Reciprocal Tariffs? Trump Touts Recalibration of US Trade Policy in a Drama-packed Address to Congress
From Heckling to Jibing and Political Poking: Is Trump Convinced That Bipartisan Support Is a Lost Cause?
Hey Grinfi Navigators!
A lot of drama is unfolding on the geopolitical scene right now. The Trump effect appears to have left markets scrambling and political leaders on edge. It’s best to describe the environment as both grim and galvanizing, but our core mission remains: turning uncertainty into opportunity for you, leveraging geostrategic and politico-economic shifts to help you make smarter, more informed decisions.
Mid-week chaos, but big mid-week opportunities!
But first, a bit of humor 😄 to lighten a tough week as we dig into the historical archives for our newly introduced feature, 'Humor of the Week’.
"War is not merely a political act, but also a real political instrument, a continuation of political commerce, a carrying out of the same by other means."
Carl von Clausewitz, “On War”, Book I, Chapter I; Originally published in German as Vom Kriege in 1832, translated by Howard and Paret (Princeton University Press, 1976, p. 87).
Disclaimer: The opinion expressed in the quote does not reflect our views but is intended for reflection purposes only.
Today, March 5, the airwaves in the U.S. and globally are buzzing with fiery responses to Trump’s impassioned address. From hate and anger to disgust, love, passion, and nonchalance, Trump has once again made the news all about himself. This comes as the White House prepares to host the first-ever White House Crypto Summit on Friday, March 7.
On March 4, Trump delivered a 100-minute address (1 hour and 40 minutes) titled America Is Back to a joint session of the U.S. Congress. According to The American Presidency Project, this is arguably the longest presidential address to Congress in modern U.S. history. It was Trump’s first address to Congress since taking office, a speech as long as it was combative. The atmosphere was charged with disruption, most notably when Representative Al Green (D-Texas) was ejected for shouting, "Mr. President, you don’t have a mandate!" while waving his cane. The drama escalated with other Democratic voices interjecting phrases like "that’s a lie," "pay your taxes," but their voices were drowned out by Republicans shouting “USA, USA!”
Typical of Trump’s bravado, he repeated his claim of a 'big numbers' popular vote win, which was met with huge Republican applause and angry Democratic reactions. Trump seemed rather indifferent to the Democrats’ response, even poking fun at them by arguing that, even if he achieved the most remarkable feats for the country, Democrats would never cheer for him—a reality that, for him, could be argued he has already accepted.
Beyond the dramatic political theater, Trump’s address reported key domestic and foreign policy priorities. He underscored his assertive foreign policy, even reading aloud a letter from Ukrainian President Zelensky expressing regret and seeking a second chance, including a total commitment to signing the mineral rights deal. This came after Treasury Secretary Bessent stated in an interview that Zelensky blew his chances with the White House meeting debacle. A quick realization for Zelensky: for Trump, deals are struck based on tangible returns rather than ideological alliances. Trump doubled down on reclaiming the Panama Canal and outlined a new trade policy of "reciprocal tariffs," including a 25% tariff on all agricultural imports by April 2. He also signaled a broader shift in trade policy, with potential new measures targeting India, Japan, and European economies. This move is expected to rattle supply chains, particularly for export-oriented countries like Germany.
On Our Geopolitical Radar:
Here’s what we’re observing:
Defense stocks are soaring as the EU ramps up spending, with €800 billion ($841.5 billion) in new defense investments for the ReArm project announced on March 4 by European Commission President Ursula von der Leyen. Companies like Rheinmetall, Leonardo, and Thales have seen substantial stock price increases, with Rheinmetall rising by over 90% since the start of the year. The latest report by French defense firm Dassault Aviation, released today (March 5), shows that its adjusted net sales rose to €6.23 billion ($6.62 billion) in 2024, above its annual guidance and up from €4.80 billion in 2023. With plans to deliver 25 Rafale and 40 Falcon jets in 2025, the projected annual revenue for Dassault is around €6.5 billion this year.
However, there may be some forks in the road. While geopolitical scuffles are driving a dramatic rise in defense spending, projections for 2025, which align with those of other major defense companies, explicitly do not account for the potential impact of U.S. tariffs that could directly target foreign defense firms or the possibility of EU retaliatory measures.
The European aviation sector is consolidating, but instead of full-scale mergers (due to stricter EU merger regulations- EUMR), we're seeing smaller stake acquisitions and strategic deals, such as Lufthansa moving toward a 10% stake in airBaltic and Air France-KLM's interest in TAP.
Germany is ramping up defense manufacturing by repurposing automotive factories to produce military equipment. More is expected in the coming months as soon-to-be Chancellor Merz (whose party won the recent elections) emphasizes Europe's need to declare defense independence from the U.S. However, Germany faces serious challenges concerning its dependence on U.S. markets for its exports.
Zelensky appears to be cowering. Trump publicly read Zelensky’s regret letter before Congress. This comes after the U.S. paused all military aid to Ukraine and following Zelensky’s consultation call with British Prime Minister Keir Starmer, French President Macron, and other EU leaders. Meanwhile, U.S. Vice President JD Vance's controversial remark referring to the UK and France as 'some random countries' has further rattled feathers across the Atlantic among those still committed to the transatlantic partnership. Reports suggest a new meeting between Zelensky and Trump could be scheduled soon, though many factors would need to be considered first. While the deal is still theoretically on the table, Treasury Secretary Bessent indicated that Zelensky may have blown it. However, nothing is set in stone in Trump’s foreign policy playbook.
A high-level EU defense and support meeting kicks off tomorrow, March 6, in Brussels, where major policy discussions and new defense spending commitments on military coordination and industrial defense strategies are expected.
Trump’s tariff escalation continues. He is threatening new tariffs on all agricultural imports by April 2 while pushing a "Made in America" shipbuilding revival, complete with tax incentives and the creation of a new ‘Office of Shipbuilding’ to boost U.S. naval production.
China has hit back at recent US tariffs. On March 5, Beijing slapped a 15% tariff on U.S. agricultural imports in retaliation for Washington’s 10% levy on Chinese goods.
The U.S. Embassy in Mogadishu issued a security alert today, March 5 regarding credible threats of imminent terrorist attacks, including at Aden Adde International Airport. A "Do Not Travel" advisory remains in effect due to terrorism, crime, and civil unrest in Somalia.
The European Commission has unveiled €800 billion for its ‘ReArm Europe’ project, aimed at enhancing EU military capabilities in response to growing concerns about Russian aggression. The plan includes €150 billion in loans for joint defense procurement, focusing on drones, missiles, and ammunition. The goal is to strengthen Europe by addressing intra-EU defense policy fragmentation, increasing interoperability, and bolstering the European defense industrial base, following President Trump's decision to suspend all U.S. military aid to Ukraine and the EU’s renewed push for strategic autonomy.
Japan and South Korea have expressed interest in partnering with the U.S. on the Alaska LNG project, a $44 billion initiative to construct an 800-mile pipeline to transport natural gas from Alaska for export to Asia. Japan is also courting U.S. tech companies for investments in its semiconductor industry.
Taiwanese company TSMC has announced a $100 billion investment in the U.S., specifically in Arizona, to enhance its semiconductor manufacturing capabilities. This includes three new fabrication plants, two advanced packaging facilities, and a major R&D center. TSMC’s total U.S. investment is expected to reach $165 billion, making it the largest single foreign direct investment in U.S. history.
Spain is positioning itself as Europe’s green hydrogen leader, with ambitious targets to produce 2.5 million metric tons of renewable hydrogen annually by 2030, driven by its abundant solar resources. However, water scarcity in the country poses a significant risk to this achieving this goal, as hydrogen production is water-intensive.
At the same time, Japanese scientists led by Dr. Hiroaki Maeda and Professor Hiroshi Nishihara at Tokyo University of Science have developed a palladium-based nanosheet catalyst, known as bis(diimino)palladium coordination nanosheets (PdDI), which offers a cost-effective alternative to platinum in hydrogen production. By using a simple synthesis method and minimizing the use of