April: Electoral Victories and Tariff Chaos

by Jon Fuhrman

Wednesday, April 9.  April has been quite a month in the Trump Presidency, and we’re only 9 days in.

We began on a good note – for us, anyway – with strong results in the elections on Tuesday.  Our candidate in the Wisconsin State Supreme Court race won BIG time, by 55%, and the Democrat running for State Superintendent of Education also won, though the margin was a little lower.  Last November, Trump carried Wisconsin by almost 1% -- 30,000 votes out of 3.4 million ballots cast.  On Tuesday, the turnout of 2.35 million voters was definitely lower than November, but actually impressively high for an off-year special election.  In 2023, when a Democrat won a Supreme Court seat and first tilted the Court to a 4-3 liberal majority, the turnout was only 1.85 million voters.  So half a million more voters turned out compared to what had been, in 2023, a record-setting turnout.

Further, our candidate, Susan Crawford, didn’t just win in the Democratic strongholds of Madison and Milwaukee (although she racked up 75 – 80% majorities in those vote-rich counties); she won in the surrounding suburban counties, flipped several rural counties, and did far better than usual for a Democrat in the deep-red areas of the state. 

So it was a critical win in several respects.  First off, for Wisconsin, it preserves the liberal tilt of the Court, which is likely to rule on issues like Congressional reapportionment and reproductive rights.  With the House having razor-thin margins, a shift of even one or two seats could be critical.

Secondly, Elon Musk had personally campaigned and dropped over $26 million on the campaign for the GOP candidate.  That turned the race into the most expensive state Supreme Court race in our nation’s history.  You may recall that Musk personally handed out checks of $1 million each to randomly selected voters who had signed his “petition” for electoral integrity; he originally based eligibility for the million dollar prizes on having voted in the Supreme Court race, but that ran over the bright line in Wisconsin state law prohibiting paying people to vote (like the laws in most other states).

Despite this deluge of campaign funding, the solid groundwork of the state Democratic Party, and the changing attitudes of voters, delivered an unmistakable rebuke to Musk and Trump.  Further, this matched closely our results in the two Florida special Congressional elections.  Though our Democratic candidates lost both elections, they each outperformed the November results by 10 – 12%.  We’ve seen roughly this same shift in special elections this year in Iowa, where we flipped a State Senate seat, and in Pennsylvania, where we also flipped a state Senate seat.

In fact, there have been 14 contested special elections in state legislative districts, and Democrats have outperformed their 2024 results by an average of 10%.  As a comparison, back in 2017, there were 67 special state legislative elections, and Dems outperformed by an average of 11%.  You’ll recall that, in 2018, we had the Blue Tsunami and picked up 40 House seats.  You can be sure that we’re not the only ones who can read these numbers.

The day after those elections, President Trump announced his tariffs, after the close of trading, and on Thursday the market started tanking.  It nose-dived Thursday, again on Friday, and, after a bit of a mid-day rally, sank again on Monday.  The collective loss on the Dow Jones average was over 4,000 points, over 10% of the value.  The decline continued Tuesday, for nearly another 1,000 points.  Through all this time, we got conflicting and consistently changing information – which countries would be hit, how much the tariffs would be, when they would start.  But consistently, the message was that Trump wouldn’t bend, although the White House constantly bragged about how many countries were begging for negotiation and pleading for relief, all groveling supplicants to the mighty President.

Then, today, suddenly the clouds cleared.  Tariffs would be postponed for 90 days; most tariffs would be cut to a nominal 10% (although folks didn’t much dwell on the fact that the tariffs had been 3%, so the 10% is still quite a significant increase).  It’s not clear what caused the change.  One possibility is the turmoil in the bond market Tuesday night, with foreign holders and major arbitrageurs all starting to sell Treasuries – which would push interest rates up sharply.  Another commentator suggested that there were signs of instability in the payments market – the underlying plumbing of the financial markets that facilitates ACH transactions, automated deposits and withdrawals, ATM transactions.  That’s the sort of thing that broke down in 2008 and could lead to a global financial crisis. 

Whatever it was, the Administration blinked.  Or maybe that was their plan all along.  We’ll never really know, because the President would never admit to being the one who blinked.  Or perhaps Treasury Secretary Scott Bessent has become the “adult in the room” and walked the President back from the brink.  But the markets breathed a sigh of relief and shot up by over 2,500 points.

For a bit of perspective, if one looks back to 2017, when Trump first took office, the Dow was at 20,000.  It had risen to 30,000 by the end of his Presidency, in 2021.  After 4 years of a “terrible” economy under Joe Biden, the market inexplicably had risen to 44,000.  So even after today’s recovery, we’re still nearly 5,000 points – 11% -- off our recent peak.  That impacts not only millions of 401(K)’s and IRA’s.  It also hits all the retirement funds like CALPERS and CALSTRS, and their equivalent in every state and in private industry, which are heavily invested in the market.  So tens of millions of working Americans are impacted by these losses.  Presumably the market will bounce back.  But people’s confidence, and employers’ confidence, might take a while to recover, which means less spending, less hiring, less production – pretty much the recipe for a Trump recession.

And all that is without knowing how China might respond.  Trump specifically left the 125% tariff on all Chinese goods in place.  They are responding in kind, and they are not likely to blink first.  In fact, the Chinese probably have the stronger bargaining position.  If I were they, I’d simply nationalize all the Tesla facilities in China.  Elon Musk has already been sniping at Trump about the tariffs; something like that could really stress their little bromance.

It would seem that all this pain and confusion is finally registering with voters.  You see it in the special election results.  You see it in the most recent polling: Quinnipiac has President Trump deeply underwater, with only a 41% approval rate versus a 53% disapproval, with similar margins on specific topics like handling the economy, handling trade, foreign policy.  On the tariffs specifically, he’s under water by 50%.

You can also see signs of discontent in the protests being organized, nationally and right here in Pasadena.  At first, I somewhat doubted the value of these protests.  They’re not going to change the minds of the Administration or of MAGA Congressmembers.  So what are they going to achieve?  But I think I was wrong.  There is a power in this sort of performative politics.  It provides a constructive outlet for our passion, and it draws others in by assuring them they are not alone in their discontent.  It provides a hook for news coverage, and, when they are truly widespread (there were demonstrations last Saturday in nearly every state capital, in blue, purple and red states, in urban and rural communities) they may at least add to the unease that GOP members in districts with a 5 – 10% edge may be feeling.

Now the razor-thin GOP majority in the House has to struggle with approving a budget resolution.  Votes were scheduled several times this week but cancelled due to apparently irreconcilable differences between the hard-core Freedom Caucus and the bulk of the caucus.  Speaker Johnson wants to go along with the Senate budget plan, which just sort of sneaks in continuing all the Trump tax cuts along with a perfunctory nod to some budget cuts.  The Freedom Caucus folks want to whack away at Medicaid, and even Medicare, to lop a trillion or two off the budget.  The Speaker knows most of his caucus, and nearly the whole GOP caucus in the Senate, won’t buy off on that.  So he’s stuck, and all his slick hand-waving and promises of future cuts won’t buy off the hard-core defectors.  Of course, one could always seek help from the Democrats, which would mean giving in on at least a few key issues.  He might use that possibility in a game of chicken with his hard-core defectors, but they’d probably call his bluff.  Worse, this is just the first of a stream of similar legislative issues where the demands of the Freedom Caucus won’t align with the majority of the House, or Senate, GOP caucuses.  One might almost feel sympathetic toward the Speaker – almost.