1 00:00:05,480 --> 00:00:06,600 Speaker 1: Welcome to the Truth. 2 00:00:06,360 --> 00:00:08,039 Speaker 2: With Lisa Booth, where he gets the heart of the 3 00:00:08,039 --> 00:00:11,520 Speaker 2: issues that matter to you. Today, we're talking tariffs, more 4 00:00:11,560 --> 00:00:15,120 Speaker 2: specifically that Supreme Court decision six to three that President 5 00:00:15,120 --> 00:00:19,280 Speaker 2: Trump can't use AJIPA to impose his tariff strategy. What 6 00:00:19,320 --> 00:00:21,320 Speaker 2: does this mean for the president? What does it mean 7 00:00:21,320 --> 00:00:25,040 Speaker 2: for his leverage moving forward? We're going to ask Iszak Nikatar. 8 00:00:25,200 --> 00:00:29,280 Speaker 2: She's the former Undersecretary of Commerce and an international trade attorney. 9 00:00:29,360 --> 00:00:31,920 Speaker 2: She worked during President Trump's first administration, So we're going 10 00:00:31,960 --> 00:00:35,760 Speaker 2: to talk to her about his trade strategy. What does 11 00:00:35,760 --> 00:00:37,920 Speaker 2: it mean, why did he do it in the first place, 12 00:00:38,159 --> 00:00:40,520 Speaker 2: What do you need to know at home? There's also 13 00:00:40,520 --> 00:00:43,880 Speaker 2: a report recently that there has been a decoupling from 14 00:00:44,000 --> 00:00:48,040 Speaker 2: China as a result of President Trump's trade policies. So 15 00:00:48,600 --> 00:00:51,000 Speaker 2: how important is that and what does this all mean 16 00:00:51,159 --> 00:00:56,080 Speaker 2: moving forward? I'm sorry, but tariffs, they're complicated. Trade. It's complicated, 17 00:00:56,480 --> 00:00:58,400 Speaker 2: but Nazak is going to break it down for us, 18 00:00:58,520 --> 00:01:03,800 Speaker 2: So stay tuned. Well, and Zaka, it's great to have 19 00:01:03,840 --> 00:01:07,360 Speaker 2: you on. I interviewed you recently on Fox Business and 20 00:01:07,440 --> 00:01:10,480 Speaker 2: you just did so. It was after the IEPA Supreme 21 00:01:10,520 --> 00:01:12,479 Speaker 2: Court ruling, and you just did such a good job 22 00:01:12,600 --> 00:01:16,200 Speaker 2: explaining everything. And I feel like tariffs and trade and 23 00:01:16,240 --> 00:01:19,360 Speaker 2: all this stuff is so complex, and you just did 24 00:01:19,360 --> 00:01:21,800 Speaker 2: such a great job of explaining it in layman's terms 25 00:01:21,840 --> 00:01:24,000 Speaker 2: for the rest of us. So I appreciate you coming 26 00:01:24,040 --> 00:01:26,600 Speaker 2: on and making the time my pleasure. 27 00:01:26,760 --> 00:01:28,800 Speaker 1: Good to be with you again, and thank you for 28 00:01:28,800 --> 00:01:29,200 Speaker 1: having me. 29 00:01:29,520 --> 00:01:31,320 Speaker 2: Oh well, thank you. Well. I guess walk us through 30 00:01:31,360 --> 00:01:35,160 Speaker 2: real quick what the Supreme Court decision means for President 31 00:01:35,240 --> 00:01:39,080 Speaker 2: Trump's tariff strategy and no longer being able to use AEPA. 32 00:01:39,920 --> 00:01:42,560 Speaker 1: Yeah, I mean, what the Supreme Court ultimately did was 33 00:01:42,600 --> 00:01:45,640 Speaker 1: it just said, you know, the IEPA authority is just 34 00:01:45,680 --> 00:01:49,880 Speaker 1: to sort of limit transaction, stop transactions. You can't put 35 00:01:50,280 --> 00:01:54,440 Speaker 1: tariffs on things through the IEPA authority. And that's really 36 00:01:54,480 --> 00:01:57,640 Speaker 1: all it was, was just setting guardrails on you know, 37 00:01:57,680 --> 00:01:59,920 Speaker 1: if you want a tariff, you can't use this authority. 38 00:02:00,360 --> 00:02:03,800 Speaker 1: But it didn't say that the president doesn't have tiff authority. 39 00:02:03,840 --> 00:02:07,920 Speaker 1: The president has a vast tariff authority, and so could 40 00:02:07,920 --> 00:02:11,880 Speaker 1: the president quickly pivot to the range of other authorities 41 00:02:11,880 --> 00:02:14,920 Speaker 1: he has, you know, beyond the traditional sort of the 42 00:02:14,919 --> 00:02:17,640 Speaker 1: way we think about tiarffs. The trade remedy, anti dumping, 43 00:02:17,680 --> 00:02:21,359 Speaker 1: countervailing duty, tariffs, busy apps section two three two, National 44 00:02:21,400 --> 00:02:24,920 Speaker 1: security tariffs Section three oh one, Trade retaliatory. If our 45 00:02:24,960 --> 00:02:29,440 Speaker 1: foreign trading partners practices harm us economically, we can retaliate 46 00:02:30,040 --> 00:02:33,520 Speaker 1: discriminatory behavior by our trading partners. We can tariff that too, 47 00:02:34,040 --> 00:02:36,320 Speaker 1: and so and of course, as we see now the 48 00:02:36,360 --> 00:02:41,840 Speaker 1: balance of payments, tariffs, everything that the President wants to teariff, 49 00:02:41,880 --> 00:02:44,520 Speaker 1: he has other authority to do it. So I think 50 00:02:44,560 --> 00:02:46,359 Speaker 1: he's moved past it, and I think he was right. 51 00:02:46,720 --> 00:02:49,920 Speaker 1: He said, Look, the Supreme Court just has emboldened me 52 00:02:50,360 --> 00:02:53,920 Speaker 1: to use other authorities that I actually have. And I 53 00:02:53,919 --> 00:02:56,320 Speaker 1: think he's going to proceed in doing that. And I 54 00:02:56,320 --> 00:03:00,600 Speaker 1: think that there's enough cause for him to want to 55 00:03:01,000 --> 00:03:03,880 Speaker 1: use tariffs as leveraged to get corrections from our trading 56 00:03:03,919 --> 00:03:06,639 Speaker 1: partners discriminatory behavior against us. 57 00:03:07,080 --> 00:03:09,760 Speaker 2: You know, it's interesting because when you were on because 58 00:03:09,919 --> 00:03:11,760 Speaker 2: at face value, you know, you look at some of 59 00:03:11,840 --> 00:03:15,520 Speaker 2: these other legal avenues, these different sections that President Trump 60 00:03:15,720 --> 00:03:19,440 Speaker 2: will use is using, as you mentioned, sections one twenty two, 61 00:03:19,560 --> 00:03:22,040 Speaker 2: three oh one, two thirty two on their face like 62 00:03:22,080 --> 00:03:25,320 Speaker 2: they seem limiting in the sense of like with three 63 00:03:25,400 --> 00:03:27,280 Speaker 2: oh one and two thirty two, you've got to do 64 00:03:27,320 --> 00:03:30,280 Speaker 2: like these investigations, and then with one twenty two you're 65 00:03:30,320 --> 00:03:33,400 Speaker 2: capped at fifteen percent and there's an expiration date. And 66 00:03:33,440 --> 00:03:36,400 Speaker 2: so on its face, these seem more limiting than what 67 00:03:36,480 --> 00:03:38,880 Speaker 2: he could have potentially done under or what he was 68 00:03:38,920 --> 00:03:42,040 Speaker 2: able to do under AEBA. But you said on when 69 00:03:42,080 --> 00:03:44,280 Speaker 2: I was co hosting that that's actually not the case. 70 00:03:44,480 --> 00:03:48,000 Speaker 2: So why isn't it the case and why is it 71 00:03:48,040 --> 00:03:49,440 Speaker 2: not limiting for him? 72 00:03:49,840 --> 00:03:53,360 Speaker 1: Yeah, so, and that's a good way of sort of 73 00:03:53,400 --> 00:03:56,880 Speaker 1: putting it. It's not limiting in terms of the scope 74 00:03:57,040 --> 00:04:02,640 Speaker 1: and the height of the tariffs. The only constraint in 75 00:04:02,760 --> 00:04:05,920 Speaker 1: consideration is it's a little bit more documentation, right, a 76 00:04:05,920 --> 00:04:08,960 Speaker 1: little bit more processes rather than just sort of a 77 00:04:09,040 --> 00:04:12,920 Speaker 1: quick proclamation. So, to give you an example, sort of 78 00:04:12,920 --> 00:04:18,120 Speaker 1: the two thirty two tariff authorities national security based imports 79 00:04:18,120 --> 00:04:21,360 Speaker 1: of articles and then and they're derivative, so imports of 80 00:04:21,400 --> 00:04:23,920 Speaker 1: the thing, and then if that thing is embedded into 81 00:04:23,920 --> 00:04:27,760 Speaker 1: a downstream product, those can all be tariffed if they're 82 00:04:27,800 --> 00:04:31,640 Speaker 1: important to national security, and then the tariffs apply globally. Now, 83 00:04:31,640 --> 00:04:36,080 Speaker 1: does the administration have to conduct an investigation and does 84 00:04:36,080 --> 00:04:37,800 Speaker 1: it have two hundred and seventy days to do a 85 00:04:37,839 --> 00:04:41,040 Speaker 1: two thirty two investigation? Certainly does it need to two 86 00:04:41,440 --> 00:04:43,679 Speaker 1: Does it need two hundred and seventy days to conduct 87 00:04:43,680 --> 00:04:47,480 Speaker 1: a two thirty two investigation? Absolutely not. The Commerce Department 88 00:04:47,640 --> 00:04:50,760 Speaker 1: US here, they look at these sort of distortions constantly 89 00:04:50,839 --> 00:04:53,599 Speaker 1: all the time, so long as the administration, you know, 90 00:04:53,720 --> 00:04:56,400 Speaker 1: looks at sort of maybe some third party reports by 91 00:04:56,440 --> 00:04:59,080 Speaker 1: think tanks, and then supplements it with its own data 92 00:04:59,120 --> 00:05:01,920 Speaker 1: and puts a cover on top of it. Especially since 93 00:05:01,920 --> 00:05:04,680 Speaker 1: the two thirty two, like AIBA, isn't subject to the 94 00:05:04,800 --> 00:05:07,440 Speaker 1: Administrative Procedures Act, which has all of these sort of 95 00:05:07,520 --> 00:05:12,479 Speaker 1: additional requirements process requirements. The President can go out of 96 00:05:12,480 --> 00:05:14,839 Speaker 1: the gate within just a few weeks with a whole 97 00:05:14,920 --> 00:05:18,080 Speaker 1: bunch of new Section new tariffs under the Section two 98 00:05:18,080 --> 00:05:21,200 Speaker 1: thirty two authority the other one that's pretty nimble, and 99 00:05:21,600 --> 00:05:24,479 Speaker 1: those authorities don't have timeframes. So long as the national 100 00:05:24,520 --> 00:05:28,600 Speaker 1: security harm exists or threat exists, those tariffs can continue 101 00:05:28,680 --> 00:05:31,479 Speaker 1: and there's no cap at the level of those tariffs. 102 00:05:31,640 --> 00:05:34,120 Speaker 1: Same with the sort of this authority that the President 103 00:05:34,160 --> 00:05:37,720 Speaker 1: hasn't use before Section three thirty eight of the Trade Act. 104 00:05:37,839 --> 00:05:41,440 Speaker 1: It's an old authority. It's never been used before to 105 00:05:41,480 --> 00:05:45,120 Speaker 1: impose tariffs, but it's dormant in some respect, but it 106 00:05:45,200 --> 00:05:47,840 Speaker 1: is still a valid lot and all that requires is 107 00:05:47,880 --> 00:05:53,080 Speaker 1: a presidential determination that foreign trading partners have discriminated against us, 108 00:05:53,360 --> 00:05:56,640 Speaker 1: and then he can pose tariffs indefinitely for as long 109 00:05:56,680 --> 00:05:59,800 Speaker 1: as those that discrimination continues. That one is capped at 110 00:05:59,800 --> 00:06:02,240 Speaker 1: FI fifty percent. But those are just two of the 111 00:06:02,279 --> 00:06:05,520 Speaker 1: several authorities he has, and I think he can execute 112 00:06:05,560 --> 00:06:08,760 Speaker 1: three thirty eight pretty instantaneously, and then the two thirty 113 00:06:08,760 --> 00:06:10,880 Speaker 1: two is just a matter of weeks of putting together 114 00:06:10,960 --> 00:06:14,159 Speaker 1: a report in some data and a proclamation that goes 115 00:06:14,200 --> 00:06:14,520 Speaker 1: with it. 116 00:06:15,960 --> 00:06:19,080 Speaker 2: I think the challenge with tariffs it's rather complex, and 117 00:06:19,160 --> 00:06:21,480 Speaker 2: even when you get down to like trade deficits and 118 00:06:21,520 --> 00:06:24,640 Speaker 2: so I think the American people they don't really understand it. 119 00:06:25,560 --> 00:06:27,880 Speaker 2: And the challenge with that is I think, you know, 120 00:06:27,920 --> 00:06:31,400 Speaker 2: after Liberation Day, President Trump sort of took authority over 121 00:06:31,440 --> 00:06:34,400 Speaker 2: the economy, even though he's still trying to fix what 122 00:06:34,480 --> 00:06:37,560 Speaker 2: Biden did because of tariffs. I guess walk us through, 123 00:06:37,720 --> 00:06:42,120 Speaker 2: like what's the purpose of President Trump's tariff strategy, why 124 00:06:42,200 --> 00:06:44,920 Speaker 2: was it necessary, what's behind it? 125 00:06:45,600 --> 00:06:47,880 Speaker 1: You know, I think I commend the president. He's the 126 00:06:47,920 --> 00:06:51,600 Speaker 1: first president who's decided to take on this ever ballooning 127 00:06:51,800 --> 00:06:56,119 Speaker 1: American debt. Thirty eight point seven trillion dollars six point 128 00:06:56,240 --> 00:07:01,680 Speaker 1: four billion dollars accumulating on our national debt per day. 129 00:07:02,200 --> 00:07:05,919 Speaker 1: That puts downward pressure on the currency. And that debt 130 00:07:05,960 --> 00:07:10,480 Speaker 1: is financed by borrowing from abroad. And it also signals 131 00:07:10,560 --> 00:07:13,080 Speaker 1: sort of a downward trend in jobs. It signals a 132 00:07:13,160 --> 00:07:18,280 Speaker 1: downward trend in manufacturing, and increased relyance on foreign goods. 133 00:07:18,480 --> 00:07:21,920 Speaker 1: When I articulate all of those, nobody can credibly say 134 00:07:22,040 --> 00:07:24,880 Speaker 1: any of those things are good for America. Yet why 135 00:07:25,040 --> 00:07:28,640 Speaker 1: a year after year, you know, prior administrations and Congress 136 00:07:28,640 --> 00:07:32,600 Speaker 1: have ignored this ballooning debt. So one way to sort 137 00:07:32,600 --> 00:07:36,280 Speaker 1: of correct for this debt is to impose tariffs. What 138 00:07:36,320 --> 00:07:39,600 Speaker 1: did the tariffs do? They slow American importation of goods. 139 00:07:40,240 --> 00:07:44,160 Speaker 1: And then under President Trump, he's looking at deals. You know, 140 00:07:44,240 --> 00:07:47,760 Speaker 1: if foreign countries want or companies want exemptions from tariffs 141 00:07:47,760 --> 00:07:49,960 Speaker 1: and then they have to invest in the United States. 142 00:07:49,960 --> 00:07:54,320 Speaker 1: Increased FDI offsets the debt that we're in. And then 143 00:07:54,400 --> 00:07:58,679 Speaker 1: obviously slowing tariffs slows down the deficit and the debt 144 00:07:58,920 --> 00:08:01,680 Speaker 1: that's sort of the econ side of it in terms 145 00:08:01,720 --> 00:08:04,240 Speaker 1: of the national debt. But when I give you examples 146 00:08:04,400 --> 00:08:09,560 Speaker 1: like the Europeans in terms of their discriminatory practices against 147 00:08:09,760 --> 00:08:12,600 Speaker 1: US autos, I wrote the Auto's investigation in the first 148 00:08:12,600 --> 00:08:16,480 Speaker 1: Trump administration and the importation, and they're hollowing out of 149 00:08:16,520 --> 00:08:19,600 Speaker 1: the American auto industry with its nexus to the defense sector. 150 00:08:19,640 --> 00:08:22,720 Speaker 1: It's important for national security. We're becoming assemblers in the 151 00:08:22,840 --> 00:08:26,840 Speaker 1: United States, the Europeans, also the Japanese and South Korean. 152 00:08:26,880 --> 00:08:30,960 Speaker 1: The imports have sort of suppressed domestic prices such that 153 00:08:31,120 --> 00:08:34,720 Speaker 1: the component producers, the cool components and cars that are 154 00:08:34,760 --> 00:08:39,079 Speaker 1: getting gadgety and have more compute power, those are getting 155 00:08:39,120 --> 00:08:42,800 Speaker 1: more expensive because they can do cooler things. But because 156 00:08:42,840 --> 00:08:47,400 Speaker 1: import pressures have kept car prices flat, those component producers 157 00:08:47,440 --> 00:08:50,120 Speaker 1: off short because they now can't sell to the American 158 00:08:50,160 --> 00:08:54,840 Speaker 1: OEMs at their increased prices because the OEMs here are 159 00:08:54,360 --> 00:08:58,440 Speaker 1: getting crunched on import prices. So the component producers are 160 00:08:58,440 --> 00:09:02,360 Speaker 1: getting this cost price crease. Increasing cost can translated to 161 00:09:02,360 --> 00:09:05,880 Speaker 1: to increasing prices, so they're offshoring, which has led us 162 00:09:05,920 --> 00:09:09,360 Speaker 1: to becoming to assemblers. What's even worse is when you 163 00:09:09,400 --> 00:09:12,720 Speaker 1: look at a country, like a region like Europe, they 164 00:09:13,000 --> 00:09:17,319 Speaker 1: discriminate against American cars in Europe through standards. Then when 165 00:09:17,360 --> 00:09:21,320 Speaker 1: they do trade agreements with foreign countries around the world, 166 00:09:21,360 --> 00:09:25,600 Speaker 1: they force them to adopt the discriminatory European standards that 167 00:09:25,720 --> 00:09:29,400 Speaker 1: discriminate against American cars. So now not only do we 168 00:09:29,480 --> 00:09:33,360 Speaker 1: have Europe that's discriminating against US, but you're forcing its 169 00:09:33,400 --> 00:09:36,480 Speaker 1: trading partners to discriminate against us. And then when we're 170 00:09:36,480 --> 00:09:39,920 Speaker 1: doing these tariffs in the first Trump administration, Congress said well, 171 00:09:39,960 --> 00:09:42,720 Speaker 1: do you think our trading partners are harming national security? 172 00:09:43,000 --> 00:09:46,840 Speaker 1: And my answer was resoundingly yes. They're dumping still into 173 00:09:46,840 --> 00:09:49,440 Speaker 1: the United States. They're dumping an aluminum and look at 174 00:09:49,440 --> 00:09:52,040 Speaker 1: what happened to the car to cars. We have a 175 00:09:52,200 --> 00:09:55,440 Speaker 1: lot of bad behavior by our trading partners to correct. 176 00:09:55,520 --> 00:09:58,360 Speaker 1: And I commend President Trump, WHI who has been the 177 00:09:58,400 --> 00:10:01,000 Speaker 1: only president to date who's been taking the bull by 178 00:10:01,000 --> 00:10:03,560 Speaker 1: the horns and take tackling these issues. They might be 179 00:10:03,600 --> 00:10:05,800 Speaker 1: in the short term unpopular, but I think once the 180 00:10:05,840 --> 00:10:09,600 Speaker 1: American public realizes what's happening, they will be supportive. 181 00:10:10,480 --> 00:10:13,560 Speaker 2: You know, because right now, you know, you've got critics 182 00:10:13,559 --> 00:10:17,439 Speaker 2: saying it's attacks on American goods. That's sort of the 183 00:10:17,520 --> 00:10:20,079 Speaker 2: narrative from the left heading into the midterms. You've got 184 00:10:20,080 --> 00:10:25,440 Speaker 2: groups like the Tax Foundation that say in twenty twenty 185 00:10:25,480 --> 00:10:28,000 Speaker 2: five that the Trump tariffs amounted to an average tax 186 00:10:28,040 --> 00:10:32,480 Speaker 2: increased per US household of one thousand dollars. What are 187 00:10:32,480 --> 00:10:34,559 Speaker 2: you say in response to that? And you know, is 188 00:10:34,600 --> 00:10:37,120 Speaker 2: it attacks on American households? 189 00:10:37,559 --> 00:10:40,000 Speaker 1: You know What's I find really cute. These sort of 190 00:10:40,040 --> 00:10:42,800 Speaker 1: economists just kind of make up formulas and make up math. 191 00:10:42,840 --> 00:10:45,079 Speaker 1: And I say that as an economist, but I certainly 192 00:10:45,160 --> 00:10:48,560 Speaker 1: don't do that makeup formulasm may makeup math to be 193 00:10:48,880 --> 00:10:53,480 Speaker 1: very self serving. I'll give you two probated pieces of information. One, 194 00:10:53,640 --> 00:10:56,640 Speaker 1: a lot of importers have actually acknowledged the fact that 195 00:10:56,840 --> 00:10:59,760 Speaker 1: because of the tariffs, they've been able to negotiate with 196 00:11:00,080 --> 00:11:05,200 Speaker 1: foreign exporters to reduce their export prices to the United 197 00:11:05,200 --> 00:11:08,520 Speaker 1: States so the importers can better absorb those tariffs, and 198 00:11:08,559 --> 00:11:10,800 Speaker 1: so those tariff the insid in the tariffs is not 199 00:11:10,920 --> 00:11:14,960 Speaker 1: being passed to US customers in that arrangement, which means 200 00:11:15,000 --> 00:11:17,599 Speaker 1: the foreign countries are bearing the brunt of the tariffs. 201 00:11:17,760 --> 00:11:21,559 Speaker 1: I love that. Number Two. I just looked at the CPI, 202 00:11:21,640 --> 00:11:24,360 Speaker 1: the Consumer Price Index, and the Producer's Price Index. For 203 00:11:24,720 --> 00:11:26,320 Speaker 1: the White House, they had asked me to look at 204 00:11:26,320 --> 00:11:30,360 Speaker 1: a few data indicators for them, and the CPI and 205 00:11:30,400 --> 00:11:33,720 Speaker 1: the PPI they're both within our target and inflation rate 206 00:11:34,360 --> 00:11:36,800 Speaker 1: of two percent. They're slightly above two, but they have 207 00:11:37,080 --> 00:11:41,800 Speaker 1: moderated significantly from the twenty twenty two twenty twenty three 208 00:11:42,040 --> 00:11:46,160 Speaker 1: highs seven to nine percent inflation during the Biden administration, 209 00:11:46,480 --> 00:11:51,080 Speaker 1: and now we're around the two percent target rate, hovering 210 00:11:51,120 --> 00:11:54,520 Speaker 1: at two point seven. That tells me that the President's 211 00:11:54,640 --> 00:11:59,400 Speaker 1: trade policies have done just the opposite. They haven't caused inflation. 212 00:11:59,720 --> 00:12:03,959 Speaker 1: They've actually worked to moderate inflation. And why is that happening. 213 00:12:04,040 --> 00:12:08,080 Speaker 1: Wages are going up, more manufacturing is happening in the 214 00:12:08,120 --> 00:12:13,160 Speaker 1: United States, consumers can better absorb any small price increases. 215 00:12:13,160 --> 00:12:16,199 Speaker 1: But as I just mentioned, the price increases haven't been 216 00:12:16,320 --> 00:12:20,160 Speaker 1: what we see across the board because of the CPI 217 00:12:20,280 --> 00:12:23,959 Speaker 1: and the PPI indicator. So economists can just make up numbers, 218 00:12:24,040 --> 00:12:26,480 Speaker 1: but the proof is in the putting, and the putting 219 00:12:26,559 --> 00:12:29,720 Speaker 1: is the CPI and the PPI, which are significantly below 220 00:12:30,040 --> 00:12:34,040 Speaker 1: the Biden administration. And thanks to President Trump, he's moderated 221 00:12:34,040 --> 00:12:36,120 Speaker 1: that in twenty twenty five with his policies. 222 00:12:36,960 --> 00:12:39,839 Speaker 2: You know what happens I think would it's some of 223 00:12:39,880 --> 00:12:41,920 Speaker 2: you would know, one hundred and seventy five billion right 224 00:12:42,000 --> 00:12:44,800 Speaker 2: under the AEPA, Yeah. 225 00:12:44,600 --> 00:12:47,600 Speaker 1: One hundred and seventy seven pluses or just rough estimates. 226 00:12:47,679 --> 00:12:50,679 Speaker 2: Yeah, I've heard different numbers, but roughly around there. So 227 00:12:50,960 --> 00:12:53,720 Speaker 2: you know, all that money's already been collected, So like 228 00:12:53,760 --> 00:12:57,920 Speaker 2: what happens after you know what happens now with that money? 229 00:12:59,160 --> 00:13:02,640 Speaker 1: Yeah, that's that's a big sort of focus of debate. 230 00:13:02,760 --> 00:13:07,000 Speaker 1: I think there's going to be three likely scenarios. I 231 00:13:07,000 --> 00:13:10,120 Speaker 1: think one, the administration could just set up its own process. 232 00:13:10,160 --> 00:13:12,840 Speaker 1: The Department of Justice has already articulated that it intends 233 00:13:12,920 --> 00:13:18,720 Speaker 1: to comply with the Supreme Court's decisions. So could the 234 00:13:18,760 --> 00:13:22,040 Speaker 1: administration set up its own process to start issuing refunds. 235 00:13:22,080 --> 00:13:24,640 Speaker 1: Yes to Option two, which I think is more likely, 236 00:13:25,160 --> 00:13:27,800 Speaker 1: is that the US government, the administration is going to 237 00:13:27,840 --> 00:13:31,200 Speaker 1: wait for the Court of International Trade to issue an 238 00:13:31,240 --> 00:13:35,840 Speaker 1: opinion on you know, how refunds should be administered, and 239 00:13:35,880 --> 00:13:38,160 Speaker 1: so I think they're waiting for that, and then they'll, 240 00:13:38,240 --> 00:13:40,200 Speaker 1: if they need to, they'll set up a process or 241 00:13:40,240 --> 00:13:43,720 Speaker 1: they'll just have litigants litigate to get tariff refunds on 242 00:13:43,760 --> 00:13:47,120 Speaker 1: an individual by individual basis. What I think is also 243 00:13:47,280 --> 00:13:50,600 Speaker 1: equally likely to happen is, in addition to the present 244 00:13:50,720 --> 00:13:54,960 Speaker 1: the administration just waiting for the court to issue an 245 00:13:54,960 --> 00:13:57,320 Speaker 1: opinion on how the process should work. I think that 246 00:13:57,360 --> 00:14:02,600 Speaker 1: they're also going to look at ways of disincentivizing companies 247 00:14:03,000 --> 00:14:06,760 Speaker 1: from recovering the tariffs. And there's a really rational basis 248 00:14:06,800 --> 00:14:10,320 Speaker 1: for doing this. These tariffs, these AEPA teriffs were imposed 249 00:14:10,360 --> 00:14:14,000 Speaker 1: to deal with the national security emergency, whether it's ventil 250 00:14:14,200 --> 00:14:18,000 Speaker 1: the border crisis, you know, India not buying Russian energy. 251 00:14:18,360 --> 00:14:22,840 Speaker 1: Those emergencies haven't gone away. So if the president, the 252 00:14:22,880 --> 00:14:26,840 Speaker 1: president can very easily articulate and say, listen, I have 253 00:14:26,960 --> 00:14:29,600 Speaker 1: to I was trying to deal with emergencies through punishment, 254 00:14:29,640 --> 00:14:33,160 Speaker 1: economic punishment to these countries. Now that the court has 255 00:14:33,200 --> 00:14:36,600 Speaker 1: taken that power away from me, the emergencies still exists, 256 00:14:36,600 --> 00:14:39,960 Speaker 1: and now I have to recoup the amount lost from 257 00:14:40,000 --> 00:14:43,600 Speaker 1: the punishment by paying those back. So I'm going to 258 00:14:43,680 --> 00:14:47,440 Speaker 1: now proceed with new authorities in a way double the 259 00:14:47,520 --> 00:14:50,000 Speaker 1: level of punishment for a period of time on these 260 00:14:50,040 --> 00:14:52,480 Speaker 1: countries to make up for the fact that the court 261 00:14:52,640 --> 00:14:56,560 Speaker 1: made me lose time. Companies, you, if you agree to 262 00:14:56,560 --> 00:15:00,000 Speaker 1: not seek a tariff refund all for a period of time, 263 00:15:00,120 --> 00:15:02,760 Speaker 1: lower your punishment. Lower the tariffs you have to pay. 264 00:15:03,040 --> 00:15:05,880 Speaker 1: Now that the president feels like he's almost has to 265 00:15:06,040 --> 00:15:08,840 Speaker 1: for about a year, double the punishment to make up 266 00:15:08,880 --> 00:15:11,640 Speaker 1: for the lost time in twenty twenty five. And then, companies, 267 00:15:11,880 --> 00:15:16,000 Speaker 1: if you agree not to seek refunds, maybe I'll reduce 268 00:15:16,240 --> 00:15:19,280 Speaker 1: the forward looking tariffs because you've you've allowed me to 269 00:15:19,400 --> 00:15:22,600 Speaker 1: keep the backward the twenty twenty five tariffs. If that 270 00:15:22,680 --> 00:15:25,000 Speaker 1: makes sense, I can very much see him doing that, 271 00:15:25,080 --> 00:15:28,800 Speaker 1: and I don't think he would be wrong in asking 272 00:15:28,880 --> 00:15:31,000 Speaker 1: companies to cooperate with him that way. 273 00:15:31,400 --> 00:15:33,120 Speaker 2: Quick break more on the other side. If you like 274 00:15:33,160 --> 00:15:35,040 Speaker 2: what you're hearing, please share on social media or senate 275 00:15:35,080 --> 00:15:40,640 Speaker 2: to your family and friends. So it was reported that 276 00:15:41,440 --> 00:15:44,640 Speaker 2: while President Trump's tariffs helped lower the trade deficit with 277 00:15:44,800 --> 00:15:48,480 Speaker 2: several major US trading partners, the total US trade deficit 278 00:15:48,520 --> 00:15:51,480 Speaker 2: for twenty twenty five slip by just zero point two percent. 279 00:15:52,800 --> 00:15:55,240 Speaker 2: Does that tell the full picture or can you unpack 280 00:15:55,320 --> 00:15:56,280 Speaker 2: that for us? 281 00:15:56,720 --> 00:15:59,680 Speaker 1: Yeah? I mean I think the trade there's you know 282 00:15:59,800 --> 00:16:02,840 Speaker 1: it takes a while for the economy to adjusts. And 283 00:16:02,880 --> 00:16:06,600 Speaker 1: I think just because the trade deficits was reduced slightly, 284 00:16:06,760 --> 00:16:09,520 Speaker 1: you know we're not going to have overnight impacts. If 285 00:16:09,520 --> 00:16:12,880 Speaker 1: we're going to reduce our reliance on imports, companies have 286 00:16:12,960 --> 00:16:16,160 Speaker 1: to shift their supply chains. They have to requalify products, 287 00:16:16,560 --> 00:16:20,000 Speaker 1: they have to find alternative sources in the United States. 288 00:16:20,040 --> 00:16:22,720 Speaker 1: And if we don't have adequate capacity in the United 289 00:16:22,760 --> 00:16:25,720 Speaker 1: States to be alternative suppliers from within our own borders, 290 00:16:25,920 --> 00:16:28,800 Speaker 1: then we've got to build up those supply chains. So 291 00:16:28,920 --> 00:16:31,560 Speaker 1: the fact that it's going to take a little while 292 00:16:31,800 --> 00:16:34,680 Speaker 1: to sort of real seed dense in the trade deficit 293 00:16:35,120 --> 00:16:38,200 Speaker 1: doesn't mean right that not to suggest that you're saying that, 294 00:16:38,200 --> 00:16:41,720 Speaker 1: but to those detractors, it doesn't mean that it's not working. 295 00:16:41,920 --> 00:16:45,040 Speaker 1: It just means that the supply chain needs to shift. 296 00:16:45,360 --> 00:16:48,640 Speaker 1: Manufacturers have to change their behavior, products have to be qualified, 297 00:16:48,720 --> 00:16:52,160 Speaker 1: We need to build more here. But once we do that, 298 00:16:52,280 --> 00:16:54,200 Speaker 1: and you don't take the foot off the gas pedal 299 00:16:54,200 --> 00:16:56,920 Speaker 1: because you're not accelerating in half a second. You keep 300 00:16:56,960 --> 00:16:58,960 Speaker 1: your foot on the gas pedal because you know that 301 00:16:58,960 --> 00:17:02,520 Speaker 1: that accelerant is going to ultimately happen. And again pointing 302 00:17:02,560 --> 00:17:06,080 Speaker 1: to the data that we talked about earlier, thirty eight 303 00:17:06,119 --> 00:17:10,040 Speaker 1: trillion dollar debt, the downward pressure on the currency, the 304 00:17:10,400 --> 00:17:13,119 Speaker 1: more import reliant that's making us look at what's happening 305 00:17:13,160 --> 00:17:15,320 Speaker 1: with China. I think, I think we need to do 306 00:17:15,400 --> 00:17:19,480 Speaker 1: everything we can to incentivize more domestically sourced goods, certainly 307 00:17:19,480 --> 00:17:23,520 Speaker 1: for national security and defense capabilities as well, you. 308 00:17:23,520 --> 00:17:25,879 Speaker 2: Know, and on that with China. There was a new 309 00:17:25,920 --> 00:17:32,320 Speaker 2: analysis from JP Morgan Chase Institute that found that the 310 00:17:32,320 --> 00:17:35,959 Speaker 2: the tariff strategy has driven a wedge between businesses American 311 00:17:36,000 --> 00:17:39,280 Speaker 2: businesses and Chinese suppliers. There has been some decoupling as 312 00:17:39,280 --> 00:17:42,560 Speaker 2: a result of these tariffs. What's the significance of that 313 00:17:43,000 --> 00:17:44,560 Speaker 2: and how significant is this? 314 00:17:45,840 --> 00:17:48,320 Speaker 1: China is unlike sort of any trading partner that we've 315 00:17:48,320 --> 00:17:51,680 Speaker 1: seen before. When it captures to supply chains, it's demonstrated, 316 00:17:51,720 --> 00:17:55,320 Speaker 1: but it's willing to use it to harm American interests. 317 00:17:55,400 --> 00:17:58,280 Speaker 1: So I think businesses have been clear eyed. I remember 318 00:17:58,320 --> 00:18:01,040 Speaker 1: on the first Trump administration, we were we were talking 319 00:18:01,040 --> 00:18:03,840 Speaker 1: about the risks of China, and everybody looked at us 320 00:18:03,880 --> 00:18:06,400 Speaker 1: like we had, you know, five heads. But I think 321 00:18:06,600 --> 00:18:12,000 Speaker 1: as they've come to themselves witness China's on fair trading practices. 322 00:18:12,520 --> 00:18:16,920 Speaker 1: The administration first administration ever to call the stuff out. 323 00:18:17,040 --> 00:18:21,199 Speaker 1: Companies then started taking notice and then slowly started realizing 324 00:18:21,280 --> 00:18:25,600 Speaker 1: weight the administration's right, that China is stealing our ip 325 00:18:25,880 --> 00:18:29,119 Speaker 1: than they indigenize, and then they wipe us out. I 326 00:18:29,119 --> 00:18:32,920 Speaker 1: think companies started realizing that there's a problem. Different companies 327 00:18:32,960 --> 00:18:36,720 Speaker 1: reacted at different sort of paces, but I think the 328 00:18:36,800 --> 00:18:41,399 Speaker 1: move is happening away from China. And whether you know, 329 00:18:41,640 --> 00:18:46,040 Speaker 1: whether impose higher tariffs the administration ultimately on China or not, 330 00:18:46,560 --> 00:18:50,640 Speaker 1: I think businesses now realize, especially with the magnet situation, 331 00:18:51,040 --> 00:18:54,760 Speaker 1: that increasing or keeping reliance on China is a really 332 00:18:54,840 --> 00:18:58,040 Speaker 1: risky proposition. They're seeing that now in the battery space, 333 00:18:58,280 --> 00:19:01,560 Speaker 1: where China has such a stranglehold over the battery supply chain, 334 00:19:01,600 --> 00:19:03,760 Speaker 1: and we're just not going to be able to move 335 00:19:03,800 --> 00:19:07,119 Speaker 1: ourselves in the immediate term away from Chinese batteries unless 336 00:19:07,160 --> 00:19:10,760 Speaker 1: we have more domestic capacity and technology growth. I think 337 00:19:10,800 --> 00:19:14,680 Speaker 1: companies are because they're being so heavily impacted, they're really 338 00:19:14,720 --> 00:19:16,679 Speaker 1: seeing that there was a merit to doing that, and 339 00:19:16,720 --> 00:19:20,159 Speaker 1: they're choosing sometimes to couple themselves because of those risks. 340 00:19:21,119 --> 00:19:23,199 Speaker 2: Well, yeah, and we've seen trying to threaten us before 341 00:19:23,200 --> 00:19:27,240 Speaker 2: with like antibiotics during COVID, and you know, kind of 342 00:19:27,400 --> 00:19:33,080 Speaker 2: holding that power over heads when they're rightfully facing criticism 343 00:19:33,160 --> 00:19:34,640 Speaker 2: for unleashing it on the world. 344 00:19:36,040 --> 00:19:38,520 Speaker 1: And even and one thing I just want to sort 345 00:19:38,520 --> 00:19:40,720 Speaker 1: of emphasize is even about things that we don't see 346 00:19:40,720 --> 00:19:44,840 Speaker 1: publicly when companies do their own independent negotiations with the Chinese, 347 00:19:44,880 --> 00:19:47,359 Speaker 1: when the Chinese realize that they have the supply chain, 348 00:19:47,760 --> 00:19:51,520 Speaker 1: they put some pretty onerous and oppressive terms on American companies. 349 00:19:51,560 --> 00:19:55,440 Speaker 1: We just simply need a battery, right for medical equipment, 350 00:19:55,520 --> 00:19:58,480 Speaker 1: et cetera. And so I think that realization things that 351 00:19:58,520 --> 00:20:01,840 Speaker 1: we don't necessarily hear about out publicly because these are 352 00:20:01,920 --> 00:20:05,200 Speaker 1: just agreement by agreement between two companies, I think that 353 00:20:05,359 --> 00:20:08,680 Speaker 1: is really spooking American companies too to move away from China. 354 00:20:08,800 --> 00:20:12,159 Speaker 2: We're still dealing with a supply chain crisis from COVID. 355 00:20:12,960 --> 00:20:13,159 Speaker 2: You know. 356 00:20:13,920 --> 00:20:17,480 Speaker 1: That's I don't think that the two things. I don't 357 00:20:17,480 --> 00:20:22,560 Speaker 1: think that the supply chain crisis is there anymore with 358 00:20:22,640 --> 00:20:27,160 Speaker 1: the level of acuteness or really to any significant material 359 00:20:27,200 --> 00:20:30,200 Speaker 1: degree at all. I think what's remained is a little 360 00:20:30,200 --> 00:20:33,399 Speaker 1: bit of the PTSD that that companies realize that if 361 00:20:33,440 --> 00:20:37,600 Speaker 1: they don't start finding domestic sourcing now, that they will 362 00:20:37,600 --> 00:20:40,680 Speaker 1: be in jeopardy. But the other thing that has been 363 00:20:40,800 --> 00:20:43,639 Speaker 1: a little bit of awakening for companies and industries and 364 00:20:43,760 --> 00:20:47,359 Speaker 1: certainly in the US government, is that even our trading partners, 365 00:20:47,560 --> 00:20:49,840 Speaker 1: you know, during COVID, we couldn't get a lot of 366 00:20:49,880 --> 00:20:54,600 Speaker 1: aerospace parts out of Mexico because they had sent their 367 00:20:54,640 --> 00:20:58,240 Speaker 1: factory workers home, and then that impacted our commercial and 368 00:20:58,320 --> 00:21:01,560 Speaker 1: military readiness and the air space and defense supply chain. 369 00:21:02,280 --> 00:21:05,920 Speaker 1: And so even when we do have trading partners that 370 00:21:06,040 --> 00:21:08,359 Speaker 1: you know, we generally more or less trust, or we 371 00:21:08,400 --> 00:21:11,440 Speaker 1: have trading agreements with, I think the government is realized 372 00:21:11,440 --> 00:21:14,320 Speaker 1: that we need to build in more and more into 373 00:21:14,320 --> 00:21:17,359 Speaker 1: these trade agreements that they won't to the extent that 374 00:21:17,400 --> 00:21:20,400 Speaker 1: there's a pandemic or some global crisis like that, They're 375 00:21:20,400 --> 00:21:23,880 Speaker 1: not just going to arbitrarily restrict us from having critical 376 00:21:23,920 --> 00:21:26,760 Speaker 1: supply chains that we rely on them for. That also 377 00:21:26,840 --> 00:21:29,679 Speaker 1: feeds into the narrative of do we really want to 378 00:21:29,720 --> 00:21:32,720 Speaker 1: rely on foreign trading partners for things that are critical 379 00:21:32,720 --> 00:21:35,800 Speaker 1: to national security. Adam Smith, the father of free trade, 380 00:21:35,840 --> 00:21:40,639 Speaker 1: even underscored in his book Wealth of nations that a 381 00:21:40,680 --> 00:21:44,000 Speaker 1: country should not depend on its neighbors for things that 382 00:21:44,040 --> 00:21:46,760 Speaker 1: are critical to national defense. And I think COVID was 383 00:21:46,800 --> 00:21:48,120 Speaker 1: an important awakening there. 384 00:21:49,440 --> 00:21:52,720 Speaker 2: Before we go to what extent have the You've touched 385 00:21:52,840 --> 00:21:54,479 Speaker 2: on it a little bit earlier, But to what extent 386 00:21:54,560 --> 00:21:59,640 Speaker 2: have these tariffs brought manufacturing back to the United States? 387 00:22:00,320 --> 00:22:03,720 Speaker 2: How long of a road is that process? You know? 388 00:22:04,280 --> 00:22:06,879 Speaker 1: Let me I want to answer this by one something 389 00:22:06,960 --> 00:22:11,280 Speaker 1: really important. In the first Trump administration, I was speaking 390 00:22:11,320 --> 00:22:14,040 Speaker 1: at an event about the two thirty two tariffs. I 391 00:22:14,040 --> 00:22:16,159 Speaker 1: had to defend those a lot until the world started 392 00:22:16,240 --> 00:22:19,560 Speaker 1: understanding the merits of them. And a gentleman in the 393 00:22:19,560 --> 00:22:21,040 Speaker 1: front of the audience asked me. He said, do you 394 00:22:21,040 --> 00:22:24,560 Speaker 1: know how much the Trump character costing the average American family? 395 00:22:25,000 --> 00:22:27,600 Speaker 1: And I responded by saying, do you understand how much 396 00:22:27,720 --> 00:22:32,520 Speaker 1: foreign countries predatory economic practices are eroding wages such that 397 00:22:32,640 --> 00:22:35,439 Speaker 1: mothers and fathers have to work multiple jobs now to 398 00:22:35,480 --> 00:22:38,399 Speaker 1: have enough money to have the dignity to put food 399 00:22:38,480 --> 00:22:41,399 Speaker 1: on the table for their families, and pencils and their 400 00:22:41,480 --> 00:22:44,480 Speaker 1: children's backpacks to send them to school. Well that god, 401 00:22:44,520 --> 00:22:46,880 Speaker 1: I'm real quiet. My point is this, and I'm glad 402 00:22:46,920 --> 00:22:50,440 Speaker 1: you're asking this because we have to get our manufacturing 403 00:22:50,480 --> 00:22:53,240 Speaker 1: industry up and running. In some of the poorest parts 404 00:22:53,240 --> 00:22:57,119 Speaker 1: of the country, one manufacturing facturing facility, and if that 405 00:22:57,200 --> 00:23:01,120 Speaker 1: manufacturing facility goes, the workers they're doing can have options. 406 00:23:01,400 --> 00:23:04,439 Speaker 1: We need a manufacturing renaissance in the United States, and 407 00:23:04,480 --> 00:23:10,520 Speaker 1: the President is initiated that with forcing countries to rectify 408 00:23:11,000 --> 00:23:13,879 Speaker 1: their economic harms to the United States of the past 409 00:23:13,960 --> 00:23:17,719 Speaker 1: by investing in critical capabilities here. We need more jobs, 410 00:23:17,720 --> 00:23:21,960 Speaker 1: and with more jobs, we should be through tariffs generating 411 00:23:22,040 --> 00:23:24,800 Speaker 1: higher wages, so we can get to that sort of 412 00:23:24,840 --> 00:23:28,120 Speaker 1: American dream where in a family, one person or maybe 413 00:23:28,160 --> 00:23:30,159 Speaker 1: if both want to work, both want to work. But 414 00:23:30,240 --> 00:23:33,200 Speaker 1: that's a family choice, not a necessity. And that comes 415 00:23:33,200 --> 00:23:36,840 Speaker 1: with more manufacturing job options here and better wages, and 416 00:23:36,880 --> 00:23:41,159 Speaker 1: those will come once we eliminate unfair trading practices that 417 00:23:41,320 --> 00:23:47,800 Speaker 1: have significantly suppressed wages. In nineteen eighty sixty seventy percent 418 00:23:47,880 --> 00:23:51,800 Speaker 1: of an average American's income was spent on just necessities. 419 00:23:52,240 --> 00:23:56,360 Speaker 1: In twenty twenty four, the expenditure of the average American 420 00:23:56,480 --> 00:24:00,360 Speaker 1: exceeded income by six percent. That is happy, it's not 421 00:24:00,520 --> 00:24:04,040 Speaker 1: necessarily that we're buying more and more we're buying it 422 00:24:04,160 --> 00:24:06,560 Speaker 1: all the cheap junk from China, so that's offset. But 423 00:24:06,600 --> 00:24:09,199 Speaker 1: it's the fact that our wages just haven't increased with 424 00:24:09,359 --> 00:24:13,800 Speaker 1: the amount that we need to the natural cost increases today. 425 00:24:14,000 --> 00:24:17,560 Speaker 1: So we very much need to tackle this wage suppression 426 00:24:17,760 --> 00:24:21,680 Speaker 1: caused by foreign predatory economic practices head on, and that's 427 00:24:21,720 --> 00:24:24,200 Speaker 1: one of the things that the Trumpe administration is doing. 428 00:24:25,280 --> 00:24:28,400 Speaker 2: Very interesting, complex stuff. Thank you so much for coming 429 00:24:28,400 --> 00:24:30,560 Speaker 2: on the show. Really appreciate you breaking this down for us. 430 00:24:30,640 --> 00:24:32,480 Speaker 1: My pleasure, Lisa, thank you for having. 431 00:24:32,240 --> 00:24:36,199 Speaker 2: Me listen to Zak Nikatar, former Undersectary of Commerce for 432 00:24:36,280 --> 00:24:39,239 Speaker 2: President Trump and also an international trade attorney. Appreciate her 433 00:24:39,280 --> 00:24:41,520 Speaker 2: for coming on the show. Appreciate you guys at home 434 00:24:41,560 --> 00:24:43,880 Speaker 2: for listening every Tuesday and Thursday, but you can listen 435 00:24:43,920 --> 00:24:45,720 Speaker 2: throughout the week. I also want to thank John Cassio 436 00:24:45,720 --> 00:24:48,080 Speaker 2: and my producer for putting the show together. Until next time.