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Tonight, just minutes after the markets
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close, President Trump reigniting the
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trade war with China, imposing an
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additional 100% tariff on Chinese
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imports on top of the 30% that was
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They uh hit the world with something
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that really is not anything that people
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are going to do. And and it's uh it was
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shocking. Stocks tanking after the
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president warned this morning a massive
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increase in tariffs on China was coming.
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Even saying the move could be
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potentially painful for Americans. By
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the end of the day, the Dow was down
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nearly 900 points and the S&P marked its
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biggest drop since April. The new
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tariffs start November 1st. The
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president blasting China for new
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restrictions that would limit access to
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rare earth minerals, a market China
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dominates. Those minerals critical for
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making everything from cars to
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smartphones. The president calling it a
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sinister and hostile move, saying there
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is no way that China should be able to
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hold the world captive. President Trump
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now considering cancelling an upcoming
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meeting with Chinese President Xi.
1:01
I'm not sure how you're reading this
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because President Trump, as we've
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established already, is known for
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bluster, certainly before a meeting. The
1:08
markets though think they just got a big
1:10
reality check. Now suddenly we do care
1:12
about trade with China. Do you see this
1:14
as the actual decoupling that we've been
1:17
talking about? I don't think it's the
1:19
actual decoupling, but I think some of
1:21
us have been a bit mystified as to why
1:22
the markets have been so sanguin all
1:24
along. Many of the deals even with our
1:26
allies are still basically unsettled. Uh
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and we've been expecting this one to not
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just be a smooth ride to you know
1:34
happiness with uh some lower level of
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tariffs. So uh it was a very uh
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precipitous but not entirely unexpected.
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So, we haven't heard, as far as I know,
1:45
anything formal in response from Beijing
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to the post this morning or now this
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100% tariff move. Do you suspect that
1:52
the meeting is as good as canceled now
1:54
or does this draw President Xi to talks
1:58
Well, obviously we're seeing tit fortat
2:00
in a different way. During Trump won
2:02
with the trade war, we saw tit for
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tariff on on tariff rates. Now, we're
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seeing a whole host of commercial
2:08
relations being put to the test. Uh, you
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know, the US has fees on ships. uh
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Chinese ships that land on US ports that
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China has now on American chips, chips,
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sorry. We have export controls, they
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have export controls. We have tariffs,
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they have tariffs. Uh we have placed a
2:27
number of their companies on entity
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lists. American companies can't do
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business with them except with certain
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permissions. China has done the same. So
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I think China has learned uh how to play
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this game and President Trump knows
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that. He has said himself that he thinks
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the US has three times, you know, the
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firepower that the the Chinese uh do. Um
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many people don't think that's true. Not
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in the short run at least. We haven't
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really prepared for this. We're still
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dependent on China in many areas. And
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the Chinese here are speaking with their
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policies. Uh not through their PR
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people. Boy, it's pretty remarkable the
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list that you just ticked through. Uh
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you add now inspectors fanning out at
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ports across China to make sure that
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Nvidia chips are not getting into the
3:14
country. Are both sides just trying to
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tenderize each other ahead of talks or
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are we moving further apart I guess is
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the question. So, some analysts have
3:23
been painting this as kind of um you
3:26
trying to each each side trying to get a
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little bit more uh firepower going into
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the negotiations. I think that is true,
3:34
but I think there's a whole lot more
3:35
here at stake, Joe. I think that the
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national security concerns and um the
3:41
segment of the administration um and the
3:44
previous administration that really
3:46
wanted to see reliance on China for
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particularly critical minerals. Yeah.
3:53
Um and seeing uh you know a whole host
3:56
of relations with China severed. Um and
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the Chinese don't like that.
4:01
Uh they wanted to see export controls
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reduced not increased. They wanted to
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see investment in the United States
4:08
eased not made more difficult. Uh and
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they're signaling that pretty clearly uh
4:13
with this. So the national security
4:14
issues here I think are really coming to
4:17
the four. Unfortunately, in the US, we
4:19
don't have any clarity on how this
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struggle within is going to work out.
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So, we have the bilateral and then we
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have what's going on inside the United
4:27
I want to ask you about something in
4:28
that very long missive from the
4:30
president on Truth Social this morning.
4:32
More than 500 words right in the middle
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of it. He refers to peace in the Middle
4:37
East, the timing of these letters on
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rare earths going out. He says, "The
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letters were especially inappropriate in
4:43
this was the day that after 3,000 years
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of bedum fighting, there is peace in the
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Middle East." I wonder if that timing
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was coincidental. What did he mean by
4:53
I think that President Trump is is
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getting ready to take a victory lap and
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he certainly doesn't.
4:58
That's all it was. That was
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Why did you do it today? And he didn't
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get the the Nobel Peace Prize. So that
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that was his mood when he wrote this
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Yeah. Well, I you know, you can never
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say that the Chinese didn't do it to
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rain on the parade, but I think that you
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know, we have been watching this for a
5:13
long time, Joe, and I think and having
5:15
this conversation. So, I think the the
5:17
timing may have been there, but clearly
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this is a long-standing issue. It's
5:21
something that's very important to
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American businesses and Chinese
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businesses. And unfortunately, today was
5:26
We are still technically in a trade
5:28
truce, right? That's got a couple of
5:29
more weeks on it when we remember the
5:30
talks that took place overseas. Whatever
5:33
happened to getting a 15% cut of Nvidia
5:35
and AMD sales to China? I thought we
5:37
were on the verge of something.
5:39
Well, you know, all of this has come up
5:41
again investment promises in the US and
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we don't really have anything on paper.
5:47
We don't have, you know, the deals are
5:48
not in place. And I think this is what's
5:50
keeping uncertainty in the markets so
5:52
high. You know, a lot of people are
5:54
saying that economists have
5:55
underestimated the agility of American
5:58
markets. I don't think we have at all. I
6:00
think that what we have been warning
6:02
about and is true is that uncertainty
6:04
makes it so difficult for firms to plan
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and to work around whatever it is that
6:08
the government ends up doing. Uh if
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President Trump goes through with 100%
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tariffs and at the Peterson Institute
6:15
we're estimating that the average tariff
6:18
on China is about 50% already. So you
6:22
You are going to see you know uh we
6:24
talked in the earlier about is it an end
6:26
to trade. We're already seeing enormous
6:27
amounts of avoidance and evasion and so
6:29
it's just going to send these supply
6:31
chains into real adaptation move with a
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lot of things happening that we really
6:36
don't want to see in the global economy.
6:38
Are our west coast ports about to go
6:41
Uh this would be devastating for the
6:43
ports. Very a very big hit to the ports.
6:46
Um and you know a lot of a lot of
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workers at those ports in warehousing
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and trucking and rail.
