TACO Trump's Tariffs Suffer Defeat In The Courts And The Bond Vigilantes Say The Trade War Ain't Over - All Roads Lead To Gold

Now that the US Court of International Trade has ruled that Trump’s tariffs are illegal and blocked them, the question is what’s next? Trump and his team must be fuming, especially considering the ruling came out a few hours after Trump was asked by a reporter about folks on Wall Street giving his flip flopping on tariffs a name, TACO (for Trump Always Chickens Out), that visibly angered him.

Immediately after the ruling was announced, the White House put out a statement that they would appeal the ruling. So now it is on its way to the appeals court and then the Supreme Court. I highly doubt that Trump will adhere to the ruling, and will likely ignore the ruling. It does put into question the status of the negotiations of trade agreements.

My guess is that Trump and his team will come out swinging and we will hear more about sanctions to replace the tariffs or some other way for Trump to keep his trade war going.

Initially, once the news went out about the ruling, the stock futures jumped up as did the US dollar, while gold and bonds dipped.

The bond vigilantes have had palpable disdain for the tariffs, and instead of rejoicing that they have been thwarted by the court, they continue the trend of bond prices down and yields up. Which suggests that they don’t believe the trade war is over, or there is a deeper issue with the US debt market.

It is probably both.

The chances that the trade war is over is minimal. Trump campaigned on having a trade war and believes strongly that it is a panacea that will right all of the perceived wrongs that he is convinced are being perpetrated on America concerning trade now and for decades.

Despite America having the largest economy in the world and the most debt which has been used to grow the economy and was supported partially by foreign buyers of the debt.

Every time he loses in court his minions come out and call the judges activists and make the case that they should not be able to overrule Trump’s desires.

That is the problem with governing using executive orders and social media posts. It circumvents the checks and balances of writing bills and having them passed into law. Doing it that way opens the White House up to court rulings. It also sends the message that Trump doesn’t have confidence that his sweeping actions will be passed by the GOP controlled House and Senate.

Look at his big spending bill, they were only able to get one extra vote by the folks in the House, they obviously didn’t think it was beautiful. Now it is on its way to the Senate to vote on, and of course some GOP ‘leaders’ are talking against it, but will fold once the pressure comes down on them from the White House.

It is a horrible bill that will amplify spending and drive the debt higher, making the Death Spiral of Debt much worse. The GOP ‘leaders’ in the House and Senate have no backbone and Trump is the same old spending and debt junkie he was during his first term.

Elon Musk has thrown in the towel on DOGE because he finally realized his guy and the rest of the buffoons in Washington are addicted to spending and growing the debt. Even though the debt is at an unprecedented level and the cost of servicing the debt is unsustainable.

Slashing spending is what is needed. Instead the Washington Swamp is the same as always with Trump and the GOP every bit as much Swamp creatures as the spending and debt junkies on the left.

With the debt and fiat currency system in America and worldwide broken and no politicians interested in fixing it, gold will continue on its upward trajectory. The debt crisis is so severe that even if the politicians wanted to do the right thing, it would take a long time to fix the mess they have created.

Kicking the debt can down the road worked for a long time, but those days are over. The straw that is breaking the debt camel’s back is the cost of servicing the debt. And a trade war won’t help it because it will cause stagflation.

Each day that passes brings us one day closer to the Gold Standard 2.0.

Investors can get ahead of the curve by owning gold and gold stocks. The gold miners are making money hand over fist, yet their stock prices are not pricing in the current price of gold, nor that gold is heading much higher.

For investors that want the most leverage to gold, the junior gold miners that are increasing their production and bringing down costs, and the gold miner developers that have high-quality projects and gold explorers with important discoveries are a tremendous option. The crowd has not figured that out yet, but it is only a matter of time.

All roads lead to gold and gold stocks for savvy investors.

All the best,

Allan Barry Laboucan