Dow, S&P 500, and Nasdaq hit record lows on the heels of the worst single day point fluctuation in history. What's causing it? What's behind it? We also bring on Dr. EJ. and Tony from Heritage to help us make sense of these economic indicators and this volatility in the market.
00:00:06.000We go through the breaking news of the day, including additional China tariffs, wild swings in the Dow of 2,600, plus the largest single-day point fluctuation in the history of the Dow Jones Industrial Average.
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00:02:09.000I'm Andrew Colvin, executive producer of The Charlie Kirk Show, and I'm joined by the one and only Blake Neff, one of our producers here on the show.
00:02:18.000Blake, this has been an action-packed morning when it comes to the economy, financials, the tariff war, the trade war.
00:02:27.000But Blake, let's just bring our audience up to speed of what's happened in the last few hours here.
00:05:12.000Same. We're basically open to negotiating with every country that isn't China.
00:05:16.000And if you take the US trade deficit, most trade the US does is not with China.
00:05:22.000So if you reduce the range of trade war from every single country in the world to just China, that's undoing a lot of what we've announced in the past week.
00:05:32.000As you said, I'm more in the middle on this.
00:05:35.000I would say what I feel and what a lot of people feel concerned about is the sense that This was like just taking a giant...
00:05:44.000It was like they wanted to push one single button to achieve everything they wanted to do.
00:05:50.000There's been reporting that one of the offices in the Trump White House, they actually did go and they figured out what would a reciprocal tariff be on every tariff on U.S. goods.
00:06:00.000So they look at what actual tariffs are they imposing in France?
00:07:49.000But directionally, I completely agree.
00:07:54.000That there needed to be, as Jack Posobiec calls, a reset of the great reset.
00:07:59.000We needed a reset of the way that we do business with our trading partners.
00:08:03.000And I do believe that President Trump's art of the deal brinkmanship can be unnerving for the market.
00:08:11.000It can be unnerving for many people that are just watching it take place.
00:08:15.000But the base that voted for Trump wanted change.
00:08:24.000Farmers, beef ranchers that are saying, yes, thank you, because all of these other countries have been able to sell into America for years, and we haven't been able to do the same to those countries, Australia, Argentina, whatever.
00:08:40.000This is recalibrating different parts of the economy, and that's going to be rough and bumpy for a little while.
00:08:47.000But I think what is very clear after this morning is that President Trump is dead serious.
00:09:58.000They couldn't hammer this out because the EU are really good negotiators.
00:10:02.000The United States has been locked in by a free trading, I would say, cult that...
00:10:09.000Sold a lot of our workers down the river.
00:10:11.000Meanwhile, EU has been very strategic about protecting its industry.
00:10:15.000And so why is she willing to say this now?
00:10:18.000She's willing to say it because President Trump is playing hardball and the world is quickly catching up to the fact that we're not messing around.
00:10:25.000Now, yeah, we've lost trillions in market value over this trade war, this tariff policy, to adjust essentially a 1 to 1.5 trillion.
00:10:39.000And a lot of people say $8 trillion in market cap is not worth a $1.5 trillion trade deficit.
00:10:46.000You have to expand that over years, folks.
00:10:49.000And you have to also assume the human price that has been paid as a result over years of these trade tariffs and these trade barriers that these countries put up.
00:12:22.000So Bill Ackman, he's a Wall Street Veteran, very opinionated.
00:12:26.000He's been a guy, a very loud voice on Twitter and then X over the past few years.
00:12:31.000He very notably was one of the sort of...
00:12:34.000He's generally mostly a Democrat donor historically, and he is one of the most prominent voices who shifted towards being a pretty vocal Trump supporter in 2024.
00:13:04.000Been pretty upset about the tariff announcement, and he's been on a tear the last couple of days on X. He had a very long post last night that's already over 12 million views.
00:13:15.000I can't read the whole thing, but I want to get to a few excerpts from it.
00:13:19.000He says, you know, the country is 100% behind President Trump on fixing a global system of tariffs that has disadvantaged the country.
00:13:29.000But, he says, He continues later, He continues further down,
00:13:56.000What CEO and what board of directors will be comfortable making large, long-term economic commitments in the United States in the middle of an economic nuclear war?
00:14:09.000He says it's not just big companies that will suffer.
00:14:12.000Small and medium-sized businesses will experience much greater pain.
00:14:17.000Because almost no business can pass through an overnight massive increase in the cost of business, and they can't pass that on to their customers.
00:14:26.000So long story short, he's saying the president has an opportunity on Monday, he was saying this yesterday, to call a timeout and have time to execute on fixing an unfair tariff system.
00:14:38.000Pretty angry because just a short time after he posted this, he then followed up and he said, I just figured out why Howard Lutnick in the Trump administration is indifferent to the stock market crashing.
00:14:49.000He and Cancer Fitzgerald, the company that he was from, are long bonds.
00:15:18.000But I am just, I, Bill Ackman, am frustrated watching what I believe to be a major policy error occur after our country and our president have been making huge economic progress and that is now at risk due to tariffs.
00:16:06.000I don't know that he's got the guts or the true belief and the conviction to stay the course when it gets rocky.
00:16:16.000And I'm a little bit different in that way.
00:16:18.000I think, you know, where I will agree with him is that businesses, markets need predictability.
00:16:25.000And so the sooner that we can get to a predictable baseline, the better it will be long term.
00:16:30.000And so whether that baseline is the 10% tariff across the board, so be it, or if we're going to have right now, Trump, you know, basically what happened with China to bring the audience up to speed with that, is we essentially had 54% tariffs on China.
00:16:45.000They came back with reciprocal tariffs or, you know, retaliatory tariffs of 34%.
00:16:53.000Trump now went to Truth Social and said, listen, we're going to hit you with an additional tariff of 50%, which would essentially put the tariff over 100% on Chinese imported goods.
00:17:04.000I think China is his number one nemesis here that he wants to take off the chessboard.
00:17:09.000And he's playing some high risk poker.
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00:19:57.000So, again, there is definitely some good progress here.
00:20:00.000But overall, there's a lot of rumor, which means there's a lot of volatility.
00:20:04.000Another thing that we know for sure was that because there were so many short positions on Wall Street, as soon as we saw a little bit of an uptick today in stocks, there was a rush to cover.
00:20:13.000In other words, people were starting to buy stocks for fear that if the price went up, they'd have to buy them at an even higher price.
00:20:21.000Now, normally, Stock prices going up would be a good thing, but in the case of a short position, it's exactly the opposite.
00:20:27.000You're betting on things going down, not up.
00:20:31.000This all caused a tremendous amount of not just volatility, but a huge swing.
00:20:37.000The Dow had its biggest intraday swing ever, moving over 2,600 points between its lowest and its highest point of the trading day, and we're only halfway done at this point.
00:20:46.000So, again, tons of rumors, which means tons of volatility.
00:20:51.000They're looking for definitive answers.
00:20:53.000We thought we were going to get that last week with the tariff announcement, and unfortunately, because of the way these tariffs have been structured, we've gotten exactly the opposite of clear answers.
00:21:04.000Yeah, I want to go into that idea of the way these tariffs are structured, Dr. Antoni, because there's been a lot of back and forth, especially on social media, about that some people feel that President Trump shot Too high on the tariffs, that they're not one-to-one.
00:21:22.000They say they're factoring in trade deficits as well as other non-tariff-related trade barriers.
00:21:30.000Basically, President Trump, if I was looking at this, I would say that he is very provably a true believer that he wants to get equal trade, meaning no trade deficit ongoing with the United States and our trading partners.
00:21:48.000I predict that this is going to be a fairly long-term struggle and a trade war, if we want to use that word.
00:22:20.000What President Trump wanted were true reciprocal tariffs.
00:22:24.000In other words, he wanted a kind of economic golden rule, if you will, where we say to other countries, look, you are imposing these tariff and non-tariff barriers on us.
00:22:33.000You are penalizing our exporters and therefore our workers.
00:22:37.000We're going to do exactly the same thing to you.
00:22:39.000Holding up a mirror, as it were, to these other countries.
00:22:42.000That is what he tasked members of his administration with, like the Commerce Department, like the U.S. Trade Representative, etc.
00:22:51.000That was the whole reason for the delay, for example.
00:22:54.000Waiting until April 2nd was to give those folks time to calculate what are the average effective tariff rates among all these different countries around the world.
00:23:04.000Instead, what we got was something that has literally nothing These tariff rates have nothing to do with other nations' tariff and non-tariff barriers.
00:23:14.000They simply looked at the ratio of imports to exports and only looked at the imports and exports of products, not even services.
00:23:21.000And so at the end of the day, you're simply looking at trade deficits.
00:23:25.000And again, it's just the trade deficit in terms of goods.
00:23:29.000Unfortunately, that means for some countries where we actually have an overall trade surplus, maybe we sell them shoes.
00:23:37.000They sell us shoes, so we're buying shoes from them, let's say, and then maybe we turn around and sell them financial services.
00:23:44.000And they are buying much more in financial services from us than we buy shoes from them.
00:23:49.000That's a trade surplus for the United States.
00:23:51.000Except that according to this formula, it's counted as a trade deficit, and we impose a penalty tariff rate on that country for having that trade deficit in goods with them.
00:25:07.000I can go on and on, whether it's currency manipulation, etc.
00:25:11.000The list just goes on and on when it comes to China and all of their unfair trade practices.
00:25:15.000And yet again, they have a middle-of-the-road tariff rate.
00:25:36.000The issue here is that he has people within his administration who frankly have not served him well enough, who did not provide him with the reciprocal tariff schedule that was promised.
00:25:48.000And again, if you look at markets' reaction, when it was first announced we were going to have this 10% across-the-board tariff, markets actually rallied initially.
00:25:57.000The futures markets went up, I think, about 1.5% on that news.
00:26:00.000But then all of a sudden, when this tariff schedule appeared, where it made absolutely no sense, these numbers clearly did not come from tariff and non-tariff barriers.
00:26:09.000That's when futures started to tumble, and then we've had now three days, basically, where the markets have really taken it on the chin.
00:26:19.000People don't know where we're going to go from here, and that's a problem.
00:26:23.000Yeah, and I think, to your point, I mean, President Trump, I believe, everything that I'm seeing and everything that I've seen from him historically is dead set on correcting a trade deficit that we currently are experiencing.
00:26:39.000Let's just play one of many clips that are out there.
00:27:05.000I could have one man say, we're going to tax you 25%.
00:27:10.000And I could say another, listen, we're going to tax you 25%.
00:27:18.000I mean, there's tons of these clips around.
00:27:21.000So, I mean, here's what I, and he's been consistent throughout the years.
00:27:24.000And I think he's seeing this moment as his one opportunity where he's early on in his term to seize this issue and push it forward.
00:27:34.000Now, I will agree that the way it was done, I think, has spooked the markets.
00:27:39.000I think you could have done it a different way.
00:27:41.000So let's game this out then, Dr. Antoni.
00:27:44.000So where would you like to see His strategy go from here.
00:27:49.000Because Trump is going to claim a win one way or the other.
00:27:54.000We know politically that's going to be part of the next step.
00:27:57.000What does he have to do to claim plausibly that his tariff and his policies have effectuated the change he wanted while also rewarding the markets, bringing everybody to a stable place with predictability?
00:28:11.000Well, I think one of the key things is going to be during these negotiating processes with different countries will be to come up with actual average effective tariff rates.
00:28:21.000So you look at a nation like Canada, look at all of their tariffs, but also their non-tariff barriers, their quotas, for example, that they put on things like American dairy products.
00:28:31.000You know, that really hurts our dairy farmers.
00:28:33.000So figure out, okay, what is the mathematical equivalent in terms of an overall tariff?
00:28:38.000And so say to Canada, look, If you are willing to get rid of X, Y, and Z tariffs or non-tariff barriers that you currently have in place, we will reduce this tariff rate by a certain amount, okay?
00:28:52.000But the problem with, again, with the current tariff schedule, when there is no real relationship between those trade barriers and the rates, some of these nations are coming to the negotiating table with their arms up in the air saying, we have no idea what we're supposed to do here.
00:29:07.000We have no idea how we can actually So I think some further explanation from the White House and some further clarification on what the actual rates should look like would go a long way.
00:29:19.000the other really big thing is that it seems like we've kind of put the cart before the horse in a certain sense.
00:29:26.000You know, what this economy really needs is supply-side policies.
00:29:30.000It's like we just threw them an anchor without first building them a boat.
00:29:51.000that we get things like the tax cut across the finish line.
00:29:54.000And also what I would really like to see from Congress, you know, this isn't just the administration's fault.
00:29:59.000Congress has been painfully slow to act on this.
00:30:02.000So I would love to see Congress in the reconciliation process where we get the tax bill through to include in that process this 10% kind of baseline tariff that the president has put in place.
00:30:16.000Put that into statute, but do it as a border adjustment tax.
00:30:20.000and that has a lot of different advantages First, it gives a huge benefit to our exporters, which encourages production here, encourages manufacturing, and encourages American jobs, which is tremendous.
00:30:31.000But it also puts the tariff only on imports.
00:30:35.000So you're not going to have things like the car industry where a car part may cross the border between the U.S., Mexico, and Canada half a dozen times before it goes into the final car assembly.
00:30:46.000You don't want that to get hit with a tax every single time.
00:30:49.000So a border adjustment tax solves a lot And the other great thing, by putting it in statute, is the fact that now you can include that in the calculation of the reconciliation process so that all the revenues can be used to reduce income taxes.
00:31:08.000What does the future hold for business?
00:31:09.000Ask nine experts, you'll get all sorts of different answers.
00:31:12.000In fact, you might get 10 answers if you ask nine experts.
00:31:14.000They'll say a bull market, a bear market, rates will rise or fall, inflation up or down.
00:31:19.000Can someone please invent a crystal ball?
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00:32:09.000Dr. Antoni, you were talking about something, and I think it's a nuanced point, but I think it's incredibly important because you brought up the reconciliation package.
00:33:21.000Basically, because these different tariffs, which are going to generate revenue, these tariffs are being put in place by the executive and not put in statute by the legislature, they can't be counted in the reconciliation process in terms of revenue that's going to come into the Treasury.
00:33:38.000And that's so important because under reconciliation, this is supposed to be a process by which you take an existing budget and you basically just tweak it.
00:34:21.000And if you grow the tax base faster than the tax rate declines, overall tax revenue actually increases.
00:34:28.000That's what we saw during the first Trump administration.
00:34:30.000The problem is that's not how the Congressional Budget Office scores it.
00:34:33.000And so you need what they sometimes call an offset to the reduction in personal income tax rates.
00:34:40.000And a great way to do that would be to take the revenue that's going to come in from a tariff, a border adjustment tax is what we should...
00:34:52.000...shift some of the tax burden onto foreigners, which is great from an economic standpoint because there is actually an externality at play here.
00:35:00.000It is our Navy that patrols the world's sea lanes.
00:35:03.000It is our Navy at our expense that keeps the ocean safe for international trade.
00:35:10.000And so it only makes sense that other nations would help pay that expense, and a great way for them to do it would be to tax the very thing that our Navy is supporting, which, again, is international trade.
00:35:57.000And I'm not happy with what's going on in the market today, but the distribution of equities across households, the top 10% of Americans own 88% of equities.
00:36:49.000The point is, is this recalibration of our economy a way to make it so that Main Street finally gets that relief and Wall Street's just going to have to take it on the chin?
00:37:01.000Or is there a way to make them both win?
00:37:44.000Equities. So stocks appreciate in price tremendously.
00:37:48.000Those who already own homes, those who own an apartment complex, let's say, whatever the case may be, all of those assets are going to rise in price.
00:37:57.000And so for the people who have essentially...