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🎶 Friday Listening: Phosphorescent – Song For Zula

After baggage fees, is there a bigger consumer scam than ACH transfers? You’re telling me it takes three business days to move a bunch of numbers from one account to another? And during those three days, the money has left my account but is not yet in the other person’s—meaning the bank is holding it and collecting the vig. Interfacing with the banking industry is where my inner Bernie Bro really comes out. Vampire squids, all of them.

In a (tortured) way, that kind of dovetails with what I wanted to talk about today. That is, the giant consumer scam that I fear is headed our way. Yesterday morning, the CFO of Walmart came out and said for the first time that tariff-related price hikes—potentially in the “double digits”—were coming as soon as the end of the month. Even with the reciprocal tariffs on “pause” and much of the rest in limbo, the world’s largest retailer is saying it still cannot absorb the impact from this trade war, and is about to pass the costs on to us.

Walmart saying this publicly will now give cover for other big retailers to do the same. Something like this happened a couple years ago, when the economy opened up after Covid and everything went haywire. Businesses looking for opportunities to raise their prices found one in the “supply chain” chaos. Why did Starbucks raise the price of a brewed coffee by 50 percent since 2020? Because they could. I’m not suggesting the supply chain wasn’t actually messed up, or that the money printer that was turned on during Trump 1 and sped up under Biden didn’t lead to the inflation we’re still dealing with, it obviously did. But prices tend to only go in one direction: up. And if retail juggernauts like Walmart are saying they can’t absorb even the relatively modest tariff level at present, your local small business doesn’t stand a chance.

This is my fear with the tariffs, that we’re going to get the worst of all worlds. They don’t bring in enough revenue to be meaningful, but we consumers still end up paying for Trump’s big vanity project.

There was an Axios story making the rounds last night, headlined: Hard data suggests tariff-driven inflation and recession fears may be overblown. The article looks at a few economic indicators—retail sales, PPI, etc.—that held relatively steady in April. I noticed a bunch of the MAGA faithful on Twitter sharing this as proof of President Trump’s negotiating brilliance and that his critics were wrong, when I saw it as the opposite. First, one month of data is virtually meaningless. But more importantly, the fact that the stock market has recovered since “Liberation Day” and that the economy has been holding up so far is because Trump backed off the worst parts of his original policy, as his critics (and the markets) were telling him to do. Score one for the critics!

Anyway, the president is headed back to DC after what could be considered, if you gloss over the $400M Qatar blood-money plane, a diplomatic success. Or at least, he put a fair number of diplomatic balls in the air on this trip. We’ll see where they land. Trump also got a potential win—as well what seems like a likely loss—at the Supreme Court yesterday, whether the justices appeared highly skeptical of the government’s legal theory for ending birthright citizenship, but more open to the idea of restraints on lower-court injunctions (the bigger prize for this White House). That’s the news for this lovely spring Friday.

Have a great weekend, enjoy the weather and LGK!

Keir Starmer Has Transformed Into Donald Trump

British Prime Minister Sir Keir Starmer has taken to employing anglicized forms of Trumpian rhetoric and emulating the president’s stances on immigration in an apparent effort to stave off growing electoral threats from the country’s truly MAGA-esque forces.

As the U.K’s broadsheets and tabloids have begun to notice, the prime minister has channeled Trump in increasingly frequent and obvious ways. Seemingly borrowing from the Trump playbook, he pledged to “cut the weeds of regulation” in a January op-ed for The Times, and more recently described his approach to the development of nuclear power stations in England and Wales as “build, baby, build,” echoing Trump’s promise to “drill, baby, drill.” Read the full story.

Also happening:

• Trump’s Middle East tour: President Donald Trump has wrapped up a high-profile 4-day tour of key Middle Eastern nations, including Saudi Arabia, Qatar, and the United Arab Emirates, aiming to strengthen U.S. influence through a mix of economic, diplomatic and strategic initiatives. Here are five takeaways.
• Birthright citizenship: Supreme Court Justice Amy Coney Barrett’s remarks in court on Thursday have sparked MAGA backlash online, with some saying President Donald Trump made a “huge mistake” appointing her to the bench. Here’s why.

This is a preview of The 1600—Tap here to get this newsletter delivered straight to your inbox.