You’re now on ‘Trump time’: US puts pressure on China, EU to make a trade deal

Tick tock, the Trump administration has set the clock. According to reports, President Trump is demanding U.S. trading partners submit their best offers by tomorrow with the July 8th tariff deadline looming. It's a global game of economic chicken and the White House says it's done waiting. Hello everyone, welcome to The Big Money Show. I'm Jackie DeAngelis. With me are my co-hosts, Taylor Riggs, Jerry Willis, and Perdigian McDowell, Brian Bremberg, and with us for the entire hour, Prairie Operating Company EVP So, let's get back to this. Lower tariffs, fairer quotas, and real enforcement on everything from digital trade to critical minerals. Those are the demands coming from Washington. And Trump is turning up the pressure himself, writing this on Truth Social. If other countries are allowed to use tariffs against us and we're not allowed to counter them, our country doesn't even have a small chance of economic survival. Sources say deals with allies like India might be within our reach, but for others, especially in Europe and Asia, we could be shaping up for quite a showdown. So, I have gone through this, Lou Bassanese, and I've said that list of tariffs he was holding right there was not really a real list, that this was all about negotiation. When the UK deal came in, I was optimistic. When China pause came in, I thought, okay, things are going well. When he said we're having trouble with the EU, I said, Houston, we have a problem. And this signifies to me that there is a bigger problem. I do. I think you said it rightly. It's a game of chicken, and he's really having to take a stronger stance. But I gotta give you credit. Long ago, when he was awaiting inauguration, you said he's carrying a big stick with tariff talk. And I think we're seeing that again. And countries need to wake up. I mean, it's a July 8th deadline, and we're here, it's June 3rd, right? So, he knows he needs to get the ball moving in the right direction, shift momentum, because I'm with you. China seemed like a great deal. This seemed like momentum was happening, and now it's slowing down. EU, understandably, is gonna be hard. You're talking with 27 different countries. Someone is gonna feel like they're being neglected in that. But time is of the essence. I think the president is right to push the issue, force it now, and use all means possible. I mean, who would have thought social media could have such an influence on international affairs and economic policy? Yeah, I get what he's trying to do here, but I also am of the school that ultimatums sometimes can really backfire in your face. You have to be careful. Taylor, when we're looking at the countries that are the most difficult to negotiate with, I would probably say China and the EU top the list. So, you're looking at some of that. So, this is very interesting, you guys. We've talked a lot about who needs who more. Does China need the US more? Do they fall first? Do they blink first in this game of chicken? We got China private sector manufacturing numbers out overnight, and lo and behold, they slide into contractionary territory from expansion territory. Gauge for new export orders in China drops to the lowest level since July of 23. Employment declines, prices low as supply and demand weakens. Here's another quote from manufacturers in China. Unfavorable factors affecting China's economic development remain prevalent. External trade environment uncertainty has increased. Downward pressure on the economy has intensified relative to recent periods. And then, lo and behold, what Morgan Stanley, our favorite US bank, Brian, by some measures, has to say about the US economy. To our surprise, US manufacturing construction starts up in the first quarter. My chart of the day shows that US manufacturing construction tracking 250% higher relative to 2019 levels. So again, one note, one data point. But I come out this morning and I'm thinking, wow, it looks pretty negative for China and I'm only raising positive stuff. There's another volatile level of GDP that we don't talk about because it's so volatile, but it's showing very high growth so far in the second quarter for the US. So again, in the game of chicken, who needs who more? Well, I think the data points keep piling up though. I did the math and China would suffer a 2.2% drag on GDP if they don't resolve things with the US. Now we're talking about, they're trying to maintain 5%, I mean, basically cutting it in half. They need us way more. As you're citing, the US economy is reaccelerating. Yeah, you don't want the factories there to slow. We've already seen rumblings of the natives getting restless as a result of this back and forth. But the truth social post coming from Donald Trump is quite intriguing to me because he makes an interesting point. Other countries are using tariffs on us, yet we're limited here in the United States. He's been challenged in the court system of whether or not he can use emergency powers, Brian, in order to enact the tariffs that he wants to. Obviously you've highlighted, there are several tariff tools that he has in the toolbox he can use, but they're not as extensive as he would like them to be. And so we do have to ask ourselves, are our rules to a certain degree limiting? Well, he's got more power on tariffs than any president in the history of this country. I mean, the grand sweep of tariffs in America has been Congress giving more of that power to the executive. So he's in a pretty good spot. Now, Donald Trump always takes everything he can get. He's not, like he doesn't take the Brenberg approach, which is, man, I've still got a lot of other things I could do, right? He takes the Trump approach, which is I want everything. He wants 301, 232, whatever the one Dagan said yesterday was. He wants IEEPA, he wants it all. Okay, I think he's in a good spot. I'm a little more positive on the ultimatum than you. I get it. The ultimatums I give to my kids backfire often. They're generally not good, right? I can second that. Donald Trump is better at ultimatums than I am. And I think he's going to these countries and he's saying, let's get this moving on Trump time. You're now on Trump time. You've sat around and thought about it. You've sort of tested where the wind is blowing. Let's make a deal. Give me your best offer. We'll tell you if it's good enough. But I like that. This is a good time. If you're right, and China always lies about their numbers, but if they're telling you manufacturing's soft, then it's bad, okay? In the U.S., we keep getting these surprising numbers. Like, oh my gosh, unemployment's good. Oh my gosh, inflation's good. Oh my gosh, manufacturing's come back. It's a good time for the U.S. to use that leverage and get something done. So I like what he's doing with this. But can I say just one thing here? It's not just China and the EU and other countries. It's also the stock market and investors who play a role in how fast this has to go. And it's gonna be interesting to see, I think, just how patient the market will be going forward. Because I think they're gonna want this wrapped up. You know how the market is. It's like, okay, are we done yet? Can we move on? Earnings are out? Okay, bye. You know, they want it fast. They want it done. Do you think they're kind of done, though? I mean, we got that, you were talking about that EU thing on Friday, right? Like Houston, we have a problem. And the market was, you know, dropped for a bit. No, so I think- But like, we're just back. I think the market's been pretty good about this, to be perfectly honest with you. Now that the initial gut punch, the shock has worn off, and they know Trump is in a Trump kind of- Trump speed. Right, Trump speed kind of negotiation right now. They're taking it on the chin here. I think the rest of the data's been pretty encouraging, and so have earnings. And so the market is saying, you know, it looks at the neighbors. Taylor, you point out those that we're negotiating with and the positions that they're in, and is saying, this is still the best house in a crummy neighborhood right now. And they continue to analyze it that way, and they give them some more data. But also- It keeps coming in. I mean, if we look at earnings, right? Analysts got really negative and only expected 6% growth. They came in at 12.9% for the quarter. So like Brian was saying, all these reports keep coming in unexpectedly positive or more positive than we thought originally. And the stage is set for that to continue. I mean, we're seeing companies that are absorbing the tariff pressure, sacrificing some margins. They're still seeing demand. Retail reporting, we were talking about this last week. The retailers came out with, without an exception almost, maybe Walmart, the only one, really strong reports that the consumer is theirs. You also have the prospect of the big, beautiful bill and tax cuts passing. And I think that's holding this market up as well because it's optimistic that the plan, all the spokes in the wheel are finally coming together. And this is what he promised. We're gonna be talking later in the show about the consumer. We're gonna be talking later in the show about some of the new energy projects, all these different things that have to come together to float this economy. But right now, even despite the fact that we're in a negotiation, so far, so good. You talked about earnings growth. My estimates had 13.1%. The official Taylor Riggs estimates. 0.2% higher than you, but I'm Pollyanna, so maybe we'll attribute it to that. That's not relative to revision. That is literally earnings growth year over year, taking all the revisions out of it. I mean, that is solid and healthy. And as long as that grows above the long-term median, which is about 7%, valuations priced higher, goes up 90% of the time and by 9% on average. Not saying everything is in the clear and we're all going higher, but the fundamentals so far have held up phenomenally well. And that's really important because if you have fundamentals like that that you're building on and they wanna get the growth engine going, that's what's gonna pay for the tax cuts and the big, beautiful bill, or at least the part that the spending cuts don't pay for. You've got a good case to make that growth is gonna be higher than a lot of the estimates out there. That's what I think is being priced in right now. I hear a really strong case to not freak out about tariffs. Like, that is my day-by-day-by-day lesson in this, is I don't think businesses are freaking out as much as the financial press. I don't think investors are freaking out the way everybody thought they were going to. I know that there's some news outlets that would love to see all of this fall apart, but I don't think most of America wants to see it fall apart, and that's why it's not falling apart. So is it not freak out about the tariffs because it's all gonna turn out well, or is it don't freak out about the tariffs because ultimately nothing's gonna happen? I would say both. I'd say two reasons. One is I don't think tariffs are gonna have as much impact on our overall economy as people say they are. I mean, 80% of our economy is a domestic economy, okay? I think that's one of them. I think the other one is President Trump doesn't want to destroy the American economy. He doesn't want to destroy American capital, and he wants to see it win in the globe, and so I think he's gonna ultimately do things that benefit growth and prosperity in the country, and if you believe those two, if you recognize the first thing, that our economy's very domestic in a lot of ways, and if you believe the second, which is you've got a president who loves economic growth, I think you're gonna be okay. And if he comes to the 10% baseline that we've been saying the market's probably expecting, and most people are expecting now, he generates some tariff revenue, which is something that he wanted to do, and when you cobble that all together, all those savings, 200 billion here, 175 billion with Doge, you've got his gold card initiative that's coming out, you start adding up those numbers, and they actually are pretty impactful, especially on the Doge side when you're cutting a lot of waste. So I think that he reaches his objective. He just, he had to go hard, hard and high when he started to be able to get the conversation going. Yeah, and don't lose sight of the fact that Brian's point, we have a domestic economy, largely, and tariffs only impact goods, right? And personal consumption, two-thirds of that spending is on services. So we're talking about tariffs impacting a third of consumer spending, not the entire thing, so it's really a smaller impact than most people or most news outlets have tried to make it out to be. Absolutely, meantime, we're looking at stocks today, and Taylor, you're watching Cigna. You guys, how could we not do this one, right? All the jewelry makers like Cigna up 10%. Remember, Cigna owns Kay, Jared, and Zales, and there is a new fad out there on lab-grown diamonds, man-made diamonds, not a cubic zirconium that literally the biology of the diamond is the same as an earth-made one, but you just grow it in the lab, but it's like a fraction of the cost. So Cigna Jewelers is saying that they're adding more lab-grown diamonds to their fashion jewelry assortment because if you don't wanna buy a real engagement ring, you could buy a lab-grown diamond, but if you want something higher than just fashion jewelry of like a cubic zirconium, lab-grown diamonds are double the price of that, which is helping them, and higher gold prices are helping them. So lab-grown diamonds is this very interesting sort of middle-of-the-road niche that they're really tapping into. Yeah, they're nodding. No, I'm nodding because there used to be another company that was trying to forge their way in this market. It was in between cubic zirconia and lab-grown, and about five, six years ago, it was a small-cap company that just couldn't get traction. It's funny how consumer tastes adjust. Now it's okay. You're saving 30 to 40% on average off a typical diamond. You get more bling for your buck. I think that is- And you can't tell the difference. It's lower end. You cannot tell the difference. You're talking about K Jewelers and Zales. De Beers just said they're not going to be producing any more lab-grown diamonds higher end. Tiffany's won't either, but- No. Oh, really? Associated with it. There's definitely a certain market for it, and it's hard with lab-grown diamonds. There isn't a resale value. You don't know what, if I wanted to trade up, what is that market- Why would someone buy your used lab-grown diamond when they could go buy a new lab-grown diamond? Brian, I'm really into this stuff. Well, I just, the main problem with lab-grown diamonds is the name lab-grown diamond. You're thinking lab-grown meat? It's the butt. The biology is the same, but- They need a better name, though. It can't be lab-grown. Fake would be worse. Man-made? I don't like that. Sustainable? Get back to me on that. We need a better name. Biologically engineered. Like GMO. Like your food. Which we love. I don't know. All right, coming up.