Speaker 1: Hey guys, Saga and Crystal here.
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Speaker 1: Good morning, everybody, Happy Tuesday. Have an amazing show for
Speaker 1: everybody today. What do we have, Crystal, indeed we do.
Speaker 2: So we are not spending the entire show on tariffs,
Speaker 2: but we are spending just the fast show. I'm deriff,
Speaker 2: so we're going to give you the very latest. Trump
Speaker 2: made a bunch of comments yesterday where the markets are
Speaker 2: all that good stuff.
Speaker 4: We've also gotten your reporting.
Speaker 2: Apparently, Elon Musk and Scott Bessett made personal appeals to
Speaker 2: Trump Bessett to change the messaging on tariffs. Elon musk
Speaker 2: to change the actual reality of the tariffs. We're taking
Speaker 2: a deep dive into China's response and what that could
Speaker 2: mean for them and for us and for the world.
Speaker 2: CEO of a clothing company is joining us to break
Speaker 2: down specifically just nuts and bolts, how he's the ame
Speaker 2: out the terrors, how it will impact his business, so
Speaker 2: we can get kind of like the granular real world
Speaker 2: impact in the sense of that. At same time, Baby
Speaker 2: was at the White House yesterday. Yes, Trump pushed his
Speaker 2: chair in for him. No worry, it's all taken care of.
Speaker 2: This comes on the same day that we learned that
Speaker 2: the Israeli killed an American citizen in the West Bank.
Speaker 4: So there's obviously a lot to discuss there.
Speaker 2: Trump also announced in that set that same he wasn't
Speaker 2: calling it a press conference.
Speaker 1: Whatever, he called it edible offspring.
Speaker 2: He announced direct talks with Iron So this comes at
Speaker 2: a time of deep concern that we could be headed
Speaker 2: towards a war. So maybe maybe this is an off ramp.
Speaker 2: We can all be really hopeful about that. And the
Speaker 2: Supreme Court handed the Trump administration a big win yesterday
Speaker 2: on the Alien Enemies Act. YouTuber Piasco, who happens to
Speaker 2: also be an attorney with deep knowledge of these issues
Speaker 2: going to join us to break down what exactly this
Speaker 2: ruling means, both for the peace people who are already
Speaker 2: in now Salvador and for the future of the Trump
Speaker 2: administration's use of this controversial approach.
Speaker 4: So a lot to get to. As I said in
Speaker 4: the show today.
Speaker 3: Yes, that's right, jam packed. But thank you, by the way,
Speaker 3: to all of our premium subscribers. We really appreciate you,
Speaker 3: and you guys got a taste of what some of
Speaker 3: it looks like. We had our Ama yesterday where we
Speaker 3: fell for the trolling from mister Walter Bloomberg, who's a
Speaker 3: completely bake account. But we all lived that together live,
Speaker 3: and so that's what you're missing out on. Although we
Speaker 3: did post a little bit of preview breaking Points dot com.
Speaker 3: If you can't afford a premium membership or anything like that,
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Speaker 3: send it to a friend. It's really helpful. Take your
Speaker 3: favorite episode, maybe the Yesterday's the Tariff episode. I thought
Speaker 3: that one was particularly good. As Crystal said, let's go
Speaker 3: ahead and get to the tariffs. Some major comments from
Speaker 3: Donald Trump doubling down, tripling down, quadrupling down, despite a
Speaker 3: lot of the cope that is out there right now.
Speaker 3: While he was in the Oval Office, here's what he
Speaker 3: had to say, Well.
Speaker 5: We're not looking at that. We have many, many countries
Speaker 5: that are coming to negotiate deals with us, and they're
Speaker 5: going to be fair deals. We're going to have one
Speaker 5: shot at this, and no other president's going to do
Speaker 5: this what I'm doing. And I'll tell you what, it's
Speaker 5: an honor to do it because we have been just
Speaker 5: just destroyed what they've done to our system. Tending millions
Speaker 5: and millions of cars into the US. But we don't
Speaker 5: have a car that's been sold to the European Union
Speaker 5: or other places. But let's go for the European Union.
Speaker 5: And it's not going to be that way. It's got
Speaker 5: to be fair and reciprocal. It's got to be fair.
Speaker 5: It's not fair. If you look at what's happening, you're
Speaker 5: going to see this today. I said, we're going to
Speaker 5: try and get groceries down right, an old fashioned term,
Speaker 5: but a beautiful term. Eggs. So when I got in
Speaker 5: the press went absolutely crazy. The first week they said
Speaker 5: eggs have quadrupled in price. I said, I just got here,
Speaker 5: tell me about it. And Brooke Rowlins and our team
Speaker 5: did agree. Job and eggs are down now seventy nine
Speaker 5: percent and they're all over the place.
Speaker 6: Do you expect any of these deals to be made
Speaker 6: before April ninth? And secondly, there's been some mixed messages
Speaker 6: from your administration. You're talking about negotiations and yet others
Speaker 6: in your administration are saying that these tariffs are actually permanent.
Speaker 5: What is that actually, Well, they can both be true.
Speaker 5: That can be permanent tariffs and they can also be
Speaker 5: negotiations because there are things that we need beyond tariffs.
Speaker 5: We need open borders. You know, we almost had to
Speaker 5: deal with China.
Speaker 1: They can be permanent or they can be held for negotiating.
Speaker 2: They can be permanent and they can be negotiations. That
Speaker 2: clears that up.
Speaker 3: For us as part of the problem. That's why the
Speaker 3: markets are all over the place. We can go ahead
Speaker 3: and put the current screenshot of the markets. The current
Speaker 3: s and P five hundred futures are up some two
Speaker 3: point five percent, and the Japanese nik Index rallied about
Speaker 3: six percent last Night on the hopes of tariff relief.
Speaker 3: But the thing is is that the message is incredibly
Speaker 3: unclear and everybody is just completely grasping for because for
Speaker 3: all of the talk of negotiation from Secretary Besent from
Speaker 3: Donald Trump, there there's also the undertone of also, it
Speaker 3: may not matter at all, and what the timeline of
Speaker 3: that obviously still has massive ramifications as all of these
Speaker 3: tariffs continue to come into place. For example, if you're
Speaker 3: a country and you're watching Peter Navarro talk about the
Speaker 3: removal of reciprocal tariffs from say Vietnam, you really have
Speaker 3: no idea what to do.
Speaker 1: Let's take a listen to that.
Speaker 7: When you have a country like Vietna. Let's take Vietnam.
Speaker 8: When they come to us and say we'll go to
Speaker 8: zero tariffs, that means nothing to us because it's the
Speaker 8: non tariff cheating that matters. Let's do Vietnam, Joe, they
Speaker 8: sell us fifteen dollars for every one dollar we sell LAMB.
Speaker 8: About five dollars of that fifteen is China transshipping to
Speaker 8: Vietnam to evade their tariffs.
Speaker 2: What we're all trying to understand is then if there
Speaker 2: are going to be negotiations, and you're saying zero is
Speaker 2: not enough?
Speaker 9: What is enough?
Speaker 8: Zero is a small first start?
Speaker 1: Okay, then what is enough? And let me ask you
Speaker 1: but related to them, well, let me.
Speaker 8: Answer that question.
Speaker 7: Let me answer. Let's take them one at a time.
Speaker 7: We got plenty of time. So what is enough? Okay?
Speaker 8: You take any given country that are like fingerprints. They
Speaker 8: all cheat us in a different way. So here are
Speaker 8: the things they cheat us on. Some of them engage
Speaker 8: in currency manipulation. Some of them have a hefty vat tex.
Speaker 8: All of them dump into our markets. All of them
Speaker 8: engage in heavy export subsidies and government subsidies. All of
Speaker 8: them put up these phony technical and fido sanitary barriers
Speaker 8: to our ag products and our autos and everything in between.
Speaker 8: Many of them steal our intellectual property. A lot of
Speaker 8: them runs sweatshop labor, including forced child labor. They have
Speaker 8: pollution havens. So when you say to me, ed, what
Speaker 8: do we want from them?
Speaker 3: We want fairness, So negotiation and zero is not enough.
Speaker 1: This is the difficulty. Now what are we doing here?
Speaker 3: I would also point out, yes, it is true Vietnam
Speaker 3: is a haven of transhipping. Part of the problem is
Speaker 3: that we actually told companies were like, don't produce in China,
Speaker 3: you should go to Vietnam.
Speaker 1: Yeah's part of the reason.
Speaker 3: One at that situation, we literally wanted that to happen
Speaker 3: because Vietnam is a much better ally to us and
Speaker 3: actually has pretty good relations.
Speaker 2: So now what Another example of that is Apple has
Speaker 2: moved some significant portion of their iPhone manufacturing to India.
Speaker 4: Yeah, I know, same.
Speaker 2: Reason, because they were, Okay, you guys aren't happy with China.
Speaker 4: We got it, we got it.
Speaker 2: India's an ally, We'll move some of our production there.
Speaker 2: India got hit while they're like fifty percent tariffs as well.
Speaker 1: Tariff that's right.
Speaker 2: So yeah, I mean all of this, many of these
Speaker 2: dynamics were actually created by intentional American policy to move
Speaker 2: manufacturing out of China to other allies. And now it's like, okay,
Speaker 2: well they're going to have huge tariffs as well. You
Speaker 2: could see from the stock market they are clearly betting
Speaker 2: that Trump is bluffing. They are betting that no, he
Speaker 2: doesn't really mean it when he says that they're you know, permanent.
Speaker 2: And this is, by the way, according to the reporting
Speaker 2: from Jeff Stein, from Andrew ross Erkin, from other people,
Speaker 2: who are talking to, you know, people in and around
Speaker 2: Trump's orbit. He's saying the same things publicly that he's
Speaker 2: saying privately. He's saying, no, I don't intend to roll
Speaker 2: these all back. And not only do you have Peter
Speaker 2: Navarro there who says, no, zero percent tariffs.
Speaker 4: That's not good enough, that's not good enough.
Speaker 2: You also had Trump in that press conference saying the
Speaker 2: EU had offered zero for zero tariffs, also not good enough.
Speaker 2: So I'm not sure what gives them the confidence that
Speaker 2: they feel like he's imminently going to, you know, announce
Speaker 2: some oh fifty countries have made a deal and look
Speaker 2: at these amazing things that I want.
Speaker 4: Maybe maybe they're right.
Speaker 2: It's certainly possible Trump has put tariffs on and backed off,
Speaker 2: you know, in just the past few months we have
Speaker 2: seen this all play out. But I do think the
Speaker 2: market is not pricing in enough uncertainty about how Trump
Speaker 2: may ultimately handle this, because I think he's loving all
Speaker 2: of it.
Speaker 4: I think she loves being in the what.
Speaker 2: Are they call it, the catbird seat and having all
Speaker 2: of these people have to come to him, and CEO's
Speaker 2: calling him and begging for relief and trying to petition,
Speaker 2: the king and all of these countries blowing up his phone.
Speaker 4: He loves this. So, like I said, we'll see.
Speaker 2: I also think it's important to keep in mind, you know,
Speaker 2: in the same way that Trump after like he does
Speaker 2: January sixth, he basically gets away with it. He has
Speaker 2: all these criminal charges, he's found guilty of multiple felonies,
Speaker 2: he still gets elected president of the United States.
Speaker 4: He has zero f's to give.
Speaker 2: Like he thinks, all these people told me I was
Speaker 2: wrong before and they were proven wrong, and here I am,
Speaker 2: and they don't know anything. And rather than having people like,
Speaker 2: you know, a serious people like Bob Littheiser in there,
Speaker 2: he has like clowns like Howard Letnox. So he intentionally
Speaker 2: constructed a circle that was never going to tell him
Speaker 2: no on anything that he's ultimately doing. And Peter Rovarro
Speaker 2: probably has a similar mindset. I mean, this is man
Speaker 2: who was in prison for contempt for refusing to testify
Speaker 2: to Congress about again January sixth. So he has really
Speaker 2: emerged as the most sort of like ideological, hard line
Speaker 2: pro tariff figure within the Trump administration. And so I
Speaker 2: think his mentality probably plays into this dynamic as well.
Speaker 1: There's no question. I mean Navarro.
Speaker 3: Also, people need to remember the origins of the first term.
Speaker 3: He was effectively banned from the Oval office for almost
Speaker 3: a year the first year of the Trump administration, when
Speaker 3: Trump really handed a lot of the reins over to
Speaker 3: Jared Kushner, to Gary Kohne, to a lot of those
Speaker 3: types of folks which did everything they could to keep
Speaker 3: him out of that, out of the decision making process.
Speaker 3: Even during COVID there was a lot of Navarro efforts
Speaker 3: to try and to bring some manufacturing not have so
Speaker 3: much reliance on PPE and personal protective equipment for hospitals, ventilators,
Speaker 3: things like that. Jared Kusher completely put the kybosh on that.
Speaker 3: Will Kusher's not here at this time around, neither is
Speaker 3: Gary Cohne. Trump does see a central failure of his
Speaker 3: presidency to not be able to many of those first
Speaker 3: things in the first term, and so he wants to listen.
Speaker 3: And then second is I have noticed this the best
Speaker 3: way for people like Navarro and others Bannon, etc. They
Speaker 3: can everything can be forgiven if you were willing to
Speaker 3: back him on stop the steal. In the two cases,
Speaker 3: those two cases I just mentioned, they literally went to
Speaker 3: jail basically, rather than to turn and to try testify
Speaker 3: against Donald Trump. There can really be no greater expression
Speaker 3: of literal loyalty. At the same time, what the markets
Speaker 3: are hoping and grabbing onto right now is this right here,
Speaker 3: let's put it up there on the screen. So Secretary
Speaker 3: Bessant apparently flew to Florida to lobby Donald Trump on
Speaker 3: the tariff message over the weekend, and this explains some
Speaker 3: of the talk that we saw yesterday. Secretary Besson urged
Speaker 3: Trump quote to focus his message on negotiating favorable deals
Speaker 3: or risk the stock market creating further Bessant, who quote
Speaker 3: landed with the President White House on Marine one Sunday night,
Speaker 3: told Trump that Mark Kid would remain in peril unless
Speaker 3: he started putting more emphasis on talking about his endgame
Speaker 3: with the tariffs winning deals with other countries. So that's
Speaker 3: part of the reason at least the word negotiation has
Speaker 3: crept back up into the White House lexicon yesterday. But
Speaker 3: it's one of those where it's so muddled that people
Speaker 3: really are grasping at something I do not see right now.
Speaker 3: For example, they've said, oh, well, we've had all see
Speaker 3: we've had leaders of seventy some countries call the White House.
Speaker 1: First of all, it sounds super inefficient.
Speaker 3: But the second is, how are you going to get
Speaker 3: this resolved on a reasonable enough timeframe?
Speaker 1: I want people to understand the stake.
Speaker 3: So a friend of mine, Ryan Peterson, the Flexport guy,
Speaker 3: the CEO of Flexport, you know, he just revealed yesterday.
Speaker 3: Quote on April seventeenth, the US Trade Representative's Office is
Speaker 3: expected to impose fees of one point five million per
Speaker 3: port call for ships made in China, and for five
Speaker 3: hundred thousand to a million if an ocean carrier carries
Speaker 3: a single ship made in China, or even one has
Speaker 3: on order from a Chinese shipyard. Now, who does anyone
Speaker 3: want to guess how many ocean containers ships were built
Speaker 3: by the United States of America last year?
Speaker 1: The answer is zero, Just so everybody knows.
Speaker 3: Quote, there are actually only twenty three American made and
Speaker 3: crude container ships in the entire world today. They are
Speaker 3: all servicing domestic ocean freight. They are quote tiny compared
Speaker 3: to today's mega ships, and they are not even allowed to.
Speaker 1: Sail to overseas ports.
Speaker 3: So what do you think is going to happen if
Speaker 3: you make a company pay a million five every time
Speaker 3: they dock.
Speaker 1: What are you gonna do.
Speaker 3: You're gonna dock less or no, or you're gonna dock once.
Speaker 3: So what does that mean? That means a lot of
Speaker 3: these smaller ports, Baltimore and a few others. Yeah, see
Speaker 3: you longshoremen, good luck. I hope that you enjoy not working.
Speaker 4: They'll just go to one big port. They're gonna to
Speaker 4: l truck everything.
Speaker 1: Even worse, what happened during COVID.
Speaker 3: Does anyone remember all of that nightmare in the Port
Speaker 3: of Los Angeles.
Speaker 4: That's what was in part massive inflation.
Speaker 1: Massive inflation.
Speaker 3: So it's like you can see this stuff coming from
Speaker 3: a mile away and guess what, guys, that's coming in
Speaker 3: nine days. Does anybody think that that is going to
Speaker 3: be solved in nine days? And this is a country China,
Speaker 3: which has actually called our bluff multiple times. We're about
Speaker 3: to talk about this in a little bit on China.
Speaker 3: I think what I would really hope everybody from the
Speaker 3: show can take away is to get away with the
Speaker 3: boomer mindset of these are some backwards No, no, no,
Speaker 3: We're dealing with a hyper sophisticated global powerhouse, one that
Speaker 3: has levers of power that we could only dream of
Speaker 3: in the United States of America. And so when I
Speaker 3: look at this and then I see the President talking
Speaker 3: about a one hundred and four percent tariff that is
Speaker 3: going to be played not only on all Chinese goods,
Speaker 3: but then this one point five million dollar port call,
Speaker 3: I am looking at a literal mass explosion of supply
Speaker 3: chain disruption, you know, COVID level supply inflate, supply side inflation.
Speaker 3: And then also, do we not want more union worker jobs,
Speaker 3: not just in Los Angeles.
Speaker 1: I want them in Baltimore right over here.
Speaker 4: That's right, we don't.
Speaker 3: They're gonna skip it, and no one's gonna say, oh,
Speaker 3: you're giving into the Chinese guys again.
Speaker 1: You know, the problem is we have not spent any
Speaker 1: money building.
Speaker 3: Ships or boosting our shipyard industry for thirty five years.
Speaker 3: They have been pouring money into They beat us just
Speaker 3: because they paid for it. We can't just come in
Speaker 3: at the very last minute and be like, oh, sorry,
Speaker 3: you know, all thirty five years of rectifying decision or
Speaker 3: you know, bad decisions and all of that, we expect
Speaker 3: all of this stuff to open. Do you know how
Speaker 3: long it even takes to build a ship. I'm telling
Speaker 3: I beg people to go and look at these things.
Speaker 3: I took a trip once down to the Panama Canal.
Speaker 3: You can't even wrap your head around how big some
Speaker 3: of these mega container ships are. Some of us so
Speaker 3: big they still can't fit through the canal.
Speaker 2: That's what we're talking about, saying yeah, and I mean listen,
Speaker 2: you're still also relying on capitalists to take a look
Speaker 2: at that, you know, state of affairs and be like, oh,
Speaker 2: that makes me really want to manufacture in the US. Like,
Speaker 2: first of all, as we've discussed at nauseum at this point,
Speaker 2: like with the on again off against guys of madmen,
Speaker 2: the next administration may do total something totally different no
Speaker 2: one is going to And also courting a global recession,
Speaker 2: like a lot of big investments don't really get made
Speaker 2: in when you have a recessionary environment and you know,
Speaker 2: the chaos of it means that, yeah, everybody is just
Speaker 2: going to freeze into place. So when you don't pair
Speaker 2: it with any sort of concerted government spending and directed
Speaker 2: effort at industrial policy to you know, strongly encourage the
Speaker 2: capitalists to do the thing you want them to do,
Speaker 2: then you are unlikely to get the results that you want,
Speaker 2: because you can't just wave a magic wand and suddenly
Speaker 2: there are a bunch of American containerships. Also with regard
Speaker 2: to that, I saw that yesterday and it also triggered
Speaker 2: for me like, okay, okay, Well, that does not seem
Speaker 2: like an administration that is ready to back off of
Speaker 2: their maximalist, like terrorist protectionist position. That seems like an
Speaker 2: administration like a president who is all in on this direction.
Speaker 2: So you know, again, look, maybe the Wall Street maybe
Speaker 2: they're going to be right. Maybe they're going to prove
Speaker 2: Jeff Stine wrong for once. By the way, there were
Speaker 2: people in Jeff Stein's timeline yesterday who were like, thank you.
Speaker 2: You know, I saw youim breaking points and I listened
Speaker 2: to you, and I saved a bunch of money by
Speaker 2: you know, moving things around or taking money out of
Speaker 2: the stock market, et cetera. But maybe this time Justine
Speaker 2: is going to be wrong and the Wall streeters are
Speaker 2: going to be right.
Speaker 1: But I don't know where.
Speaker 4: They're getting their confidence.
Speaker 2: A couple last things we have the Larry Fink he
Speaker 2: uh sounded off about how you know, he thinks very
Speaker 2: likely we are all ready in a recession. This is
Speaker 2: the CEO of Black Rock. Let's go ahead and take
Speaker 2: a listen to what he has to say.
Speaker 7: Are we.
Speaker 1: Headed for recession? Are we in a recession?
Speaker 7: You know, most CEOs I talked to.
Speaker 5: I would say we are probably in a recession right now,
Speaker 5: right now, right now.
Speaker 2: And it's not just him, so he says most, not
Speaker 2: just him, most CEOs I talk to think we are
Speaker 2: in a recession right now. You can rust shure. This
Speaker 2: is a man who talks to a lot of CEOs.
Speaker 2: Let's put this CNBC to They're like pulling of their
Speaker 2: the CEOs that are in their network. Once CEO said,
Speaker 2: this is the Trump recession with tarff price increases, job
Speaker 2: losses coming, and a majority of the CEOs that they
Speaker 2: reached out to sixty nine percent expect a recession.
Speaker 4: Three quarters of.
Speaker 2: Those CEOs expect a recession to be moderate or mild,
Speaker 2: So they're not saying great depression kind of thing, but
Speaker 2: rather than severe. But you know, this still is an
Speaker 2: extremely pessimistic view of the economy and directly directly attributable
Speaker 2: to the policy decisions of Donald Trump.
Speaker 3: Yes, and this also right now you might say, don't
Speaker 3: you hate black Rock and all each other people. Yeah,
Speaker 3: but guess what they are? The market, Larry Fink literally
Speaker 3: is the market. So we should listen to what because again,
Speaker 3: you may not like these people. You may like to
Speaker 3: see him cry, and I think that's great as long
Speaker 3: as it doesn't affect you. But the problem is and
Speaker 3: the way that our world is set up today, specifically
Speaker 3: our country, our capital markets, those people when they say
Speaker 3: there's a recession, it becomes a self fulfilling prophecy. Those
Speaker 3: people are going to go from ten billion to five
Speaker 3: You're going to go from what negative five to minus
Speaker 3: five thousand, And that's a lot more dismaying for a
Speaker 3: lot of people.
Speaker 1: That are out there.
Speaker 2: All right, So let's dig in specifically on China. This
Speaker 2: is obviously a major part of the dynamic here, major
Speaker 2: impetus for the launching of this trade war. And Trump
Speaker 2: issued this on true social yesterday. Let's put it up
Speaker 2: on the screen, he says, yesterday China issued retaliatory tariffs
Speaker 2: of thirty four percent on top of they're already record
Speaker 2: setting tariffs, non monetary tariffs, a legal subsidization. I can't
Speaker 2: say that of companies and massive long term currency manipulation.
Speaker 2: Despite my warning that any country that retalities against the
Speaker 2: US by issuing additional tariffs above and beyond their already
Speaker 2: existing long term tariff abuse of our nation will be
Speaker 2: immediately met with new and substantially higher tariffs. Therefore, if
Speaker 2: China does not withdraw is thirty four percent increase of
Speaker 2: their already long term trading abuses by tomorrow that would
Speaker 2: be today now April eighth, the US will impose additional
Speaker 2: tariffs on China of fifty percent effective April ninth, that
Speaker 2: would be tomorrow. Additionally, all talks with China concerning their
Speaker 2: requested meetings with US will be terminated. Negotiations with other
Speaker 2: countries which have also requested meetings will begin taking place immediately.
Speaker 2: Thank you for your attention to this matter. So, Sagara,
Speaker 2: assuming that these new tariffs on top of the original
Speaker 2: tariffs go into place, you're talking about in more than
Speaker 2: one hundred percent tariff.
Speaker 1: One hundred and four specific yes.
Speaker 2: Specifically one hundred and four percent on China.
Speaker 3: Yes, man, that must be really tough actually for the enforcers,
Speaker 3: because you can't just double it whenever you come to
Speaker 3: the price, you actually have to multiply for the one
Speaker 3: oh four sure, right, let's go through some of the things,
Speaker 3: and this is again we need respect for China. We
Speaker 3: can be in terms of on shoring and all of this,
Speaker 3: and we can acknowledge many of the sins of the
Speaker 3: past about as stealing you know, technology, trade barriers, currency manipulation.
Speaker 1: All of that is old news.
Speaker 3: Now we are living in twenty twenty five in a
Speaker 3: world where they have one of the world's best car companies,
Speaker 3: are a net manufacturer, a net exporterer, and have some
Speaker 3: of the best manufacturing high tech and low tech in
Speaker 3: the entire world. So let's go and put this up
Speaker 3: there on the screen from the Financial Times. I was
Speaker 3: genuinely amazed reading through all of this. The Chinese know
Speaker 3: exactly how to destroy us, and they have a whole
Speaker 3: of government approach. They don't need to, you know, mess
Speaker 3: with the Federal Reserve, they don't have to deal with Congress.
Speaker 3: They are basically doing everything we would want to do
Speaker 3: if we wanted a coherent tariff strategy.
Speaker 1: So let's start with the first thing.
Speaker 3: Not only did they impose the thirty four percent reciprocal
Speaker 3: tariff or sorry that yeah, thirty four percent in terms
Speaker 3: of what we put into place, they immediately also held
Speaker 3: back several things that they could use for maximum pain
Speaker 3: on the US. So first example is control of rare
Speaker 3: earth minerals. Some ninety percent of rare earth minerals so
Speaker 3: called rare earth minerals as Ryan likes to say, come
Speaker 3: from China, at the very least the finished refined products
Speaker 3: over ninety percent, all of them coming to the United
Speaker 3: States require an export license. Those export licenses, yeah, you
Speaker 3: can basically say goodbye to that. If something like this
Speaker 3: goes into effect, even with the tariff, they'll simply just
Speaker 3: not export it. Number two, there was a theory that
Speaker 3: this would destroy the domestic Chinese economy. Well, unlike this
Speaker 3: stupid country, what are the Chinese doing? They're saying, Okay, well,
Speaker 3: we control our central bank and it's all controlled by
Speaker 3: a single entity, the CCP. We will then move to
Speaker 3: immediately lower borrowing costs for all domestic business in China.
Speaker 3: We will basically facilitate a boom in terms of liquid money.
Speaker 3: Number two, we will pump as much money into the
Speaker 3: domestic economy as necessary to boost domestic demand and spending,
Speaker 3: and to make sure that our citizens do not have
Speaker 3: a decrease in quality of life and the business circle
Speaker 3: remains squared. Those are all the things that they are
Speaker 3: doing and can do like this, all of those we
Speaker 3: have to rely on some you know, stage in the
Speaker 3: Federal Reserve to wake up from his nap three months
Speaker 3: from now, hope and pray. We also, if we want
Speaker 3: any stimulus, what do we have to wait for Mike Johnson. Yeah,
Speaker 3: I'm sure we're going to get on top of that.
Speaker 1: Tomorrow.
Speaker 4: They're going in the opposite.
Speaker 3: We're actually going to cut it right exactly. So let's
Speaker 3: think about who you would rather be. Would you rather
Speaker 3: be the person who has like full control over your
Speaker 3: entire economy, has deeply studied its enemy, who has studied
Speaker 3: now four years of stupid sanctions on Russia, which is
Speaker 3: the greatest training playbook in the history of mankind for
Speaker 3: the Chinese. Or would you rather be you know, we
Speaker 3: just had this, or you're going to hear a segment
Speaker 3: with Andrew Chan the country which mindlessly scrolls TikTok and
Speaker 3: which buys Sian and Temu products and is literally addicted
Speaker 3: to it.
Speaker 1: I think I know which one I'd rather be.
Speaker 2: Yeah, which at the center of our social contract is
Speaker 2: these cheap goods, Like our public has not been primed
Speaker 2: you be willing to experience any pain around consumer goods.
Speaker 2: As you know, I mean we saw in inflation how
Speaker 2: much that urt people and how much of a major
Speaker 2: political issue it became.
Speaker 4: And socger to add to your list.
Speaker 2: You know, another thing that the Chinese government has going
Speaker 2: for it, and I fully understand this authoritarian government. It's
Speaker 2: hard to know exactly what public opinion is, but Harvard
Speaker 2: did a study of public sentiment visa VI the government,
Speaker 2: and it's extremely popular. I'm talking like ninety five percent
Speaker 2: saying either satisfied or highly satisfied. They have a lot
Speaker 2: more unity around their government than obviously here. Trump is
Speaker 2: very divisive, he is pretty he's quite unpopular, he's you know,
Speaker 2: net underwater at this point. You have massive protests that
Speaker 2: were happening in the streets last weekend. So you have
Speaker 2: a society that is not at all bought in on
Speaker 2: this project whatsoever. And you know, I think that also
Speaker 2: gives them a tremendous advantage in terms of what they
Speaker 2: can ask their public to accept. And you know, we also,
Speaker 2: like I think a lot of our mental model are
Speaker 2: very outdated. I was just thinking about the you know,
Speaker 2: the example of BYD like BYD this giant Chinese automaker,
Speaker 2: seller of evs globally and hybrid models as well, and
Speaker 2: we don't buy it their cars like, they don't rely
Speaker 2: on the US domestic market.
Speaker 4: And guess what.
Speaker 2: BYD is growing like gangbusters and they are now selling
Speaker 2: more cars than Tesla does. In twenty twenty four, they
Speaker 2: sold four point twenty seven million vehicles. So it is
Speaker 2: an instance of Hey, guess what, they didn't need us.
Speaker 2: They didn't need us for this company to be successful.
Speaker 2: They didn't need us for this company to grow wildly,
Speaker 2: and they have the whole rest of the world that
Speaker 2: they can that they can sell to. And I think
Speaker 2: your point about Russia is also really important one, just
Speaker 2: in terms of how I've been thinking about this. You know,
Speaker 2: every like mainstream economist thought that the devastating sanctions we
Speaker 2: put on Russia would be so destructive to their economy.
Speaker 2: I mean, we really tried to give them the financial
Speaker 2: death penalty.
Speaker 3: We don't even have tariffs on them because we have
Speaker 3: no trade that's right. Yeah, we literally cut.
Speaker 2: Them off all out economic warfare, yes against Russia, and
Speaker 2: guess what, like, I'm not going to say it didn't
Speaker 2: hurt them. And they also have the wartime economy to
Speaker 2: help to compensate. But it did not end them. It
Speaker 2: did not destroy them. They were able to figure it
Speaker 2: out because they had been thinking for a while and
Speaker 2: planning for a while, knowing that we are fickle and
Speaker 2: that they are in an adversary, and knowing that this
Speaker 2: eventuality could be playing out. China has also been thinking
Speaker 2: and preparing and is in a much better position to
Speaker 2: shoulder such an economic blow than Russia is. So I
Speaker 2: think that if the Trump people think that they're going
Speaker 2: to be able to bully and punish China into submission here,
Speaker 2: I think they are completely wrong about.
Speaker 1: One hundred percent. So let's return to the shipbuilding thing.
Speaker 3: I was thinking about a nice little statistic here from
Speaker 3: our friend Arno. In twenty twenty four loan CSSC, the
Speaker 3: Chinese State Shipbuilding Corporation, built more commercial ships by tonnage
Speaker 3: than the entire US shipbuilding industry has built since the
Speaker 3: end of World War Two.
Speaker 1: Okay, so let's let that sit in.
Speaker 3: Let's say that we have you know, this trade war
Speaker 3: one point five million port call and America's shipbuilding industry,
Speaker 3: which is defunct and basically rotting from rust. We're going
Speaker 3: to spin that up miraculously over a five year period
Speaker 3: where we'll continue to produce nothing. As I said, in
Speaker 3: twenty twenty four, we produced not one. They produced more
Speaker 3: in one year than we did for the entire period
Speaker 3: of the last seventy five years, and we eventually miraculously
Speaker 3: are able to turn one out. We are still seventy
Speaker 3: five years behind where they are now. This let's again
Speaker 3: think about capital markets and efficient market hypotheses and all
Speaker 3: of these other things. I will remind you of my
Speaker 3: favorite stat from Joe Eisenthal. The Hong Kong or the
Speaker 3: Chinese Stock Exchange in Shanghai is flat to two thousand
Speaker 3: and nine. We are up over even with the dip
Speaker 3: some one hundred to eighty percent just over the last
Speaker 3: five years.
Speaker 1: Are you more.
Speaker 3: Materially wealthy as a country by having that eighty percent
Speaker 3: bump in the S and P five hundred? Obviously no.
Speaker 3: We are a massive service based dominated economy. And I agree,
Speaker 3: of course with the idea of bringing back manufacturing. However,
Speaker 3: you cannot just simply flip a switch. The amount of
Speaker 3: money it would require to reach even ten percent of
Speaker 3: the CSSC's shipbuilding capacity would make Mike Johnson and Ran
Speaker 3: Paul have a heart attack. That's just to reach ten percent.
Speaker 3: They don't agree that's the truth. So if you don't agree,
Speaker 3: then just simply condemn us, you know, to our current
Speaker 3: fate of consuming only fans and pornography and sports betting
Speaker 3: and Timu and Schian.
Speaker 1: But don't do some half assed shit, which is the
Speaker 1: worst work right now. Is now we're just going to
Speaker 1: be poor and addicted.
Speaker 2: Poor, addicted, and your wages are going to be lower.
Speaker 2: You're going to have less of a safety net. Like
Speaker 2: it is the worst of all worlds. It's taking things
Speaker 2: that were bad and making them worse. That's the direction
Speaker 2: that they are headed in with all of this. We
Speaker 2: have to say those they are borrowing some from Chinese thought.
Speaker 2: There's some strong Mawist sentiments being expressed from the Treasury
Speaker 2: Secretary himself, Scott Bessant. This was pretty entertaining to listen to.
Speaker 2: He went on with Tucker Carlson, take a lism.
Speaker 9: What we are doing on one side, the president is
Speaker 9: reordering trade. On the other side, we are shedding excess
Speaker 9: labor in the federal government and bringing down federal borrowings.
Speaker 9: And then on the other side that will give us
Speaker 9: the labor that we need for the new manufacturing, and
Speaker 9: we're going to relever the private sector. So the private
Speaker 9: sector in essence has been in recession during the Biden years,
Speaker 9: and this is an opportunity to right size the federal
Speaker 9: government and unleash the private sector again.
Speaker 2: So what he's talked about is how these federal government
Speaker 2: workers who were laid off, you know, the people who
Speaker 2: were like research and cancer or whatever, they can now
Speaker 2: go to work in the new factories for being proct online,
Speaker 2: which again very reminiscent of.
Speaker 1: The efforts to your cultural revolution.
Speaker 2: Cultural revolution put the intellectuals and the scientists to the
Speaker 2: re education camp, sent them into the factory. Of course,
Speaker 2: to your point, there's no actual investment in creating those factories,
Speaker 2: so the factories aren't actually going to come. It's just
Speaker 2: going to mean we're going to have less cancer research
Speaker 2: and people will be poor.
Speaker 3: Yeah, So it is funny, although if you read the
Speaker 3: Three Body Problem, you do know that there are of
Speaker 3: course benefits, as somebody who wants to aliens revealed to
Speaker 3: be to the United States, so that that was the
Speaker 3: only benefit of the Cultural Revolution from that book.
Speaker 1: Sorry, I guess I just spoiled it. But whatever the
Speaker 1: wor three it's it's been out since two thousand and six.
Speaker 1: They made a Netflix document or a Netflix thing about it.
Speaker 1: Get them. I can't get any more. But you should
Speaker 1: read the book. Yeah, it's it's amazing.
Speaker 3: And again, you know, even almost to defend Mao and
Speaker 3: all these people, they even had a program at least
Speaker 3: to facilitate that. They had the Red Arm you know
Speaker 3: whatever it was called, that the Red Guards and others
Speaker 3: to facilitate you know, the movement of these mass intellectuals
Speaker 3: and state capacity, et cetera. And they had quotas and
Speaker 3: they had a system. It didn't always work, obviously, you
Speaker 3: had to come up.
Speaker 1: With the fake things.
Speaker 3: I do recommend if anybody ever wants to you should
Speaker 3: read Ezra Vogel has a biography of Deng Xiaopang and
Speaker 3: Dang specifically was purged and was one of these people
Speaker 3: who was purged and actually sent to go work in
Speaker 3: a factory and his period during the Cultural Revolution and
Speaker 3: the Great Leap Forward is absolutely fascinating to actually go
Speaker 3: and to study it eventually informed the modern Chinese model
Speaker 3: of where we are today. So yes, if we would
Speaker 3: like to repeat the mistakes of China.
Speaker 1: I guess we can.
Speaker 3: You know, maybe our Dang is somewhere out there. He's
Speaker 3: a fired NIH worker who stitching. Was it screwing the
Speaker 3: tiny little screw?
Speaker 4: Yeahtle power bok into the iPhone?
Speaker 1: Fifteen years from now, he will come and save us or.
Speaker 2: She so well, he's going to be replaced by robots.
Speaker 2: So anyway, Also, according to Unk.
Speaker 1: Maybe we need an AI ding job. Honestly, we could
Speaker 1: do worse than AI danger.
Speaker 2: Listen, I'm coming around to the view that maybe we
Speaker 2: do need to just accept our fate with THEI overlords
Speaker 2: because the current human model is not going also all
Speaker 2: that great in my personal estimation. But I mean, look, people,
Speaker 2: I believe in humanity.
Speaker 4: It's a joke.
Speaker 3: I believe in humanity. I believe in democracy. But you
Speaker 3: can't help but look at the Chinese model and be like,
Speaker 3: this is obviously better, Like it's obviously working better than
Speaker 3: what we have right here. I'm not saying it would
Speaker 3: work here, obviously, wouldn't. We don't have one billion Han
Speaker 3: Chinese seventy five or what more eighty years of psyop
Speaker 3: population to believe in all this, We're not not ethnically
Speaker 3: the same yes, there, we don't have a ten thousand
Speaker 3: year history or whatever two thousand year history of civilization
Speaker 3: and all that said, you can clearly see that there
Speaker 3: are major advantages to this like well executed authoritarian model,
Speaker 3: and that when we're going going up against them with
Speaker 3: a lot of the weaknesses that we have as a
Speaker 3: result of like degenerate capitalism, that we really are like
Speaker 3: the caricature in some ways of what they think of
Speaker 3: us and how they justify their authoritarianism over their population.
Speaker 3: If you look at many of the results, our own
Speaker 3: consumer results are entertainment results. What Americans smen to choose
Speaker 3: to do their time. Obesity, you know, like the constant
Speaker 3: chase of dopamine hits. Like that is what this country
Speaker 3: is ultimately all about. I was really thinking about that
Speaker 3: with cars, like what distinguishes the American car jeeps, which
Speaker 3: are pieces of shit with coolers and heated seats that
Speaker 3: are gigantic that break down.
Speaker 1: Every two to three years.
Speaker 3: Yeah, they're big, they're comfy, they have all these dumb
Speaker 3: ass features, tailgating seats right that they charge you seventy
Speaker 3: five thousand dollars and somebody who makes sixty grand years like, yeah,
Speaker 3: let me get a twenty five percent EIGHTPR on that,
Speaker 3: and I'll pay the monthly at a bare minimum rate
Speaker 3: for the next four hundred and twenty months.
Speaker 1: I'm not even making this shit up. This is reality.
Speaker 3: This is literally what America what it looks like. Or
Speaker 3: you know, you could have something different, but.
Speaker 2: Well, I will steal Ryan's point is, like, listen, one
Speaker 2: of the reasons I love this country is like our rights,
Speaker 2: like the freedom of speech, and increasingly like you can't
Speaker 2: feel comfortable to speak out on some key issues like,
Speaker 2: for example, Israel Palestine and think that that right is
Speaker 2: still intact. So if we're going to not even have that, like,
Speaker 2: what are what are we doing here? What are we
Speaker 2: getting out of this arrangement? At this point, let's go
Speaker 2: ahead and get to some of the cracks maybe that
Speaker 2: are emerging in the MAGA coalition.
Speaker 4: We could put the first one up on the scrade.
Speaker 2: This is certainly the biggest deal with regard to you know,
Speaker 2: who has the most power with Trump at this point.
Speaker 2: Washington Post reporting that Elon Musk made direct appeals to
Speaker 2: Trump to reverse sweeping new tariffs over the weekend as
Speaker 2: he was launching a barrage.
Speaker 4: They say, a social media post.
Speaker 2: We covered this yesterday, criticizing Peter Navarro, one of the
Speaker 2: lead White House advisors for President Trump's aggressive tarra plan.
Speaker 2: Musk was going over that same officials head and making
Speaker 2: personal appeals to Trump. They attempted intervention, confirmed by two
Speaker 2: people familiar, has not brought success so far, no kidding.
Speaker 2: Trump threatened Monday to add new fifty percent tariffs on
Speaker 2: imports from China, which we also just covered. Musk meanwhile
Speaker 2: posted a video to x in which the late conservative
Speaker 2: economists Milton Friedman, how did the benefits of international trade
Speaker 2: cooperation the impersonal operation of prices, as he put it,
Speaker 2: breaking down the sources of the materials that go into
Speaker 2: a simple wooden pencil. They go on to say that
Speaker 2: this is of course the highest profile disagreement between the
Speaker 2: president and one of his key advisors. So, you know, Musk,
Speaker 2: as we point it out yesterday, has been kind of
Speaker 2: like posting a little passive aggressively on Twitter about this.
Speaker 2: We've known that he's look, he's the he was praising
Speaker 2: Malay previously for rolling back tariffs. He said that thing
Speaker 2: publicly about how he wants there to be zero tariffs
Speaker 2: between the US and the EU and apparently is also
Speaker 2: trying to his pitch directly to the precedent's Yeah, are
Speaker 2: hitting his heat against the brick wall at this point.
Speaker 3: Look, he's his problem is that Trump only cares about
Speaker 3: a few things.
Speaker 1: Basically. Actually it may even be one. I'm not even
Speaker 1: particularly convinced he cares all that much about immigration.
Speaker 2: But whenever I think he thinks that's politically beneficial for.
Speaker 1: Him, yeah, does not. He does not actually pay attention.
Speaker 4: He owntsources that to Steve Stephen.
Speaker 3: Miller and to Tom Homan, and he's like, you guys,
Speaker 3: do a good job, and I'll back you up rhetorically,
Speaker 3: even though our deportations are basically flat to wherever the
Speaker 3: Joe Biden administration. But on trade, it's like the one
Speaker 3: thing that he does care about. So he's not going
Speaker 3: to listen to Elon and Elon confused that, you know,
Speaker 3: with Doge. As we said before, Trump never cares particularly
Speaker 3: about Doge.
Speaker 1: It's all rhetorically useful.
Speaker 3: Coalitionally, he can see there's some people who are jazzed
Speaker 3: up about it.
Speaker 1: He's like, yeah, okay, well.
Speaker 4: He likes that the Libs are freaking out.
Speaker 1: I got it.
Speaker 2: That's all they know he feels like the bureaucracy was
Speaker 2: opposed to him, so he feels like this is an
Speaker 2: enemy that's being sort of like defenestrated by Elon.
Speaker 4: So it's useful for.
Speaker 1: Him bingo exactly this time around.
Speaker 3: Though, And actually we shouldn't rule out Elon's ego in
Speaker 3: this either. Guess who's nobody's talking about right now, Elon,
Speaker 3: unless it's as a what tertiary story to the tariffs?
Speaker 3: Doge is like what you know, for people to pay
Speaker 3: attention to politics, It's like, we're not even paying attention
Speaker 3: to dose right now.
Speaker 1: We should.
Speaker 3: It will come back, I can guarantee you that. But
Speaker 3: that just feels like a very been there, done that thing.
Speaker 3: And if anyway, if anything, this is Trump reasserting himself
Speaker 3: into his own presidency, but in a sense doing it
Speaker 3: and not only what I think will eventually become a
Speaker 3: very unpopular and poisonous move for his own presidency, but
Speaker 3: he's doing it in a way that splits the coalition
Speaker 3: previously that was able to really bring him. He could
Speaker 3: be all things to all people as long as he
Speaker 3: was just kind of floating in the clouds.
Speaker 1: He got the.
Speaker 3: Tech right, the barstool right, Maga Wright, who obviously will
Speaker 3: back him no matter what. This is like the first
Speaker 3: time he's staking something out. And so, as you said,
Speaker 3: you begin to see the cracks that are forming. For example,
Speaker 3: here we've got Dave Portnoy. He says he's riding with
Speaker 3: Trump for now, but he said he's lost some twenty
Speaker 3: million dollars.
Speaker 1: Let's take a listen.
Speaker 7: I went super viral when I said I lost seven
Speaker 7: million dollars. I'd kill to be back to losing seven
Speaker 7: million dollars. I haven't even looked if I had to
Speaker 7: guess them down in these last three days, probably close
Speaker 7: to twenty I don't know, like ten to fifteen percent
Speaker 7: of my net worth poof. But I'm still here. That's
Speaker 7: the game. That's that's what I'm in. Like, Do I
Speaker 7: like it?
Speaker 5: No?
Speaker 7: Am I crying? Am I like?
Speaker 5: Oh?
Speaker 7: Whoa is me? I wish I voted for Kammalin? No?
Speaker 7: Do I wish this didn't go down like this? Yes?
Speaker 7: Am I in this to make money? Yes? Do I
Speaker 7: wish I had that money in my back in my investment?
Speaker 10: Oh?
Speaker 1: Yes, So we'll see, we'll cracks begin to emerge.
Speaker 2: Yes, it's also sad, like everyone's going to over Democrats
Speaker 2: myself included in the mid terms theame oh did he say?
Speaker 11: Thank? You?
Speaker 2: Should say that that might have been in the rent
Speaker 2: we had only lost seven million, not the twenty million
Speaker 2: like Jesus Christ.
Speaker 3: Well, it's going to get closer to forty to fifty million.
Speaker 3: What do you think that's going to be here, He's going.
Speaker 4: To be putting his pronouns in his bio here Verty.
Speaker 1: Yeah, I've seen that joke.
Speaker 3: Bill Ackman will be doing land acknowledgments by that time.
Speaker 1: Let's go to the next one here.
Speaker 3: This is Kevin O'Leary from Shark Tank begging Trump to
Speaker 3: back off.
Speaker 1: Let's take a lesson Kevin, your analysis of what's going on.
Speaker 11: Please, it's all Euro right now, because this is the
Speaker 11: test case right here. I think this is a really
Speaker 11: huge opportunity for Trump to find an off ramp here
Speaker 11: in the administration because it's not Vietnam. That's not big enough.
Speaker 11: But EU has a huge aspect that is so important,
Speaker 11: and that's on automotive because if you think about how
Speaker 11: restricted it's been in Germany alone, or in Switzerland or
Speaker 11: France about getting US cars into those markets. They've been
Speaker 11: so putatively oppressed with tariffs, and they're willing to wipe
Speaker 11: those out. So what you get to say is, look
Speaker 11: in the intern while we're building our own factories in
Speaker 11: the US. On whatever it is you want to look at,
Speaker 11: I'm going to show you how it's done with euro
Speaker 11: And the Eurozone has been brought to its knees. It's
Speaker 11: willing to go zero zero and open its markets up.
Speaker 11: And that's the key steward, the idea that you would
Speaker 11: open up the Marcus and set the path for every
Speaker 11: other negotiation of the other fifty nine countries. Whether it's
Speaker 11: Penguin Islands or whatever, it doesn't matter. This is the opportunity.
Speaker 11: This is the moment. And if Navaral sees it that
Speaker 11: way and advises Trump, and whether Lutnick sees it, but
Speaker 11: that's what the market is holding onto right now. The
Speaker 11: volatilities remain extreme, but this Eurozone deal is the beginning
Speaker 11: of a beautiful outcome, if you want to put it
Speaker 11: that way. And then you get to say to everybody, look,
Speaker 11: it was a lot of volatility, but I got us there.
Speaker 1: This is the moment.
Speaker 3: Yes, it was a lot of volatility, but I got there.
Speaker 3: It's like, yeah, I'm not thinking that's happening any.
Speaker 4: Type this man, they're so like a beautiful That is
Speaker 4: part of the.
Speaker 3: Yes when you deal with the think about for anybody
Speaker 3: out there. I'm sure this has never occurred before. You've
Speaker 3: ever worked for some shithead boss? How do you deal
Speaker 3: with it? And they're the most egomaniacal, annoying people on
Speaker 3: the playe.
Speaker 1: You got to stuck up to them a little bit.
Speaker 3: You got to just say, oh, you know, you got
Speaker 3: the olatter their ego, you know, to be able to
Speaker 3: work them towards a solution and make sure they think
Speaker 3: it's their idea. That's basically what we're dealing with here.
Speaker 3: Trump is that boss for the entire country.
Speaker 2: It's more how I felt with my kids when they
Speaker 2: were like four years old, to be honest with you
Speaker 2: and make them feel like it's their idea. Yeah, there
Speaker 2: you go, present them with choices, but only the choices
Speaker 2: you want them to go.
Speaker 4: Yeah, it's a similar strategy.
Speaker 1: Right thing, Go all right, let's now, let's go flip
Speaker 1: the coin.
Speaker 3: What does it really look like for a lot of
Speaker 3: the supporters here, we got Fox and Friends back in
Speaker 3: Trump up.
Speaker 1: Let's take a listen.
Speaker 12: This is precisely what Donald Trump said he was going
Speaker 12: to do, which is always a shock when a politician
Speaker 12: does that, and it's what he's been saying for literally decades,
Speaker 12: that this is what needs to be done to save
Speaker 12: the American economy.
Speaker 7: And I'll just bring up this go ahead.
Speaker 6: Well, I was just going to say, you have to
Speaker 6: just let him do what he's going to do. Give
Speaker 6: him some time, because he is a businessman, he's a billionaire,
Speaker 6: he knows what he's doing.
Speaker 4: And when does.
Speaker 6: America say we're tired of paying the most, We're tired
Speaker 6: of paying and paying and paying and doing what every
Speaker 6: administration has done. When do we say we're standing up
Speaker 6: for ourselves and we're going to make free and fair trade.
Speaker 6: We're if you're charging us this amount, we're going to
Speaker 6: charge you that amount.
Speaker 4: That is not what we're doing.
Speaker 3: We're doing.
Speaker 1: Gotta let the Yeah.
Speaker 3: Actually, that's the real problem, is anybody because as you
Speaker 3: and I know, there are well meeting people out there
Speaker 3: and they trust their president, they voted for him, and
Speaker 3: he tells you it's a reciprocal tariff, and they're like, yeah, okay,
Speaker 3: it's a reciprocal tariff.
Speaker 1: It's not a reciprocal tariff.
Speaker 3: We can break it down, the fake formula and all
Speaker 3: of that all you want, but empirically it's not reciprocal.
Speaker 1: It is something.
Speaker 3: It's a trade deficit tax basically. Okay, you can tell
Speaker 3: about too if you want. Doesn't sound so it sounds
Speaker 3: a little different though.
Speaker 10: I think whenever you do trade deficit tax, which is
Speaker 10: decades and we're trying to make up for this, this
Speaker 10: and this, and it's actually not reciprocal, and actually even
Speaker 10: if they drop the tariffs is zero, then we still
Speaker 10: are not going to take that int account. You're like, hmm, okay,
Speaker 10: all right, well I'm feeling a little bit differently about
Speaker 10: this now, aren't I. For example, we also have a
Speaker 10: new MAGA version of the World Economic Forum.
Speaker 1: Let's put this up there on the screen. I genuinely
Speaker 1: love this one.
Speaker 3: You do not need the new iPad, you do not
Speaker 3: need the new cell phone, you do not need the
Speaker 3: new video game console.
Speaker 1: You want them. There's a big difference. If you look
Speaker 1: at the people.
Speaker 3: Whinding about terrorifts, I challenge you to ask how their
Speaker 3: lives have been affected in any way. In other words,
Speaker 3: you will live in the pod and you will eat bugs.
Speaker 4: You will eat the bugs, and you will love it.
Speaker 3: I feel complicated, right because I kind of agree with him.
Speaker 3: I mean, is your life all that materially better because
Speaker 3: of the new iPad, the new cell phone, the new
Speaker 3: video game console, all the new products electronic products that
Speaker 3: we've been able to purchase since the Great Recession?
Speaker 1: I don't think so. I think we're much for poorer
Speaker 1: country actually.
Speaker 3: But you know, as we always say, if that's the
Speaker 3: only social contract that's on the table and you're going
Speaker 3: to screw with that, that's a big problem unless you're
Speaker 3: offering something very very different.
Speaker 1: I mean, really, what you I think a good middle.
Speaker 3: Ground or whatever for America would say, yeah, you can
Speaker 3: still have your iPad. We're going to try and build
Speaker 3: it here here all the steps that we're going to
Speaker 3: be able to do.
Speaker 1: It's a win win.
Speaker 3: You can still have your consumerism, we can still have
Speaker 3: it made here on the cell phone point, I mean,
Speaker 3: what do we really want me? I want competition. I
Speaker 3: want to see something interesting in something new. That's part
Speaker 3: of the thing that's exciting about BYD is finally you're like,
Speaker 3: at least it's different. I haven't seen a different new
Speaker 3: novel thing prop up technology wise, other than AI since
Speaker 3: the invention of the iPhone.
Speaker 1: That's it.
Speaker 3: And even with the AI thing, it's now all commoditized
Speaker 3: basically across the spectrum, and it all seems to be
Speaker 3: going the same way of monopolization and of being rolled up.
Speaker 1: That's a great thing.
Speaker 3: About America, about entrepreneurship, but we don't see a lot
Speaker 3: of that.
Speaker 1: And I don't know, just looking at this, I just
Speaker 1: know in my bones.
Speaker 3: Yeah, I did my whole rant about degenerate capitalism, but
Speaker 3: like that's who we are right now. And you know,
Speaker 3: it takes a literal cultural revolution to be able to
Speaker 3: move away from it. It took us seventy five years to
Speaker 3: get here. It'll probably take us, I would say, fifty
Speaker 3: to get out. You got to start small, and you
Speaker 3: got to give people buy in, otherwise this will be
Speaker 3: an aberration. My current prediction is that America will be
Speaker 3: the most neoliberal country on Earth in twenty twenty nine.
Speaker 3: Like in twenty twenty nine, after Donald Trump is gone,
Speaker 3: we will be like the gen Z is going to
Speaker 3: be the most neo libbed Milton Friedman out.
Speaker 1: That is generation so possible. I'm telling you, I'm calling
Speaker 1: from a mile away.
Speaker 2: I mean, I think I can't remember who it was
Speaker 2: that made this point, but it was a good one.
Speaker 2: It was people's mental model is that Trump is trying
Speaker 2: to bring us back to the fifties or sixties. But
Speaker 2: he's that's not what he's saying. He has consistently this
Speaker 2: campaign and into this administration and at his inauguration he
Speaker 2: wants to bring us back to nineteen hundred. He wants
Speaker 2: to bring us back to the era of McKinley. That
Speaker 2: is a very different landscape. You're talking about before the
Speaker 2: introduction of the income tax, which of course is aspirationally progressive,
Speaker 2: and which was put in place specifically so that you know,
Speaker 2: the government in the World War One and then World
Speaker 2: War Two would be funded more by the rich than
Speaker 2: Tariff's land, of course, squarely on the working class. He's
Speaker 2: just implemented with the tariffs, the largest regressive tax on
Speaker 2: the working class in American history. You're also talking during
Speaker 2: the Gilded Age. This is a time before you have
Speaker 2: you know, child labor laws, is a time before you
Speaker 2: have significant union rights and labor organizing and workplace protections.
Speaker 2: This is before the New Deal, so you don't have
Speaker 2: the social safety net built out, you don't have even
Speaker 2: things like social security and medicare in place. So I
Speaker 2: do think it's important for people to have that mental
Speaker 2: model of that's the thing he's going for, not some
Speaker 2: fifties or sixties ideal. And if we think about the
Speaker 2: time period when American manufacturing was at its height, I mean,
Speaker 2: first of all, the world was just a different places, right,
Speaker 2: much of the world was devastated by World War Two.
Speaker 2: It gave us this unique, you know, advantage where we
Speaker 2: were sort of the only game in town. And the
Speaker 2: other two pieces of that that are often overlooked is
Speaker 2: number one, you did have a really strong labor movement,
Speaker 2: so people were able to achieve relatively high wages, relatively
Speaker 2: stable employment, and secure pensions too by the way, secure retirements.
Speaker 2: You also had, you know, the buildout of the FDR,
Speaker 2: social safety net, and housing was way more affordable, healthcare
Speaker 2: way more affordable, education, way more affordable. And this was
Speaker 2: also before you have now this advent of increasing levels
Speaker 2: of automation, so that you know, the same factory can
Speaker 2: produce many much much more with many fewer human beings required,
Speaker 2: which is another thing that Latinix says. So you know,
Speaker 2: there's there's no going back either to nineteen hundred or
Speaker 2: to the fifties or sixties or seventies or whatever your
Speaker 2: you know, period of peak manufacturing American renaissance is going
Speaker 2: to be. And the fact that they have no interest
Speaker 2: in I mean that Trump is busting unions. He's consistently
Speaker 2: been a union buster his entire life. He's taken that
Speaker 2: into this administration. They're cutting the social safety net. There
Speaker 2: are zero efforts in place to improve the cost of housing.
Speaker 2: In fact, the tariffs will only increase the cost of housing.
Speaker 2: No efforts in place to reduce the cost of education,
Speaker 2: no efforts in place to reduce the cost of healthcare.
Speaker 2: In fact, some of the very mild reforms put in
Speaker 2: place by the Biden administration have been rolled back on
Speaker 2: that front. So that's the landscape that you're actually looking
Speaker 2: at here. But I did enjoy this particular This was
Speaker 2: more of a creative, I think, attempt to spin the
Speaker 2: tariffs in a positive light. Congressman Roger Williams, who apparently
Speaker 2: is a car salesman, says that one good thing about
Speaker 2: the tariffs is that now used cars are going to
Speaker 2: be more expensive. So this CCS is a positive Let's
Speaker 2: take a listen.
Speaker 11: To that, and people with used cars or used cars
Speaker 11: are going to be worth a little bit more.
Speaker 1: And when they was worth more, they have more down payment,
Speaker 1: they have more equity, and they can make their payment lesson.
Speaker 2: It was, so there you go, use cars are going
Speaker 2: to be more expensive. So you know, that's that's a
Speaker 2: good That was actually a.
Speaker 3: Great landscape for all of us in twenty twenty ten.
Speaker 3: Oh that was awesome.
Speaker 2: Yeah, at a time when car Loan defaults are actually
Speaker 2: spiking and at like I think like an all time high,
Speaker 2: they've definitely gone up significantly.
Speaker 3: Let me just quickly split the difference on nineteen oh
Speaker 3: two's let's make the case for at least some of
Speaker 3: the time of McKinley.
Speaker 1: You know, it was nice.
Speaker 3: We were not the global pre eminent country that ran
Speaker 3: the entire world.
Speaker 1: It was a lot cheaper, actually to be a country
Speaker 1: that was not.
Speaker 4: McKinley was moving us in that direction.
Speaker 1: Yes he was, but we weren't there. He was the
Speaker 1: taginning of the America. Let's take it.
Speaker 3: Let's take it all the way back to let's say
Speaker 3: nineteen hundred, right in the beginning of the progressive era,
Speaker 3: literally pre the true expansion of at least the total
Speaker 3: expansionism that was eventually embraced with the conquest of Cuba.
Speaker 1: And of the Philip Pildians.
Speaker 3: At that time, what was America's like actual what was
Speaker 3: America's goal? America's goal was to to secure its place
Speaker 3: amongst the global.
Speaker 1: You know, it was to have some respect. But it
Speaker 1: was not to replace the German Empire or the British Empire.
Speaker 3: It was one which wanted some reciprocity in the world
Speaker 3: of trade. It was one where forty percent of our
Speaker 3: you know, so, or of our revenue at that time
Speaker 3: would come from customs duties. But broadly, it was a
Speaker 3: country very similar to some of the issues that we
Speaker 3: have now. We had major fights about immigration, We had
Speaker 3: big fights about the transition to industrial capitalism. We were
Speaker 3: an inward focused country that needed to hash out all
Speaker 3: of those types of problems before we eventually became this
Speaker 3: player in the middle of World War One. I'd also say,
Speaker 3: and this is a common thing too, you know, yes,
Speaker 3: you know, we can talk about the nobility of income
Speaker 3: tax and all that, but the true necessity of income
Speaker 3: tax was to fund the war machine. I mean, it's
Speaker 3: not a surprise the first income tax ever instituted in
Speaker 3: the history of the United States is during the American
Speaker 3: Civil War when they need money, and so a lot
Speaker 3: of it was actually not just correcting some gilded age,
Speaker 3: you know, wealth and balance.
Speaker 2: But that was part of it, that was part of
Speaker 2: the intellectual case that was made to the public about it, because.
Speaker 3: The reason they needed the money in the first place
Speaker 3: was to build bombs and weapons, to send two hundred
Speaker 3: thousand Americans to die for what to preserve the British
Speaker 3: Empire during the First World War. That's why I get
Speaker 3: really annoyed at people who get so furious at the
Speaker 3: Americans of nineteen twenties and nineteen thirties for passing smooth
Speaker 3: holly or for being isolationists. It's like, guys, literally two
Speaker 3: hundred thousands of two hundred thousand of their sons were
Speaker 3: murdered on the fields of France for like Woodrow Wilson's idealism,
Speaker 3: and you got taxed and you got a great depression.
Speaker 1: What did you get out of that?
Speaker 3: I mean, of course you're going to be somebody who
Speaker 3: is deeply skeptical of internationalism, of global trade. So anyway,
Speaker 3: I just think it's there is at least some things
Speaker 3: you can learn from that time of the simplicity of
Speaker 3: not being the seat of the global empire, some of
Speaker 3: the benefits of what could that be and you don't
Speaker 3: have to return to that era certain things about it
Speaker 3: which were actually great. And you know, so I just
Speaker 3: think that there's often there's often this idea that we
Speaker 3: currently are living in where everything from that time period
Speaker 3: is like regressive and bad. But there were certain there
Speaker 3: are mental models which you can adopt, and you can
Speaker 3: look at from that time and say, yes, there are
Speaker 3: certain things that we should aspire to. And I think
Speaker 3: one of the things that we should at least try
Speaker 3: to aspire to is to move away from having to
Speaker 3: fund let's say, I mean Pete Hexstath yesterday, so that
Speaker 3: the next Penagon budget is going to be one trillion
Speaker 3: dollars a trillion dollars.
Speaker 4: Yeah.
Speaker 2: Well, but and I guess that's why I see the
Speaker 2: I see things differently. You're right, the full American empire
Speaker 2: had not been built out, But that was the direction.
Speaker 2: I mean, McKinley takes the first big steps, yes, in
Speaker 2: that direction. And you know, just in terms of the
Speaker 2: system of taxation, tariffs are deeply regressive. They land if
Speaker 2: you are a working class person, much of your income
Speaker 2: is going to consumption. If you're a wealthy person, it doesn't.
Speaker 2: And that's why it's like, you know, all these like
Speaker 2: flat tax libertarian people. That's why a flat tax is
Speaker 2: always wildly unpopular because people look at the fact of like, oh,
Speaker 2: I'm going to get charged the same thing as this billionaire. Actually, no,
Speaker 2: it's going to be a much larger percent of your income.
Speaker 2: And so, you know, the ideal of the income tax
Speaker 2: is that it would be progressive, that the burden would
Speaker 2: fall more heavily, you know, on the which people would
Speaker 2: actually be taxed. We all know there's a million ways
Speaker 2: that there's loopholes, and it's not lived up to its aspiration.
Speaker 2: But Trump consistently talks about getting rid of the income
Speaker 2: and going back to that funding model altogether. And that
Speaker 2: would be a war on the working class. That would
Speaker 2: be requiring the working class to fund the one trillion
Speaker 2: dollar defense budget and all of the wars. Because it's
Speaker 2: not like they're rolling back, as we are about to
Speaker 2: discuss in some of our later foreign policy blocks. It's
Speaker 2: not like they're rolling back American Empire. In fact, there's
Speaker 2: you know, many expansionist plans that this administration is pushing
Speaker 2: at this point, you know, the last piece I just
Speaker 2: wanted to quickly get to here, just in terms of
Speaker 2: where everybody in Maga world is shaking out. You have
Speaker 2: another one of the billionaire Trump donors who is upset.
Speaker 2: Ken Lingo, and we could put this up on the
Speaker 2: screen from the Financial Times said to them, among other things,
Speaker 2: he said, I don't understand the goddamn formula. I believe
Speaker 2: Trump's been poorly advised by his advisors about this trade
Speaker 2: situation and the formula. They're no, dude, this is Trump's formula.
Speaker 2: His advisors have been doing everything they can except for
Speaker 2: to borrow to push him in a different direction.
Speaker 4: But this is all him.
Speaker 2: But again to your point, this is the way that
Speaker 2: they all deal with him because they don't want to
Speaker 2: get crosswise with the king.
Speaker 4: When you have a monarch, this is what happens