ARE WE IN A TRADE WAR?
I HEAR FROM DEFENDERS OF THE PRESIDENT
THAT WE AREN'T BUT I ALSO HEAR FROM HIM THAT WE HAVE ALREADY
LOST THE TRADE WAR BUT IF WE ENGAGE IN ONE THAT IT'S EASY TO
WIN, BUT WE'VE ALREADY LOST.
I WILL JUST LAY OUT THE FACTS FROM
THE LAST WEEK AND THEN WE WILL TRY TO FIGURE OUT WHAT OUR TRADE
POLICY WITH CHINA IS --
ALTHOUGH TO BE FAIR U.S. SCIENTISTS HAVE STOLEN THE
CHINESE HOAX OF GLOBAL WARMING, SO I GUESS WE HAVE GOTTEN A
LITTLE BIT BACK FOR OUR MONEY --
SO IN TURN CHINA VOWED TO TARGET KEY U.S. EXPORTS
INCLUDING SOYBEANS, BUT ALSO INTERESTINGLY LEVI'S, WHISKEY,
AND HARLEY-DAVIDSONS AMONGST OTHERS, SO THAT AMOUNTED TO
ABOUT $50 BILLION WORTH OF TARIFFS ON U.S. GOODS.
GREAT,
BOTH OF OUR ECONOMIES WILL BE DOING MUCH BETTER AS A RESULT OF
50 BILLION ONE WAY OR THE OTHER WAY, SO DONALD TRUMP SAW
THAT AND SAID --
THAT CAME LATE LAST EVENING.
SO THE CHINESE HEARD ABOUT IT,
THOUGH, AND THEY SAID THIS --
MINISTRY SPOKESMAN GAO FENG SAID --
SO WE PUT TARIFFS ON THEM AND THEY PUT THEM BACK ON US SO WE
DOUBLED DOWN ON THEM AND NOW THEY SEEM PREPARED TO DO THE
SAME TO US, WHICH IS AN INTERESTING SITUATION TO BE IN,
I THINK ACADEMICS HAVE A TERM FOR THAT, BUT ANYWAY WHEN
WE GO TO A LITTLE BIT OF THE PRESIDENT DEFENDING THIS
RECENT MOVE AND THEN WE WILL HAVE A LITTLE BIT OF DISCUSSION.
WE HAVE A TRADE DEFICIT, DEPENDING ON THE WAY YOU
CALCULATE, OF $504 BILLION.
SOME PEOPLE WOULD SAY IT'S REALLY
$375 BILLION.
IN PARTICULAR WITH CHINA WE WILL BE DOING A SECTION
301 TRADE ACTION, IT COULD BE ABOUT $60 BILLION, BUT THAT'S
REALLY JUST A FRACTION OF WHAT WE'RE TALKING ABOUT.
I'VE ASKED THEM TO REDUCE THE TRADE DEFICIT IMMEDIATELY BY
$100 BILLION.
THAT'S A LOT.
SO THAT WOULD BE ANYWHERE FROM 25%,
DEPENDING ON THE WAY YOU FIGURE, TO MAYBE SOMETHING EVEN MORE
THAN THAT.
BUT WE HAVE TO DO THAT.
SO WE'RE DOING THAT.
OKAY.
MY FAVORITE PARTS -- SO MUCH FUN HERE, UNTIL OF COURSE
THE TRADE WAR ACTUALLY BEGINS AND THEN NOT FUN FOR ANYONE.
FIRST OF ALL HE SAYS THERE'S A TRADE DEFICIT OF 500 BILLION.
SOME SAY 375 BILLION.
YOU KNOW WHY SOME SAY THAT?
THAT'S THE
REAL NUMBER.
HE EARLY SAID $500 BILLION AND THEN THEY TOLD HIM
KNUCKLEHEAD, YOU GOT IT WRONG FOR THE BILLIONTH TIME IN A ROW,
SO HE SAYS IT'S STILL 500 BUT SOME SAY 375 BILLION.
THAT WAS
FUN.
ANOTHER FUN PART WAS AFTER THEY DO THESE ROUNDS OF
TERRORIST THREATS THEY SAY IN LIGHT OF CHINA'S UNFAIR
RETALIATION, AS JOHN READ TO YOU.
BUT WAIT WE STRUCK FIRST.
DON'T GET ME WRONG, CHINA DOES A LOT OF THINGS, MANIPULATION OF
THE CURRENCY, THEY ATTACK OUR INTELLECTUAL PROPERTY, ETC., AND
AS A LOT OF PEOPLE IN POLITICS ARE POINTING OUT THERE ARE SMART
WAYS TO ADDRESS THAT, THIS IS NOT AMONG THEM, BUT WHEN WE GO
WE WILL BE DOING TARIFFS ON YOU, 50 BILLION AND 100 BILLION, AND
THEY RETALIATE, YOU CAN'T THEN CRY ABOUT IT AND SAY THAT'S SUCH
UNFAIR RETALIATION, I CAN'T BELIEVE THEY DID THAT.
IT'S THE
MOST BELIEVABLE THING IN THE WORLD, OF COURSE THEY ARE GOING
TO RETALIATE.
THAT'S KIND OF HOW THIS WORKS, AND THE FACT THAT HE
AS USUAL COULDN'T SEE IT COMING IS HILARIOUS AND DEPRESSING.
AND
I LIKE CHINA'S QUOTE, THEY SAID THAT THEY WILL, QUOTE,
COUNTERATTACK WITH GREAT STRENGTH.
MY GUESS IS THEY SAID
IT THAT WAY SO IT WILL GET TRUMP'S ATTENTION, THEY KNOW THE
KNUCKLEHEAD IS LIKE YOU ARE EITHER WEAK OR STRONG, YOU
EITHER LOSE OR WIN.
SO THEY SAY WE WILL COME AT YOU WITH GREAT
STRENGTH, AND HE'S LIKE, OH NO!
HE ALSO SAID $100 BILLION, I CAN'T HELP IT, IT MAKES ME THINK
OF AUSTIN POWERS THE WAY HE PRONOUNCES THE NUMBER, IT FEELS
UNREAL BECAUSE THAT'S THE WAY UNFORTUNATELY EVERYTHING IS WHEN
YOU HAVE A PRESIDENT WHO ACTS LIKE A PETULANT CHILD AND MAKES
EVERYTHING A TIT FOR TAT, WANTS TO WAVE HIS STEAK, AND MAKE SURE
EVERYONE KNOWS WHO HAS THE LARGEST ONE, BUT AS YOU POINT
OUT IT WOULD BE THE AMERICAN VOTERS WHO PUT HIM IN OFFICE WHO
WOULD BE THE MOST HURT, PEOPLE WHO WORK IN AGRICULTURE AND
MANUFACTURING, IT'S A LOSE/LOSE FOR EITHER SIDE, OUR ECONOMIES
ARE SO INTERCONNECTED AND INTERDEPENDENT, BUT THAT'S
WHAT YOU GET WHEN EVERYONE WANTS TO PLAY AROUND WITH WORDS
AND HUNDREDS OF BILLIONS OF DOLLARS.
I THINK IT'S EVEN WORSE THAN THAT.
IS A FINANCIAL PERSON
BEFORE I RAN FOR CONGRESS, HE'S SITTING HERE TALKING ABOUT WHAT
HE'S PLANNING TO DO, THERE ARE WAYS WE COULD EFFECTIVELY
IMPROVE OUR SITUATION NATIONALLY IN OUR TRADE DEALS, WE
DEFINITELY NEED TO RENEGOTIATE ALL OF THEM ENSURING THAT PEOPLE
INTERNATIONALLY ARE ALSO PROTECTED, AS WELL AS THE
INTERESTS OF AMERICA AS FAR AS BEING ABLE TO REGULATE THESE
DEALS AS WELL.
BUT THE ONE THING THAT I FOUND MOST RIDICULOUS
ABOUT HIS TANTRUM THAT HE THREW OVER THIS DEAL WAS THAT HE
FAILED TO EVEN TALK ABOUT ANOTHER SOURCE OF OUR ECONOMY
THAT'S BEING OUTSOURCED, AND THAT IS THROUGH OUR OWN AMERICAN
COMPANIES THAT HE JUST GIVE A HUGE TAX BREAK TO, AN PRE-MUCH
JUST GAVE THEM, YOU KNOW WHAT, WE'LL JUST MAKE YOU PAY A
MINIMAL TAX TO BRING ALL THAT OFFSHORE MONEY BACK TO THE
UNITED STATES WHEN THEY ARE ABLE TO PROFIT OFF OF WAGES AND
COUNTRIES OF PEOPLE THAT ARE NOT LIVABLE, THAT ARE BEING
DETRIMENTALLY AFFECTED, AND YET WE'RE NOT REALLY ADDRESSING THAT
PROBLEM WITHIN OUR OWN COUNTRY AND HE'S GOING AND DOING THIS
EXTREME MEASURE IN OTHER COUNTRIES, AND YET REWARDING
AMERICAN COMPANIES THAT ARE NOT KEEPING JOBS HERE IN AMERICA.
SO
IT'S VERY -- IT'S BEING A HYPOCRITE TO ME.
LET ME DOUBLE DOWN ON THAT AND GIVE EVEN MORE CONTEXT.
SO
WHY?
IS HE DOING THAT THERE IS THE RIGHT WAY TO DO IT, FOR
EXAMPLE I'M AGAINST THE TPP AND THE REASON FOR THAT IS THAT IT
GIVES MULTINATIONAL CORPORATIONS SOVEREIGNTY OVER OUR LAWS AND
OTHER COUNTRY'S LAWS.
IT'S NOT THAT WE ARE AGAINST FREE TRADE,
IT'S THAT WE WANT IT TO BE ON BEHALF OF THE CITIZENS, NOT ON
BEHALF OF CORPORATIONS, AND THERE IS A GIANT DIFFERENCE.
THE
REASON DONALD TRUMP CAN'T SAY THAT, THE REALITY OF THE
SITUATION, EVEN THOUGH HE KNOWS THAT IS A POPULAR POSITION,
THAT'S WHY HE TOOK IT DURING THE CAMPAIGN -- HE CAN'T SAY IT
BECAUSE THOSE CORPORATIONS ARE HIS DONORS.
SO THAT'S WHY HE'S
GOT TO SAY ON WHEN TO TAKE ON CHINA, BECAUSE SAYING HE'S GOING
TO TAKE ON MULTINATIONAL CORPORATIONS IS NOT GOING TO
PLAY WELL IN RAISING FUNDING FOR HIS CAMPAIGN AND THE REPUBLICAN
CAMPAIGNS OVERALL.
IN THE RIGHT WAY TO DO IT WOULD BE THROUGH A
SERIES OF COUNTERMEASURES WHERE THEN YOU FORCE CHINA TO REACT TO
YOU PUBLICLY, AND THAT MAKES THEM THE BAD GUY. AND YES IT
DOES MATTER BECAUSE IT MATTERS HOW THE REST OF THE WORLD
REACTS, EUROPE, ETC., THAT'S A STRATEGIC WAY OF HANDLING IT.
THE SECOND REASON TRUMP SAYS THIS SO BRASHLY AND OPENLY IS HE
DOESN'T CARE ABOUT DOING IT THE RIGHT WAY, PARTLY BECAUSE HE'S
NOT BRIGHT ENOUGH BUT THE OTHER REASON IS SO HE COULD TAKE
CREDIT.
IT'S POLITICS.
I WAS TOUGH WITH CHINA.
WAS THAT THE
BEST STRATEGY?
NO, BUT IT HELPED HIM POLITICALLY BECAUSE WITH HIS
KNUCKLEHEAD VOTERS THERE LIKE HE WENT LIKE THIS TO CHINA AND I
NOTICED THAT, SO HE MUST BE A TOUGH GUY.
I HATE TO INTERRUPT YOU BUT YOU AND I HAVE TALKED ABOUT THIS
BEFORE, I FEEL THE SAME WAY WITH RUSSIA WHEN PEOPLE BRING IT UP.
BECAUSE THAT'S THE WAY OUR POLITICS WORKS, UNFORTUNATELY WE
ARE SO FOCUSED ON OPTICS, WE JUST WANT SOME ONE TO ACT TOUGH
AND SAY THEY WERE TOUGH.
NOBODY ACTUALLY THINK THROUGH POLICY,
WHAT IT'S GOING TO MEAN AND WHAT THE CONSEQUENCES OR
REPERCUSSIONS OF IT MIGHT BE, IT'S ALL ABOUT WHETHER YOU STOOD
TOUGH AND TALKS TOUGH OR NOT. AND I THINK THAT KIND OF SPREADS
ALL-AROUND, SO LET'S THINK ABOUT HOW SHALLOW WE CAN BE A LOT OF
THE TIME.
HE'S BEEN TALKING ABOUT CHINA AND OUR TRADE DEFICIT WITH THEM
SINCE BACK DURING THE ELECTION AND HE'S BEEN TALKING ABOUT
TARIFFS, AND THAT'S ONE OF THE THINGS I WAS WORRIED ABOUT WHEN
HE BECAME PRESIDENT IS HE TALKED ABOUT TARIFFS LIKE THIS, AND
AFTER ALL THIS TIME I STILL DON'T THINK HE KNOWS WHAT THE
TRADE DEFICIT ACTUALLY REPRESENTS.
NO WAY.
HE THINKS IT'S A MEASURE OF COMPETITION AND NOT A MEASURE OF
OUR INDUSTRIES WHICH CHANGE OVER TIME.
AND IN TERMS OF EARTH
MEANT TO I FIND IT FRUSTRATING, HE SEEMS TO THINK IT'S TOO BIG
AND WE NEED IT SMALLER, HE PROPOSED $150 BILLION SMALLER,
BUT HE ORIGINALLY THOUGHT IT WAS 500 BILLION AND NOW HE SEEMS TO
ACCEPT ITS 375 BILLION, THAT'S ALMOST EXACTLY HOW MUCH SMALLER
HE NEEDED IT TO BE SO WHERE BE GOING THROUGH THIS PROCESS?
AND
ANOTHER THING, EVERYONE SAYS HE IS ENGAGED IN A GAME OF CHICKEN
WITH CHINA AND HE REFUSES TO SWERVE.
BUT HE'S NOT, BECAUSE IN
A GAME OF CHICKEN YOU RISK YOURSELF.
HE'S NOT RISKING
HIMSELF.
IF IT CRASHES, IT'S THE ECONOMY THAT CRASHES, NOT DONALD
TRUMP.
DONALD TRUMP WILL BE JUST FINE.
HIS VOTERS COULD BE
RUINED, THEY COULD LOSE THEIR INDUSTRIES, THEIR HOUSES, BUT
HE'S GOING TO BE FINE.
SO STOP ACTING LIKE HE'S BEING BRASH AND
BOLD.
YOU CAN BE VERY BOLD WITH OTHER PEOPLE'S MONEY, THAT'S
EASY.
HE HAS DONE THAT ALL HIS LIFE TOPPING I WOULD LIKE TO END WITH
TWO OTHER QUOTES, LARRY KUDLOW, WHO IS A TALKING HEAD ON
TELEVISION -- NOTHING WRONG WITH THAT PER SE -- BUT NOT
NECESSARILY THE RIGHT PERSON FOR THE POSITION OF NATIONAL
ECONOMIC ADVISOR TO THE PRESIDENT, THAT'S WHAT HE IS
NOW, HE'S ALWAYS BEEN FOR FREE TRADE AND AGAINST TARIFFS, NOW
BECAUSE HE'S WORKING UNDER THE THUMB OF DONALD TRUMP HE IS LIKE
TARIFFS, GOOD IDEA?
HE HAD A HUGE FIGHT THE OTHER DAY WITH
ONE OF THE FOX BUSINESS HOSTS THAT HE USED TO BE FRIENDS WITH,
ANYWAY HE WROTE, OR HE SAID, TURNING TO EXPLAIN THIS AWAY, WE
AREN'T RUNNING A TRADE WAR, NOTHING HAS HAPPENED, NOTHING
HAS BEEN EXECUTED, THERE'S NO THERE THERE YET, BUT THERE WILL
BE.
IN OTHER WORDS TURN TO SPLIT THE BABY.
DON'T PANIC, MARKETS,
THERE IS NO TRADE WAR.
BUT DONALD TRUMP, DON'T FIRE ME
BECAUSE THERE WILL BE.
BUT THERE ISN'T. BUT THERE WILL BE.
BUT
THERE ISN'T. AGAIN, FOR ANY TRUMP ADVISOR, AND I CAN'T STAND
LARRY KUDLOW, BUT FOR ANY TRUMP ADVISOR I FEEL BAD FOR BECAUSE
IT'S AN IMPOSSIBLE JOB.
YOU HAVE TO SOMEHOW TRY TO MAKE SURE THE
WORLD DOESN'T EXPLODE WELL YOUR BOSS IS TRYING TO MAKE IT
EXPLODE.
AND FINALLY, IF YOU DON'T BELIEVE US, MAYBE YOU WILL
BELIEVE A DEEPLY RIGHT-WING REPUBLICAN FROM NEBRASKA, CLASSY
BEN SASSE.
HE SAID ABOUT THE SANCTIONS, THE TARIFFS, I SHOULD
SAY, THIS IS THE DUMBEST POSSIBLE WAY TO DO THIS.
THAT'S
A DIRECT QUOTE.
HE SAID HOPEFULLY THE PRESIDENT IS JUST
BLOWING OFF STEAM AGAIN, BUT IF HE'S EVEN HAVE SERIOUS THIS IS
NUTS
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