By Michael O’Neill.

Lollapalooza was launched by Perry Farrell of Jane’s Addiction, and it spawned massive annual music festivals from 1991 to 1997. In contrast, Tariffapalooza is President Trump’s strategy of using tariffs to Make America Great Again. It has touched nearly every country on the map in some way or another—even those solely inhabited by penguins. Unlike Farrell’s creation it hasn’t exactly been a hit.

It may not be a total flop, but so far, only the UK has agreed to a deal—and ended up worse off than before. The rest of the world is making noises about making deals, but it is mostly hot air. Trump’s strategy looked strong out of the gate, but momentum stalled after the blizzard of tariffs rolled out on “Liberation Day,” April 2 were ruled illegal by the Court of International Trade (CIT) on May 28.

The Trump administration panicked, and the next day secured a temporary reinstatement from a federal court of appeal. The government has until June 9 to respond.

G-20 Countries Aren’t Playing Along
Leaders of G-20 nations haven’t rushed to retaliate. Those that hinted at countermeasures backed off after Trump delayed implementation of new tariffs until July 9. And why should they? A poll by G. Elliot shows Trump’s approval rating on the issue of the economy is -15.75 and -22.24 on inflation. That is down from 8.24 and 1.99 points in January when this tracker began. Tanking poll numbers and a disgruntled population may be enough motivation for Trump to change course. Furthermore, if the CIT ruling is upheld, Trump’s ability to repackage the tariffs under new legal statutes becomes a long, uphill slog.

China Hasn’t Called
Trump was feeling mighty confident in early April when he hiked China tariffs to 145% and said China must initiate contact for trade talks to begin. China ignored him. Then, in what appears to be a back-room maneuver, contacts in the Swiss government were used to broker and mediate tariff negotiations in Geneva. Those talks resulted in a 90-day truce and US tariffs dropped to 30% while China tariffs fell to 10%. Chinese President Xi Jinping wasn’t at those meetings and neither was Trump.

But Xi Jinping has still not called, and Trump is getting antsy because China has a hammer, and tech products are the nail. China is delaying the issuance of licences required by companies to export some key rare-earth minerals, which impacts production of EVs, smartphones, computers, and F-35 fighter planes, among other things, while disrupting the global supply chain in the process. Some EU automakers and parts manufacturers have already suspended production. Car manufacturers in Japan, India, and the US are warning of supply disruptions.

And that is making Trump so nervous he tweeted his admiration of Mr. Jinping: “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”

Let’s Make A Deal – Kananaskis-Style
Trump, ever the showman, thrives in the spotlight. He dominated the 43rd, 44th, and 45th G7 summits during his first term, and he’s set to do the same at the 51st G7 in Alberta on June 17–18. Canada has not reacted to Trump doubling the 25% tariff on Canadian steel and aluminium imports because, reportedly, Trump wants to use the G-7 as a forum to announce a new Canada/US tariff deal. If true, Ontario Premier Doug Ford did not get the memo, and he is demanding that the Canadian government immediately retaliate to the tariff increase.

Tariff Inflation Puts Bank of Canada on Hold
The Bank of Canada held its overnight rate at 2.75%, citing global trade uncertainty, softening domestic growth, and sticky inflation pressures. The recent tariff chaos—courtesy of Trump’s “Tariffapalooza”—has led to erratic global trade flows, export front-loading, and a volatile business environment. While Q1 Canadian GDP surprised on the upside at 2.2%, underlying demand remains flat, housing is weak, and unemployment is creeping higher. Inflation dipped to 1.7% largely due to a carbon tax repeal, but core measures are firming, and tariffs are expected to feed price pressures. That outlook is unlikely to change and therefore neither will Canadian interest rates at the July 30 meeting.

Loonie Hanging Tough
Tariff madness, sticky inflation, rising budget deficits, and a sluggish economy suggest that USDCAD should be probing the 1.4000 area, but that is not the case. Traders are looking for a reason to sell US dollars, partly because Trump wants a weaker currency but mainly because of increasing US recession fears from the tariff fallout. The June 4 US ADP employment report combined with a weak US ISM data gave new life to Fed rate cut odds, with better than 50% odds for three consecutive rate cuts beginning in September. That news, combined with bearish medium-term USDCAD technicals, argues for USDCAD to test support in the 1.3490 area.

Lollapalooza radiated energy and creative chaos, while Tariffapalooza reeks of confusion and crisis.