The Breakdown - How Much Does the 90-Day Tariff Pause Actually Change?

Episode Date: April 11, 2025

After bond markets started absolutely puking, President Trump reconsidered his tariffs and announced a 90-day pause. The at least partial reprieve (the trade war with China is still very much on) send stocks soaring -- but how significant is the policy shift actually? Will it be enough to calm rattled nerves or is it just another indicator of how little consistency and assuredness markets are operating with. Sponsored by: Crypto Tax Calculator Accurate Crypto Taxes. No Guesswork. Say goodbye to tax season headaches with Crypto Tax Calculator: Generate accurate, CPA-endorsed tax reports fully compliant with IRS rules. Seamlessly integrate with 3000+ wallets, exchanges, and on-chain platforms. Import reports directly into TurboTax or H&R Block, or securely share them with your accountant. Exclusive Offer: Use the code BW2025 to enjoy 30% off all paid plans. Don’t miss out - offer expires 15 April 2025! Ledger Ledger, the world leader in digital asset security, proudly sponsors The Breakdown podcast. Celebrating 10 years of protecting over 20% of the world’s crypto, Ledger ensures the security of your assets. For the best self-custody solution in the space, buy a LEDGER™ device and secure your crypto today. Buy now on Ledger.com. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Thursday, April 10th, and you better believe we are talking about the 90-day pause. What does it mean? How good is it actually? Is it going to change anything in markets? It seems like it is, but is it really. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation. come join us on the Breakers Discord. You can find a link at the show notes or go to bit.ly slash breakdown pod. Well, friends, as you well know at this point, Trump's trade war is on pause as the administration

steps back from the brink. Reciprocal tariffs went into effect on Tuesday night, adding to the baseline 10% tariffs that came into force over the weekend. However, come Wednesday morning, the president had a change of heart. He authorized a 90-day pause on the enhanced tariff rate, and in press comments that the White House to explain his reversal, Trump added, I thought that people were jumping a little bit out of line. They were getting a little bit yippy, a little bit afraid. Not really clear at all on what that means, but Treasury Secretary Scott Besson insists everything is going according to plan, commenting, we saw the successful negotiating strategy President Trump implemented a week ago today, and it has brought more than 75 countries forward to negotiate. It took great courage for him to stay

the course until this moment. This was his strategy all along. Sure, whatever, let's take that at face value. Broadcasting the administration's intentions from here, he added, what we've ended up with here, as I told everyone a week ago, do not retaliate and you will be rewarded. So every country in the world who wants to come and negotiate, we are willing to hear you. One White House source told Politico that, quote, Scott Besson is in the driver's seat now, referring to the Treasury Secretary taking over from the U.S. Trade Representative in pushing for the pause and taking point on negotiations. And that for Wall Street is definitely good news, given that one of the big things that was causing more consternation and concern was Besson seemingly being sidelined. White House

Deputy's Chief of Staff for Policy, Stephen Miller, backed the latest moves to a You've been watching the greatest economic master strategy from an American president in history. Shockingly, Democrat Senate leader Chuck Schumer isn't buying that this is all 40 chess or the art of the deal, stating, this is government by chaos. He keeps changing things from day to day. His advisors are fighting among themselves, calling each other names, and you cannot run a country with such chaos, with such lack of understanding for what's going on in the world and the facts. The infighting Schumer is referring to has centered on Elon Musk. The billionaire special government employee is now referring to Trump's lead trade advisor as Peter

R. Werdow, and calling him dumber than a sack of bricks. Interestingly, the White House press secretary didn't deny that there was discord in the ranks. Instead, she chalked it up to Boys Will Be Boys, and that the public sparring would continue and noted the press should be, quote, very grateful that we have the most transparent administration in history.

Still, while the world has been granted a three-month reprieve in general, the Chinese trade war continues to escalate. On Tuesday night, China had announced 84% reciprocal tariffs against Trump's levy, which stood at 104% in total. In the post where they announced the pause for the rest of the world, Trump stated, based on the lack of respect that China has shown to the world's markets, I am hereby raising the tariff charged to China by the U.S. to 125% effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping

off the USA and other countries is no longer sustainable or acceptable. Trump then is still leaving the door wide open for President Xi to come to the table and negotiate, stating to the press, we'll get a phone call at some point and it'll be off to the races. It'll be a great thing for them, it'll be a great thing for us. It's going to be a great thing for the world and for humanity. The other big moving piece is the EU. On Wednesday, the European Commission approved a 21 billion euro tariff package targeted against products like soybeans, motorcycles, and orange juice. The countermeasures will be applied in three rounds, with 3.9 billion euro in trade impacted

by measures going into effect next week. White House officials said that despite this, the EU would still be included in the 90-day pause. And that's just about where things stand as of Thursday morning. There are a million minor stories reverberating in the background. Trump, for example, has threatened a major tariff on pharmaceutical imports to be announced soon. Politico reports that the dealmaking is going nowhere fast, with the administration doing little more than telling countries to take a number and get in line. One foreign diplomat said that none of Trump's top officials have a mandate to negotiate.

Even if you have a meeting, apart from a nice tweet, you don't get anything. Trump's trade representative was emasculated in a House hearing earlier in the day, where he was the first to reveal that a 90-day pause was being considered. Democrat Stephen Horsford alleged the entire production was a market manipulation tactic to benefit investors. He asked the trade official, who's in charge? Because it sure doesn't look like the trade representative. It looks like your boss just pulled the rug out from under you and paused the tariffs.

There's no strategy you just found out three seconds ago. We saw you. Meanwhile, the administration is also getting pilloried by GOP lawmakers who refused to rubber-stamp Trump's budget megabill. Chip Roy asked the press, why am I voting on a budget based on promises that I don't believe are going to materialize? In other words, TLDR, chaos still reigns in Washington even with the 90-day pause. Today's episode is brought to you by a crypto-tax calculator. If you're looking for accurate crypto taxes with no guesswork, check out Cryptotax Calculator.

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enhancing your digital security. If you are in this space, you owe it to yourself to at least check out Ledger and their ecosystem what they have available to you. So thanks, thanks once again, to Ledger for sponsoring the show. Still, over on Wall Street, no one took a single breath to consider the complexity of the situation. The stock market bled lower to start the day, but stabilized in reverse as the first hints of a pause circulated in Washington. Following Trump's announcement, the S&P 500 ripped with a 7.3% gain within the hour. The day ended with the S&P up 9.5% and the NASDAQ gaining 12%. This was the eighth largest single-day move for the S&P, with the only comparison being

relief rallies in the 1930s in 2008. The NASDAQ hasn't seen a move this large aside from a headcat bounce at the beginning of 2001 in the middle of the dot-com bust. Trump had tipped off traders that something was brewing just as markets opened. Across a series of posts, he wrote, be cool. Everything is going to work out well. The USA will be bigger and better than ever before. This is a great time to buy. Traders, meanwhile, seemed exhausted from five days of nonstop volatility. Eric Deaton, the president of Wealth Alliance said, we're living minute to minute. There are a whole bunch of petrified people out there trying to grasp with something positive. I don't think this is the bottom. That can't be called until we see the actual deal signed.

did soften overnight, but not by much. Michael Purvez, the founder and CEO of Talbacking Capital Advisors, warned that we're not out of the woods yet, commenting, I'm selling into this bounce. This type of two-way volatility is tremendous, but it's not uncommon in bare markets, and it's not an indication of a market bottom. In the crypto markets, the move was just as exaggerated. Bitcoin gained around 9% on the day, topping out at 83,000. The announcement triggered a 5% move within minutes, demonstrating the number of trading bots watching for the headline. Ethereum and numerous altcoins posted double-digit gains. Carol Kreedov and automation engineer at Coin Panel said, even traditional markets are behaving like meme coins. Now, I can barely

keep up with the news. If you're listening to this on Thursday night or Friday morning, you'll probably have seen already that markets turned red once again as the China-U.S. Trade War seemed to escalate. So if anything, this idea that we are not out of the woods yet was made even more apparent by the second day after this so-called reprieve. And indeed, I think one of the big questions is what the psychic damage of the last couple of days might be, even if this pause really holds. Of course, we didn't get the global tariffs that Bill Ackman said would cause an economic nuclear winter, but the world is still being charged 10% on all exports to the U.S. 25% tariffs on Canada and Mexico are still in place, running on a separate track to global negotiations. And tariffs on China, America's third largest

trading partner remain at levels that are functionally very close to an embargo. Unless the penguins of the McDonald Islands quickly ramp up industrial production, there is a massive hole in global trade. Michael Nicolettos of Defi advisors commented, we're not witnessing a trade war anymore, we're watching the U.S. shutting down China's capital account. As trade seizes up, the U.S. loses access to cheap Chinese goods, but China will see the flow of U.S. dollars slow putting their economic model at risk. Indeed, to many, it appears that this is a trade war against China with the rest of the world merely pawns in the geopolitical game.

The danger will be if the rest of the world turns towards Beijing rather than Washington. Political commentator Thomas Friedman wrote in the New York Times, Now Beijing knows that Trump not only blinked, but he so alienated our allies, so demonstrated that his word cannot be trusted for a second, that many of them may never align with us against China in the same way. They may instead see China as a better, more stable, long-term partner than us. Bill Reinch, Bill Clinton's export policy advisor had a similar read, saying, shifting for massive tariffs to temporary relief is, quote, just a horrible way to run the show.

You're demonstrating to people that were an unreliable partner. It's a roller coaster ride. One day they're up and one day they're down. One day they're on and one day they're off. In markets, the big unresolved question is how much lasting damage was done to the bond market. Tuesday night saw generationally high volatility as long maturity bonds sold off in the middle of the night. As global stock markets breathe the sigh of relief on Wednesday, bond yields remained at elevated levels. The 10-year traded at 4.3% overnight, while the 30-year was at 4.75%. Each is only down

about 25 basis points from the extraordinary spike the previous night. Indeed, many believed it was the bond market dysfunction, not the stark market crash, that guided yesterday's reversal. Analyst Annie Constant tweeted, if the bond market scared Trump and his most are saying the Chinese caused the bond market sell-off, then China scared Trump? Is that it? Winking to the reader, he pointed out that there was an auction for 10-year bonds yesterday, adding, by the way, the 10-year auction with an A-plus oversubscribed with indirect foreigners setting the price. Paula Macro isn't so sure that markets can keep on trucking like nothing ever happened, writing, it's hard to stress how damaging confidence this all is.

And although Trump claims that he isn't watching the stock market, he clearly has his eyes fixed on the 10-year. Mixed into yesterday's reasons for walking back tariffs, he commented, I was watching the bond market, the bond market is tricky. I saw last night where people were getting a little queasy. With bonds no longer selling off, analysts debated what to make of the event. Bloomberg's Connor Sen wrote, I have a nitpick about the bond vigilantes claim. It was systemic stress and de-leveraging that happened to wreak havoc in global bond markets

this week that forced the issue, not some discretionary fundamental repricing of government-long bonds. Many made the point that no one makes a sudden decision to reprise bonds in a hurry at midnight on Tuesday. And indeed, the event seemed more like a textbook hedge fund de-leveraging. Spencer Hakimian of Tulu Capital tweeted, round of applause to the Japanese hedge fund that was 60x levered on 10-year USTs that blew up last night to save the world from the Great Depression.

We will not forget your sacrifice, brother. Bucco Capital had a much blunter take, commenting, never forget that your elected officials failed you and the market had to punch him in the mouth until he got the point. The president just tried to guide the economy off a cliff, and they didn't do a damn thing. Who is to say it won't happen again next week? Ultimately, whatever you think of these policies,

whether you think there is merit, or at least more merit than most people are giving credit now to these tariffs, there is absolutely no doubt that we are living in a world of extraordinary chaos and volatility. Now, Trump historically throughout his career has used this to his, great advantage, and to the extent that his advantage is America's advantage, there are some who are still going to give him the benefit of the doubt. But boy, do things remain uncertain up in the air, but if nothing else interesting. I will, of course, continue to have coverage of this,

although next week I will be out on spring break, so hopefully we really do chill for a little bit. For now, in any case, that's going to do it for today's breakdown. Appreciate you listening, as always, and until next time, peace.