A Pragmatic Trump

It was the pause that refreshed… the stock and bond markets. When President Trump paused his tariff policy for three months on Wednesday the stock market took off like a rocket. People had not seen that much action since… who knows when.

The Trump policy had produced a severe stock market decline. It was also damaging the bond market. People have been losing money. So, Trump took a step backwards and declared that he was easing up on his policy. To the great relief of the markets.

For a day, at least. After the great boom on Wednesday the markets rolled over on Thursday. Apparently, players were unhappy about the trade war between America and China.

Many people were looking for insight into how Trump makes executive decisions. Was he always planning it this way or was he  improvising? 

Does Trump impose his will imperiously or does he decide between different proposals offered by different advisors? Does he function as a dictator imposing his will on everyone or does he think through the options before making a decision?

We recall that in the lead-up of Wednesday’s market action cracks had begun to appear among Trump’s advisors. In particular, Elon Musk called tariff hawk Peter Navarro-- as dumb as a sack of bricks. Others have pointed out that Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have not always been reading from the same hymnal.

So, two exceptionally intelligent advisors disagreed. It happens. In truth, it should happen. No executive can function effectively if he surrounds himself with people who all think the same thing. Or who are all trying to suck up to the boss.

If debate there was, the indications are that Scott Bessent won the round. When Trump paused the tariffs Bessent was doing most of the television interviews.

Now, everyone in the financial world knows that Bessent is exceptionally intelligent. Formerly a trader in currency futures, Bessent made himself a fortune. He is widely respected in the financial world.

This tells us that Trump hired people of great intelligence and ability. He did not fill his cabinet with a bunch of political hacks. He did not fill it with diversity hires. It matters that he wanted to have, in his inner circle, people who knew the most and could provide the best advice.

You might say that Trump, in pausing the tariffs, showed a sign of pragmatism. The markets did not seem to be joining his party, so Trump corrected. He listened to the arguments proposed by his best advisors and made a decision. 

This does not tell us that he was a dictator imposing his will on his subordinates or even on the nation. This shows a willingness to read reality and to adapt to it.

When they pulled back the curtain, we saw, exposed, a pragmatic Trump. Who knew?