Trump’s Trojan Horse

Tresmark: History teaches us a lot, but it’s amazing how we unsee the obvious.
– When the U.S. hiked tariffs during the Great Depression, three things happened—none of them good.
1. American farmers and exporters got smoked.
2. Global trade collapsed by a jaw-dropping 60%.
3. A recession turned into a deep, soul-crushing Depression.
– When USA raised tariffs in 2018, it was the US farmers and consumers that were hurt the most.

And once again, the promised economic revival never showed up

The Trojan Horse
Trump’s new wave of tariffs is being paraded as MAGA’s (Make America Great Again) economic Excalibur. But it feels a lot like a Trojan Horse, patriotic and glorious on the outside, quietly self defeating from the inside. The tariffs are bound to make things more expensive, reduce export markets, reduce employment opportunities and reignite inflation.

King Trump
In just two months, King Trump managed to dethrone King Dollar.
– The USD Index tanked from 110 to 102.
– U.S. stock markets shed nearly $5 trillion in just two days.
– Brent crude slumped from $76 to $65.
– The 10-year T-Bill yield sank from 4.80% to 3.98%.

This isn’t just volatility—it’s chaos! And now, the odds of a global recession have doubled (a red flag we at Tresmark waved back on March 8). The knock-on effects will be global trade disruption, frozen supply chains, and growth put on hibernation.

Brent to trade even lower
In fact, we now see Brent trading below the $50 mark, not only due to global slow down, but also due to Saudi potentially abandoning its role as a swing producer and glutting the market.

Impact on PKR
The Rupee faces a tricky terrain, with two pressure factors:
– Competitive Advantage: Slight edge for Pakistan, but other countries may play dirty—currency devaluation to hold on to exports.
– Demand Destruction: With global trade slowing, Pakistan could lose $1–1.5 billion in exports. That’s a 3–5% haircut, not insignificant.
In theory, the Rupee should slip. But in reality, it probably won’t—not by much.

With the government intent on showcasing an economic turnaround—from IMF success stories to record-low inflation, 1,000 bps in rate cuts, reduced energy tariffs, and a $36bn remittance windfall—the last thing they want is a runaway Rupee to upset the apple cart. Expect a managed slide—maybe 5–10 paisa a week.

Pakistan will need to sit down with the US and negotiate what ever favourable terms it can muster, but the key success factor would be how quickly rather than how much.

T2 vs T2
For years, T2 (Terminator 2) was the most creative movie of “things we created to help us that ended up nearly killing us.” that needs to change now

T2 (Trump 2.0) is on track to rewrite that script—with tariffs, isolationism, and a leadership vacuum at the global level, its like he’s trying to burn the house to keep it warm. He’s stepping back from trade, climate, NATO, alliances, innovation and abondoning America’s role as a global leader

T2’s full strategy isn’t clear yet—but from here, it feels more counter-MAGA than pro-MAGA.

Forecasts
USD/PKR
• 1 Week: 280.75
• 1 Month: 281.50
• 1 Quarter: 283.00
EUR/USD
• 1 Week: 1.1006 (Neutral)
• 1 Month: 1.0804 (Bearish)
• 1 Quarter: 1.0776 (Bearish)
GBP/USD
• 1 Week: 1.3010 (Bullish)
• 1 Month: 1.2949 (Bearish)
• 1 Quarter: 1.2910 (Bearish)
USD/JPY
• 1 Week: 145.42 (Sideways)
• 1 Month: 146.70 (Sideways)
• 1 Quarter: 147.03 (Bullish)
Oil WTI
• 1 Week: 62.80 (Bullish)
• 1 Month: 70.22 (Bullish)
• 1 Quarter: 67.33 (Bullish)
Gold
• 1 Week: 3076.25 (Bullish)
• 1 Month: 3008.57 (Bearish)
• 1 Quarter: 3014.29 (Neutral)