Speaker 1: Welcome to a little special edition of the Chuck Podcast,
Speaker 1: specifically for my YouTube subscribers. And so this is what
Speaker 1: I want to deal with this morning, on this Friday morning,
Speaker 1: which is a question I've already been getting over the
Speaker 1: last forty twenty four hours, which is simply what do
Speaker 1: all these tariffs mean for us politically? So look, here's
Speaker 1: what we do know at the moment. This is not
Speaker 1: going to go This does not look like it's going
Speaker 1: to go very well. You have this kind of economic
Speaker 1: shock to the system, this kind of you know, record
Speaker 1: breaking balls in the stock market. It's the type of
Speaker 1: story that everybody pays attention to. This is not the
Speaker 1: type of stories that it's just people that are invested
Speaker 1: in the stock market, or just wealthy people invested in
Speaker 1: the stock market. This is a global story. This is
Speaker 1: arguably the lead story in every major news organization around
Speaker 1: the world because these tariffs have impacted everybody. So look,
Speaker 1: I think a few things here that we both overestimated
Speaker 1: with Trump and underestimated with Trump. And it has to
Speaker 1: do with the idea that he's a transactional guy. And
Speaker 1: the assumption was and frankly, this is what many in
Speaker 1: the business community because Donald Trump campaigned on this, he
Speaker 1: said he was going to do this. He is believed
Speaker 1: in tariffs. It goes back to nineteen eighty seven. Back
Speaker 1: in nineteen eighty seven, when Roger Stone was trying to
Speaker 1: help create Donald Trump the politician, Donald Trump bought a
Speaker 1: full page ad in the New York Times. I believe
Speaker 1: it was in New York Times, maybe been the Post
Speaker 1: Times in journal actually, but it was definitely a full
Speaker 1: page ad that talked about how Japan was ripping off
Speaker 1: America and that Japan our trade deficit, and you know,
Speaker 1: we had idiot negotiators. If you recall nineteen eighty seven,
Speaker 1: Ronald Reagan was president, so he in some ways, Donald Trump,
Speaker 1: who doesn't have much of an ideology, right he was
Speaker 1: one time pro jo and now he's pro life and
Speaker 1: all these things. If there's one issue has been consistent on,
Speaker 1: it's this belief that the American economy should and should
Speaker 1: all be sort of within the borders of America. So
Speaker 1: he does I think this is one of his actual
Speaker 1: core beliefs, that this is the way the system should work,
Speaker 1: that there should be more manufacturing in the country, that
Speaker 1: if you have that that and he sees everything through
Speaker 1: this binary way, there's winners and losers, and America is
Speaker 1: the winner, so therefore they shouldn't have trade deficits with anybody.
Speaker 1: People should have trade deficits with America, but it shouldn't
Speaker 1: be the other way around. So he's somebody that doesn't
Speaker 1: really you know. If I were, if I were a critic,
Speaker 1: I'd say he doesn't understand the global economy. But he
Speaker 1: certainly doesn't. I would say he doesn't really, he doesn't
Speaker 1: buy in to this idea that the global economy has
Speaker 1: been a success. I for the life of me, I
Speaker 1: don't see how people don't look why most people don't
Speaker 1: understand that if you essentially look from post World War
Speaker 1: two to now, America has written the rules for the
Speaker 1: global economy and it has benefited America immensely. Still the
Speaker 1: wealthiest nation still, you know, and I say little things.
Speaker 1: Go to any other country and ask yourself if you'd
Speaker 1: rather live there or hear when it comes to simple
Speaker 1: things like the mail service or the quality of toilet paper,
Speaker 1: never mind the availability of goods and services, the availability
Speaker 1: the fact that we do have a lot more cheap
Speaker 1: goods available to us. Why do I grew up in Miami,
Speaker 1: people used to fly in from other countries in order
Speaker 1: to simply go shopping in the United States. Okay, is
Speaker 1: this has been what the global economy has done for America.
Speaker 1: So I know it's not cool to be for the
Speaker 1: status quo these days. Right, everybody wants to disrupt and
Speaker 1: change and disrupt and change. But this is one disruption
Speaker 1: that doesn't make a lot of sense because one could
Speaker 1: argue that since America has essentially decided that the cause
Speaker 1: of World War two was that we didn't have enough
Speaker 1: the economic ties with each other, and the more economic
Speaker 1: ties you have, that less likely you're going to fight
Speaker 1: each other. And so guess what. The last time we
Speaker 1: went through this tariff business, it was followed by World
Speaker 1: War Two, and there's plenty of evidence that it was
Speaker 1: a pretty direct link. The nineteen twenty nine stock market
Speaker 1: crash essentially was the beginning of the collapse of the
Speaker 1: German economy was already fragile. It sort of accelerated the
Speaker 1: collapse of the German economy, which of course accelerated the
Speaker 1: rise of Adolf Hitler. And I don't think I need
Speaker 1: to tell you what happened after he took over Germany.
Speaker 1: So The point is is that this the American leadership
Speaker 1: post World War Two concluded we can't have this type.
Speaker 1: So what was born all of these multi national multilateral organizations,
Speaker 1: whether it's NATO, the IMF, all of these things, and
Speaker 1: it has been a success. We went nearly eighty years
Speaker 1: without a war in Europe essentially, or almost eighty years.
Speaker 1: There was the Balkan War. We can't ignore that, and
Speaker 1: obviously we have the war now with Ukraine. But the
Speaker 1: fact of the matter has been relative peace on Europe,
Speaker 1: the longest arguably period of peace in Europe if for
Speaker 1: a thousand years, if you want a nitpick on this.
Speaker 1: So this is a radical change and it isn't going
Speaker 1: to get better overnight. So what does this mean politically?
Speaker 1: It's already pretty clear to me that most elected Republicans,
Speaker 1: if they could vote without fear of Donald Trump, would
Speaker 1: take back tariff authority tomorrow. You're already seeing some Senate
Speaker 1: Republicans Chuck Grassley is introduced to bill with Maria Cantwell
Speaker 1: that I think we'll have majority support, probably not yet
Speaker 1: sixty votes, but trust me, it'll get there. But let's
Speaker 1: talk realistically. What do I how should you watch the
Speaker 1: next eighteen months, essentially between now and the midterms, because
Speaker 1: if there is a change in control of either house
Speaker 1: in Congress the midterms, I do think these teriffs will
Speaker 1: go away almost immediately. So if let's make this, I
Speaker 1: believe right now, if there were a Democratic House and
Speaker 1: a Republican Senate that they would collectively grab the tariff
Speaker 1: keys away from Donald Trump. And so the likelihood of
Speaker 1: a Democratic House and a Republican senate's pretty high come
Speaker 1: January of twenty twenty seven. But between now and then,
Speaker 1: the question is would there be a majority in the
Speaker 1: House and a majority in the Senate to do this
Speaker 1: with the Republicans in charge of the House. In the
Speaker 1: answer to that, that is likely. No. There is a
Speaker 1: big distinction between House Republicans and Senate Republicans. House Republicans
Speaker 1: are more reliant on the base of Donald Trump's party.
Speaker 1: They're more reliant on Donald Trump, and they're frankly, you know,
Speaker 1: their political careers would be dead if Donald Trump decided
Speaker 1: to kill their careers. I'm not saying Senate Republicans aren't
Speaker 1: fragile to potential threats from the Donald Trump base, but
Speaker 1: there's certainly a bit more inoculated and many of them
Speaker 1: don't have to run in twenty six. Not all of
Speaker 1: them have to be on the ballot in twenty six,
Speaker 1: So there's a little bit In fact, many of them
Speaker 1: won't be on the ballot ever again with Donald Trump
Speaker 1: or with Donald Trump as president, So there's a little
Speaker 1: bit more security that they have in their minds to
Speaker 1: try to separate themselves from Trump. And frankly, even if
Speaker 1: you are on the ballot in twenty six, senators are
Speaker 1: dealing with a general election electorate. Okay, so a guy
Speaker 1: like Tom Tillis may be vulnerable to a Trump primary.
Speaker 1: Challenge of the matter is he only wins a reelection
Speaker 1: if he can figure out how to win the middle
Speaker 1: and on this tariff business, which really hurts a state
Speaker 1: like North Carolina. To he's going to have to sit
Speaker 1: here and walk a line. He doesn't want to antagonize
Speaker 1: Trump because I think he would struggle in a primary
Speaker 1: in North Carolina. And at the same time, you know,
Speaker 1: if somebody to is right beat him in a primary,
Speaker 1: I don't think that person can win a general election
Speaker 1: in these midterms of North Carolina. So that's just one example.
Speaker 1: But the point is this is what I would watch
Speaker 1: for over the next sort of three to six months.
Speaker 1: I think the don't assume that Donald Trump is negotiating
Speaker 1: with countries. Do I think some countries will get some
Speaker 1: negotiated reprieve. Yes, I think the UK will not much.
Speaker 1: Anybody else in Europe, anybody aligned with the EU know,
Speaker 1: but I think the UK, because of Brexit, he will
Speaker 1: be more inclined to do a deal there. I think
Speaker 1: he's likely to do a one on one deal with
Speaker 1: Japan because the Japanese have basically been courting him very carefully.
Speaker 1: They've been obsessed with courting him multiple leaders, certainly this
Speaker 1: ruling party has, and I think he is likely to
Speaker 1: reward them with some sort of side deal. But for
Speaker 1: the most part, I think he believes this in his bones,
Speaker 1: and so I don't think there's going to be a
Speaker 1: ton of reprieve. So what does that mean? The markets
Speaker 1: are still going to be volatile, People are not going
Speaker 1: to be happy. Remember who's watching the stock market the
Speaker 1: most these days, it's retirees. What's one other thing about
Speaker 1: retirees that people forget about. They vote, right, the person
Speaker 1: most likely to vote in a special or election or
Speaker 1: a midterm election is somebody over the age of fifty
Speaker 1: they are the most likely voter, so and right now
Speaker 1: they're the ones most sensitive to a loss in value.
Speaker 1: Baby Boomers, people in their thirties and forties, you know,
Speaker 1: you can even look at this moment, Oh, maybe there's
Speaker 1: a buying opportunity. You know, you're still invested for the
Speaker 1: long term ten years, fifteen years, touch in your retirement,
Speaker 1: you might have more patience for this. But if you're
Speaker 1: in your fifties, sixties, or seventies, aka the people who
Speaker 1: are the most likely voter and the people the most
Speaker 1: likely to show up, you're going to be very sensitive
Speaker 1: to these market disruptions. So I think you're going to
Speaker 1: likely to see that this is sort of I would.
Speaker 1: I think this is going to be what the Afghanistan
Speaker 1: withdrawal was to Joe Biden, is what this tariff bomb
Speaker 1: that Donald Trump set off earlier this week is going
Speaker 1: to be for him. That Afghanistan withdrawal for Joe Biden
Speaker 1: dropped his approval rating anywhere below forty five somewhere between.
Speaker 1: You know, sometimes could get as low as thirty eight.
Speaker 1: He never got above forty five again for the rest
Speaker 1: of his presence. At this point, I don't expect Donald
Speaker 1: Trump to get above forty four or forty five for
Speaker 1: the rest of his presidency because of this tariff stuff.
Speaker 1: So this is likely to make him less popular, doesn't
Speaker 1: mean he's going to be less popular among the MAGA base.
Speaker 1: In fact, you see, you know, he's got his propaganda
Speaker 1: machine going his media. The sort of the supportive folks
Speaker 1: of his in the media are sort of putting their
Speaker 1: blinders on and pretending that this is you know, he's
Speaker 1: got some brilliant plan here, but it's it's it's going
Speaker 1: to become toxic. You're going to have I think a
Speaker 1: few things to watch for include House Republicans who decide
Speaker 1: not to seek reelection. Some of them may decide I'm
Speaker 1: going to run for governor, I'm going to run for
Speaker 1: the Senate, but I'm not going to run for the House,
Speaker 1: because I think a House Republican is going to be
Speaker 1: a lot more vulnerable in this environment than a Senate Republican.
Speaker 1: Senate Republican might be able to inoculate themselves some you've
Speaker 1: already seen a few of them break away when you
Speaker 1: had ran Paul Mitch McConnell, Lisa Murkowski, Susan Collins vote
Speaker 1: with the Democrats on that, on the on the Canadian tariffs,
Speaker 1: So I think you will have some some that do that.
Speaker 1: If you start seeing the Republican retirements get into the
Speaker 1: double digits, it almost will be handing the Democrats control
Speaker 1: of the House. And I think that will be something
Speaker 1: to watch for because I think you look, we already
Speaker 1: saw in these Monday elections that the Republican base is
Speaker 1: not that engaged. At least Donald Trump's base is not
Speaker 1: engaged enough to win these elections, certainly not in Wisconsin.
Speaker 1: We saw a place like a Scanbia County in Florida
Speaker 1: vote for a Democrat for Congress. For the first time
Speaker 1: since two thousand and six has a Scambia County supported
Speaker 1: a Democrat either for Congress, do you a Senate or
Speaker 1: the presidency. Why is that significant? Well, it's Scambia County
Speaker 1: is home to Pensacola, a naval base. It's got probably
Speaker 1: the largest cohort of federal government workers or federal government
Speaker 1: adjacent workers in the state of Florida because of all
Speaker 1: the adjacent aspects that come with a major naval base
Speaker 1: like the one in Pensacola. Already see the vulnerability and
Speaker 1: that's just a reaction to all of the all of
Speaker 1: the cuts that have been taking place due to DOGE,
Speaker 1: and certainly some of this comfort onto that now you
Speaker 1: have this economy that's going to hit people right in
Speaker 1: the pocketbooks. I mean, the dollar store is going to
Speaker 1: turn into the ten dollar store. You know, they're not
Speaker 1: going to be able to find things that cost a dollar.
Speaker 1: That's going to hit a lot of Trump voters. That's
Speaker 1: going to hit a lot of red districts. So I
Speaker 1: don't think he's going to back down. I think the
Speaker 1: thing that what we all thought about Donald Trump, that
Speaker 1: he was transactional, that the markets would be a guardrail.
Speaker 1: I think we now need to realize that this third
Speaker 1: term stuff is such bs. He's more Thelma Louise here.
Speaker 1: He's got nothing to lose in his mind. He actually
Speaker 1: this might be the one thing he has conviction about,
Speaker 1: and he I think has a higher pain tolerance for
Speaker 1: the market chile rations, a higher pain tolerance for maybe
Speaker 1: rich people calling him to complain than the average politician.
Speaker 1: The average politician, Republican or Democrat, has their largest donor
Speaker 1: on speed dial on their cell phone. So I think
Speaker 1: members of Congress are going to be hearing, not just
Speaker 1: from their constituents with fault and gray phone calls into
Speaker 1: the congressional offices, but the members of Congress themselves are
Speaker 1: going to hear from their biggest supporters, who are all
Speaker 1: going to look at their stock portfolios and panic. So
Speaker 1: it is hard to see how this gets better for
Speaker 1: Republicans before now and the midterms. And I know we
Speaker 1: consider and say this is a long way to go,
Speaker 1: but this is something, this severing of ties with so
Speaker 1: many allies. I got to read you this one quote
Speaker 1: here from the Canadian Prime Minister, which is just an
Speaker 1: astonishing quote, but it's pretty important. This is the current
Speaker 1: Canadian Prime Minister, Mark Carney, and he said the following
Speaker 1: the eighty year period when the United States embraced the
Speaker 1: Mannal of global economic leadership, when it forged alliances rooted
Speaker 1: in trust, in mutual respect, and champion the free and
Speaker 1: open exchange of goods and services is over. While this
Speaker 1: is a tragedy, it is also the new reality. And
Speaker 1: that's why I don't think I think Trump had the
Speaker 1: miscon conception that somehow America was essentially an essential economy
Speaker 1: and that there's just no way that countries wouldn't essentially
Speaker 1: change their economic behavior to appease the United States. This
Speaker 1: is providing a huge opening for China. We now have
Speaker 1: two of our closest Asian economic allies, Japan and South Korea,
Speaker 1: who are coordinating with the Chinese on how to respond
Speaker 1: to the US tariffs. We have the Canadians figuring out
Speaker 1: with the EU how to coordinate. We have now thrown
Speaker 1: people countries that we thought were allies of the United
Speaker 1: States into the arms of China, which seems to be
Speaker 1: an absolute you know, the unintended consequence that nobody should
Speaker 1: want left or right. I mean, if we lose our
Speaker 1: alliances to our chief economic and frankly cultural rival for
Speaker 1: global supremacy, what have we done? You know, we're not
Speaker 1: going to like that. So that's why, you know I
Speaker 1: always say to people who don't want America to be
Speaker 1: the beat cop, I said, Okay, if America is not
Speaker 1: the world's policeman, somebody will be. And you're not going
Speaker 1: to like any other country being the world's cop. You're
Speaker 1: going to be a lot happier for the world's cop.
Speaker 1: And we're just seating this turf we are giving China
Speaker 1: and opening all around the world with countries that were
Speaker 1: so aligned with US, I never thought those bonds would
Speaker 1: be shaken. So look, I think this is a Republican
Speaker 1: Party that's quoting disaster. I'm going to quote Ran Paul,
Speaker 1: who made a various stute point a couple nights ago.
Speaker 1: Ran Paul one of the few Republican senators who's been
Speaker 1: publicly pushing back against these tariffs. This is his sort
Speaker 1: of core libertarianism in him. A libertarian doesn't want any
Speaker 1: time gariffs on anything. But he pointed out a very
Speaker 1: important fact. The Republican Party pre World War Two was
Speaker 1: very similar to the current Republican Party of today, a
Speaker 1: bit isolationist. It was the party of business, and back
Speaker 1: then in the nineteen tens, twenties, and thirties, America's businesses
Speaker 1: were afraid of foreign competition, and so they did want
Speaker 1: tariffs because it protected their businesses, it protected their wealth.
Speaker 1: This is not how the economy works anymore. This is
Speaker 1: the equivalent of Donald Trump trying to somehow manufacture the
Speaker 1: ice block industry again. You know, there was the ice
Speaker 1: block industry used to be a big deal in Europe
Speaker 1: until we figured out refrigeration and we didn't need blocks
Speaker 1: of ice to cool our food. And this is the
Speaker 1: equivalent of trying to turn back the clock to an
Speaker 1: era that doesn't exist. You know, we put those tariffs
Speaker 1: in when we were we weren't using airplanes for cargo.
Speaker 1: Then we were using ships and certainly in this country trade.
Speaker 1: So it is there's no part of this that makes sense.
Speaker 1: And trying to look back and say this was some
Speaker 1: golden age, it wasn't a golden age. We had extreme
Speaker 1: poverty back in the late nineteenth century, early twentieth century,
Speaker 1: we had child labor issues, we had terrible work conditions.
Speaker 1: So I'm not sure what part of that era of business,
Speaker 1: what part of that era of the economy, is actually
Speaker 1: something to wish we had again. So you know, this
Speaker 1: is and you know what happened after that. The Republican
Speaker 1: Party wasn't trusted with control of the legislative branch for
Speaker 1: nearly sixty years. Sixty years. You know, they had a
Speaker 1: brief period where they controlled the House the two elections
Speaker 1: in the fifties thanks to the popularity of Dwight Eisenhower,
Speaker 1: but that went away quickly and they went forty straight
Speaker 1: years with control of the House. This all goes back
Speaker 1: to the Republican Party and their trade issue and being
Speaker 1: essentially punished for essentially wrecking the economy in the twenties
Speaker 1: that led to the Great Depression, and many economists have
Speaker 1: concluded it was the bad tariff regime, among other things,
Speaker 1: that put us in that situation. So I can't see
Speaker 1: a positive outlook politically here for the Republicans. And the
Speaker 1: question is how when do how many congressional Republicans break
Speaker 1: for him? And when do they break for him? I
Speaker 1: explained earlier, I highly doubt the House Republicans will crack
Speaker 1: because they got there because of Trump. So in some ways,
Speaker 1: in for a diamond for a dollar, the Senate Republicans
Speaker 1: want to break, Maybe they'll wait till after they passed
Speaker 1: the tax cut because they're going to need a lot
Speaker 1: of help from Trump on that. By the way, you
Speaker 1: want to talk about stupidity with this legislative agenda by
Speaker 1: this White House. If he knew he always wanted to
Speaker 1: do this teriff for all these tariffs, he should have
Speaker 1: waited six months, gotten his tax cut, then done this. Instead,
Speaker 1: he's now the tax I think he's put his tax
Speaker 1: cuts in jeopardy here, because I think this economy is
Speaker 1: just going to be in terrible shape. Come the end
Speaker 1: of the summer into the fall, we're going to see
Speaker 1: all sorts of horrible warning signs. You're going to see
Speaker 1: a rise of unemployment rate. We've already seen that the
Speaker 1: parent company of Chrysler and Cheep has already announced TERFF
Speaker 1: related layouts. And so the tax cut's going to come.
Speaker 1: I'm sure Donald Trump's going to try desperately to come
Speaker 1: up with some sort of rebate check of some sort
Speaker 1: to try to and call it like sort of hey,
Speaker 1: I'm going to give the first, you know, the first
Speaker 1: chunk of tariff money that comes in the country. I'm
Speaker 1: going to give it back to my farmers. I'm going
Speaker 1: to give it back. And it really isn't you know.
Speaker 1: All it is is our own money that we paid
Speaker 1: that essentially is covering the tariff costs then being sent
Speaker 1: back perhaps in check form. But I'm not sure Congress
Speaker 1: is going to be comfortable going along with that because
Speaker 1: whether it'll even come as as believable. But I think
Speaker 1: he will try something to mitigate this, but I don't
Speaker 1: think it's going to be getting rid of the tariffs.
Speaker 1: And even if he gets rid of him, it's not
Speaker 1: going to solve the larger problem he has already severed.
Speaker 1: He's already severed all of these economic and potentially national
Speaker 1: security ties with so many key allies that putting these
Speaker 1: partnerships back together is going to take decades. It's going
Speaker 1: to take decades, and it's going to take because the
Speaker 1: concern this is now twice that America's elected him, and
Speaker 1: this disruptive ideology. So our European our traditional European partners,
Speaker 1: are traditional Asian partners. They're not going to quickly get
Speaker 1: back into bed with us, even if the next term
Speaker 1: is sort of somebody who is a non a president
Speaker 1: who isn't in favor of trump Ism. But it's going
Speaker 1: to be a long seventeen months, so I think people
Speaker 1: will have to prepare accordingly. I think you will see
Speaker 1: a pullback and spend and that will be just all
Speaker 1: of that will be a domino effect. But I do
Speaker 1: expect Congress will finally find its spine and take its
Speaker 1: tariff power back from the presidency. But it may not
Speaker 1: happen until you have at least one chamber in Democratic hands.
Speaker 1: And I think of at the House, if the Democrats
Speaker 1: pick up the House and Republicans, even if it's you know,
Speaker 1: Republicans don't lose a single senency. I promise you there's
Speaker 1: a large majority that if they know it, can they
Speaker 1: know they have the votes in the House to do it,
Speaker 1: they will take the tariff keys away from the mad
Speaker 1: King here. And I think that likelihood is quite high
Speaker 1: that this is This is potentially one of the greatest
Speaker 1: political disasters. This is I'm trying to come up look
Speaker 1: for other equivalents. Maybe this could be as bad as
Speaker 1: what happened to Democrats in ninety four with the assault
Speaker 1: weapons ban, with healthcare. Perhaps this is as bad as
Speaker 1: the Tea Party for the Republicans for the Democrats in
Speaker 1: twenty ten. Perhaps it's Watergate nineteen seventy four. But I
Speaker 1: think this is not going to be a small ripple.
Speaker 1: This is going to be a gigantic crack here. And
Speaker 1: who knows it. Perhaps perhaps this leads to a new
Speaker 1: fight inside the Republican party. Maybe there are primaries. I'm
Speaker 1: not there yet. I think as long as Donald is
Speaker 1: king of his party, you're not going to see successful
Speaker 1: primary challenges. But I do think if this does lead
Speaker 1: to what happened the last time the Republicans played with
Speaker 1: terror fire and it leads to huge successes for the Democrats.
Speaker 1: You will see the Republican Party have a real fight
Speaker 1: over the direction post Trump. But for now, prepare for
Speaker 1: a very tumultuous and likely This is You know, Donald
Speaker 1: Trump's life just got so much harder to politically conduct
Speaker 1: this presidency. Good luck everybody. M