The Charlie Kirk Show - Rejecting Tariffs, or Rejecting Uncertainty?

00:00:00.000 Hey, everybody.

00:00:00.000 Welcome to The Charlie Kirk Show, this breaking news edition.

00:00:03.000 It's myself and Blake Neff.

00:00:06.000 We 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.

00:00:21.000 What's causing it?

00:00:22.000 What's behind it?

00:00:23.000 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.

00:00:32.000 But listen, here's the bottom line.

00:00:33.000 Stay the course.

00:00:35.000 Stay steady.

00:00:35.000 Keep your wits about you.

00:00:37.000 The sky is not falling.

00:00:38.000 We break it down right here for you.

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00:01:09.000 Buckle up. 0.96

00:01:09.000 Here we go. 0.96

00:01:10.000 Charlie, what you've done is incredible here.

00:01:12.000 Maybe Charlie Kirk is on the college campus.

00:01:14.000 I want you to know we are lucky to have Charlie Kirk.

00:01:18.000 Charlie Kirk's running the White House, folks.

00:01:21.000 I want to thank Charlie.

00:01:22.000 He's an incredible guy.

00:01:23.000 His spirit, his love of this country.

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00:02:09.000 I'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.

00:02:18.000 Blake, this has been an action-packed morning when it comes to the economy, financials, the tariff war, the trade war.

00:02:27.000 But Blake, let's just bring our audience up to speed of what's happened in the last few hours here.

00:02:33.000 We have seen...

00:02:35.000 The largest, just by point, maybe not by percentage, but by points, a 2,600-point swing on the Dow.

00:02:42.000 It was down like, you know, let's say 1,500 points.

00:02:46.000 It swung up to as high as about 850, 860, based on some rumors that President Trump was considering a 90-day pause in his tariff regime.

00:02:59.000 That turned out to be fake.

00:03:01.000 News. Fake news.

00:03:03.000 But in the meantime, we've seen the market fluctuate.

00:03:06.000 Currently, it's down about 940, the Dow.

00:03:09.000 But here's what I would say to everybody out there watching wondering what the heck is going on.

00:03:15.000 Don't pay too close of attention to the market currently.

00:03:19.000 There is a lot of moving pieces.

00:03:22.000 There is a lot that is changing in and in flux any given moment.

00:03:26.000 So everybody just take a breath.

00:03:28.000 Breathe. Despite a lot of prognosticators and economists awfulizing On the internet,

00:03:56.000 awfulizing on business shows and the like.

00:04:00.000 So Blake, I want to get your take on this.

00:04:02.000 I know that you are, let's just say, in the spectrum of pro-tariff or anti-tariff.

00:04:08.000 You're sort of, I would say, somewhere in the middle.

00:04:11.000 So I'm curious about your take of what you've seen this morning.

00:04:15.000 We were on chats Sunday night basically predicting, I would say, a much bigger market collapse than what we've ultimately seen.

00:04:26.000 Now, the day is not done yet.

00:04:27.000 It's about we're down 840 as I'm looking.

00:04:29.000 Well, it's been back and forth all day.

00:04:35.000 The line I saw was when there was basically a false report that a 90-day pause was likely or imminent.

00:04:44.000 Overall, stock markets rose about $2 trillion in value.

00:04:49.000 That's three.

00:04:50.000 Yeah, $3 trillion maybe.

00:04:51.000 And it's gone up and down, up and down all the day.

00:04:55.000 And I think probably the reason it's more moderate is I think there's a greater sense that some sort of deals are likely to be made.

00:05:03.000 We have the European Union offering to junk a bunch of tariffs.

00:05:07.000 We have Vietnam offering to eliminate all tariffs if they can make a deal.

00:05:11.000 And we have Trump.

00:05:12.000 Same. We're basically open to negotiating with every country that isn't China. 0.76

00:05:16.000 And if you take the US trade deficit, most trade the US does is not with China.

00:05:22.000 So 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.

00:05:32.000 As you said, I'm more in the middle on this.

00:05:35.000 I 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...

00:05:44.000 It was like they wanted to push one single button to achieve everything they wanted to do.

00:05:50.000 There'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.

00:06:00.000 So they look at what actual tariffs are they imposing in France?

00:06:04.000 What are they imposing in Vietnam?

00:06:06.000 What are they imposing in...

00:06:08.000 Great Britain and so on.

00:06:10.000 And then they were going to match those point for point.

00:06:12.000 And then apparently the White House just thought, nah, let's just go for the easiest one.

00:06:18.000 And so they did this trade deficit-based calculation.

00:06:22.000 And what's missing from that is, what do we say our goal here is?

00:06:25.000 Our goal is to bring more manufacturing back to America.

00:06:30.000 But when it's just like this, it's not finely tuned to that purpose.

00:06:34.000 So, for example, you're doing a flat tariff on everything.

00:06:39.000 You're not doing, for example, a tariff on finished goods, but then no tariff on raw materials.

00:06:45.000 That would encourage people to bring raw materials into the U.S.

00:06:49.000 and then make stuff here.

00:06:50.000 Instead, it's just basically a hike on everything.

00:06:55.000 Yeah, no, and I think that is one of the critiques that I've heard floated, that it's a...

00:07:05.000 You know, a sledgehammer when a scalpel was needed and that sort of thing.

00:07:08.000 And I will say that, listen, you know, President Trump, he did not hide that this was going to happen.

00:07:16.000 Now, we didn't understand the details or how it was going to be, you know, sort of put into place, put into practice.

00:07:23.000 Nevertheless, this is not a mystery.

00:07:25.000 President Trump has been very, very clear about this.

00:07:28.000 I happen to, and Blake, you and I have talked about this privately.

00:07:32.000 I am a true believer in this strategy.

00:07:35.000 I hear every one of the pushbacks, and I absolutely disagree.

00:07:40.000 I will say they could have done it without so much pomp and circumstance.

00:07:44.000 They could have just done it quietly and done it country by country.

00:07:48.000 I would have been fine with that.

00:07:49.000 But directionally, I completely agree.

00:07:54.000 That there needed to be, as Jack Posobiec calls, a reset of the great reset.

00:07:59.000 We needed a reset of the way that we do business with our trading partners.

00:08:03.000 And I do believe that President Trump's art of the deal brinkmanship can be unnerving for the market.

00:08:11.000 It can be unnerving for many people that are just watching it take place.

00:08:15.000 But the base that voted for Trump wanted change.

00:08:24.000 Farmers, 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.

00:08:40.000 This is recalibrating different parts of the economy, and that's going to be rough and bumpy for a little while.

00:08:47.000 But I think what is very clear after this morning is that President Trump is dead serious.

00:08:53.000 Peter Navarro's dead serious.

00:08:54.000 Howard Letnick is dead serious about resetting and recalibrating a lot of these trade negotiations.

00:09:00.000 Now, one of the pieces of news that came across the wire this morning was out of the EU, okay?

00:09:07.000 So I'm going to go ahead and play this clip.

00:09:09.000 This is what I think is a good sign, and I'll explain on the other side of it.

00:09:13.000 136. We stand ready to negotiate with the United States.

00:09:18.000 Indeed, we have offered zero-for-zero tariffs for industrial goods, as we have successfully done with many other trading partners.

00:09:25.000 Because Europe is always ready for a good deal, so we keep it on the table.

00:09:31.000 But we are also prepared to respond through countermeasures and defend our interests.

00:09:37.000 So this was European Commission President Ursula, that's quite the name, von der Leyen.

00:09:44.000 And she says the EU stands ready for a zero for zero tariff deal.

00:09:47.000 Now, you know, she makes it sound like this is something they do all the time.

00:09:52.000 Everything's fine.

00:09:53.000 I don't know why we couldn't have just, you know, gotten together and hammered this out.

00:09:56.000 Well, here's the problem.

00:09:58.000 They couldn't hammer this out because the EU are really good negotiators.

00:10:02.000 The United States has been locked in by a free trading, I would say, cult that...

00:10:09.000 Sold a lot of our workers down the river.

00:10:11.000 Meanwhile, EU has been very strategic about protecting its industry.

00:10:15.000 And so why is she willing to say this now?

00:10:18.000 She'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.

00:10:25.000 Now, yeah, we've lost trillions in market value over this trade war, this tariff policy, to adjust essentially a 1 to 1.5 trillion.

00:10:39.000 And a lot of people say $8 trillion in market cap is not worth a $1.5 trillion trade deficit.

00:10:46.000 You have to expand that over years, folks.

00:10:49.000 And 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.

00:10:59.000 So guess what?

00:11:01.000 As soon as we get resolution on this, you're going to see that market cap shoot right back up.

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00:12:17.000 What does Bill Ackman say?

00:12:18.000 Break down this whole Bill Ackman story for us.

00:12:21.000 Of course, of course.

00:12:22.000 So Bill Ackman, he's a Wall Street Veteran, very opinionated.

00:12:26.000 He's been a guy, a very loud voice on Twitter and then X over the past few years.

00:12:31.000 He very notably was one of the sort of...

00:12:34.000 He'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.

00:12:45.000 He denounced DEI.

00:12:47.000 He was very involved in attacking universities like Harvard after the 10-7 attacks.

00:12:53.000 So he's a guy who...

00:12:54.000 Generally in the middle, has moved towards supporting the right, probably a good barometer of the centrist Wall Street money person.

00:13:01.000 And he is...

00:13:04.000 Been 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.

00:13:15.000 I can't read the whole thing, but I want to get to a few excerpts from it.

00:13:19.000 He says, you know, the country is 100% behind President Trump on fixing a global system of tariffs that has disadvantaged the country.

00:13:29.000 But, he says, He continues later, He continues further down,

00:13:56.000 What 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?

00:14:07.000 That's the term he uses.

00:14:09.000 He says it's not just big companies that will suffer.

00:14:12.000 Small and medium-sized businesses will experience much greater pain.

00:14:17.000 Because 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.

00:14:26.000 So 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.

00:14:37.000 And he got...

00:14:38.000 Pretty 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.

00:14:49.000 He and Cancer Fitzgerald, the company that he was from, are long bonds.

00:14:53.000 He profits when our economy implodes.

00:14:57.000 It's a bad idea to pick a secretary of commerce whose firm is levered on long, fixed income.

00:15:03.000 It is an irreconcilable conflict of interest.

00:15:05.000 And then, this morning, He walked back from that.

00:15:09.000 He said, it was unfair of me to lash out at Howard Lutnick.

00:15:13.000 I don't think he is pursuing his self-interest.

00:15:15.000 I'm sure he is doing the best he can.

00:15:17.000 It is not an easy job.

00:15:18.000 But 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.

00:15:32.000 So this is just one guy, but...

00:15:34.000 He is speaking for a lot of people, I think.

00:15:37.000 There's a lot of people who are very anxious about what the tariff policy is.

00:15:42.000 They're warning that this will have dramatic consequences if it's not paused or mitigated in some way.

00:15:48.000 And we can see their eggs playing out in the markets every day.

00:15:51.000 Well, and I will agree with Ackman.

00:15:53.000 I think he's a very smart guy.

00:15:55.000 I don't necessarily...

00:15:57.000 I think he's a true believer in sort of reforming, reshaping the American economy, especially with our trade deficits.

00:16:04.000 I think he likes it.

00:16:06.000 I don't know that he's got the guts or the true belief and the conviction to stay the course when it gets rocky.

00:16:16.000 And I'm a little bit different in that way.

00:16:18.000 I think, you know, where I will agree with him is that businesses, markets need predictability.

00:16:25.000 And so the sooner that we can get to a predictable baseline, the better it will be long term.

00:16:30.000 And 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.

00:16:45.000 They came back with reciprocal tariffs or, you know, retaliatory tariffs of 34%.

00:16:53.000 Trump 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.

00:17:04.000 I think China is his number one nemesis here that he wants to take off the chessboard. 0.96

00:17:09.000 And he's playing some high risk poker.

00:17:12.000 There's no doubt about it.

00:17:13.000 basically saying China cannot survive without being able to trade all these goods into the United States.

00:17:21.000 Now, there's going to be other problems for us that comes along with China having supply chain issues into the United States.

00:17:29.000 But that is the number one foe that Trump is after.

00:17:32.000 It's very, very clear.

00:17:33.000 So I happen to think that, listen, the sky's not falling.

00:17:37.000 It's going to get bumpy, but we got to stay the course right now.

00:17:40.000 The world is waking up to the power of gold.

00:17:46.000 National banks are scrambling to secure it.

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00:18:44.000 Honored to be joined by Dr. EJ Antoni.

00:18:48.000 He's an economist over at Heritage.

00:18:50.000 Dr. Antoni, welcome to the show.

00:18:52.000 Thanks for making some time here on a breaking news day.

00:18:55.000 Sum up for us what you are seeing.

00:18:58.000 The market looks like Dow is down 480.

00:19:01.000 I mean, it was down much lower than that.

00:19:04.000 Then it shot up to about plus 840 on some fake news of a 90-day pause in the tariff war.

00:19:10.000 Now we're back down at 450, something like that.

00:19:13.000 We're hearing news about 50-plus countries that are at the negotiating table.

00:19:18.000 We've got Bibi Netanyahu has just arrived at the White House.

00:19:21.000 Lots happening.

00:19:22.000 Make it make sense for us.

00:19:24.000 Well, Andrew, thanks for having me.

00:19:25.000 Unfortunately, a lot that we have to go on right now is really just rumor, and that's why there's so much volatility in the marketplace.

00:19:32.000 Now, there are a few things that we know for sure, right?

00:19:34.000 Like you mentioned Benjamin Netanyahu being in town.

00:19:38.000 That's something we can definitively say is the case.

00:19:41.000 But as far as nations being at the negotiating table, again, there's rumors that there's a lot more.

00:19:46.000 There's rumors that there's a lot less.

00:19:48.000 We have heard some EU officials go on the record saying that they are willing on certain things to go to zero tariffs if the U.S.

00:19:56.000 does as well.

00:19:57.000 So, again, there is definitely some good progress here.

00:20:00.000 But overall, there's a lot of rumor, which means there's a lot of volatility.

00:20:04.000 Another 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.

00:20:13.000 In 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.

00:20:21.000 Now, normally, Stock prices going up would be a good thing, but in the case of a short position, it's exactly the opposite.

00:20:27.000 You're betting on things going down, not up.

00:20:30.000 So whatever the case...

00:20:31.000 This all caused a tremendous amount of not just volatility, but a huge swing.

00:20:37.000 The 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.

00:20:46.000 So, again, tons of rumors, which means tons of volatility.

00:20:50.000 Markets are looking for direction.

00:20:51.000 They're looking for definitive answers.

00:20:53.000 We 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.

00:21:02.000 We've gotten a lot of misdirection.

00:21:04.000 Yeah, 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.

00:21:22.000 They say they're factoring in trade deficits as well as other non-tariff-related trade barriers.

00:21:30.000 Basically, 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.

00:21:48.000 I predict that this is going to be a fairly long-term struggle and a trade war, if we want to use that word.

00:21:56.000 Are you seeing the same?

00:21:59.000 And please comment on the way that these tariffs were structured in the first place.

00:22:03.000 Was it done right?

00:22:04.000 Were there things we could have done better?

00:22:07.000 The floor is yours.

00:22:08.000 Andrew, these are great questions.

00:22:10.000 Thank you for asking them.

00:22:11.000 And it's really something I think where we need to set the record straight because there is so much misinformation out there.

00:22:17.000 There are way too many versions of the truth here.

00:22:18.000 There's only one truth.

00:22:19.000 So here it is.

00:22:20.000 What President Trump wanted were true reciprocal tariffs.

00:22:24.000 In 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.

00:22:33.000 You are penalizing our exporters and therefore our workers.

00:22:37.000 We're going to do exactly the same thing to you.

00:22:39.000 Holding up a mirror, as it were, to these other countries.

00:22:42.000 That is what he tasked members of his administration with, like the Commerce Department, like the U.S. Trade Representative, etc.

00:22:51.000 That was the whole reason for the delay, for example.

00:22:54.000 Waiting 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.

00:23:04.000 Instead, what we got was something that has literally nothing These tariff rates have nothing to do with other nations' tariff and non-tariff barriers.

00:23:14.000 They simply looked at the ratio of imports to exports and only looked at the imports and exports of products, not even services.

00:23:21.000 And so at the end of the day, you're simply looking at trade deficits.

00:23:25.000 And again, it's just the trade deficit in terms of goods.

00:23:29.000 Unfortunately, that means for some countries where we actually have an overall trade surplus, maybe we sell them shoes.

00:23:36.000 Excuse me.

00:23:37.000 They sell us shoes, so we're buying shoes from them, let's say, and then maybe we turn around and sell them financial services.

00:23:44.000 And they are buying much more in financial services from us than we buy shoes from them.

00:23:49.000 That's a trade surplus for the United States.

00:23:51.000 Except 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.

00:24:01.000 That's the goal here.

00:24:21.000 We want more free trade, not less.

00:24:24.000 It's not that we're protectionists.

00:24:26.000 It's that, again, we want true, reciprocal free trade.

00:24:30.000 Free and fair trade.

00:24:31.000 Because they engage in the most trade abuses,

00:24:58.000 whether that's manipulation of the currency, subsidizing industry and dumping artificially low-priced products in other countries'markets.

00:25:05.000 You have slave labor.

00:25:07.000 I can go on and on, whether it's currency manipulation, etc.

00:25:11.000 The list just goes on and on when it comes to China and all of their unfair trade practices.

00:25:15.000 And yet again, they have a middle-of-the-road tariff rate.

00:25:36.000 The 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.

00:25:47.000 That's the issue here.

00:25:48.000 And 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.

00:25:57.000 The futures markets went up, I think, about 1.5% on that news.

00:26:00.000 But 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.

00:26:09.000 That'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.

00:26:18.000 All has to do with uncertainty.

00:26:19.000 People don't know where we're going to go from here, and that's a problem.

00:26:23.000 Yeah, 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.

00:26:39.000 Let's just play one of many clips that are out there.

00:26:41.000 Let's play 107.

00:26:42.000 This is 2012, President Trump talking about tariffs.

00:26:46.000 107. And I said, somebody said, well, what would you do?

00:26:51.000 What can you do?

00:26:52.000 So easy.

00:26:54.000 I drop a 25% tax on China.

00:26:58.000 And, you know, I said to somebody that is really the messenger.

00:27:03.000 The messenger is important.

00:27:05.000 I could have one man say, we're going to tax you 25%.

00:27:10.000 And I could say another, listen, we're going to tax you 25%.

00:27:18.000 I mean, there's tons of these clips around.

00:27:21.000 So, I mean, here's what I, and he's been consistent throughout the years.

00:27:24.000 And 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.

00:27:34.000 Now, I will agree that the way it was done, I think, has spooked the markets.

00:27:39.000 I think you could have done it a different way.

00:27:41.000 So let's game this out then, Dr. Antoni.

00:27:44.000 So where would you like to see His strategy go from here.

00:27:49.000 Because Trump is going to claim a win one way or the other.

00:27:54.000 We know politically that's going to be part of the next step.

00:27:57.000 What 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?

00:28:11.000 Well, 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.

00:28:21.000 So 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.

00:28:31.000 You know, that really hurts our dairy farmers. 0.71

00:28:33.000 So figure out, okay, what is the mathematical equivalent in terms of an overall tariff?

00:28:38.000 And 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?

00:28:50.000 And that's your negotiating tool.

00:28:52.000 But 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.

00:29:07.000 We 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.

00:29:19.000 the other really big thing is that it seems like we've kind of put the cart before the horse in a certain sense.

00:29:26.000 You know, what this economy really needs is supply-side policies.

00:29:30.000 It's like we just threw them an anchor without first building them a boat.

00:29:49.000 And so it is...

00:29:51.000 that we get things like the tax cut across the finish line.

00:29:54.000 And also what I would really like to see from Congress, you know, this isn't just the administration's fault.

00:29:59.000 Congress has been painfully slow to act on this.

00:30:02.000 So 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.

00:30:16.000 Put that into statute, but do it as a border adjustment tax.

00:30:20.000 and 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.

00:30:31.000 But it also puts the tariff only on imports.

00:30:35.000 So 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.

00:30:46.000 You don't want that to get hit with a tax every single time.

00:30:49.000 So 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.

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00:32:09.000 Dr. 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.

00:32:20.000 Now, there was some waffling.

00:32:22.000 And I would say Congress was attempting to water down some of these spending cuts, the tax, extending Trump's tax cuts.

00:32:31.000 There was, I mean, you've got the moderates and you've got the fiscal hawks.

00:32:34.000 And I mean, what we were getting was a muddled mess.

00:32:38.000 I do think one of the unintended consequences, positive consequences of what we're seeing in the markets is now Congress has...

00:32:47.000 Added incentive to ensure that we are getting the supply side relief that you're talking about, meaning are we going to get deregulation?

00:32:54.000 Are we going to get these tax cuts extended?

00:32:59.000 Are we also going to add this 10% baseline tariff?

00:33:04.000 You categorize it a different way, but what that does is it essentially builds in that revenue.

00:33:12.000 into this reconciliation package.

00:33:14.000 Continue on with that because I think it's a really important point that nobody's really bringing up at this point.

00:33:20.000 Well, thank you, Andrew.

00:33:21.000 Basically, 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.

00:33:38.000 And 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.

00:33:48.000 And so you're not supposed to...

00:33:52.000 You're supposed to have no effect.

00:33:55.000 It should even out.

00:33:57.000 So if we're going to make a change like reducing marginal tax rates on income taxes, which is terrific, that's a great thing.

00:34:04.000 It's exactly what the economy needs.

00:34:05.000 It's what the middle class needs.

00:34:07.000 They need tax relief.

00:34:09.000 But now you're going to need to offset that somewhere.

00:34:12.000 And I understand the fact that there's a law for curve effect here.

00:34:15.000 In other words, as you reduce tax rates, that increases...

00:34:18.000 Which grows your tax base.

00:34:21.000 And if you grow the tax base faster than the tax rate declines, overall tax revenue actually increases.

00:34:28.000 That's what we saw during the first Trump administration.

00:34:30.000 The problem is that's not how the Congressional Budget Office scores it.

00:34:33.000 And so you need what they sometimes call an offset to the reduction in personal income tax rates.

00:34:40.000 And 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...

00:34:48.000 I totally agree.

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.

00:35:00.000 It is our Navy that patrols the world's sea lanes.

00:35:03.000 It is our Navy at our expense that keeps the ocean safe for international trade.

00:35:10.000 And 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.

00:35:21.000 I totally agree.

00:35:22.000 I think that's really well said, Dr. Antoni.

00:35:25.000 I want to switch gears slightly here.

00:35:28.000 And this clip was making the rounds.

00:35:30.000 It was Secretary of Treasury Scott Besson.

00:35:33.000 He sat down with Tucker Carlson and he made this pretty remarkable statement.

00:35:37.000 Now, I want to factor in what Scott Besson says here in this clip.

00:35:42.000 And then kind of use that to understand the way the market is reacting.

00:35:48.000 Is it an overreaction?

00:35:50.000 Are the wrong people incentivized in the wrong ways here?

00:35:54.000 So let's go ahead and play cut 124.

00:35:57.000 And 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.

00:36:11.000 88% of the stock market.

00:36:13.000 The next 40% owns 12% of the stock market.

00:36:18.000 The bottom 50 has debt.

00:36:20.000 They have credit card bills.

00:36:23.000 They rent their homes.

00:36:24.000 They have auto loans.

00:36:26.000 And we've got to give them some relief.

00:36:28.000 So, Dr. Antonio, let me frame it this way.

00:36:31.000 There seems to be a disconnect between Wall Street and Main Street.

00:36:37.000 And obviously, when Trump has done this tariff regimen, we are seeing Wall Street panic.

00:36:45.000 They're unsure.

00:36:47.000 There's no predictability.

00:36:48.000 I understand that.

00:36:49.000 The 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?

00:37:01.000 Or is there a way to make them both win?

00:37:03.000 That's a great question, Andrew.

00:37:06.000 And look, it's not that we need to redistribute wealth from Wall Street to Main Street.

00:37:11.000 The redistribution of wealth is not the answer here.

00:37:14.000 Instead, what we primarily want is we want to focus on Main Street growing.

00:37:18.000 Now, the good news for Wall Street is the fact that when Main Street does better, Wall Street will too, right?

00:37:24.000 The problem is that in this country, we haven't had that happen in a very, very long time.

00:37:29.000 Instead, Wall Street has continued to do better at the expense of Main Street.

00:37:35.000 When you have runaway inflation, for example, what goes up in price?

00:37:39.000 Everything. The price of a home goes up, rent goes up, food goes up.

00:37:43.000 But you know what else goes up?

00:37:44.000 Equities. So stocks appreciate in price tremendously.

00:37:48.000 Those 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.

00:37:57.000 And so for the people who have essentially...

00:38:03.000 They do just fine.

00:38:05.000 But everyone else, as the secretary was just saying, they're forced to take on a lot of debt.

00:38:10.000 Homes become perpetually out of reach.

00:38:12.000 The median mortgage payment on a home today is literally twice as high as it was four years ago.

00:38:20.000 In other words, under the Biden administration, the median price home became twice as expensive.

00:38:26.000 That's obscene.

00:38:26.000 And that's why for the first time since the Great Depression, people think No, I totally agree.

00:38:50.000 I think you're 100% right.

00:38:51.000 What they want is predictability.

00:38:53.000 It's almost like the market isn't rejecting tariffs on its face.

00:38:58.000 What it's rejecting is...

00:38:59.000 Can we predict what the basic operating assumptions are for businesses internationally?

00:39:08.000 And by the way, just as we're talking here, Dr. Antoni, we're seeing some green.

00:39:11.000 The S&P 500 looks up.

00:39:13.000 The NASDAQ looks back up.

00:39:15.000 The Dow's down 200.

00:39:16.000 It was down much, much more.

00:39:19.000 I'm not sure what the...

00:39:20.000 1,200 at one point.

00:39:22.000 Yeah, I'm not sure what any signal's causing this.

00:39:25.000 But hey, perhaps we end on a high note here, Dr. Antoni, that the sky is not falling.

00:39:31.000 We're going to get some resolution here.

00:39:33.000 Stay the course.

00:39:34.000 Keep your wits about you.

00:39:36.000 But your points are well made.

00:39:37.000 Thank you for making the time on a busy, breaking news day, Dr. Antoni.

00:39:42.000 Andrew, thank you for having me.

00:39:44.000 Thanks so much for listening, everybody.

00:39:46.000 Talk to you soon.

The Charlie Kirk Show - April 08, 2025

Rejecting Tariffs, or Rejecting Uncertainty?

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