In today’s issue:

  • Trump has one foot in the White House
  • Trump is in favour of free trade, not tariffs
  • The Swamp will bite back, but how?

It’s time to wheel out Neil Ferguson. Wherever they keep him at the Imperial College London, his epidemiological models are badly needed. The plague of Trump Derangement Syndrome is about to turn into a full-blown pandemic.

As I write this, the shockwaves of Kamala Harris’ disastrous Fox News interview are still echoing in the empty echo chambers of left-leaning minds. They didn’t even need fact checkers to bring her down.

Speaking of fact checkers, things are getting mighty awkward for that lot. Trump was roundly lambasted for claiming violent crime has risen under the Biden administration. But the FBI recently quietly revised its numbers. It turns out, Trump was right after all.

It reminds me of when Trump was ridiculed for pointing out how large-scale immigration was causing trouble in Sweden… shortly before migrant riots there.

Just as he was mocked for warning the Germans about their reliance on Russian gas… before Russia invaded Ukraine and the Nord Stream pipelines were blown up.

Consistently, Trump has managed to harness the immense power of Trump Derangement Syndrome. If the left could only keep their masks on, he’d have no chance at the presidency. But something about him makes it impossible for them to keep their cool.

Now the betting markets and polls are moving firmly in Trump’s favour as the Democrats’ slow motion train wreck accelerates. The bigger the lead, the more bizarre the Democrats will become.

The big question now is simple. What plans does Trump have for you, me and our money?

The NATO precedent

Trump’s most flagrant policy seems to be his tariffs. He even declared tariff to be the “most beautiful word in the dictionary”.

No single utterance has ever converted so many people to the cause of free trade so quickly. It leaves the lifetime’s work of Adam Smith and David Ricardo in the shade.

But is he serious?

I suspect Trump’s comments at the G7 in 2018 reveal what the likely next president really believes:

“You want a tariff-free, you want no barriers, and you want no subsidies, because you have some cases where countries are subsidizing industries, and that’s not fair.

“So you go tariff-free, you go barrier-free, you go subsidy-free. That’s the way you learned at the Wharton School of Finance.”

Does that sound like a protectionist to you?

Then what on earth is he up to now? Why is he threatening tariffs in the thousands of percent?

I think there’s a precedent that explains it…

One of Trump’s big bugaboos in 2016 was Europe’s failure to live up to their NATO commitments on defence spending. The American taxpayer was funding and providing Europe’s security, while the Europeans shirked both.

Back in 2002 I went to school with some of the Americans whose parents were posted to defend Germany. My basketball coach was a marine drill sergeant, not retired at the time. It seemed very odd for all these soldiers to be there.

How did Trump successfully get the Europeans to boost defence spending by tens of billions of US dollars?

Did he ask them nicely, as Biden would?

Did he befuddle them into doing it, as Harris would?

No, he bluffed them. Just like a property tycoon would.

First, he threatened to abandon Europe. Then he threatened not to defend the place in a war. And then to leave NATO altogether.

Did Trump really want to do any of this? I doubt it.

The idea was to funnel more money European money to US defence contractors, not less American money.

And I suspect the same shenanigans is at work on tariffs.

I think Trump is a free market guy

The real question is how to get there.

As any parent would tell you, the easiest way to achieve something is not to run for election and then impose your policy. Reverse psychology is what works on a bunch of little politicians.

By declaring tariffs to be the most beautiful word in the dictionary, Trump has goaded all his political opponents to take the position he wants.

Perfect.

Next his threats of tariffs will be met with European and Chinese willingness to negotiate. Then he’ll get the outcome he really wants: less trade barriers to US goods in other countries.

This would also be a continuation of Trump’s foreign policy as well. A load of bluster and waving a big stick, before chumming up with just about anyone. Even the Rocket Man in North Korea.

Negotiating in this way both raises the stakes of defiance and improves the incentives of compliance. That’s why Trump kept a lid on conflicts during his time in government, compared to the Biden administration.

If I’m right, this implies the pressure cooker that is our geopolitical and global economic situation could ease dramatically if Trump wins the election. This is precisely the opposite to what most would expect from a Trump presidency.

Unravelling some of China’s and Europe’s unfair trade practices would trigger more economic growth for all – the whole point of free trade.

Encouraging oil and gas development would ease energy prices too.

Corporate tax cuts would incentivise investment.

There’s just one problem with all this. Will it be permitted?

In an upcoming special report, I’m predicting how a Trump administration might be undermined. It won’t be lawfare, but a way most familiar to readers in the UK. More on that, soon.

Until next time,

Nick Hubble
Editor, Fortune & Freedom