The Bureau of Labor and Statistics (BLS) has released the jobs and employment data for April [SEE HERE].  Within the data we see 177,000 jobs were gained, beating expectations of 133,000.   The unemployment rate remains unchanged at 4.2%.

Federal government employment declined by 9,000 in April [BLS, Table B-1]  Health care added 51,000 jobs: consisting of hospitals (+22,000) and ambulatory health care services (+21,000). Transportation and warehousing increased by 29,000 jobs in April: with warehousing and storage (+10,000), couriers and messengers (+8,000), and air transportation (+3,000).

.@StephenMoore reacts to the jobs report: “436,000 increase in the number of people who are employed. So, this is an amazing report… The labor force participation rate rose. So, this is a very strong number.” pic.twitter.com/CuAPwD52Yn

— Rapid Response 47 (@RapidResponse47) May 2, 2025

(Via Wall Street Journal) – The U.S. economy continued to add jobs at a steady clip in April, although the pace of gains slowed slightly during a month that saw changing tariff announcements and market turmoil.

The U.S. added 177,000 jobs in April, the Labor Department reported Friday, above the gain of 133,000 jobs economists polled by The Wall Street Journal had expected to see.

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This next story is a natural outcome in the flow of goods. Remember, the Bureau of Economic Analysis (BEA) of the first quarter is a hindsight review. Meaning the information released today was based on activity in January, February and March 2025.

U.S. companies surged the purchasing of import goods, mostly from China, by more than 50% in the first quarter. They were/are building inventory. So, what happens in China starting in April?

Hong Kong, CNN – China’s factory activity contracted at its fastest pace in 16 months in April, as steep US tariffs took a heavy toll on the manufacturing sector, adding urgency to Beijing’s efforts to roll out fresh economic stimulus.

The manufacturing Purchasing Managers’ Index (PMI) fell to 49.0 in April, the weakest reading since December 2023, according to data released by the National Bureau of Statistics (NBS) on Wednesday. A reading below 50 signals a contraction.

Zhao Qinghe, a senior statistician at the NBS, said in a statement that the contraction in factory activity was due to “sharp changes in the external environment and other factors.” (read more)

The U.S. has front-loaded the inventory. So, orders to China drop now. It’s a natural outcome.

We have purchased goods in advance. So, orders to China drop. As a result, the cargo shipments from China to the USA drop in April, May and June.

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The absolute key to the first quarter GDP result is to remember that ‘imports‘ are a deduction in the economic equation of Gross Domestic Product.  The GDP is the valuation of all goods and services produced in the USA *minus* the value of imports.

The Bureau of Economic Analysis (BEA) releases the results of the first quarter GDP.  The overall economic growth seems low at –0.3% until you look at how U.S. companies responded in February and March to the tariff announcement.

Companies proactively purchased massive amounts of products in advance of the tariffs leading to an overall increase in imports of 41.3%.  Which results in a 5.3% deduction to GDP.  Every dollar of those imports is a deduction to the GDP equation, giving the false appearance of lower domestic production.

There was a massive surge in import goods purchases of 50.9% versus the prior period [Table 1, line 20].  That’s the largest periodic increase in import purchases I have ever seen.  Simultaneously, fixed asset investment in equipment for domestic production surged 22.5% [Table 1, line 11].

Put both of these metrics together and what you see are U.S. companies building consumer inventory from overseas (imports) while simultaneously preparing themselves to shift production into the USA.  The massive import purchases are a bridge to cover the time needed to shift the manufacturing from overseas to the USA.  This is exactly what we want to see.

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As we saw previously in Term-1, President Trump has again divided and assigned trade negotiation responsibility to key cabinet members.  In this interview with CNN National Economic Council Director Kevin Hassett smiles and walks effortlessly through the narrative engineering attempt by CNN pundit Kassie Hunt.

This is a must watch interview if you are following the details of the current global trade renegotiation.

Hassett outlines the current status of trade negotiations with some of the biggest trade partners in the world.  India and Southeast Asia are being handled by Treasury Secretary Scott Bessent.  Commerce Secretary Howard Lutnick is in control of the section 232 (national security) tariffs, and USTR Jamison Greer has 19 current Free Trade Agreements outlined with various partners all willing to accept the reciprocity agreement.  WATCH:

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Last week CTH noted, “interested political followers in the USA should pay close attention to how the International Longshore and Warehouse Union (ILWA) respond to the corporate media narrative. …  Will the International Longshoremen’s Association stand with Trump, or will they drop support as the global trade reset emphasizes domestically manufactured jobs?  That will be an interesting aspect to watch because the dockworker union leadership will face massive pressure to comply with the anti-tariff narrative.”  (full article)

Yesterday, we got the answer: “The International Longshore and Warehouse Union (ILWU) unequivocally condemns the recent tariffs that the Trump administration has imposed.”

[SOURCE]

All these moves are so transparently political, it almost makes you laugh.  However, that said, we are now in a better position to understand exactly how the Democrats and Deep State operatives will weaponize the supply chain along with their union orcs.

In the next phase of the anti-Trump tariff agenda, approximately 3 months from now it will begin, we will see/hear a constant drumbeat of empty shelves, missing parts and missing products.  Whether factually true, or whether the shortages are an outcome of a strategy by the ILWA to assist the shortage narrative, the overall objective will be to blame President Trump for everything from shortages of medicine to shortages of parts to fix, repair or maintain consumer products.

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DAY 100

Press Briefing by the White House Press Secretary Karoline Leavitt and Treasury Secretary Scott Bessent on Unleashing Economic Greatness.

Inbound Investments So Far:

Project Stargate, led by Japan-based Softbank and U.S.-based OpenAI and Oracle, announced a $500 billion private investment in U.S.-based artificial intelligence infrastructure.

Apple announced a $500 billion investment in U.S. manufacturing and training.

NVIDIA, a global chipmaking giant, announced it will invest $500 billion in U.S.-based AI infrastructure over the next four years amid its pledge to manufacture AI supercomputers entirely in the U.S. for the first time.

IBM announced a $150 billion investment over the next five years in its U.S.-based growth and manufacturing operations.

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After spending three months riding his bicycle in slow circles at the bottom of the White House driveway while staring in the windows, it was reported this morning that a frustrated Jeff Bezos would announce his Amazon company would start to label the tariff impact on all products sold by the company.

However, in the angered reaction to President Trump’s tariffs against the majority of his suppliers, what Jeff Bezos likely didn’t realize is the tariff label acts as a “Country of Origin Label” (COOL).

All of the products sold on Amazon that would have tariff cost labeling, are not made in the USA. All of the products without tariff labels would be made in the USA.

Given the nature of American preference toward higher quality products, the “Tariff Label” becomes a DeFacto blacklist. Purchase reviews would proceed accordingly.

WASHINGTON – [T]he e-commerce giant will soon show how much Trump’s tariffs are adding to the price of each product, according to a person familiar with the plan. The shopping site will display how much of an item’s cost is derived from tariffs – right next to the product’s total listed price. (source)

How Amazon could possibly calculate this ‘cost’ given the complex nature and changing dynamics of total cost of production, currency evaluations, subsidies, and countervailing duty offsets, was an unknown.  However, as would be predicted, shares of Amazon stock started to plummet, which led to Amazon quickly denying the report.

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Only President Trump could get the Canadians to vote for an exit to the USMCA, and he did it brilliantly.

To understand President Trump’s position on Canada, you have to go back to the 2016 election and President Trump’s position on the NAFTA renegotiation.  If you did not follow the subsequent USMCA process, this might be the ah-ha moment you need to understand Trump’s strategy.

During the 2016 election President Trump repeatedly said he wanted to renegotiate NAFTA, the North American Free Trade Agreement.  Both Canada and Mexico were reluctant to open the trade agreement to revision, but ultimately President Trump had the authority and support from an election victory to do exactly that.

In order to understand the issue, you must remember President Trump, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer each agreed the NAFTA agreement was fraught with problems and was best addressed by scrapping it and creating two seperate bilateral trade agreements. One between the USA and Mexico, and one between the USA and Canada.

In the decades that preceded the 2017 push to redo the trade pact, Canada had restructured their economy to: (1) align with progressive climate change; and (2) take advantage of the NAFTA loophole.  The Canadian government did not want to reengage in a new trade agreement.

Canada has deindustrialized much of their manufacturing base to support the ‘environmental’ aspirations of their progressive politicians.  Instead, Canada became an importer of component goods where companies then assembled those imports into finished products to enter the U.S. market without tariffs.  Working with Chinese manufacturing companies, Canada exploited the NAFTA loophole.

Justin Trudeau was strongly against renegotiating NAFTA, and stated he and Chrystia Freeland would not support reopening the trade agreement.  President Trump didn’t care about the position of Canada and was going forward.  Trudeau said he would not support it.  Trump focused on the first bilateral trade agreement with Mexico.

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Hat Tip very dear friend of the Treehouse, Zurich Mike.

Switzerland is in a conundrum. More specifically, the Swiss National Bank is stuck betwixt two points that are also playing out in other stable western countries.  Exports to the USA account for over ten percent of the Swiss manufacturing base.

The Trump tariffs are putting pressure on Switzerland to drop the value of their currency as an offset to retain competitive pricing.  However, simultaneous to the tariffs, the Swiss Franc is being purchased by global investment groups and sovereign foreign countries as a safe harbor due to the stability of the currency, which is driving up the value of the franc.

The Swiss Franc is now at the highest point against the U.S dollar in decades. One franc is worth 1.21 dollars.  This makes their exports cost even more.  The Swiss government desperately needs to lower the value of their currency.  The Swiss central bank has already dropped interest rates to 0.25% and is now contemplating negative interest rates as a result.

SWITZERLAND – […] That is why many are speculating on a reaction from the Swiss National Bank (SNB). SNB Director Martin Schlegel could weaken the currency by selling the Swiss franc against the dollar and euro in order to support the export-oriented economy.

But this could provoke a backlash from Trump if he perceives the SNB’s intervention as currency manipulation. Even during Trump’s first term in office, Switzerland was on the US list of suspected currency manipulators.

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[AUTHORS NOTE: Having attended the ASEAN conference to make contacts, after a brief respite at home I spent the past several weeks traveling Southeast Asia to research the likely impact from Trump’s tariff and global trade reset. Visits included manufacturing and distribution facilities in the Philippines, Malaysia, Thailand, Vietnam, Cambodia, Sri Lanka and South Korea. What I will share with you in the next few months is an overview from direct first-hand discussions, contrast against the MSM financial media outline.]

The predictable doomsday Wall Street Journal narrative includes a forecast for a massive drop in exports from China as shipping conglomerates begin to outline a drop in trans-pacific sea cargo and container carriers.

What I would say to concerned Americans is to filter out the political narrative and remind yourself of the expanded footprint throughout SE Asia that Beijing has already established.  Chinese companies, many of them subsidized by the CCP, are pre-positioned to begin transnational shipping. I have witnessed it first-hand.  However, here’s the WSJ narrative as it begins.

WSJ – The number of ships sailing from China to the U.S. laden with clothes, electronics, furniture and other goods is plunging, as an accelerating number of cargoes are canceled.

The scrapped sailings come after the Trump administration ratcheted up tariffs on China while giving a three-month reprieve on punitive levies for much of the rest of the world.

At the Port of Los Angeles, one of America’s biggest gateways for imports from China, executive director Gene Seroka told port officials Thursday that he expects a 35% drop in import volumes in two weeks “as essentially all shipments out of China for major retailers and manufacturers has ceased.”

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