Yesterday we achieved a total reset with China after productive talks in Geneva. Both sides now agree to reduce the tariffs imposed after April 2nd to 10% for 90 days, as negotiations continue in the larger structural issues. [00:00:19] The United States and China have reached a temporary deal that mutually lowers tariffs, with Trump describing this deal as a total reset. Now, I should note that if it is considered a reset, it's only a temporary 90 day reset. [00:00:35] But before I get to the details on what the trade negotiation entails, what do you think, Jake? Reset. No. So it's a positive step because the 145% was mental. But, it's not that great. [00:00:52] So I think it's going to have a whole host of issues, but maybe I'm wrong because the stock market disagrees with me. They're super excited. They think everything's hunky dory. But we're going to tell you about a couple of things here that make you realize, this is still going to cause huge problems, and it is not what it appears to be. [00:01:09] So things aren't going back to what they were prior to the announcement that Trump made on Liberation Day. It's important to remember that because the United States is still maintaining its 10% universal tariff on all foreign imports into the United States. [00:01:25] And yes, that also impacts China, of course. So the Trump administration has repeatedly stated that this number is the absolute lowest any country will be able to negotiate in regard to their products being imported to the U.S. [00:01:41] Now, the U.S. Also insists insists that China is still not doing enough to stop the flow of fentanyl into the United States and is keeping. And as a result, Trump has decided to keep the additional 20% tariff on Chinese goods as a consequence of that. [00:01:58] So, as you can see, you got the 10% tariff. You know, the baseline. In addition to that, you have the additional 20% tariff in regard to fentanyl. However, the Trump administration has indicated that China is starting to negotiate in good faith. [00:02:14] So that signals that things are moving in a more positive direction. So here's Treasury Secretary Scott Bessent with more. We saw here in Geneva that the Chinese are now serious about assisting the U.S. In stopping the flow of precursor drugs because the Chinese brought their trade [00:02:35] delegation, the led by the vice premier. But they also brought a deputy minister for security who was there? Fentanyl expert. We brought someone from our national security staff, and they had a very long [00:02:55] and in-depth sidebar about how our two countries could work together. So obviously, there you have addressing the issue with the flow of fentanyl into the United States. One other thing that I'll add before I go to you, Jake, is the fact that the Trump administration's tariffs on specific sectors or specific products [00:03:15] like cars and steel will remain in place. And they do, in fact apply to Chinese imports. So there are still going to be steep tariffs. But this thing that Trump does is really fascinating, where he'll kind of come out out of the gate with like a crazy number. [00:03:32] Everyone panics about that number. And then through his negotiations the tariffs are lowered. But they're still high right? They just seem lower relative to what he had initially proposed. Yeah. So there's two problems here. [00:03:48] And first one is did we really get anything out of this, or was this just a surrender? That was dressed up like it was a peace treaty and a negotiation and a compromise. Because I read a bunch of things. I haven't seen anyone explain to us what China gave to us. [00:04:08] They still have a 10% tariff on us across the board. So what? They took back the 115% on top because we had moved it to 125, so they moved it to 125. Correct. Okay. But that didn't solve anything from before Trump made the threats [00:04:25] and put on the tariffs. So that leads to the second problem, which is Trump loves to create a mess. And then when he halfway resolves, it takes credit for resolving the mess. But brother, this mess didn't exist before you. The mess that existed before you was on China especially. [00:04:41] But other countries as well. But especially China. Putting tariffs on us and having unfair trade practices. - But none of that got resolved. - So? So where's the win? I'm trying to figure out where the win is. And by the way, the prices are about to keep increasing. [00:04:59] You're going to wonder why. I'll get back to that in a second. Well, to that point, the Trump administration is currently alleging that China will ease its non-tariff barriers. But they haven't they haven't provided details on a what that means [00:05:16] and what that would look like. Who knows, there might be more details coming out in regard to that, you know, in future reporting. But for for now, we don't really know what that means. So you're right, according to the current reporting, it doesn't really seem like the U.S. Has really gotten much out of China here, other than the fact that China has lowered [00:05:33] its tariffs in response to Trump's threats of increasing tariffs on Chinese goods. To be clear, not the original tariffs they had, the extra tariffs they put in because of the tariffs Trump put in. Yeah. So we have gained nothing from this so far. This gambit of putting 145% tariff on China. [00:05:50] Now, in retaliation to Trump's announcement on Liberation Day, China decided to stop exporting rare earth minerals to the United States. At the moment, China has paused those exports of rare earth minerals to the U.S., but that could resume thanks to this deal. [00:06:08] But again, going back to the point that Jake just made. The stopping of this trade was in response to Trump's announcement on Liberation Day. So that was China essentially retaliating against the Trump administration. So both the U.S. [00:06:23] And China were set to face economic hardship due to these tariffs, make no mistake about that. In fact, just last Friday, Reuters had reported that Chinese officials have grown increasingly alarmed about tariffs impact on the economy and the risk of isolation as China's trading partners have started [00:06:40] negotiating deals with Washington, according to three officials familiar with Beijing's thinking. Among the main drivers of Beijing's climbdown were internal signals that Chinese companies were struggling to avoid bankruptcies and to replace the U.S. Market. [00:06:56] Three people familiar with the Chinese government's thinking said some areas feeling immediate impact were furniture and toy makers as well as textiles, said one of the officials. And according to Reuters or sources who spoke to Reuters. [00:07:11] The Chinese government also feared that its trading partners would essentially start negotiating new agreements with the U.S. While leaving China behind. And so, in regard to the feel of the more recent negotiations and how the Trump administration believes that China is negotiating in good faith, [00:07:30] it's likely because these tariffs weren't just going to crush the American economy. They were also going to crush China's economy as well. So what happens after the 90 days are up? Because remember, this is temporary. This is only going to be in place for 90 days. Trump has stated that if negotiations with China fall through, [00:07:47] then his administration would just raise tariffs back to the insanely high figure that he has lowered, you know, from in recent negotiations. So that's where the negotiations currently stand. Yeah. So let me tell you about the two things that are going to happen next [00:08:03] and not going to happen. So but first box is a member on YouTube and wrote in China blinked brother I don't. Yes and no. Let's put it this way. I think Anna is right that China blinked in the sense of they had these companies [00:08:19] that were going to go under, and they went and made a deal with America. They didn't give up anything. So it's not like they really blinked in that sense. Other than the new stuff, as we've explained a couple times, but, but I think we blinked a lot more. We got nothing like they still have the old tariffs that they had. [00:08:37] And the reason Trump blinked is because, we were about to have empty shelves. We started to have some empty shelves. The shipping stopped. We were going to have supply chain issues, because when you add 145% on top of anything, it's totally unsellable. [00:08:53] So they don't bother shipping it, right? Right. There is nobody has 150% profit margin. And they think, oh no big deal on your 145%. You've added on top, I'll make the extra. That's not a thing that exists. So he avoided that colossal mess of his own making. [00:09:08] That was in the middle of happening right now. The part where I would say China blinked only a little bit is because they had us so badly cornered that if China went to the European Union and some of the other allies we have and circled the wagons against us, [00:09:25] then we would have been in monumental trouble. And they could definitely outlast us. But they chose not to do that. And my guess is, is because of those very influential, very wealthy businessmen in China who are like, yeah, yeah, yeah, the Chinese government can withstand this. [00:09:41] The Chinese people can withstand this, but our bank accounts can't. So they have corruption over there as well. That affects us. But now finally, the most important part. So we still have a 30% tariff on them, right? Because the 20% extra for fentanyl, that's nonsensical. [00:09:56] China will say, oh yeah, we're going to stop that and we'll choose to believe them and take that 20% off. I guarantee it. There's no question about it. He's definitely going to take that 20% off. It's only a matter of time. Right. So but in the meanwhile it's still 30%. 30% is still super high. [00:10:16] It's not like, oh, it's lower than 145%. So I bet prices going up by at least 30% is not going to be a big deal. No, it's going to be a big deal. And so when the prices continue to rise, even after this big spectacle about. [00:10:31] How we have a deal and China did what we wanted. Right? And the stock market totally bought into it went up a lot. Today. It's past Liberation Day, where it was the day before Liberation Day when the market collapsed because of the proposed tariffs. It's now high, which I think is nuts. [00:10:48] But hey, maybe they know better than I do and maybe people will think, oh, 30% extra on prices skyrocketing. No big deal. But I don't think so. And I think Trump is a lot more backing down to do, because these tariffs are never going to work in the structured this way. Yeah. Just to get a little more specific. [00:11:04] Today the Dow Jones jumped over 1100 points or almost 3%. The S&P 500 went up 3.26% and the Nasdaq went up Three 5%. So today was the best day since April 9th for all three indexes. [00:11:22] But you know, there is still a lot of concern about prices going up for items that are being imported from China. And also, I personally am fearful that companies that are not or products that aren't going to be impacted by Trump's tariffs [00:11:39] are going to also be inflated in price, because that's always what happens. I mean, you had supply chain disruptions during Covid, so some products as a result of those disruptions ended up being in short supply. Prices went up for those products. [00:11:55] But then other companies selling other items that weren't impacted by supply chain issues took advantage of that and increased their prices also. And I'm just going to leave you with a quote from Gene Seroka. He is the executive director for the Port of Los Angeles. [00:12:10] And he says even at 30%, a 30% tariff with a 90 day reprieve, it's not going to dramatically change what we're seeing right now. So, Soroka said companies that supply critical goods like health care products and that sell merchandise time to the holiday season, such as toys, [00:12:28] might use this moment to restock, but your refrigerator outdoor patio set, regular stuff is not just going to come and flood the marketplace because we've gone from 145 to 30%, he said. And in fact, Jay Foreman, who serves as the CEO of a toy company [00:12:46] called Basic Fund, expects prices to go up for toys to the tune of 10 to 15%. Yeah. So my last thoughts here are there's another problem. You layer on top of what Anna just said, which is that once they raise the prices, [00:13:03] as we saw with the supply chain issues, they never bring them back down. So that makes the inflation permanent. Once they get you to buy something at a certain price, they're like, there's no company that's going to bring it back down. So that means all the companies in those industries toys, refrigerators, etc. [00:13:21] They're all going to have to raise their prices probably by about 30%. Right. And then after they do, even if the tariffs go away, since they all raise them together, there's no competitive need to bring them back down. So they'll just keep them higher. Right. Exactly. [00:13:37] And then that inflation will last for a long, long time until they screw us. And last thing is, I know I asked for principals and for people not to be hypocritical on both sides, and I know that there's no chance it's going to happen. But in this case. So which one is it, guys? The ones that supported Trump's maniacal tariffs. [00:13:54] So was it that they're going to last forever and they're going to rebuild manufacturing or it's the art of the deal. Okay, I'm okay with you picking one. I'm not sure that I you even really believe the one you're picking, but you got to pick one. You can't say they were going to last forever, and they were going to rebuild manufacturing when they just didn't last forever. [00:14:11] He just took them away. And he's going to keep on taking them away. So. Well, my look, my read of this is that it's actually a mix of both. I think that there are targeted tariffs on specific industries that Trump is serious about. So for instance, he's keeping the tariffs on steel steel imports specifically. [00:14:29] And so I think that's the right way to do tariffs doing like these weird wide ranging tariffs on all imports when it doesn't necessarily make sense for American consumers is ridiculous. So I think when it comes to, you know those broad wide ranging tariffs [00:14:48] on other countries, it's a way to scare those countries and bring them, you know, to the negotiating table. So but Anna, you and I have been saying that from day one that you could do targeted specific industry specific tariffs and that that's actually a progressive position. And so but that's not what Trump's supporters were saying. [00:15:07] Right. They were saying the global nuclear tariffs were a genius idea, and they were going to work and they were going to magically rebuild manufacturing. It takes ten years to rebuild an industry. So it takes minimum 3 or 4 years to build a factory, right. [00:15:22] Before you even get there. So I'm just pointing out for you guys if he. But if at the end he gets to a position we like, which is, hey, he's keeping it on steel and a couple other industries, he negotiated some deals. I'll take a win. Right. And but but please don't buy into everything a politician says. [00:15:41] So when he said he was going to magically rebuild manufacturing. Come on, guys, obviously that wasn't the case when I said. And it's not like people didn't say that they did. I had a debate on Piers Morgan with Kari Lake and Sargon, and they both said, no way those tariffs are going to be in place forever, [00:15:58] and that we were going to come back in four months, and that they were going to still brag about how they were in place. I think it was four days later. They were most of them were gone. The so just listen to what people are saying and judge you. Use your own judgment for what you want out of this, right? [00:16:14] No matter where the partizans lie. And keep an open mind and independent judgment. 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.