The Ben Shapiro Show - What The Hell Happened on LIBERATION DAY?!

00:00:00.000 Well, folks, yesterday was Liberation Day, and we are going to go through everything tariff-related you could possibly imagine.

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00:00:23.000 Okay, so yesterday, President Trump declared that it was, in fact, Liberation Day.

00:00:28.000 He said this is our economic My fellow Americans, this is Liberation Day.

00:00:52.000 I've been waiting for a long time.

00:00:56.000 April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again.

00:01:13.000 This is one of the most important days, in my opinion, in American history.

00:01:19.000 It's our Declaration of Economic Independence.

00:01:23.000 Sounds cool.

00:01:24.000 Sounds cool.

00:01:25.000 So how are we going to actually do that?

00:01:27.000 Well, here's the thing.

00:01:28.000 The president's vision of international trade is, I'm sorry to say, mistaken.

00:01:33.000 The president seems to believe that international trade is a zero-sum game.

00:01:37.000 Here is the president explaining that actually the United States is a victim of everyone else when it comes to international trade over the past several decades.

00:01:44.000 Nearly a century later, in the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral Okay, for their military.

00:02:04.000 We pay for everything they have to pay.

00:02:07.000 And then when you want to cut back a little bit, they get upset that you're not taking care of them any longer.

00:02:12.000 But we have to take care of our people, and we're going to take care of our people first.

00:02:16.000 so he's actually making a separate case here, which is that people should pay their own way when it comes to their welfare and defense spending.

00:02:21.000 Totally agree, 100%.

00:02:23.000 That is absolutely true.

00:02:25.000 Also, that has literally nothing to do with what the President of the United States did yesterday.

00:02:29.000 It seems to be predicated, his giant tariff policy that he just dropped on the market unilaterally, probably unconstitutionally yesterday.

00:02:36.000 And I'll get to that in a moment.

00:02:38.000 It's predicated on a few false notions about the American economy.

00:02:41.000 One is that the American economy has been a giant fail for the last 40 years.

00:02:45.000 That is simply not true.

00:02:47.000 This is a myth that is propagated by both parties.

00:02:49.000 And I know, it's a fun myth.

00:02:51.000 It's something people like to believe.

00:02:52.000 It's that yesterday was economically better than today.

00:02:54.000 And then you look at all the stuff around you, and you look at the phone in your pocket, and you look at the computer before you, you look at the internet, you look at the fact you can literally order any product at any time from anywhere on earth, and it arrives at your doorstep in two days at a price you can afford.

00:03:05.000 And you think to yourself, would I rather live in 1980 when the only person with a cell phone was Gordon Gekko on a beach holding a shoebox to his head?

00:03:14.000 When central air conditioning was kind of a rarity when the cars, if you were lucky, had electric windows.

00:03:23.000 Okay? Was that like better?

00:03:24.000 Were things better?

00:03:25.000 Just on an economic level.

00:03:26.000 Forget about everything else.

00:03:27.000 I can make a case about the spiritual level.

00:03:29.000 You can make a case about the dissolution of the family.

00:03:31.000 I agree with many of those cases.

00:03:32.000 But we are talking here about economics.

00:03:33.000 We're not talking about the life of the spirit within.

00:03:36.000 We're talking about economics, which is the distribution of goods and services.

00:03:40.000 So, I need to start by showing you a few charts that show you That America, in fact, does not suck and has not sucked for several decades economically.

00:03:49.000 Because this is a myth that all politicians like to tell.

00:03:52.000 Number one, there is this notion that American de-industrialization has been happening.

00:03:58.000 That America has been hollowed out by de-industrialization.

00:04:00.000 That we are not actually manufacturing anymore in this country.

00:04:03.000 That is not true.

00:04:05.000 It is not true.

00:04:05.000 In the mid-90s, the United States was producing in real manufacturing value-added.

00:04:10.000 In 1997, we were producing $1.4 trillion.

00:04:13.000 In 2025, we are producing $2.4 trillion.

00:04:18.000 And it is an arithmetic increase.

00:04:20.000 You can see the line on this chart.

00:04:22.000 We are manufacturing more.

00:04:23.000 Why aren't there more manufacturing jobs?

00:04:24.000 The answer is technology.

00:04:26.000 We are manufacturing more because we have better robots.

00:04:28.000 And they are doing much of the work that people seem to have a very warm and fuzzy feeling about, but that they would never want to do themselves.

00:04:35.000 I notice a lot of people, why can't I have a factory job just like 1955 Ford or something?

00:04:39.000 Yes, I'm sure that you wanted to be in a non-air conditioned factory Riveting all day.

00:04:44.000 That just sounds like you.

00:04:46.000 That's most Americans.

00:04:47.000 That's your ideal job.

00:04:49.000 No, it isn't.

00:04:50.000 It isn't.

00:04:51.000 Just like working in a coal mine isn't your ideal job either.

00:04:54.000 Here's another chart.

00:04:55.000 We've been told the lie that the American middle class has been hollowed out by international trade.

00:05:00.000 Here's what actually happened to the American middle class over the course of the last several decades.

00:05:05.000 The American middle class stayed approximately the same size, shrank a little bit.

00:05:10.000 Why did it shrink?

00:05:11.000 Why did it shrink?

00:05:12.000 Not because people became lower middle class or poor, but because a huge number of Americans went into the upper middle class.

00:05:20.000 The number one change in the status of American families in terms of income from just before 1980 to about 2015 was a 16 percentage point increase in the upper middle class.

00:05:33.000 In other words, people got richer.

00:05:35.000 And by the way, everyone got richer, including the poor, because the stuff you can get as a poor person in America in 2025 is way the hell better than the stuff that you could get as a poor person in America in 1980.

00:05:44.000 That's just a reality.

00:05:46.000 How about wages?

00:05:47.000 We keep hearing that wages are stagnant, that they've stagnated since 1979.

00:05:51.000 Here, according to the Bureau of Labor Statistics, is a chart.

00:05:55.000 It shows you the average hourly earnings of production and non-supervisory employees.

00:06:00.000 And it shows you what happened to wages between 1980 And 2025, and what you see is a steep increase from the 1990s and up.

00:06:09.000 A very steep increase.

00:06:11.000 I know this cuts against the conventional political wisdom, which is the American economy sucks and it's because everybody is cheating us.

00:06:19.000 Now, one of the things that President Trump is predicating his tariff war upon is the idea that trade deficits are inherently bad.

00:06:25.000 A trade deficit is where we import more stuff than we export in terms of value.

00:06:30.000 Now, as I've pointed out before, You have a trade deficit with literally every business that you do business with unless they are buying your product.

00:06:36.000 So, I have a trade deficit with my local Publix.

00:06:39.000 A large trade deficit.

00:06:41.000 They have bought pretty much nothing from me.

00:06:42.000 And I've bought tens of thousands of dollars over the years from my local Publix. 0.95

00:06:46.000 Clearly, they are screwing me.

00:06:48.000 Or maybe they're not because I'm getting value for my dollar in the form of food and supplies. 0.93

00:06:54.000 Or maybe I should go over to my Publix and just beat the living out of the general manager.

00:06:57.000 I don't know.

00:06:57.000 One of those two things.

00:06:59.000 Trade deficits They're an accounting procedure, trade deficits.

00:07:04.000 You label something in export and you label something in import.

00:07:08.000 But trade itself is about mutual benefit where you wouldn't do the trade in a voluntary system.

00:07:12.000 So the idea that every trade deficit someone is getting screwed is a zero-sum view of how economies work and it's not true.

00:07:20.000 As Thomas Sowell points out, the eminent economist, quote, if the goods and services available to the American people are greater as a result of international trade, then Americans are wealthier, not poorer.

00:07:29.000 Regardless of whether there is a deficit or a surplus in the international balance of trade.

00:07:33.000 In fact, I can name you a period in American history where there was a fairly large surplus in America's balance of trade.

00:07:39.000 The entire Great Depression.

00:07:41.000 Now, there were times in American history that were great, where we also had a surplus.

00:07:45.000 There were times in American history that sucked, where we had a deficit.

00:07:47.000 And times in American history that were great, where we had a deficit.

00:07:50.000 As it turns out, trade deficits have pretty much nothing to do with the health of an economy.

00:07:56.000 They don't tell you very much.

00:07:59.000 In fact, the French economist, Frédéric Bastiat, who's really cutting about this stuff, writing in the 19th century, he said, look, if you're so worried about trade imbalances, then actually what you should do is you should sink ships filled with your own exports before they ever get to the other side.

00:08:13.000 So if we're exporting oranges to Europe and they're going to send us apples in return, the best way to ensure That no trade imbalance takes place is we should send our oranges out of the country and we should sink the ship before it ever gets to Europe so they can't send us apples back.

00:08:27.000 Then we have a large export on our ledger and no imports.

00:08:30.000 Great idea!

00:08:30.000 The economy will be stronger.

00:08:33.000 So, a fundamental misunderstanding of trade deficits, and again, that's not balance of payments.

00:08:38.000 It's a different thing.

00:08:39.000 Balance of payments is about the flow of gold.

00:08:42.000 We're no longer on a gold standard, but it's about currencies and all that.

00:08:44.000 Trade deficits are a different thing.

00:08:46.000 The reason I'm bringing up trade deficits is because this is how President Trump is calculating His Liberation Day tariffs.

00:08:52.000 According to the Washington Post, President Trump said Wednesday he will impose a new 10% tariff on all imported goods, along with higher import taxes tailored for each of about 60 countries.

00:09:01.000 His advisers say maintain the largest barriers against U.S. products and a sharp turn toward the kind of protectionism the United States abandoned nearly a century ago.

00:09:08.000 So President Trump said that for decades, our country has been looted, pillaged, and plundered by nations near and far, both friend and foe alike.

00:09:14.000 This is not going to happen anymore.

00:09:17.000 So let's take a look.

00:09:19.000 At the Liberation Day quote-unquote reciprocal tariffs.

00:09:22.000 Okay, so here I have a chart.

00:09:24.000 President Trump held it up.

00:09:25.000 He held like a big chart.

00:09:26.000 Like, like Wheel of Fortune or something.

00:09:28.000 He held like a big chart that showed reciprocal tariffs.

00:09:31.000 And what it said was, in one column, the names of the countries.

00:09:35.000 In another column, tariffs charged to the United States, including currency manipulation and trade barriers.

00:09:41.000 And then, USA discounted reciprocal tariffs.

00:09:44.000 So his idea is, here is the tariff rate that a country is charging us.

00:09:47.000 And then we're going to take half that rate and charge it to them.

00:09:50.000 There's only one problem.

00:09:51.000 I mean, there are many problems.

00:09:52.000 There's only one problem here.

00:09:54.000 What is labeled the tariffs charged to the United States is not, in fact, the tariffs charged to the United States.

00:09:58.000 It is not true.

00:10:00.000 It is not true. 0.97

00:10:01.000 And I looked at this and I thought, holy crap.

00:10:05.000 The EU is charging us 39% tariff rates on all products. 0.87

00:10:09.000 We're exploring stuff there and they're charging a 39% tariff.

00:10:12.000 That's what this chart says.

00:10:13.000 Japan is charging us 46% tariffs.

00:10:17.000 Malaysia is charging us a...

00:10:19.000 Cambodia is charging us 97% tariffs?

00:10:22.000 And then I thought to myself, self, I said, that doesn't sound correct to me.

00:10:26.000 That doesn't sound right at all.

00:10:29.000 In fact, that sounds totally wild.

00:10:32.000 I mean, that can't be true.

00:10:34.000 And so I made the mistake of actually looking up some of these statistics.

00:10:38.000 What are the actual average annual tariff rates that are charged on American goods by countries like, for example, Japan?

00:10:45.000 Or Taiwan, which this chart says is charging us a 64% tariff rate.

00:10:49.000 And it turns out there is zero correlation whatsoever.

00:10:52.000 Those are not, in fact, the tariff rates that are being charged on American goods going into Taiwan or Japan or India or any of these other places.

00:10:58.000 It's just not right.

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00:13:04.000 So where's that number coming from?

00:13:06.000 And this is where the trade deficit comes in.

00:13:08.000 It's coming from taking the trade deficit of that country and dividing it into the imports that the United States is taking in from that country and then calling that a tariff rate.

00:13:21.000 Hey, that has nothing to do with the tariff rate.

00:13:23.000 Nothing at all.

00:13:24.000 Zero things to do with the tariff rate.

00:13:26.000 The reason, by the way, that we have a tariff...

00:13:29.000 So, according to this chart, according to this chart, for example, Madagascar is charging us 93% tariffs and we ought to charge them 47% tariffs. 0.66

00:13:41.000 Hey, that's what it says.

00:13:41.000 That's what the thing says.

00:13:43.000 There is only one problem with this.

00:13:45.000 That is not remotely true.

00:13:46.000 And if we have a trade deficit with Madagascar, then So the hell what?

00:13:53.000 It's Madagascar!

00:13:54.000 The GDP per capita in Madagascar is like $530 a year.

00:14:00.000 Our trade deficit with Madagascar is a few million dollars.

00:14:04.000 Is the idea we have to chisel out of the people of Madagascar extra dollars for American products or we are getting screwed by the great and powerful people of Madagascar?

00:14:15.000 Is that the idea here?

00:14:16.000 It makes zero sense.

00:14:19.000 It literally has nothing to do with the actual tariff rate.

00:14:22.000 How do we know this?

00:14:22.000 We have perfect proof.

00:14:24.000 Yesterday, Israel, which already had almost no tariffs on the United States, 99% of all goods coming into Israel had no tariff on them from the United States.

00:14:32.000 That was something that Israel did in the 2000s because they used to have high tariffs.

00:14:35.000 And what ended up happening is that Israelis would come to the United States, load up their bags with a bunch of American-made goods, and then take them back with them to Israel to avoid the tariffs. 0.54

00:14:43.000 So, Israel just got rid of all the tariffs.

00:14:45.000 Yesterday, Israel announced zero tariffs on any American goods.

00:14:49.000 The Trump administration hit them with a 17% tariff anyway, claiming that they had a 33% tariff rate on American goods, which clearly is not true.

00:14:56.000 Why? Because it turns out that we buy more stuff from the Israelis than the Israelis buy from us. 0.66

00:15:02.000 Shocker! They're a smaller country.

00:15:04.000 We're a giant market, not a giant shock, as it turns out.

00:15:08.000 So this is pretty crazy, because it turns out the trade deficit has nothing to do with the tariff rates.

00:15:12.000 So we are punishing countries that have a low tariff rate with us.

00:15:15.000 For example, like South Korea is listed on this chart As having a 50% tariff rate on us.

00:15:20.000 The average tariff rate South Korea has on American goods, according to the World Trade Organization, is 0.79%.

00:15:27.000 We have a free trade agreement with South Korea.

00:15:31.000 It is listed on this chart as 50%.

00:15:33.000 That's nonsense.

00:15:35.000 It's not true.

00:15:37.000 It just isn't true.

00:15:38.000 And it leads to a 25% reciprocal tariff on all South Korean goods.

00:15:44.000 Now, there are a number of reasons why this is a problem.

00:15:47.000 Okay, whatever, who cares?

00:15:49.000 Do we need other countries?

00:15:52.000 Okay, so first of all, yes, we do.

00:15:53.000 It turns out that the supply chains all across the planet are incredibly complex, and if you like the products that you have, at the quality that you have them, and at the price that you have them, you're not going to get to keep them.

00:16:02.000 You don't get to keep them.

00:16:03.000 Anybody who tells you that you can is telling you the same kind of falsehood that Barack Obama said when he said, if you like your doctor, you can keep your doctor.

00:16:10.000 You don't get to keep your Xbox at the same rate with the same quality.

00:16:14.000 You don't.

00:16:15.000 That's just not the way that these tariffs are going to work.

00:16:17.000 So what exactly happens?

00:16:18.000 Well, Tyler Cowen points out, quoting Scott Lincecum over at Cato, Trump's reciprocal tariffs impose hundreds of billions of dollars in new taxes on Americans without public or congressional input, because that's actually what happens.

00:16:29.000 I have friends, for example, who import product to the United States and then sell them.

00:16:34.000 Why? Because they can't get the product in the United States.

00:16:37.000 So, for example, I have a friend who's in the jewelry business.

00:16:41.000 And this friend in the jewelry business imports products that are not capable of being manufactured Or found in the United States from abroad.

00:16:49.000 So it's not like there's an import substitution you can just buy from an American.

00:16:52.000 That's not how it works.

00:16:53.000 This, by the way, this company is an American company.

00:16:56.000 The tariff that is now being applied to all of those imports is like 35-40%.

00:17:00.000 Those prices will get passed directly onto the consumers.

00:17:04.000 It is a tax paid for by Americans.

00:17:06.000 So this is a massive tax increase on American consumers.

00:17:09.000 That's what it is.

00:17:10.000 And it is designed to be so.

00:17:12.000 And it is talked about in these terms.

00:17:14.000 By the Trump administration that this will cost 600, 700 billion dollars in additional revenue to the government.

00:17:19.000 You know what we call revenue to the government typically?

00:17:21.000 Paid for by Americans because that's who pays for it. 0.95

00:17:23.000 If you're importing a product and nobody buys it, then you stop importing the product and nothing gets paid to the government.

00:17:29.000 It has to be sold.

00:17:31.000 That is the consumer pays the tax.

00:17:33.000 That is what we would call a tax increase.

00:17:36.000 Okay, these secret calculations that are not so secret anymore because it turns out that actually they just have nothing to do with tariffs at all.

00:17:42.000 Those calculations are nonsensical.

00:17:46.000 This idea that President Trump is doing this based on legislation that suggests that there is a national emergency on the basis of trade deficits.

00:17:55.000 No. The answer is no.

00:17:57.000 This is in the purview of Congress.

00:17:59.000 There is no national emergency that justifies a unilateral tax increase of the size that the administration is attempting to levy down on the basis of a trade deficit.

00:18:10.000 Because we buy more stuff from Madagascar than the Madagascase buy from us, that is not a good reason to declare a national emergency because it ain't a national emergency any more than it's a national emergency that I buy more stuff from my publics than they buy from me.

00:18:26.000 By the way, there are already free trade commitments that are now being breached by the Trump administration.

00:18:31.000 We have free trade commitments with many of the countries that we are currently slamming with tariffs.

00:18:35.000 Again, it's going to cost American consumers.

00:18:37.000 It will cost American producers who use inputs from other countries.

00:18:41.000 And most importantly of all, if this is supposed to somehow screw, for example, the Chinese, precisely the opposite is about to happen.

00:18:50.000 Why? Because many of the countries that are about to get absolutely hammered are countries that exist in Southeast Asia.

00:18:56.000 So if you want to know what the actual tariff rates are that these various Southeast Asian nations are charging the United States, the answer is not what President Trump is putting up there, which again is rooted in the Trade deficits that we supposedly have with these various nations.

00:19:09.000 If you want to know the answer, I did.

00:19:11.000 So I asked my friends at Perplexity, sponsors of the show, what are the actual effective tariff rates Southeast Asian nations have against American goods?

00:19:17.000 Not the Trump statistic, which is rooted in trade deficits.

00:19:20.000 Also, please make a chart correlating the trade deficit or surplus those countries have with the United States with their GDP per capita.

00:19:26.000 So, according to Perplexity, The actual effective tariff rates imposed by Southeast Asian nations on American goods vary significantly across countries.

00:19:33.000 The figures cited by the Trump administration appear to be exaggerated and based on trade deficits rather than real tariff structures.

00:19:39.000 According to the WTO, Vietnam's average most favored nation tariff rate is approximately 9.4%.

00:19:45.000 Now remember, according to the Trump statistic, the average tariff rate that's being charged by Vietnam, the effective tariff rate, is 90%.

00:19:50.000 Okay, so 10 times what the actual tariff rate is, is what the Trump administration is claiming.

00:19:55.000 Asian nations like Indonesia, Malaysia, Impose average MFN rates, most favored nation rates, of 7.5% and 5.6%, respectively.

00:20:04.000 Those numbers are far lower than the inflated numbers presented by the Trump administration.

00:20:08.000 Now, as to trade deficits that we have with these various countries, the answer is, because they're poor, they generate cheap product, like in Vietnam, your t-shirt's probably made in Vietnam, and they have no money.

00:20:17.000 So we run a $95 billion trade deficit with Vietnam.

00:20:22.000 Their GDP per capita is $4,200.

00:20:24.000 $4,200.

00:20:27.000 Okay, so what are we going to do?

00:20:28.000 Chisel that out of them?

00:20:30.000 Precisely? That $95 billion trade deficit?

00:20:32.000 Because we want to buy their t-shirts?

00:20:35.000 Same thing with, say, the Philippines.

00:20:37.000 We have a $5 billion trade deficit with the Philippines.

00:20:40.000 And the GDP per capita in the Philippines is $3,700.

00:20:43.000 Meanwhile, Singapore, right, which Singapore is getting hit with a 10% tariff, by the way, for no reason, because we actually have a trade surplus with Singapore.

00:20:50.000 They have a $10 billion trade deficit with the United States.

00:20:53.000 How can Singapore afford that?

00:20:54.000 I mean, aren't we just screwing them? 0.98

00:20:56.000 I mean, obviously, according to this logic, we're screwing them. 0.89

00:20:59.000 If they have a trade deficit with us, it must be that we're jobbing them in some way.

00:21:03.000 The reason that they can have a trade deficit with us is because, wait for it, their GDP per capita is $72,000.

00:21:11.000 Say again, none of this is rooted in economic reality.

00:21:15.000 And the biggest problem is there's no way to sort of get out of the box that's been created by these statistics because If you were saying, lower your tariff rates, and if the tariff rate is already zero or close to it, where do you go from there?

00:21:29.000 So one of the things that happened during the pandemic is knowing that the Chinese were bad actors, many producers started shifting their supply chains out of China and into other nearby countries, like, for example, Vietnam.

00:21:41.000 Believing the United States would punish China, but not Vietnam.

00:21:43.000 Well, now the new tariffs slam Vietnam with a 46% tariff.

00:21:48.000 So, why don't you shift your production back to China?

00:21:50.000 More importantly, if you're the EU and you're now getting racked by the United States with a gigantic tariff, or if you're Canada and you're getting absolutely ravaged by an American tariff, you need markets for your goods.

00:22:01.000 Where are you going to go?

00:22:03.000 Maybe to a country that is perfectly willing to militarize capitalism on behalf of fascism, the Chinese. 0.99

00:22:09.000 The Chinese are about to make extraordinary inroads in Southeast Asia. 1.00

00:22:13.000 They're about to make extraordinary inroads in Europe and in Canada.

00:22:16.000 Because it turns out when America withdraws from the world and basically declares a trade war on literally everyone, including, by the way, an island with no people.

00:22:24.000 I'm not even kidding.

00:22:25.000 This is a thing.

00:22:27.000 Included in the list of places that President Trump is going to tariff.

00:22:32.000 I wish I were kidding.

00:22:32.000 I'm not kidding.

00:22:33.000 Included in this list is, in fact, the Heard and McDonald Islands.

00:22:37.000 We are hitting the Heard and McDonald Islands with a 10% tariff.

00:22:41.000 The Heard and McDonald Islands include Zero people.

00:22:48.000 Includes penguins!

00:22:49.000 We're hitting the pe- Screw them penguins.

00:22:53.000 Penguins. Stupid penguins. 1.00

00:22:57.000 Okay, so, it- What exactly is this designed to do? 1.00

00:23:03.000 Again, it is predicated on a bad idea of how international trade works.

00:23:09.000 If, I've said this a thousand times, this is not coming from a place of, I want Trump to fail.

00:23:12.000 It's coming from a place of, if he engineers a recession based on these sorts of tariffs, which seems increasingly likely if you were to stick with this, if he were to do that sort of thing, all of the amazing things that need to happen and that he is pursuing and that his administration is filled with good people who want to do, all that stuff goes by the wayside.

00:23:29.000 A bad economy kills everything around it.

00:23:31.000 It is the neutron bomb of politics.

00:23:33.000 If you drop, The neutron bomb of politics.

00:23:36.000 A recession into the lap of this administration.

00:23:38.000 It doesn't just destroy this administration's economic agenda.

00:23:41.000 It destroys the administration wholesale.

00:23:43.000 That is what happens in American politics.

00:23:45.000 Recessions destroy administrations.

00:23:48.000 And by the way, everyone close to them, all the tech bros, get destroyed.

00:23:51.000 All the business people get destroyed.

00:23:54.000 It's really important not to self-engineer a bad economy.

00:23:58.000 Really quite important.

00:24:02.000 It's... It is frustrating at the very least, because this has not been well justified by literally anyone, including members of the Trump administration.

00:24:11.000 JPMorgan put out its forecast, quote, on a static basis, today's announcement would raise just under $400 billion in revenue or about 1.3% of GDP, which would be the largest tax increase since the Revenue Act of 1968.

00:24:24.000 We estimate that today's announced measures could boost PCE prices, By 1 to 1.5% this year, we believe the inflationary effects would be mostly realized in the middle quarters of the year.

00:24:32.000 So, in other words, inflation will start ticking up again fairly significantly.

00:24:35.000 The resulting hit to purchasing power could take real disposable personal income growth in both the second and third quarters into negative territory.

00:24:41.000 And with it, the risk that real consumer spending could also contract in those quarters.

00:24:45.000 This impact alone could take the economy perilously close to slipping into recession.

00:24:49.000 That's before anyone else tries to punish us for punishing them.

00:24:53.000 This is before, according to JP Morgan Accounting, for the additional hit To gross exports and to investment spending.

00:24:59.000 Headlines about retaliatory measures by U.S. trading partners are already coming out.

00:25:02.000 We expect to learn more in coming days.

00:25:04.000 The somewhat confusing nature of today's news, coupled with uncertainty over how long these tariffs will remain in place, should make for an even less friendly environment for investment spending.

00:25:12.000 We plan to revisit our forecast later this week.

00:25:15.000 By the way, you know who else is upset?

00:25:16.000 The manufacturers!

00:25:17.000 This was supposed to save the manufacturers, right?

00:25:19.000 You heard President Trump say it.

00:25:20.000 We are going to bring manufacturing back to the United States.

00:25:22.000 Here is a statement from the U.S. Needless to say, today's announcement was complicated, and manufacturers are scrambling to determine the exact implications for their operations.

00:25:34.000 The stakes for manufacturers could not be higher.

00:25:36.000 Many manufacturers in the United States already operate within margins.

00:25:39.000 The high cost of new tariffs threaten investment, jobs, supply chains, and in turn, America's ability to outcompete other nations and lead as the preeminent manufacturing superpower.

00:25:47.000 Manufacturers build things in America to sell around the world, and manufacturers in America Share President Trump's goal of supporting manufacturing investment growth and expansion here at home.

00:25:56.000 To empower manufacturers to drive the economy, the administration should minimize tariff costs for manufacturers investing and expanding in the United States, ensure tariff-free access to critical inputs manufacturers use, secure better terms for manufacturers by negotiating zero-for-zero tariffs.

00:26:11.000 So in other words, bring the tariffs down, not increase them.

00:26:15.000 That's the National Association of Manufacturers saying that.

00:26:19.000 We'll get to more in a moment.

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00:28:26.000 Make sure to check out the million-dollar triple lock protection details If you look at that, China, first row, China, 67%.

00:28:52.000 That's tariffs charged to the USA, including Currency manipulation and trade barriers.

00:28:59.000 So, 67%.

00:29:01.000 I think you can, for the most part, see it.

00:29:03.000 Those with good eyes, with bad eyes.

00:29:05.000 We didn't want to bring...

00:29:06.000 It's very windy out here.

00:29:07.000 We didn't want to bring out the big charts because it had no chance of standing.

00:29:12.000 Fortunately, we came armed with a little smaller chart.

00:29:15.000 So, 67%.

00:29:17.000 So, we're going to be charging a discounted reciprocal tariff of 34%.

00:29:21.000 And I think, in other words, they charge us, we charge them, we charge them less.

00:29:25.000 So how can anybody be upset?

00:29:27.000 So then he said, if imposing tariffs and protective barriers actually made us poorer, then why would other countries be doing it?

00:29:34.000 Here is President Trump saying this.

00:29:37.000 We charge 2.8% for so many things that other countries are charging 200%, 300%, and 400% for.

00:29:46.000 If imposing tariffs and protective barriers made nations poor, then every country on earth would be racing to eliminate these policies, and China would be the first in line.

00:29:57.000 They run a very strong country.

00:30:00.000 Okay, well, actually, as it turns out, many countries have spent the last couple of centuries eliminating many of these policies.

00:30:07.000 And maybe we should take a look at what he's saying.

00:30:10.000 Here is a chart.

00:30:11.000 It shows that actually the countries that have, for example, as a general matter, the lowest tariff rates are also the countries with, wait for it, wait for it, wait for it, the highest GDP per capita.

00:30:22.000 Why, it turns out that richer countries have been steadily lowering their tariff rates.

00:30:26.000 And many of the poorest countries on earth have really, really high average tariff rates, including, by the way, Madagascar and Burundi and the Central African Republic.

00:30:34.000 Why, it's almost as though Tariff rates actually decrease wealth because tariffs increase prices and reduce trade and all the things the tariffs are designed to do.

00:30:49.000 President Trump suggested that the tariffs are kind and they are generous and they are friendly.

00:30:53.000 Here he was saying that the tariffs are kind because it's only half the rate that other countries are charging us.

00:30:57.000 But as we've already discussed, and herein lies the problem, those aren't the real tariff rates.

00:31:03.000 For nations that treat us badly, we will calculate the combined rate of all their tariffs, non-monetary barriers, and other forms of cheating.

00:31:12.000 And because we are being very kind, we're kind people.

00:31:16.000 But we will charge them approximately half of what they are and have been charging us, so the tariffs will be not a full reciprocal.

00:31:27.000 Okay. Here is the actual thing.

00:31:29.000 Those are not the real tariff rates, and this is why it matters.

00:31:31.000 Okay, why does it matter how the calculation is done, right?

00:31:33.000 The reason it matters is because if the goal was to get other countries to lower their tariffs, which I am totally fine with, I would love it.

00:31:39.000 That would be great.

00:31:41.000 If that was the goal, then you can't tariff countries that have no tariffs on us, or we already have a free trade agreement.

00:31:47.000 If you are using trade deficits to calculate a fake tariff rate and using that as the margin of tariff on those countries, There is literally no way for them to forestall the tariffs you are putting on their country, other than by presumably getting the people of Madagascar to somehow buy millions of dollars of American product.

00:32:05.000 Or the people of Ethiopia to buy billions of dollars of American product.

00:32:09.000 GDP per capita in Ethiopia, 950 bucks a year.

00:32:12.000 By the way, the actual tariff rates among the biggest countries in the world are actually Fairly low.

00:32:18.000 According to the World Trade Organization, the United States has a trade-weighted average tariff rate of 2.2% in 2023.

00:32:24.000 That's compared with 2.7% for the EU, 1.9% for Japan, 3.4% for Canada, 3.3% for China, and 1.7% for Switzerland.

00:32:36.000 I mean, if the goal is to get the tariffs lower, then maybe we should do that.

00:32:41.000 Maybe that should be the actual goal here.

00:32:44.000 Maybe that's what we should do.

00:32:45.000 Well, Scott Besson, the Treasury Secretary, He was asked about all of this, and his basic perspective is, it's not clear how long these tariffs are going to last, how they're going to be implemented.

00:32:53.000 As we'll get to in a moment, there are already exemptions that are being put out there for the tariffs by the Trump administration, like immediately.

00:32:59.000 Here was the Treasury Secretary.

00:33:02.000 These are our closest allies, South Korea, Japan.

00:33:06.000 When you look at those countries and the tariffs that they're being charged, if they're calling, what would you say to those nations who may have concerns about how to To lower these numbers?

00:33:16.000 Well, I would say they've been doing it to us for a long time.

00:33:20.000 And if they don't like tariffs, then why do they have them?

00:33:26.000 And should we view these as permanent?

00:33:28.000 Again, I think we're going to wait and see how this plays out.

00:33:34.000 We're going to wait and see how this plays out is the hope of all markets everywhere, because the markets are sending pretty strong signals.

00:33:40.000 They don't like it very much, by the way, by the polling.

00:33:42.000 Again, this notion that Americans are just, they hate foreign trade.

00:33:46.000 They hate it with a p...

00:33:47.000 Gallup poll, 2025.

00:33:49.000 What do you think foreign trade means for America?

00:33:51.000 Do you see foreign trade more as an opportunity for economic growth increased through U.S. exports or a threat to the economy from foreign imports?

00:33:59.000 81% opportunity for economic growth.

00:34:02.000 14% threat to the economy.

00:34:04.000 I have a basic rule in politics.

00:34:05.000 Do not take the 20 side of 80-20 issues.

00:34:07.000 Unless there's like a great moral reason to do so, don't do it.

00:34:10.000 It's not a good idea.

00:34:13.000 So what exactly is the Senate going to do?

00:34:15.000 Well, the Senate voted on a resolution that says that they're going to try to seize back power from the executive branch over tariffs like this.

00:34:22.000 It would require action in the House to actually stop this.

00:34:25.000 I doubt that that's going to happen anytime in the near future.

00:34:28.000 The Republican Party is, of course, very much split over this.

00:34:31.000 Nobody wants to go up against the Trump administration on this.

00:34:34.000 This is the purview of Congress.

00:34:36.000 Let's be clear.

00:34:37.000 What President Trump is doing should never, if it was ever delegated by Congress to the executive, that's insane.

00:34:42.000 And it probably wasn't.

00:34:44.000 It's not a national emergency that justifies one of the biggest tax increases on American consumers in the history of America.

00:34:51.000 It is a very, very...

00:34:52.000 It does not...

00:34:53.000 It does not justify that.

00:34:56.000 There is no national emergency because the United States buys more product from Thailand than we sell to Thailand.

00:35:02.000 That is not, in fact, a national emergency.

00:35:04.000 Again, There are many reasons why tariffs can be good.

00:35:06.000 Tariffing China to punish them, to try and cut them off from the world economy. 0.99

00:35:09.000 Good. This, by the way, is also why you should sign free trade agreements with all the nations that rim China.

00:35:14.000 Tariffs for purposes of protecting national security-laden industries in the United States.

00:35:19.000 Good and useful.

00:35:20.000 We can't have outsourcing if, God forbid, we need to produce things for a war or a pandemic or whatever.

00:35:27.000 Tariffs in order to get other countries to drive down their own.

00:35:29.000 Fine and good.

00:35:31.000 But the tell to me here is, again, I go back to this.

00:35:34.000 If the idea is to get other countries to lower their tariffs, if this is raise the tariffs to lower the tariffs, then why are we charging tariff rates on countries that don't have tariffs against us?

00:35:43.000 Why? That's the tell.

00:35:45.000 And so the question becomes what this actually looks like in practice.

00:35:48.000 Now, I've been a little bit catastrophist about this because I'm taking the Trump administration at their word.

00:35:54.000 The reality is I don't think that this thing gets implemented anything like it is currently being retailed to the public.

00:35:59.000 I think in reality, the Trump administration is likely to bull those holes right through this tariff regime in the areas that it figures is going to most hurt Americans, and it's likely to try and leverage headlines out of various foreign nations, suggesting they're going to invest in America to the tune of some billions of dollars before lowering the tariff rates again.

00:36:19.000 Because, as I've said before, I do have faith that President Trump actually responds to headlines and responds to the news.

00:36:25.000 He lives in the world of reality, and it would not be living in the world of reality for him to simply ignore if markets hate all of this, if costs start going up, If a recession is imminent.

00:36:34.000 He does not want to preside over a recession.

00:36:36.000 Which is why, again, I think this policy is misbegotten.

00:36:38.000 I also think President Trump is not going to implement it as currently stated.

00:36:42.000 So, what does this actually mean in practice?

00:36:44.000 Well, the White House quietly put out a fact sheet yesterday to all of its embassies talking about what exactly President Trump is doing.

00:36:52.000 So apparently, the tariffs will remain in effect until such a time as President Trump determines the threat posed by the trade deficit An underlying non-reciprocal treatment is satisfied, resolved, or mitigated.

00:37:01.000 So he can unilaterally decide, hey, we solved the trade deficit, all done.

00:37:05.000 So presumably, what does that mean?

00:37:06.000 That means you get a few announcements from various countries saying that we're going to invest in the American economy.

00:37:11.000 And then President Trump's like, big headline win, tariff gone.

00:37:14.000 He could easily do that.

00:37:15.000 I'm hoping.

00:37:16.000 That's what he is planning on doing.

00:37:18.000 Also, there are some very key goods that are not actually going to be subjected to the tariffs, including, by the way, steel and aluminum articles and auto and auto parts.

00:37:27.000 Already subject to Section 232 tariffs.

00:37:30.000 Copper, pharmaceuticals, semiconductors, and lumber articles.

00:37:33.000 Okay, well, this, and this shows you the bizarreness of this sort of tariff regime.

00:37:38.000 One of the things that the tariffs were allegedly designed to do was reshore manufacturing of key components.

00:37:43.000 Like, for example, semiconductors.

00:37:46.000 Semiconductors are basically the oil of the 21st century.

00:37:48.000 They're the thing no one can operate without.

00:37:50.000 So if you actually wanted to reshore, through tariffing and protectionism, manufacturing of semiconductors, You would leave the tariffs on the semiconductors, but he doesn't want to do that because it'll radically increase the price of every product that uses a semiconductor, ranging from your phone to your fridge.

00:38:04.000 So he's exempting that.

00:38:06.000 All articles that may become subject to future Section 232 tariffs, bullion, and energy, and other certain materials that are not available in the United States.

00:38:14.000 So we're still going to be importing that Canadian gas, presumably.

00:38:17.000 Which, by the way, is the reason we have a trade deficit with Canada.

00:38:20.000 We have a trade surplus for literally everything else, except for gas.

00:38:25.000 Like, if you take away the gas in the American balance of trade with Canada, we have a surplus with Canada.

00:38:32.000 Meanwhile, USMCA-compliant goods will continue to see a 0% tariff.

00:38:38.000 Non-USMCA-compliant goods will see a 25% tariff.

00:38:41.000 Non-USMCA-compliant energy and potash will see a 10% tariff.

00:38:47.000 Again, I do not think this policy Is the long-lasting, durable, strictly imposed policy that is currently being laid out by the White House.

00:38:56.000 I think President Trump is going to see how the markets react.

00:38:58.000 He's not going to like it, and he's going to start punching holes through this pretty much as fast as possible.

00:39:02.000 But Democrats finally got their talking point.

00:39:05.000 All they had to do was wait, and now they got it.

00:39:07.000 So Democrats are saying the recession is a-coming.

00:39:10.000 It is recession day, says Hakeem Jeffries, the House Minority Leader.

00:39:13.000 Remember, Republicans have the barest of bare majorities in the House.

00:39:17.000 Democrats just won the Wisconsin Supreme Court, which means Not a single administrative action has been done by Donald Trump, House Republicans, or Senate Republicans to lower the high cost of living in the United States of America.

00:39:47.000 In fact, Republicans are crashing the American economy in real time and driving us to a recession.

00:39:58.000 This is not Liberation Day.

00:40:01.000 It's Recession Day.

00:40:03.000 Well, he's certainly hoping it is.

00:40:07.000 And herein lives, they've been rooting for a session.

00:40:11.000 Democrats are rooting for a session.

00:40:13.000 So the number one thing you don't want to do is, you know, jump on a rake.

00:40:16.000 Chuck Schumer, the Senate minority leader who's been on the outs with his own party, he's looking pretty...

00:40:20.000 Fresh and peppery as well in the aftermath of the announcement.

00:40:23.000 This map has how much each state would pay for this absurd, crazy, chaotic trade war.

00:40:33.000 But the worst thing about it is that it so hurts American families.

00:40:39.000 It is estimated that the average American family will pay more than $5,000 out of their pocket to pay for these tariffs.

00:40:50.000 Meanwhile, James Carville jumping on the bandwagon and torching President Trump over the tariff regime.

00:40:55.000 It's just Trump going pile man.

00:40:57.000 He gets in there and he figures, I don't have to get approval from Congress.

00:41:01.000 I don't need to bring it to a cabinet.

00:41:03.000 I can just do this.

00:41:04.000 And so the idea that he could just do something on his own unilaterally has great appeal to him.

00:41:11.000 And then, of course, everybody's got to call him to get, because you can exempt people.

00:41:16.000 And so he likes getting you up for everything.

00:41:18.000 He loves having foreign people call and say, can you exempt, you know, Finnish steel from these tariffs or whatever it is.

00:41:25.000 And it's all just a play.

00:41:27.000 There's no policy behind it.

00:41:29.000 It's just his ego playing itself out in public.

00:41:32.000 Now, let's say that that's right.

00:41:34.000 Let's say that President Trump actually is able to get a bunch of countries to announce that they are reshoring American manufacturing.

00:41:40.000 Or that they're going to lower their own tariffs.

00:41:42.000 Okay, so he gets the win.

00:41:44.000 The proof is going to be in the pudding, as it always is.

00:41:47.000 Because the thing about economics, you can feel it in your pocketbook.

00:41:49.000 Economic policy, you feel at your kitchen table.

00:41:52.000 Economic policy is the thing that you can tell every time you open up your grocery bill.

00:41:57.000 Every single time.

00:41:58.000 So, the proof is going to be in the pudding.

00:42:00.000 If the prices go up, if your business is having trouble making payroll, if consumption goes down, If investment goes down because investors are freaked out because they're getting whipsawed like nobody's business.

00:42:10.000 Again, I was talking with investors pretty much all day yesterday, given what was going on.

00:42:14.000 And the number one thing that I was hearing from major investors is, I don't know what the hell is going on.

00:42:20.000 That was the number one thing.

00:42:22.000 Before and after.

00:42:24.000 The amount of confusion, chaos in the markets, a feeling of complete dyspeptic ulcer, ridden, kind of, Churn?

00:42:35.000 That is very real and that is not good for markets because there's a bunch of money sitting on the sidelines waiting to be invested.

00:42:41.000 There's a bunch of economic growth ready to go.

00:42:43.000 So, again, the markets are reacting as you would expect the markets to react.

00:42:46.000 They opened just in the trash heap this morning.

00:42:49.000 When the bell sounded to open the market, the Dow Jones Industrial Average plummeted immediately more than 1,000 points.

00:42:56.000 The S&P 500 plummeted more than 3%.

00:42:58.000 The NASDAQ plummeted almost 4.5%.

00:43:01.000 That was on open.

00:43:03.000 Well, CNBC actually obtained audio of the CEO of Restoration Hardware, whose stock got pummeled this morning on open.

00:43:11.000 He was doing a call with his investors.

00:43:13.000 It was an open call.

00:43:14.000 And here was his reaction to what was going on in the markets when he found out what had happened to his stock.

00:43:20.000 Do we have that sound, Bill?

00:43:21.000 Yeah. So Gary Friedman's on the call and apparently is notified in the middle of the call that his stock was down 25%.

00:43:29.000 Take a listen.

00:43:35.000 Oh, boy.

00:43:53.000 Oh, boy.

00:43:54.000 So if that's the reaction across the country, that is not going to be great.

00:43:58.000 Okay, so the question is going to be how the markets take this as it sinks in.

00:44:02.000 What's going to happen over the course of the next week?

00:44:04.000 Is President Trump going to send out surrogates, like the Treasury Secretary, to walk some of this back to try and point out where an off-ramp is?

00:44:11.000 Or is he just going to keep doubling down on the theory that it's short-term pain for long-term gain?

00:44:15.000 If so, he's going to have to explain how short-term the pain is and what exactly the long-term gain is, because that has not even been spelled out at this point.

00:44:22.000 If the idea is that other countries are just going to reshore to the United States to take advantage of our markets, In some way, but we will leave tariffs on stuff that they export to us.

00:44:33.000 Or they could just form trade blocs themselves and then go make time with the Chinese.

00:44:38.000 They could do that.

00:44:39.000 There are real world implications for this sort of stuff.

00:44:42.000 Trade wars are in fact not good and not easy to win, particularly if you don't actually have a plan.

00:44:47.000 You actually have to have a plan.

00:44:49.000 So I want somebody to lay out that plan.

00:44:50.000 Seriously, you've heard me on today's show pretty animated about how I don't think that this is particularly good policy.

00:44:55.000 So, What I would love is for somebody to make the case as to why this is actually excellent policy, why this is going to be salutary for the United States, why this is going to benefit the people of the United States en masse.

00:45:05.000 And if you're going to call for sacrifice from the American people, the question is, what is the thing on the other side of that sacrifice that is better and good?

00:45:13.000 What is that thing?

00:45:14.000 There are a lot of theories out there.

00:45:15.000 Things like, well, what if we weaken the dollar?

00:45:17.000 Meaning there's just less demand in international trade for the American dollar because people are tariffing us and we're tariffing them.

00:45:23.000 And then when we weaken the dollar, then we can pay off our debt more easily or something like that.

00:45:27.000 Well, you're not going to pay off your debt unless you grow the economy or inflate your way out.

00:45:31.000 That's just the reality.

00:45:32.000 So that's not a great answer.

00:45:34.000 If the case is that we need to reshore, then what we should be doing is targeting the places where we want to reshore the most and understand that there are costs to doing that to consumers and to businesses, because that, of course, is very real.

00:45:46.000 But I have yet to hear an actual explanation of what I've heard so far from people inside the administration.

00:45:51.000 Unfortunately, I wish this weren't the case.

00:45:52.000 What I've heard so far is a lot of casting of various aspersions at foreign countries for engaging in trade with us, regardless of whether they are good or bad, because we're treating Canada the same way we're treating China here.

00:46:07.000 And this is why I think the markets are confused.

00:46:10.000 Investors are confused.

00:46:11.000 Confusion and fear are going to breed sell-offs.

00:46:13.000 That is what they're going to breed.

00:46:14.000 Less investment, less job growth.

00:46:17.000 It's This is all avoidable.

00:46:20.000 It's all avoidable.

00:46:21.000 We need to hear an actual narrative, not a bunch of talking points that are generated for a cork board that is filled with statistics made up by some sort of AI.

00:46:30.000 Well, joining us online to discuss everything economics related is Representative Jody Arrington, of course, from Texas.

00:46:35.000 He is the House Budget Committee Chairman.

00:46:37.000 Representative, thanks so much for joining us.

00:46:39.000 I really appreciate it.

00:46:40.000 You bet, Ben.

00:46:41.000 Great to be with you.

00:46:42.000 I do want to get to the budget, the big, beautiful bill and all that.

00:46:46.000 Obviously, I'd be remiss if I didn't start with the big economic news, perhaps of the decade, which would be the President's announcement of his tariffs.

00:46:53.000 Yesterday, the markets reacted quite poorly.

00:46:55.000 This morning, obviously, Dow Jones Industrial Average dumped 3% on open.

00:46:59.000 Similar numbers from the S&P 500, the NASDAQ down almost 5%.

00:47:02.000 What do you make of the tariffs?

00:47:04.000 Do you think that they are geared toward the lowering of tariffs in other countries?

00:47:07.000 What are you hoping President Trump is going to achieve with this?

00:47:11.000 I hope past is prologue and that the same strategies that were applied in President Trump's first term that were successful in resetting the trade arrangement or relationship with our trading partners Happens in this round, and I suspect it will.

00:47:28.000 So we just need a level playing field for manufacturers, for farmers, and for our workers.

00:47:34.000 And I think that's a pretty basic principle that we should rally around the President for.

00:47:39.000 We've had our manufacturing and industrial base hollowed out over the years.

00:47:45.000 We've suppressed worker wages in this country.

00:47:48.000 We've left economic activity and growth on the table.

00:47:53.000 All because we've allowed other countries to take advantage of our low barriers to entry or access to our markets, while they've used tariffs and a lot of non-tariff barriers to effectively tax our products going into their markets.

00:48:10.000 So this reset is important.

00:48:12.000 There will be pain and some disruption on the front end, But in the long run, we have to do it.

00:48:19.000 And the big piece of this that is probably underestimated and undervalued is our dependence on other countries for drugs, for computer chips, and other important products and materials for our national security or public safety.

00:48:34.000 So all in all, this will be a huge boon to this economy and critical to our national security.

00:48:42.000 Trump has to stay the course.

00:48:44.000 We have to support him.

00:48:45.000 And I'm all in.

00:48:46.000 Congressman, I do have to ask a couple more questions on that.

00:48:49.000 One is, you mentioned semiconductors, you mentioned some of the other products that are national security related.

00:48:53.000 He's already exempted, he says, semiconductors from the import tariffs, presumably because it would raise prices too much on so many of the products that we use.

00:49:00.000 And I guess the other question is that the sheet that he put out yesterday, that the administration put out, labeling tariff rates at 70, 80, 90 percent in some of these countries, it appears that that was calculated by essentially just taking the trade deficits with those countries and dividing it into the imports to the United States from those countries and coming up with a percentage that really has nothing to do with the tariff rate.

00:49:20.000 So for example, South Korea is listed on this particular form as having a 50% tariff rate.

00:49:25.000 We have a free trade agreement with South Korea.

00:49:27.000 We pay an effective tariff rate in South Korea of something like 0.8%.

00:49:30.000 Even if you add their value-added tax on top, you're talking about like a 10% tariff, certainly not a 50% tariff.

00:49:36.000 My problem with that calculation is I'm with you.

00:49:39.000 I want them to lower their trade barriers, but it seems to me that if you're A country like, for example, Israel literally yesterday announced zero tariffs on American products coming in.

00:49:47.000 We hit them with a 17% tariff anyway.

00:49:49.000 What sort of deliverable is the administration actually looking for?

00:49:53.000 That's the thing I want clarity on.

00:49:54.000 If there's a deliverable on the other end of these tariffs, sure, sounds great.

00:49:57.000 What do you think the deliverable ought to be?

00:50:00.000 Well, I think it should just be an apples to apples fairness in terms of trade policy.

00:50:05.000 So, It should be tariffs.

00:50:08.000 There are non-tariff sort of technical barriers like GMO with respect to our ag products.

00:50:15.000 There are quotas that are not considered tariffs, but they're still huge barriers.

00:50:21.000 They've been for many years for dairy products going into Canada.

00:50:25.000 That was part of the restructuring of the NAFTA to USMCA.

00:50:31.000 And so there's a number of ways VAT taxes Border adjustment taxes.

00:50:36.000 So I think the President and his team are looking at the totality of it, but I'm with you.

00:50:42.000 It needs to be apples to apples.

00:50:44.000 We're not looking for isolationism or we're not looking for Chinese industrial policy where we're subsidizing our guys and blocking out competition from others.

00:50:55.000 We believe in free markets and competition, but free markets and free trade don't exist if they're not fair On an apples-to-apples trade policy basis, and I think that's a good fundamental principle in trade policy and trade negotiations.

00:51:13.000 And Congressman Arrington, one of the things that I think that people in the markets are worried about is that there's been a lot of whipsawing, a lot of kind of policy uncertainty so far, particularly in regards to this stuff.

00:51:21.000 The investors that I know are kind of holding out their money, waiting to see where everything settles, which isn't an unreasonable position given the changes.

00:51:27.000 President Trump is declaring these tariffs on a national emergency basis, and the national emergency that he's claiming is the trade deficit.

00:51:33.000 It is difficult to see how a trade deficit amounts to a national emergency under the law.

00:51:38.000 Where do you think the line of congressional authority lays with regard to tariffs as opposed to executive authority on tariffs?

00:51:45.000 That's a great question.

00:51:47.000 I think there are national security implications if we can't make materials that go into making war machines that protect our country and our allies like Israel. 0.72

00:52:00.000 So that's one you have to watch closely.

00:52:03.000 I think we all were surprised during COVID to find out that we couldn't get protective gear for our healthcare workers, or that 90% of our antibiotics, for example, were made in China.

00:52:16.000 And then, you know, computer chips that run everything, effectively.

00:52:19.000 We were a sole source provider with Taiwan.

00:52:23.000 So you have to look at these things, I agree with, in terms of where is the national security or public safety nexus?

00:52:31.000 And then on everything else, Ben, it needs to be the apples-to-apples fairness issue.

00:52:38.000 And because I do think we've been taken for granted That's why we have a two to one, three to one deficit with the top 20 countries representing the top 20 largest economies in the world.

00:52:51.000 So, Congressman Arrington, all of this makes it that much more important that the big, beautiful budget resolution actually get passed because the markets are already priced in, I assume, because pretty much everyone I'm talking to has.

00:53:03.000 The permanence of the Trump tax cuts, if that were to disappear, there would be a massive market catastrophe.

00:53:10.000 I think it's pretty clear to everybody that the big, beautiful bill needs to happen.

00:53:15.000 Where does that stand?

00:53:16.000 How do you see that being ushered through the process?

00:53:17.000 Yes.

00:53:18.000 Well, let's just go back and look at, just real quickly, the first term.

00:53:24.000 We had the highest levels of business investment, R&D investment.

00:53:30.000 We had the lowest unemployment.

00:53:32.000 We lifted 6 million people out of poverty.

00:53:34.000 All of this was The comprehensive economic policy agenda, which included reset on trade, but it also was good energy policy, good tax policy, and work incentives, right?

00:53:45.000 Work incentives for work-capable adults.

00:53:48.000 So we've got to get back, transition from unbridled spending and failed economic policies to this agenda, most of which, to your point, is wrapped up in this budget reconciliation bill.

00:54:00.000 We need to lock in the low taxes.

00:54:02.000 We certainly can't have $400 billion tax hikes in the first year, which send us into a recession.

00:54:08.000 We can't add 22% on average of a tax hike on tax-paying Americans after Bidenflation, which was about a 20% regressive tax hike.

00:54:18.000 So, couldn't agree more.

00:54:20.000 That's in there.

00:54:21.000 Opening up energy production, deregulating the economy, work incentives, investment in military and border security, all in there.

00:54:29.000 That's why it's one big beautiful bill, right?

00:54:31.000 That is the full America First agenda for the most part and the most consequential piece of legislation in my lifetime, Ben.

00:54:38.000 But we have to make sure that as we advance this and all the cost to it, we start to bend the spending curve that's driving an unsustainable debt.

00:54:51.000 And Republicans have failed in the past to do that.

00:54:54.000 And I want to make certain Not just for this great country, our economy, and our current security or defense readiness, but for our children, who are going to inherit the whirlwind of our recklessness, now to the tune of $36 trillion in debt, $2 trillion annual deficits, $1 trillion just to service the debt.

00:55:13.000 Those are all deferred taxes on our children.

00:55:16.000 So we have to have offsets, we cannot increase the deficit, and we've got to get our country on a sustainable and responsible path.

00:55:24.000 That's missing from the Senate's bill.

00:55:25.000 That was in the House bill, and I made sure of it along with other colleagues.

00:55:30.000 So at the end of this rainbow, we have to get to a spot that we reignite economic growth through all the policies we've talked about, including tax, but we're bringing the debt to GDP down.

00:55:42.000 We're bringing the deficit to GDP down.

00:55:44.000 Otherwise, we bankrupt the country and none of this matters.

00:55:48.000 None of it.

00:55:48.000 And we're not the leader of the free world.

00:55:51.000 Our values aren't the dominant values that influence the world, and we can't support our allies, etc, etc.

00:55:57.000 Congressman Arrington, I've said on the show that you co-authored with Phil Graham, former chairman of the Senate Banking Committee, the single most important op-ed of the last five years, which was this op-ed in the Wall Street Journal talking about how means-tested welfare programs are the thing that's bankrupting the United States.

00:56:10.000 For the most part, Medicare and Social Security are paid for.

00:56:13.000 For the most part, not in their entirety, but the thing that actually is rising dramatically continues to be the cost on the means-tested welfare programs.

00:56:19.000 When you talk about the budget bill, what in your version of the budget bill was aimed at sort of bringing down the cost curve on those?

00:56:27.000 Well, a whole lot.

00:56:29.000 I mean, you have to have...

00:56:30.000 If you just took the Medicaid, that's the largest means-tested welfare program.

00:56:35.000 It doesn't have a work requirement for able-bodied adults, like all the other programs from the Bill Clinton welfare-to-work era that actually brought down dependence on welfare by 80%, but it's been gamed by states and others, especially California.

00:56:52.000 So we have to close the loopholes there, and we have to put actual expectations for work-capable adults in these programs, like in Medicaid.

00:57:02.000 If you just reviewed the roles This is a basic program integrity measure that everybody can understand.

00:57:07.000 If you review the roles and make sure that those benefiting are legally eligible and they're not here illegally in this country or for other reasons aren't eligible, then you save 160 billion dollars just reviewing it twice versus once.

00:57:23.000 So it's all of the above.

00:57:25.000 You also have states and local special interests that siphon money away from these programs that have nothing to do with the beneficiary.

00:57:34.000 So, it's broken, it's part of what's bankrupting the country, and we've got to act responsibly as we right this fiscal ship to focus on these welfare programs.

00:57:46.000 Well, that's House Budget Chairman Jody Arrington doing good work on the Hill.

00:57:48.000 Really appreciate your time, sir, and thanks for your insight.

00:57:50.000 Ben, it's an honor to be with you.

00:57:53.000 Meanwhile, there is in fact breaking news on the Joe Biden front, believe it or not.

00:57:58.000 So, there is a brand new piece out from the UK Guardian.

00:58:03.000 Suggesting, a new book, top Biden aides were perfectly well aware that Joe Biden was ailing during the 2024 election.

00:58:09.000 Ron Klain served Biden from 2021 to 2023.

00:58:12.000 And then he came back last June to run debate prep.

00:58:15.000 According to Klain, in this new book, it turned out Biden, quote, did not know what Trump had been saying and couldn't grasp what the back and forth was.

00:58:22.000 Left preparation and fell asleep by the pool.

00:58:25.000 Obsessed about foreign leaders saying, quote, these guys say I'm doing a great job as president, so I must be a great president.

00:58:29.000 didn't really understand what the argument was on inflation and had nothing to say about a second term other than finish the job. 1.00

00:58:35.000 As described by Klain to a reporter, Chris Whipple, at one point Biden had an idea, quote, if he looks perplexed when Trump talks, voters would understand that Trump was an idiot. 0.99

00:58:43.000 Klain replied, sir, when you look perplexed, people just think you're perplexed. 0.99

00:58:46.000 And this is our problem in the race.

00:58:47.000 The book is titled Uncharted, How Trump Beat Biden, Harris and the Odds in the Wildest Campaign in History.

00:58:54.000 Well, I mean, yes, obviously Klain was hiding it.

00:58:59.000 Klain, by the way, has been saying that Biden should have stayed in the race, which, again, is an easy sort of revisionist history given the fact that Harris then went on to lose to Donald Trump.

00:59:08.000 But it's pretty unbelievable.

00:59:09.000 These stories are crazy.

00:59:10.000 Whipple says, quote, Biden had answers on cards.

00:59:29.000 He was just extremely exhausted.

00:59:31.000 And I was struck by how out of touch with American politics he was.

00:59:34.000 He was just very, very focused on his interactions with NATO leaders.

00:59:37.000 Klain wondered half seriously if Biden thought he was president of NATO instead of the United States.

00:59:44.000 Ooh, boy.

00:59:45.000 Well, I wonder why he lost.

00:59:48.000 I wonder why he dropped out and then Kamala Harris lost. 0.91

00:59:51.000 Meanwhile, in other hilarious news, Jonathan Allen of Politico is now reporting that Barack Obama behind the scenes after Biden dropped out was actually working to scuttle Kamala Harris's presidential bid.

01:00:02.000 This is another one of these new books called Fight Inside the Wildest Battle for the White House.

01:00:06.000 Here's Jonathan Allen explaining.

01:00:08.000 President Obama absolutely did not think that Joe Biden should continue, according to our sources, close to President Obama.

01:00:15.000 And he also didn't want Kamala Harris to be the replacement for Biden.

01:00:20.000 He didn't think that she was the best choice for Democrats.

01:00:23.000 And he worked really behind the scenes for a long time to try to have Well, it turns out that,

01:00:46.000 I think that's a little excuse making by Barack Obama, but maybe he shouldn't have selected Joe Biden as his vice president, and then maybe he shouldn't have selected Kamala Harris as Joe Biden's vice president.

01:00:56.000 He was very involved in that, actually, back in 2020.

01:01:00.000 Alrighty, folks, the show continues in a moment.

01:01:02.000 We are going to be talking about Elon Musk at Doge.

01:01:04.000 Is he out?

01:01:04.000 Politico says he may be on his way out.

01:01:06.000 We'll get into that.

01:01:07.000 The administration denies.

01:01:08.000 Plus, we'll take your questions, as always.

01:01:10.000 Head on over to Daily Wire.

01:01:11.000 Plus, if you're not a member, become a member.

01:01:13.000 Use code SHAPIRO.

01:01:13.000 Check out for two months free on all annual plans.

The Ben Shapiro Show - April 03, 2025

What The Hell Happened on LIBERATION DAY?!

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