dlvr.it
'The gun was at his head': Here’s why Trump really 'capitulated' to market pressure
More details are becoming available about what may have caused President Donald Trump to back down from imposing broad new tariffs on most of the world.
Following several days of financial markets sliding in response to Trump's "Liberation Day" tariffs, the president announced Wednesday that — with the exception of tariffs on China — he was pausing all other trade duties from going into effect for 90 days. In a Wednesday segment on Fox Business, commentator Charles Gasparino said that several sources confided to him that it was actually "the White House who capitulated." He added that while he was a "patriot" he admitted that the Trump administration was the first to blink based on the international bond market.
READ MORE: 'Truly a moron': Elon Musk's brother begs Trump to fire 'dumber than a sack of bricks' advisor
Gasparino said that the administration ultimately pulled back because of threats that Japan — which he said runs " major money management firms that are involved in the bond market" — was contemplating dumping some of its estimated $1.26 trillion in U.S. Treasury securities. Gasparino said Japan "forced [the administration's] hands" with the move, and said that he was told Japan now believed the United States bond market "was not a great place to do business."
"He had no choice," Gasparino added. "The gun was at his head. It was very bad."
Essentially, U.S. Treasury securities — which make up the vast bulk of the $36 trillion national debt — are the primary way in which institutional investors and foreign governments choose to park their money. While the FDIC only guarantees bank deposits up to $250,000, U.S. Treasury securities are guaranteed by the full faith and credit of the U.S. government. But if a major buyer of treasuries decided to dump their holdings, it could potentially trigger a sell-off throughout the rest of the bond market, causing a global financial crisis.
The U.S. Treasury securities market is also highly dependent on Congress raising the debt limit, which it statutorily has to do by this summer. If Congress fails to raise the debt limit and pushes the U.S. into default, it would effectively violate the guarantee associated with treasuries, which would also lead to a major financial catastrophe. Trump said earlier this year that he would be in favor of abolishing the statutory requirement to raise the debt limit, and abolish the concept of the debt ceiling entirely.
READ MORE: 'I rebuke you in the name of Jesus': GOP rep explodes at Johnson in closed-door meeting
Watch the video of Gasparino's remarks below, or by clicking this link.
— (@)
