WE HAVE A NUMBER OF AMAZING UPDATES FROM YESTERDAY'S
ANNOUNCEMENT THAT THERE WOULD BE NEW TARIFFS ON BOTH STEEL AND
ALUMINUM, 25% ON STEEL AND 10% ON ALUMINUM.
THE FIRST PART IS
THERE ARE CONCERNS THIS COULD SPARK SOME SORT OF NEW
INTERNATIONAL TRADE WAR, AND IN FACT TODAY WE HAVE INDICATIONS
THAT THAT MIGHT BE UNDERWAY.
OFFICIALS IN CHINA ARE SAID TO
BE CONSIDERING SOME SORT OF STRIKE BACK IN THE FORM OF
TARIFFS OR SOMETHING RELATED TO THAT, BUT WE ALREADY HAVE
DETAILS ON ONE AREA, THE PRESIDENT OF THE EUROPEAN UNION
SAID THEY WILL INSTITUTE NEW TARIFFS ON PRODUCTS LIKE
HARLEY-DAVIDSONS, KENTUCKY BOURBON, AND BLUE JEANS.
I DON'T
REMEMBER THE EXACT BREAKDOWN BUT FOR EACH OF THOSE THEY ARE
CHIEFLY MANUFACTURED IN THE STATES OF THE LEADERS OF THE
SENATE AND THE HOUSE.
YOU HAVE PELOSI, MCCONNELL, AND RYAN FOR
THOSE PRODUCTS, SO THEY ARE SENDING A MESSAGE, AND THEY ARE
SOME OF THE MOST TYPICALLY AMERICAN PRODUCTS.
BUT THIS IS
WHAT WE CAN AND DID EXPECT WHEN WE TALKED ABOUT THIS OVER THE
LAST COUPLE OF YEARS.
DESPITE THAT TRUMP ISN'T WORRIED ABOUT
TRADE WAR, HE TWEETED THIS MORNING --
OKAY, I LOVE THAT HE PUT AN EXAMPLE IN BECAUSE I WAS
CONFUSED.
WHEN HE GAVE ME THE EXAMPLE I WAS LIKE, THAT CLARIFIES IT.
JUST THINK OF THE CUTEST COUNTRY YOU CAN THINK OF.
CLEARLY THAT IS --
LUXEMBOURG.
I WAS THINKING JAPAN, HELLO KITTY AND ALL THAT.
I WAS LED TO BELIEVE THAT A TRADE WAR IS COMPLICATED AND
NUANCED.
BUT IT TURNS OUT IT'S EASY.
IF YOU HAVE A TRADE
DEFICIT WITH THE COUNTRY, STOP TRADING WITH THEM AND THEN YOU
WON'T HAVE A DEFICIT, EASY.
NO, THAT'S NOT HOW IT WORKS!
SOME
PEOPLE HAVE A THEORY THAT TRUMP IS TRYING TO MAKE IT MORE SIMPLE
THAT HE CAN RELATE TO HIS VOTERS -- NO, HE DOESN'T UNDERSTAND.
IT
ISN'T FOR THE PURPOSE OR EDIFICATION OF HIS VOTERS, OR TO
APPEAL TO THEM IN SOME WAY, HE DOES NOT UNDERSTAND COMPLICATED
ISSUES.
IN FACT HE WILL COME OUT AND SAY THINGS LIKE NO ONE KNEW
HEALTHCARE WAS COMPLICATED.
NO, THE REST OF US KNEW IT WAS
COMPLICATED EXCEPT FOR YOU.
SO TRADE DEFICITS ARE NOT AS EASY
AS, WELL, OKAY, WE ARE "DOWN" $100 BILLION IN TRADE WITH CHINA
FOR EXAMPLE, TYPICAL RANDOM CUTE COUNTRY, AND THAT MEANS IF WE
STOP TRADING NOW WE ARE EVEN.
NO, THAT TRADE AFFECTS SO MANY
OTHER INDUSTRIES INSIDE THE UNITED STATES AND HAS
RAMIFICATIONS, IT'S NOT JUST THERE'S A DEFICIT AND WE WIPED
IT OUT BY NOT DOING ANYTHING, THAT'S RIDICULOUSLY NOT JUST
SIMPLISTIC BUT WRONG.
YOU ARE IMPLYING THERE MIGHT BE SOME SORT OF RIPPLE EFFECT,
AND INDEED THERE IS THAT THEY WE WILL TRY TO EDUCATE THE
PRESIDENT HERE, IT TURNS OUT THAT WHILE HE SEEMS TO THINK
THAT YOU SET UP THIS BIG TARIFF AND IN THE COUNTRY, SAY CHINA,
JUST PAYS FOR IT AND THE PRODUCTS CONTINUE ON AS THEY
ALWAYS HAVE, THAT'S OBVIOUSLY NOT HOW IT ALWAYS WORKS
ESPECIALLY WHEN YOU TALK ABOUT RAW MATERIALS LIKE STEEL AND
ALUMINUM THAT ARE USED IN SO MANY U.S. PRODUCTS.
WE'RE GOING
TO DO A BRIEF OVERVIEW, THIS IS NOT ALL-ENCOMPASSING, OF AREAS
OF THE U.S. ECONOMY AND HOW THIS WILL AFFECT THEM --
IT CLOSES BY SAYING --
WAS IT WILBUR ROSS THAT WENT ON TV AND SAID IT WILL JUST MAKE
YOUR CAR A FEW HUNDRED DOLLARS MORE, WHO CARES ABOUT THAT?
WELL, PERHAPS THE BILLIONAIRES DON'T CARE ABOUT THAT BUT FOR
MOST PEOPLE IT WILL BE SIGNIFICANT, AND YOU WILL BE THE
ONE TO PAY FOR IT, NOT THE AUTOMOTIVE INDUSTRY.
BUT IT'S
NOT JUST CARS, IT'S ALSO SMALLER PRODUCTS YOU ARE MORE LIKELY TO
BUY ON A DAILY BASIS.
MILLERCOORS, ONE OF THE BIGGEST
BEER MAKERS, SAYS THIS --
I WON'T EVEN GO THROUGH ALL OF THESE BUT YOU HAVE THE BOATING
INDUSTRY CONCERNED ABOUT THIS, YOU HAVE THE AMERICAN RETAIL
MANUFACTURERS ASSOCIATION SAYING THIS WILL AFFECT THE MOST EVERY
INDUSTRY, AND WHAT IT IS, IN EFFECT, HIS ATTACKS ON AMERICAN
CONSUMERS, EVERY SINGLE AMERICAN CONSUMER.
AND THE LESS MONEY YOU
MAKE, THE MORE LIKELY IT IS YOU WILL SPEND ALL THE MONEY YOU
MAKE, THAT MEANS YOU WILL BE AFFECTED FAR MORE THAN THOSE
HIGHER UP ON THE ECONOMIC LADDER.
SO MANY THINGS THAT ARE ASSOCIATED WITH THINGS WE BUY
ARE MADE UP OF PARTS, YOU ARE BUYING THE ENTIRE THING AND MANY
OF THOSE PARTS COME FROM COUNTRIES WE WILL NOW BE IN A
TRADE WAR WITH, AND AS CENK SAYS, OUR PRESIDENT DOESN'T
UNDERSTAND -- AND BY THE WAY, REMEMBER THAT RAP ABOUT HE'S A
BILLIONAIRE AND HE WILL KNOW SO MUCH ABOUT THE ECONOMY -- AS IT
TURNS OUT HE DOESN'T KNOW ANYTHING ABOUT THE ECONOMY, HE
DOESN'T KNOW ANY OF THE SUBTLETIES OR COMPLEXITIES.
HE
WAS A BAD BUSINESSMAN WHO HAD SIX BANKRUPTCIES AND BASICALLY
STIFFED A BUNCH OF CONTRACTORS AND ENDED UP IN COURT WITH THEM.
HE'S THAT KIND OF BUSINESSMAN.
NOW HE'S HAVING TO DO REAL
BUSINESS, AND THE SUBTLETIES OF A DELICATE ECONOMIC RELATIONSHIP
WITH COUNTRIES WORLDWIDE ARE LOST ON HIM.
THIS IS A WAR YOU
CAN'T WIN.
HE SHOULD REMEMBER YOU CAN'T WIN ANY WAR, ECONOMIC
WAR, TRADE WAR, OR FIGHTING WAR.
AND WE WOULD BE BETTER SERVED.
BUT HE DOESN'T GET THAT.
AND HIS FOCUS ON TRADE IS ABOUT MAKING JOBS COME BACK TO
THE THAT IT STATES OR RAISING WAGES FOR AMERICAN WORKERS, IT'S
REALLY JUST WHOSE IS ON TOP, WHO'S GOING TO WIN IN THIS TRADE
DEFICIT.
THERE IS NO PROGRESSIVE ANGLE.
WHEN PROGRESSIVES
CRITICIZE NAFTA OR TPP IT'S BECAUSE IT IS GIVING HANDOUTS TO
CORPORATIONS OR ESSENTIALLY MAKING WAGES LOWER AND SENDING
JOBS OVERSEAS, THERE IS NO NUANCE IN THAT, IT'S JUST
ESSENTIALLY WE AREN'T WINNING WITH THIS, AND ALSO IT'S JUST AN
EFFORT TO KIND OF SAY I'M GOING AFTER CHINA TOO.
LET ME GIVE YOU A LITTLE BIT MORE CONTEXT TO IT AS WELL.
OKAY -- AND BY THE WAY IT'S NOT A BLACK-AND-WHITE ISSUE.
UNDER
NO CIRCUMSTANCES WOULD NOT ANY TARIFF EVER MAKE SENSE, AND IT'S
NOT JUST A LEFT-WING OR RIGHT-WING POSITION, SOME ON THE
LEFT ARE IN FAVOR OF PROTECTIONISM, IN FACT THE LABOR
UNIONS LIKE AFL-CIO APPLAUDED THIS MOVE.
SO IT IS NUANCED IN
THE POLITICAL LANDSCAPE AS WELL.
BUT TO GIVE MORE CONTEXT TO WHAT
JOHN WAS SAYING, OKAY, LET'S SAY WE PROTECT OUR STEELWORKERS
MORE, AND YOU WOULD, AND THAT'S WHY LABOR UNIONS AND THE STEEL
COMPANIES ARE HAPPY WITH IT.
BUT NOW YOUR CARS ARE MORE
EXPENSIVE, SO WHAT HAPPENED TO THE TRADE DEFICIT?
NOT ONLY NOW
ARE THE CARS MORE EXPENSIVE INSIDE THE UNITED STATES BUT
WHEN YOU GO TO SELL THEM IN OTHER PLACES THEY WILL ALSO BE
MORE EXPENSIVE, HENCE LESS PEOPLE WILL BUY THEM, WHICH WILL
CREATE A LARGER TRADE DEFICIT.
WITH LOOK, ARE STEEL AND
ALUMINUM BIGGER OR OTHER PRODUCTS THAT STEEL AND ALUMINUM
AFFECT A BIGGER PART OF OUR INDUSTRY?
THERE'S AN ANSWER TO
THAT, THE INDUSTRIES THAT USE STEEL IMPORT 80 TIMES AS MANY
PEOPLE AS STEEL PRODUCING INDUSTRIES.
SO THEY AFFECT 80
TIMES AS MANY EMPLOYEES AS THERE ARE IN THE STEEL INDUSTRY.
THAT'S ON STEEL ALONE.
SO WHEN YOU HAVE THAT EFFECT GO ALL
ACROSS OUR ECONOMY, AND AFFECT OUR EXPORTS, THIS MIGHT
IRONICALLY INCREASE OUR TRADE DEFICITS.
AGAIN YOU WILL HAVE TO
SEE HOW IT PLAYS OUT, LET ALONE THE CONSEQUENCES OF CHINA, AND
MOST ESPECIALLY THE EUROPEAN UNION AND OUR ALLIES LIKE CANADA
WERE ENRAGED BY THIS, STRIKING BACK, WHICH WOULD THEN HAVE A
DIFFERENT EFFECT ON OUR TRADE DEFICITS AND WOULD MOVE THE
NUMBERS AGAIN.
BUT TRUMP LOOKS AT THAT AND GOES WHAT YOU MEAN,
I DO A TARIFF, MY STEEL IS STRONGER, THAN THE TRADE DEFICIT
DROPS.
THAT'S NOT HOW IT WORKS, AND IT'S UNFORTUNATE THAT WE
HAVE A PRESIDENT WHO DOESN'T UNDERSTAND COMPLICATED POLICY
MATTERS, AND THEN MAKES DECISIONS OFF-THE-CUFF ON AN
ISSUE OF GREAT IMPORTANCE FOR JOBS AND THE ENTIRE WORLD
ECONOMY.
WHAT YOU DESCRIBED ISN'T A SOLITARY ACTION EITHER, WE WERE
TALKING EARLIER ABOUT THE SOLAR INDUSTRY, AND IN A SIMILAR WAY
HE ANNOUNCED MASSIVE 30% TARIFFS ON SOLAR CELLS AND CERTAIN
TECHNOLOGY THAT ARE BROUGHT INTO THE U.S. AND THEN ARE USED TO
INSTALL SOLAR DEVELOPMENT AND THINGS LIKE THAT, WE NEED THAT
STUFF FROM OUTSIDE OF THE U.S. SO SEEMINGLY TO PROTECT THE OIL
INDUSTRIES AND COAL AND THINGS LIKE THAT, HE PUTS THESE TARIFFS
UP AND IT WILL END UP COSTING MORE JOBS IN THE SOLAR INDUSTRY
THAN IT COULD EVER GAIN BACK IN THE COAL INDUSTRY, AND IN THE
NEXT FEW YEARS WE COULD LOSE MORE JOBS IN THE SOLAR INDUSTRY
THAN THERE EVEN ARE IN THE COAL INDUSTRY.
AND WE KNOW WHAT ONE
INDICATOR OF THE ECONOMY THINKS --
IT'S POSSIBLE SOME OF THAT MIGHT STABILIZE OVER TIME BUT
INITIALLY THIS DOESN'T LOOK LIKE A VERY POPULAR MOVE.
AND WE WILL
TALK A LITTLE MORE BUT WE DO HAVE A FAR MORE PERSONAL
COMPONENT OF THIS IN THE AREA OF CORRUPTION THAT WILL BE
INTERESTING.
ONE LAST THING ON WHAT EMMA MENTIONED, THE LEFT IS SPLIT ON
THIS ON SOME WAYS AND IT DEFINITELY MATTERS HOW YOU DO
THE EXECUTION, BUT ONE OF THE REASONS THE LEFT IS OPPOSED TO A
LOT OF THESE TRADE DEALS IS NOT BECAUSE OF TARIFFS.
SOME ON THE
LEFT ARE, BUT I THINK THE MAJOR CONCERN, CERTAINLY THE ONE I
HAVE, IS WHO WRITES THE TRADE DEALS?
IT'S NOT TO SAY WE
SHOULDN'T HAVE TRADE, THAT WOULD BE PREPOSTEROUS, BUT THE
QUESTION IS WHAT IS IN THE TRADE DEALS AND WHO IS IN CHARGE?
THE
MAIN ISSUE FOR EXAMPLE WITH THE TRANSPACIFIC PARTNERSHIP WAS
THEY WERE WRITTEN LARGELY BY CORPORATIONS.
EFFECT FOR A LONG
TIME OUR CONGRESSMEN WEREN'T EVEN ALLOWED TO SEE THE DEAL.
AND WHEN THEY WERE ALLOWED TO SEE IT THEY WEREN'T ALLOWED TO
BRING STAFF OR LAWYERS OR ANY HELP TO LOOK AT THE DEAL.
THEN
YOU GO, WELL, WHO IS IN CHARGE AND FOR WHOSE BENEFIT ARE WE
WRITING THESE DEALS?
BECAUSE JUST BECAUSE KOCH IS OSTENSIBLY
AN AMERICAN COMPANY, WHICH DOESN'T MEAN ANYTHING, THEIR
SHAREHOLDERS ARE ALL ACROSS THE WORLD, DOESN'T MEAN THAT
BENEFITS AMERICAN CITIZENS.
AND THE GOVERNMENT ISN'T SUPPOSED TO
BE RUN BY AND FOR CORPORATIONS, IT'S SUPPOSED TO BE RUN BY AND
FOR PEOPLE, THE CITIZENS.
THOSE ARE THE BIGGER ISSUES IN
TRADE-IN OF COURSE TRUMP DOESN'T TOUCH AND DOESN'T MIND MUCH
BECAUSE HE LIKES THE CORPORATE DONORS.
SO HE'S ONLY DONE, IN MY
OPINION, THE WORST PART OF PROTECTIONISM WITHOUT
ACTUALLY DOING THE POSITIVE PARTS.
AND I WILL ADD THAT IT MIGHT JUST DUPE A FEW PEOPLE.
UNFORTUNATELY DEMOCRATS HAVE PINNED THEMSELVES INTO A CORNER
BY HILLARY CLINTON BEING FOR TPP AND THEN BACKING AWAY FROM IT,
BUT OBAMA BEING A CHAMPION OF IT AND A LOT OF DEMOCRATS BEING FOR
IT.
UNIONS AND PEOPLE IN THE MIDDLE OF THE COUNTRY HATE THAT
AND NOW TRUMP CAN AT LEAST PUT A FEATHER IN HIS CAP AND SAY I DID
THIS, SO NOW DEMOCRATS LOOK LIKE THE PARTY OF SHIPPING JOBS
OVERSEAS AND TRUMP LOOKS LIKE AT LEAST I'M PUTTING TARIFFS
ON STEEL AND MAKING SURE WE KEEP JOBS IN THE COUNTRY.
BUT THESE ARE TRADE AGREEMENTS, AND JUST LIKE HE WAS
DOWN ON THE IRANIAN NUCLEAR DEAL, THESE ARE TRADE AGREEMENTS
IN PLACE, WE HAVE TRADE RELATIONSHIPS THAT HAVE BEEN
CODIFIED, THIS IS A REAL AGREEMENT.
AND I MENTIONED THE
IRAN DEAL BECAUSE JUST LIKE THAT HE WANTS TO SWIM AWAY FROM THAT
DEAL, AND TO WHATEVER EXTENT HE WANTS TO BUST UP THESE
ARRANGEMENTS WE HAVE WITH EXISTING GLOBAL PARTNERS ON
TRADE PEOPLE WILL BE LESS TRUSTING OF THE UNITED STATES IN
FUTURE DEALS.
SO THERE'S A RIPPLE EFFECT JUST FROM THE
STANDPOINT OF DIPLOMACY AND FUTURE ECONOMIC AND TRADE
AGREEMENT WE WILL MAKE WORLDWIDE.
I OPPOSE THIS FOR ALL THE REASONS WE STATED HERE, I THINK
IT'S A BAD IDEA AND THE PRESIDENT DOESN'T UNDERSTAND ALL
THE CONSEQUENCES, BUT I WANT TO GIVE HIM CREDIT FOR ONE THING,
TO EMMA'S POINT, HE PROMISED ON THE CAMPAIGN TRAIL HE WOULD DO
TARIFFS.
HE IS.
I THINK THAT IS A POPULIST POSITION, IT MIGHT
NOT BE A GREAT POLICY POSITION, THE DEMOCRATS GOT OUT FLANKED ON
IT WHEN IT COMES TO UNIONS AND THE AVERAGE AMERICAN WORKER, IT
MIGHT HAVE BAD CONSEQUENCES FOR THE ECONOMY IN WHICH CASE IT
WILL BLOW UP ON TRUMP, BUT YOU HAVE TO GIVE THEM CREDIT, OFTEN
POLITICIANS SAY ONE THING AND DO THE OTHER WHICH TRUMP HAS DONE
IN DOZENS OF CASES.
ON EVERY OTHER ISSUE.
BUT IN THIS CASE HE SAID HE WOULD DO TARIFFS AND HE DID
TARIFFS.
I'M NOT GOING TO GIVE HIM CREDIT THOUGH.