Transcript
Speaker: Hello and welcome back to the Debatable Discussions podcast.
Speaker: Today, me and Diane, amidst the recent panic caused by President Donald Trump, we've decided to reconvene and discuss the big thing that has dominated the news headlines, which is, of course, the tariffs.
Speaker: So, as John said, we're going to be talking about tariffs today, the economic implications as well as the political implications.
Speaker: But first, for some numbers, we're going to be talking about tariffs.
Speaker: In the last week, about $3 trillion have been wiped from the US stock market, which is...
Speaker: one's biggest losses in history.
Speaker: The economy is effectively crashing.
Speaker: But I want to talk a bit more about this formula used.
Speaker: Yeah.
Speaker: So, yes, because as many of the listeners will have seen, Trump's formula did seem a little bit skewed.
Speaker: I mean, I think even sort of basic math students and economists were saying, what is going on here?
Speaker: Yeah.
Speaker: Yeah, so basically it's delta Ti, which is just delta Ti as in change in tariff, equals chi i minus mu i, which basically means sort of, which is a trade deficit.
Speaker: Chi, so chi minus mu in Trump's view is the trade deficit.
Speaker: And then on the bottom of the fraction we have...
Speaker: Two Greek letters, we've got epsilon and phi, who each are set at 0.25 and 4.
Speaker: Therefore, when you times them together, they equal 1, cancelling each other out.
Speaker: So they're basically useless, just to provide some more complexity, over MI, so over imports.
Speaker: Basically, Trump has calculated the trade deficit here.
Speaker: This is not a tariff.
Speaker: All that board that he had with, oh, these other terrorist countries are imposing on us, that is simply not true.
Speaker: That is the trade deficit.
Speaker: So I'm going to be reading out some of these because they are sort of...
Speaker: Bizarre.
Speaker: There is no better word to describe them than bizarre.
Speaker: So my favourite one is the 93% tariff on Madagascar.
Speaker: Apparently Madagascar has a 93% tariff on the US.
Speaker: That isn't true.
Speaker: Madagascar simply grows a lot of vanilla and a lot of spices whilst also being a relatively poor country.
Speaker: So they export a lot of vanilla and spices bought by the US and other richer countries but they don't have a lot of things to buy.
Speaker: They don't have a lot of money to buy high-end technology from the US therefore creating a 93% trade deficit.
Speaker: Again, not a tariff.
Speaker: 97% on Vietnam and Cambodia.
Speaker: Again,
Speaker: These tariffs aren't tariffs, it's just the trade deficit because a lot of textiles are made in Vietnam and Cambodia, leading to those countries exporting a lot, but again, having a relatively poor economy, not being able to buy the high tech industry, the products made in the US.
Speaker: So...
Speaker: just as those three comparisons go, what President Trump has done is a joke.
Speaker: It's, firstly, it's misinformation.
Speaker: The US people have been completely misled.
Speaker: And, you know, if you go on social media now, you'll see people saying Trump is playing chess in a world of checkers.
Speaker: If you'd like to see Anthony's Karen Mucci opinion about Trump playing chess, go back to the last episode.
Speaker: I highly recommend it.
Speaker: But again,
Speaker: What has happened the last couple of days has been absolutely horrendous.
Speaker: So John, can you tell us more about the implications that have happened as a result of these tariffs?
Speaker: Yeah.
Speaker: I mean, so Wednesday, the 2nd of April was, as Trump coined it, Liberation Day.
Speaker: But I think firstly, with the tariffs, it's important to say is that they are far worse than anticipated.
Speaker: Because I remember back to the US election, back to those presidential debates where Trump mentioned tariffs and Harris wasn't really too strong about them.
Speaker: I mean, Biden did introduce some more tariffs in his presidency,
Speaker: And, you know, she was slightly hesitant towards the level Trump wanted, but there wasn't a great level of hesitance.
Speaker: However, Liberation Day turned out to be so much far worse, so much worse than anticipated significantly.
Speaker: And you can see that with the effect on the global economy.
Speaker: Simply firstly, because I've got the stats here, but the measures will increase aggregate consumer prices by between one and a half percent.
Speaker: Similarly, there'll be a reduction in GDP growth in the USA.
Speaker: This is also expected to happen in countries across the globe.
Speaker: But focusing on the USA, the consumer market is also going to be brutally affected.
Speaker: I've got to say in the light of these tariffs, I've sort of become quite interested in that sort of side of economics.
Speaker: And one thing which sort of surprised me to find out is that actually you think that by increasing tariffs, you actually mean that US industries can survive more easily.
Speaker: But that isn't the tech, isn't the case.
Speaker: It's overall far more expensive for consumers.
Speaker: And domestic industries match the foreign market.
Speaker: price.
Speaker: Yeah, I do agree.
Speaker: I mean, I think tariffs were a great idea maybe in the 19th century.
Speaker: when trade wasn't as, I don't know, as sort of global in a way.
Speaker: Countries didn't rely incredibly on China, basically.
Speaker: They didn't rely on Asia mostly for a lot of products.
Speaker: I'm sure we'll get onto that later.
Speaker: But I think in 2025, imposing tariffs is going to do nothing else apart from rates, prices, prices,
Speaker: We've seen many American businessmen, such as Elon Musk's brother, say that their products are going to go up by 25%, 30%.
Speaker: Ford as well has said that their prices are going to have to go up because they need parts from China.
Speaker: They physically cannot build a car without getting things in from China or from other countries.
Speaker: Yeah.
Speaker: Yeah, I've got to say, yeah, as well, the whole sort of argument of, oh, it's going to create more jobs, it's going to revive domestic industries, let's say in the Rust Belt, it's an expensive way to make jobs tariffs.
Speaker: Okay, yes, you may make 2,000 jobs in the US steel industry or in the US textiles manufacturing industry, but the effect that it has on consumer markets is so considerable that it just totally eliminates the
Speaker: this, oh, we're going to help revive some domestic industries.
Speaker: Yeah, and I mean, now we're basically going to get into a trade war.
Speaker: I mean, I've...
Speaker: So listening today, what's going on in Europe?
Speaker: The EU is planning to impose maybe some sanctions back.
Speaker: They haven't actually made their mind up, but China's definitely going to.
Speaker: They've made statements that this is bullying, this is blackmail, it's a trade war, and that they'll fight to the death.
Speaker: I don't think for any moment that President Xi or any of the Chinese finance ministers are going to
Speaker: back down at this sort of tariff.
Speaker: They're just going to impose high tariffs in the US.
Speaker: Going to go into a sort of global trade war, which is the last thing we need.
Speaker: I mean, it's pretty much already on the horizon.
Speaker: At the time of recording this episode, Trump and China has dominated the news because obviously Trump increased China's overall tariff to 60%, but then China retaliated with 34% on all goods imported from the USA, which sort of sent equity, sent the financial stock markets into absolute disarray and even further shock.
Speaker: And Trump right now, you can tell he's nervous because,
Speaker: this sort of retaliatory thing, I don't think he was entirely expecting and he definitely was not hoping for.
Speaker: And the potential of the crisis this could have globally is just huge.
Speaker: Yeah, I mean, looking at sort of where the stock market went, I mean, I don't know if our viewers have seen, but on the social networks and news networks,
Speaker: There's a sort of graph of the richest man on the planet, how much they want slash lost.
Speaker: And I mean, their losses are quite big.
Speaker: People lost billions, literally billions.
Speaker: some tens of billions.
Speaker: Buffett, on the other hand, who cashed out all his money two months ago, is making about 12, 15 billion on this crash.
Speaker: But it just shows that the economy has been so heavily affected.
Speaker: I mean, people are saying that Trump is doing this to weaken the dollar.
Speaker: They're saying to weaken the dollar and then to affect banks' interest loans.
Speaker: I don't think he's that clever.
Speaker: Me too.
Speaker: He's got no end.
Speaker: I don't think exactly.
Speaker: As Anthony Scammeridge said.
Speaker: Yeah, I don't think he has planned ahead how he's going to coerce several world, international and US institutions into this perfect genius plan that comes out of a Bond movie.
Speaker: It's just not going to work.
Speaker: What I think needs to happen, ASAP, is for basically people to say, like, this is not sustainable.
Speaker: We're going to send Europe, Asia, the States, basically the entire world into a massive trade war.
Speaker: And I mean, you know, we're looking only at developed countries, but what about Madagascar?
Speaker: What are they going to do now?
Speaker: Because their sort of output of vanilla and spices isn't going to change.
Speaker: They need to sell them at half the price.
Speaker: No, they're just going to drive those prices up.
Speaker: And now when you go to buy vanilla in a supermarket, you're going to have to pay double for it because Trump's for these steeply high tariffs.
Speaker: Yeah, I mean, yeah, I totally agree with you there.
Speaker: Tariffs just hurt consumers effectively.
Speaker: That's, if you want a sentence, tariffs hurt consumers and they're almost a false illusion.
Speaker: But it's interesting thinking about tariffs and Trump in general, because I remember back to the US election, we sort of passed our mind back all the way into 2024 in November, people were fairly optimistic for the Trump presidency.
Speaker: people were thinking it will be very different to his first presidency, which in many ways can sort of be summed up as novice.
Speaker: However, Trump's handling of Ukraine, his handling of Gaza, and now the tariffs altogether, those compounded, have just showed how just astoundingly novice, immature his presidency is.
Speaker: I mean, the tariffs, he has no endgame.
Speaker: I think these will go down to be a huge economic mistake.
Speaker: He's not going to revitalise the US as he says he will, no.
Speaker: His handling of Ukraine, it's... I mean, you can see the effects it's had on the UK, for example.
Speaker: Reform UK was potentially... was challenging the Conservatives neck and neck.
Speaker: But Farage's association to Trump has hurt him considerably.
Speaker: And that's sort of a side effect, but it documents how, you know, the wider public image of Trump and how much has decreased due to, firstly, Ukraine, and now these tariffs.
Speaker: I think looking back now at history, John, you can tell us more about this, but how...
Speaker: How free was trade in the British Empire in the 17th, 18th, 19th century?
Speaker: How does that era compare to 2025?
Speaker: I think it's quite interesting because historically, looking at empires is perhaps the easiest way to look at trade.
Speaker: But if you go back to the 17th, 16th century, especially in the 17th century, where trade was mercantilist,
Speaker: So this is effectively trade that's based on things like exchanging gold or silver in return for, let's say, tea, porcelain, silk.
Speaker: And this type of trade was basically governed by monopolies.
Speaker: So the East India Company, it's a monopoly, for example, or the VOC, which is the abbreviated way of saying the Dutch East India Company.
Speaker: They effectively all other, they were a monopoly.
Speaker: So almost tariffs in that sort of similar sense.
Speaker: Only they controlled all trade.
Speaker: However, there's a fundamental shift in the 19th century, which totally changed how people perceive trade in general.
Speaker: Now, what happened effectively in the 19th century was that there was a huge shift from mercantilist policies, which endorsed this idea of monopolies, all the way to free trade.
Speaker: And I think the British Empire and Britain documents this very well.
Speaker: So firstly, monopolies had a huge downfall.
Speaker: This is partly due to this emergence of perhaps more liberal classical ideas.
Speaker: So this rise of classical liberalism inspired by economists such as Adam Smith.
Speaker: is partly due to this huge shift, but also the Industrial Revolution itself.
Speaker: This meant that Britain could out-produce slash undersell others, which led to a growing middle class, growing merchant class, which lobbied the government, the British government, to allow more competition and to get rid of these monopolies, which drained away competition.
Speaker: In addition, other events built up, such as the repeal of the Corn Laws in 1846.
Speaker: And this all culminated in effectively the East India Company losing its monopoly in India in 1813, I believe, and then losing it in Hong Kong in the 1830s.
Speaker: So initially the British Empire is mercantilist, it's governed by monopolies.
Speaker: However, we see an era of free trade in the 19th century.
Speaker: And this is very successful.
Speaker: Yeah, I mean, I think that's a great comparison because, you know, I think today, if you look at the sort of world economy, free trade definitely massively increased the economy.
Speaker: These tariffs are doing nothing apart from sort of breaking the legs of that free trade.
Speaker: And before we close, I was just, you know a policy is bad if Ben Shapiro starts criticising Trump.
Speaker: Yeah.
Speaker: So that's when you know it's actually serious.
Speaker: Yeah.
Speaker: The one time Because this trade deficit Is not a bad thing Inherently Yeah There is however One time in history Where the USA actually Had a positive Trade deficit And that was The Great Depression
Speaker: So, yeah, I'll say, yeah, I mean, for me, this whole thing has been an advertisement for free trade.
Speaker: And I mean, it's coincided with me sort of studying more about Hong Kong's history.
Speaker: And from that, and from, you see the period when they got rid of their monopolies and Hong Kong is a city built on free trade.
Speaker: Sort of companies like Jardine Matheson, which smuggled opium.
Speaker: They document how countries like Hong Kong are built on free trade.
Speaker: And actually free trade is quite beneficial.
Speaker: And I don't think, I think perhaps someone needs to tell President Trump that before the turmoil unfolds further.
Speaker: Yeah, perfect.
Speaker: I think, you know, a shorter episode this time, but as always, if you enjoyed it, do leave us a comment, do give us a five-star review, follow us on our YouTube, new YouTube channel.
Speaker: As well as this, do listen back to our previous episode of Anthony Scaramucci, some great stuff on Trump, crypto, keeping in the economic world.
Speaker: And thank you for listening.
Speaker: Yes, thank you everyone for listening and we'll see you soon.
