April 8th, 2025: How The Economic Turmoil Is Crushing Russia & The EU Offers Zero Tariffs
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It's Tuesday, the 8th of April. Welcome to the President's Daily Brief. I'm Mike Baker. Your eyes and ears on the world stage. All right, let's get briefed.

We'll start things off today with a look at just how global economic turmoil is hammering Russia's war chest. Oil prices have dropped sharply since President Trump announced sweeping new tariffs, enough to threaten the Kremlin's ability to fund its war in Ukraine. I'll explain why this drop in revenue could force Moscow to rethink its military strategy.

Later in the show, more world leaders are lining up to make a deal. The European Union is offering to eliminate all industrial tariffs on the U.S. That's a deal that some Senate Republicans are urging the president to accept. Plus, Israeli Prime Minister Netanyahu traveled to Washington to meet with President Trump yesterday. We'll look at the results of that gathering. And in today's Back of the Brief, Dave.

Deadly storms continue to sweep through the Midwest and South of the U.S., causing widespread flooding and killing at least 21 people. I'll have the details. But first, today's PDB Spotlight. Yesterday, we looked at how President Trump's sweeping tariff policies could spell trouble for China. Today, we're focusing on another U.S. adversary, that would be Russia, and how the economic fallout is hitting Putin right in the pocketbook.

Actually, I don't think Putin carries a pocketbook. He strikes me as more of a man-purse kind of fellow. Now, the interesting thing here is that Russia wasn't even on Trump's tariff hit list. The White House has stated that sanctions render trade with Russia effectively negligible, making additional tariffs redundant. Other heavily sanctioned nations like Cuba, North Korea, and Belarus were also left off of the list.

But unfortunately for Russia, markets don't really care about direct targets. They react to uncertainty. And this particular reaction has sent oil prices spiraling downwards. Let's set the stage first.

Just before Trump announced these new tariffs, Brent Crude, that's the global benchmark for oil, was sitting comfortably around $75 per barrel. But as soon as the tariffs landed, oil took a nosedive. Today, prices are hovering around $64 a barrel. That's a drop of more than $10 in just a few days, and it's the lowest price since 2021. Now, why does that matter to Russia?

Well, I'm very glad you asked that question. It matters because Russia's economy is deeply tied to oil. You might recall the famous line from now-deceased Senator John McCain, Russia is a gas station masquerading as a country.

The Kremlin counts on oil and natural gas exports for roughly a quarter of their entire federal budget. And right now, Russia's flagship crude, the Ural's oil, is trading at around $50 a barrel. That's significantly below Moscow's expectations. Just to give you an idea of how much lower, Russia's oil and natural gas exports are

Russia's entire 2025 budget was initially built around oil trading at $70 per barrel. Even last month, when things started looking shaky, the Russian Ministry of Finance scaled back their expectations, predicting prices around $60 a barrel. But now, even those revised projections look optimistic.

And here's why this is so bad for Russia, especially right now. The Kremlin needs cash, lots of it, to sustain their war in Ukraine. Military spending has skyrocketed by more than 60% this past year alone. Since invading Ukraine in February 2022, Russia has leaned heavily on oil revenues to keep their war machine running.

At around $80 per barrel, Russia was sitting pretty. Low production costs, somewhere between $20 and $30 a barrel, meant healthy profits even with Western sanctions, including a $60 price gap by G7 countries. And of course, China has been the main beneficiary, ready, willing, and able to purchase Russian oil despite the sanctions. But that uncomfortable margin for Russia is starting to disappear.

If prices drop another $10 or so, say to $40 a barrel, that could erase about $20 billion from Russia's annual revenues. When that happens, well, Russia has few choices. Raid its reserves, hike taxes on already strained Russian companies, or borrow heavily, if they can, from international markets. All tough options in an economy already bruised by war and sanctions.

To be fair, look, Moscow's not going bankrupt tomorrow. They have reserves, but they can't write out low prices forever. A sustained slump means a significantly reduced war chest, and that could force the Kremlin to make some very tough decisions about its costly war in Ukraine. Bottom line, Russia built its budget, and basically its entire war economy, betting on high oil prices.

That bet is starting to look shaky. And now the economic storm that Russia didn't even see coming could seriously undermine Putin's ambitions in Ukraine. All right, coming up next, Europe is offering zero tariffs to the Trump administration. That's zero. And Netanyahu just wrapped up a high stakes meeting at the White House with President Trump. I'll be right back.

Hey, Mike Baker here. Now, let's take a look around at the economy. What do we see? Oh, well, I'll tell you what we see. Tariff wars. Yep, they're happening. Recession fears and, well, there's that stubborn inflation. It's no wonder that gold has been routinely hitting all-time highs. And in volatile markets, like the one that we've got right now, don't sit on the sidelines with your head in the sand. Don't just pretend that everything's going to get better. Take control and safeguard your savings.

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In a bid to halt the escalating global trade war, the European Union, the EU, offered to eliminate all industrial tariffs with the U.S., just as President Trump threatened new economic penalties as global markets are reeling in response. On Monday, European Commission President Ursula von der Leyen rolled out a quote, zero for zero proposal, saying the EU is ready to axe all industrial tariffs if the U.S. is willing to do the same.

She calls on Washington to remove tariffs on goods like cars, chemicals, machinery, pharmaceuticals, and rubber and plastic machinery, saying the EU is, quote, always ready for a good deal. Her idea isn't new. It's a revival of a concept first explored during the Abandoned Transatlantic Trade and Investment Partnership, referred to as the TTIP, because everybody loves a good acronym. And those talks of a decade ago were scrapped by Trump in his first term.

Von der Leyen didn't mince words, stating, quote, We've offered zero-for-zero tariffs for industrial goods, as we have successfully done with many other trading partners. We keep it on the table, end quote. But she made one thing crystal clear. This isn't a plea. If the U.S. shrugs it off, she warned, the EU's ready to hit back if diplomacy fails. She stated, quote, We're also prepared to respond through countermeasures and defend our interests, end quote.

Right now, the EU's average tariff on U.S. non-agricultural goods sits just above 1.5%. But for American cars, a steep 10%. That's more than any other G7 country, and it's a legacy of the TTIP collapse that still stings.

As we've been tracking closely here on the PDB, von der Leyen's overture comes as Trump just slapped a fresh wave of 20% tariffs on the EU and several other allies last week, ratcheting U.S. trade barriers to levels not seen in over a century. In Luxembourg, EU trade ministers gathered to map out their next move. The bloc's trade commissioner confirmed what many suspected. Europe is locked and loaded with, quote, a robust list of retaliatory measures.

Von der Leyen doubled down, adding, quote, we stand ready to negotiate, but we won't stay idle, end quote. Now, back in Washington, not everybody is on board with Trump's tariff blitz. Republican Senator Mike Lee took to X with a post stating, quote, let's take that deal, referring to Von der Leyen's offer. Fellow Republican Senator Ron Johnson echoed that sentiment, writing, quote, at some point you have to take yes for an answer.

Now, despite the stateside pleas, Trump appears to be remaining defiant. On Truth Social, the president posted, quote, Be strong, courageous and patient and greatness will be the result. Now, he spelled greatness in all caps. So that's really great. By midday, the Dow plunged 750 points. The S&P dropped one and a half percent and the Nasdaq slid more than one percent.

Stocks did briefly rally on a false rumor that Trump might delay the tariffs, only to tank again after the White House called the report, quote, fake news. Meanwhile, as we reported yesterday, China is playing hardball.

After Trump's announcement last week, Beijing responded with retaliatory tariffs of its own. And now Trump is threatening to up the ante unless China reverses its latest 34% tariff hike. Otherwise, the U.S. will slap another 50% tariff on Chinese imports starting today. Now, if you're doing the math, and who isn't, that would bring the total tariffs on Chinese goods to a staggering 104%.

That includes previous rounds of penalties, like the fentanyl-related tariffs and last week's trade hits. But Beijing, well, for now, isn't backing down. Chinese officials blasted the U.S. strategy as destabilizing and protectionist. Economists warn that the ripple effects could be brutal, resulting in higher prices for American consumers and a flood of Chinese goods into other markets.

White House advisor Peter Navarro made the Trump administration's position clear. Tariff relief won't come cheap. Countries looking for a reprieve better be ready to overhaul their tax codes and gut their regulatory regimes in what could become a long-grinding standoff.

Okay, shifting stateside, President Trump welcomed Israeli Prime Minister Netanyahu to the White House on Monday in a high-stakes meeting that touched on tariffs. Tariffs are everywhere. The war in Gaza and a bombshell revelation of upcoming direct talks between Trump and Iran over its nuclear advancement.

The meeting opened with a pointed exchange on trade. Netanyahu pledged to eliminate Israel's trade deficit with the U.S., telling Trump he would do so, quote, very quickly. As you might recall, the pledge comes on the heels of sweeping global tariffs that Trump announced last week, with a 17% levy on Israel as part of what he branded Liberation Day. The tariffs are poised to hit Israel's economy hard.

The tariffs, set to take effect Wednesday, will cost Jerusalem an estimated $3 billion annually in exports and threaten roughly 26,000 jobs across sectors like biotechnology, chemicals, and electronics.

Israel attempted to preempt the blow by unilaterally eliminating tariffs on American goods, mainly food and agricultural products, but Washington declined to offer a reciprocal exemption. In the Oval Office, Netanyahu framed the move as a bid for fairness, saying, quote, I'm a free trade champion, and free trade has to be fair trade, end quote.

Trump, for his part, acknowledged that Netanyahu, quote, started off our conversation today with the offer to drop tariffs, but stopped short of matching the gesture. Instead, he made a broader point, stating, quote, we help Israel a lot. That comment, well, wasn't accidental. It was a quiet signal that Trump may be using the tariffs as leverage, tying trade relief to progress on ending the war in Gaza.

In the hours leading up to the meeting, Trump spoke with French President Emmanuel Macron, Egypt's president and Jordan's king, each a core player in ceasefire and regional peacekeeping efforts. Seated beside Netanyahu, Trump predicted the war could end in the, quote, not too distant future, stressing the importance of securing a hostage release. Trump said, quote, this man is working very hard with us to do that, casting Netanyahu as a partner in the diplomatic push.

Netanyahu confirmed that a new hostage deal is in the works and backed Trump's idea of relocating Palestinians as part of rebuilding efforts and U.S. ownership of the strip. Netanyahu stated, quote, we didn't lock them in, he said, of displaced Palestinians inside the war-torn enclave. Trump emphasized the, quote, Gaza is a dangerous death trap.

He then blasted Israel's 2005 withdrawal from the Strip, calling it a historic blunder, flatly stating, quote, it should never have been given away. While critics have condemned the idea of transferring Gaza's displaced population, all 2.3 million of them, Netanyahu praised Trump's plan as bold and claimed talks were advancing with countries willing to receive those refugees, though he didn't name them.

Trump, meanwhile, emphasized the end goal, turning Gaza into a, quote, safe field. But the biggest shock came at the tail end of the meeting, when Trump announced that the U.S. would begin direct negotiations with Iran this Saturday. The negotiations, centered on Tehran's rapidly advancing nuclear program, mark a dramatic diplomatic turn that could either produce a breakthrough or set the stage for conflict.

As we reported here on the PDB, Trump warned last month that, quote, if Iran doesn't make a deal, there will be bombing. In the Oval Office meeting, Trump made it clear, stating, quote, Iran would be in great danger if it refuses to abandon its nuclear ambitions, adding that a deal, quote, would be preferable to doing the obvious in a not so veiled reference, of course, to military action.

Trump stated that Iran flat out cannot have a nuclear weapon, adding that if Saturday's talks aren't successful, it will be a, quote, bad day for Iran. Netanyahu echoed the president's hardline stance, stating, quote, whatever happens, we have to make sure that Iran does not have nuclear weapons, end quote.

Okay, and coming up next in the back of the brief, deadly storms have devastated parts of the Midwest and the South in the U.S., leaving at least 21 dead and entire communities underwater. We'll have those details next. Hey, Mike Baker here. Have you heard about the Maha movement?

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In today's Back of the Brief, a sprawling storm system that ravaged the Midwest and South last week continues to unleash chaos across the U.S., placing millions on flood watch. At least 21 people are dead across eight states, casualties of a weather system that has torn through the country with alarming speed and force. The worst of it hit Tennessee, which now counts 10 storm-related deaths.

Other states, such as Missouri, reported three deaths, while Arkansas, Kentucky, Georgia, and Indiana each recorded a couple. Mississippi and Alabama also suffered casualties. Kentucky, in particular, is dealing with a storm hangover that won't quit. In Louisville, the Ohio River surged five feet in just 24 hours, overwhelming a levee and turning farmlands into floodplains.

Central counties of the state faced mandatory evacuations after more than seven inches of rainfall inundated the region and crippled a major power substation. But it was western Kentucky that bore the brunt with nearly 16 inches of rain over four days, smashing the state's all-time rainfall record.

An assistant fire chief in Kentucky's Anderson County put it bluntly, stating, quote, we've had families lose everything, calling it a, quote, once-in-a-generation weather event. Over the weekend alone, more than 40 people had to be pulled from the rising waters.

And it's not over. As of Monday, nearly 9 million residents across Georgia and eastern Alabama remain under flood watches, with rescue operations still underway and damage assessments, well, far from complete. Since last Wednesday, the same storm system has triggered at least 93 preliminary tornado reports, making Saturday the 10th consecutive day with confirmed tornado activity. And that's a new benchmark for early season severe weather in the U.S.,

Meanwhile, meteorologists warn that another low-pressure system is gathering steam, sweeping from southeast Virginia down to the Gulf Coast. The National Weather Service says it's primed to ignite another round of thunderstorms and flash floods across an already saturated landscape.

Rivers across the Mississippi, Arkansas, Tennessee, and Ohio valleys have yet to crest, and when they do, likely later this week, the flooding could escalate even further. Emergency officials are urging residents in vulnerable areas to stay vigilant. Recovery efforts are underway, but with more storms on the horizon, well, the threat is far from over.

And that, my friends, is the President's Daily Brief for Tuesday, the 8th of April. If you have any questions or comments, please reach out to me at pdbatthefirsttv.com. And finally, remember what your mother told you. To listen to the show ad-free, just become a premium member of the President's Daily Brief by visiting pdbpremium.com. Always listen to your mom. I'm Mike Baker, and I'll be back later today with the PDB Afternoon Bulletin.

Until then, stay informed, stay safe, stay cool.

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