Aug 23, 2019

Axios PM

By Mike Allen
Mike Allen

Good afternoon: Today's PM — edited by Justin Green — is 497 words, a 2 minute read.

📉 The Dow Jones Industrial Average lost 621 points today, or 2.37%. The Nasdaq lost 3%, and the S&P 500 was off 2.59%.

Situational awareness: Justice Ruth Bader Ginsburg has completed a 3-week course of radiation therapy for a malignant tumor on her pancreas.

1 big thing: The tweets of August

Illustration: Sarah Grillo/Axios

President Trump may not intend to launch the 2nd Cold War, but his tweets today laid out one path to get there.

Why it matters: The president is using Twitter to demand a conscious uncoupling of the world's two largest economies.

Trump's tweets, sent after China announced retaliatory tariffs on $75 billion in U.S. goods:

  • "Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."
  • "I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!)"

Reality check: Presidents don't get to order companies to come home.

Between the lines: Earlier today, Fed Chair Jay Powell warned that "trade policy uncertainty" is a driving factor for the market's fears.

  • Trump's response: "My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?"

Behind the scenes: Trump recently told advisers that he would be perfectly happy if the U.S. did no trade whatsoever with China, Axios' Jonathan Swan tells me.

  • In late 2017, Trump first caught aides off guard when he floated the impossible idea of cutting off all trade with China.

What's next: Sources briefed on the president’s reaction this morning say they expect him to announce more tariffs imminently. 

The bottom line: All of this has gone down during a strong economy. Imagine how bad it'd get were things to turn in the other direction.

Bonus: Chart du jour
Expand chart
Data: FactSet; Chart: Andrew Witherspoon/Axios

The above chart shows the Dow's reaction to Trump's China tweets.

Bonus: Pic du jour

Photo: Guillermo Legaria Schweizer/Getty Images

People shout holding signs at the Brazilian Embassy in Colombia during the "S.O.S Amazonia" protest in response to Amazon rainforest fires.

2. What you missed
  1. David Koch died at the age of 79: He was a billionaire libertarian who supported conservative causes and campaigns. His N.Y. Times obit.
  2. Rep. Seth Moulton dropped out of the 2020 presidential race after failing to gain traction. Go deeper.
  3. The CDC is "concerned" about a new multidrug-resistant strain of Salmonella that killed 2 and sickened 255 people from June 2018 to March 2019. Go deeper.
3. 1 fun thing

Photo: Kevin Mazur/Getty Images for SiriusXM

Taylor Swift's 7th album, "Lover," was released today — and, after the celebrity-world-revenge-tour of 2017's "Reputation," it's a return "to her specific, observational, and heart-on-her-sleeve songwriting style," writes Pitchfork's Quinn Moreland.

  • Naming the album a Critics' Pick, the N.Y. Times' Jon Caramanica singles out two tracks in the middle — "Paper Rings" and "Cornelia Street" — calling them "jolts of the personal, a reminder that there is a person inside the song, something Swift has sometimes overlooked in her quest for bigness."

Don't forget that Swift is still a business force to be reckoned with:

Mike Allen