They say tariffs are the worst economic policies ever, and for lots of reasons. But what if that's the biggest lie in modern economics. They told you tariffs are just a tax on you. They say they start trade wars. They say that making stuff in America means that you're going to pay ten times more.
But what if none of that's true.
Because if they're wrong, we've built our economy on a myth. We've handled our power to countries that don't play fair. Now, I've spent years studying this and talking about this and speaking around the world about history cycles and what actually works. And in this video, I'm going myth by myth to show you what they don't want you to see. So let's go, all right, We're going to jump right through this, go through the biggest myths that you've heard.
Now, why are they myths and why are they not real?
Well, the main reason why is these myths are being pushed by academics. They're being pushed by theories that sound really good on paper, but they're not in the real world. Now, somebody who's built multiple businesses and had multiple exits, I've learned the real world and when I break these down to you.
It's going to make perfect sense.
And I just want to let you know that again, in theory, it sounds good, but the real world is much more complex. Anyway, Let's jump right in the consumer price myth. So you've been told mainstream media is telling you that if tariffs, if the US puts tariffs in place, then you, the consumer will pay more, and they say it's basically a hidden tax. It's like increasing taxes. So Trump says he's going to lower taxes, but tariffs, now that's a hidden tax.
Okay.
Number one. Again, the consumer is the one that's gonna pay this. They're going to pay more. And they tell us that because you're going to have to pay more for prices for goods and services, then that's also going to cause inflation.
Prices will be going up.
I listened to Scott Pssent, the Treasury Secretary, on an interview I believe with Tucker Carlson, and he said that if the consumer is going to pay the increase, then why are other nations so worried about it? Interesting perspective again from somebody who knows how to make money. Let's break this down how this really works in the real world. So, first of all, when we talk about tariffs, there's three parties involved. First, you have the exporter. Okay, so this
is the exporter, maybe the producer, if you will. So goods are being made in another country in China, and they're exporting them. They're exporting them over to America. Let's say they're going to increase tariffs. But really the importer or retailer would be Walmart, right, So China exports to Walmart. And then the third party in this is this is you, the consumer. So there's three people in this chain. So the United States, one of the new Trump policies, we're
going to add tariffs. We're going to add ten percent on China, now whatever one hundred and twenty five percent. We're going to increase tariffs. First of all, where does that get paid? Who pays it? Well, the person that pays it is the importer. So Walmart or whoever imports this is going to have to pay that new percentage of imports to the US, not the exporter, not China, not you the consumer.
They have to pay it.
However, this is where free markets and capitalism and business one oh one gets a little bit into the details.
So Walmart has to pay the United States.
But they can't afford to pay an extra twenty percent or forty percent.
They can't do that.
So who's gonna pay it? Well, it's going to be split between these three parties. So what mainstream media wants to fearmonger you and say that you are going to pay all of that increase, that's not the case. As a matter of fact, you're probably not gonna pay any of it. So this difference, the ten twenty whatever the tariffs are gonna be, are gonna be split here. So what Walmart's gonna do is they're going to push this back back to the exporting country. This is why the
countries don't want it. So Walmart says like, hey, I don't have that in my margin. I don't have that amount of money. So you, the producer exporter, are going to have to lower your prices. You're gonna have to lower your prices down to offset that, and then the producer is going to push that down the supply chain. So all the way down from the raw materials to the commodities to the labor, everybody gets squeezed to change
this amount here. Now they're going to eat some of it, push it all the way back backwards.
They're gonna eat some of.
It, but the consumer is most likely not gonna eat any of it. Why is that, Well, if Walmart could just raise its prices by ten or twenty or fifty percent, they would, but they can't. Obviously, you I, the consumer, we can't afford to pay that increase. They would have already done that. The consumer, especially today, it's already stressed for really thin and so the price here, if any increase that all will be very minimal. Only what could
be managed and afforded. All of the rest is going to be pushed back down, which is why China doesn't want it. So it's not an increase on you the consumer. It's not going to cause inflation like they say it is. What it is is going to affect the manufacturing nations, which is why they don't want it. All Right, The next one we're going to talk about is the retaliate myth. Now real quickly, I do want to just say, you know,
one thing that's not being tariff technology Right. Technology moves around the world, and we are witnessing the largest explosion of technology in the world the world's ever seen. Is a fifty year cycles happening for the six time in three hundred years, and it gives us a blueprint to invest into the convergence of AI, robotics, autonomous vehicles, Bitcoin, and so much more. I'm going to do a whole workshop on this and show you this exact blueprint and what I'm buying so we can all make money.
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But let's figure out why retaliation is really a myth. And so this is like, why would you antagonize China? Don't you know that they could start war with us and we can't go to war, or they may invade Taiwan or all these different things, So why would we retaliate? And so that's a big myth that China is going to retaliate and that we're going to take this from this trade war and potentially turn it into a real war, a cold.
War to a hot war, if you will.
However, in the real world where real economic decisions matter, well, what you'll find out is that strategic thinking are much more powerful and more important than emotional You see in theory, I guess that makes sense. But in the real world, if I act emotionally, I put people at risk, I put my country at risk, I put my legacy at risk. And so what I find is that cooler heads prevail and we think through strategy over emotion. Let me give
you an example of what I'm talking about. So let's say that here we have the two nations battling out right now, China and America. Right here now, America wants to impose terrafts on China. Well, China and America both have strategic things they can do. Sure, they could just retaliate and start war. Why would they do that? So they have levers, like, well, they could impose tariffs back China's done that.
They could manipulate.
Their currency, lower their currency to offset those tariffs, which.
Is what the US wants.
They could use things like rare earth elements, things the US really needs, but China produces as leverage to offset that, they can use diplomacy, they could try and come and talk about this. The US also has levers, so that's the tariffs that have already been put on. The US can do sanctions because it controls the global monetary system.
They can do sanctions.
They can restrict technologies what the US has been doing, restrict how much advanced chips that China can have, things like that, and then they can restrict exports back the other way. So there's lots of levers that can be done without going to war. And if you think about it, here's what would happen. So when you have to make a decision, you know that in the real world there's no black and white.
We have trade offs.
So what we typically want to do is you'd see like a decision tree.
So the US imposes.
Tariffs on China, what's China going to do? Well, they have two options. Number one, they could retaliate. Option two they could adapt. And the way these options, should we retaliate and start war or should we just adapt and pivot to these So would retaliate be well, if we retaliate, we're going to hurt ourselves even worse. I mean people could die, We're going to spend a lot of money, but we also hurt our own exports. That means not only are we hurting our people in our military, but
we're crushing our economy. At the same time, we risk consumer prices going up. So there's a lot of risk if we retaliate. Do we really want to do that? Why don't we think about what about adapting? Well, we could just subsidize our exports, which is what China has been doing for a long time. We could find alternative buyers. And as a matter of fact, this is basically what happens in the first round of Trump tariffs back in
twenty eighteen. China said, fine, we're going to retaliate, and so what we're going to do is we're not going to buy American soybeans anymore.
Big deal. Now, it was a big deal in the beginning.
The US suffered, right, I mean, we had farmers that need to sell the soybeans. But the US could have retaliated back, but instead that you went down the adapt route and they found European.
Buyers to buy the soybeans.
So today the soybeans from America are still being sold, just to a different buyer. China instead of buying from the US, went I think to Brazil to buy them, and so things adapt. This is a moving market. The world changes and adapts and people sure certainly could go to war over it, but cooler heads typically would prevail and strategically, we just adapt instead of retaliated and going to war. If China wants to go get Taiwan over this,
it's not about a ten or twenty percent tariff. They want Taiwan, right, it's a bigger deal, all right, Okay, myth number three is the comparative myth.
All right.
Now, this one again is really baked in school room theory. And so in economics one o one they're telling you that each country should specialize. And this is sort of like capitalism. So instead of to be growing my own food and building my house and making my own clothes, let me just build the house, you grow the food, and you make the clothes specially, and that's great, and that's what free markets are built around. However, in economics one to one they say that globalism should expand into
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So this country's really good at growing wheat, this country's really good at growing mangoes, this country's really good at pulling you know, minerals out of the ground.
And this country's really good at making weapons.
Right, and so in that free trade would always win. But again that's baked in theory and ultimately false assumptions.
Let me break that down for you.
Okay, So in a classic free trade frame, what you would have is one country there's really good at raising sheep and they make a lot of wool. Then we have country too, they're really good at growing grapes, and making wine, so country too, you just make the wine, and country one you just make the wool, and we'll just trade wool for wine. Well that's a classic frame, and that is again baked in theory. But in the real world it's a little bit different. So let me
tell you. So the real world we saw like in nineteen ninety Taiwan had some computers. Now and now today Taiwan has microchips some of the best in the world, right, and so they've changed. So what are we talking about. We're talking about the difference of a comparative advantage somebody makes wool, somebody makes wine, versus a strategic advantage.
So what are you talking about.
A comparative advantage would be just do what you're good at, make the wool, make the wine. A strategic advantage is build what you need to be good at, not what you're good at, what you need to be good at. So I might be really good at wool, but we might also need weapons. I might really be good at wine, but we probably need some manufacturing or industrial base as well.
In a comparative advantage, it thinks about things statically, like economies just stay the same forever, like just make the wool for all of eternity will always be necessary versus. A strategic advantage understands that we're in a dynamic economy and things change and technology change and people change. But also what happens is economies changed. So when you start at the bottom, So some of the Asian countries that are just now getting manufacturing at the bottom, some people
might say, oh, that slave labor. Well yeah, I mean it's like bottom level labor, and economies have to grow their way out of it. One hundred years ago, the US basically had that same slave labor as.
Well, making the clothes, making the textiles.
Now it's over in Asia, but each country grows out of it, sort of like what happened with Taiwan. They grew out of it. So it's not a static economist. The dynamic coming number two or three. Comparative advantages based on past efficiencies.
I used to be.
Really good at wool or wine or growing wheat. But a strategic advantage is based on future potential. I see the world is changing this way, we should be really good at that. I see that potentially our security is going to be threatened. We should think about building up our military or in the case of Taiwan, we see technology growing, maybe we should get really good at microchips. As a matter of fact, that's the story of Taiwan. Taiwan wasn't good at making microchips, but they decided that
they should get good at making microchips. They decided to build plants to do that when they had no experience doing that, and now they're.
Some of the best in the very world.
So instead of wool and wine, think about semiconductors and ai moving to what is going to be It's dynamic. The world changes, the shifts. Great nations don't just trade their strengths, David, they develop new ones all right. Now on the next myth, this is the reshoring myth. So what you hear is that you know, part of this whole tariff strategy that's sort of the leverage layer one.
Really it's about bringing manufacturing back to the US, reindustrializing, So bringing manufacturing back to the United States.
And so the myth is that we'll.
Shoot, everything's going to get more expensive then, right, because i mean, shoot, you make stuff in Asia or China where labor is really cheap, and then you make it in the United States where labor is really expensive. Of course, it has to bring prices back up, right, of course it has to. And again that's based in theory. It's not based in the real world. And any business owner understands this. This is a one D argument in a four D multi dimension world.
Let me explain what.
I'm talking about here, okay, So let's just look at like automobiles, for example, the auto worker labor is what they're talking about.
Hey, in China, it's five to ten dollars.
Is what an auto worker makes in China, five to ten dollars an hour. In America, that same workers sixteen to twenty nine dollars. So obviously if I have to pay twenty nine dollars instead of five to ten dollars, it's going to increase my costs. Okay. Well, again, a business owner understands that labor is just one piece of the entire total product costs.
So we have design, so it's to design how much we pay them.
We have logistics, how do we get all the raw materials and all the pieces and all of that moving around, the shipping costs and now the cars have to be shipped over to the United States.
We have the energy inputs.
So one of the Trump's things is to get in energy down really low, whereas like in Germany the automobiles, energy has gotten so high that a lot of German autos are now being built in other European countries where energy is lower. There's quality and waste. We know that to German quality is really good. Chinese quality, typathy isn't. So there's a lot of waste that's accounted for that. Then we have labor, and then we have time. So how long does it take to get the stuff over there?
And how long does it take to make it? And how long does it take to get over here. Let me give you an example. Right now, Mexico is becoming one of the powerhouses in the world for manufacturing. A lot of manufacturing that was happening in Asia is being coming to Mexico.
Now.
Labor in Mexico is more expensive than labor in Asia. However, the Mexican workers are a lot more efficient, meaning they can get a lot more done with a lot less time. So if a worker, let's just say hypothetically, was making two dollars an hour and it took them ten hours to produce a good, that would be twenty dollars, right but let's say another worker is being paid ten dollars an hour, but it takes them only two hours to get it done, that's still only twenty dollars. So it's
not the price of the labor, it's the efficiency. But not just the efficiency of the labor. All of these other things, the quality of the waste, the inputs of the energy, the shipping cost, the logistics in all of that is a very complex thing. This is why in theory it sounds like it makes sense. So we have labor in China, it's cheap.
In the US it's higher.
Certainly, shipping and from China to the US is expensive in the US.
It is local risk.
Well, there's geopolitical risk in China. We saw that with Apple where Apples also having to move their plants over to India because there's geopolitical risk. In the US, it's stable automation in China, it's lower in the US. There's advance quality inconsistent in China, US higher.
Now we could argue each one.
Of these and what product we're talking about, but you get the idea. We're trying to break the myth here. Again, in theory, it sounds logical. Are reasonable in the real world. If you're a business owner, you know that it doesn't make sense. And so it's certainly possible that the US could reinshore a lot of things, use automation, become more efficient and save in a lot of areas, and potentially match the cost, potentially even bring the cost down. Okay,
the next myth is that tariffs equal isolation. Terriffs are anti trade. Terrafts are anti globalism. That means that you don't want to participate in the world and you want to.
Be an island.
Well maybe maybe not again, maybe that's oversimplified. Tools, trade or terrifts protectionism are greater than building up walls.
So it's not about walls.
It's about tools and strategically using tools. So countries want to use these tools because it's how you adapt, it's how you can grow, and so these tools, TIFFs, walls are a tool that.
Can be used to buy time. This is what America is.
This is exactly how America grew When America broke off from Europe.
Europe was much more advanced. Europe could make everything faster and cheaper.
Right, So the US had to put tariffs in place to protect the economy. So it could grow to then outpacing the European economy right as it happened, but it needed to buy itself timeless. Those protections did that. Now also you want to use them strategically. Again, theory is just dumb.
And it's vague. Specifically, we want to use strategic uses.
So for example, it doesn't make any sense to be the best fruit producer when fruit grows in a different part of the world, Like let them grow the fruit, We'll bring the fruit over here.
We don't really grow good fruit here, right, we have these.
Minerals on the ground they don't have so let's get these minerals out there. So definitely it's strategic as well. Remember these are very dynamic, very complex issues.
Let me break this down.
So what we want to do is we want to do targeted terifs I don't just say everything that's the starting point, then break it down targeted tariff. So thinking about the strategic cycle. So what we really want to do is we want to reshore key industries. So what am I talking about, Well, the COVID supply chain, the COVID pandemic that exposed the supply chains for what they were really highlighted for the US and for the rest
of the world. A lot of dangerous situations where supply chains were weak, and maybe there's very key things that we need we can't get. The Russia Ukraine war has completely exposed how should we say, incapable the US and European the NATO forces are at industrial policies such as how can we even create enough bullets or enough weapons to go over to war? And so we need to
reshore key industries. So some things like national defense, for example, might be worth paying a little bit more for because it's really important their key industries. Then we need to train the workforce, and we need to invest in innovation. For all this to happen, It doesn't happen at the blank of an eye. It takes time. So again, what a tariff's dow is they sort of protect that. They put up a wall, they give you a moat, and they buy time to allow this to grow and become
more competitive. Think about it like this. Tariffs are like a shield. They sort of block out the outside. Like I said, that's what America did as it was first founded. What that does is it gives you time to build this out, build the factories, build the automation build those things. Then it allows us to become competitive in that new way. Now, ultimately this brings the whole world forward. Remember it's not
about labor, it's about efficiency. So there was a famous story of a Milton Friedman and went over to China and he saw all these people in China digging I think it was a dam, and they were all using shovels, and he said, you know, like, why are they doing this by hand with shovels, Like why wouldn't you bring an attractor? And they told them, well, it's because if we bring attractor, what are all these people going to do for work?
We need to keep them working.
And he said, well, if that's the case, then why not just give them all spoons, then we can have more peop working. Shoot, why not just have them dig with toothpicks. We could have even more people working. So
it's not about people working, it's about efficiencies. And so what happens is if through these tariffs and building and having to learn how to be competitive, we can come up with more efficient ways, new technologies, robotics, automations, things like that then allows humans to go work on higher value things. So tariffs aren't isolationists. They're like an incubator. They're like a shield that allows these new innovations to be built up. All right, so we've busted a whole
bunch of myths on tariff. The world is much more complex. The real world is much more complex. It's dynamic, and we've learned that they're not a hidden tax on the consumer.
They don't automatically start trade wars.
People typically think rationally or strategically, not just emotionally. How they're tools, and they're really a way for nations to recalibrate, to reinvent, to build what the world needs, not just what they're good at, like sharing sheep. We learned the US didn't win through free trade. The US was able to build this industrial base because it protected it enough to allow it to grow, and that we can keep outsourcing, or we can start building back some of the key things.
We don't need to grow the fruit, but there are key things that need to happen. So hopefully this breaks it for you. Now if you want to find out what we're doing about this to make money. You know this is on manufacture goods. But you know one thing that's not exposed to US technology and that's really where the big opportunity is to make money. And I called this fifty year cycle we've been talking about. It's the quantum wave cycle, AI, robotics, Bitcoin, all converging together.
I'm going to do a.
Whole presentation workshop on this next week.
It's all live, it's for free. There's a link down below. Come hang out.
I'm going to show you this fifty year cycle that we're using as a blueprint to invest and build more wealth than any time in history. Coming out as for free. There's a link down below. But let me know what your single biggest myth is. And if you have other myths, drop the in the comments and I'll bring them up.
And we'll bust those myths as well. All right, that's what I got to your success. I'm out.