Fire Hose Economics: (Weekly Wrap-Up Friday July 12, 2025)

If you’ve ever tried to drink from a fire hose, you’ll know two things: it’s going to hurt, and you’re going to drown. That’s what global markets are dealing with in mid-2025.

The U.S. trade team, led by a commander-in-chief unafraid of bold declarations, has adopted a policy of economic brinksmanship that’s made tariffs the weapon of choice.

Meanwhile, Bitcoin’s breaking ranks, gold’s back in the policy spotlight, and the Fed is quietly sweating over a CPI print due any day now.

Each of these forces alone would be worth a market-wide panic. Together? Let’s just say the investment community is learning to tread water while blindfolded.

But first, let’s talk about the snow globe.

Shake, Rattle, Repeat

There’s disruption…and then there’s what’s happening with tariffs.

The administration’s new “tariff-first, negotiate-later” policy is something George is calling the snow globe approach: shake everything, disorient your opponents, then watch who grabs the nearest chair.

Announce tariffs. Big ones. Then…maybe…backtrack.

Consider this: 30% tariffs on goods from the EU and Mexico.

Copper, critical to modern manufacturing? Slammed with a 50% duty.

Pharmaceuticals? As high as 200%.

Other countries like Japan, South Korea, Vietnam, and Brazil are all dodging economic shrapnel. Vietnam faces up to 40% on transshipped goods. Brazil? Straight 50%.

Even friends of the Empire are getting the cold shoulder.

So why the theatrics?

Here’s the current Trump playbook: announce a 70% tariff. Watch global headlines melt down. Wait for trading partners to knock. Then offer a 10% “compromise.”

Political win unlocked. And in the background, investors reach for the antacids.

But wait…how does this impact markets?

Let’s zoom in…

Markets Yawn. For Now.

Despite the economic fireworks, the S&P 500 has shrugged. Up 7% year-to-date.

Nasdaq? Practically lounging on an inflatable pool chair.

You might think markets have grown numb. Or maybe they’ve just figured out the trick: most of these tariffs are made for headlines, not enforcement.

Take copper. You can’t build a modern economy without it.

Tariffing copper into oblivion while touting a manufacturing renaissance?

That’s like launching a cooking show and banning stoves. Analysts suspect these copper tariffs are likely to “adjust”…

In other words, copper tariffs will likely vanish before anyone pays a dime.

But here's the problem: even if the market doesn’t panic, businesses still have to plan. And how do you plan for a policy that might reverse by lunchtime?

As European stocks tumble and Canadian unemployment ticks up, the “small bite” theory isn’t bringing much comfort to industries caught in the blast radius.

So if the market doesn’t crash and inflation doesn’t spike… has the administration pulled off the impossible?

Not quite. And here’s why…