China wants to make a deal. They just don't know how quite to go about it. You know, it's one of those things they don't know quite. They're proud people. And President Xi's a proud man. I know him very well. And they don't know quite how to go about it, but they'll figure it out [00:00:15] in the process of figuring it out. But they want to make a deal. Yeah. Trump and these tariffs man. Okay. So even with Trump's controversial tariff reversal yesterday, the US and China are still locked in a back and forth battle of tariff escalation. [00:00:32] We now have a tariff of of 145% imposed on Chinese imports, while China has placed an 84% tariff on US goods. How high will they go? The suspense is killing us, and you got to wonder who is going to come out on top of this trade war. [00:00:48] Jake, you want to wager any bets? Yeah. Not us. So look, in a trade war, this disastrous, no one wins. So I want to talk about the scale of the potential disaster that still remains, [00:01:03] and you could tell by how badly the stock market did today, giving back some of the big gains from yesterday. So people are still super worried. We're going to explain why they're worried right now. Okay. So here's what you need to know about the ongoing trade war, at least as it stands right now. [00:01:20] First, whatever happens with the United States and China is going to have a large impact on the rest of the world, as Jake just alluded to. So none of this is happening in any kind of vacuum. This is from the Wall Street Journal. They said, combined, the two countries account for more [00:01:35] than 40% of the world economy. We import a lot more from China than they import from us. So China imports only about $160 billion a year in US goods, compared with the more than $400 billion in goods it exports to US here in the United States. [00:01:54] The US is dependent on China for 73% of its smartphones, 78% of its laptops and 87% of its video game consoles. So American consumers clearly have a lot to lose here, even if, you know, we decided to build all of the manufacturing plants and hire all of the people [00:02:13] to assemble all of these products here, we would still be paying a hell of a lot more for them compared to what we pay now. But China would suffer without us, too. So since Trump's first term, the US share of Chinese exports dropped from 19.2% to 14.7%. [00:02:30] But the loss of 15% of China's export market is still crippling. The effects of the tariffs are already taking hold as well. Chinese sellers on e-commerce platforms are raising prices by up to 70% on to US consumers, [00:02:46] while others are preparing to exit the US market as punitive tariffs make trade unsustainable, according to one of China's biggest e-commerce associations. So it's worth noting that China has plenty of leverage to use against the US economy. [00:03:01] China could target the US farmers, for example, by banning certain imports like soybeans or poultry. Back during his first term, when Trump also targeted China with tariffs, Trump had to subsidize the American farmers to help insulate them from the negative impacts of his trade war. [00:03:18] Also, China has pledged to import fewer Hollywood movies, which will cost American studios a significant chunk of box office money. Something else they could do. China is the fifth largest export market for American services such as finance, consulting and law. [00:03:33] The Chinese government could ban American companies from doing that kind of business in China. And there's even more of where that came from. China could move faster to shed its large U.S. Treasury holdings, which would drive up the price of issuing [00:03:49] debt and disrupt the bond market. It could choose to target the US housing market by selling hundreds of billions in mortgage backed securities, which could push rates up. China holds almost $800 $100 billion in US debt. It is the second largest foreign holder after Japan. [00:04:06] As for next steps, the Chinese government has stated that it still is open to negotiations with the United States, but they are not going to back down from a trade war with us. Both the United States and China are attempting to portray the other as the bad actor in these negotiations, [00:04:23] even though, like we started it right, we're still very much dealing with the fallout of all of last week and yesterday. You know, the market volatility, the reneging on the tariffs, the maybe insider trading. I know you guys are going to talk about that more in the second hour. But American consumers are worried about the price of eggs, which by [00:04:42] the way Trump says have gone down. But they haven't. They've gone up. He's just saying things now. How do you think the average American I'm curious, or maybe even the average Trump voter is understanding everything that's happening right now. Or do you think they're just not understanding it? Because, as you said, a lot of them are watching Fox News. [00:04:59] And at this point, Fox News is just giving them propaganda? Yeah. No, I think it's more complicated than that and including the substance. So first, just to be fair, we didn't start the tariffs on China. China started tariffs on us initially. Right. [00:05:14] Not during the Trump administration but over a long period of time. So now having said that, what Trump did was kind of what China's been doing is kind of like Israel's occupation. And what Trump did was like October 7th. So we could say, okay, Trump started it because he did this massive attack [00:05:31] on China and the rest of the world. But these tariffs have been going on a long time, and China has been doing a lot more than America has. So I give you that analogy. Yeah. Thank you. I give that context because I'm not saying that we shouldn't have done reciprocal tariffs on China. [00:05:47] I think we should have. And I've been saying that for a long time. But these are not reciprocal. China did not have 145% tariff on us. Like if you don't know anything about tariffs that like tariff is just another word for tax. So that's putting 145% tax on goods that are coming into this country. [00:06:08] And it's not on China. The Chinese companies will have troubles because of this. But remember, the companies that are importing it here are the ones paying it and passing it on to the consumers because they have to. They they they don't have 146% profit margin they've got to pass on. [00:06:25] And you know, when they're passing it on when they shouldn't, we tell you right here on the show, we tell you about how it's price gouging. We pointed that out during the supply chain issues when the grocery stores were doing price gouging. This would not be price gouging that you can't absorb 145%. There is no profit margin that large. [00:06:42] So so okay. So number one not remotely reciprocal. These are maniacally high. They make no sense at all. They guarantee a trade war. There's no way around a trade war when you do something this gigantic and nuclear basically economically number two us our prices are going to go up. [00:07:01] So when he was doing it against the whole world, which he withdrew, you know, in about, you know, just a little while earlier. Right. Just last day yesterday, the prices were guaranteed to skyrocket across the board. Now, it's not going to be across the board, but it's still going to hit steel [00:07:17] aluminum cars which are separate tariffs on top of the Chinese tariffs. Some pharmaceuticals. Oh great. Drug prices weren't high enough. Now there's some reasons for tariffs on pharmaceuticals. But again the severity of this is out of control. Go back to China. [00:07:33] There's tons of goods coming in, as he has explained from China. All the prices on those will skyrocket. And so people are going to start to feel the pain. And when they do well, that's going to lead to my next point. Look, I told you guys that these tariffs were so mental that there's no way [00:07:51] that they were going to stay in place. I said it on The Young Turks, I said it on every show. And I said on those shows here, I'm saying it on the record. There's no chance that these tariffs will remain. And of course, the right wingers I was opposed to were like, oh, including Kari Lake. Oh yeah. No way. [00:08:06] They're going to rebuild the manufacturing base. They're going to last for the entirety of the Trump term, blah blah blah blah blah blah, nonsense, nonsense, nonsense. We were right about that because there are certain laws of physics and economics and they can't. And so there's no way they could last. All right. [00:08:21] Now, will these China tariffs lasted 145%. No chance. 0% chance. So this one last time on the overall tariffs when he backpedaled yesterday he got absolutely no concessions nothing but a giant L zero concessions [00:08:38] nothing in return. Just oops I screwed it up okay. On China he has to get some concessions. Otherwise it's too humiliating. So China is going to have to do some face saving measures. And when they do, if they just tweak their original tariffs by a little bit, [00:08:56] everyone on the right will go. To the deal. We do it. Right. So by the way, there is a way, Like I said, you could do a reciprocal on China and you could bring down their tariffs in a more organized, strategic way. But that's not this. So but overall it won't last. [00:09:12] But but as long as it lasts, it'll do significant damage not just to the markets but to the overall economy. As those companies start to fire people because they don't have enough resources. And as prices go up. And by the way, we already saw it today as the markets went down 1100 points [00:09:29] when people realized, oh, all the tariffs aren't gone. He's still doing enormous, unprecedented, unheard of tariffs on our largest trading partner. Yeah. And it's very difficult for average people to exist [00:09:45] with this kind of market uncertainty. Right. Because I think a lot of times whenever things are being reported about these stories, you know, you hear about the stock market, you hear about bond markets and you hear about other countries buying debt, things like that. And the average person doesn't really understand how that's going to impact them [00:10:01] or how it could impact them. There is so much going on with this administration right now. Apart from all of this tariff drama. Right. Like you have. We're going to talk about the budget in a minute. We're going to talk about Medicare and Medicaid in a minute. There's so many things that are threatening so many different aspects [00:10:18] of American life in this country. Things that we have come to take for granted. And to your point, you brought up something that I think is very important here with a lot of different things going on with this administration. And it's a fact that, yes, there are problems that need to be addressed [00:10:33] and things that need to be fixed, right? There is government inefficiency that needs to be addressed. And it was being addressed. Maybe it could have been addressed better. But that's the thing is, if things can be addressed better than address them in a better way, right? Be more strategic about it. Don't just burn everything down. [00:10:49] Because what I was talking about earlier in the show, you can't you have to be more responsible with your with the way that you choose to conduct business and what the plans you choose to execute. Whenever millions of lives are in danger, millions of lives are going to be affected by it. [00:11:04] And this administration, they don't really have a plan for how to get people out of the of the problems that they create for them. So we're going to have to see what happens because they really don't have a plan. If they do have one, they're not telling us about it. Maybe that's the art of the deal. And I just don't get it. [00:11:20] Maybe we're not supposed to get it. Maybe that's part of Trump's Art of the deal, is that he, you know, just makes decisions whenever he feels like making them. So, you know, maybe that's his secret, is he he just goes off of his own intuition. It's very intuitive, I heard. Yeah. Any any final thoughts before we move on to this next story? [00:11:36] Yeah. Last couple of thoughts here. Yeah. So first of all he just he has no idea what he's doing. Period period period period. He never has never will. So but there's an important point in here. Guys, China can actually do a nuclear option if they go in that direction. They also hurt themselves. [00:11:53] But if they start selling off all their Treasury bonds, they're the largest holder of Treasury bonds that in America, that would Do enormous damage to the dollar. That would do enormous damage to interest rates, that would do enormous damage [00:12:09] to our economy, like untold damage. That's why I'm calling it the nuclear option. And in fact, when Japan began to do that last night or two nights ago, that's what caused the panic that got Trump to turn around on the tariffs overall. So China's not going in that direction yet, because if they do that, [00:12:25] it would also devalue, the value of the Treasury bonds they hold. And they hold nearly $1 trillion worth. It's I think it's around 800 billion or so. So that's a most important thing, is we cannot have that nuclear option happen. [00:12:43] I'm not even sure that Trump is aware of it because I'm not sure Trump is aware of anything. And so last time, at least, there were some professionals in the room that he would listen to. These days he's just flying off the handle and going, damn my intuition. I know what's going on. He doesn't know anything. If you ask him about the bond market, he couldn't begin to answer it. [00:13:00] So is he aware that China has that nuclear option. I don't even know. I don't even know. So look, to last thing is to your point. Yes, I have seen some. Not a lot, but some, MAGA folks going. Yeah, I don't get it. [00:13:15] I don't understand what he's doing, but I hope he knows what he's doing. And I'm like, look, at least that's an honest answer. And then as we've, of course, reported here, some of the shows that supported Trump, not MAGA shows, not right super right wing shows, but like some bro shows and Dave Portnoy, etc. [00:13:31] That definitely backed Trump before the election are now saying, I don't know if we made a mistake. This guy is super volatile. Doesn't seem to know what he's doing. Kind of told you not kind of really told you, but it's okay. That is a little reassuring. I do appreciate that. [00:13:48] Yeah. No. And look, I'll take anybody who comes to the right conclusion. So awesome. Love it. To Portnoy and others. Way to keep an open mind. Every time you ring the bell below, an angel gets its wings. Totally not true, but it does keep you updated on our live shows.