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Speaker 1: So President Trump decides that tariffs on beef and coffee

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Speaker 1: are all of a sudden no good. These are a serious,

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Speaker 1: serious issue, these tariffs, and they have to be gotten

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Speaker 1: rid of in order to lower prices. Yet I have

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Speaker 1: been told reliably by all the people of Magaville that

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Speaker 1: tariffs are great. It's what's going to make America safe.

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Speaker 1: And you don't understand Tony and Steve Bannon referred to

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Speaker 1: me as a stock Republican. Oh, Steve, you're pretty Tony Katz,

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Speaker 1: Tony Katz today, good to be with you. If the

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Speaker 1: tariffs work so beautifully, why cut any tariffs at all,

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Speaker 1: especially on things like beef or coffee or bananas in cocoa.

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Speaker 1: Doctor Mattwell joined US economist at the University of Indianapolis.

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Speaker 1: And this all starts with a story I saw at

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Speaker 1: Breitbart dot com and it was a FED study. If

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Speaker 1: this is what the headline says, FED meaning the Federal Reserve.

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Speaker 1: FED study vindicates Trump policy one hundred and fifty years

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Speaker 1: of evidence show tariff's lower inflation. And they go through

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Speaker 1: this idea that they studied from eighteen seventy to twenty twenty,

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Speaker 1: and they took a look at tariffs, the United States,

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Speaker 1: the United Kingdom. In France, they took a macro view

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Speaker 1: at this, and what they came to realize is that

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Speaker 1: when you engage tariffs in putting a price increase on

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Speaker 1: things from other countries, that what happens is that inflation

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Speaker 1: doesn't go out of control. And we certainly have seen

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Speaker 1: the United States that inflation did not rise. It's been

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Speaker 1: kind of interesting. It's still higher than where the FED

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Speaker 1: wants it to be. But I sent this story to you,

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Speaker 1: doctor will and I said, break this down for me.

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Speaker 1: What in the world are we seeing here? So before

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Speaker 1: we get into Trump's changes on tariffs, wood and iron included,

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Speaker 1: along with coffee, tea, beef, bananas, and tropical fruit, just

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Speaker 1: to name some. Walk me through this. You read this

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Speaker 1: story over at bright Bart. What was the story saying

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Speaker 1: and does it have credibility?

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Speaker 2: Well, let me start off by saying, I downloaded the

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Speaker 2: twenty five page report. I went through it in great detail,

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Speaker 2: and what I can tell you is that the bright

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Speaker 2: Bart headline is misleading. The research report. By the way,

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Speaker 2: it's just a working paper. That means that it's not

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Speaker 2: even in its final version. There's still some flaws in

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Speaker 2: it that need to be fixed, and it came up

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Speaker 2: with some conclusions. By the way, I agree completely with

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Speaker 2: its conclusions, just not the clickbait that's attached to it.

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Speaker 2: There was some good about tariffs, and there is a

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Speaker 2: lot of bad about tariffs in this report, and there's

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Speaker 2: nothing in it that I would disagree with. In fact,

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Speaker 2: one hundred percent of what it says. You and I

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Speaker 2: have been saying since February. So let's just start off

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Speaker 2: by saying the headline is misleading and when you get

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Speaker 2: into the details, there's really no surprises. So let's start

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Speaker 2: with the good news.

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Speaker 1: No, no, yeah, let's start with what is it that

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Speaker 1: you agree with?

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Speaker 2: Well, I agree with all of it, but it's only

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Speaker 2: one piece of positive and three parts negative. For Trump.

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Speaker 2: The positive that this is what's true in the headline.

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Speaker 2: The CPI doesn't increase for three months following a tariff,

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Speaker 2: No big deal. The CPI is only a partial measurement

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Speaker 2: of consumer prices. It's not even the total inflation picture.

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Speaker 2: All these other things pce ppi ism. They cherry picked

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Speaker 2: one little inflation indicator and only for a narrow time frame,

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Speaker 2: which was three months. Terrifts are attacks, taxes do not

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Speaker 2: immediately cause inflation. What they do is they cause the

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Speaker 2: price of goods to go up, but other goods don't

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Speaker 2: get purchased. If you're buying more bananas or more coffee,

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Speaker 2: you're buying less of something else. So the CPI has

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Speaker 2: not changed in the three months following a tariff. But

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Speaker 2: you and I have seen Toyota's profits, GM profits, Intels,

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Speaker 2: you know, John Deere's profits. All these companies are eating

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Speaker 2: the tariffs. This report does accurately say the CPI doesn't

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Speaker 2: go up for three months, but they didn't look for

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Speaker 2: four months or five months or six months down the road,

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Speaker 2: and they only looked at one small narrow indicator. And

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Speaker 2: they're correct on that one small narrow indicator. But here's

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Speaker 2: here's the revelation. They point out the reason and these

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Speaker 2: are problems that are buried and Breitbart did not report

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Speaker 2: about this. And the report it has it in there,

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Speaker 2: you just have to read it. Why is inflation down

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Speaker 2: for consumers because demand is down Because when you have

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Speaker 2: a tariff, it says in this research report that people

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Speaker 2: have less money to spend, so they buy less of

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Speaker 2: other things. So there's a decrease in consumer demand. That's

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Speaker 2: what happens in socialist countries. That's why they have no

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Speaker 2: consumer goods. So they say, yeah, inflation is down, that's

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Speaker 2: because people have no money to buy anything.

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Speaker 1: The whole thing. They say, oh, whoa, whoa. Let's stop

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Speaker 1: for a second. Talking to doctor Mattwell, economist at the

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Speaker 1: University of Indianapolis. People are buying everything everywhere all the time.

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Speaker 1: What do you mean they have no money to buy anything.

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Speaker 2: I'm exaggerating to the degree they have less money. So

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Speaker 2: let me be more precise and academic. The inflation CPI

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Speaker 2: is down because demand is down for other products. Because

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Speaker 2: when people spend more money on a tariffed product, they

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Speaker 2: have less money to spend on another product. Therefore they decrease.

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Speaker 2: There's a decrease in consumer demand for other goods, that's

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Speaker 2: what I mean. So you're spending more on your bananas,

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Speaker 2: so you have less money to buy a watch, and

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Speaker 2: so as a result, there causes a decrease in demand.

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Speaker 2: And that's what this report found. There's just a drop

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Speaker 2: in demand which caused this is short term, short term

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Speaker 2: consumer lack of inflation. That's what I'm I'm sorry Tony

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Speaker 2: if I exaggerated with hyperbole.

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Speaker 1: Yeah, because I want to make sure everybody's on the

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Speaker 1: same page with what it is that we see. So

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Speaker 1: on this report. The report isn't utilizing a totality of sources.

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Speaker 1: It's just using one index to come up with its conclusion.

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Speaker 1: And this is only a working paper. This hasn't been

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Speaker 1: is a question not being peer reviewed or is it

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Speaker 1: a question of even if it was. It's utilizing one

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Speaker 1: bit of analysis, to which okay, But it isn't giving

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Speaker 1: a total story.

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Speaker 2: No, that is correct. By the way, I agree with

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Speaker 2: this conclusions. It's only a working paper. It needs some improvements.

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Speaker 2: If I were to give the author some advice, I

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Speaker 2: could tell you where the nerdy statistics would be. But no,

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Speaker 2: I agree with the conclusions and the narrow definition of inflation.

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Speaker 2: But that's not the headline. The headline that is not

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Speaker 2: reported by Breitbart is that it found two other major

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Speaker 2: problems with tariffs that are not in the headline. One

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Speaker 2: is that the tariffs reduce economic activity, that tariffs cause

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Speaker 2: a drop in the economic production of a country, and

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Speaker 2: we have seen that, you and I have talked about it.

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Speaker 2: The PMI is down eight months in a row, eight

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Speaker 2: months in a row since the terroriffs began, we've seen

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Speaker 2: a contracting of the manufacturing in the United States. That

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Speaker 2: should be the headline of this research report. I agree

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Speaker 2: with its conclusion, it just isn't reported in the headline

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Speaker 2: by Breitbart or its own report in the summary at

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Speaker 2: the top. The second thing, the third thing, is that

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Speaker 2: tariff's cause unemployment. This report says tariffs cause unemployment. Surprise,

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Speaker 2: look at the headlines. There are reports everywhere about people

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Speaker 2: losing jobs. It saves the job in that one company

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Speaker 2: that's protected by a tariff, but the overall economy suffers.

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Speaker 2: So this report, again I don't disagree with the conclusions,

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Speaker 2: but the headline misreports what's actually in this research data.

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Speaker 1: Talking to you, doctor Matt Will, economist at the University

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Speaker 1: of Indianapolis. Now let's engage a larger conversation. This cutting

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Speaker 1: of these tariffs come after the election of Mamdani in

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Speaker 1: New York, a couple other Democrats and Republicans feeling in

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Speaker 1: a very very quick bit of reflection that you know

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Speaker 1: what it's about affordability. We understand the affordability argument. We're

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Speaker 1: the people making it affordable on drug prices. Let's say,

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Speaker 1: even though I don't necessarily like the methodology, and we

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Speaker 1: are going to make things more affordable here, there and everywhere.

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Speaker 1: And President Trump getting that message and saying, okay, we'll

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Speaker 1: reduce the tariffs on things that I have been railing about,

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Speaker 1: specifically beef, and he's been going after those who are

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Speaker 1: cattle ranchers, which I don't think is the best approach.

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Speaker 1: And we're going to get rid of the tariffs on beef,

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Speaker 1: and therefore beef will be less expensive from other countries.

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Speaker 1: See problem solved. I'm doing a great job because I

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Speaker 1: understand things are costing too much right now and they

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Speaker 1: will get better over time. An argument he's finally starting

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Speaker 1: to make. But isn't this the correct Maybe I'll say

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Speaker 1: it differently. Doesn't this prove us correct that tariffs indeed

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Speaker 1: raise the prices? Or is this part of some other

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Speaker 1: strategy that economists might understand but Layman might not be

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Speaker 1: aware of.

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Speaker 2: Oh, it's possible to be both, And I'll tell you both,

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Speaker 2: because first of all, it is at recognition that tariffs

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Speaker 2: are bad. But also it's a different strategy because recall

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Speaker 2: that what he's trying to do with beef is Argentina.

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Speaker 2: He needs to help out the president of Argentina, who

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Speaker 2: I'm a big fan of and I believe you're a

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Speaker 2: big fan of, yes, And what he did recently is

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Speaker 2: he quadrupled the import quota of beef from Argentina to

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Speaker 2: eighty thousand metric tons. So part of this is to

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Speaker 2: give Argentina tariff relief. That's what the president is doing.

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Speaker 2: So both of your points are correct. There's another reason,

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Speaker 2: which is Argentine Argentinian beef, and the other is to

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Speaker 2: actually admit that the tariffs are a bad idea. And

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Speaker 2: so let's spin it in a way that makes it

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Speaker 2: look like, oh, it was good, but now we've served

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Speaker 2: its purpose. Let's get rid of it.

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Speaker 1: So when we talked about Argentina and the credit swaps,

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Speaker 1: so here's how it went down. Guys. We gave Argentina

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Speaker 1: twenty billion dollars US dollars cash green box. You've seen pictures.

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Speaker 1: We took twenty billion dollars of our Argentinian pesos, which

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Speaker 1: you've never seen and really aren't worth much. And that

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Speaker 1: is called a credit swap, and it's not usually done

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Speaker 1: with nations that aren't first world nations like ourselves. It

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Speaker 1: was to give them a lifeline, and one of the

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Speaker 1: problematic parts of this doctor will was that they could

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Speaker 1: use that twenty billion dollars and go buy Chinese products,

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Speaker 1: other products, and so we're helping out other economies and

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Speaker 1: we're left holding the bag of this twenty billion. Secretary

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Speaker 1: of the Treasury Scott Bessen last week was saying we

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Speaker 1: made a profit on the credit swaps. I was trying

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Speaker 1: to figure out what he meant by profit. I understand

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Speaker 1: the definition of profit, but where and how and how

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Speaker 1: do we see it? How did it manifest? Can you

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Speaker 1: explain it?

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Speaker 2: That's very interesting, And I apologize for not having the

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Speaker 2: Argentinian to the US dollar conversion in front of me.

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Speaker 2: But what he is saying is that we bought payesos

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Speaker 2: and then under some short timeframe, we sold the pasos

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Speaker 2: back and we got more dollars in exchange. I don't

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Speaker 2: know that that's true, and I also don't know that

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Speaker 2: that's false. I don't have the Argentinian paso data in

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Speaker 2: front of me. I could look it up and get

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Speaker 2: it back to you, but that's what he's claiming. I

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Speaker 2: don't know that it's true or that it's false. But

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Speaker 2: the thing is with the beef. Let's not leave this

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Speaker 2: topic is this is a great thing. This is in fact,

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Speaker 2: you and I discussed this on the air previously, that

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Speaker 2: the way to help out Argentina is to remove all

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Speaker 2: the tariffs so that they can buy stuff. I mean,

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Speaker 2: so that we can buy their stuff. If we buy

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Speaker 2: Argentinian beef, they get US dollars, then we don't have

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Speaker 2: to do the currency swap. Let them sell us stuff.

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Speaker 2: That's how everyone should get the dollars. It shouldn't be

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Speaker 2: done through this government imposed currency swap.

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Speaker 1: Talking to doctor Matt Will, economist at the University of Indianapolis.

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Speaker 1: So now let's get back to the reduction of these tariffs,

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Speaker 1: these tariffs on coffee and a whole bunch of things.

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Speaker 1: Now there's a real tariff that I'm looking at as

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Speaker 1: President Trump wants to do a one hundred percent tariff

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Speaker 1: on Nicaragua, which is going to damage the cigar industry

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Speaker 1: in ways that I cannot explain or comprehend. But the

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Speaker 1: removal of these tariffs on these everyday items, at what

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Speaker 1: moment does it get felt and maybe more to the point,

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Speaker 1: will it will Americans notice a price difference in products?

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Speaker 1: And does the removal of an Argentinian tariff on beef,

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Speaker 1: then lower the cost of American beef.

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Speaker 2: Wow, okay, which one do you want to deal with? First?

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Speaker 1: Let's start with the last one one, Because you talked

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Speaker 1: about beef specifically, so American cattle ranchers do they now say, Hey,

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Speaker 1: the tariff has been lowered on Argentinian beef, so we're

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Speaker 1: going to lower our price so we're better competitive because

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Speaker 1: we have to keep our stuff selling instead of the

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Speaker 1: Argentinian stuff.

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Speaker 2: Possibly, and I mean that possibly. I'm not trying to

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Speaker 2: avoid your question, because what it creates a competition. Tariffs

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Speaker 2: create an artificially high price, so that means Argentinian beef

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Speaker 2: would cost more. Therefore US producers can charge more as

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Speaker 2: well because the competition is more expensive. You remove the tariff,

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Speaker 2: there's competition and everybody will have to compete on quality

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Speaker 2: and price. So yes, US consumers will benefit. Now, I'm

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Speaker 2: okay if a US rancher has to cut their prices,

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Speaker 2: because I'm the consumer and I want to pay less

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Speaker 2: for my stake. I don't want to be in subsidizing

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Speaker 2: the cattle industry by my government imposing a tariff or

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Speaker 2: a tax or any other protective measure. So you know,

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Speaker 2: maybe people won't like me for saying it, but I'm

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Speaker 2: fine if US producers have to compete with other producers

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Speaker 2: on a level playing field, and if that causes prices

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Speaker 2: to go down, good.

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Speaker 1: So now back to the other part of it. Will

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Speaker 1: we see in all of these products the prices going

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Speaker 1: down now that the tariff has been removed.

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Speaker 2: It hasn't been removed. The tariffs on Brazilian coffee were

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Speaker 2: rolled back, they weren't reduced or eliminated. There's still an

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Speaker 2: additional there's still at least a ten up to a

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Speaker 2: forty percent tariff. It was fifty. This is simply being reduced.

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Speaker 2: That's purely window dressing. It has not been eliminated. So

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Speaker 2: I don't think you're going to see a reduction in

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Speaker 2: cost because it simply provides a little bit of relief,

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Speaker 2: not a lot, and the wholesalers, the importers will have

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Speaker 2: to decide how much of that cost to pass along.

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Speaker 2: We have not changed our scenario. This is strictly window dressing.

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Speaker 2: You go from fifty percent down a little bit, it's

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Speaker 2: not that big of a change.

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Speaker 1: If you're advising President Trump, and I would still argue

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Speaker 1: that most people feel better with him engaged in economic

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Speaker 1: realities than Joe Biden or Kamala Harris. What is the

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Speaker 1: advice to winning this even if we want to think

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Speaker 1: it's accurate, or even if you think it's inaccurate, let's

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Speaker 1: just use it. What do we think of him and

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Speaker 1: the advice should give to how to win this affordability conversation?

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Speaker 2: I would say that President Trump is doing a fantastic

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Speaker 2: job in so many areas such as deregulation, business friendly environment,

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Speaker 2: getting people to invest in the United States. Across the board,

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Speaker 2: his policies are working. He has one headwind that continues

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Speaker 2: to be the teriff situation, and the consumers are starting

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Speaker 2: to feel it. Like we started our conversation, the research

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Speaker 2: report said, short term there's not consumer inflation, but longer

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Speaker 2: term there probably is, and we see it. He's harming

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Speaker 2: the consumer at this point with the consumer based tariffs,

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Speaker 2: and I think if he would simply eliminate it all

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Speaker 2: his other incredibly good policies would actually cause the economy

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Speaker 2: to grow even more than we've seen at the three

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Speaker 2: point eight percent from last quarter.

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Speaker 1: Doctor Matt Will, economists at the University of Indianapolis. I

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Speaker 1: appreciate you taking the time for it more is coming up,

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Speaker 1: keep it here. I'm Tony Katz, and this is Tony

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Speaker 1: Katz today