Speaker 1: Do you want to be an American idiot?
Speaker 2: Seven WLW. President Trump is going to speak tonight at
Speaker 2: nine pm to sell you on the economy, addressing what
Speaker 2: he calls the affordability hoax and the promise he made
Speaker 2: on the trail to reduce the cost of living from
Speaker 2: day one. As he said, we know that's not going
Speaker 2: very well for the president. You know what, you know,
Speaker 2: you go to the store and you see the price
Speaker 2: of beef, You see the price of many thing except gas.
Speaker 2: We're to what four or five year low right now?
Speaker 2: Everything certainly feels much higher. And you know that when
Speaker 2: you look at your checkbook, your savings account at the
Speaker 2: end of the month. Of course, adding to inflation would
Speaker 2: be the tariffs, and the President's going to talk about
Speaker 2: that tonight. And on it is trade attorney Michelle Schultz
Speaker 2: again on the Scott's Loan Show. Michelle, how are you
Speaker 2: good morning?
Speaker 1: I have been busy a bet. Yes, it's all tariffs
Speaker 1: all the time, lots of change.
Speaker 2: Yeah, I'm sure the President is going to address a
Speaker 2: lot of that tonight. And so we know the tariffs
Speaker 2: brought in like close to a quarter trillion dollars so
Speaker 2: far this calendar year. But companies like Costco and Bumblebee,
Speaker 2: the tuna company, Revlon, the makeup company, RayBan Sunglasses, many
Speaker 2: others are getting in line because the first person in
Speaker 2: line gets paid first. In the lawsuits to lock down
Speaker 2: the billions of dollars they might be out if the
Speaker 2: Supreme Court rules against President Truft's tariffs to begin with,
Speaker 2: So let's start there the likelihood that that's going to happen.
Speaker 2: What do you see in the tea leaves.
Speaker 1: Well, I'd say fifty to fifty. You know, in the beginning,
Speaker 1: I thought it was pretty likely that the Supreme Court
Speaker 1: would strike down the tariffs because they expressed so much
Speaker 1: skepticism during the initial hearings. But the more I read,
Speaker 1: the more I follow the government's reactions, I'm thinking it's
Speaker 1: possible it could go either way. So companies like Costco,
Speaker 1: Revlon and the big guys have gone in and they
Speaker 1: have petition for Customs to essentially be forced to delay
Speaker 1: its final computations so that refunds would be quicker. And
Speaker 1: we're due for the final liquidation of entries as of Monday.
Speaker 1: So it's been kind of a race to get to
Speaker 1: the front of the line. Who can get to the
Speaker 1: front of the line and who can get paid first
Speaker 1: if we could keep Customs from finalizing its calculations. Unfortunately, Monday,
Speaker 1: the Court of International Trade denied a consolidated motion for
Speaker 1: this very thing. So it looks like, yeah, like.
Speaker 2: One hundred and thirty billion dollars, I mean so far
Speaker 2: that number is growing. Is what the refund would be got.
Speaker 2: And the thing is the preemptive lawsuits coming in to
Speaker 2: be paid as being liquidated by the government. The Supreme
Speaker 2: Court rules against the terraf after liquidation occurs, doesn't that
Speaker 2: create kind of a legal black hole where companies can't
Speaker 2: get refunds even though they paid on constitutional tariffs. How
Speaker 2: would that shake out?
Speaker 1: That would be in my mind, it would be administratively
Speaker 1: a mess. And I think that's what the DOJ was
Speaker 1: concerned about when they last week they mentioned that, hey,
Speaker 1: we've already been collecting about one hundred and thirty billion
Speaker 1: in tariffs. I think if all that has to be refunded,
Speaker 1: then it does have to be refunded, and there will
Speaker 1: be a mechanism for refunds, such as protesting the liquidation
Speaker 1: of customs entries. The problem is the time we're going
Speaker 1: to have to go through a long process to get
Speaker 1: that money back.
Speaker 2: Yeah, and where does the money actually come from if
Speaker 2: it's already been spent? I mean, I you know, he
Speaker 2: has a list of I think there's like seven or
Speaker 2: eight things on there. What he's going to do with
Speaker 2: this money coming in from tariffs, including two thousand dollars
Speaker 2: checks or taxpayers. All well and good, but if you
Speaker 2: cut those checks, there's no getting it back. Where if
Speaker 2: he's spend some of that money, where's it going to
Speaker 2: come from?
Speaker 1: Yeah, that's a great question. I don't know. I think
Speaker 1: it would have to come from through customs and border protection,
Speaker 1: but I don't know what funds they'd pull it from.
Speaker 1: It's the money's already been spent. It's been It's long
Speaker 1: been the case that customs have to provide refunds if
Speaker 1: someone overpaid. But wow, this is on a grand scale.
Speaker 1: We're talking about billions and thousands of companies. So I
Speaker 1: think it's legally the refunds will be required, but it
Speaker 1: will be a process, and in my experience requesting refunds,
Speaker 1: it's going to take a long time.
Speaker 2: Yeah, And we'll probably hear more of this tonight when
Speaker 2: the President speaks at nine o'clock. But Trump promised to
Speaker 2: use the tariff revenue for as I had to look
Speaker 2: it up. Yeah, eight different purposes with the checks. There's
Speaker 2: tax cuts, there's paying down debt, there's eliminating MTIMP tax
Speaker 2: in some groups, and the list goes on and on
Speaker 2: and on. But you know, I don't know does Congress
Speaker 2: have to appropriate it like any other revenue, or does
Speaker 2: he just start cutting checks himself. I mean, that's the
Speaker 2: other question is how much authority has an executive branch
Speaker 2: versus Congressional park Congress. Congress, as we know under Republican control,
Speaker 2: really doesn't want to do anything. They're happy with him
Speaker 2: doing whatever he wants and doing very little as representatives
Speaker 2: and senators. I wonder what happens in that regard exactly.
Speaker 1: Yes, and under the constitution, Congress is the branch that
Speaker 1: has authority over taxes and terrifts. Tariffs are attacked, they're
Speaker 1: a tax on the US importer. So you know, you'd
Speaker 1: think that Congress would have to weigh in on this
Speaker 1: at some point if refunds are required. It's going to
Speaker 1: be a combination, I think of the executive branch and
Speaker 1: then Congress, which, as you mentioned, is just going to
Speaker 1: probably support the Executive Regiet's decisions and then Customs, So
Speaker 1: Customs is going to be swimming in payerwork.
Speaker 2: I think yeah, doesn't mean for a smooth system. Michelle
Speaker 2: Schultz on the SHIF trade attorney, expert in the area
Speaker 2: of tariffs and the like, and I'm sure your phone's
Speaker 2: been ringing off the hook with all this stuff going
Speaker 2: on from your clients. Tonight, the President is going to
Speaker 2: talk at nine o'clock to sell us on the economy
Speaker 2: and the affordability hoax, as he calls it. I don't know,
Speaker 2: you go to the store's customer expensive, I don't know
Speaker 2: how that's a hoax. You know more than anyone your
Speaker 2: personal finances. If you're doing fine and you're above water
Speaker 2: and have a extra to spend, it's probably not that
Speaker 2: big a deal. But as of course you get closer
Speaker 2: and closer to the poverty line, or you just simply
Speaker 2: make less money. Your middle class or lower you know
Speaker 2: that it's it's really expensive out there, say maybe energy
Speaker 2: and gasoline right now. So he's gonna try and sell
Speaker 2: us on that tonight. It should be interesting what he says.
Speaker 2: And of course the other area of this thing is Michelle,
Speaker 2: you know this better than anybody. Are the terroriffs actually
Speaker 2: working in a sense, because I mean, China just surpassed
Speaker 2: a one trillion dollar trade surplus, which means they export
Speaker 2: more than they import. If they export more than import
Speaker 2: and that number is going up, that would indicate at
Speaker 2: least relative to China, the tariff's not working.
Speaker 1: Right right, Yes, relative to China, we can see that
Speaker 1: the tariffs really aren't having the intended effect. China's actually
Speaker 1: doing more business with other countries and they have found
Speaker 1: that it's easier to what they called dump or sell
Speaker 1: products below market to other countries rather than dealing with
Speaker 1: US at this point, So you know, yeah, I think
Speaker 1: the tariffs have resulted in difficulty for US importers, and
Speaker 1: at the same time, China seems to be fine.
Speaker 2: Yeah, it doesn't have the endent. I mean there's other
Speaker 2: countries out there that are squeezing, for sure, But I
Speaker 2: mean this was all set to leverage China, and China's going, okay,
Speaker 2: we'll fine, we'll just go We'll just expand market share
Speaker 2: elsewhere and forget about you guys. But then tariffs go
Speaker 2: away or we get the balance back. Are those stations
Speaker 2: going to all of a sudden go, Hey, you know what,
Speaker 2: We're just going to go back to good old maide
Speaker 2: in the USA goods, you know, outside of maybe some
Speaker 2: core products. I don't see that happening because once you
Speaker 2: change change vendors, so to speak, it's difficult to get
Speaker 2: that business back, isn't it.
Speaker 1: Oh? Yes, very difficult. And I think there is a
Speaker 1: lot of sentiments regarding America that we're not reliable right now.
Speaker 1: So I'm hearing that from the EU, from South America,
Speaker 1: from everywhere. And you'll see China is currently very successful
Speaker 1: in India, Brazil, Africa, you can look anywhere and they're
Speaker 1: doing well because they're playing the game right. I think
Speaker 1: that we are at a disadvantage at this point. Companies
Speaker 1: don't necessarily trust us because we may or may not
Speaker 1: go through with a transaction, or we may request christ changes.
Speaker 1: And even if we do buy something at the regular price,
Speaker 1: then the US company is losing profitability because they have
Speaker 1: to either increase their price to match the terroiffs and
Speaker 1: which are up to fifty percent or more, or they
Speaker 1: have to just do something else.
Speaker 2: Yeah, and I think Michelle on the terriff issue, I
Speaker 2: think there's a credibility problem here for Trump administration and
Speaker 2: Republicans in a sense because you know the cry against
Speaker 2: the Affordable Care Act, which is true. You know, we
Speaker 2: subsidize things in this country to the extreme, and it
Speaker 2: doesn't do anything to reduce and drive down the actual
Speaker 2: cost of things. It's just simply a coupon. It's a voucher,
Speaker 2: is what it is. To make it look to you
Speaker 2: and your family like, hey, healthcare is affordable, it's not.
Speaker 2: It's it's out of control of the government's just taking
Speaker 2: money from a different pile and giving it to you
Speaker 2: to shut you the hell up so you can afford
Speaker 2: your healthcare insurance. And that is a legitimate bee for
Speaker 2: Publicans have, and it's one hundred percent acrid. However, when
Speaker 2: you now have twice on that for farmers and bailed
Speaker 2: them out because in this case, because of teriffs where
Speaker 2: Ohio farmers lost about seventy six million dollars in exports
Speaker 2: to China. Well overall the trade is down like seventeen billions.
Speaker 2: So the long story is we're bailing out farmers with
Speaker 2: twelve billion dollars. Unfortunately it's to work by the seventeen
Speaker 2: billion dollar loss in China. Trade to China loan. So
Speaker 2: we're essentially subsidying farmers for the tariffs. That doesn't make
Speaker 2: any sense at all.
Speaker 1: Yeah, it doesn't make sense. And we're still seeing with
Speaker 1: our clients that farmers are they have stock, they can't
Speaker 1: sell their jumping products, and even agricultural equipment is taking
Speaker 1: a huge hit because they can't afford to buy the
Speaker 1: new stuff. They're going to use their own equipment. It's
Speaker 1: really still impacting farmers and agriculture, you know, down to
Speaker 1: the individual and I think sending them a check for
Speaker 1: a couple thousand dollars is not really helpful.
Speaker 2: No, no, no, you know it's again it's more subsidy.
Speaker 2: And on that too, farmers in the particular Ohio farmers. Facally,
Speaker 2: there's a double whammy there. There's higher cost from the
Speaker 2: import taxes and lost export revenue from retaliation from countries
Speaker 2: like China. So, from a trade law perspective, Michelle schultz Weer,
Speaker 2: you're an expert in is the predictable outcome of the
Speaker 2: policy something the administration's legally required to consider before imposing
Speaker 2: those tariffs or other statues that can just impose it
Speaker 2: without any economic impact analysis whatsoever. It feels like the
Speaker 2: latter's true.
Speaker 1: Yeah, I believe the ladder's true. Unfortunately, because so the
Speaker 1: tariffs that are the baseline tariffs, the reciprocal tariffs, those
Speaker 1: are the tariffs that are on virtually every country, and
Speaker 1: those were implemented under an emergency statue as if a
Speaker 1: trade deficit or an emergency. So let's say the court
Speaker 1: holds up those tariffs, they still have plenty of options
Speaker 1: for the US government to impose tariffs under other statutes,
Speaker 1: like aluminium and steel, which are under a National Security statute.
Speaker 1: There's another statue that covers unfair trade practices, and none
Speaker 1: of this, none of these statutes really ask what's the
Speaker 1: impact on the importer in the United States state, They're
Speaker 1: more focused on policy.
Speaker 2: So the big picture of the takeaway here is American
Speaker 2: farmers are suffering because of those massive losses we talked.
Speaker 2: Big companies are lining up to sue for refunds, and
Speaker 2: the government collected almost a quarter trillion dollars but promised
Speaker 2: to spend it in eight different ways. So, if you're
Speaker 2: advising someone whose business is import export and you have
Speaker 2: a global market here, what do you tell how are
Speaker 2: you tell them to navigate this chaos right now, and
Speaker 2: do you think we'll ever have clarity in the next
Speaker 2: few months on the legality of all this stuff.
Speaker 1: I think we will have clarity. So that's the light
Speaker 1: at the end of the tunnel. I'm hearing maybe beginning
Speaker 1: of twenty twenty six. Folks have been saying before the
Speaker 1: end of twenty twenty five. I don't know that we'll
Speaker 1: have that much clarity then, And I don't think that
Speaker 1: all the tariffs will be cleared up. Many of them
Speaker 1: are going to continue, and there's not much of a
Speaker 1: path forward for the importer. So what we're doing is
Speaker 1: some importers want to get in line, they want to sue.
Speaker 1: On the other hand, the Court of International Trade is
Speaker 1: not willing to bind customs as far as its final calculations.
Speaker 1: They've denied a consolidated motion on Monday about by importers,
Speaker 1: So I think, you know, as it drags out, we
Speaker 1: continue to look at technicality. We've had importers that have
Speaker 1: been overpaying because they've been overvaluing their goods, and we
Speaker 1: follow the customs regulations very closely to determine if you're overvaluing,
Speaker 1: if you're paying a percent onto high value or maybe
Speaker 1: you're paying on the wrong country of origin, or.
Speaker 2: I don't know how you sort all this stuff out.
Speaker 2: I'll be honest, my head would explode her. How's your
Speaker 2: head not exploding? It is okay, okay, good good. I
Speaker 2: just couldn't hear it from more. You're thank god you're
Speaker 2: in the phone, not in the studio. Are cleaning people
Speaker 2: are are are overworked already. She has Michelle Schall's trade
Speaker 2: attorney on the show. I always love having you on, Michelle,
Speaker 2: because you're you just simply cut right through it to
Speaker 2: help us figure out something complex is tariffs and what
Speaker 2: it all means. And if you don't know what it means,
Speaker 2: it should scare the hell out of the rest of us,
Speaker 2: that's for sure. You have a great day. Thanks again
Speaker 2: for coming on the show.
Speaker 1: You too, Thank you so much. Happy holidays, yeahppy holidays,
Speaker 1: Mary Christmas. Yeah.
Speaker 2: So it's a damist party in power right tonight. The
Speaker 2: Republicans are today, actually I should say they're gonna not
Speaker 2: vote for and include subsidies to continue the Obamacare for
Speaker 2: another couple of years. However, it is till they sort
Speaker 2: this out, and so yeah, you may feel like the
Speaker 2: rugs being pulled out under if you're one of the
Speaker 2: twenty two million Americans on it, okay, good because we
Speaker 2: don't want subscdy amen, and subsidy is it's stupid. Then
Speaker 2: tonight to nine President Trump will tell you why subsidies
Speaker 2: are good when it comes to farmers and everything else
Speaker 2: and two thousand dollars checks to Americans, isn't that subsidy?
Speaker 2: The answer would be yes, yes, it would be leadership.
Speaker 2: Where is it? I don't I don't see it. I
Speaker 2: don't see it on the left. I don't see it
Speaker 2: on the right. I just don't see it. News on
Speaker 2: the way minutes here, seven hundred w all the