Valuetainment - August 02, 2019


Episode 350： US China Trade War Explained


Episode Stats


Length

17 minutes

Words per minute

203.96121

Word count

3,618

Sentence count

395

Harmful content

Misogyny

4

sentences flagged

Hate speech

10

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Trade war between the United States and China could be the biggest trade war in history. What are the reasons behind this trade war? Why is this happening and what is the purpose behind it? Why does China want to trade with the USA?

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 30 seconds. One time for the underdog. Ignition sequence start.
00:00:06.980 Let me see you put them up. Reach the sky, touch the stars up above.
00:00:11.120 Cause it's one time for the underdog. One time for the underdog.
00:00:17.220 I'm Patrick Bedeby, host of IITEM, and today we're going to talk about the U.S.-China trade war
00:00:20.820 and seven reasons that could possibly be causing this trade war.
00:00:24.880 So before we get right into it, let's first talk about the word tariff,
00:00:27.140 what it means and why countries put a tariff on other countries to import their products in.
00:00:31.340 So first, a tariff is a tax. For instance, you bring your products from China to U.S.,
00:00:37.040 I put a 25% tariff on this product. So if you bring $100 billion,
00:00:41.460 you're going to have to pay another $25 billion. On top of that $100 billion, that's the tariff.
00:00:45.940 This is why you'll notice a lot of times where when people come here from Europe,
00:00:51.120 they look at a Camero and they say, oh my gosh, that's such a luxury car.
00:00:53.680 It's an exotic car. Look at that. But Americans look at Camero and they're like,
00:00:57.400 just a Camero you can buy for $20,000. But Europeans don't pay $20,000. They may pay $40,000 for it. 0.96
00:01:02.780 Just like when Americans go to Europe and they say, cab drivers driving around a Mercedes.
00:01:07.360 Cops have Mercedes. What is this all about? Because what a Camero is in U.S.
00:01:11.300 is exactly what a Mercedes is in Germany, right? So part of tariff is to protect the businesses in
00:01:17.820 your country so the business flows through your job creators, not somebody else's. But you're
00:01:22.900 willing to allow them to come in and compete. So that's a tariff. Now, trade deficit. What is a
00:01:26.820 trade deficit? This is where a big part of this war started taking place. Let me explain to you
00:01:30.660 what a trade deficit is. Here's U.S. trade deficit. U.S. imports $3.1 trillion in, meaning countries around
00:01:38.960 the world want to do business in America. And America allows them to come in, last year $3.1
00:01:45.620 trillion. Now, U.S. gives other countries only $2.5 trillion. So 3.1 coming in, but only 2.5 going
00:01:55.540 on. Now think about this. U.S. is only 330 million people around the world. The world has another 6.8
00:02:00.920 billion. But there's the same amount, business being in U.S. and out, because everybody wants
00:02:06.400 to be in America. So that creates a $600 billion deficit. Now, added this $3.1 trillion that
00:02:14.260 comes in, $539 is China, which is 17.3%. But out of our $2.5 trillion that goes out, only
00:02:23.260 $120 billion is China, which is 4.8%. Meaning, China is giving us less than we are giving them.
00:02:33.060 China's making more because we're allowing them to compete in America way more than we 0.99
00:02:36.880 are doing in America. Somebody may say, well, it's not like they're not allowing you. They
00:02:40.140 just don't have a need for you there. And you would like them to come here because of cheap
00:02:43.420 labor and all this other stuff. Let me continue. The total deficit, again, $621 billion. But
00:02:48.840 out of the $621, $419 is China alone, which is 67% of the deficit. 67% of the deficit. So, President
00:02:59.640 Trump is sitting there saying, well, wait a minute. Wait a minute. Why are we giving
00:03:02.960 them so much money? And why are we not getting anything for this? Why are we not doing it
00:03:07.040 in America? Why are we creating jobs over there? Why are we not keeping this to ourselves? Why
00:03:11.040 are we helping their economy? Aren't they trying to compete with us? Aren't they coming up
00:03:14.740 from like nobody to now, number seven, number eight, number five, number four, number three,
00:03:18.100 number two? They're wanting to compete with America. What is going on over here? No, no,
00:03:21.700 no, no, no. Let's find out what we produce well. We export grain, wheat, corn, soybean,
00:03:29.200 meat, pork, poultry, mechanical parts like chips, different kinds of things. China exports
00:03:34.260 electronic parts, wooden furniture, aluminum car parts, fashion accessories like the handbags,
00:03:39.260 seafood. That's what we're looking at. Okay. So that's what we export. How come we're not
00:03:43.320 doing more? Why are we giving them so much money? Why are they doing so well? We're helping
00:03:47.380 them. Aren't we helping them become closer to us? I don't know why this is taking place.
00:03:51.700 So, you know, what are the reasons for this trade war? Why are we doing this? What's the
00:03:54.600 purpose behind it? Here's what you got to realize. Anytime you're dealing with politics,
00:03:59.260 you're dealing with power. Motivation for business owners is money and freedom and financial freedom
00:04:03.960 and control. Leave me alone. But when it comes on to politics, power is key. Then it's economy.
00:04:09.420 Then it's politics, which is ideology. China is trying to say our ideology works because we have
00:04:15.980 the kinds of people that follow what we tell them. We are leaders. We tell them what to
00:04:19.560 do and they do it. America is weak leaders because their people always tell them what
00:04:24.000 to do. You know, the voters always tell them what to do. And you always know what America
00:04:27.780 is doing. America, matter of fact, everyone knows their bad news because they have freedom
00:04:31.220 of speech and they have freedom of press. China, we know everything America is doing. America
00:04:35.940 has no clue what we're doing. We are more powerful. And America is trying to say, hey, people
00:04:40.640 are better if they have a freedom of speech. Let Americans speak. Let us have freedom of
00:04:43.900 press. You know, we believe we have a better empire. There's a bit of an ideology going
00:04:47.200 on there with communism and capitalism. They have obviously competition. Everybody's competing.
00:04:51.860 You got money. You got market. You got control. Now, all that being said and done, what's
00:04:56.920 President Trump's motivation? Some people are saying, why did he all of a sudden start
00:04:59.740 picking on China? It's not a new thing. In 2014, when President Trump wasn't President
00:05:05.940 Trump, he was Donald Trump, aka Apprentice, you're fired. Here's what he tweeted in May of
00:05:12.160 2014. Remember, China is not a friend of the United States. Look at how many likes this tweet 0.73
00:05:18.100 got. And it was only retweeted 345 times. You know what that means? Nobody was really paying
00:05:23.180 attention to what he was saying about politics back then. But this China thing is not a new
00:05:27.460 thing with President Trump. He's been thinking about this for a while. So now, what is he
00:05:31.340 wanting to do? What's his motivation behind this? What is he doing? Is it the fact that he wants to
00:05:35.660 keep manufacturing jobs in the U.S.? Is that what it is? Is it the fact that he wants to
00:05:39.920 reduce the U.S.-China trade deficit? Maybe he wants that $4.19 to go lower? Is it the
00:05:44.800 fact that he still wants to keep U.S. as the dominant power, doesn't want to give
00:05:47.880 anybody else a shot? Maybe it's the fact that he's trying to get U.S. out of debt.
00:05:51.360 Because, you know, U.S. owes China $1.13 trillion of debt. And it used to be $1.3 trillion
00:05:57.600 in 2013, and it's $1.13 trillion. Maybe this is a way for him to learn to get out of
00:06:02.340 this debt because he's used to eliminating debt. They used to owe a billion dollars to
00:06:06.880 a bank. And this is maybe his comfort zone. It's like, I'm okay with this. I can handle
00:06:10.820 things like this. Maybe it's him bullying the bully. A lot of people are afraid of China.
00:06:14.980 A lot of people are saying, well, I'm not going to say anything because we need them. We need
00:06:18.460 them. We need them. There's only one country that maybe doesn't need China, that maybe China
00:06:21.980 needs more than they need them. And he's like, well, my position, I'm going to get out and say
00:06:26.400 something about this. And I'm going to bully the bully. Maybe that's what it is. Or maybe it is
00:06:31.720 the vision that China launched back in 2015 to their people called Made in China 2025.
00:06:38.540 And here's what Made in China 2025 was. Some may say this is brilliant. Some may say it's
00:06:43.380 manipulative. But all I can tell you is this 100% benefits China more than anybody else. 0.92
00:06:50.220 So part one of the five-point game plan is setting explicit targets. Here's what that means.
00:06:55.800 Chinese government is pressuring private companies to adjust their vision to China's 2025 vision.
00:07:01.300 So saying, here's what we're doing. We would like you to do anything you do with your company
00:07:06.060 to help us reach this vision as a whole. Which some may say, okay, that's cool. That's a visionary.
00:07:11.080 Somebody else says, why are you pressuring us? You know, why are you making us do a lot? Maybe
00:07:14.820 we want to do something else. But that's what China's doing. Number two, providing subsidies. 0.99
00:07:18.960 $300 billion investments. This is going to be very low interest rate loans. Whatever they can do
00:07:23.760 to help these businesses grow. We're talking $300 billion of China's going to lend, give, invest into private
00:07:30.080 companies. Right? Number three, it's foreign investment and acquisitions. Government is
00:07:34.860 encouraging companies to invest into semiconductor firms to gain access to their technology. Well,
00:07:41.400 what do you mean? Well, we want you to go buy and invest into semiconductor companies in U.S.
00:07:45.660 so we find out exactly what they're doing with their technology. And you know how much they put in
00:07:49.640 2016? $45 billion into U.S. companies. And they invest in like, oh, this is what they do. Let's do this
00:07:56.480 in China. Oh my gosh, this is what they do. Let's do this in China. That's the third one. Point number 0.96
00:08:00.280 four is mobilizing state-backed companies. What does that mean? State-backed. Meaning companies
00:08:05.240 that are owned by the government. This is kind of like, you know, CIA investing into Facebook. I mean,
00:08:10.220 imagine if that happened to America. CIA is wanting Facebook to do better because they get all the
00:08:14.960 data because that's where all your information is. That's one of their game plans. And last but not least,
00:08:19.840 point number five, which is probably the one that's concerning the most people. EU is not happy about this.
00:08:24.380 Central America is not happy about this. Brazil is not happy about this. Middle East does not
00:08:28.640 happen. A lot of people are not happy about this. Here's what it is. Number five, forced transfer
00:08:33.900 agreement. Here's what this means. If you choose to do business in China, they are forcing you to share
00:08:40.840 all your trade secrets with them. All. You're Boeing. You want to go into China? You want to do business
00:08:45.700 out there? Guess what, Boeing? Share all your trade secrets with us. Then we're going to go design our own
00:08:50.200 Boeing. That's what China is doing. And this right here got a lot of people concerned. A lot of people
00:08:56.280 are saying, wait a minute, that's not fair. You know, you can come and do business in our country.
00:08:59.620 We don't ask you to do all this stuff. You can come do business here. But if I want to go do business
00:09:03.380 in China, I have to share with you all my trade secrets. Yes, that's the game plan. Why are they
00:09:06.660 doing this? Here's why. U.S. is good at, you know, ideas and innovation. U.S. is good at free market
00:09:11.840 competition. They don't mind competition. They want new companies coming out there competing with the rest
00:09:16.040 of them. U.S. is good at technology. China, on the other end, they're good at cheap labor. Very 0.85
00:09:20.880 cheap labor. You hear a lot of these videos and these stories about what it takes and how hard
00:09:24.800 kids work and how much money they're making per day. But they're good at cheap labor. And a lot of
00:09:28.180 people say, wait a minute, if I can get somebody to work with me for $5 a day, here you go.
00:09:31.400 They're good at copying. You hear a lot of times, here's Nike, but you got another one made in,
00:09:36.260 you know, China's version that says Nicey or whatever it's called. But it's a similar kind of a whoosh.
00:09:40.460 They're very good at copying products, right? But they're also very good at manufacturing. So it's kind of like
00:09:44.840 they're good at copying, but they're good at manufacturing. So maybe we need them. Why are
00:09:48.560 you doing this? They find out about a product. They unpack the product. Then they make the same
00:09:52.300 exact product for a fifth of the price. We're not helping ourselves. What is going on over here,
00:09:56.320 right? So U.S. knows this is taking place. And this is why it's leading us to who is this hurting
00:10:02.960 the most? A lot of people are concerned. I think this is hurting a lot of people. Well, who's hurting
00:10:07.100 the most? Who's taking the biggest hit? So we were saying other foreign relationships,
00:10:11.940 some of these tariffs that Trump imposed on other countries, immediately Brazil came
00:10:15.960 out, wait a minute, that tariff you put on China is hurting us. Then Trump came out and
00:10:20.320 said, okay, this tariff excludes Brazil. Then Brazil took their tariff down. So, you know,
00:10:25.360 U.S. put a tariff on to China about certain products. Canada, Mexico came back and said,
00:10:29.220 wait a minute, this is hurting us. We are threatening to put an impulse to U.S. on such and such product
00:10:34.160 that you import to us. Then Trump's like, okay, this tariff is only China, right? So a part of
00:10:39.700 this is also hurting relationships with other countries. Number two, it's hurting the small
00:10:44.400 business owner. A lot of these small business owners are relying on buying a product for a
00:10:48.160 certain price and selling it for retail to make money. Wait a minute, I'm having to pay more.
00:10:52.040 I'm having to spend more. I'm not making the same kind of profits. Number three, farmers in U.S.,
00:10:57.740 just between January to March, two months, three months, farmers in U.S. lost $11.8 billion
00:11:04.720 in three months. Farmers. By the way, in, I believe it's Illinois, Wisconsin, and Indiana,
00:11:11.020 highest rate of bankruptcies in the last decade in those areas. They are taking a big hit. And
00:11:17.140 obviously, consumers are also taking a big hit. And, you know, you hear the whole thing,
00:11:20.320 wow, you know, it's short-term pain for long-term gain. This is why we're doing this,
00:11:25.100 because we're going to have long-term gain. No one really knows this. We are currently in the
00:11:28.420 short-term pain process. We're not yet in the long-term gain process. So having said this,
00:11:33.660 some of the people say, wait a minute, Pat, you know, what about this fact that, you know,
00:11:38.260 what if China realizes that, hey, if you want to play this game with us, don't you owe us $1.13
00:11:45.140 trillion? You know, what if China sells their debt? What happens there? Could that affect the U.S.
00:11:52.180 economy in a massive way? I mean, let's face it. China's got $1.13 trillion in T-bills, tenure,
00:11:59.200 treasury bills, treasury bonds. And the current rate, I believe, is 3.4%. And by the way,
00:12:04.400 U.S. also owes Japan, I think it's $1.07 trillion, and U.S. owes Brazil $308 billion,
00:12:10.680 and U.K. $284 billion, and Ireland $274 billion. What do we do? What if China sells the debt?
00:12:16.280 What if they do? Here's what happens if China sells the debt.
00:12:18.660 What happened in 2008? The massive market crash that we faced in 2008 in the U.S., where the market
00:12:26.860 tanked nearly 40% in a year. I'll never forget that. I'm in the financial industry. I'm a Series
00:12:30.840 7 financial advisor. And we're like, boom, 38%. Clients calling, calling, calling, calling.
00:12:36.780 As bad as that was, it's going to be worse if China does this. And you know who affects the most if this 0.99
00:12:42.040 happens? China. China's going to take the biggest hit. China will be one of the ones that takes the 0.99
00:12:45.940 biggest hit in this. Why will China take the biggest hit? Because remember, if that happens,
00:12:51.500 what are they going to do with this? This is a big part of the economy. $539.5 billion. So now
00:12:57.400 you're listening to this and you say, well, Pat, who needs who more? Who needs who more? I mean,
00:13:02.180 U.S. relies on the cheap labor. Let's face it. We need them. And China kind of relies on us for our U.S. 0.99
00:13:10.100 goods. They need us, but who needs more? So here's the part that President,
00:13:15.940 Trump is used to. If there's one thing President Trump is used to, he knows negotiation and he
00:13:22.940 knows leverage. This is what I mean. He may not be the most, you know, likable guy out there in the
00:13:29.300 world. Not a lot of people like this guy. And it's for obvious reasons. He goes after people
00:13:33.600 hardcore, but he knows leverage. What do I mean by leverage? He knows these guys need it. I mean,
00:13:39.800 one time President Trump owed a billion dollars to the bank and somebody asked him and says,
00:13:43.520 aren't you worried that you owe the bank a billion dollars? He says, why should I be worried?
00:13:47.560 The bank should be worried. I have their billion dollars. They're the ones that should be worried.
00:13:51.580 So he realizes China should be worried. They have our 1.1. We have their 1.13 trillion dollars.
00:13:57.940 And in this entire leverage game, China also has to realize their net migration rate,
00:14:04.380 which is how many people are moving to China, how many people are moving to China,
00:14:08.220 is one of the lowest net migration rates in the world. It's in the negative. While U.S. migration
00:14:14.220 rate is the highest in the world. We take more immigrants than any other country in the world.
00:14:20.440 It's not even close. We're number one. Even though you hear all this stuff about immigration,
00:14:24.020 everybody in the world wants to come to America. Not everybody in the world is wanting to go to China.
00:14:28.260 Why is that? You know, this whole thing that you hear, if you go search right now, forget about
00:14:32.180 where I'm at. Go search right now, China's unemployment rate. And look how weird it is.
00:14:37.060 The last 20 years, 3.4%, 3.5%, 3.8%, 3.2%. How do we know that's accurate? Remember, 1.00
00:14:45.720 free press in U.S., there's no free press type of stuff going on in China. You don't hear Democrats
00:14:51.340 and Republicans going at it. One of the best things for America is the fact that we have Democrats going
00:14:56.620 against Republicans and Republicans going against Democrats. There's always this push so you can kind
00:15:01.080 of sit there and say, there's the truth. There's the truth. There's the truth. Oh, these guys are
00:15:04.880 playing the games. There is none of that. Some people say the unemployment in China is around 14%,
00:15:08.560 13.14%. By the way, CNBC did an article saying a third of millionaires in China want to leave for
00:15:14.320 three reasons. Number one is education. Number two is polluted cities. And number three is their
00:15:19.280 government has way too much control over their people. So what's going to really happen here?
00:15:23.640 How long is this really going to last? Because when you're looking at the same, well, Pat,
00:15:26.320 I don't really understand what's going to happen. Here's the reality of it. It's really who can hold
00:15:31.840 out the longest right now. Really. Who can afford the longest right now? You know, when the mortgage
00:15:37.320 crisis took place and a lot of people lost a lot of things, there were also a lot of people that
00:15:42.480 became very wealthy afterwards. You know why? It's because who had the most cash and who was the
00:15:47.360 most stable? In this situation, whoever's most stable, whoever has most cash, whoever needs the other
00:15:53.200 person less is going to win here. And eventually someone's going to come out of it. Because what
00:15:58.720 President Trump is starting to realize is he's saying, wait a minute, what if we make those jobs
00:16:03.280 come to America? What if we do manufacturing in America? What if, what if we bring those jobs back?
00:16:08.660 Well, what if we make all that money come back here? Well, what if we're making iPhones here?
00:16:13.200 And forget about what if we don't make them here? How about we go to another country that doesn't 1.00
00:16:16.740 offer high tariffs? How about we go to another place that's not offering us as expensive as it is?
00:16:20.640 Why don't you go to another Asian country that's out there? But don't go to China. 0.87
00:16:24.080 Because he realizes this vision that China has, they want power. They want domination. 0.67
00:16:30.260 They want to be number one. And President Trump is extremely competitive. And he's not okay with
00:16:35.220 that happening on his turf. Could it happen 10, 20, 30, 40, 50, 60 years from now? I don't know.
00:16:39.120 I can't predict the future. What I can tell you is this trade war that's going on, it's all about
00:16:44.680 leverage. And whoever has the most leverage is probably going to end up winning at the end.
00:16:49.140 Thanks, everybody, for listening. And by the way, if you haven't already subscribed to
00:16:52.380 Valuetainment on iTunes, please do so. Give us a five-star. Write a review if you haven't already.
00:16:58.160 And if you have any questions for me that you may have, you can always find me on Snapchat,
00:17:02.220 Instagram, Facebook, or YouTube. Just search my name, PatrickBitDavid. And I actually do respond
00:17:07.720 back when you snap me or send me a message on Instagram. With that being said, have a great day today.
00:17:12.720 Take care, everybody. Bye-bye.
00:17:19.140 Bye-bye.