As I alluded to in my last post, I was optimistic a year ago. Wrong on a lot, but I had some idea of how things might go. Right now, I have to admit, I’m clueless. The Ukraine War still rages. We’re bombing boats on the high seas and suspected terrorist sites in Nigeria. Not exactly peace on earth.

Inflation is still uncomfortably high. The national debt gets scarier by the minute. Employment is dicey, and manufacturing jobs are falling. Consumer sentiment is weak:

Yet the stock market keeps hitting new highs, and the economy is growing. What gives? Darned if I know, given today’s crosscurrents. I’ll share the clues I’m looking for that clarify the situation.

The first, expected early in 2026, is the Supreme Court’s ruling on the executive branch’s tariff powers. So many of Trump’s second-term actions depend on his ability to slap tariffs on anyone at will; any limits will change the face of his administration. Without knowing what restrictions the court will put on the executive, it’s hard to plan.

If the court narrowly decides that the law underlying the tariffs fails to cover them, but no further, the administration can invoke another law and reimpose the tariffs. Those who are negatively affected will sue again, and we’re back to square one, confused. Previously, I complained that the court was taking way too much time to decide a fundamental constitutional question: Does the first article of the Constitution mean what it clearly states, only Congress has the power to levy tariffs?

Could we be at the apex of the second Trump administration? The president is claiming victory on every front. Major trade deals with the E.U. and Japan, among others, were announced, with markets reaching new highs. Everyone is bending a knee to the master of the deal. Everyone knows because Donald Trump is on TV around the clock, telling us how great everything is going. To hear him tell it, there is almost too much winning.

Just under the surface, one can see some big rocks that the Administration is approaching. Both Japan and the E.U. imports are subject to a fifteen percent tariff. This rate seems stiff and protective of our manufacturing industries, such as the automotive sector, but a closer look reveals a different picture.

Reason’s economic and trade writer, Eric Boehm, points out that our domestic carmakers are dependent on inputs from Canada and Mexico, which are subject to a 25 percent levy. Using lower-cost parts and materials, Toyota could build autos completely in Japan, pay the tariff, and still undercut our auto manufacturers. The companies and the auto workers are already complaining about the disadvantage.

71% of Toyota cars sold in the U.S. are made here. This production supports hundreds of thousands of jobs in the U.S. With the price advantages afforded by the agreement to produce in Japan, these jobs are at risk.

If the 15% rate is suitable for Japan to produce at home, the E.U., subject to the same rate, will find itself in a similar position. European auto makers also employ a large number of people in the U.S. The Street put it this way, “The Big 3 now has a similar problem with EU competitors, as their 15% duties pale in comparison to the 25% duties U.S. manufacturers have to pay to get their cars from their Canadian and Mexican plants.” 

Catching up on some things I’ve commented on in the past. Remember when Donald Trump said he would end the Ukraine War in 24 hours? I made some suggestions on how he might accomplish this goal. Mainly, it consisted of ways to bring the pain of War to Russia—longer-range weapons to shoot back. As usual, the President ignores my advice. He still tells Ukraine not to hit key cities in Russia. Over half a year into his term, and the War rages on worse than ever.

After several pauses in aid to Ukraine, Trump has concluded that Putin is jerking him around. A former KGB officer can’t be trusted, who knew? Now he’s arranged to ship more arms to the embattled nation that our NATO allies will pay for. To many, this suggests a shift in Trump’s stance on the War.

I’m skeptical. The Washington Post’s David Ignatius, who in the past had good sources, says the new aid includes longer-range weapons and lifts range restrictions on some they already have. Still, unless these weapons hit the political centers of Moscow and St. Petersburg, it won’t matter that much. Till the people of these cities face the same terror that the citizens of Kyiv experience now, Putin has no incentive to change. Yet, Trump says Ukraine shouldn’t hit Moscow.

The President also threatened tough action on the sanctions-tariff front but gave Putin 50 days’ notice before any implementation. After more than six months, why so much time? Is it to head off the Senate from passing the Graham-Blumenthal sanctions bill? The Senate should pass the bill now with its significant bipartisan majority to send a message to both Putin and Trump.

O.K., who left the closet door open and let Peter Navarro, the White House trade advisor, out? All I know is I woke up Friday morning to find Tariff Man, A.K.A. President Donald Trump had threatened the European Union with a 50% tariff on June 1st if they didn’t bend to his will. Added to this blast was a 25% tariff on any iPhones built outside the U.S. Apple has been moving production to India.

So much for the assurances uttered by those behind Trump’s first-term tax success; as I’ve pointed out, Larry Kudlow, Steve Moore, and Art Laffer led us to believe massive tariffs were only a tactic to obtain fairer trade terms. On “Liberation Day,” we saw high tariffs, only to be partially rolled back, but here we go again. How often do we hear the cry of “wolf” without any canine attack before we stop listening about wolves and anything else we hear from the Crier?

We may have legitimate complaints against our trading partners, and they have their concerns. But why not negotiate in good faith rather than making enemies out of friends and potential friends? Our relationship with Europe is already shaky over the Ukraine conflict and NATO. Do we need a more estrangement?

As the most populous nation on earth, India, as an ally, could help offset China. India is a rapidly developing nation willing to produce things we’ve been getting from China. We should be happy that Apple builds phones there rather than in China. No, Trump demands Apple make expensive phones in the U.S. India has every reason to feel stiffed by the U.S. Do we want to punish an American Tech company while we’re claiming that’s what the EU is doing? Why take business from India?

Trump claims he has all the cards, and everyone must give in to his desires. This blog is devoted to public policy, ours, and other nations. Looking at things from the perspective of different countries, Trump’s contention isn’t necessarily so.