Dear Reader,
The news this week was dominated by the breakdown of the Constitutional order as the Trump administration deliberately provoked a confrontation with the Courts, while the Republican controlled Congress continues to allow the growth of the administrative state through the leeching of power from Congress to the presidency, despite Republicans running against the taking of power from the other branches by the executive. Consequently, the biggest news has been the extrajudicial deportation of Kilmar Ábrego García, an alleged but unproven member of the transnational criminal organization MS-13. The Supreme Court of the United States (SCOTUS) said the removal from the United States of El Salvadoran citizen and Maryland resident Kilmar Ábrego García and his imprisonment in the El Salvadoran Center for Terrorism Confinement (CECOT) was illegal, and the Trump administration has admitted this. But SCOTUS has ordered that the administration abide by a lower court ruling to facilitate the return of García to the US. However, the administration then claimed that as a member of MS-13, García is a terrorist and a threat to the public. But this raises the question of why the administration will not simply produce the evidence that he is a member of MS-13. This has led to the conclusion that the administration is incompetent and cruel. But a feature of the second Trump administration has been deliberate obfuscation and opacity. Therefore, given the deceptive operations of the administration, it is possible that Kilmar Ábrego García is in fact a member of a criminal gang, and the theater surrounding his deportation is designed to ultimately embarrass administration opponents so that future criticism of the harm done to innocents by the administration is muted, silenced, and delegitimized. Likewise, the Supreme Court would be embarrassed, and observers think the administration considers the United States Supreme Court Chief Justice, Mr. John Roberts, to be pusillanimous and able to be pushed around and forced to make historic mistakes.
China
Tariffs work when you produce something and want to hurt the competition. They fail, they cannot work, if you do not make and cannot produce the thing you are taxing. You are only raising the price for your consumers, which only hurts your opponent if you are their only market. But if you are only one market among many, you only hurt yourself. China has cut off Boeing from parts made in China and is shutting the US out of minerals that cannot be found in North America.
China is showing resilience to US pressure. Chinese nationalism will not allow it to back down, and the people are rallying to the Communist Party. The CBC reports on Chinese leverage over America.
The so-called Chinese peasants are angry, and their government is letting them vent and maybe encouraging it, according to the Times of India. There is a nationalist OEM Rebellion brewing. An OEM, or Original Equipment Manufacturer, is a company that produces parts or finished products that are then sold under another company’s brand, you know, like the iPhone designed by Apple in California but manufactured in China by Foxconn, a giant OEM whose name never appears on the cool Apple product box. In the context of China’s global trade, OEMs are the foundation; they are the hidden genie in the lamp branded “Made in China,” granting your product wishes, though they rarely deal directly with consumers. Chinese OEMs power the global supply chain.
Western companies often apply massive markups, believed to range from 50% to over 1,000% after factoring in other costs on products made by Chinese OEMs, reaping huge profits by branding and marketing goods manufactured at low cost. The real figures are often guarded corporate secrets. An iPhone assembled in China for around $500 might retail for over $1,000, while knock-off but same-quality as the high-end, sneakers made for $5 can sell for $150, the same with luxury handbags whose knockoffs may be of the same quality as the namebrand, but both cost $40 to produce. The namebrand sells for thousands. The result is a global system where China does the building, the West does the branding, and the consumer pays for the logo, driving up Western corporate profits, but the tariffs undermine that system for Americans and their Chinese partners. Chinese marketers and OEMs are now considering undercutting American retailers by selling direct to US consumers as payback for the tariffs and insults. The campaign is most aggressive on TikTok.
The US Economy
Europeans and other foreign investors have their eye on May 2026 because US President Donald Trump has lashed out at the Federal Reserve Chair, making clear he wants a compliant central bank rather than a reformed one. Investors will likely begin to limit their exposure to US markets, probably seeking solace in the Euro, the Pound, and perhaps the loonie, the Canadian Dollar. Americans will find their wealth transferred out of the country, perhaps like in the 1970s. Likewise, foreign companies like Hermes are increasing their prices for US consumers only. Meaning people in other countries will save money compared to Americans, increasing rather than decreasing relative American poverty. It is likely that Americans attempting to buy things cheaply when vacationing abroad will face heightened scrutiny when returning home, and perhaps the Trump Administration will impose new rules on what Americans have to declare when coming through customs and border checks in order to ensure the tariff pain impacts American citizens.
Chilling Tourism and Provoking Boycotts
Summer economies and Sunbelt states are looking at billions in loses as foreign tourists deliberately avoid America. Yes, that is billions with a “B” as Bloomberg reports. Canadians, especially, are believed to be staying away, according to Deutsche Welle. This is already affecting the hiring of young Americans looking for summer jobs.
Reducing tariffs will not stop boycotts. Only in Hollywood does insulting proud nations work. The governments may be full of frightened politicians, but the people are different. Europeans, Asians, and Canadians are boycotting American products. And they do not care if the tariffs are lowered. Expect US exporters to suffer lost sales even if trade deals are worked out at the end of the 90-day pause. Americans must remember they are not the only ones with pride; they are not the only ones who can hold a grudge.