In this episode, we discuss President Trump's comments on tariffs, the Supreme Court's ruling against his broad-based tariffs, and the impact on the stock market of that ruling. We also talk about the mid-term elections and what it means for the future of the economy.
00:01:48.220I think that's what he's talking about.
00:01:48.860Tom, what do you think about that whole exchange with tariffs and how I'll remember you if you don't do it?
00:01:52.980Well, I mean, let's face it. Most presidents are quietly, you know, the head of the Federal Trade Commission and their head of the FCC because they appoint people and then they pick up the phone.
00:02:07.320And what we're seeing here is he's just playing the cards very, very openly.
00:02:11.360It says, I will remember you. I said, what does that mean? I'll remember you.
00:02:15.620And so, you know, people don't want to, people don't want to run afoul of a U.S. president that will say your name in headlines, potentially affect your stock price, and also take steps.
00:02:30.160Yet FedEx and, you know, UPS both have had, you know, they've got earnings issues.
00:02:38.960And I think some of these may not feel like, you know what, it may offend them, it may not offend them.
00:02:44.820Maybe the midterms will go to a more neutral direction.
00:05:52.740The Supreme Court, I'm just going to say,
00:05:54.240the Supreme Court already ruled against him.
00:05:56.780And then the thing is that he's got these other avenues that he's pursuing.
00:05:59.820So just pursue those other avenues until they either expire or they get ruled against.
00:06:04.840But to then go and surreptitiously start to invoke threats, bail threats to companies, private companies, no, not a big fan of that strategy.
00:06:18.860Well, do you think it's more national security or economic, though, because how do we fix the problem of other countries underselling companies in terms of what they could pay for labor, for manufacturing?
00:06:30.020How are we supposed to compete with that?
00:06:32.900Well, there might be reasons why these other countries in the world, you say, are underpaying their labor.
00:06:42.200It could well be that these other countries in the world have surplus labor.
00:06:46.460And if they have surplus labor, well, then it would stand to reason that their wage rates would be lower.
00:06:52.820Like in the United States, you know, right now, because of the out-migration file, we don't have.
00:07:00.520We have an unemployment rate barely more than 4%.
00:07:04.020Are you going to come after Canada because the Canadian unemployment rate is 7%?
00:07:08.300Would you think that Canada should not have reduced wage rates or pressures
00:07:13.660because there's more of a surplus of labor in Canada
00:07:15.980or anywhere else in the world relative to the United States.
00:07:44.740As a Canadian yourself, what do you think about Carney's relationship with China right now?
00:07:52.160Well, I think that his relationship with China is intertwined with his relationship now with really with the rest of the world.
00:07:59.180So I think that Carney has almost given up on the United States as a viable partner.
00:08:08.760So he's partnering with whoever is going to want to do business with Canada.
00:08:15.760As a Canadian, do you see yourself as China as the number one enemy of Canada or no?
00:08:22.220I would rather that Carney does more to foster a positive relationship with the United States, you know, than going and cozying up to China.
00:08:37.360Yeah, you know, because I think China is not a military enemy.
00:08:42.180China's not a military enemy of the United States either,
00:08:45.060but it's a massive economic adversary.
00:08:47.920And if it's an economic adversary to your biggest trading partner,
00:12:35.940He actually moderated a little bit, and Carney's running around like Trump is this great boogeyman stepping on everybody's feet.
00:12:44.080When he's got a good deal going, and I think he just sold out his old economy, going to get BYD to bring electric vehicles to Canada.
00:12:55.900And BYD was known to be putting predatory pricing all across the EU and to undermine Mercedes and Volkswagen, which makes a ton of things, and the Nissan conglomerate and BMW.
00:13:12.380They sat there. What was it? Bulgaria? Check me on this. I think they have a BYD had an import place or a assembly, final assembly in Bulgaria, and they were sending all of this EVs into Europe and just undercutting everybody's price.
00:13:27.120Does Carney think he's not going to get the same deal out of China, that they're not going to do that?
00:13:31.900My goodness. So I'm kind of shocked. I feel like he's bowing to political pressure.
00:14:04.500from doing business with us than we do
00:14:06.360And so a lot of presidents have negotiated favorably on behalf of China, which, by the way, starting with Nixon, Nixon is who built China, because at that time, everybody was worried about the power USSR was going to have and, you know, Soviet Union and all this other stuff.
00:14:19.400And then we said, hey, let's help these guys out.
00:15:21.600You know, so to me, a part of I think what maybe Tom is saying is the fact that all these other countries are winning from having the best customers in the world, which is America.
00:15:29.760And we need to make sure they're happy.
00:15:31.600You said something which was interesting that it's a good debate to have.
00:15:36.420Should he have done it where he went after every country around the world instead of doing it as one liberation day?
00:15:42.620Maybe that's a good strategy to debate.
00:15:44.660I can see that being a good debate because the reality of it is who was it really wanting to have trade war with?
00:18:48.040If you want to go back into a world where the trade balance will be zero for every country in the world, which is what I think President Trump would like, we're going to end up with much weaker global economic growth.
00:19:01.720And because the U.S. is a large closed economy, it will be relatively better off.
00:19:06.940But it'll be like cutting off your nose to spite your face.
00:19:11.220You don't have to do much more than just go take an economics course in balance of payments economics, international trade economics, to know that free trade, if conducted properly, benefits everybody.
00:19:31.860Now, it doesn't mean that the principal cheater here has been and always been China, and not just in goods but also in services.
00:19:40.220Well, then, well, that's what we've done all along for, and the big problem was not the get round of negotiations that started in the 1970s, which was multilateral.
00:19:50.080It was when we allowed China into WTO, unshackled, back in 2001.
00:19:56.880That was the problem, okay, then to globalize it, then to globalize it.
00:20:02.140And it just showed me, I'll just tell you right now, everything I've seen out of the administration in the past year, since April last year, tells me there's a fundamental lack of understanding of how the balance of payments works.
00:20:18.720And I know that people, for some reason, they think tariffs are a great thing.
00:20:24.120I think that, once again, I'm a Reaganite, okay?0.97
00:20:27.720We knew back then that the cheater was really Japan.0.91
00:20:31.180It was really in the good sector, primarily steel and autos, and we went after them with Section 301.0.75
00:20:38.340We went after them, and then it got resolved.
00:20:44.240Now, the one thing I'll say about Carney, and this is where we're in agreement, okay, by the way, because most of your commentary was on Carney.
00:20:52.360By the way, you said Carney gave up on the U.S. and went elsewhere, and I'm like, how can he possibly give up?
00:21:43.880It will never be an equal relationship because we depend.
00:21:47.960Like, we ship out, like, 80% of our GDP is shipped out south of the border.
00:21:54.240So the United States has always had economic leverage.
00:21:57.500And when you go back to when the free trade agreement was signed before Mexico, back in the late 1980s with Brian Mulroney and Reagan and George H.W. Bush, we just had to show in Canada that although we're going to be the immense beneficiary, you're going to benefit as well.
00:22:12.020But the United States is a large, closed economy.