Trump announces new tariffs on China, and China retaliates with a 34% tax on all U.S. goods. What does this mean for the economy and the jobs market? What will it mean for consumers and businesses? And how will it affect the economy overall?
00:00:00.000China is now hitting back, retaliating against the Trump tariffs, announcing this morning it is now slapping a reciprocal 34 percent tariff on all U.S. goods.
00:00:11.280With stock futures, I mean, this is not looking good.
00:00:14.340The next piece of data that investors and beyond are also going to be looking at this morning is the March jobs report.
00:00:28.480Absolutely. I mean, we're looking at absolutely brutal reaction from the markets yesterday, and it could easily get a lot worse today because we are starting to see the beginning of the retaliation.
00:00:40.600And there's no polite way of putting it.
00:00:42.920We are sliding into a major trade war.
00:00:45.620And the last time we saw anything like this was almost 100 years ago, back in the 1930s, when we had a wave of protectionism and populism and patriotism, a nice word for nationalism, that ended very badly.
00:00:59.540So, frankly, looking back to the future right now is a very good guide to what's happening.
00:01:04.220I want to read to you something that Steve Bannon told the Wall Street Journal, that he said when it comes to negotiating with other countries, every day will be like Christmas.
00:01:12.820At the end of the day, what really excites him is talking about a deal with Canada, having Whitcoff update him on Russia.
00:01:18.980And then whatever small wins he gets, they're going to act like it's a big, giant win and run a victory lap.
00:01:53.720Yeah, I mean, so Trump claims these are reciprocal tariffs.
00:01:58.620And that sort of says he says, you know, we're getting ripped off.
00:02:02.020So therefore, in Trump's mind, the stakes here are really high.
00:02:05.180If he strikes a deal, he'll be able to stop us getting ripped off.
00:02:08.260The problem with that is it simply isn't true.
00:02:12.080Most of our trading partners have average tariff rates of one to two percent.
00:02:17.120Trump is about to move the United States to 20 percent.
00:02:20.740We will have tenfold higher tariff rates than any other country.
00:02:26.040Even if he strikes all the best deals in the world, he'll be only able to reduce tariff rates by one to two percent because that's all they currently are.
00:02:34.800He's starting a fight where there's no table stakes when you win.
00:02:37.640Let me kind of give you the the the economist tools, because it's based on concepts like export and import demand elasticities, currency adjustments and things like that.
00:02:49.520But here's here's the analytical issue we're trying to do under the principle that the president wants to charge those countries what they charge us.
00:02:59.540As you pointed out, Vietnam has a tariff, applied tariff rate.
00:03:05.780It's much larger than ours, but doesn't come near the tariff we've charged them.
00:03:11.100So the question is, how do you value the following, Phil?
00:03:14.400So let me count the ways you got to value currency manipulation.
00:03:19.220You got to value the VAT tax distortions, dumping, export subsidies, technical barriers to trade, agricultural barriers to trade, quotas, bans, counterfeiting, intellectual property theft and all of that.
00:03:33.900So here's the punchline. If you look at the trade deficit, which every country runs from us, the first thing economists should tell you, ask the next one you have on your show, should the UNS have chronic and sustained trade deficits?
00:03:48.140No, there's according to economic theory, they should not.
00:03:50.820So what the trade deficit does for any given country, it's the sum of all cheating.
00:03:56.720It's the sum of all unfair trade practices.
00:03:59.660And in a national emergency where the trade deficit itself is the national emergency and security threat because it takes our factories, our jobs and transfers wealth abroad,
00:04:11.080the reciprocal tariff is that which reduces the trade deficit with each country.
00:04:16.720This is the problem. This is just Trump gone hog wild, willy nilly.
00:04:22.260Nobody knows what's going on, even at the White House.
00:04:24.980I mean, when they announced this, Trump in the Rose Garden had his whole chart next to him.
00:04:30.440Fair enough. Let's look at the tariff chart, but go pull up the White House website and you'll see something totally different on tariff numbers.
00:04:39.540We are dealing with a dangerous amateur hour in this White House and everybody's lives are going to be affected by this because if this kicks in like we think,
00:04:50.460you're going to see prices of smartphones go up, produce, avocados is the one people are mainly focused on.
00:04:58.040But any kind of, you know, generic medicine that you might need to have a cheaper type of prescription than you would get normally from your pharmacy.
00:05:08.080Once you go on and on, this could unravel and nobody has confidence that Trump really knows what he's doing.
00:05:14.620He just wants to do something audacious and big.
00:05:17.740I can tell you this right now, what we're seeing was positive.
00:06:55.980I've just got to see this thing through.
00:06:58.480A complete total reorganization of the world's economic system, trading system, and at the same time, a reordering of the world's geopolitical or geostrategic by one man, Donald Trump.
00:07:11.560That is executing this today, just put out another tweet.
00:07:16.580Hey, for everybody investing in the United States, I'm rock hard here on policy, not going to move.
00:07:23.960My sources tell me, and we're fairly dialed in at these countries around the world, they're signing up people like crazy to come to Washington, D.C. to surrender and say, yes, maya culpa, maya culpa, maya maxima culpa.
00:07:41.080We are wrong to have not just tariffs, can't look at tariffs, but the non-tariff barriers.
00:07:53.960To stop American goods being sold, just go around the world.
00:07:57.640If you travel around the world, how many American cars do you see in Japan?
00:08:11.500Speaking of Korea, we're going to get to that in a moment.
00:08:13.260The judicial insurrection is just not in federal court in Washington, D.C., where a judge who should start impeachment hearings next week is trying to insert himself between the commander-in-chief and the commander-in-chief's responsibilities.
00:08:30.560South Korea, they removed the president last night.
00:08:32.720I would certainly hope that somebody in the State Department, somebody in the Defense Department, is on watch here.
00:08:45.440I would argue that the South Koreans are one of our principal allies, and we're going to lose the South Korean Peninsula and all those good folks, and I don't know, 28,000 American troops that are there.
00:09:01.040We're going to play a clip and then bring in Colonel John Mills.
00:09:04.520Shelley Coomer is going to be in later as a businessman, a guy that had his life turned upside down because of this, and he's asked for sustained tariffs, whatever the number is.
00:09:13.620He loves President Trump's plan, but as all small businessmen, and we can revitalize this country with small and medium-sized manufacturing.
00:09:22.000It can be done, and it will be done if you stick, if you just hold the line.
00:09:29.560Don't let the meltdown on Wall Street because it's temporary.
00:09:59.800One thing that's quite evident is Ezra Klein's book, Abundance, which I think comes to these kind of weird and wrong conclusions, but it's quite brilliant in its analysis of the credential class, what the Democratic Party has become into the credential class.
00:10:34.800Their big article, their lead article about this whole thing is how a house, essentially a house for millionaires, how a house for millionaires is going to cost more.
00:10:46.060Because Trump's tariffs means that either the goods from overseas that we shouldn't be using to build these houses is going to cost more or it's going to come back to the United States.
00:10:58.080And, oh, by the way, they throw in, they say not just the goods, but then they throw in that 25 percent of the construction industries, illegal alien slaves.
00:11:09.440And they imply in the article that's all good.
00:11:13.100This is why in the Rose Garden you had union people, union people cheering on President Trump.
00:11:25.540The trade deficit accumulated, our debt is $37 trillion, $38 trillion, exploding every day because we're not dealing with it.
00:11:36.260And, oh, by the way, Elon, before you leave town, I just need you to check in and show me where the trillion dollars of cuts are.
00:11:55.780And for Kash Patel and Pam Bondi, our brothers and sisters over the Justice Department, will you please start, just announce you've got a grand jury.
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00:18:28.060A Warren Buffett article, the Oracle of Omaha, in 2003, when the trade deficit was virtually, it was big, but it was nothing compared to today, saying it's the end of the country unless we take care of this.
00:18:45.140Ezra Klein's book says the Democrat, the credential class, like those little kids in school, remember in grade school, all the suck-ups?
00:18:52.760And I'm sorry if this sat in the front of the class and teacher, teacher, teacher.
00:18:56.000It's all about process and they're turning around.
00:18:58.180Hey, Bannon's, you know, goofing off in the back.
00:19:10.160If you're outside of their bandwidth of what they understand is a process and their bandwidth is quite tight and tiny.
00:19:18.780It only thinks of citizens of the world.
00:19:22.340We want every nation to thrive and prosper, but not at the expense of American workers.
00:19:30.220That's the system we have today, that the top 1% or the top 3% glean it all because that's the connective tissue to the globalist apparatus.
00:19:40.740They have set up and let evolve to the detriment of this country.
00:19:46.220That is the raison d'etre of Donald John Trump.
00:21:03.680Bloomberg, now Bloomberg has three things.
00:21:09.820And Michael Bloomberg's worth, I don't know, $80 billion, $100 billion, because he's a bond trader and got an idea.
00:21:15.800His big idea is what about if we put all the information on Earth that comes across this thing called the wire and later the Internet right on a terminal.
00:21:24.960So a bond trader that has to make decisions in a moment's notice about what's happening in the world.
00:21:31.660By the way, the 10-year treasury is at under 4%.
00:21:58.640If you ever feel lonely, you want companionship, you know, the middle of the night and, you know, maybe the bad habits you want to get away from, maybe having another beer or doing whatever you're doing, have another piece of chocolate cake.
00:22:13.240Now, it's business news, but it's covering the news 24-7.
00:22:17.660It's actually like you're sitting in the situation where you get 24-7, boom, boom, boom, Asian markets open, European markets open, then back to the United States, it starts to cycle over again.
00:22:55.700And this is why Bloomberg's worth $100 million.
00:22:57.800It's the terminal to the bond traders, and it connects all the capital markets in the world.
00:23:02.140Every desk that's important in the world is connected to this.
00:23:04.420So if you're on the terminal news, the Bloomberg people who are curating this and want to make sure they get paid that $100,000 on each terminal, make sure that this news is meaningful to reality.
00:24:43.120Or setting up a new category of if you make a million bucks a year or more, you have a different tax rate.
00:24:49.780My point, in the last 48 hours, Donald Trump and the Republican Party have put forward a plan of not tariffs, but an economic plan to revitalize this nation as a major manufacturing superpower.
00:25:12.320And to revitalize her citizens with well-paying, meaningful careers, not just jobs, careers.
00:25:25.660And that a young person wouldn't have to go to college to an indoctrination center and get some DEI-approved degree and take out hundreds of thousands of dollars of loans that you can't pay back because you can't get a job with that crap.
00:25:38.680You just become part of the whiny credential class.
00:25:42.880They're going to sit around and whine all day at a Starbucks, look to get into trouble.
00:25:50.680And at the same time, understand the fact that the wealthy, the top 1%, the top 3%, have got to pitch in here and help us cut this deficit.
00:26:01.700You've got to back off your lobbyists.
00:26:03.220You've got to sit there and say, hey, these cuts have to happen.
00:26:06.220And if not, and we need more tax cuts for the working class and middle class, particularly no tax on Social Security, then you've got to plug the gap.
00:26:30.900You know, Mike Johnson and the crowd over at the House, I haven't really seen a show of force.
00:26:36.760Like, you know, the time when they want something and they want a tax cut for their donors, they all get on the capital steps and there's like, you know, 400 of them, or I guess 220 of them.
00:26:47.820They're all up there for a group shot.
00:26:49.480Like, it's the last day of third grade and you're getting your class picture.
00:26:53.860Mike Johnson sitting there, Polly Pox sitting there, the big old head of his, smiling, that goofball smile.
00:26:59.280Don't see a big chorus coming out for the tariffs.
00:27:04.560They're still working through that Austrian economics playbook.
00:29:16.660We had an absolutely brutal reaction from the markets yesterday, and it could easily get a lot worse today, because we are starting to see the beginning of the retaliation.
00:29:28.680And there's no polite way of putting it.
00:29:30.700We are sliding into a major trade war, and the last time we saw anything like this was almost 100 years ago, back in the 1930s, when we had a wave of protectionism and populism and patriotism, a nice word for nationalism, that ended very badly.
00:29:47.580So, frankly, looking back to the future right now is a very good guide to what's happening.
00:30:04.500Well, he can certainly smash things up dramatically.
00:30:07.160He's essentially already smashed up a very carefully constructed pattern of collaboration that was created in the last five decades.
00:30:14.860And in many ways, we are going back to the 1930s, because it's worth remembering that when we had the explosion of protectionism in the 1930s, that came after another long period of globalization before World War I that went dramatically into reverse after that, with tragic consequences.
00:30:32.540So we have to hope that history isn't repeating itself this time around.
00:30:35.300But the key point I want to make, which I covered in my book this morning, is that essentially in my column this morning, we're used to analyzing trade through the lens of neoliberal economics, people like Adam Smith and David Ricardo.
00:30:50.740We have to go back and look at the current policy framework, frankly, using the tools from the 1930s.
00:30:56.080And there's writers, economists like Albert Hirschman, who looked at power politics and bullying, which is much more relevant to understanding what's happening today.
00:31:04.200Power, power, okay, the Financial Times of London, that's Jillian Tett, wonderful person.
00:31:36.080The person who used to talk about that all the time was Lou Dobbs.
00:31:38.640And he said the day was coming that you were not going to manufacture anything in this country and working class people are going to work three jobs.
00:32:03.900This is the core of President Trump, of why he ran for public office, of why he came back.
00:32:15.120If he had just gone to Mar-a-Lago and stayed and played golf and bought more golf courses, none of the attacks, they wouldn't try to put him in prison.
00:32:26.860They wouldn't try to get him for insurrection.
00:33:05.100That's why, like, Cincinnatus, the heroic Roman general, he came back to do it again in the greatest show of moral courage in the history of this nation.
00:33:25.940And you've got guys over in the Senate right now who owe their entire political being to President Trump, their entire political being to President Trump.
00:33:37.960And they're over there right now working with Democrats and Democrats have sold out the working class.
00:33:44.300What did the 2024 not a wake up call to even the rhino Republicans and what the party's become and why you're winning?
00:33:54.000We have a twenty five trillion dollar trade.
00:33:56.080What does that mean that the wealth of this country has gone to other places, principally to China and even there, an intermediary to go back to the Lords of Easy Money on Wall Street that shipped that got the factories over there in partnership with the Chinese Communist Party?
00:34:12.880How's that going to look 50 years from now when they look back in history, it's the same as the Wall Street guys that financed Hitler and the big corporations that financed Hitler?
00:34:32.260He had plenty of backing behind the scenes.
00:34:36.060Just like the Chinese Communist Party, another murderous dictatorship has got plenty of big money backing and big corporation backing and big oligarch backing.
00:34:45.620And who's who the saps they come after?
00:34:48.080The working class in the United States of America, because you've been sold out by your elites, sold out by your elites.
00:34:55.460And now they have the gall to sit there and go, my million dollar house could be a little more expensive because I'm not going to use slave labor.
00:35:05.080And I have to buy product from here in the United States of America.
00:35:09.740The New York Times article epitomizes the globalist mentality.
00:35:14.320They hate this country and they particularly hate you.
00:35:37.160If you were Trump supporter, they didn't want you.
00:35:38.940The worst element in this country are the corporatists, the globalist corporatists who use all the benefits of the United States of America and what the little guys provide as far as social stability.
00:35:54.440But don't think anything about giving anything back.
00:36:53.460The whole system is on your shoulders.
00:36:55.120Jillian Tett just told you for the last five decades, we've had a system that's, you know, working pretty well.
00:36:59.680Yeah, it's working damn well for the city of London and damn well for Wall Street and damn well for Singapore and damn well for Frankfurt and these other money centers.
00:37:10.380It's working great for the oligarchs in Silicon Valley and the Mag 7.
00:37:15.440The Mag 7 that hyped all this on AI anyway.
00:37:21.100And Katie Turr, I said yesterday, Katie Turr spent the entire hour yesterday trying to gin up a Kramer moment where Kramer got everybody all worked up in 2008.
00:37:32.440You must, if you need cash, he told people, if you need cash in the next five years, you must sell your stocks today.
00:37:43.880Katie Turr spent an entire hour on the floor of the New York Stock Exchange yesterday trying to gin up with the bonehead Steve Leesman from Columbia Journalism School, never traded, never sat in a pit or traded in his life, knows nothing about capital markets or really economics.
00:38:03.780Just a big liver-lipped liberal spouting his nonsense.
00:38:10.580They sat there trying to gin up a route yesterday.
00:40:13.240First off, that judge, I'll throw an OFAC ruling on him and cut his visa off, cut his passport or anything he's got to the United States, cut it off.
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