several pickup models to the rest of the world successfully.


April 2nd liberation day was a gross mistake; I am very disappointed in the delivery and execution by our Whitehouse.Scott Bessent, treasury secretary, is supposed to be a man of reason and intelligence. He's a former Wall Street executive and seasoned investor. Born in Conway, SC, I was slightly reassured that someone in the middle of South Carolina wouldn't nuke our economy with a monocle.Scott, co-author of the tariff policy and announcement on April 2nd, described the importance of free trade to Fox News. In this example, the treasury secretary described countries like Japan, which don't allow American potatoes to be exported to McDonald's in Japan.


A 25% tariff on all goods from Japan to the USA was implemented last week to balance fair trade.Yep, I'm serious, and no, I didn't make it up! Our number one trading partner is problematic over a Potato.Waging a global trade war on everyone at once will have long-lasting consequences.Stocks and Bonds:For most of my investing life, I have seen markets, i.e., stocks, tend to sell off or buy into a significant news event. (the expression is sell on rumor, buy on news) a common and very normal cycle of free markets.Pre-April 2nd, I was more confident about our next several months of progress; we would know the tariffs and be able to work around them. But this development of a global trade war is not good for anyone.I hope cooler heads find a way to fix it, and we can move on as long-term investors.Every week, I become more excited about growing outside the United States.


This will be the place to invest for progress and growth.American nationalism will bond other countries to create new and exciting opportunities for businesses and consumers. Like the schoolyard bully, America will be on timeout; no one wants to be around. Trump's policies will wreak havoc until Congress has had enough.


I am leaning toward the thought that Congress will remove the presidential powers of tariffs and more to rein in the power of the White House, which could happen as early as the Fall.

 

Chris

 

 

Christopher R Lakian

Owner, Portfolio Manager, AIF

 

Magnetic North Financial LLC

1156 Bowman Road Suite 200

Mt Pleasant SC 29464

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OneSeven ("OneSeven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Magnetic North Financial represent the individual's role with Magnetic North Financial, and not their role with OneSeven. Services are provided under the name Magnetic North Financial, a DBA of OneSeven.

 

 
 
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OneSeven ("OneSeven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Magnetic North Financial represent the individual's role with Magnetic North Financial, and not their role with OneSeven. Services are provided under the name Magnetic North Financial, a DBA of OneSeven.

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