Speaker 1: Hey, guys, Saga and Crystal here.
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Speaker 1: Good morning, everybody.
Speaker 3: It is a gloomy day here in Washington, gloomy fitting
Speaker 3: the mood of the global economy in Crystal.
Speaker 1: So what do we have today?
Speaker 2: Yes, indeed, Trump is doubling down on his tariffs, no
Speaker 2: sign of some big negotiation or walk back insight, and
Speaker 2: global markets already in freefall this morning. This is before
Speaker 2: the US market's officially open. So we decided to spend
Speaker 2: the whole show basically talking about tariffs because this is
Speaker 2: such monumental news with such massive cascading effects for everyone here.
Speaker 4: And globally. So we're going to start with just the
Speaker 4: details of where we are, what we know. Jeff Stein
Speaker 4: is going to join.
Speaker 2: He's going to weigh in on his latest reporting of
Speaker 2: how this tariff scheme was developed. And also big fight
Speaker 2: developing between two Trump supporters, Bill Ackman, who has now
Speaker 2: come out against the tariffs, and Howard Lutnik, who of
Speaker 2: course is the Commerce Secretary. We also have the very
Speaker 2: latest polling about how Americans are feeling about all of this,
Speaker 2: with the caveat being all of this polling really occurred
Speaker 2: before the massive market movements, before these massive announcements, so
Speaker 2: getting early indications though about how nervous Americans are about
Speaker 2: this direction. Elon appears to be breaking with Trump over
Speaker 2: tariffs and specifically getting into a bit of a battle
Speaker 2: with Peter Navarro. Protests have also broken out nationwide. These
Speaker 2: are not just about tariffs, but about overwhelming sort of
Speaker 2: resistance among the Democratic base to Trump and Elon and
Speaker 2: everything that's going on. So we wanted to take a
Speaker 2: look at that as well. Was the first really big
Speaker 2: nationwide organized resistance to Trump two point zero, and we're
Speaker 2: going to have a nice discussion debate between Rocanna and
Speaker 2: orn Cass should be interesting to get both of their perspectives.
Speaker 2: Grow us not some neoliberal like Free Trader. He has
Speaker 2: a nuanced view on tariffs. I'm interested to hear or
Speaker 2: and explain exactly how he feels about everything that is
Speaker 2: going on and how this plan is being implemented right
Speaker 2: now as well.
Speaker 3: That's right, or the more serious person that we could
Speaker 3: find that will actually defend some of at least what
Speaker 3: is going on here, So we wanted to make sure
Speaker 3: we did that. Yeah, as Crystal said, though, it's going
Speaker 3: to be a tariff special here. Thank you very much
Speaker 3: to all our premium subscribers out there. By the way,
Speaker 3: the best way that everybody could help with our show
Speaker 3: right now is really just like subscribe and to share it,
Speaker 3: especially if you're listening on the podcast is texted to
Speaker 3: a friend. Especially, I know tariff's very sensitive subject and
Speaker 3: a lot of people are trying to wrap their heads
Speaker 3: around what's going on. So that's why we wanted to
Speaker 3: really dedicate this to everybody, and it is I think
Speaker 3: best listened to as a whole. All right, let's go
Speaker 3: ahead and start with the tariffs, is Crystal said, Let's
Speaker 3: go put this up there on the screen, major movement
Speaker 3: in the Asian and the European markets, basically a massive
Speaker 3: implosion of all of the stock value across the globe
Speaker 3: since the announcement of the tariffs. For those who are watching,
Speaker 3: you can see various stock indices across the world that
Speaker 3: are down. The minimum is in China down five percent,
Speaker 3: although things changed actually just since we made this graphic.
Speaker 3: The Hong Kong Stock Exchange having its worst days since
Speaker 3: nineteen ninety seven in some fifteen percent drop overnight. Germany
Speaker 3: down almost ten percent, Canada down, the UK down, the
Speaker 3: United States down over fifteen percent in the Japanese Nicky Index,
Speaker 3: I believe, with one of the worst days in the
Speaker 3: history of that they even I think had to flip
Speaker 3: their circuit breaker to set yeah trading over in Japan.
Speaker 3: So you can just see what is occurring globally. No
Speaker 3: sign from Donald Trump yet that he is backing down.
Speaker 3: He spent the weekend in Florida golfing. We'll return to
Speaker 3: that in a little bit on Air Force One, though
Speaker 3: he did take a few questions.
Speaker 1: Here's what he had to say, the pain in the market.
Speaker 5: At some point, you're unwilling to tolerate this idea of
Speaker 5: you're a threshold.
Speaker 6: I think your question is so stupid.
Speaker 5: I admit I think it's a I don't want anything
Speaker 5: to go down, but sometimes you have to take meticine
Speaker 5: to fix something. And we have such a horrible We
Speaker 5: have been treated so badly by other countries because we
Speaker 5: had stupid leadership that allowed this to happen. They didn't
Speaker 5: get it spoken when.
Speaker 7: They look at the fact that we have.
Speaker 5: A billion dollar trade deficit. When you look at the
Speaker 5: trade deficit that we have with certain countries, way over
Speaker 5: a billion per country. With China, it's a trillion dollars,
Speaker 5: and we have to solve our trade deficit with China.
Speaker 6: We have a trillion dollar trade.
Speaker 5: Deficit with China, hundreds of billions of dollars a year
Speaker 5: with us with China, and unless we solve that problem,
Speaker 5: I'm not going to make a deal.
Speaker 3: Those comments would make sense, Crystal. I thought there were
Speaker 3: just tariffs on China. Maybe some of us could get
Speaker 3: behind that, but that's not really what's going on here.
Speaker 3: We got to basically it's average some thirty percent tariff
Speaker 3: across the world, including fifty percent or whatever on Vietnam.
Speaker 3: Multiple countries calling the White House over the weekend might
Speaker 3: be a bit difficult because the President is down golfing
Speaker 3: in mar A Lago. He did win his golf championship though.
Speaker 1: Congratulations. Well some good too, That's great, that's right. Let's
Speaker 1: put this up there on the screen.
Speaker 3: This is his latest from truth social We have massive
Speaker 3: financial deficits with China, the European Union, and many others.
Speaker 3: The only way this problem can be cured is with tariffs,
Speaker 3: which are numbering tens of billions into the USA.
Speaker 1: They are already in effect and a beautiful thing to behold.
Speaker 3: The surplus with these countries has grown during the presidency
Speaker 3: of Sleepy Joe Biden.
Speaker 1: We are going to reverse it, and reverse it quickly.
Speaker 3: Someday people will realize the tariffs for the United States
Speaker 3: of America are a very beautiful thing. So there is
Speaker 3: still yet no major movement there by the White House.
Speaker 3: In terms of where we are here in the United States,
Speaker 3: things are a bit all over the place. As we said,
Speaker 3: the Japanese Index and the Hong Kong Index just absolutely
Speaker 3: got destroyed overnight the United States markets. It's roughly like
Speaker 3: two point five percent as of US right recording. Right now,
Speaker 3: we can put that on the screen just in terms
Speaker 3: of where everything is. The Nasdaq was down by about
Speaker 3: two point eight percent. It honestly could extend much much worse.
Speaker 3: It was even worse whenever the futures did open this morning.
Speaker 1: Nobody really quite knows.
Speaker 3: If, though, that the S and P does fall today
Speaker 3: more than four percent for a third day in a row,
Speaker 3: it will be the first time since the Great Depression.
Speaker 1: And I think that's one of those.
Speaker 3: Where it's always difficult to contextualize history, you know, when
Speaker 3: it's actually happening. But the truth is is that we
Speaker 3: are in one of the five great market crashes in
Speaker 3: modern American history from the Great Depression, not just me
Speaker 3: saying that the data indicates this is the worst crash,
Speaker 3: not a listens March of twenty twenty. And then finally,
Speaker 3: you know, to get to the inevitable retort, they're like, well,
Speaker 3: why doesn't matter, and it's like, well, even if you
Speaker 3: don't own any stocks, and that's fine, I think fifty
Speaker 3: eight percent of Americans do. But for the rest of
Speaker 3: the country and the bottom of the income scale, the
Speaker 3: market and the liquidity in that market and the decision
Speaker 3: making being driven by those companies that will affect one
Speaker 3: hundred percent of us. You know, you could have owned
Speaker 3: zero stocks in two thousand and nine and you still
Speaker 3: would have suffered the consequences because you would not have
Speaker 3: any access to the company wants to hire you, doesn't
Speaker 3: have any access to cash, they have no market, they
Speaker 3: have no liquidity, they have no ability to borrow. They're
Speaker 3: going bus. You know, these capital markets, for better or
Speaker 3: for worse, and I think for worse now do absolutely
Speaker 3: rule our entire lives.
Speaker 1: And we'll talk about that.
Speaker 3: I think more in terms of tariff strategy, and what
Speaker 3: I think the biggest flaw in the overall roll out
Speaker 3: in the strategy was is that fact is is that
Speaker 3: we're basically asking private markets to you know, act in
Speaker 3: a way that we believe is beneficial to the state,
Speaker 3: but with no real incentive, you know, both to the
Speaker 3: company for the employer to minimize any sort of short
Speaker 3: term not even short term, long term economic pain.
Speaker 1: Now at this point that's another thing.
Speaker 3: Everyone's like, oh, well, he could cut a deal, and
Speaker 3: he could cut a deal and things could sert, just like, yeah,
Speaker 3: they could. But you know, in the interim, there are
Speaker 3: a lot of companies, even in this week that will
Speaker 3: pay literally millions of dollars in tariffs. You can't just
Speaker 3: take millions of dollars off of somebody's bottom line and
Speaker 3: expect nothing to happen.
Speaker 1: I mean, it just doesn't really work that way. Yeah,
Speaker 1: I mean that's where I continue to fall.
Speaker 3: Even if this is a short term strategy, there's a
Speaker 3: lot of pain in that short term strategy for millions
Speaker 3: of people, not to mention them. Level of uncertainty in
Speaker 3: the markets, in the overall pocketbooks, the amount of consumer
Speaker 3: spending that's going to shrink as a result of this
Speaker 3: genuinely cannot be overstated.
Speaker 2: Yeah, it's I don't think anyone really knows how massive
Speaker 2: the fallout is going to be. Like, there is no
Speaker 2: limit to how bad it could be. And yeah, Trump
Speaker 2: could walk back from it at any time. I mean
Speaker 2: he walked back from the you know, the height of
Speaker 2: the Canada and Mexico tariffs. This man, he's a mad man.
Speaker 2: He's all over the place. But there's a big debate
Speaker 2: on econ Twitter at this point of like we may
Speaker 2: already be past the point of no return in a
Speaker 2: certain respect because let's say today he comes out and says,
Speaker 2: you know what, I've deals with fifty countries good enough,
Speaker 2: We're rolling this back to you know, a lower level,
Speaker 2: and we'll revisit it a month from now, which is
Speaker 2: kind of the playbook that he's been running. Do you
Speaker 2: think if you are someone making decisions for a major business,
Speaker 2: a major manufacturing concern, like, is this going to give
Speaker 2: you confidence to want to invest more in the United
Speaker 2: States of America?
Speaker 4: Of course not, of course not.
Speaker 2: I mean if you're running any company, including our own,
Speaker 2: by the way, thinking about how things are going to go,
Speaker 2: and you know how people are feeling with a potential
Speaker 2: recession coming and how their premium membership budget is looking
Speaker 2: at this point like you are going to freeze in
Speaker 2: place at best, and at worst you're going to start saying,
Speaker 2: you know what, these people, this project that we had going,
Speaker 2: that we were hopeful for for the future, this is
Speaker 2: just not the environment to do it in. So in
Speaker 2: some ways, even if at this point Trump were to
Speaker 2: come out and say, just getting guys, you know, late
Speaker 2: April Fool's joke, Liberation Day is over. Who is going
Speaker 2: to want to invest in this climate? And you know,
Speaker 2: I used to get really irritated with all the like
Speaker 2: uncertainty talk because this was used against you know, any
Speaker 2: sort of like progressive economic policy that would benefit working
Speaker 2: class people or whatever. But at certain point, you really
Speaker 2: do as a business owner, as an investor, as someone
Speaker 2: who is an executive in a company, you need some
Speaker 2: sort of stable policy climate in which to make decisions.
Speaker 2: And you will not have that with this present period.
Speaker 2: You will not have that with this president. And I
Speaker 2: think given the you know, seesaw nature of American politics,
Speaker 2: I think there are a lot of countries and a
Speaker 2: lot of companies here and around the world that are saying,
Speaker 2: I don't know if we'll ever have that with the
Speaker 2: US again.
Speaker 4: Period.
Speaker 2: You know, a couple things that I just wanted to
Speaker 2: emphasize from Trump's comments and why they sent the markets
Speaker 2: into such a free fall. You know, last week, of
Speaker 2: course there were significant market losses, but I think we
Speaker 2: both had the feel of like it actually.
Speaker 4: Could have been worse.
Speaker 1: Oh, it could have been much.
Speaker 2: Worth And the reason for that is because there was
Speaker 2: still a hope on Wall Street of like Trump's going
Speaker 2: to come on on Sunday before the future's market opens
Speaker 2: and he's going to announce a bunch of deals and
Speaker 2: he's going to step away from this and instead he
Speaker 2: makes this comment sometimes you have to take the medicine
Speaker 2: number one and seems to not care at all about
Speaker 2: the nuclear bomb that he's dropped on the global economy,
Speaker 2: which just on like a personal level, thinking about this
Speaker 2: person's psychology, I cannot wrap my head around someone who
Speaker 2: would drop this level bomb and then just go I'm
Speaker 2: gonna go play golf, I'm gonna go host a fundraiser
Speaker 2: at mar A Lago like insanity. But so he says
Speaker 2: that in no indication of making these deals, and the
Speaker 2: in fact, he told his surrogates, I don't want you
Speaker 2: to say these are a starting point for negotiations. No,
Speaker 2: these are in place, and that's that. And then the
Speaker 2: other thing he said that was so disconcerting is he's
Speaker 2: holding onto this idea that if you have a trade
Speaker 2: deficit with any country, no matter what the dynamics are,
Speaker 2: Like we talked about Lesotho last week, right, this poor
Speaker 2: African nation that we buy diamonds for and they're too
Speaker 2: poor to afford our products, and in his mind, that
Speaker 2: means that Lesotho is ripping us off. Okay, idiotic, stupid,
Speaker 2: like the most Kindergarten level of understanding of trade you
Speaker 2: could possibly imagine, but he reiterates that. And it matters
Speaker 2: not only for understanding how stupid the policy is, which
Speaker 2: most people I think already understand, but it also matters
Speaker 2: because what deal can Lesotho make with us that's going
Speaker 2: to fix that problem?
Speaker 4: There isn't one.
Speaker 2: So, you know, countries that had, in anticipation of Trump
Speaker 2: loving tariffs had rolled back their terrri straight trying to
Speaker 2: get ahead of it, say like Israel is one example
Speaker 2: of that, like, look, we don't even charge you any tarffs.
Speaker 4: They still got hit with tariffs.
Speaker 2: There is no deal that you can make with virtually
Speaker 2: any of these countries that's just going to close the
Speaker 2: trade deficit overnight.
Speaker 4: That is not how this works.
Speaker 2: And so that was the other thing that made a
Speaker 2: lot of investors go what the fuck because that indicates
Speaker 2: there are no grand bargains or deals. This is not
Speaker 2: just a negotiating tactic. May really be serious about moving
Speaker 2: forward with this, and it is just as nonsensical as
Speaker 2: it appears on its face when you're looking at you know,
Speaker 2: the Penguin islands and this stupid formula that we're going
Speaker 2: to talk more about that they may not even be
Speaker 2: applying correctly. It really doesn't matter to him what the
Speaker 2: carnage is, what the fallout is. You know, he has
Speaker 2: this idea and has had about Terris number one and
Speaker 2: number two.
Speaker 4: He likes that.
Speaker 2: He likes that the whole world is jumping at his moves.
Speaker 2: He loves that all these countries are having to call
Speaker 2: and scramble, that all these companies are going to come
Speaker 2: on bended knee to try to get their car ount
Speaker 2: to try to get their exemption. And he loves that
Speaker 2: he can do all of this apparently without having a
Speaker 2: consult a single person.
Speaker 4: I mean, the power to raise.
Speaker 2: Revenue and institute tariffs is supposed to be with Congress.
Speaker 2: He's using eyepen in a very similar way to how
Speaker 2: he's you know, using these sort of like national security
Speaker 2: or national emergency car bounds to claim extraordinary powers from SOLFF.
Speaker 2: That's what he's doing here with tariffs. There will be
Speaker 2: court challenges. I don't know how that will go. I
Speaker 2: don't think anyone knows really how that will go. But
Speaker 2: he also likes. What he loves about this is that
Speaker 2: it all comes down to him, and he can be
Speaker 2: the dictator and he doesn't have to ask anyone for anything.
Speaker 2: And all the chaos around him doesn't bother him one bit.
Speaker 1: Well, I mean, why would it bother him?
Speaker 3: As you said, it's very you know, it's something that
Speaker 3: feeds his own conception of what's going on. But what
Speaker 3: I just simply cannot move away from is there's genuine,
Speaker 3: like massive pain not even being done necessarily to billionaires
Speaker 3: or companies or anything. That's like real folks who have
Speaker 3: retirement accounts who are watching these just evaporate. I mean, look,
Speaker 3: let's also contextualize it correctly. You know, one year of
Speaker 3: gains in the S and P five hundred are erased.
Speaker 3: That means basically, if you had money over the last
Speaker 3: year and you were chunking it away into your four
Speaker 3: oh one k, and you were doing everything that you're
Speaker 3: supposed to do, that money's gone or it's you know,
Speaker 3: it's now it's actually down. And if you look at
Speaker 3: over at the five year period, who was a common
Speaker 3: talking point, oh my gosh, the SP five is up
Speaker 3: over one hundred percent. Well now it's down to eighty two.
Speaker 3: So now we're already back to twenty twenty four, you know,
Speaker 3: style valuation. Let's wait another week. What are we going
Speaker 3: to go back to twenty twenty three. You know the
Speaker 3: backward clock that's ticking here for a lot of people,
Speaker 3: layers of what preciseable percentage of the country which is
Speaker 3: over sixty five, and size of percentage even more that
Speaker 3: are over seventy. I was telling you this morning there
Speaker 3: are a lot of people who are on retirement to
Speaker 3: have mandatory withdrawals, you know, from their IRA accounts. So
Speaker 3: what if you're literally forced to sell at the bottom.
Speaker 3: I mean, that's a that's a horrible thing to be
Speaker 3: inflicting on people. Finally, as you and I just want
Speaker 3: to really stick on this point with the capital markets,
Speaker 3: the way that this is being basically rolled is we're
Speaker 3: implementing this massive tariff and so if you want to
Speaker 3: build here, you have to move here. We will not
Speaker 3: compensate you at all in the interim. We are not
Speaker 3: giving you a tax break. In fact, Steve Manution, the
Speaker 3: former Secretary of the Treasury, was onto CNBC on Friday,
Speaker 3: and I actually thought he gave a great answer.
Speaker 1: He was like, look, of course we can have tariffs.
Speaker 1: I mean, you know, I'm pro tariff.
Speaker 3: I know you are in some cases yeah as well, Yeah,
Speaker 3: you know what that needs to be paired with a
Speaker 3: dollar for dollar manufacturing credit and or infusion from capital
Speaker 3: of Congress, which would mean what for Apple. Let's say
Speaker 3: we want Apple to build an iPhone here in America
Speaker 3: or build more of it. Okay, let's say five to
Speaker 3: fifty percent of it something like that here in the
Speaker 3: United States.
Speaker 1: Well, that's going to cost X, Y, and z.
Speaker 3: We will then acknowledge that we can have Apple pony
Speaker 3: up some of that cash. Congress and then others the
Speaker 3: administration will say we will also kick a tax credit
Speaker 3: or a break to make sure that you don't fire
Speaker 3: people in the interim and you don't rehab it on
Speaker 3: our overall equities markets, which is what we're currently having.
Speaker 1: There's none of that.
Speaker 3: Actually, the Congress wants to remove manufacturing tax credits right
Speaker 3: now so that they can pay for a permanent extension
Speaker 3: or whatever.
Speaker 1: Some of these corporates. That's that's why I want people
Speaker 1: to understand.
Speaker 2: That's right.
Speaker 3: So the problem is that not only do we have
Speaker 3: a massive teriff regime in place, we are actually currently
Speaker 3: have a gop led Congress which wants to reduce the
Speaker 3: amount of social spending that there is while extending corporate
Speaker 3: tax rusts and not increasing manufacturing tax credits, which would
Speaker 3: actually benefit all of the stated goal of bring things over.
Speaker 1: And that's why I'm just like, this is so it's
Speaker 1: not even stupid.
Speaker 3: Stupid is something that doesn't necessarily bear consequences.
Speaker 1: This has massive consequences.
Speaker 3: And you know that's another thing too, where you know
Speaker 3: the administration is really banking on like, oh well he
Speaker 3: said he was going to do just like, well, okay,
Speaker 3: hold on a second. Nobody nobody, And this is why
Speaker 3: the markets crashed as they were ever floated a thirty
Speaker 3: five for forty percent tariff.
Speaker 1: Nobody floated.
Speaker 3: When you say reciprocal tariffs, that's a word, it has
Speaker 3: a meaning, it has a definitional term, right, And that
Speaker 3: Bess Crystal. With the actual calculation from what I can
Speaker 3: tell of whate reciprocal tariff would mean, even with currency
Speaker 3: market manipulation and all, that is maybe five to ten percent.
Speaker 3: Whenever it comes to China, on Japan, it would be five.
Speaker 3: Actually it might even be zero if you factor in
Speaker 3: a few other things. Do you know why he decided
Speaker 3: not to do that because the number was not big enough.
Speaker 3: So that's where this is ten times out of step.
Speaker 3: Even with allegedly many of the things that he sold
Speaker 3: on the campaign trail, and that is why you are
Speaker 3: seeing the level of freak out. And look, very soon,
Speaker 3: real voters, you're all going to start you were going
Speaker 3: to feel this in a very real way. Screw retirement.
Speaker 3: We're talking layout. We've already seen it. We've already seen
Speaker 3: Stilantus layoffs nine hundred people in Michigan.
Speaker 1: We've already seen people freeze investment.
Speaker 3: Just wait, start asking around for people who are like, yeah,
Speaker 3: we had a project and it got pulled. You're going
Speaker 3: to see consultants go down if the pharma tariffs eventually
Speaker 3: do go into place.
Speaker 1: Oh my god, just good luck.
Speaker 3: You know, to the entire US consulting industry, a centure
Speaker 3: and those of people. Do I love those industries, No,
Speaker 3: but there's a lot of people who work there and
Speaker 3: they propel a lot of people there as well. If
Speaker 3: we want to change things, we need tax credits, we
Speaker 3: need capital infusion. Currently is a four to five hundred
Speaker 3: billion dollars raised on people. If you take that out
Speaker 3: of money out of the economy, you've got to put
Speaker 3: it back in at the same time.
Speaker 1: But they don't, they don't want to do any of that.
Speaker 4: Yeah, that's right.
Speaker 3: So we're looking at some you know, an eight level
Speaker 3: liquidity crunch and also this final you know word here there.
Speaker 1: This our economy is leveraged to the hilt. We learned
Speaker 1: nothing from two thousand and eight.
Speaker 3: When you start to drop fifteen to twenty we're talking
Speaker 3: margin calls at the top of Wall Street, We're talking
Speaker 3: you know, these major fortune five hundred. They are levered
Speaker 3: up to the hilt, maybe not one hundred times like
Speaker 3: they were during two thousand and eight. But we've really
Speaker 3: learned very little about debt crises and all this because
Speaker 3: there's been you know, a deck fifteen years of cheat
Speaker 3: money that is all going to end. And when you
Speaker 3: pull all that back out of the economy, I can't
Speaker 3: even begin to describe, like what the layoffs and the
Speaker 3: unemployment situation and all that's going to look.
Speaker 2: Like, isn't it Warren Buffett who says when the stock
Speaker 2: market goes down, you find out who's women without Yeah.
Speaker 1: That's right, it's true. Yeah, it's scirically true.
Speaker 4: Everybody is.
Speaker 2: I was reading an article about how everybody's making calls
Speaker 2: around to try to figure out what the equivalent and
Speaker 2: of like the Lehman brothers this time is some entity
Speaker 2: that's really at the center that's overleveraged at this or that,
Speaker 2: or you know, it could also be some gigantic manufacturing
Speaker 2: concern that had, you know, move forward with all these
Speaker 2: investments potentially related to the the Inflation Reduction Act and
Speaker 2: the Chips Act, which by the way, like they weren't enough,
Speaker 2: those things were working to increase significantly. You can look
Speaker 2: at the Joe, We're going to show the chart when
Speaker 2: we talked to rowan Orn manufacturing infrastructure investment in this country.
Speaker 2: And not only are they not doing the analogous thing
Speaker 2: for whatever industries that they want to build up, but
Speaker 2: Chips Act is being de facto rolled back because Doge
Speaker 2: went in and like cut half the staff that was
Speaker 2: implementing this.
Speaker 4: And again it has been.
Speaker 2: Very, very successful the IRA because it focuses on things
Speaker 2: like you know, EV batteries and green energy. Like Trump
Speaker 2: doesn't like that, so that's being hacked hacked at as well.
Speaker 2: So like the things that were actually working to increase
Speaker 2: manufacturing investment in this country are being killed. There are
Speaker 2: no corresponding to tax crist and by the way, with
Speaker 2: this level of across the board tariff even that, like
Speaker 2: what you're going to subsidize everything in the entire You're
Speaker 2: going to subsidize banana production and coffee being production and
Speaker 2: diamond mind product, like it still would be insanity given
Speaker 2: the way that they're moving forward. But there's none of
Speaker 2: that either. In fact, there's an austerity push on the
Speaker 2: other side. And then you know, even if you think
Speaker 2: about the advanced manufacturing that we have here, are so
Speaker 2: many of they're either raw materials or the parts that
Speaker 2: they're sourcing come from overseas, so they're being hit with
Speaker 2: those arrafs when they're trying to import things to you know,
Speaker 2: assemble a complicated final product.
Speaker 4: And so no, I mean.
Speaker 2: There, I think this is much more likely to it
Speaker 2: to negatively impact, to damage significantly the manufacturing, investment production
Speaker 2: that we do have, than it is to spur any
Speaker 2: sort of a renaissance.
Speaker 4: Last thing.
Speaker 2: And I'll say, I mean, I'm sure I'll have many
Speaker 2: other comments that I can make today and I will
Speaker 2: make in the future, et cetera. But you really do
Speaker 2: have to look at this as class warfare. And I
Speaker 2: know that this is being framed it's like, oh, this
Speaker 2: is going to be great for the working class, nonsense.
Speaker 2: Trump has said he wants to get rid of the
Speaker 2: income tax, and certainly, even if he doesn't achieve that
Speaker 2: maximalist goal, he's going to extend the Tax Cut and
Speaker 2: Jobs Act, which is a gigantic tax cut for the
Speaker 2: richest people in the country, and he wants to move
Speaker 2: towards funding the government through tarifs. Terrafts are a regressive tax.
Speaker 2: They hit the working class way harder than they hit
Speaker 2: rich people because the working class, of course, spends much more,
Speaker 2: as a larger percent of their income on goods. So
Speaker 2: when prices are going up for groceries and toilet paper
Speaker 2: and clothes and medicine and everything else in that you
Speaker 2: could think of in the fresh fruits and vegetables, like
Speaker 2: so much of what is consumed to your comes from overseas,
Speaker 2: that is incredibly, incredibly regressive and it is going to
Speaker 2: hurt working class people. It's going to devastate them now obviously,
Speaker 2: like the rich people are getting hurt right now in
Speaker 2: the market as well. But the impetus here and why
Speaker 2: he always talks about McKinley, because what was the state
Speaker 2: of taxation under McKinley. It was all effectively teriffs. There
Speaker 2: was no income tax in place, and that is the
Speaker 2: direction that he wants to move things in. So you know,
Speaker 2: it's I always want. I think it's really important to
Speaker 2: talk about the specifics of what the formula is and
Speaker 2: how it's being implemented and how it doesn't make sense.
Speaker 2: But I also think we have to keep in mind
Speaker 2: the bigger picture of what he is actually trying to accomplish,
Speaker 2: and I think among those things are again consolidating power
Speaker 2: and power grab and I also think it is shifting
Speaker 2: the burden of taxation on to working class people, shifting
Speaker 2: the burden of funding the government on to working class people.
Speaker 2: And you know, if he sticks with this plan is
Speaker 2: going to be devastating for so many.
Speaker 4: And the market, the market matters.
Speaker 2: I don't want to say that it's like, oh, who
Speaker 2: cares that if the market is crashing, real there is
Speaker 2: real pain there as sober as indicating. But the market
Speaker 2: is also just the first indicator of how catastrophic this
Speaker 2: is going to be. Look At how regular people fared
Speaker 2: in coming out of the housing crisis. Look at how
Speaker 2: regular people would have fared in the COVID crash had
Speaker 2: there not been a massive government infusion to support people
Speaker 2: you know, look at how regular people fail fair in
Speaker 2: any recession, any massive market crash, and there is no
Speaker 2: indication that there is some major government program coming to
Speaker 2: help support people through these times. In Trump's words, we
Speaker 2: just got to take the medicine. I think that's a
Speaker 2: good place to transition to Jeff and talk with him
Speaker 2: about his reporting.
Speaker 4: He's been so.
Speaker 2: Good on this issue, even going back to the camp
Speaker 2: and you know, he was one who was saying, like, listen, guys,
Speaker 2: he talks about tariffs a lot, and you're right that
Speaker 2: you never laid out this particular scheme, but he did
Speaker 2: lay out pretty maximalu's tariff ideas. I don't think Wall
Speaker 2: Street ever took them seriously. They thought they were getting
Speaker 2: their tax cuts and that this was just like a
Speaker 2: negotiating tactic. And you know that would be something like
Speaker 2: the level of tariff imposition from his first term maybe
Speaker 2: amped up a little bit, but I don't think they
Speaker 2: ever took that particularly seriously. And Jeff has also done
Speaker 2: a fantastic job digging into the behind the scenes and
Speaker 2: surprising no one. It really was Trump who said this
Speaker 2: is the way that I want to do it. Some
Speaker 2: of his advisors had been working on some more sophisticated
Speaker 2: level of tariff plan, and he said no, no, no,
Speaker 2: And the decision making went up to the hours before
Speaker 2: he made the announcement there at the White House. So
Speaker 2: with that being said, let's go ahead and get to economics.
Speaker 2: Chief Economics report is at his name now, I want
Speaker 2: to give him his fancy name. He's got a fancy
Speaker 2: title at the Washington Post now chief economics reporter. Jeff's
Speaker 2: time from the Washington Post.
Speaker 3: Joining us now the chief economics reporter for the Washington Post.
Speaker 3: Jeff Stein, great friend of the show. Good to see you, Jeff.
Speaker 3: You've been number one to be reading this week as
Speaker 3: we enter and post liberation.
Speaker 4: That's in every week.
Speaker 8: Yeah, that's right, all the reporting skills I learned. We're
Speaker 8: here on breaking points.
Speaker 3: Ah, that is absolutely not true. All right, let's go
Speaker 3: and let's go ahead. Jeff's reaction. He's gonna break down
Speaker 3: not only Donald Trump's role behind all of this. He
Speaker 3: will reveal the truth behind the fake formula. None of us,
Speaker 3: many of us, have paid notice to the fact that
Speaker 3: many of the tariffs were being put into place on
Speaker 3: some unpopulated islands. The USCA secretary was actually asked about
Speaker 3: this or sorry, The Secretary of Agriculture was asked about
Speaker 3: this over the weekend.
Speaker 1: Let's take a listen. We'll get reaction.
Speaker 4: Why are you putting import tariffs on islands that are
Speaker 4: entirely populated by penguins?
Speaker 9: Well, I mean that, Come on, Jake, Obviously, here's the
Speaker 9: bottom line. We live under a tariff regime from other countries.
Speaker 1: We have too long is the.
Speaker 9: Idea that America goes first? I mean, come on, whatever, listen,
Speaker 9: the people that are leading this are serious, intentional, patriotic,
Speaker 9: the smartest people I've ever worked with. I did not
Speaker 9: come up with the formulas.
Speaker 3: So Jeff, who came up with this formula? Where where
Speaker 3: do this thing come from? You've got the story. We'll
Speaker 3: put it up there, but you can talk well while
Speaker 3: we show off your work.
Speaker 8: The weird thing about that answer, with all these respect
Speaker 8: to the Agriculture secretary, is like, if I was a
Speaker 8: Trump Cabinet official, I feel like I could have given
Speaker 8: a somewhat cojent response. Like the reason that these tiny
Speaker 8: little islands were hit by the tariffs is in.
Speaker 6: Part because there's some.
Speaker 8: Concerns that they could be vehicles for transhipment, right, like,
Speaker 8: if you're a foreign country and you're trying to just
Speaker 8: send something to a country that you know, the tiny
Speaker 8: middle island, then you reincorporate, say that that that good
Speaker 8: is now from that island and then send it onward.
Speaker 8: That's what I would have said if I was the
Speaker 8: Agriculture secretary, even though the idea that a substantial proportion
Speaker 8: of trade could be rerouted through an island with like
Speaker 8: fall penguins and no people on it is probably overblown,
Speaker 8: Like that's what you could have said in response, even
Speaker 8: I mean, according to the trade expers I've spoken to,
Speaker 8: even more kind of shocking about this formula that they
Speaker 8: use to determine country specific terrors, which are different than
Speaker 8: the universal one that they applied on all countries, which
Speaker 8: we can talk about sort of the criticisms of and
Speaker 8: the very strong criticisms of the country specific tariffs hit
Speaker 8: countries based on essentially their trading deficit with the US.
Speaker 8: And so you have countries like Lesotto, which is a
Speaker 8: big minner of diamond exporter to the US, which is
Speaker 8: an incredibly poor country. Of course we buy more from
Speaker 8: Lesoto than they do from US. That has nothing to
Speaker 8: do with the thing that the White House and Trump
Speaker 8: are talking about as being the impetus of this global
Speaker 8: trade war, right because they're saying, look, which there is
Speaker 8: some truth to this part that the US has, you know,
Speaker 8: is a global purchaser of stuff across the world, that
Speaker 8: we have a global trade imbalance, which is all true,
Speaker 8: that it is you know, particularly bad with some countries
Speaker 8: like China, and that they want to do something about it.
Speaker 8: But Lesoto is not a net center of exports to
Speaker 8: the US because they have nefarious currency arrangement or high
Speaker 8: terror farriers our exports because it's an incredibly poor country,
Speaker 8: Like it would make no sense for Lesoto to be
Speaker 8: buying more stuff from US than we do from from them.
Speaker 6: So that's like the I think the.
Speaker 8: Overarching frame and the question to your question, Stager, like
Speaker 8: why do they do this? We had reporting last week
Speaker 8: about how the Trump administration's sort of top economic minds
Speaker 8: had weeks been working on a formula that was narrowly
Speaker 8: about sort of the thing the problem that they're ostensibly
Speaker 8: trying to solve, which you can debate whether it's worth solving,
Speaker 8: but this issue of US buying more than we sell
Speaker 8: to the rest of the world, and they had a
Speaker 8: plan that took into account. They had several plans that
Speaker 8: took into account all kinds of currency manipulation factors and tariffs,
Speaker 8: and they were coming up with sophisticated measures to deal
Speaker 8: with that. I cannot prove who wrote the more crude
Speaker 8: formula that was widely mocked that Trump, as we reported,
Speaker 8: personally selected, but I do know that it bears striking
Speaker 8: resemblance to a number of public state public formulas previously
Speaker 8: endorsed by Peter Navarro, who is sort of the most
Speaker 8: ultra maximalist trade hawk in Trump's orbit. And so I'll
Speaker 8: just leave that observation there.
Speaker 2: Yeah, to get from you the reaction from Bill Ackman,
Speaker 2: who is now very unhappy with these tarifs, and of
Speaker 2: course he's been a big Trump supporter. He's also accusing
Speaker 2: Howard Lutnick of profiting off of the crash of the
Speaker 2: stock market. If we could put before up on the screen, guys,
Speaker 2: this is what part of what acca He's famous for
Speaker 2: these freaking way too long posts on Twitter. But in
Speaker 2: any case, this is a portion of what he had
Speaker 2: to say. He said, business is a confidence game. The
Speaker 2: president is losing the confidence of business leaders around the globe.
Speaker 2: The consequences for our country and millions of our citizens
Speaker 2: who have supported the president, in particular low income consumers
Speaker 2: who are already under a huge amount of economic stress,
Speaker 2: are going to be severely negative.
Speaker 4: This is not what we voted for.
Speaker 2: The president has an opportunity on Monday to call a
Speaker 2: time out, have the time to execute on fixing an
Speaker 2: unfair tariff system. Alternatively, we are heading for a self
Speaker 2: induced economic nuclear winter, and we should start hunkering down.
Speaker 2: May cooler heads prevail before I get into the the attack.
Speaker 2: Then on Howard at Nick Commerce Secretary, just would love
Speaker 2: to get your reaction to Ackman, you know, and his
Speaker 2: position here and saying, hey, you got to call a
Speaker 2: time out here or else we're headed for this economic
Speaker 2: nuclear winter, because you've been pointing out for a long time. Listen, guys,
Speaker 2: he's serious about these tarts.
Speaker 5: Now.
Speaker 2: Did he float this particular formula on the campaign trail? No,
Speaker 2: but he was floating some pretty maximus positions. And it
Speaker 2: certainly seems like people like Bill Ackman and a lot
Speaker 2: of the other Wall Street types who were excited about
Speaker 2: a Trump administration they thought they were getting.
Speaker 4: Their tax cut.
Speaker 2: They did not think that they were getting self induced
Speaker 2: global economic meltdown.
Speaker 8: Yeah, I mean, just from a writerly perspective, I think
Speaker 8: the technical term here is burying the lead.
Speaker 6: If you're saying we might be headed.
Speaker 8: For economic nuclear winner, normally you don't put it at
Speaker 8: the bottom of six hundred words of text and after,
Speaker 8: you know, seven paragraphs of expository throat clearing.
Speaker 4: It was very New York Times of him.
Speaker 6: Yeah, yeah, no comment a post report.
Speaker 8: I'm I think you know exactly as you're saying, It's
Speaker 8: been really remarkable to see.
Speaker 6: Like, I don't think anything Trump.
Speaker 8: Has done is really that surprising based on his campaign rhetoric,
Speaker 8: based on the reporting. I mean, I wrote a story
Speaker 8: in August twenty twenty three.
Speaker 6: You can go look it up. I promise it's real.
Speaker 8: It says in detail that that President Trump is seriously
Speaker 8: considering or plans to, if re elected, launch a global
Speaker 8: trade war that includes tariff barriers as high as sixty
Speaker 8: percent on China, which is pretty.
Speaker 6: Close to what they ended up with.
Speaker 8: That is, would include a universal tariff of up to
Speaker 8: ten or twenty percent, which is almost double what he
Speaker 8: in fact actually proposed in terms of universal tariffs. That
Speaker 8: includes these sectoral tariffs on entire industries now we haven't
Speaker 8: even seeing yet, right, So like for all the all
Speaker 8: the sort of financial carnage we've seen in markets, like
Speaker 8: some of the biggest measures that they're considering are not
Speaker 8: even yet announced. So that's that's tear ups on all
Speaker 8: kinds of the same good that come in wherever they're from.
Speaker 8: And autos we've seen, but farm the Lumbard copper, et cetera.
Speaker 8: You know, as I've been pointing on Twitter, it's just
Speaker 8: it's hard for me to understand how some of the
Speaker 8: richest people in the world couldn't afford one hundred and
Speaker 8: fifty dollars subscription to The Washington Post. And it makes
Speaker 8: me wonder, like why I didn't just start in investment
Speaker 8: service for these guys in charge like ten times my
Speaker 8: current salary, Because there were people who, you know, I
Speaker 8: have sources who are lobbyists who are paid four or
Speaker 8: five six times when I'm to give Wall Street advice
Speaker 8: on how to invest in, how to navigate Washington, and
Speaker 8: a lot of times our reporting was much closer to
Speaker 8: what actually happened, So I could ramble on about this
Speaker 8: for days.
Speaker 3: Yeah, I've been I think it's a good point to
Speaker 3: be fair. So also, and despite you writing it, there
Speaker 3: were also a lot of people who worked for him
Speaker 3: telling a lot of those people just don't worry about
Speaker 3: it's not going to happen. So you know, it's not
Speaker 3: like he wasn't also feeding them a lot of what
Speaker 3: they wanted to hear during the campaign.
Speaker 1: I guess that might be.
Speaker 8: True, but like I definitely take it as a possibility
Speaker 8: that I'm just like not talking the right people.
Speaker 6: But I don't know. I'm not like the best source
Speaker 6: reporter in America.
Speaker 8: But you know, there are people who are like in
Speaker 8: the Trump circle who talked to me, and they have
Speaker 8: they have been like very clear, like for a year
Speaker 8: and a half or two years to me now that
Speaker 8: like you talked to Trump one on one about this stuff,
Speaker 8: like there is no or very little sort of like yeah,
Speaker 8: this is a bluff. Yeah, like this is a design
Speaker 8: to get people to move. It's like I talked to
Speaker 8: a senator a couple of months ago and he said
Speaker 8: that he was like begging Trump to like not do
Speaker 8: the tariffs, and Trump was like.
Speaker 6: Basically just said, we need to get back.
Speaker 8: To where McKinley was over and over to this senator
Speaker 8: and the Center's like, what are you talking about? So,
Speaker 8: I mean, I think there is an element that are
Speaker 8: there are people goes to Trump who are saying to
Speaker 8: Wall Street, this isn't serious. But I also think people
Speaker 8: were just kind of seeing what I'm hearing things that
Speaker 8: weren't really even being said.
Speaker 6: If that makes sense.
Speaker 2: Yeah, they were hearing what they want to do. Let's
Speaker 2: go ahead and get the attack on Letning. Now he
Speaker 2: has since walked this back and apologized for it. But
Speaker 2: I think this is before b that we can put
Speaker 2: up on the screen here. So Ackman says, I just
Speaker 2: figured out why Howard lutnink Co, of course, is the
Speaker 2: Commerce Secretary and adamant Trump tariff defender on cable news,
Speaker 2: is indifferent to the stock market and the economy crashing.
Speaker 2: He and Canter that's his firm, are long on bonds.
Speaker 2: He profits when our economy implodes. It's a bad idea
Speaker 2: to pick a Secretary of Commerce whose firm is levered
Speaker 2: long fixed income. It's an irreconcilable conflict of interests. Of course,
Speaker 2: this administration is rife with conflicts of interest. If you
Speaker 2: aren't cashing it in, you're in this administration. I don't
Speaker 2: know what you're doing. But you know, what did you
Speaker 2: make of this from Ackman? As I said, he did
Speaker 2: walk this back and apologize. I think Letnik he must
Speaker 2: be doing his best in a very difficult position.
Speaker 4: Whatever.
Speaker 2: But you know, do you think there's is this fair
Speaker 2: critique of Lutnik at all? And also bigger picture, what
Speaker 2: do you make of these two you know, previously very
Speaker 2: solid Trump supporters. Lutink I don't think has weighed in,
Speaker 2: but Ackman attacking him directly.
Speaker 8: Yeah, I don't know much about the internal, you know,
Speaker 8: positions of Canter Fitzgerald.
Speaker 6: I do think it doesn't make a ton.
Speaker 8: Of sense that that that this strategy on crashing the
Speaker 8: market would lead to an uptick.
Speaker 6: In bond sales.
Speaker 8: I mean that mostly affect the issuance, which is a
Speaker 8: US government function.
Speaker 6: So it's it's hard for me to see like that really.
Speaker 8: I mean, I guess you could see the price of
Speaker 8: existing thing outstanding bonds go up, but I don't know
Speaker 8: at a very minimum, Like I just would like to
Speaker 8: see a lot more any evidence at all of this.
Speaker 6: Before even suggesting there's anything there.
Speaker 8: I think on the political dynamic, I think it is
Speaker 8: really interesting that we're seeing an increasing number of people
Speaker 8: in the Trump orbit attack not the president but sort
Speaker 8: of people around him, like Elon Musk over the weekend
Speaker 8: went after Peter Navarro, who, as I mentioned, this sort
Speaker 8: of court to this whole strategy.
Speaker 6: Bill Lackman.
Speaker 8: They're going after not the president himself but the Commerce secretary.
Speaker 8: And there seems to be another element of like, this
Speaker 8: can't have been the president's fault.
Speaker 6: Personally, so we need to find a stand in.
Speaker 3: You know.
Speaker 8: It's like the King, it could never be wrong. It's
Speaker 8: his advisor. So I think there is an elements of
Speaker 8: that going on, where people are trying to find maybe
Speaker 8: a fall guy that Trump can then be like, oh,
Speaker 8: this whole lapse was like this guy's fault.
Speaker 6: It's all Trump guys.
Speaker 8: This is like all being done by the President, like
Speaker 8: you see those clips of him in nineteen eighty being
Speaker 8: like Japan is ripping us off, it's him, you know.
Speaker 8: But if that's what they need to do to feel
Speaker 8: like they can sort of make clear to Trump that.
Speaker 6: This has to change without hitting him directly, I think
Speaker 6: we're going.
Speaker 2: To see more of that gives him a way to
Speaker 2: save face potentially of like oh what this guy gave
Speaker 2: me some terrible advice. Allry, Howard Lutnik, You're own right.
Speaker 3: Last question for you then, Jeff, where do you think
Speaker 3: things are going to go for the next week? So
Speaker 3: the administration's cope is fifty different countries have called us
Speaker 3: and we're negotiating.
Speaker 1: What does that mean?
Speaker 8: I mean we reported last week that the Trump White
Speaker 8: House sent out internal talking points to their people saying,
Speaker 8: do not characterize this as a negotiation. And Lutnik has
Speaker 8: a desine. They've all been saying, like, this is not
Speaker 8: going to be resolved in days or weeks. Is there
Speaker 8: a chance that in the back of his head Donald
Speaker 8: Trump is still thinking, like, tell everyone in my inner
Speaker 8: circle that this is not a negotiation so that we
Speaker 8: have higher leverage with the rest of the world as
Speaker 8: the economy implodes. Like it's possible, But I don't really
Speaker 8: think so. And so far I've continually taken the like
Speaker 8: the under on the like Trump is bluffing by a lot,
Speaker 8: and I think people would be wise to continue to
Speaker 8: do so.
Speaker 1: Yeah.
Speaker 2: I do have one more for you, Jeff, just on
Speaker 2: the political temperature from Republicans. There is starting to be
Speaker 2: an effort for Congress to reclaim what should be its
Speaker 2: powers over leving tariffs.
Speaker 4: Many Republicans have.
Speaker 2: First of all, I mean they're terrified to go against
Speaker 2: Trump to start with, he has really consolidated control over
Speaker 2: that party. And second of all, they were comforting themselves
Speaker 2: with the idea of like, oh, some of them are
Speaker 2: even saying like, oh, he's going to use this as
Speaker 2: a negotiating tool to take teriffs down to zero, so
Speaker 2: this is actually free trade, Like this is you know,
Speaker 2: I'm totally in line with my Chamber of Commerce orientation here.
Speaker 2: Increasingly that position is untenable. So do you think that
Speaker 2: there could be some significant breakage within the own part
Speaker 2: his own party, you know, among senate Senate Republicans in particular,
Speaker 2: from Trump and this tariff insanity.
Speaker 8: Yeah, I think it's it's common, especially like if we
Speaker 8: get to Tuesday, Wednesday, Thursday, and we're in a bear
Speaker 8: market and the recession is.
Speaker 6: Hitting, their need to be loyal to Trump will start
Speaker 6: to crack.
Speaker 8: And I think you're seeing some signs that already, with
Speaker 8: this still somewhat tepid Commressional Review of Terror Policy bill
Speaker 8: moving forward forward to you're seeing more Republicans than would
Speaker 8: have been conceivable a few weeks ago sign up for that,
Speaker 8: but that's not really going to be enough to brain
Speaker 8: Trump in at all, just based on the text of legislation.
Speaker 8: Will more aggressive legislation be proposed if this gets worse,
Speaker 8: I definitely think so. I mean, it's incredible to think about.
Speaker 8: You know, Commssional Republicans were furious about President Biden's unilateral
Speaker 8: four hundred billion dollars so student loan bailout, and Trump,
Speaker 8: by the White House's own accounting, is moving forward with
Speaker 8: a unilateral six trillion dollar tax fike, you know, more
Speaker 8: than ten times the size of the student loan bailout.
Speaker 8: The legal questions there are certainly different, but you know,
Speaker 8: I think a lot of Republicans in their bones are
Speaker 8: not okay with this, and you're going to hear from
Speaker 8: them pretty soon.
Speaker 6: I agree.
Speaker 1: All right, then, thank you for joining us. We appreciate it.
Speaker 4: Thanks Jeff, I know you're super busy. We really appreciate it.
Speaker 4: Thanks you too.
Speaker 2: So you're just talking to Jeff stin there about how
Speaker 2: Republicans may react to all of this, and they will
Speaker 2: likely be watching very closely the public reaction to what
Speaker 2: is going on in the markets and with Trump's tariff policy.
Speaker 2: Harry Enton took a look last week at the polling
Speaker 2: that we do have at this point about how Americans
Speaker 2: feel about this direction.
Speaker 4: Let's go ahead and take a listen to that.
Speaker 7: The Press secretary criticize the people she calls the naysayers
Speaker 7: when it comes to these tariffs.
Speaker 1: Who are the naysayers?
Speaker 10: The nay sayers are the majority of the American public.
Speaker 10: It's the American people who are the naysayers. Oppose new
Speaker 10: tariffs on other countries all goods. Look at this, fifty
Speaker 10: six percent of Americans opposed new tariffs on all goods.
Speaker 10: How about cars in particular, fifty six percent of Americans
Speaker 10: oppose new tariffs on imported cars in park car parts. Look,
Speaker 10: the bottom line is the American people oppose, oppose, opposed, No, no, no,
Speaker 10: they do not want new tariffs. I looked at a
Speaker 10: ton of polling. You It's really hard to find any
Speaker 10: in which you find folks supporting new tariffs. Maybe against China,
Speaker 10: but against all other countries, especially our allies. No no,
Speaker 10: noose a pose a posts.
Speaker 7: So Caroline love It again told Kate in that discussion
Speaker 7: that the president is is laser focused on reducing prices.
Speaker 7: What do voters say that they believe the tariffs will
Speaker 7: do to prices.
Speaker 10: What do voters believe the tariffs will do to prices?
Speaker 10: At least in the short term? Tariffs will raise prices? Again,
Speaker 10: what did we get here? Ey two percent of Americans
Speaker 10: overall say that the prices will go up in the
Speaker 10: short term. How about among Republicans through Republican base. This
Speaker 10: was a shocker to me. Sixty four percent of Republicans
Speaker 10: believe that tariffs will in fact cause prices to go
Speaker 10: up in the near term. And get this, just five percent,
Speaker 10: five percent of Americans overall believe that tarifs, at least
Speaker 10: in the short term, will bring down prices. You don't
Speaker 10: have to be a mathematical genius to know, mister Berman,
Speaker 10: that seventy two beats five.
Speaker 2: So a lot of a lot of warnings there for
Speaker 2: this direction from the president and for his party. Put
Speaker 2: this up on the screen from you gov. This was
Speaker 2: a poll taken on April third, and they say that
Speaker 2: among US adults, only thirteen percent on March ninth through eleventh,
Speaker 2: and then nineteen percent on April third say that raising
Speaker 2: tariffs will help the average American. And there's a big
Speaker 2: partisan divide here where you know, there's a significant number
Speaker 2: of Republicans who say it will help, but even there
Speaker 2: it's not a majory. It is a plurality at thirty
Speaker 2: nine percent. Among Democrats, it's only six percent think they
Speaker 2: will help independence, it's only fourteen percent. So there is
Speaker 2: next two zero confidence among the American public that this
Speaker 2: is actually going to be, you know, taking the medicine
Speaker 2: and on the other side, some grand utopio weight crber.
Speaker 1: Yeah, that's right.
Speaker 3: If you look at it overall, and we still have
Speaker 3: not yet seen the impact. That's actually the probably the
Speaker 3: most important point to underscore. This is where you start at.
Speaker 3: This is the market is the leading indicator. The price
Speaker 3: at Walmart hasn't gone up yet, right, you haven't actually
Speaker 3: been seen the layoffs. We just know that that it's
Speaker 3: likely coming unless there's some major impact. But in the interim,
Speaker 3: this is the baseline from which you're beginning with. So
Speaker 3: that's really not where you want to be. Let's go
Speaker 3: and put the next one up there on the screen, though,
Speaker 3: and this is the word of caution for everybody who's
Speaker 3: out there who is hoping and praying for some big
Speaker 3: shift in the Republican base. I'm not so sure it
Speaker 3: says quote Republican skepticism of free trade service. When voters
Speaker 3: were asked whether tariff's help or hurt the economy, seventy
Speaker 3: seven percent said tariff's help create jobs and our beneficial.
Speaker 3: Ninety three percent of Democrats that they raise prices in
Speaker 3: our negative force. The survey was taken before this market
Speaker 3: down on Thursday and Friday, but it is still, you know,
Speaker 3: an indicator of where things were beforehand. Trump successfully completely
Speaker 3: flipped that in terms of the Republican and the Democratic basis,
Speaker 3: how they thought broadly about tariffs, probably the.
Speaker 1: Best idea of negative polarization.
Speaker 3: But it does just show us that even with everything
Speaker 3: that there is right now, you and I all need
Speaker 3: to remember the level of trust that a lot of
Speaker 3: these Republican voters have in Donald Trump. They don't trust
Speaker 3: the media. They don't trust you know, the New York Times,
Speaker 3: the Wall Street Journal or CNBC.
Speaker 1: If anything.
Speaker 3: They liked seeing Jim Kramer and these other people panicking.
Speaker 3: Right there's a lot of negative polarization. In fact, the
Speaker 3: best argument I've heard that's pro tariff is everybody who
Speaker 3: was wrong about this, this, this, and this are the
Speaker 3: people who are upset about tariffs.
Speaker 1: I sympathize with that.
Speaker 3: You know, whenever you see yourself as I do, find
Speaker 3: somehow in agreement with people posting Milton Friedman memes.
Speaker 1: Makes me cringe. I'm like, maybe I'm entirely wrong about
Speaker 1: this entire thing. I don't think so.
Speaker 3: But obviously anybody who thinks they're right, you know, broadly does.
Speaker 1: But that is the broader thinking.
Speaker 3: You have an entire part of the American electorate which
Speaker 3: is negatively polarized against every institution.
Speaker 1: Trying to tell them that this is wrong.
Speaker 3: It's only going to harden their beliefs almost certainly at
Speaker 3: an emotional level. And really, I don't think that there
Speaker 3: will be any grand flip for them unless there is
Speaker 3: some serious economic fallout. And you know, as we just said,
Speaker 3: it's just not there yet. Yes, the stock market and
Speaker 3: all of that is there, but that's just you know,
Speaker 3: a prelude. If you think about h nine, what was
Speaker 3: the absolute bottom and the worst part of it, It's
Speaker 3: not when the market drop by fifty percent. It's when
Speaker 3: people were fire sailing their houses and you know, people
Speaker 3: were showing up to occupy Wall Street. It takes some
Speaker 3: eighteen months for this stuff to really bleed into the
Speaker 3: overall economy, somebody goes to the bank, you know, or
Speaker 3: somebody goes to that bank there. People are not lending,
Speaker 3: there's a liquidity crunch this you know, rate crises and
Speaker 3: all this. So get fired from my job six months
Speaker 3: later because cash reserves have fallen down. That's when the
Speaker 3: stuff really starts to roll. So we're still not there yet.
Speaker 3: I think people should buckle up.
Speaker 10: Yeah.
Speaker 2: Republicans are very much in trust the plan mode. Yeah,
Speaker 2: no doubt about it. Like you said, they don't believe
Speaker 2: anybody but Trump. And so if Trump is like this
Speaker 2: is going to be great, they're like, all right, well
Speaker 2: we'll see. Maybe it's going to be great.
Speaker 4: I don't know.
Speaker 2: And the question is, and if we could put the
Speaker 2: last element actually up on the screen here, guys, see five.
Speaker 2: The question is, once it gets from quote unquote just
Speaker 2: a market drop and you start to see even more
Speaker 2: companies laying off workers and prices are going up, and
Speaker 2: you you know, likely are in a situation of stagflation
Speaker 2: and the economic disaster in ordinary people's lives. If we
Speaker 2: get to a place, god forbid where that becomes undeniable,
Speaker 2: does that change anything, and you know, the lowest approval ratings.
Speaker 2: This is a Nate Cone rite up. He says, Republican's
Speaker 2: tariffs suppose a risk like no other. Trump's political strength
Speaker 2: is built on the economy. If it thinks he could
Speaker 2: drag his party down with him, he has a whole
Speaker 2: You know, look at the way that recessions have normally
Speaker 2: worked out for presidents, and this one, if we do
Speaker 2: end up in recession, will be completely self inflicted and
Speaker 2: there will be no ability like Obama in ten twenty
Speaker 2: twelve is like, Hey, I'm still trying to pull a
Speaker 2: down of this mess that these last guys left, you know, Biden.
Speaker 2: Same thing with Trump coming out of the COVID crash,
Speaker 2: like I'm just trying to get things back together after
Speaker 2: these people screwed things up. Trump is not going to
Speaker 2: have that luck to like he owns this one hundred percent.
Speaker 2: There is no ability to be like, oh but Joe Biden, No,
Speaker 2: you are the one who did this and architect of this,
Speaker 2: so it lands in your lap. So if there is
Speaker 2: a recession, it will undeniably be because of the singular
Speaker 2: person of Donald J. Trump, and Nate writes in this piece,
Speaker 2: he says the tariff announced Wednesday, how introduce a political
Speaker 2: problem of an entirely different magnitude for Trump and his party.
Speaker 2: No party or politician of recession proof. Historically, even truly
Speaker 2: dominant political parties have suffered enormous political defeats during major
Speaker 2: economic downturns. In none of those cases, not even with
Speaker 2: the infamous Smoot Holly tariff, could the president be held
Speaker 2: responsible for the downturn as self evidently as today and
Speaker 2: whatever it may have felt like after the election, the
Speaker 2: Republican Party is not even close to politically dominant. Keep
Speaker 2: in mind, and this is part of why Trump is,
Speaker 2: I think, in such complete giving no fox about anything mode.
Speaker 2: Is like he doesn't care about the Republican Party. He
Speaker 2: doesn't really care if it's a complete bloodbath in the midterms.
Speaker 2: He's doing whatever he wants anyway. And so you also
Speaker 2: have to keep in mind, as popular as he is
Speaker 2: with the base, he's not going to be on the
Speaker 2: ballot in the midterm elections. And we have seen consistently
Speaker 2: that his popularity with the Republican base does not sleep
Speaker 2: over to the broader Republican Party. So yeah, they have
Speaker 2: to be looking at the results in Wisconsin have to
Speaker 2: be looking at the leader of their the undisplayed leader
Speaker 2: of their party intentionally. It appears crashing the entire economy
Speaker 2: and go oh shit, Like if we're in if I'm
Speaker 2: in a district that's less than Trump plus fifteen, I'm
Speaker 2: starting to get real nervous looking what is going on here.
Speaker 3: I hate to say it, but you know who I
Speaker 3: see making big bets that I think are going to
Speaker 3: pay off, Ted Cruz. And I hate to say it,
Speaker 3: but I see him out there. He's counter signaling on tariffs.
Speaker 3: He's talking about tax hikes, he's trying to loop it
Speaker 3: into some of his old school conservatism. And Ted Cruz
Speaker 3: is a guy is hardline on immigration but anti tariff,
Speaker 3: one of those people who could credibly say I ran
Speaker 3: against Donald Trump in two thousand and sixteen. And I'm
Speaker 3: not just one calling this. Other people are saying. They're like,
Speaker 3: I think he's going to challenge Shadey Vance for the nomination,
Speaker 3: and if you think about what the future of that
Speaker 3: might look like. Trump has already said he doesn't want
Speaker 3: to endorse an Actually he wants to run for a
Speaker 3: third term. But let's assume that he's just going to
Speaker 3: slip this one out and let people.
Speaker 1: Dangle in the wind.
Speaker 3: Well, you would rather be on the record against it.
Speaker 3: And I again, I hate to say it, because I
Speaker 3: think Ted Cruz is totally wrong. Ted Cruz is an
Speaker 3: actual on iroonic free trader, doesn't believe in tariff's at all.
Speaker 3: Who believes in you know, this Tea party libertarian vision.
Speaker 3: But let's be honest. I mean, the bad way that
Speaker 3: this is all being handled and rolled out, it's going
Speaker 3: to poison the well of tariff discussion for a generation.
Speaker 4: Really sucks.
Speaker 1: It's horrible.
Speaker 3: I was thinking about it, you know, in terms of
Speaker 3: two thousand and eight, for people like us who really
Speaker 3: became politically aware at that time. Anytime I hear about
Speaker 3: leverage or credit default, I'm just like, no, you know,
Speaker 3: it's it's baked in for all of us who lived
Speaker 3: through all of that. Well, think about if you're you know, me,
Speaker 3: twelve years younger, what are you living through right man?
Speaker 3: If you're a college senior right now, Holy shit, can
Speaker 3: you imagine having to graduate into this economy? I mean
Speaker 3: it'd be one of the those where if you especially
Speaker 3: you know, with the overall lee times for where we are,
Speaker 3: what we're only a month or so away from college graduation.
Speaker 1: I think, what are they going to do? Yeah, I
Speaker 1: mean what are you going to do?
Speaker 3: And there are a lot of signs, just like, oh
Speaker 3: nine law school applications are double what they were just
Speaker 3: from last year. That's a terrible sign. It means people
Speaker 3: are willing to leverage up to two hundred k in
Speaker 3: the hopes that things are better three years from now.
Speaker 3: By the way, news flash, it's not going to be.
Speaker 3: But as those people found out at that time, I
Speaker 3: know a lot of those folks that didn't end up
Speaker 3: working out so well for them. But all of the
Speaker 3: signs are there. So you're graduating in a month. Okay, No,
Speaker 3: we're looking at occupy again. That's what happened last time
Speaker 3: eighteen months or so. And so the polling and the
Speaker 3: way that the base and all of that will be
Speaker 3: negatively impacted could genuinely poison the well on tariffs, not
Speaker 3: just for them, but for the entire country writ large.
Speaker 3: And it's again I hate this because politically we are
Speaker 3: such a yo yo nation.
Speaker 1: We're just going to.
Speaker 3: Flip back to some sort of Obama as you know argument,
Speaker 3: which is gonna make a lot of sense to a
Speaker 3: lot of people and who were willing to listen.
Speaker 2: I mean, and it's unfortunate because there actually was a
Speaker 2: new bipartisan consensus around some level of intelligent trade protectionism.
Speaker 4: You know, Trump and Trump could have claimed credit for that. Absolutely.
Speaker 2: He started that interaction with the taries he put on China,
Speaker 2: which I supported, you supported. They didn't actually accomplish that
Speaker 2: much because they weren't paired with industrial policy, but they
Speaker 2: did open the door. And then Biden is able with
Speaker 2: Inflation Reduction Act in the Chips Act, which again no
Speaker 2: one is saying that this is like remade the economy
Speaker 2: and it was the end all be all, but these
Speaker 2: were significant investments that were paying off. They genuinely were
Speaker 2: working for critical investments for industries that are going to
Speaker 2: be important in the future and important for national security.
Speaker 2: And Trump is blowing that up. And now you know
Speaker 2: that consensus about Arris. There's this western Pennsylvania Democratic representatives
Speaker 2: like represents an area around Pittsburgh, Representative Luzio, and we're
Speaker 2: trying to get him on the show. Actually I think
Speaker 2: we haven't booked for this week. I want to speak
Speaker 2: with him, but you know, he comes from this like
Speaker 2: blue collar part of Pennsylvania and very like union heavy,
Speaker 2: et cetera. And he put out this video that was like, listen, guys,
Speaker 2: tariffs in certain certain circumstances, yes, but what Trump is
Speaker 2: doing is crazy.
Speaker 4: Like he's very clear, I oppose this thing that is
Speaker 4: being done.
Speaker 2: Democrats will ript Liberals got living him to shreds for
Speaker 2: daring to say that in some instances tariffs are good
Speaker 2: and that's where that's where the Democratic Party is going
Speaker 2: to be, unfortunately, and that is where so much of
Speaker 2: the country is going to be because it's difficult to
Speaker 2: have this nuance like think, tariffs are a tool, right,
Speaker 2: they can be used in a good way, and they
Speaker 2: can be used in a very bad way. But it's
Speaker 2: hard to have that nuanced conversation when they're being used
Speaker 2: to just intentionally crash the markets and blow up the
Speaker 2: whole economy.
Speaker 1: Totally, I totally agree.
Speaker 3: I can see it coming from a mile away, is
Speaker 3: that this negative polarization and increasing the way already the
Speaker 3: way that it is. The Democrats are done with tariffs,
Speaker 3: probably for an entire generation.
Speaker 1: Keep going.
Speaker 3: The dependents will join you there, and eventually the non
Speaker 3: MAGA part or whatever is left of the Republican party,
Speaker 3: and you'll find yourself at a supermajority who supports things.
Speaker 1: Like TPP or whatever, you know, and we're.
Speaker 3: Going to be right back from where we started twenty
Speaker 3: five years from now. And so this is where, look,
Speaker 3: you do need to blame the practitioners, where if you're
Speaker 3: gonna do something which is genuinely extraordinary, you have to
Speaker 3: do it right now. Nobody is saying Donald J. Trump
Speaker 3: is mister detail or any of that, but I mean,
Speaker 3: at a basic level, what people I think voted for
Speaker 3: is there's this idea that there's a senile old man
Speaker 3: in the White House.
Speaker 1: We're going to restore things to normalcy.
Speaker 3: And yes, we'll have our chaos in terms of Trump,
Speaker 3: you know, drum thing about Mika Brazinski's facelift. But but
Speaker 3: and p goes up, the gospel gas price goes down,
Speaker 3: the people around him seem to generally ish more competent
Speaker 3: compared to these Jake Sullivan type idiots or Anthony Blincoln.
Speaker 3: So fine, but that's not what you're getting now. Like
Speaker 3: you said, now you own this thing one hundred percent.
Speaker 1: Okay.
Speaker 3: You know, people say, like, oh, he's a world historic figure.
Speaker 3: He's making a huge bet and it is true. Trump
Speaker 3: is actually fundamentally a gambler. He believes that he can
Speaker 3: do this and he can get away with it. Obviously,
Speaker 3: he's ten times more successful than I am in politics,
Speaker 3: so maybe he's right. But it's one of those where
Speaker 3: you can see all of the building blocks for a crisis.
Speaker 3: I was talking thinking about this with Doge as well.
Speaker 3: At a certain point, it's no longer up to you.
Speaker 3: Like I said before about that whole airline disaster, imagine
Speaker 3: if they had fired air traffic controllers and you had
Speaker 3: a crash. Even if you're not responsible that crash, you're
Speaker 3: getting blamed for that crash.
Speaker 1: Same thing with what's.
Speaker 3: Happening right now with the economic you know, with these
Speaker 3: economic the tariffs and a potential recession. Let's say that
Speaker 3: something totally out of the norm happens. Remember previous recessions
Speaker 3: that have sparked actual sell offs like this nine to
Speaker 3: eleven and the pandemic.
Speaker 1: Who knows shit happens. That's one of the rules of
Speaker 1: running the world. Do you have no idea?
Speaker 3: Russia invades Ukraine, boom gas market entirely implode. Same October seventh,
Speaker 3: changed the entire route of every shipping container in the
Speaker 3: entire world. You never you can't plan for such an event.
Speaker 3: So let's say he's got this grand plan and then boom,
Speaker 3: something happens.
Speaker 1: You know in the world.
Speaker 3: Now you're in that fortieth order consequence. But you are
Speaker 3: going to bear one hundred percent of the responsibility for that.
Speaker 3: And people don't forgive and you know, honestly, they shouldn't
Speaker 3: forgive you.
Speaker 1: They shouldn't forgive you.
Speaker 3: He screwed people's lives and if you get laid off
Speaker 3: as a result of them, well, I don't know what
Speaker 3: to tell you.
Speaker 1: That's the number one thing you're not supposed to do.
Speaker 2: Yeah, he said some really wild things too, Like he
Speaker 2: said there should be no supply chains.
Speaker 4: They should all be in the US.
Speaker 2: This is like, it's like the philosophy of North Korea,
Speaker 2: like unironically the philosophy.
Speaker 3: As I've heard, my heart is in my heart, I
Speaker 3: am autarchist, which is what you're talking about. That's what
Speaker 3: the North Korean model is, And just why do we
Speaker 3: really need all of these other countries. That's where my
Speaker 3: heart is. That is not where my head and my
Speaker 3: stock portfolio. It's more the reality of all of the
Speaker 3: global supply chain. It would be great to get you know,
Speaker 3: twenty percent more autarchic, you know, be a nice little
Speaker 3: goal for us. But you know, look, let's be real.
Speaker 3: You know, if we want to do that, it's going
Speaker 3: to take a billion dollars in investment. We're going to
Speaker 3: need actually not a billion, many many more than the
Speaker 3: hundreds and hundreds. Yeah, it's probably be a trillion dollars.
Speaker 3: And even that, maybe we'll get five ten percent. It's
Speaker 3: a start at the very least. It's a philosophy. If anything,
Speaker 3: I think Trump is negatively polarizing US, and I think
Speaker 3: ten years from now, what you're going to watch is
Speaker 3: Trump is a lot like FDR in that, you know,
Speaker 3: he showed people what was possible in such a way
Speaker 3: that people are like, I'm not so sure about this.
Speaker 3: Donald Trump will be the very last president to have
Speaker 3: IEBA authority. I'm one hundred percent confident of that. Donald
Speaker 3: Trump will be the very last president to be able
Speaker 3: to you know, alien enemies. That's getting some sort of
Speaker 3: you know, when the House takes credit just like they
Speaker 3: passed the twenty second Amendment, they're going to say and
Speaker 3: Congress has to approve by fifty or two votes or whatever,
Speaker 3: and a lot of the things that he's pushing right now.
Speaker 3: The legacy of that will actually likely be one of
Speaker 3: reaction and reassertion I think by Congress obviously could be
Speaker 3: totally wrong.
Speaker 2: But yeah, well, last thought on this on the sort
Speaker 2: of broad historical sweep, I mean, in part because of
Speaker 2: the disaster of the Smoot Holly terraces and how they
Speaker 2: exacerbated the Great Depression. You know, progressives, FDR was a
Speaker 2: free trade guy. I mean, you know, moved very much
Speaker 2: in the direction of thing.
Speaker 1: It's not a hundred like that's a very free freedman
Speaker 1: and monitorist.
Speaker 2: But it did make the during depression worse. Like at
Speaker 2: that time it was terrible economic policy.
Speaker 1: I'm still not ready to say it was. Well, okay, the.
Speaker 4: Monsters it was the only thing, yes.
Speaker 1: For and I do not think that is accurate. But
Speaker 1: this that's a much more nuance.
Speaker 2: But you know, back to my point, it is widely
Speaker 2: believed and was widely believed at the time that Smoot
Speaker 2: Holly exacerbated the Great Depression, and FDR's whole you know
Speaker 2: push was to roll back trade barriers, and that helps,
Speaker 2: you know, begins an era in which the progressive position
Speaker 2: on trade was for a long time lowering trade barriers
Speaker 2: and lowering tariffs. And during McKinley's time also there was
Speaker 2: actually pushback. It was somewhat divided depending on the industry
Speaker 2: and where you would doing, whether you're a farmer, a manufacturer, whatever.
Speaker 2: But you know, there was a long period in which
Speaker 2: the progressive position was a free trade position, and that changed,
Speaker 2: you know, over time. And this that's why, you know,
Speaker 2: I do think there is so there are so many
Speaker 2: facets to what is being done right now. It just
Speaker 2: is impossible to wrap your heat around. And I can't
Speaker 2: think of another single policy move that has been made
Speaker 2: by a leader here or around the world. Maybe like
Speaker 2: you know, our decision to enter World War two, but
Speaker 2: that was sort of like made for us when we
Speaker 2: were attacked at Pearl Harbord, but that could have this
Speaker 2: level of both domestic and global radical fallout. And the
Speaker 2: other thing that we haven't even touched on here is
Speaker 2: the rest of the world also is going to get
Speaker 2: a say, you know, the Europeans are getting ready to
Speaker 2: announce what their retaliatory tariffs are going to be, or
Speaker 2: what their response is going to be. China's already announced
Speaker 2: quite a significant response You already have had a shift
Speaker 2: in the global power balance. You already had to move
Speaker 2: away somewhat from the dollar as well, and that too
Speaker 2: will have a massive global reordering effect, with consequences that
Speaker 2: are hard to comprehend.