Tariffs Gone Wrong? - Trump's Trade War Backfire

basically he is basically the godfather of these tariffs. Now he'll be the first one to tell you this isn't the way he would have implemented. In fact, he did a New York Times out ed that, which is what inspired me to put him on. As I've promised to you, even if I'm skeptical of an idea, that doesn't mean I don't want to have somebody on here making their case and let's work shop it and you know, let's

have a back and forth. I think the conversation that I have with Orange Casts about the terriffs as they've been implemented versus perhaps how he would have implemented, we'll see, looks a tough argument to make, which is you got to sort of take some medicine for a while before the goal of what these tariffs are, which is to return some manufacturing back to the United States. It's going to take a while, and the question is whether you can get enough patients from the public to put this

off and whether the theory is right. You know, can you really motivate certain industries that have decided to manufacture outside the United States to come back? Is there enough incentive to do that? I think we're all about to find out. Obviously, now a little point of order here. We did this interview before Donald Trump sort of flippantly

said well maybe though maybe kids are for Christmas are going to have to go with fewer toys and the dolls might cost a little bit much. I will tell you that is what I think is going to be

the most fascinating part. And I don't want to prejudge the conversation I have with Orang cast for you, but if I were in his shoes, I'd be worried that my theory of the case is may never get a chance to be tested because of the poor implementation by this administration, the haphazard way that they've been dealing with the tariffs, and the fact that there's I think the

signal has been sent. Everything's kind of negotiable. And if that's the case, then how do you when does a company decide Okay, I'm finally going to bring everything here. But I do think politically this White House has done a terrible job communicating the tariffs in general, a terrible

sort of preparing the country, preparing business for this. When you listen to mister cass there there was another way this could have been done, in an alternative universe, perhaps in a more transparent and methodical way that you try to implement something like this. There may have been poor, more political support, but it actually brings me to where I want to focus most of my opener here, which is, look, I've certainly given this Trump White House a hard time.

I think it's been a terrible one hundred days for them politically, and a lot of Americans seem to agree that that's the case. I think that this White House is another huge problem in blind spot, and that is they only know how to communicate with their base, and they only seem interested in communicating with their base own the Libs. It still seems to be the mindset worrying

about catering to the base and making them happy. I could argue that this firing of Mike Waltz in some ways is more of a response to the base than it is anything else. I guess he hasn't been fired, I should correct myself. He just was simply moved to another position, which you got to. You know, whatever you think of Donald Trump is at least he's showing some loyalty to Mike Waltz. Meaning here you got this guy

to quit his seat in Congress. The guy who replaced him was literally sworn in three weeks ago, and now he could have been completely out of a job. Ambassador to the United Nations is not such a bad consolation prize. It's no National security advisor. That's arguably the second most powerful job in a West Wing after the chief of staff. It's certainly the second best office. But the lack of their lack of interest in trying to communicate with skeptics,

not critics on the left. They don't want to communicate with their pure critics. That's a White House's prerogative. But if you're actually trying to make a political argument and win a political argument, you've actually got to try to communicate to skeptics, you know, whether it's people like I think the folks that are listening to this podcast who may be skeptic of this tariff regime but you know, really not happy with how it's been rolled out. It's

been sloppy. At least make your case in a more logical way and try to talk to this crowd. And I don't think they've done a very good job of that. And that's the question I have. Are they even interested in it? You know, the Trump one point zero their communication shop seemed to be interested, and Donald Trump did it in his first term, trying to communicate with everybody.

In fact, I think the great strength of Donald Trump's candidacy in twenty sixteen versus the other campaigns was that he was sort of agnostic when it came to the media. Sure he had opinions of who he thought was good to him and not, but he was willing to talk

to anybody. I guess we're seeing a little bit of that in his decision to say yes to the Atlantic, And that is a reminder if you can get directly to the president, he'll give you time, even if he doesn't even if he doesn't like your outlet, because he's got that much confidence in himself, right he believes nobody can get the best of him. He believes he can survive in an interview, and as long as he's getting

a chance to talk, he's okay with it. I wonder the question I have is a is he surrounded by a press staff that wants him to do that? Or is he surrounded by a press staff that is going to try to prevent him or block him from dealing with journalists that are neither anti Trumpers or pro Trumpers,

but are essentially professional skeptics. And I've always said that's that's what I believe believe my job has been when it comes to covering policy, which is okay, show your work, be a skeptic about it, intrigued about it, cover it, kick the tires, do all the do all those things. But as a journalist, if you behave as a professional skeptic, then you're more likely to get more information and I think deliver a better report for the average American on this.

But I do think the big you know, he's they've got to figure out how to how to communicate beyond their base, because right now it's not working for them politically. It may make them feel good, right, and if that's all the world that they live in, that's nice, But

then they're going to get a shock to the system, as they already have been when they start holding elections. Uh. The Waltz. The way the President handled the Waltz situation is interesting, and I think the question is going to be what should what should we take away from this? Right, it wasn't a total like get out of here mindset, you know, poor old Ryan's previous was fired by tweet and was essentially it appeared essentially abandon after Air Force

One landed at andrews Now. I don't think that's the way he felt at the end of the day, but it certainly looked that way, and that certainly seemed to be a look that the president back then didn't seem to mind the fact that he gave Waltz a sort of consolation prize. I think shows that he would like to have some loyalty. And it's probably smarter right if you don't do that. Who knows who knows who Waltz

may talk to when you fire. Ask Pete Hegseth what it's like when you fire former staffers, and what happens when they start talking to the press. So I am intrigued by the decision that they have and they had this extra they had this extra job that they hadn't filled because of the narrow House majority and the decision to pull back the nomination, which, of course you an ambassador was originally supposed to go to at least Dephonic.

But what's interesting, and as my one of my producers, Laurene Gardner put it to me, he says, I hope you can keep track of all of Marco Rubio's titles. Right now, he is the Senate confirmed Secretary of State, but he's also the acting administrator of the US AID. He's also the acting Archivist, and now he's also the

National Security Advisor. Now a lot of people are making Kissinger comparisons, because the last person to hold both Secretary of State and National Security Advisor was Henry Kissinger to Richard Nixon. And that'll be an interesting question whether Rubio keeps this for a while, or whether the President decides to reward witkof his sort of personal negotiator from around the world, his special envoy for everything. Right, it wasn't

just one thing he sent him to putin. He sent him to Iran, he sent him to Israel. So I think right now Witkoff is sort of his personal envoy. I can tell you from my understanding is that that Marco Rubio really has earned a lot of trust of Donald Trump. You know, when you start to look at why, why was Walt's sort of pushed out? Was he pushed out because of the Jeffrey Goldberg signal incident? Or was

he pushed out because Magan never trusted him anyway? Because he was a well known sort of conventional or traditional national security Republican. What do I mean by that? Somebody pre Trump? Right? What there where the Republican establishment was pre Trump? Now, Marco Rubio is somebody that I think a lot of people, including myself, would have put him

in that track. Even the way he uh, the way he ran the Intel Committee with Mark Warner when they were one would be chair, when vice chair, depending on which party was in charge, seemed to also indicate that he really was sort of more on the conventional side of of of where of American foreign policy, which which I'd say center left and center right, you know, both

share share that philosophy. But as as people have told me who are close to this situation, that the more time that Trump has spent with Rubio and Rubio had proximity going for him. Right. Obviously, we know this was a nasty primary fight in twenty sixteen and there was no love loss between Marco Rubio, Little Marco and Donald Trump and the hands comment and all that business. But that over the four years Rubio became you know, worked really hard to regain Trump's trust. Now, for some of

you that might be a huge turnoff. Some of you might think he's just being a hypocrite. And you know what, none of us know the motive for sure. But he became Secretary of State not because Donald Trump thought he owed the establishment wing of the party somebody to give a place to. He gave it to him because over time he started leaning on Rubio when it certainly came to do with anything having to do with form policy

in Latin America. I mean, Donald Trump doesn't make any decision on Venezuela without running it by Rubio, and it was the case towards the end of his first term. So I won't be surprised if this relationship of national security Advisor and Secretary State is something that lasts a good six to nine months, which in a Trump white House would be a long time. Remember he went through four national Security advisors in his first term. He went

through four chiefs of staff in his first term. So you're looking at about you know, you know, every nine to twelve months some sort of shift or change here. What's interesting about all the titles that Marco Rubio has is that it also gives Donald Trump flexibility. So we now see what he was willing to do with Waltz. Well, I don't want to totally kick him out of the administration because you never know if you create an enemy. Well, let's say he finally comes to the conclusion that hag

Seth just can't manage the Pentagon. Well, now there's three titles he essentially can take away. Hag Seth is Senate confirmed, and so if you want to make him the National Security Advisor, he could. I don't know if that's what. If Trump wants hake Seth around that much, But maybe he gives hagg Seth the Administrator of Aid, maybe he hands him the archivist role, maybe he gives them an ambassadorship.

But I wonder if this is going to be the new pattern of Trump where he finds a place when he decides someone isn't working in a position, rather than create an eventual source against his administration, which they're very paranoid about leaks that instead, you find a place within the administration, you keep this person in the tent. Just something I'm going to be watching for. And you know what, one thing we do know is Donald Trump doesn't like

to feed the media beast. So even if he makes a decision to get rid of somebody, he'll delay it a little bit, just in time, so it looks like it's his decision. He doesn't want to look like the press pushed him on this. But the the uncomfortable aspect of this Waltz decision is that it does seem to be a victory for Laura Lumer, the person who came in and seems to have encouraged President Trump to do purging. And this is a question of whether who's allowing her

to have his ear. Now maybe if he wants her to have his ear, there's nothing Susie Wilds can do about it, or there's maybe Mike Waltz did try to stop her, and that was part of the problem. But you know, it's my understanding that Lumer essentially has been doing vetting of any national security staffer and if they have any connection to people like Pompeo or Cotton or anybody she has deemed to be anti MAGA in the

foreign policy world. It has gotten those staffers ostracized. And I'll tell you this, while he may have kept Waltz at least in the circle by giving him the UN ambassadorship, some of these other staffers are not going to like how they were treated and on this. So that's just something to watch for. There the other things I want to clean up from the weekend, including the last time I spoke to you and I talked about the first hundred days of the Democrats, I left out one other.

You know, I think it's no doubt AOC probably of all the Democrats who are worrying about it, for their own first hundred days, she probably had the best first

hundred days. But there's another Democrat that arguably had as good of a first hundred days, and maybe even a better one, and that's Abigail Spanberger. And some of you may say who is she. She is a former member of Congress who is the essentially the Democratic nominee for governor in Virginia, an election that's going to be held

this cycle. So why do I say she's a huge winner. Well, Number one, the more unpopular first, you know, the more unpopular White houses in their first year after a presidential election, the better it is for the opposition party in the state of Virginia. We have seen a remarkable pattern something in like eight of the last nine Virginia gubernatorial elections where the party in the White House has lost the

ubernatorial race in Virginia. The most recent example, Biden wins the presidency in twenty Republican Glenn Younkin wins the Virginia gubernatorial governorship in twenty one, Donald Trump wins the presidency in sixteen, Democrat Ralph Northam wins the governorship in seventeen. So now throw in Doje and Elon Musk, and I will tell you Spanburger, the question is and whether she's

going to win this race. Barring some unforeseen event, the question is going to be whether she can win it by such a large margin that she changes she dramatically changes the makeup of the state legislature. Not a lot of swing districts in neither the Assembly or the state Senate. But she could have a large margin of victory because she's got a secret weapon in her hands, and that's government workers. When you follow Virginia politics, these off your elections.

Government workers are sometimes the most difficult to engage in state elections. They're federal government workers, which means they're usually very focused on federal government politics, but don't always see themselves as Virginians. It's been one of the struggles Democrats have had, used to have a lot, and sort of they improve that over the years. I can tell you now federal government workers that live in Northern Virginia are angry, that are on fire. Some of them are no longer

government workers, and that wasn't a choice. Some of them took retirement on purpose to avoid the dose thing. But I can tell you they're very engaged. You go around northern Virginia, you see a lot of signs of support our government workers, support your government workers. I think that makes what was already a difficult political environment for the

Republican win some seers the lieutenant governor. It puts why I would say of all Democrats, probably nobody had a better first hundred days when you look about their near

term goal than Abigail Spamburger. One other note that I want to touch on is Wes Moore in his announcement that he said he's not going to be a candidate for president in twenty twenty eight, and his decision to say it so early. Well, the only problem poor Wes

Moore has. It's not his fault. But I'm old enough to remember when Barack Obama in twenty oh five, and I think he went on Meet the President early twenty oh six and said he was not going to be a candidate for president, and then by the end of twenty oh six came back on Meet the Press to say, well, I may have changed my mind. So the point is it's fascinating that he made the decision to announce it. Perhaps that's a way of keeping donors from calling him

all the time. Perhaps he's worried that if people think he's looking too far ahead to the presidency that actually a re election campaign in twenty six might become problematic. Whatever the reason, or perhaps we should just take about his word. Maybe he thinks his family's too young to deal with as aential campaign in twenty eight he's certainly not. You know, he is somebody that has a long runway.

You know, it's not as if the moment is gone for him in twenty twenty eight, but it's an if there is no Wes Moore candidacy in twenty twenty eight. I happen to believe if he runs, he's somebody that would say is going to be one of the be in the top tier. But if he doesn't run, that's short early on. It's a big help to a guy like Pete Bootages, right, he's the other veteran in the race, having served. Wes Moore having served, that was I think a big part of his his appeal to many people.

That could be a little bit of a help to a guy like Pete Footage. And frankly anybody in the what I would say is in the establishment lane of the Democratic presidential race, whether it's Corey Booker, Pete Boutaggche, Gretchen Whitmer, but those that are sort of viting buying for the mainstream liberal support, no wesmore that that's that's a whole bunch of donors that are up for grabs. That's a whole bunch of operatives that are up for grabs,

So an interesting decision. But I will promise you, Governor Moore, no one's really gonna believe you've taken yourself out of twenty eight until you say it again after your twenty sixth race, assuming you're successful in your reelection. All right, just wanted to get a couple of those things off my little my notepad of stuff that I keep. Hey, I got to mention this. Hey, I got to mention that. My pause for a break when we come back my conversation with orn Casts, all right, and joining me now

is orn Cast. He is the chief economist, and I guess founder of American Compass is their chief economist. I hope I have that correctly, Oran and former Manhattan Institute fellow? Is that also correct?

is a problem. Right, everybody said free trade was going to be great and and and why might that not be the case? And then to have a clear idea of Okay, well, then what would you actually do about it? Because it's you know, some people would say you sort of have a toothpaste out of the tube situation where

you can't just go back on what we may have decided, even if it was it was a bad decision. And so you know, we have developed sort of a broad range of policies and a pretty comprehensive agenda, I think for what we call reindustrialization, which is the idea that we have to rebuild American industry for the sake of communities and good jobs, but also for the sake of economic growth, also for the sake of national security, and tariffs are an important.

that I think are are too high and higher than they need to be, and that's where we would depart on the specifics.

was going to happen. But essentially by six months is the impression I got from your op ed that you were you know that none of these the s that you would you would lay it out what it was going to look like, but you would give at least one hundred and eighty days of breathing room, both for Corporate America to plan for this, but also to give room for some trade deals before the implementation. That isn't how it's been.

going to be something you pay. Matters is what is the tark going to be in years three through ten, Because the investment decisions that people make today are based on what they expect policy to look like over that timeframe. And so my view is that if you want to make this sort of long term structural shift in the economy, you want to keep the upfront costs as low as possible.

You want to say, look, we are going to give a time, give time for businesses to adjust, for other countries to adjust, but we also want to be as clear and credible as possible. This is happening that if you don't start adjusting as quickly as you can, you are going to get hit. And so that's where I think,

you know, some of what the administration has done in being quite sort of abrupt, and I think shaking people out of their stupor in a sense has been helpful. But when you think about, you know, across all of those trade partners, and we think about with China, you know what is going to be the key to the success.

The key is that we have a credible and sustainable policy and that people really believe three years from now there are going to be high tariffs, and and that's where I think, you know, I think the Trim administration has already made some good course corrections, but especially in China, where where there's probably still more work to be done.

And that was really my entry point into it. I still remember the meeting when we we brought him the sort of standard briefing on you know, okay, here's what a Republican says about trade, and he kind of looked through it and said, yeah, that that's fine, But what are we going to do about China, And at that time that was sort of a very strange question to ask. I remember the senior economic advisors said, you don't do anything about China. What what's the problem? We have? Free trade?

And you know, I think Romney brought a much more sort of pragmatic business view to the issue, which which in many cases argues for a very free market approach, but when it comes to China, really doesn't that that the kind of economic relationship we had with China was clearly just not a functional one if what you cared about was business success in the United States. And so that that kind of got me sent off on a journey to figure out, Okay, what what can we say

about this? How would we approach it? And what I found was that in the right of center there was just nothing that what had you know, begun back in Meagan's day as as some kind of very thoughtful economic reforms had just sort of ossified into this kind of market fundamentalism that just well, free trade is always good and we don't have to think about it any more than that. It's interesting one of the one of the few guys the.

of opening opening trade barriers and things like that. So and certainly George W. Bush, I think uh was was part of that was part of that movement too. How do you do you believe we does our does the size of our economy indicate that that from a macro level was a good idea?

how frankly the amount of people that have been lifted out of poverty worldwide that overall, this freer and open trade has been better for a greater number of people on the globe than not. I understand there have been winners and losers, but on the whole, how would you assess that?

the United States. And here I think it's really important to say that, you know, yes, the economy has continued to grow during the period of globalization, doesn't really tell you anything about globalistation. I mean, the economy was growing in the period without globalization as well, right. In fact, growth has slowed significantly over the past couple of decades.

Productivity growth has slowed, we see investment declining. And so if you actually look at the tradition of American economic policy, you know, certainly, up until World War Two, high tariffs were the norm. The Republican Party began as the party of tariffs. And so I think it's a little bit lazy to say, like, well, but back then, I would argue the reconization must be a good thing. That doesn't

an economic analysis.

by outside by foreign forces. So in some ways there was It made sense to me that business policy, the pro business side of the argument, was to make sure American businesses were protected from its outside competition.

Reagan approached the Japanese on a range of issues. It was always very well understood that free trade can be a good thing, That trade that actually entails the trade of things you make for things that others make, can benefit everybody, but that they are also an awful lot of ways that it can go wrong. And I think

what we really lost, especially in the post World War period, when people sort of thought, well, you know, the US is now the loan superpower. It's in our interest to preside over this liberal world order that's going to benefit everybody. Of course, the real case for embracing China was that this was going to somehow lead them to liberalize and democratiz.

the direction China is going to go. There are a few sort of really crazy libertarians who would still say yes, free trade, no matter what. But I think virtually anybody would say no. It obviously makes no sense to try to pursue free trade in this way with such a totally incompatible economic and political system. And we are we are living with the consequences of that error, and I

think fortunately we're now starting to unwind it.

States and China, the two largest economies. Is there a better way we could have kept our allies on our side on this? And are we risking China? You know, are we risking the EU ending up cutting a more a deal with China that we're going to regret they cut.

is the quintessential illustration of this. You look at the relationship with China and how imbalanced it is, and you say, oh, yeah, it makes sense that there's something wrong there.

US would still have a massive trade deficit. China doesn't even account for the majority of our trade deficit.

the day, if you go all the way back to Adam Smith, you go back all the way to the economists who first made the arguments about why trade works. The entire premise is that you are trading stuff for stuff, right, the word is trade. And so what's so important to recognize is if you say, well, okay, but why you don't need to have balance trade? It could be imbalanced and maybe you know, because someone's market is bigger than somebody else els it's important to recognize that it's not

like they're just giving us the stuff. If we're not trading stuff that we make for stuff that they make. What we are trading instead is our assets. So what happens is countries like Japan and Germany and China send us enormous amounts of stuff that they produce, and instead of in return receiving things that we produce, what they

receive from us are assets. They receive ownership of our corporations in real estate, they receive lots and lots of debt, meeting pieces of paper saying we will pay you for this someday. And there are lots of really interesting reasons why they like that trade as well, But the end

result of it is therefore a double hollowing out. In the short run, you would say, hey, it's great, we got to consume a lot of stuff and didn't even have to make anything, but that comes at the expense of the strength of our economy, the opportunities for workers, kinds of investments we do or don't make. And then in the long run, of course, we've essentially mortgaged the future.

We have handed over all of those future claims on our prosperity two other countries in return for the consumption today. And so you know, again, this is something that Warren Buffett actually wrote a fascinating piece about this all the way back in two thousand and three when these trends were first just emerging. But yeah, just in very common sense terms, if you want trade to actually work, it

has to be trade. And that, I think is the core of the argument that the Trump administration is making, and one that's absolutely correct, is that we would love to have robust trade with Japan, with Germany, with the rest of the world broadly, but it needs if it's going to work, for the United States, to be the kind of trade in which other countries are buying things

for us and we are in turn buying things from other countries.

think trade deals very complicated for the United States. Because our economy is really diverse, because our workforce is really diverse, you can have these sort of different outcomes, and I think it's a challenge because you're going to pit one. You may end up you don't want to do this politically because this is a trap right where you're pitting one region against the other. Let's say we know what

NAFTA is going to do to these industrial towns and Iowa and Ohio, I want to focus on those two. I know those two states better, and that's the only reason I'm doing it. Was there a better way to implement the vocational trading. Was there a better way to encourage domestic migration, which arguably has been a way that the United States has sort of you know, people have

improved their lives in the past. What could we have done differently that would have minimized this impact on Iowa and Ohio that we ended up with without hurting the advancements that have been made in South Carolina, Alabama, you know, Tennessee, the states that have that have in Texas in particular,

right that has benefited a lot from NAFTA. So, you know, how how how could we have done this better even if we decided to still produce proceed along this road of a of essentially a North America uh Trade Agreement pre trade agreement.

can make games from that. The problem is that when you look at where the actual what is actually driving investment and economic moves in trade, too often it's none of that at all. It's just investors and corporations saying, hey, we can exploit labor and pay people a lot less to do the same thing somewhere else.

saved one because how often you're going to see that these days. Then things were made in Taiwan, right, then things were made in Japan. But the point is is that it feels as if this has been that this is what an industrial capitalism looks like. Right, There's always going to be some place that an industry finds to go to that'll be a cheaper way to make their widget.

in the United States. And so the game comes from the fact that, yes, maybe they're making the toy cars for us, and we are making the industrial equipment that makes the toy cars. Right, And again, there was a time when that was the case. I mean, you go back to the nineteen seventies, you know, sixties and seventies,

the US essentially did have balanced trade. It is a much more recent phenomenon that in many ways was driven by the development strategy in these East Asian countries that said, the way that we are going to grow is by investing massively in very competitive export sectors. So we are going to we are going to such arrange our economy

to hold down the cost of our labor and drive as much savings as possible into manufacturing growth that we can sell into the American market, because those Americans are sitting there saying, yes, please send us more cheap stuff. And so certainly it's it's important to say right like this is this is our own fault too.

But the choice you're making is not well, I feel good about it saying made in America, so I will pay, or the trade offf you're making is about the basic kind of country that you want to have, and I think the best way to think about that trade off is to recognize that we took one side of it back in you know, the nineteen nineties, and then two thousand we said making things doesn't matter. We want the

cheapest possible stuff go. And we have now seen the results of that over the past few decades, and I think the vast majority of Americans are looking at as an at that as an unwise choice. And so my claim is not that people want to pay more to feel good about a made in America label.

But the auto industry, I think is actually probably the best illustration of what we're talking about here, because you have a very concrete case study going back to the early nineteen eighties when Ronald Reagan comes into office, and that's exactly when you had these cheaper, smaller, more fuel efficient Japanese vehicles flooding the market, posing sort of a mortal challenge to the big three in Detroit. Now, what did Reagan do? Did he say, Well, free trade is wonderful.

So that's it. We're just not going to have an auto industry anymore. No, backed up by a threat, a very credible threat of tariffs coming from Congress, Reagan negotiated with the Japanese and the Japanese actually adopted what it's called a voluntary export restraint. The Japanese said, this is not sustainable. We don't want to go down the path of trade war and tariffs that were headed toward. We are going to tell our own producers stop importing into the US market and go set up shop in the

US instead. And that is why Honda and Toyota and then Nissan moved into the American South, ultimately leading to tens of billions of dollars in investment, hundreds of thousands

of jobs. And now you have, yes Japanese you know, name plates on a lot of cars driving around in the US. But the Toyota Camry has more American made content in it than a car from anybody coming, you know, any of the Detroit manufacturers. And so that I think is that is exactly what you see the Trump administration now trying to do with these negotiations. Say to these countries, Look, this old system of you just produce and we just buy and you get back kind of ownership of the

United States is over. Let's talk about what you guys can do to actually move us toward a balanced trading system. And Stephen Mirian, who's the chair of the Council of Economic Advisors, gave a very good speech a couple of weeks ago at the Hudsons too, where he talked about

exactly this set of things. This is a perfect example of what what these countries can do is tell their corporations and use policy changes in their own countries to say, we understand, we have reached the end of the road on this model because the US is not going to accept it any more. Go invest in the United States. And just like the Japanese could build cars every bit as effectively with the same quality at the same price in the United States as they've been doing in Japan.

There's all manner of things that we are currently buying from abroad that could instead be built in the United States. We're seeing it right now with Chips TSMCT I want a semiconductor it's already in that. You know, commit about sixty five billion in investment. They've just announced another one hundred billion. The most fascinating thing is they've actually they've

said so far the yield, the sort of quality and efficiency of their production in Arizona is higher than it is in Taiwan. So we can do these things. It's a question of whether it's the trade off we want to make and the policy we want to pursue.

They're going to get hurt and a lot of these businesses are going to go under because they really don't have an alternative, even even if there's eventually an alternative way for them to stay in business. Right now, they're not right. It's the shock they're you know, our supply

chains are really efficient and all of this stuff. What happens to that sort of low cost manufacturing product, and you know, the the hundreds of small, thousands of small businesses that are counting on that inventory coming from Asia.

that phasing period. You need to give companies a time time to adjust. And that's why I say, you know, high tariffs on day one, Yes, that causes some of those tiy.

disown it. I don't have a lot of time for On the flip side, I do think when you're at the level of sort of the core concepts of what are we trying to do here, especially in this sort of situation, you have to get the balance of costs and benefits right, Because I think the right way to think about this ultimately is we're talking about an investment.

We're talking about what what kinds of costs should we incur in the short run because we think it is going to pay dividends in terms of something better in the long run. And when you're doing that, and whether you know, in the private sector, as well, if you're thinking about an investment, whether you keep the costs low upfront and whether you deliver those high benefits in the long run is what determines whether you're happy with the

investment or not. And so here I think the right way to understand the risk or the concern is that if you pursue the policy in a way that adds a lot of unnecessary costs upfront, and if you do it in a way that does not deliver as many benefits in the long run because you don't create the certainty and so you don't get the investment, then it's just you're not going to be happy with the tradal And so I think even the way that Trump administration has implemented things so far, you can get some of

that reshorting, you can get things brought back to the United States. But the way that I'm hoping, I hope people will think about it, and I'm encouraged to see the administration increasingly thinking about it, is to recognize that whether or not you're you're happy with the deal at the end of the day, whether or not it was a good policy to pursue depends on whether you do it on a way in a way that keeps those

costs down and that maximizes those benefits. And so that's where that example of the small business is a really good one. Can you do this in a way that that doesn't cause those sorts of disruptions or at least

minimizes those disruptions, and you can, and I think we're moving toward it, but I think certainly right now we are seeing too much disruption.

can provide important security agreements. So maybe the point is is that a trade deficit might be worth it because of a security trade off. Right, how do you factor that in in into your thinking? Because you know that some of that is the motivation for some of the trade agreements that we do cut Like you know, I take the Colombian Free Trade Agreement. I felt like that was one that we escalated, and we accelerated as much

of trying to make sure Colombia didn't slip. Right. This was a democracy that was on the move, coming towards us, if you will, right away from its from its from its from its drug past and things like that. So we were really trying to help them. How do you factor that into your equations of trying to come up with a fair with fair trade practices.

country in a you know, limited land or elsewhere. You look at the sort of modeling of how long could the US actually sustain a conflict in the Taiwan Straits, for instance, what you see is, you know, and you look at our ability to build ships or maintain submarines or we've hollowed all that out, and none of that gets measured in the economic analysis of free trade either. So that being said, the point you make is also a good one, which is that there's real upside benefit

to these kinds of trade agreements. And you know, I think the two things I would say about it. One is I think that's a perfectly reasonable case, but it's one that we should acknowledge and break out in the analysis that too much of the discussion in recent decades has just been Look, this is a win win win, like it advances this foreign policy objective that we have, but also it's really great for American workers, and if that's not actually true, then don't sell it that way.

If you have a you know, we don't say we're going to go to war in this place, but that's okay, it's really great for the soldiers too. There's a baseline level of honesty that is necessary, among other things, if you want to sustain political support for making those kinds

of trade offs. So if we want to say, look, we're actually going to use our economic policy, our trade policy to support developing countries that you know, we think that that really makes a difference for Columbia, That makes a difference from you know, some other country in our

hemisphere that has real benefits for us. Great, but make the case on those terms, and then notice that that case doesn't hold up when you're looking at those situations where trade is actually causing us problems, which is with those other major countries, right, it's not our trade relationship with Columbia. Again, putting aside, if they become a way for other countries to cheat, that is causing the distress.

And on the flip side, you can't say I don't think, well, look, obviously we have to treat Japan this way because you know, otherwise, I'm not sure what the otherwise is. I think the reality is that the.

I think that you can step back and assess the actual calculations that other countries are facing. And you know, I think the United States should treat allies barely and transparently and so forth.

enough and conveying where they're trying to go. But you know, piecing together those comments they do make and the action that they've taken, it seems to me that the direction that they want to head is one in which there's a much better deal for countries that are sort of in the US sphere as opposed to those that are not. The difference from the past where I think we're really departing is that in the past, especially post Cold War, we didn't really ask much of anything because we were

presiding over this liberal world order. Everybody got the full deal, right, China got open access to our market just as much as Japan did, and what we are starting to shift towards world where we say, actually, the US has some things that it wants to and those have to be fair and reasonable things. But I think the things that the Trump administration is gesturing toward are fair and reasonable. So take the balance trade point, Yeah, that seems pretty fair.

The US isn't saying we demand that we now reverse things and we get to build up our industry at your expense. They're saying, let's have a trading relationship that isn't bigger thy neighbor. Let's have one where everybody can

have a healthy manufacturing sector and trade stuff for stuff, and we will hold ourselves to that too.

the Soviet Union. But I think you know, again as with the claim that like well, the economy is bigger so it must be because globalization is good. I think the idea that, like, well, we haven't had a world war since the nineteen forties, it must be because globalization is good is the sort of like comically over simple analysis that the exact same people making it.

Deer probably makes as many tractors in China as they do in the United States these days. So I get that. And there's a there's I'd like to see that what's realistic? Because you talked about all the different things we could reindustrialize here, obviously we should prioritize what we plan to reindustrialize because we may not even have enough workers to bring everything back that maybe some people would like to

see come back. So be realistic with me here, what's viable in reindustrializing in the United States and what probably isn't.

You know, this is one of the places where I think you still see a really interesting divergence between the kind of right of center focus on reindustrialization and the left of center focus, because there's obviously a lot of commonalities in some of the pushes on these fronts, but I think what you see from the left of center is much more a sense of, Okay, here's our list of the ten things we're going to reindustrialize, and here's kind of the program to do each of them.

ship building. Conveniently enough ships to rhyme with chips. There's bipartis in legislation on that too, because again purely from a national security perspective, you do need to be able to build ships. And so I think we'll see some some targeted areas like that where.

when you try to, you end up with this set of companies that isn't being asked to actually compete in the market at all. They are only right and so the irony.

older than you are. You know, we have three or four different plane manufacturers and they did have to compete for defense contracts and the Delta Airlines contract, right, yes, And now there's you know there's commercially, there's Boeing an airbus, okay, but on some of these defense things, and I think Boeing has been harmed by lack of competition, right, I think Boeing isn't as good because.

a very big, healthy, robust market. And if we get everybody to agree in that context that we're going.

about that. But if that is sort of your market and you have a commitment within that market to balance trade, at that point, I think you can mostly say, then go ahead, invest where you want to invest if there are things that are better made.

a year trade depsit now you're talking about it, trillion dollars a year more production to level that out.

when populism hijacks both political parties. But you know, I'm I always saw TPP, not as a trade agreement, as a check on China, and I just think we blew it.

in a lot of ways, I would say. And so, whether it is in chips, whether it's in some of these other areas, whether it's just an investment generally, if we can get back on a pathway to reindustrializing, and we can do it a way where the disruptions are manageable, and we can do it a way where we get to start seeing the benefits, I think that's I think that's a very popular project.

that you come down on. And I just, frankly, I love having those conversations, and so I hope to have

you back.

how all this goes. Does it give him an opportunity to do this in a more methodical way that maybe is slower in the implementation of the terrorists themselves, but actually brings business and brings the public along with I'm skeptical. One thing Donald Trump doesn't like to do is admit

that he made a mistake. And he's been sort of playing whack a mole on this tariff business for some time. All Right, let me get you a few questions here,

little ask Chuck, Ask Chuck. All right. This first question comes from Sarah and she writes, it feels like the guardrails of the executive branch have weakened, especially after the recent immunity ruling and various was it always this fragile? Also, what's your take on the rise of Resistance two point zero, whether it has real staying power? And then, on a lighter note, do you think Congress will ever address the

chaos of the NCAA transfer portal? Love all of those questions. Look, you've heard me rail about the executive, the power of the executive branch. Ultimately, the courts are begging Congress to basically flex its muscles. I can't tell you if you go look at any John Roberts opinion, He in particular, he said, seems to reluctantly side with even though he's somebody that seems to always be in favor of giving more power to the executive or at least when in doubt,

siding with the executive. He has been trying to remind Congress that if you know, they have a role here, if they choose to use it, if they choose to engage, And that's one of the questions I have. I'm a believer that everything is cyclical in American politics, and if you look in presidential elections. You know, we regularly pick a president who with the trait that we that you know, we pick a new president with a character trait that

we think the last president was missing. Well, I think one of the other cycles we could go into after the you know, I think there's a lot of exhaustion from the from the from from giving so much power to the executive branch, that we may get a Congress that will finally, at some point, a bipartisan Congress that decides, you know what, let me go reread the Constitution and go look at Article one and strengthen Congress's role on everything.

Especially with the way these tariffs have gone. It could be that tariffs is finally the straw that that sort of breaks the legislative back of Congress and finally gets members of Congress to sober up and take back control of the power that they already have. All they have to do is actually stop handing emergency powers over to the president. And see, you know, whenever they can't decide,

it seemed they kick the can to the presidency. And this is, like I said, you can really this arguably began when all this trade authority was handed to the presidency in the early nineties both the Bush and Clinton. Then nine to eleven happens and more executive authority was handed to them by Congress, and then Democratic Congress gave it to Obama, Republican Congress gave more power to Trump, and we've seen it go over and over. This has been a now quarter century of this. At some point

there will be a movement of congressional leaders in a bipartisan basis that I think shifts this back. As far as your other question about resistance two point zero, Look, I think we're going to see a thousand flowers balloon. I do think you're going to have some that's going to be extra resistancy, and you'll see the protest, and you'll probably see Bernie and AOC sticking to that world. Corey Booker, I think is certainly a stoutdblishing himself as

more of a resistance Democrat. Ditto with Chris Murphy. But then you got your Gretchen wet Merger or Andy Basheer's, and then I got like Pete Bodagich, who I think believes his brand is not a resistance brand, that his brand is some way of a new kind of politics brand. Does the resistance get strong enough that it spooks those who are trying to be more unifiers from pursuing that message, or or is there an appetite even inside the Democratic

Party for the type of nominee that is that is, you know, less antagonistic and a little bit more unifying. We'll see. As for the NCAA, Look, I think it's inevitable Congress is going to get involved. Universities get way too many too much federal funds for there not to be a for there not to be a technical reason for the federal government to insert itself. But a lot of members of Congress, you know, this college sports is parochial to them. You know, Mitch McConnell got very involved

in getting Louisville into a major conference. For the longest time Louisville was not in a major conference. He tried really hard to force the Big twelve to take him, and eventually he seemed to get the ACC to do that so plenty. Mark Warner, when he was governor of Virginia, basically put a you know, hijacked the the Big East breakup where Miami, Boston College, and Syracuse We're going to

go to the ACC. And he basically forced the University of Virginia to veto that move unless Virginia Tech were also brought aboard. So the point is it's good politics to protect your university from something, you know, from getting them sidelined, particularly in sports. So the point is it's inevitable the Congress is going to get involved into the

NCAA mess. The question is when does that happen, not if it happened. Sarah, all right, I'm going to do one more question. I've gone long, but this was one about the media, comes from Jeff Polney says, does the media go too deep or far back into the backgrounds of political candidates and department nominees, thus causing quote normal

people to avoid public service? Do we really need to know the high school nerdiness or that they drank in excess to excess in college if those are no longer issues with a person, Look, the answer, Jeff is I agree with you. You know, I do think one of the one of the things that I feel like has changed is that after you know, every we sort of overcorrect, right.

So for the longest time, men in power who were taking advantage of women were just not getting punished, right, And so then we went and said no, enough of this, right, whether it's Harvey Weinstein, et cetera. Now it seems as if our culture has decided, all right, did we over cancel people? Did we cancel people too quickly? So you're

starting to see a pull back there. We're probably going to see an overcorrection now it's too lenient, We'll probably you know, I don't think the public wanted, you know, sort of the the the culture of Pete hegseeth either and how and how he thinks about women in combat and women and in leadership roles. But I think the fair point that you have is that, look, when you have a democracy, it's of the people, and all humans

are flawed, I know plenty. And I always joke one of the reasons why I'd never want to run for office is that I don't I don't want that kind of scrutiny, and I don't want to do that to my family. It's not fair to my family to get that kind of scrutiny. And that's a bummer, right that That's what you have to think about. You know, when you run for office, you're it's just not you who

you're putting out there. Your kids could become targets. Your parents can become targets if they're still alive, aunts and uncles, colleagues at your work. So I would say that social media has certainly weaponized personal biography in a way that is ugly, and that is likely why we have the people who are willing to run for Congress right now. Right you sort of get what what the culture allows.

And so if you if the quote normies don't want that, and the non normies are like, I don't care, let's you know, I'm gonna I'm gonna be who I am, and you know, whether that's a Marjorie Taylor Green or or somebody else that you have as your avatar for that for that kind of candidate. Yeah, you know, I I do think that. But here's the problem with the quote unquote the media. I think I think responsible journalists

do have lines they won't cross. The problem is, you know, with oppo research these days, if somebody wants to politically try to kill a nominee using using you know, some ugly stuff in their background or with their family, even if a mainstream journalist says I'm not I'm not I'm not going to troll in that garbage. There's always some influencer who's willing to do it. And now that we have such you know that there is there is such

a culture that rewards this. You know, it's gonna it's it's gonna be up to those in power to decide that they're not going to allow allow that kind of politics to win or the voters to do that. And you know it's you know, I do believe these things. Over time, the culture will reject it and will decide, you know, we don't care anymore. There was a time where the public cared if public officials smoked pot. Then Bill Clinton said I, you know, I did it, but

I didn't Inhale, and they were like, okay. There was a time Gary Hart was sort of forced out of politics because of because he had an affair. Bill Clinton got caught having an affair and people rallied around his defense. And now you've got Donald Trump where we've decided that personal character is even less of a of a of a of a criteria to be president. So I do think in some ways culture dictates this more than anything.

So you know, I wonder if now that we've gotten over this sort of over canceling under canceling all of this business. Do we see a surge of normal people suddenly come into the political system running for office that's that is neither sort of outliers in character, and maybe they're a little more comfortable saying, hey, that's none of your business, or leave my family alone. And for the most part, people will do that. So, like I said,

I think this stuff cyclical. I'd like to think we're going to get back to some sort of equilibrium that maybe we realize, look, is the person qualified and do they have the character and temperament to do the job. Ultimately those should be you know, character and temper men are a big deal to me, and in fact, many times I vote as much on character and temperament as I do on substance or ideology, because you know, give me somebody with high character, even if I disagree with them,

and ultimately I know I'm going to be okay. Give me somebody with low character who I may think I agree with all the time, and that makes me nervous because what are they willing to do in order to keep power or enact power? So ultimately, I'm a person who believes character and temperament should be arguably the number one criteria people take people use to decide who should be president, but that is not the majority opinion these days. All right, I'm going to end things there. I hope

you enjoyed this episode. Good news is I'll have more common later this week, including a couple of people who have run for president before on both sides of the eye. With that tease out of the way, i'll see a sin until we upload again.