1 00:00:00,200 --> 00:00:04,600 Speaker 1: Trade policy has turned into one of those horror movie zombies. 2 00:00:05,000 --> 00:00:07,480 Speaker 1: You think it's dead, it sits up, but comes back uglier. 3 00:00:08,640 --> 00:00:10,680 Speaker 1: You kill it again, and it keeps on coming back. 4 00:00:11,039 --> 00:00:14,200 Speaker 1: So let me help you make sense of what's happened, 5 00:00:14,320 --> 00:00:24,600 Speaker 1: where we are, and where we might be going. First, 6 00:00:24,600 --> 00:00:26,440 Speaker 1: I want to take a look at the legal battle 7 00:00:26,600 --> 00:00:31,160 Speaker 1: so far, to say the least, it's been chaotic. Next, 8 00:00:31,280 --> 00:00:34,360 Speaker 1: I'll explain what the different types of tariffs are that 9 00:00:34,400 --> 00:00:37,680 Speaker 1: the President keeps fiddling with, and how different types of 10 00:00:37,720 --> 00:00:40,879 Speaker 1: tariffs shape the economy in different ways. Then we're going 11 00:00:40,960 --> 00:00:44,360 Speaker 1: to dive into the latest chapter of this zombie thriller, 12 00:00:45,000 --> 00:00:49,000 Speaker 1: the administration's latest tariff plan. It hasn't gotten much play 13 00:00:49,040 --> 00:00:52,000 Speaker 1: in the press, but it's still one of the year's 14 00:00:52,040 --> 00:00:58,400 Speaker 1: most important economic stories and it's quite odd. Finally, we'll 15 00:00:58,440 --> 00:01:02,000 Speaker 1: analyze what this plan is the President I think he's 16 00:01:02,040 --> 00:01:04,880 Speaker 1: finally figured out a way to implement tariffs that's legal, 17 00:01:05,760 --> 00:01:09,280 Speaker 1: but the cost is this is his dumbest plan yet. 18 00:01:10,680 --> 00:01:15,279 Speaker 1: Let's start with the chaotic legal battle and the constitutional point. 19 00:01:15,959 --> 00:01:19,360 Speaker 1: The constitution it gives the tariff power to Congress. See 20 00:01:19,560 --> 00:01:23,680 Speaker 1: tariff's are taxes and under Americas founding rules taxes are 21 00:01:23,720 --> 00:01:27,880 Speaker 1: supposed to come from the branch that makes the laws, Congress. Now, 22 00:01:28,200 --> 00:01:32,000 Speaker 1: in the past, Congress has handed the presidency some narrow 23 00:01:32,200 --> 00:01:36,600 Speaker 1: tariff powers for specific situations. And that makes sense. If 24 00:01:36,600 --> 00:01:40,039 Speaker 1: there's a sudden national security problem or an emergency or 25 00:01:40,080 --> 00:01:43,840 Speaker 1: some unfair trade issue that quickly arises, you want the 26 00:01:43,880 --> 00:01:47,480 Speaker 1: White House to be able to respond quickly. But what 27 00:01:47,600 --> 00:01:50,240 Speaker 1: Congress did is it gave the White House limited power 28 00:01:50,360 --> 00:01:54,840 Speaker 1: and limited tools for very specific circumstances. Trump didn't quite 29 00:01:54,840 --> 00:01:56,960 Speaker 1: listen to that part, and he decided those powers were 30 00:01:56,960 --> 00:01:59,560 Speaker 1: broad enough that they gave him permission to launch a 31 00:01:59,600 --> 00:02:03,400 Speaker 1: global trade war entirely on his own, without even talking 32 00:02:03,400 --> 00:02:06,840 Speaker 1: to Congress. Now, the courts so far have said not 33 00:02:06,880 --> 00:02:10,200 Speaker 1: so fast. But we're now in the third round of 34 00:02:10,280 --> 00:02:13,320 Speaker 1: this fight, and that might be about to change. So 35 00:02:13,520 --> 00:02:16,919 Speaker 1: let's start with round one, which was the broad emergency 36 00:02:16,960 --> 00:02:22,640 Speaker 1: style tariff powers. That's the power that underwrote that the 37 00:02:22,680 --> 00:02:25,560 Speaker 1: tariffs that the President announced with an enormous fanfare on 38 00:02:25,720 --> 00:02:28,880 Speaker 1: so called Liberation Day. He had different rates for different 39 00:02:28,919 --> 00:02:32,880 Speaker 1: countries on big poster board, using bizarre calculations based on 40 00:02:32,919 --> 00:02:35,639 Speaker 1: their trade balance with the United States. He had a 41 00:02:35,639 --> 00:02:38,480 Speaker 1: specific rate for the penguins. He announced that and ten 42 00:02:38,520 --> 00:02:41,480 Speaker 1: months later, a mere ten months later, the Supreme Court 43 00:02:41,600 --> 00:02:44,239 Speaker 1: had a look and decided that all of it was illegal. 44 00:02:44,320 --> 00:02:47,000 Speaker 1: From the very start. The president was relying on the 45 00:02:47,000 --> 00:02:50,240 Speaker 1: Emergency Powers Act. Now, those tariffs, they were illegal from 46 00:02:50,240 --> 00:02:52,000 Speaker 1: the start. The government now is in the process of 47 00:02:52,040 --> 00:02:55,200 Speaker 1: having to refund almost all of the money that it 48 00:02:55,400 --> 00:02:58,480 Speaker 1: collected this way, all that uncertainty, and we've got nothing 49 00:02:58,520 --> 00:03:03,240 Speaker 1: to show for it. On to round two. After losing 50 00:03:03,360 --> 00:03:06,200 Speaker 1: that case, the very next day, the President quickly replaced 51 00:03:06,200 --> 00:03:09,480 Speaker 1: those tariffs with a temporary worldwide tariff of ten percent. 52 00:03:09,639 --> 00:03:11,920 Speaker 1: In fact, the next day he announced fifteen percent, and 53 00:03:11,960 --> 00:03:15,960 Speaker 1: then everyone just ignored him. That ten percent temporary tariff 54 00:03:15,960 --> 00:03:17,840 Speaker 1: came under a different law. It was a law meant 55 00:03:17,919 --> 00:03:22,440 Speaker 1: for a pretty narrow international payments problem. It was meant 56 00:03:22,440 --> 00:03:24,960 Speaker 1: to address the sort of balance of payments crisis that 57 00:03:25,000 --> 00:03:27,000 Speaker 1: could occur only if the United States had a fixed 58 00:03:27,040 --> 00:03:31,079 Speaker 1: exchange rate, which we don't, so the law doesn't actually apply. 59 00:03:31,840 --> 00:03:35,120 Speaker 1: So again, the courts ruled those tariffs illegal so far, 60 00:03:35,240 --> 00:03:38,160 Speaker 1: just lower courts. Now there's still a lot of litigation 61 00:03:38,360 --> 00:03:41,240 Speaker 1: sloshing about trying to figure out exactly how much money 62 00:03:41,240 --> 00:03:43,360 Speaker 1: the government's going to have to refund, and for now 63 00:03:43,480 --> 00:03:46,000 Speaker 1: the decision only applies to the firms that actually sued. 64 00:03:46,200 --> 00:03:48,600 Speaker 1: There's going to be a lot of lawyers fully employed here. 65 00:03:48,600 --> 00:03:50,520 Speaker 1: But either way, that law was only ever meant to 66 00:03:50,520 --> 00:03:52,760 Speaker 1: be temporary from the start, so it was only allowed 67 00:03:52,760 --> 00:03:55,040 Speaker 1: to last for one hundred and fifty days, and that 68 00:03:55,240 --> 00:03:58,480 Speaker 1: time limit runs out any day now, certainly before the 69 00:03:58,520 --> 00:04:00,560 Speaker 1: major cases are going to be appealed. A good job 70 00:04:00,720 --> 00:04:04,240 Speaker 1: justice system. Now we're under round three. The White House 71 00:04:04,280 --> 00:04:08,440 Speaker 1: once again is trying to implement tariffs. It's searched for 72 00:04:08,480 --> 00:04:11,320 Speaker 1: illegal rationale and this time it's using a more formal 73 00:04:11,400 --> 00:04:15,160 Speaker 1: trade investigation process wrapped in the language of forced labor. 74 00:04:15,240 --> 00:04:17,159 Speaker 1: I'm going to have to explain that, but before that, 75 00:04:17,279 --> 00:04:19,440 Speaker 1: I want to explain what the different kinds of tariffs 76 00:04:19,520 --> 00:04:23,680 Speaker 1: are in this story. The first is we have industry 77 00:04:23,760 --> 00:04:26,640 Speaker 1: specific tariffs. These are tariffs saying that a specific sector 78 00:04:26,680 --> 00:04:31,560 Speaker 1: like steel or aluminium Americans call that aluminum, copper, pharmaceuticals, 79 00:04:32,080 --> 00:04:35,080 Speaker 1: and so they only apply apply to a specific industry, 80 00:04:35,120 --> 00:04:37,000 Speaker 1: but they often apply no matter which country the goods 81 00:04:37,040 --> 00:04:39,560 Speaker 1: come from. These were a really big deal and the 82 00:04:39,600 --> 00:04:42,760 Speaker 1: first Trump administration, and they're still around, and a lot 83 00:04:42,800 --> 00:04:46,040 Speaker 1: of them still matter, but they're not today's main story. Second, 84 00:04:46,120 --> 00:04:50,440 Speaker 1: there's national or country specific tariffs. These hit basically everything 85 00:04:50,480 --> 00:04:53,640 Speaker 1: that comes from a specific country. So this is what 86 00:04:53,680 --> 00:04:58,440 Speaker 1: the big Liberation Day strategy was all about. Country specific 87 00:04:58,440 --> 00:05:02,200 Speaker 1: tariffs were placed at different rates on different countries. Third, 88 00:05:02,320 --> 00:05:04,640 Speaker 1: once those got struck down, the White House tried using 89 00:05:04,680 --> 00:05:09,080 Speaker 1: worldwide tariffs. That's the ten percent global surcharge they've been 90 00:05:09,160 --> 00:05:12,359 Speaker 1: charging but was just ruled illegal and is set to expires. 91 00:05:12,440 --> 00:05:18,120 Speaker 1: And fourth, there's what the administration is trying to do next. Technically, 92 00:05:18,520 --> 00:05:23,560 Speaker 1: these are national tariffs, but they're effectively worldwide ish and 93 00:05:23,560 --> 00:05:26,400 Speaker 1: what makes them different from before is that now they're 94 00:05:26,640 --> 00:05:30,400 Speaker 1: investigation based. Let me explain. This means that the administration 95 00:05:30,560 --> 00:05:33,320 Speaker 1: is going to try to justify them by saying another 96 00:05:33,440 --> 00:05:38,240 Speaker 1: country's policies amount to unfair trade practices. And that matters 97 00:05:38,279 --> 00:05:41,200 Speaker 1: because many years ago, Congress delegated to the White House 98 00:05:41,240 --> 00:05:44,280 Speaker 1: the ability to respond or to retaliate in response to 99 00:05:44,360 --> 00:05:47,719 Speaker 1: unfair trade. And this is where the forced labor theory 100 00:05:47,920 --> 00:05:50,320 Speaker 1: comes in. So, first of all, what do I mean 101 00:05:50,320 --> 00:05:52,520 Speaker 1: by forced labor? Look, that's just goods that are made 102 00:05:52,520 --> 00:05:56,039 Speaker 1: with slave labor or prison labor, or prison work under compulsion, 103 00:05:56,160 --> 00:05:59,080 Speaker 1: or debt bondage, or you know all sorts of terrible, 104 00:05:59,200 --> 00:06:02,440 Speaker 1: terrible things. Now here's the thing. The United States already 105 00:06:02,440 --> 00:06:06,679 Speaker 1: blocks all imports made using forced labor, so these tariffs 106 00:06:06,680 --> 00:06:09,800 Speaker 1: won't affect the extent to which Americans support the use 107 00:06:09,800 --> 00:06:13,640 Speaker 1: of forced labor. Instead, the administration's new theory goes like this. 108 00:06:14,040 --> 00:06:17,159 Speaker 1: It says, if another country, say Australia, doesn't do enough 109 00:06:17,200 --> 00:06:22,280 Speaker 1: to try to stop those goods entering Australia, then that 110 00:06:22,360 --> 00:06:24,919 Speaker 1: means producers in that country get a leg up and 111 00:06:24,920 --> 00:06:28,920 Speaker 1: they get unfair competition for American workers. So you might say, 112 00:06:28,920 --> 00:06:31,600 Speaker 1: why does the White House love this legal rationale? And 113 00:06:31,920 --> 00:06:34,240 Speaker 1: I've got to tell you, I really don't think it's 114 00:06:34,279 --> 00:06:38,479 Speaker 1: because the President has suddenly developed big feelings about the 115 00:06:38,560 --> 00:06:42,599 Speaker 1: exploitation of the world's downtrodden. That's just my hunch, though. 116 00:06:43,440 --> 00:06:45,839 Speaker 1: I think what it likes here is this is a 117 00:06:46,040 --> 00:06:50,320 Speaker 1: legal route that comes wrapped in a formal trade investigation process. 118 00:06:50,400 --> 00:06:53,960 Speaker 1: There's findings and comments and hearings and a big fat 119 00:06:54,080 --> 00:06:58,400 Speaker 1: legal paper trail, and the courts usually give the executive 120 00:06:58,560 --> 00:07:02,159 Speaker 1: branch a lot of grace in that sort of circumstances 121 00:07:02,160 --> 00:07:04,080 Speaker 1: a lot more than when the President just waves his 122 00:07:04,160 --> 00:07:07,760 Speaker 1: hands and says there's a giant emergency, I need tariffs. 123 00:07:07,960 --> 00:07:10,320 Speaker 1: So what do we have today? Then we've got the 124 00:07:10,360 --> 00:07:15,720 Speaker 1: same trade war, the same players, probably better lawyers, but 125 00:07:15,760 --> 00:07:20,440 Speaker 1: I think ultimately worse economics. This latest plan, it's probably 126 00:07:20,480 --> 00:07:24,320 Speaker 1: the oddest. It comes from this forced labor theory, and 127 00:07:24,360 --> 00:07:29,360 Speaker 1: it's led the administration to propose tariff's on sixty economies. Now, 128 00:07:29,360 --> 00:07:31,320 Speaker 1: if you're at all like me, you thinking why sixty 129 00:07:31,360 --> 00:07:34,280 Speaker 1: of them? And it's not because the administration thinks the 130 00:07:34,320 --> 00:07:36,440 Speaker 1: other one hundred and thirty six countries in the world 131 00:07:36,440 --> 00:07:40,400 Speaker 1: are all good blokes. Instead, it's because he thinks it 132 00:07:40,400 --> 00:07:41,960 Speaker 1: doesn't need to know the name of those other one 133 00:07:42,000 --> 00:07:44,680 Speaker 1: hundred and thirty six countries because the sixty it's imposing 134 00:07:44,720 --> 00:07:47,800 Speaker 1: tariffs on they're not the worst offenders. There are biggest 135 00:07:47,800 --> 00:07:52,000 Speaker 1: trading partners and collectively they cover ninety nine point four 136 00:07:52,080 --> 00:07:57,880 Speaker 1: percent of US imports, So we're not targeting bad actors. Essentially, 137 00:07:57,960 --> 00:07:59,920 Speaker 1: we're keeping the list short so that we don't act 138 00:08:00,000 --> 00:08:04,240 Speaker 1: scidentally start tariffing penguins or other countries that may not 139 00:08:04,320 --> 00:08:06,920 Speaker 1: exist or the President hasn't actually heard of. So what 140 00:08:06,960 --> 00:08:09,000 Speaker 1: are the rates that we're going to charge. It's going 141 00:08:09,080 --> 00:08:11,520 Speaker 1: to be Americans are going to pay have to pay 142 00:08:11,560 --> 00:08:15,080 Speaker 1: a ten percent tax on imports from some countries in 143 00:08:15,080 --> 00:08:17,400 Speaker 1: twelve and a half percent tax for imports from others, 144 00:08:18,160 --> 00:08:20,120 Speaker 1: and whatch of those two rates you're going to end 145 00:08:20,200 --> 00:08:22,400 Speaker 1: up paying. This is where the whole thing gets sort 146 00:08:22,400 --> 00:08:25,600 Speaker 1: of silly. The ten percent rate is for the folks 147 00:08:25,640 --> 00:08:28,080 Speaker 1: who the administration regards as the good guys, the folks 148 00:08:28,120 --> 00:08:31,640 Speaker 1: that are working hard to reduce forced labor, and it's 149 00:08:31,800 --> 00:08:34,160 Speaker 1: charging the twelve and a half percent for imports from 150 00:08:34,200 --> 00:08:36,280 Speaker 1: countries that it reckons are the bad guys, the guys 151 00:08:36,280 --> 00:08:38,920 Speaker 1: who aren't trying hard enough. So I just want you 152 00:08:38,960 --> 00:08:42,600 Speaker 1: to notice here everyone pays at least ten percent, and 153 00:08:42,640 --> 00:08:45,400 Speaker 1: the reward for better behavior is that Americans get a 154 00:08:45,440 --> 00:08:48,079 Speaker 1: two point five percent edge point lower it's ax rate 155 00:08:48,080 --> 00:08:51,440 Speaker 1: they pay on inputs from your country. That's not the plimacy, 156 00:08:51,480 --> 00:08:54,280 Speaker 1: that's a rounding error. And as you think through the 157 00:08:54,360 --> 00:08:57,319 Speaker 1: logic of this tariff regime, realize that if you were 158 00:08:57,360 --> 00:09:01,200 Speaker 1: actually serious about building an international coalition and against forced labor, 159 00:09:01,760 --> 00:09:03,880 Speaker 1: you wouldn't do it this way. You wouldn't set a 160 00:09:03,920 --> 00:09:06,720 Speaker 1: really high tariff for everyone in a tiny discount for 161 00:09:06,800 --> 00:09:10,440 Speaker 1: those who were meeting your objectives. What's going on? He 162 00:09:10,480 --> 00:09:14,720 Speaker 1: is so transparently bad faith. It might pass muster with 163 00:09:14,760 --> 00:09:16,760 Speaker 1: the courts, but it won't with our trading partners. And 164 00:09:16,800 --> 00:09:18,960 Speaker 1: that means no one's going to come to the White 165 00:09:19,000 --> 00:09:22,959 Speaker 1: House and offer tighter rules about forced labor or better enforcement. 166 00:09:23,520 --> 00:09:26,120 Speaker 1: They're going to see, correctly, in my view, that that 167 00:09:26,200 --> 00:09:30,120 Speaker 1: whole set of issues is entirely beside the point. You 168 00:09:30,120 --> 00:09:32,120 Speaker 1: can see this another way by looking at the timing 169 00:09:32,160 --> 00:09:35,920 Speaker 1: of it all. The White House has moved this process quickly, 170 00:09:36,080 --> 00:09:38,319 Speaker 1: and it wants to get these new tariffs in place 171 00:09:38,360 --> 00:09:42,040 Speaker 1: by probably mid July. And guess what that lines up 172 00:09:42,080 --> 00:09:45,800 Speaker 1: almost exactly with when the old temporary worldwide tariff runs out. 173 00:09:46,160 --> 00:09:49,920 Speaker 1: Funny coincidence, that isn't it. Now, It's not just that 174 00:09:49,920 --> 00:09:53,720 Speaker 1: the White House now gets legal tariffs. It actually is 175 00:09:53,760 --> 00:09:55,960 Speaker 1: going to get worse tariffs. So let's talk about the 176 00:09:56,000 --> 00:09:58,880 Speaker 1: economics of all of this. I think this is actually 177 00:09:58,920 --> 00:10:01,120 Speaker 1: going to be the worst version of the trade war 178 00:10:01,160 --> 00:10:05,679 Speaker 1: for a few reasons. First is worldwide tariffs, and remember 179 00:10:05,679 --> 00:10:09,120 Speaker 1: these are effectively worldwide tariffs. They give you less leverage. 180 00:10:09,160 --> 00:10:11,520 Speaker 1: Not more normally, what you do, as you say to 181 00:10:11,520 --> 00:10:13,480 Speaker 1: one country, if you don't do X, will raise tariffs 182 00:10:13,480 --> 00:10:17,520 Speaker 1: on you. And that works because the threat's specific. But 183 00:10:17,559 --> 00:10:20,680 Speaker 1: if our retaliation involves raising tariffs not just on you 184 00:10:20,760 --> 00:10:23,360 Speaker 1: but also on all your competitors, then all of a sudden, 185 00:10:23,400 --> 00:10:26,280 Speaker 1: you're no longer at much of a competitive disadvantage. The 186 00:10:26,320 --> 00:10:28,400 Speaker 1: American stick here is not much of a stick. There's 187 00:10:28,440 --> 00:10:33,640 Speaker 1: not much incentive. Second, the chaotic nature of the Trump tariffs, 188 00:10:33,920 --> 00:10:36,640 Speaker 1: they provide very little incentive for anyone to want to 189 00:10:36,640 --> 00:10:39,880 Speaker 1: cooperate with the United States in particular, even as they 190 00:10:39,880 --> 00:10:43,240 Speaker 1: provide strong incentives for other countries to form deals between 191 00:10:43,280 --> 00:10:46,080 Speaker 1: each other. Think about it. The US right now, it 192 00:10:46,080 --> 00:10:49,560 Speaker 1: has formal trade deals and informal deals with many many countries, 193 00:10:50,320 --> 00:10:53,600 Speaker 1: including Australia and Korea, and Canada and Mexico. But the 194 00:10:53,640 --> 00:10:55,840 Speaker 1: President still wakes up every now and then and just 195 00:10:55,880 --> 00:10:58,240 Speaker 1: imposes a whole bunch of new tariffs just because he 196 00:10:58,280 --> 00:11:01,720 Speaker 1: feels like it on the flimsiest of ours, the tariff's 197 00:11:01,760 --> 00:11:06,200 Speaker 1: Canada because of fentanyl, Argentina because of how they administer elections, 198 00:11:06,520 --> 00:11:08,520 Speaker 1: the whole world because of a made up balance of 199 00:11:08,559 --> 00:11:12,120 Speaker 1: payments crisis sixty countries because he suddenly woke up with 200 00:11:12,200 --> 00:11:15,280 Speaker 1: a newfound concern about forced labor. Look, he keeps changing 201 00:11:15,320 --> 00:11:17,640 Speaker 1: his mind, which means that we are not delivering on 202 00:11:17,679 --> 00:11:19,400 Speaker 1: our end of the deal. And if we don't put 203 00:11:19,440 --> 00:11:23,080 Speaker 1: any teeth into delivering concessions to our training partners, they're 204 00:11:23,120 --> 00:11:26,199 Speaker 1: not going to put any teeth into delivering concessions to us. Third, 205 00:11:26,400 --> 00:11:29,880 Speaker 1: these tariffs, they're just too unstable to drive any form 206 00:11:29,920 --> 00:11:33,240 Speaker 1: of serious investment. Look, if we want tariffs to reshape 207 00:11:33,280 --> 00:11:36,880 Speaker 1: the economy, then the only way that works is firms 208 00:11:36,960 --> 00:11:38,679 Speaker 1: have to believe that they're going to last long enough 209 00:11:38,679 --> 00:11:41,840 Speaker 1: to affect their bottom line. But no tariff that Trump 210 00:11:41,960 --> 00:11:45,320 Speaker 1: ever passes, ever lasts more than a few weeks. And 211 00:11:45,360 --> 00:11:48,240 Speaker 1: executive's never going to build a factory because of this 212 00:11:48,280 --> 00:11:51,880 Speaker 1: week's tariff headline. They aren't going to build it based 213 00:11:51,960 --> 00:11:53,640 Speaker 1: on a tariff that's going to be gone before the 214 00:11:53,640 --> 00:11:56,520 Speaker 1: cement has drive. Look, I think it's a good point 215 00:11:56,760 --> 00:11:59,520 Speaker 1: because even if you believe that tariffs can be useful, 216 00:11:59,520 --> 00:12:01,520 Speaker 1: if you believe even the idea of a smart tariff, 217 00:12:01,679 --> 00:12:03,480 Speaker 1: I'm not sure I do. But even if you do, 218 00:12:03,600 --> 00:12:07,320 Speaker 1: these are not it. These tariffs are chaotic, they're unclear, 219 00:12:07,440 --> 00:12:10,960 Speaker 1: they're always changing, they're transitory to be directed. These are 220 00:12:11,000 --> 00:12:13,440 Speaker 1: dumb tariffs. They're dumb because we're going to get all 221 00:12:13,480 --> 00:12:16,160 Speaker 1: the costs. We're going to pay the higher prices. Our 222 00:12:16,200 --> 00:12:17,760 Speaker 1: place in the world is going to be diminished, but 223 00:12:17,760 --> 00:12:19,480 Speaker 1: we're going to get very few of the benefits because 224 00:12:19,480 --> 00:12:22,880 Speaker 1: no one believes that they can trust them. If you 225 00:12:22,920 --> 00:12:25,960 Speaker 1: want to create tariffs that stimulate investment, they need to 226 00:12:25,960 --> 00:12:27,760 Speaker 1: be durable, and the way you do that is by 227 00:12:27,760 --> 00:12:31,920 Speaker 1: passing them through Congress. And that raises the fourth problem here, 228 00:12:32,480 --> 00:12:35,680 Speaker 1: which is the presidential tariffs. They give rise to a 229 00:12:35,800 --> 00:12:38,600 Speaker 1: really awful form of crony capitalism. You can call a 230 00:12:38,600 --> 00:12:42,320 Speaker 1: corruption if you want. You see, Trump could work with 231 00:12:42,440 --> 00:12:46,200 Speaker 1: Congress to pass tariffs, but he won't because when the 232 00:12:46,200 --> 00:12:49,480 Speaker 1: White House imposes tariffs, then it's the President, not Congress, 233 00:12:50,040 --> 00:12:52,520 Speaker 1: who gets to grant carveouts, or hand out exemptions, or 234 00:12:52,559 --> 00:12:55,520 Speaker 1: push companies around, or dole out favors to his mates. 235 00:12:56,480 --> 00:13:01,320 Speaker 1: So tariffs by presidential proclamation, they're worse for the economy, 236 00:13:01,360 --> 00:13:04,200 Speaker 1: but they're better for the president and for his mates. 237 00:13:05,679 --> 00:13:08,680 Speaker 1: So where are we. Here's the lesson. The courts did 238 00:13:08,760 --> 00:13:12,920 Speaker 1: not end Trump's trade war. They blocked one version of it, 239 00:13:13,480 --> 00:13:15,880 Speaker 1: then they blocked the replacement version of it, and now 240 00:13:15,880 --> 00:13:20,119 Speaker 1: we're on to version three. Some clever White House lawyers 241 00:13:20,400 --> 00:13:24,080 Speaker 1: may have found a way to give their boss his tariffs. 242 00:13:24,360 --> 00:13:27,000 Speaker 1: It looks like this third attempt will survive. But it 243 00:13:27,000 --> 00:13:29,720 Speaker 1: will survive not because it's smarter or more principled, but 244 00:13:29,800 --> 00:13:33,079 Speaker 1: because it becomes wrapped in a legal process that courts 245 00:13:33,120 --> 00:13:36,840 Speaker 1: are more likely to tolerate. But along the way, the 246 00:13:36,880 --> 00:13:40,160 Speaker 1: White House has just lost sight of the broader objectives. Yes, 247 00:13:40,600 --> 00:13:42,680 Speaker 1: this set of tariffs is going to give the Boss 248 00:13:42,720 --> 00:13:44,880 Speaker 1: the tool he is long wanted to wave around. He 249 00:13:44,920 --> 00:13:47,560 Speaker 1: got his tariffs, He got what he wanted. But these 250 00:13:47,600 --> 00:13:50,040 Speaker 1: tariff powers aren't going to deliver for the American people. 251 00:13:50,320 --> 00:13:54,640 Speaker 1: No deals, no on shoring, not much revenue, no leverage, 252 00:13:54,760 --> 00:13:59,120 Speaker 1: no reindustrialization, no jobs, a trade deficit that hasn't budged 253 00:13:59,559 --> 00:14:02,959 Speaker 1: and won't budge. And in return, we get more opportunities 254 00:14:03,000 --> 00:14:06,160 Speaker 1: for corruption, greater uncertainty, allies who don't trust us, in 255 00:14:06,200 --> 00:14:10,360 Speaker 1: a weaker place in global affairs. And along the way, 256 00:14:10,960 --> 00:14:12,960 Speaker 1: you and I we're going to end up paying higher 257 00:14:13,040 --> 00:14:13,720 Speaker 1: prices too.