AI transcript
0:00:04 There’s over 500,000 small businesses in B.C. and no two are alike.
0:00:05 I’m a carpenter.
0:00:06 I’m a graphic designer.
0:00:08 I sell dog socks online.
0:00:12 That’s why BCAA created One Size Doesn’t Fit All insurance.
0:00:15 It’s customizable based on your unique needs.
0:00:18 So whether you manage rental properties or paint pet portraits,
0:00:23 you can protect your small business with B.C.’s most trusted insurance brand.
0:00:28 Visit bcaa.com slash smallbusiness and use promo code radio to receive $50 off.
0:00:29 Conditions apply.
0:00:38 Buying a house has long been considered the best way to build wealth and move into true adulting.
0:00:38 Isn’t it?
0:00:41 I mean, at least that’s what society wants us to think.
0:00:44 Got to get a Birkin, got to get a home, you know.
0:00:48 Okay, the handbag you can probably manage without.
0:00:50 But what about a house?
0:00:54 Surely that’s actually good, right?
0:00:58 We’re going to find out this week on Explain It To Me.
0:01:02 New episodes every Sunday morning, wherever you get your podcasts.
0:01:16 No judge decides a case based on the temperature of the day.
0:01:21 Every judge, however, is aware of the climate of the season.
0:01:22 I’m Preet Bharara.
0:01:26 And this week on Stay Tuned, I’m joined by Justice Stephen Breyer.
0:01:30 We get into how judges make sense of the law in a politically charged time
0:01:34 and what that says about the values and pressures shaping today’s Supreme Court.
0:01:36 The episode is out now.
0:01:40 Search and follow Stay Tuned with Preet wherever you get your podcasts.
0:01:45 I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:49 Trump’s tariffs are wreaking havoc around the world.
0:01:53 But the real damage is here at home.
0:02:12 Countries have long used tariffs to protect strategic industries or counter unfair trade practices.
0:02:16 In some cases, targeted tariffs are justified.
0:02:22 In his first term, Donald Trump imposed levies on hundreds of billions of dollars of Chinese goods,
0:02:25 tariffs that Joe Biden largely retained.
0:02:32 But blanket tariffs of the scale we are now seeing are what leeches are to medicine.
0:02:36 An outdated strategy that doesn’t work.
0:02:43 With his Liberation Day tariffs, Trump has threatened to blow up the global economic order
0:02:45 and spread pain around the world.
0:02:49 From China to the Pacific Island nation of Nauru.
0:02:56 But when the shitstorm subsides, America will emerge from the wreckage with the most serious wounds.
0:03:02 Erecting a protectionist trade wall around the U.S. is a brilliant idea
0:03:07 if your goal is to elegantly reduce American prosperity.
0:03:14 The markets ripped higher Wednesday when Trump postponed tariffs on dozens of nations, except China,
0:03:18 pulling the knife halfway out of the back of the U.S. economy.
0:03:22 Then tumbled again the next day.
0:03:25 Treasury Secretary Scott Bessent told reporters,
0:03:27 I don’t see anything unusual.
0:03:29 Investors disagree.
0:03:33 They realize these injuries will take years to heal.
0:03:38 Brand America now stands for toxic uncertainty.
0:03:46 Extreme tariffs, if sustained, will immolate decades of economic integration,
0:03:51 bringing an end to an era of globalization that’s created unprecedented wealth for the U.S.
0:03:56 They’ll raise prices and decrease demand for American products abroad,
0:04:01 curbing economic growth and destroying shareholder value.
0:04:05 The revenue raised will be dwarfed by the losses.
0:04:13 Like Britain’s vote to leave the European Union in 2016, dubbed Independence Day by Nigel Farage and other Brexit dullards,
0:04:19 Trump’s tariffs will go down as one of the biggest own goals in history.
0:04:25 But this is Farage on steroids, and the fallout will be much wider.
0:04:29 It’s impossible to foresee exactly how this will play out.
0:04:35 Before I sign off, Trump’s sclerotic policies will undoubtedly have lurched again.
0:04:37 See above, toxic uncertainty.
0:04:45 But what’s clear is that Trump’s trade war will thrust America’s allies into the arms of its adversaries.
0:04:48 To quote Winston Churchill, quote,
0:04:53 There is only one thing worse than fighting with allies, and that is fighting without them.
0:04:54 Unquote.
0:04:59 We’ve moved to the worse part of the equation.
0:05:05 One country is playing the long game, however, and positioning itself to exploit America’s self-harm.
0:05:07 China.
0:05:18 When I first moved to New York, I started boxing with a trainer who convinced me that I had a gift I was paying him,
0:05:20 and talked me into entering a tournament.
0:05:23 I was dumb enough to do it.
0:05:27 I remember the bell and the bright lights as I lay flat on my back.
0:05:31 More than two decades later, my nose still veers to the right.
0:05:37 It turns out a 23-year-old 5’8 guy who knows how to box and weighs 190 pounds
0:05:42 is a reasonable facsimile of Mike Tyson when matched up against a 38-year-old professor.
0:05:45 My rookie strategic mistake?
0:05:48 Assuming your adversary won’t hit back.
0:05:56 After Trump detonated his tariff bomb in that now infamous Rose Garden ceremony,
0:05:59 China responded swiftly and aggressively,
0:06:04 declaring it would match the president’s taxes with its own levies on imports from the U.S.
0:06:11 Although Trump later said he’d pause reciprocal tariffs for most countries for 90 days,
0:06:22 he raised tariffs on China’s exports to 145% in a desperate cry for some sort of big, i.e. small dick relevance.
0:06:26 China has vowed to fight to the end.
0:06:27 The difference?
0:06:30 Xi means what he says.
0:06:32 Trump is the other guy.
0:06:37 While a trade war will likely hurt China more, that misses the key point.
0:06:41 China is willing to endure more pain.
0:06:45 Remember, we left Vietnam after losing 58,000 men,
0:06:49 compared with more than 1 million for the North Vietnamese and Viet Cong.
0:06:52 I love the U.S.,
0:06:57 but the notion that Americans are going to tolerate 50% fewer toys under the Christmas tree
0:07:01 and $3,500 iPhones is laughable.
0:07:09 Amid the chaos, Europe is pitching itself as reliable, predictable, and open for fair business.
0:07:14 The EU has signed trade deals with Mexico, Chile, and Mercosur,
0:07:18 a South American bloc that includes Brazil and Argentina,
0:07:22 and aims to finalize a pact with India by the end of the year.
0:07:27 As the markets melted down and the president’s acolytes took to CNBC
0:07:31 to make excuses for giving the wheel of the world’s largest economy to a madman,
0:07:35 European Commission President Ursula von der Leyen
0:07:39 visited Central Asia to seal a new strategic partnership.
0:07:45 Among the countermeasures Europe is considering, if talks with Trump fail,
0:07:50 are imposing tougher regulation on American big tech and taxing digital services.
0:07:53 And there’s the insult to the injury.
0:07:56 European companies, such as Mercedes,
0:08:02 lose revenue that trades at a price-to-sales ratio of about 0.3,
0:08:04 while U.S. companies, such as Meta,
0:08:09 lose revenue that registers at a price-to-sales ratio of 8.
0:08:12 This is not apples for apples,
0:08:14 but apples to aircraft carriers.
0:08:18 And we are on the wrong side of the trade.
0:08:22 Trump could also thrust Europe into the arms of China.
0:08:26 The two sides agreed to restart negotiations
0:08:30 after the EU hit Chinese-made EVs with greater tariffs last year,
0:08:33 with Europe willing to take a fresh look at pricing.
0:08:38 China, the world’s second-largest economy,
0:08:43 is holding its first economic dialogue with South Korea and Japan in five years
0:08:46 and carrying out a broader charm offensive
0:08:49 aimed at redirecting exports away from the U.S.
0:08:53 China is touting itself as a global trade champion,
0:08:56 minus the toxic uncertainty.
0:08:59 In a meeting with Spain’s prime minister today,
0:09:03 Xi Jinping called for closer collaboration with the EU
0:09:07 to defend economic globalization and resist Trump.
0:09:13 Regardless of how skillfully America’s trading partners react,
0:09:17 Trump’s tariffs will inflict significant global damage.
0:09:21 Tariffs on European exports could reverse any gains
0:09:25 from Germany’s planned defense and infrastructure spending,
0:09:30 while also hitting Italy, Ireland, and other countries especially hard.
0:09:34 At the same time, China is coping with Trump’s measures
0:09:37 at a time when it’s trying to attract foreign investment
0:09:40 to tackle anemic growth and deflationary pressure.
0:09:45 Even governments in Africa that Trump has contemptuously dismissed
0:09:49 as shithole countries find themselves in his crosshairs.
0:09:54 In addition to sending shockwaves around the world,
0:09:57 the tariffs will lead to carnage at home.
0:10:01 Trump believes that taking the effective U.S. tariff rate
0:10:06 to levels we haven’t seen in a century will spark an American manufacturing renaissance,
0:10:09 make the country more self-reliant,
0:10:13 and correct decades of unfair trade imbalances.
0:10:17 In pursuit of this fever dream that will never turn to reality,
0:10:20 we’ve decided to fight a war on every front.
0:10:24 Each nation will see products imported from the U.S.
0:10:28 rise in cost as they respond with their own tariffs.
0:10:33 However, the U.S. will see an increase in the cost of all imports
0:10:35 as we take on the world.
0:10:40 If you know the 1930s Smoot-Hawley Tariff Act,
0:10:43 it’s likely you’ll recall the scene from Ferris Bueller’s Day Off,
0:10:46 the 1986 Matthew Broderick movie.
0:10:50 A tariff bill, the Hawley-Smoot Tariff Act,
0:10:56 which anyone raised or lowered, raised tariffs
0:10:59 in an effort to collect more revenue for the federal government.
0:11:01 Did it work?
0:11:02 Anyone?
0:11:03 Anyone know the effects?
0:11:05 It did not work,
0:11:08 and the United States sank deeper into the Great Depression.
0:11:09 Today…
0:11:10 Anyone?
0:11:11 Anyone?
0:11:18 Smoot-Hawley imposed sweeping tariffs on imported goods to protect American workers,
0:11:23 sparking a global trade war and deepening the Great Depression in the process.
0:11:28 U.S. tariffs under Trump will be even greater.
0:11:36 Commerce Secretary Howard Lutnick sees a future in which Apple’s iPhones are assembled in America,
0:11:38 eliminating what he called a Chinese, quote,
0:11:50 With Apple making most of its iPhones in China,
0:11:54 a trade war means the company will have to eat the costs
0:11:57 or raise prices and shift the pain to its customers.
0:12:02 A scenario that could drive the cost of a high-end iPhone
0:12:05 to as much as $2,300 from about $1,600
0:12:08 and slash Apple’s market cap.
0:12:13 Although the company has diversified production to other countries,
0:12:15 those nations, too, have been targeted.
0:12:17 And, sorry Howard,
0:12:20 Apple isn’t going to make iPhones in America.
0:12:24 If the company chose to relocate production to the U.S.,
0:12:28 they could cost an estimated $3,500.
0:12:33 Lutnick asked why iPhones can’t be made in the U.S. with robotics,
0:12:36 but he also seems to realize that automation
0:12:39 won’t fuel a sharp rise in manufacturing jobs.
0:12:45 The insanity of believing this time will inspire a better outcome
0:12:52 led to Apple shedding the value of Walmart in three trading days.
0:12:56 Even if America were to undergo a manufacturing revival,
0:12:58 it would take years to realize.
0:13:02 Intel estimates it takes three or four years
0:13:05 to complete construction of a semiconductor fabrication plant.
0:13:10 U.S. producers also import an array of items,
0:13:12 from car parts to electronic components,
0:13:16 relying on countries including Mexico, China, and Canada.
0:13:20 Trump’s tariffs ignore other important factors.
0:13:25 As the number of manufacturing jobs has plunged since the 1970s,
0:13:27 U.S. wealth has surged,
0:13:31 with the country relying increasingly on knowledge economy jobs
0:13:35 in areas ranging from software development to financial products.
0:13:38 America has made a conscious decision
0:13:40 to move to higher-end businesses
0:13:44 that pay better than traditional manufacturing roles.
0:13:46 To be sure,
0:13:48 industrial towns across the nation
0:13:50 have experienced painful declines,
0:13:53 and many Americans have been left behind.
0:13:55 But I don’t see young Americans
0:13:57 clamoring to work on an assembly line.
0:14:01 There are better ways to address America’s economic problems,
0:14:02 lift people out of poverty,
0:14:04 and tackle inequality.
0:14:08 One is to hike the federal minimum wage
0:14:10 to $25 an hour
0:14:13 from a pathetic $7.25,
0:14:15 as I’ve argued before.
0:14:19 There’s another reason this is idiotic.
0:14:23 America exports higher-margin products
0:14:25 and imports lower-margin ones.
0:14:28 Contrast NVIDIA,
0:14:31 which enjoys a 56% profit margin
0:14:33 selling highly valuable computer chips,
0:14:35 with Mercedes,
0:14:36 the German carmaker,
0:14:39 which expects a profit margin
0:14:41 of no more than 8% this year.
0:14:43 U.S. exports
0:14:46 also create much more market value.
0:14:48 Tesla recently traded
0:14:50 at more than 8 times revenue,
0:14:51 while Toyota
0:14:55 traded at less than 0.8 times revenue,
0:14:56 meaning the tariffs
0:14:59 will punish American companies more.
0:15:02 Before he’s even reached
0:15:03 the 100-day mark,
0:15:05 Trump has given lap dances
0:15:07 to a murderous dictator in Russia,
0:15:09 ambushed the democratically elected
0:15:11 leader of Ukraine at the White House,
0:15:13 sought to undermine the rule of law,
0:15:14 jeopardize the country’s position
0:15:16 as a global research leader,
0:15:18 and threatened to take over Greenland
0:15:19 and annex Canada.
0:15:21 Canada!
0:15:24 which hid Americans in Tehran
0:15:26 during the Iranian hostage crisis.
0:15:28 By isolating itself
0:15:31 and splintering its economic alliances,
0:15:33 America is on a dangerous course
0:15:35 that will weaken its economy
0:15:36 and imperil its dominance
0:15:38 on the global stage.
0:15:40 It’s as if Xi Jinping
0:15:41 and Vladimir Putin
0:15:43 are running the country,
0:15:44 not Trump and Vance.
0:15:47 White House officials said
0:15:49 the U.S. is considering offers
0:15:50 from 15 countries
0:15:51 and is close to trade deals
0:15:52 with some of them.
0:15:55 Does anyone believe that?
0:15:58 Regardless of how these talks unfold,
0:15:59 confidence in America
0:16:01 is rapidly eroding.
0:16:03 Rebuilding trust
0:16:04 and repairing the economic damage
0:16:06 will take many years.
0:16:10 The definition of stupid
0:16:11 is hurting others
0:16:12 while hurting yourself.
0:16:15 Let’s hope the Republicans
0:16:16 riding shotgun
0:16:17 will realize
0:16:18 the guy with his hand on the wheel
0:16:20 is blind drunk.
0:16:22 My prediction?
0:16:24 Within six months,
0:16:25 U.S. tariffs
0:16:27 will be largely the same
0:16:28 as when Trump decided
0:16:31 to make America 1890 again.
0:16:32 U.S. citizens
0:16:34 will opt for Netflix
0:16:35 and Novocaine
0:16:36 over outdoor plumbing
0:16:37 and child labor.
0:16:40 Xi will not back down.
0:16:41 With Trump,
0:16:43 he’s come to the same conclusion
0:16:45 as Succession’s Logan Roy
0:16:46 regarding his own kids.
0:16:49 You are not serious people.
0:16:51 Stupid.
0:16:54 Just fucking stupid.
0:16:59 We are less rich.
0:17:03 We are less rich.
0:17:03 We are less rich.
0:17:04 We are less rich.
0:17:04 We are less rich.
0:00:05 I’m a carpenter.
0:00:06 I’m a graphic designer.
0:00:08 I sell dog socks online.
0:00:12 That’s why BCAA created One Size Doesn’t Fit All insurance.
0:00:15 It’s customizable based on your unique needs.
0:00:18 So whether you manage rental properties or paint pet portraits,
0:00:23 you can protect your small business with B.C.’s most trusted insurance brand.
0:00:28 Visit bcaa.com slash smallbusiness and use promo code radio to receive $50 off.
0:00:29 Conditions apply.
0:00:38 Buying a house has long been considered the best way to build wealth and move into true adulting.
0:00:38 Isn’t it?
0:00:41 I mean, at least that’s what society wants us to think.
0:00:44 Got to get a Birkin, got to get a home, you know.
0:00:48 Okay, the handbag you can probably manage without.
0:00:50 But what about a house?
0:00:54 Surely that’s actually good, right?
0:00:58 We’re going to find out this week on Explain It To Me.
0:01:02 New episodes every Sunday morning, wherever you get your podcasts.
0:01:16 No judge decides a case based on the temperature of the day.
0:01:21 Every judge, however, is aware of the climate of the season.
0:01:22 I’m Preet Bharara.
0:01:26 And this week on Stay Tuned, I’m joined by Justice Stephen Breyer.
0:01:30 We get into how judges make sense of the law in a politically charged time
0:01:34 and what that says about the values and pressures shaping today’s Supreme Court.
0:01:36 The episode is out now.
0:01:40 Search and follow Stay Tuned with Preet wherever you get your podcasts.
0:01:45 I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:49 Trump’s tariffs are wreaking havoc around the world.
0:01:53 But the real damage is here at home.
0:02:12 Countries have long used tariffs to protect strategic industries or counter unfair trade practices.
0:02:16 In some cases, targeted tariffs are justified.
0:02:22 In his first term, Donald Trump imposed levies on hundreds of billions of dollars of Chinese goods,
0:02:25 tariffs that Joe Biden largely retained.
0:02:32 But blanket tariffs of the scale we are now seeing are what leeches are to medicine.
0:02:36 An outdated strategy that doesn’t work.
0:02:43 With his Liberation Day tariffs, Trump has threatened to blow up the global economic order
0:02:45 and spread pain around the world.
0:02:49 From China to the Pacific Island nation of Nauru.
0:02:56 But when the shitstorm subsides, America will emerge from the wreckage with the most serious wounds.
0:03:02 Erecting a protectionist trade wall around the U.S. is a brilliant idea
0:03:07 if your goal is to elegantly reduce American prosperity.
0:03:14 The markets ripped higher Wednesday when Trump postponed tariffs on dozens of nations, except China,
0:03:18 pulling the knife halfway out of the back of the U.S. economy.
0:03:22 Then tumbled again the next day.
0:03:25 Treasury Secretary Scott Bessent told reporters,
0:03:27 I don’t see anything unusual.
0:03:29 Investors disagree.
0:03:33 They realize these injuries will take years to heal.
0:03:38 Brand America now stands for toxic uncertainty.
0:03:46 Extreme tariffs, if sustained, will immolate decades of economic integration,
0:03:51 bringing an end to an era of globalization that’s created unprecedented wealth for the U.S.
0:03:56 They’ll raise prices and decrease demand for American products abroad,
0:04:01 curbing economic growth and destroying shareholder value.
0:04:05 The revenue raised will be dwarfed by the losses.
0:04:13 Like Britain’s vote to leave the European Union in 2016, dubbed Independence Day by Nigel Farage and other Brexit dullards,
0:04:19 Trump’s tariffs will go down as one of the biggest own goals in history.
0:04:25 But this is Farage on steroids, and the fallout will be much wider.
0:04:29 It’s impossible to foresee exactly how this will play out.
0:04:35 Before I sign off, Trump’s sclerotic policies will undoubtedly have lurched again.
0:04:37 See above, toxic uncertainty.
0:04:45 But what’s clear is that Trump’s trade war will thrust America’s allies into the arms of its adversaries.
0:04:48 To quote Winston Churchill, quote,
0:04:53 There is only one thing worse than fighting with allies, and that is fighting without them.
0:04:54 Unquote.
0:04:59 We’ve moved to the worse part of the equation.
0:05:05 One country is playing the long game, however, and positioning itself to exploit America’s self-harm.
0:05:07 China.
0:05:18 When I first moved to New York, I started boxing with a trainer who convinced me that I had a gift I was paying him,
0:05:20 and talked me into entering a tournament.
0:05:23 I was dumb enough to do it.
0:05:27 I remember the bell and the bright lights as I lay flat on my back.
0:05:31 More than two decades later, my nose still veers to the right.
0:05:37 It turns out a 23-year-old 5’8 guy who knows how to box and weighs 190 pounds
0:05:42 is a reasonable facsimile of Mike Tyson when matched up against a 38-year-old professor.
0:05:45 My rookie strategic mistake?
0:05:48 Assuming your adversary won’t hit back.
0:05:56 After Trump detonated his tariff bomb in that now infamous Rose Garden ceremony,
0:05:59 China responded swiftly and aggressively,
0:06:04 declaring it would match the president’s taxes with its own levies on imports from the U.S.
0:06:11 Although Trump later said he’d pause reciprocal tariffs for most countries for 90 days,
0:06:22 he raised tariffs on China’s exports to 145% in a desperate cry for some sort of big, i.e. small dick relevance.
0:06:26 China has vowed to fight to the end.
0:06:27 The difference?
0:06:30 Xi means what he says.
0:06:32 Trump is the other guy.
0:06:37 While a trade war will likely hurt China more, that misses the key point.
0:06:41 China is willing to endure more pain.
0:06:45 Remember, we left Vietnam after losing 58,000 men,
0:06:49 compared with more than 1 million for the North Vietnamese and Viet Cong.
0:06:52 I love the U.S.,
0:06:57 but the notion that Americans are going to tolerate 50% fewer toys under the Christmas tree
0:07:01 and $3,500 iPhones is laughable.
0:07:09 Amid the chaos, Europe is pitching itself as reliable, predictable, and open for fair business.
0:07:14 The EU has signed trade deals with Mexico, Chile, and Mercosur,
0:07:18 a South American bloc that includes Brazil and Argentina,
0:07:22 and aims to finalize a pact with India by the end of the year.
0:07:27 As the markets melted down and the president’s acolytes took to CNBC
0:07:31 to make excuses for giving the wheel of the world’s largest economy to a madman,
0:07:35 European Commission President Ursula von der Leyen
0:07:39 visited Central Asia to seal a new strategic partnership.
0:07:45 Among the countermeasures Europe is considering, if talks with Trump fail,
0:07:50 are imposing tougher regulation on American big tech and taxing digital services.
0:07:53 And there’s the insult to the injury.
0:07:56 European companies, such as Mercedes,
0:08:02 lose revenue that trades at a price-to-sales ratio of about 0.3,
0:08:04 while U.S. companies, such as Meta,
0:08:09 lose revenue that registers at a price-to-sales ratio of 8.
0:08:12 This is not apples for apples,
0:08:14 but apples to aircraft carriers.
0:08:18 And we are on the wrong side of the trade.
0:08:22 Trump could also thrust Europe into the arms of China.
0:08:26 The two sides agreed to restart negotiations
0:08:30 after the EU hit Chinese-made EVs with greater tariffs last year,
0:08:33 with Europe willing to take a fresh look at pricing.
0:08:38 China, the world’s second-largest economy,
0:08:43 is holding its first economic dialogue with South Korea and Japan in five years
0:08:46 and carrying out a broader charm offensive
0:08:49 aimed at redirecting exports away from the U.S.
0:08:53 China is touting itself as a global trade champion,
0:08:56 minus the toxic uncertainty.
0:08:59 In a meeting with Spain’s prime minister today,
0:09:03 Xi Jinping called for closer collaboration with the EU
0:09:07 to defend economic globalization and resist Trump.
0:09:13 Regardless of how skillfully America’s trading partners react,
0:09:17 Trump’s tariffs will inflict significant global damage.
0:09:21 Tariffs on European exports could reverse any gains
0:09:25 from Germany’s planned defense and infrastructure spending,
0:09:30 while also hitting Italy, Ireland, and other countries especially hard.
0:09:34 At the same time, China is coping with Trump’s measures
0:09:37 at a time when it’s trying to attract foreign investment
0:09:40 to tackle anemic growth and deflationary pressure.
0:09:45 Even governments in Africa that Trump has contemptuously dismissed
0:09:49 as shithole countries find themselves in his crosshairs.
0:09:54 In addition to sending shockwaves around the world,
0:09:57 the tariffs will lead to carnage at home.
0:10:01 Trump believes that taking the effective U.S. tariff rate
0:10:06 to levels we haven’t seen in a century will spark an American manufacturing renaissance,
0:10:09 make the country more self-reliant,
0:10:13 and correct decades of unfair trade imbalances.
0:10:17 In pursuit of this fever dream that will never turn to reality,
0:10:20 we’ve decided to fight a war on every front.
0:10:24 Each nation will see products imported from the U.S.
0:10:28 rise in cost as they respond with their own tariffs.
0:10:33 However, the U.S. will see an increase in the cost of all imports
0:10:35 as we take on the world.
0:10:40 If you know the 1930s Smoot-Hawley Tariff Act,
0:10:43 it’s likely you’ll recall the scene from Ferris Bueller’s Day Off,
0:10:46 the 1986 Matthew Broderick movie.
0:10:50 A tariff bill, the Hawley-Smoot Tariff Act,
0:10:56 which anyone raised or lowered, raised tariffs
0:10:59 in an effort to collect more revenue for the federal government.
0:11:01 Did it work?
0:11:02 Anyone?
0:11:03 Anyone know the effects?
0:11:05 It did not work,
0:11:08 and the United States sank deeper into the Great Depression.
0:11:09 Today…
0:11:10 Anyone?
0:11:11 Anyone?
0:11:18 Smoot-Hawley imposed sweeping tariffs on imported goods to protect American workers,
0:11:23 sparking a global trade war and deepening the Great Depression in the process.
0:11:28 U.S. tariffs under Trump will be even greater.
0:11:36 Commerce Secretary Howard Lutnick sees a future in which Apple’s iPhones are assembled in America,
0:11:38 eliminating what he called a Chinese, quote,
0:11:50 With Apple making most of its iPhones in China,
0:11:54 a trade war means the company will have to eat the costs
0:11:57 or raise prices and shift the pain to its customers.
0:12:02 A scenario that could drive the cost of a high-end iPhone
0:12:05 to as much as $2,300 from about $1,600
0:12:08 and slash Apple’s market cap.
0:12:13 Although the company has diversified production to other countries,
0:12:15 those nations, too, have been targeted.
0:12:17 And, sorry Howard,
0:12:20 Apple isn’t going to make iPhones in America.
0:12:24 If the company chose to relocate production to the U.S.,
0:12:28 they could cost an estimated $3,500.
0:12:33 Lutnick asked why iPhones can’t be made in the U.S. with robotics,
0:12:36 but he also seems to realize that automation
0:12:39 won’t fuel a sharp rise in manufacturing jobs.
0:12:45 The insanity of believing this time will inspire a better outcome
0:12:52 led to Apple shedding the value of Walmart in three trading days.
0:12:56 Even if America were to undergo a manufacturing revival,
0:12:58 it would take years to realize.
0:13:02 Intel estimates it takes three or four years
0:13:05 to complete construction of a semiconductor fabrication plant.
0:13:10 U.S. producers also import an array of items,
0:13:12 from car parts to electronic components,
0:13:16 relying on countries including Mexico, China, and Canada.
0:13:20 Trump’s tariffs ignore other important factors.
0:13:25 As the number of manufacturing jobs has plunged since the 1970s,
0:13:27 U.S. wealth has surged,
0:13:31 with the country relying increasingly on knowledge economy jobs
0:13:35 in areas ranging from software development to financial products.
0:13:38 America has made a conscious decision
0:13:40 to move to higher-end businesses
0:13:44 that pay better than traditional manufacturing roles.
0:13:46 To be sure,
0:13:48 industrial towns across the nation
0:13:50 have experienced painful declines,
0:13:53 and many Americans have been left behind.
0:13:55 But I don’t see young Americans
0:13:57 clamoring to work on an assembly line.
0:14:01 There are better ways to address America’s economic problems,
0:14:02 lift people out of poverty,
0:14:04 and tackle inequality.
0:14:08 One is to hike the federal minimum wage
0:14:10 to $25 an hour
0:14:13 from a pathetic $7.25,
0:14:15 as I’ve argued before.
0:14:19 There’s another reason this is idiotic.
0:14:23 America exports higher-margin products
0:14:25 and imports lower-margin ones.
0:14:28 Contrast NVIDIA,
0:14:31 which enjoys a 56% profit margin
0:14:33 selling highly valuable computer chips,
0:14:35 with Mercedes,
0:14:36 the German carmaker,
0:14:39 which expects a profit margin
0:14:41 of no more than 8% this year.
0:14:43 U.S. exports
0:14:46 also create much more market value.
0:14:48 Tesla recently traded
0:14:50 at more than 8 times revenue,
0:14:51 while Toyota
0:14:55 traded at less than 0.8 times revenue,
0:14:56 meaning the tariffs
0:14:59 will punish American companies more.
0:15:02 Before he’s even reached
0:15:03 the 100-day mark,
0:15:05 Trump has given lap dances
0:15:07 to a murderous dictator in Russia,
0:15:09 ambushed the democratically elected
0:15:11 leader of Ukraine at the White House,
0:15:13 sought to undermine the rule of law,
0:15:14 jeopardize the country’s position
0:15:16 as a global research leader,
0:15:18 and threatened to take over Greenland
0:15:19 and annex Canada.
0:15:21 Canada!
0:15:24 which hid Americans in Tehran
0:15:26 during the Iranian hostage crisis.
0:15:28 By isolating itself
0:15:31 and splintering its economic alliances,
0:15:33 America is on a dangerous course
0:15:35 that will weaken its economy
0:15:36 and imperil its dominance
0:15:38 on the global stage.
0:15:40 It’s as if Xi Jinping
0:15:41 and Vladimir Putin
0:15:43 are running the country,
0:15:44 not Trump and Vance.
0:15:47 White House officials said
0:15:49 the U.S. is considering offers
0:15:50 from 15 countries
0:15:51 and is close to trade deals
0:15:52 with some of them.
0:15:55 Does anyone believe that?
0:15:58 Regardless of how these talks unfold,
0:15:59 confidence in America
0:16:01 is rapidly eroding.
0:16:03 Rebuilding trust
0:16:04 and repairing the economic damage
0:16:06 will take many years.
0:16:10 The definition of stupid
0:16:11 is hurting others
0:16:12 while hurting yourself.
0:16:15 Let’s hope the Republicans
0:16:16 riding shotgun
0:16:17 will realize
0:16:18 the guy with his hand on the wheel
0:16:20 is blind drunk.
0:16:22 My prediction?
0:16:24 Within six months,
0:16:25 U.S. tariffs
0:16:27 will be largely the same
0:16:28 as when Trump decided
0:16:31 to make America 1890 again.
0:16:32 U.S. citizens
0:16:34 will opt for Netflix
0:16:35 and Novocaine
0:16:36 over outdoor plumbing
0:16:37 and child labor.
0:16:40 Xi will not back down.
0:16:41 With Trump,
0:16:43 he’s come to the same conclusion
0:16:45 as Succession’s Logan Roy
0:16:46 regarding his own kids.
0:16:49 You are not serious people.
0:16:51 Stupid.
0:16:54 Just fucking stupid.
0:16:59 We are less rich.
0:17:03 We are less rich.
0:17:03 We are less rich.
0:17:04 We are less rich.
0:17:04 We are less rich.
As read by George Hahn.
Toxic Uncertainty
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