"Trade Panic: Record Deficit of 301 Billion USD, Tariffs Drive America's Economy into a Firestorm!"

The United States has just announced a merchandise trade deficit of 301 BILLION DOLLARS over the past two months as companies try to rush ahead of tariffs. We rarely see a trade deficit over two months even being HALF, a CLEAR sign of panic. What’s happening here?

Trump Trade War 1.0 witnessed the worst monthly trade deficit of about 120 billion dollars. The trade deficit for February has just reached 147.9 billion dollars, which is 12.4 billion dollars higher than expected. The trade deficit for January has been adjusted to a huge level of 153.3 billion dollars.

The increase in this trade deficit is closely related to the supply of industry. As shown below, the import volumes of oil, LNG, gold, and steel have increased exponentially. Producers are preparing for what seems to be a very long trade war. Clearly, the producers are panicking right now.

The worst part? This data does not account for the latest tax on imported cars worth ~240 billion dollars PER YEAR. ~46% of all cars sold in the United States are imported cars, of which up to ~2.96 MILLION come from Mexico. When the car tax rate was announced, a wide race began.

Consider the activity of purchasing physical gold: We are witnessing physical gold buying activity similar to the recession in the United States. The gold inventory has increased by +100% this year with the gold price reaching $3,100/oz today. The instability over tariffs is much higher than the levels seen in the Trump trade war 1.0.

The anomalies of the trade war are being observed in many places in the market. Please take a look at the chart of gold exports from Switzerland to the United States. We have never seen the leadership of a trade war at the level currently being observed. Even March 2020 did not witness a level HIGHER THAN HALF compared to now.

We have also witnessed some extremely unusual movements in the stocks due to this result. Tesla, $TSLA, has risen by up to +9% today after news about the 25% car tax. Although Tesla sources some parts from outside the United States, these vehicles are assembled 100% in the United States. However, a few hours later, the gain was erased.

The car tax has added complexity and economic concerns. ~7.4 million cars have been imported into the United States in 2024. There is no major car brand that manufactures cars that are 100% produced in the United States. If applied for a long time, the bankruptcy of the automotive industry will occur. Due to the continuous headlines, the psychology of investors and consumers has significantly decreased. The market is becoming increasingly sensitive, which is why we see a lot of sudden fluctuations. 44% of Americans currently expect stock prices to be lower, just 11 percentage points below the peak level in 2008.

Finally, we have just witnessed the largest decline in 2 months in the stock market expectations ever recorded. Even the trade war 1.0 or the year 2020 did not see this index drop more than 15 points in 2 months.