Tariff Wars | Mexico Delays Tariffs

You're listening to Bill Handle on demand from KFI AM six forty.

KFI AM six forty Bill Handle. Here it is a Monday morning.

February third, National Carrot Cake Day.

Yep. Only because the carrot cake is so good from Stonefire Grill they brought it.

And all right, enough of that, let's do something that's not quite as important as today, but still fairly important, and that is the tariffs that President Trump has put into place.

They start tomorrow. And if you remember, of course you do that.

Part of the campaign that Donald Trump was running was the promise that prices would be lowered immediately, Costs would be lowered, inflation would be gone. Well, he has admitted that, and this is just a fact, not his issue, but he's the one that kicked this in.

Tariffs cause prices to rise. It's just that simple.

The more a terriff is in place, the more expensive products are. And that's because so much trade is going on. So, for example, the car companies, there isn't a car company, a car manufacturer in the United States that manufact it doesn't get parts from Canada or Mexico, and all of a sudden, those parts are going up twenty five percent which means guess what. Cars are going up, food is going up, phones are going up because they're all made

He says that about Canada too.

How much illegal immigration is coming from Canada, Not very much, And so it's going to be financial.

It's a financial hit, and it's gonna hurt American workers.

It's gonna hurt well, it's gonna hurt certainly American consumers long term. The policy is, if it's really expensive to buy foreign products, that means American manufacturers and workers have to make up for it because we're not gonna stop consuming.

And if all things being equal, if the.

Price is about the same, if it costs twenty five percent less to buy from Canada and all of a sudden there's a twenty five percent tariff, then it's gonna be the same price, right, And if America charges the same thing American manufacturer.

We're gonna go to American workers.

Of course, we are for a whole lot of reasons, because bringing in from overseas, from China, bringing in from Mexico, there are all kinds of transport issues, There are all kinds of.

Regulations that have to be met America. It's easy.

You order from Des Moines and you're gonna get a product three days later and you're not gonna pay tariffs or any of that.

It's easy PC stuff.

So that is the philosophy that tariffs actually long term are good for the American worker. Yes, no, don't know yet, but I'll tell you prices are going to go up.

That is a given.

And the President has admitted, Okay, it's gonna hurt. It's going to hurt temporarily. Will this is a quote and this is what he posted. Will there be some pain, Yes, maybe maybe not. They'll be pain, believe me, But we will make America great again, and it will all be worth the price that must be paid. And he said, Americans, we will understand that it is important for us to pay more money for goods and services, goods, particularly.

To make it long term better for America.

You know what, there's an argument there, and there is a philosophy there, and some people agree, some people disagree. However, when he said prices are going to go down immediately and costs will be half of what they are now by the anniversary of his first year January twentieth, twenty twenty six, well we're going to start the administration with prices going up.

I mean, that's the cost of tariffs.

And if there's going to be a trade war, and Canada, Mexico already and China already said it's going to be retaliatory. You hit us with twenty five percent taxes, We're gonna hit you at tariffs.

We're gonna hit you with twenty five percent tariffs.

So all of a sudden, it becomes super expensive to buy products that are manufactured overseas, which is what we buy overseas products by the hundreds of billions of dollars, where trillion dollars. Maybe because it's cheaper. It's all about money. It's about quality too, but it's mainly about money. We vote, we go through life based on our our wallets. That's the reality. We're a consumer nation. And so prices are going to go up. There's no way around it, and

Prices are going to go down.

Well, prices are going to go up, but you understand that prices are going to go up. That's the problem I have. I would have been far far It would have been far better, in my opinion, had Candidate Trump said, here's what I want to do.

I want to raise prices.

Or I want to invoke or kick in tariffs for the long term of American workers, because tomorrow prices go up, the tariffs kick in tomorrow.

How long do you think it takes to build a factory all of a.

Sudden, chips have gone up twenty five percent or ten percent from China, Okay, So that means it's going to be feasible for us to build a chip factory because we're now going to compete and all things being equal, we're going to buy chips here.

How long does it take to build a factory? Two years? Three years? And can you do it without subsidies from the government.

Probably not, because it's so damn expensive and it's a national security issue. So teriffts may very well be good and in many cases I'm okay, with teriffs because they do in the long term.

Exactly what the President I think is pushing for.

A lot of people believe that, but come on, really, prices are going down while they're going up. Inflation is out of control. It's a two percent I mean, what do you do that? Okay, So we talk about it becomes more expensive to buy products when the president kicks in a tariff against the country. So a product from Canada that costs one hundred dollars a manufacturer pays and not gonna be one hundred and twenty five dollars, So the manufacturer's paying a lot more money.

In the end, we do because it's the cost is moved on to us. Of course.

Now here is something you may not realize is that every tax on imports is also a tax on exports. It's a tax on us. How does that work? All right, let me give you an example. The most popular beer in America right now is Modelo especial brood in Mexico. All Right, you put a twenty five percent tariff on Modello and slay sales are going to slide. Of course they are, because it's that much more expensive now Modello imports American barley from US.

We export American barley.

Because and they buy virtually all of their barley from US for brewing.

And so all of a sudden, we're buying less.

They're buying they they're selling less because they can only sell at a higher price because of the tariffs. And guess what both get screwed, Well, not both of them, We get screwed because all of a sudden we're in a worse position. You know, all of the manufacturing or the processing of barley, we're selling less, and it's costing us more for theirs, all of it. It's all connected by the way. Barley growers don't care about how much they sell, They prepare about what price they sell it at.

And competes with imporse.

So if Modelo is more expensive, American beer also becomes more expensive. The tariff on Modello allows American beer to increase market share because all of a sudden, people aren't buying modello and we're selling more and the competition is less, which means the prices.

Can go up. Why because it's supply and demand.

If Americas rink a pile of beer, and now they don't buy Medello and they buy American beer. All of a sudden, American beer is more deer, and the prices go up supply and demand, so everything gets more expensive for everybody, and national incomes lower and prices just are more expensive. Trade wars, that's what this is about. And let me give you an example real quickly. It's not direct,

You know that's way out there.

But do you care about the rent of a brand new apartment, that department or that apartment. Well, the price to p on the cost of construction, how much it cost to build the apartment, which depends on the price of window systems that the developer pays.

That depends on the price of glass.

And by the way, we're talking about lumber which comes in from Canada too, I mean.

Across the board.

By the way, all of that Trump just raised twenty five percent put tariff on aluminum. The cost of manufacturing airplanes and cars go up, and so guess what happens. The cost of airplanes go up manufacturing. Therefore the airlines have to make that up. And you wonder what's going on. Now, here's the weird one. The Trump administration renegotiated NAFTA North America Free Trade Agreement.

Which got rid of tariffs, and his new deal.

In the US Mexico Canada trade deal quote was based on the principle of fairness and reciprocity, which.

By the way, he can't do that. It's illegal under the tree D rules. But the US stopped obeying treaty rules a while back.

Twenty eighteen, the Trump administration imposes tariffs on steel and aluminum, and so the affected countries take their case to the World Trade Organization. Four years later, December of twenty twenty two, the World Trade Issue, the World Trade Organization issued its judgment. The US lost at every single point. So what did the Biden administration say, We're going.

To ignore it?

The Biden administration said, we're ignoring it. We don't care. Trump has pulled us out of the WTO. Biden just ignored the WTO. They're both on the same page. And here's how they did it. In twenty seventeen, the Trump administration blocked new appointments to the WTO's Appellate Court, effectively the Supreme.

Court of World Trade.

The Biden administration continued the embargo. Today all seven seats on the panel are empty. And here's the clever part is that right now all seven seats of the appellate Court are non existent. They're empty, and they're the ones that make the decision. If there is no court, there is no decision.

And that's both Biden and Trump.

The point is free trade agreements, which it helps everybody the Biden administration and the Trump administration shut down. But here's the problem with free trade agreements. Right, no tariffs, so China subsidizes the manufacturing of steel, and no tariffs, so it is far cheaper to buy steel from China than it is to manufacture here under any free trade agreements.

Because they're not fair. And Trump is right, they're not fair.

If everything was equal, if China didn't subsidize, if China didn't pay forty cents an hour to its people, didn't have its own version of OSHA, it would be fair.

The reality is it's not, and so what do you do?

You let it happen and American steel workers are put out of work because there's no steel being manufactured because all being pot in China.

Or do you put teriffs on there?

So American steel workers do compete, but everything goes up in price. It's really complicated, and I want to share with you what's happening to me, My dear one of my best friends, Savil, and I own a business together and it's cookware that we import from China. And I don't want to pitch the company. It's Lake Industries dot com. Lake Industries dot com. You want to look at Platinum cookware. Okay, enough of that.

It's good stuff, Savile, thanks for joining us.

Good morning, Good morning Bill, How are you?

I'm good? All right? Get him up, Actually he wakes up really early.

But I wanted to talk about our company and we import from China. Now, huge companies have very deep pockets and they can switch over companies like ours.

Small companies.

You know, we have a couple of dozen people that work for us, and our business is coming in from China.

What is going on? Since it's just hit us, what do you do?

Well?

It was announced on Friday, as you know. And the first thing we did is we sent a letter out to all of our clients and dealers and said, hey, this is probably going to happen on Monday or Tuesday, and we are going to impose a temporary tariff search arge on all of your invoices beginning Monday or Tuesday of five percent. We did five percent for a couple of reasons. Number one, we wanted to kind of help our dealers feel the pain and what are they going to do? They just going to pass it on to

The dealers already wrote back to us.

Bill and said that's fine, We're going to pass the five percent onto the dealers. And we fully understand the situation you in. We've been watching the news.

We've expected this. Probably the toughest.

Decision for us was when to impose the tariffs, because obviously we have goods already in the warehouse that don't have tariffs. So do you wait three months and say let's get rid of those goods and then impose tariffs. And we spoke to a couple of our key dealers and said no, because then you'd have to delay removing the temporary tariffs surcharge three months down the roads.

So they said, we're okay with this.

The minute the president or the government announces the five percent tariff.

Let's go.

Then the minute they stop, let's stop.

Then the rights of fact, we had a plan for.

Monday, and we now realize the executive order is only going to be signed.

Today, so we've delayed it the day until Tuesday.

Okay, So let's talk about all of a sudden, And it was ten percent, which we're sucking up half of that, So it's five percent right off the bottom line for US. Tariffs are going to kick in. It's going to be a trade war. Trump has said the tariffs are going to go up, which I believe, which we believe completely.

So what do you do? So do we leave China?

Are we now looking or are you now looking because you obviously we're in the business, But are we looking at Vietnam, looking at the Philippines where there are no tariffs?

Yep?

So we actually the funny thing is we were looking at Mexico and that just didn't pan out, and thank god it didn't, because that's twenty five percentence, you know. We then looked at Vietnam and our friends.

Over there said to us, we're a little.

Concerned because the balance of trade between Vietnam and China, excuse me, between Vietnam and the USA is shrinking every day. So at some point in time they're going to be next on the hit list for the USA. So we've come to the conclusion the best countries for us right now, the second best countries Thailand, and our best option right now is Cambodia, of all places. So we have moved some tooling from China to Cambodia to test a couple of units out to make sure the quality is the same.

Yeah, and keep in mind that, as I said earlier, the prices are going to go up, and one of the reasons, and it's not the fentanyl for Mexico, and it's not the immigration from Canada.

I mean, the real issue is financial and.

The more we buy from a country, the more imbalance there is, and the more Trump wants to put tariffs until it reached the point where there's zero now. But the disparity grows and grows and grows, and we buy too much from them, and boom, it's tariff time.

And we're looking at Cambodia now.

Who would have ever thought Cambodia where we'd be manufacturing our cookwar at Lake Industries dot com. That's Lake Industries dot com. Got I'm such a such.

A fantastic This is the greatest segment of the whole morning.

Thank you for this.

We never thought. We never thought Cambodia for a minute. As a matter of fact, the bigger companies who anticipated this long before us because of the deeper pockets that you mentioned, they've been at Vietnam for years right now. Hence the balance of trade. I mean, the thing we need, and I know you've mentioned this morning, is we.

Need stable trade policies. That's what we need.

When I was fortunate enough to emigrate to this country, you know, Ronald Reagan was in power, and he was the best at it. And if you think about it, the American manufacturers that survived made.

The best products in the world.

When I first emigrated, the American cars were lousy, and then we had this flood of Japanese cause Korean cars, and guess what the American cars caught up, and arguably they're as good, if not better. So free trade in a lot of ways is a good thing. I do understand what the Trump administration's doing because this is going to have an impact positively immediately, you know, a positive impact immediately. Long term, I'm not so sure.

Now I'm going to argue the other side that short term it's going to have a negative impact because prices are going up tomorrow. And like many companies, since we manufacture or we buy from manufacture overseas, switching to a different company means the dies that stamp out our cookwar the companies that manufacture this. How long does it take to switch from Chinese factories and you find someone in Cambodia that's willing to do this, what is that timeline?

That is a long one. So it's not as long as it takes to both factories in America, of course, which is anyway from two years to five years in our case to get full production going, it's at least a year to get it going. We're testing it now, but it's at least a year.

Yeah, And that's the point, that's the point I am making.

Where we want American workers, we want factories here the problem is it takes a long.

Time to bring the jobs over. All, right, Savil, thank you and you're welcome. Yeah, I appreciate that. Do I pitch one more time our company?

Na?

Okay, sure please, I'm on my knees.

Okay, Lake Industries dot com. Lake Industries dot com the best cook wear in the world. All right, thanks Savil.

Thanks, But by the way.

Am I in trouble with I don't think so, because as long as I disclose that I am a principal, I can pitch the product.

Right.

Why are you looking at me?

Because you know the rule used to be in management? You know the rules more.

You know I've forgotten everything.

Okay, fair enough, it's.

The first time on his knees for you, right, Bob.

Oh Well said, give me a break. Now, it's a lot of fun.

We spend a lot of time talking about the cost of manufacturing, especially now that terrff world is coming in.

All right, did I just.

Hear amy I was putting together the next segment that the tariff was supposed to kicking tomorrow has now been delayed thirty days.

Yes, apparently, Claudia Scheinbaum from Mexico and President Trump had a phone call. And after the phone call, they said, okay, we're going to put these on hold for one month. And Mexico is sending ten thousand troops to the border.

Now the tariff is it just on Mexico? Do the tariffs on Canada and China remaining place?

As far as we know, yes, this is this information is just getting into the KFI newsroom. Trump is expected to talk to Canada's Prime minister today at three, which I believe is Eastern time.

Okay, case in point. This is Donald Trump at his best. As he says, he is going and I'm going to do it right now because I'm not happy with the border.

And when you straighten it out, I will go back on the tariffs. Boom.

She's sending ten thousand troops to the border to stop illegal immigration.

Is exactly what Trump does.

And yeap with Columbia as well.

Yep, with Columbia.

He succeeds beyond success when it comes to this.

This is the art of the deal.

This is a businessman which underlying a lot of his issues with the border. Frankly, business doesn't really care about the border. You're talking about big business. They couldn't care less. The reality is is illegal. Migrants do not take American jobs. It doesn't really do anything for the economy. Tariffs do big time. And this is a business issue, and this is where the business world is looking at Trump and put into place a business leader.

I heard a.

Lot about that. I mean the popular though. The rest of US, Yeah, we care about immigration. It really doesn't affect us. It really doesn't to make big picture, tariffs do as I said that. So Trump has said, tariffs start tomorrow unless you straighten out the border, and I mean, you do it now.

Ten thousand troops.

Are coming from Mexico to be along the US Mexican border. Absolutely what he promised to do. And it's working. It is working.

You have a little just a tiny bit of crow in your teeth.

No, no, no, not at all, not at all. I said that this is a man whose agenda is not hidden at all.

And I said, this is a man who what he does is go way beyond.

He says things that appear to be kind of crazy, and what he does is and he read his book It's a negotiating ploy. And everybody said, no, it's not a negotiating ploy. It was a negotiating ploy. It is a negotiating ploy and it has worked.

It has worked.

How did Americans respond to JFK and the Bay of Pigs.

They Americans thought, well, the Bay of Pigs, the whole situation with Bay of.

Pigs, and he Kennedy inherited. The CIA lied to him.

They think he was crazy when he stood fast.

No, because JFK didn't stand fast. It failed miserably. The Bay of Pigs invasion, the quote the the let's how do I put this? The anti crat Castro Cubans actually put it together. It was the CIA that came out and Kennedy said, this is my fault. I let it happen. He sucked it up. He said, yeah, it.

Could have gone south. Oh it did go south, and it just I'm talking nuclear south.

That was with Russia, that is Russia. And there Kennedy stood fast. There he stood fast.

And the reason that Russia was moving nuclear weapons into Cuba is because Kennedy was so inexperienced and got killed in the Bay of Pigs. And then Kennedy stood up and stood fast. Uh so you got it sort of, But it's as always more complicated than that.

By the way, just a quick one about Kennedy. Now that you bring it up, do.

You know he was as cold war as cold a cold warrior as it gets. He was the most anti Russia president that we've ever had. He he what he cared about was stopping Russia.

That was it a very interesting story.

I'll have to do that when we talk about the birth of JFK or when he was assassinated, because there's a whole story there.

That kind of stuff.

I love when you do that.

Oh yeah, that's my favorite Handle stuff is when you go deep dives down history.

Yeah, I thank you for that.

Okay, coming up, the World Cup and the LA Olympics could lose millions of dollars and I'll explain why, and it's nothing that you what you're thinking about now?

And then another personal story I want to share with you. KF I am sixty. You've been listening to the Bill Handle Show.

Catch my show Monday through Friday, six am to nine am, and anytime on demand on the iHeartRadio app.