78. Superpower Divorce: America vs China

Honey bunches of votes la forma perfecto dependar en la conto familia.

Cono juyas crujientes andiel lever qual los niños les encantas.

Ademas delicios os trosos de granola nuesces y fruta que todos vanadis frutad.

Honey bunches de votes para todos.

Tod para sabermás.

Say hello to the next generation of Zendesk AI agents, built to deliver resolutions for everyone.

Loved by over 10,000 companies, Zendesk AI agents easily deploy in minutes to resolve 30% of interactions instantly.

That's the Zendesk AI AI effect.

Find out more at Zendesk.com.

CRM was supposed to improve customer relationships.

Instead, it's shorthand for customer rage machine.

Your CRM can't explain why a customer's package took five detours, reboot your inner piece, and scream into a pillow.

It's okay.

On the ServiceNow AI platform, CRM stands for something better.

AI agents don't just track issues, they resolve them, transforming the entire customer experience.

So breathe in and breathe out.

Bad CRM was then.

This is Service Now.

Hello and welcome to this emergency episode of The Rest is Politics US.

I'm Katty Kay.

This is our live stream version because so much is happening, Anthony.

Are we playing 19D chess yet, Katie?

Or no?

I mean, what dimensional chess are we on now?

I don't, I don't, we'll get to to that.

And we're going to talk a lot about the tariffs.

We have got people joining us from everywhere.

There's a little bit of a drift going transatlantic here because the UK is clearly having incredible weather.

We've got Andrew from joining us from sweltering West Berkshire,

Berkshire, where I was born.

We've got people in sunny Manchester.

We've got people in sunny Surrey.

All of them insisting how sunny it is.

And then, of course, we have joining us from freezing Virginia as well because it is so cold here on the west coast.

But my favourite is Kitty Cat Kai, who is joining us from beautiful Lugano, Switzerland, my home country, with lakeside views and live stream news.

So, we are dropping this extra episode on Trump's turmoil in the tariffs world because he's taken so many different turns this week.

Quickly, to bring you up to date before we get into our analysis of this, he's basically paused his reciprocal tariffs

to most of the world for 90 days, but he has doubled down

tariffs to China, and China has also doubled down on tariffs to

the United States.

So we are recording this live with you guys Friday morning.

Do put your questions in the chat.

And by the way, guys, if you like this format, we do it on Mondays for our founding members.

The restispoliticsus.com is where you can become a founding member and we take your questions there too.

So if you like this format, do join us for that.

Anyway, so

we are now in a a position Friday morning.

Trump has made consecutive increases to duties on Chinese imports.

They are now standing at 145%.

This morning, Friday U.S.

time, China announced that starting tomorrow, so that's Saturday, it's going to impose 125% tariffs on all American goods.

The White House is asking the Chinese to call them to negotiate.

The Chinese are saying there are no winners in a tariff war, but the Chinese are sounding pretty belligerent about how far they are prepared to take this.

And they don't sound like supplicants.

So we had that brief moment this week where Trump announced the pause just after we had taped our live stream.

I was busy gambling, so I didn't manage to make the updated version.

I'm afraid I didn't win anything for you, Anthony.

I know that you've been worried about the markets this week, and I was trying my very best.

But I'm a little insulted that you said that I was just on the slot machines.

Do I look like a slot machine kind of person?

Is that what you're saying?

Because I like to think of myself as sort of poker or roulette or something a little bit more.

I only made that comment because you took a selfie in front of the slot machines.

Do you not remember sending that to the trip U.S.

Okay, so sometimes there are secrets between partners.

You know, I say I send you things in confidence, not for the whole world to know about, but if you I should have learned by now that you are

saying Chatham House rolls rules on the cell phone.

Oh, that's right.

Spot machine.

All right.

Okay.

Anyway, I feel like the world economy has been gambled with this week.

There you go.

That's your segue.

Is that still how it is?

This is a process of self-detonation.

Rahm Emmanuel said this week that in 80 days, Donald Trump managed to unravel 80 years' worth of work by the Americans, Caddy.

So, I mean, again, I'll just make these couple of points.

I'd like you to respond to them.

Number one,

we have no allies in a trade war.

Does everybody understand that?

If you're an American listening, we don't have any allies in a trade war because our allies don't want to fight with us in the trade war.

But the flip side is they've got to protect their own countries.

They've got to protect their own citizens.

And so let me just give this vivid example, Caddy.

Respond to it.

The Chinese, ready for this, have shut down liquid natural gas imports coming from the United States.

So all these tankers heading over to the Pacific to

LNG imports to the Chinese.

China said, No, we don't want the gas.

They cut a deal with the Australians.

It's a $1.5 billion

per day deal.

Okay, so now the Australians are going to be servicing them.

What are we going to do with

the natural gas?

It's stuck in the middle of the Pacific.

I guess we're going to try to send it to Europe.

Probably have to send it there on a discount.

So, we have no allies in a trade war.

I just want everybody to understand that.

And the 90 chess player is now having his diplomats call the Chinese and say, can you please have the Chinese request to call

Trump?

And the Chinese are like, well, we're not going to do that.

Okay.

And then the Chinese, as I mentioned earlier in the week, they've run up the propaganda.

on J.D.

Vance saying that we're borrowing from peasants to buy merchandise being made by peasants.

So I guess he's calling all of China peasants, which is a ridiculous statement.

But I have a lot of Chinese friends, and face-saving is part of that culture.

They will starve before they cave to Donald Trump.

And then, of course, they said $125 on the tariffs, but you're an imbecile.

And so we're not going to go any further than that.

We're going to ignore you.

And then, last quick point: University of Michigan inflation number, the inflation expectation for this year is now 6.7%,

Caddy.

So under Joe Biden, trending down through to,

it's lower right now.

The bond market is telling you it's not going to stay lower because the 10-year has been pushed close to 450.

And so, you know, the tariffs are going to cause inflation.

Okay, so I mean, I don't get this, and I'm very frustrated by it because these people know better.

There are people in that room that have made hundreds of millions of dollars on Wall Street, that know how the global economy works, and they know better.

But I am mad at you this morning, if you don't mind.

I'm going to share with the viewers and listeners why I'm mad at you.

You didn't genuflect towards me.

Okay.

I sort of feel like, you know, on certain, this is like a cabinet meeting, and I sort of feel like I needed some,

I feel like I needed some genuflection.

I mean, the ass kissing that's going on in this, that was a joke, Caddy Kay.

Okay, I was was just a joke.

The ass kissing that's going on in this cabinet is, did you watch any of this?

President Scaramucci, I mean, you're so right here.

I mean, this is what I always fail to appreciate quite as much as I should do, is how right you get this.

I mean, every single time you're

back now, you're blushing a bit.

I am blushing at you to turn me around.

You see, you don't really like it.

You don't really like it.

No, I don't.

And it was an imbecile.

And every president needs a little bit of the person who will say, stop being an imbecile caddy can i just come on i mean did you notice the genuflecting yesterday i mean unbelievable there's a great by the way guys there's a great meme of a statue in new york being cleaned i don't know if i can say this on the podcast and it's a a close-up of the cleaners cleaning the posterior let's put it like that nicely for our listeners

of this statue and so good at this they're saying and the slogan is this is the us the white house cabinet meeting i mean i'm i've never seen anything like that i'm like no no one's on the fahey it's depressing my man you're gonna blow up the global economy you're gonna lose but we're gonna say you're fantastic i mean the one i had a question

from the world you're brexiting for the world you're gonna lose your standing and you're gonna lower everybody's living standard in the united states right for absolutely no reason the i spoke to

somebody who's close to the president and is regular contact with the president this week and they were saying look

uh this all shows how bold donald trump is.

And that's the kind of official line.

You heard it in the cabinet.

You're hearing it from all of his officials.

This is what this person said.

Look, no one else would do this.

No one else would have the rest of the world, 75 countries, if we possibly believe that, coming to the president to make these deals.

This is the revolution in the American economy.

And it's all about Donald Trump and how bold he is.

And this proves that Trump will be bold.

I don't think it proves that.

I think it proves that Trump will blink.

That actually faced with a serious crisis in

the equity markets and then faced with a serious crisis in the bond market, which was a reflection of other countries' confidence in the US economic system, but also a reflection of their lack of confidence in the competency of the White House to steer the US economy and the global economy.

And I think that's what made Donald Trump blink.

That's why he has a boss now.

We know that.

And here's the important thing.

Other countries now know

that they have a weapon that they can use against the United States and Donald Trump in particular to get him back off.

Tank the U.S.

bond market.

I mean, he's just shown them that that's what he will respond to.

I would have thought that puts the president in a pretty weak position.

And the market is tanking.

But without naming names,

in the spirit of charitable house rules, you have met with a lot of people.

Like you are so good at sticking to those.

But you are, though.

You are good at sticking to those.

So, you have a lot of corporate people that you've met with recently.

Yes.

You've interviewed a lot of high-profile people.

Some are Trumpers.

Some are not.

Yes.

I've spent a week speaking to business people.

Okay, so give us the general consensus of what you're hearing out there.

It's two buckets of people

and something unites them.

You've got those business people who voted for Donald Trump and fully expected and support the idea of deregulation and tax cuts and are staying with Donald Trump and believe that he is the bold person that can do this.

They are worried about the

stock market.

They're worried about their shareholders.

But there is some tribalism in the country, even amongst business people who feel that they are part of the Donald Trump tribe and they want to stick with him.

And you can hear it in the kinds of things that they say.

There is also an inherent, I think, more broadly than just the business community, there are people who are sticking with Donald Trump because they feel that they were lied to by the elite, by the media,

by political parties, by economists.

And you are the people who told us in the 1990s and early 2000s that getting China into the WTO and

the rapid push to globalization at the end of the Cold War, that that would be good for us.

And it has been terrible for us.

So why should we trust you this time around?

We trust Donald Trump.

So there is that group of people who exist.

They're worried about the markets, but basically they trust Donald Trump.

And some of it's tribal.

I've heard from people who are Trump supporters who have almost got into a kind of defensive position that the more you attack me, the more I'm going to stick with my guy.

But there is also a genuine feeling that, you know, he is the person that understands them.

But then I've also heard from business leaders who voted for Donald Trump or who may support Donald Trump broadly, but who are appalled by what is happening and by the mismanagement of the economy.

And they are genuinely now

waking up to an idea that Donald Trump is fallible.

And I think you're also seeing that amongst Republicans on Capitol Hill who had kind of bought into the idea that Donald Trump can do no wrong and have after this week, having watched the White House blink, however the White House spun it, are now waking up to the idea that, oh my God, Donald Trump can get things wrong and the people can see that he gets things wrong.

And we are seeing that reflected in the numbers.

We're seeing it reflected in the polls that show people that his numbers in handling of the economy, which has always been in stronger suit, are declining and in those consumer confidence numbers that have just come out of Michigan that you mentioned this morning with the American public saying, actually, this is making us nervous about consumption.

So I think this is a fragile moment for the president.

I mean, you've got the diehard believers, but you've got a lot of people people there who are now starting to think, hmm,

this is making us nervous.

And it's not just making us nervous about the tariffs, it's making us nervous about the competence of the administration.

Is that how you see it?

Yes, but add one more point to this.

So they're, yet they all know, at least the ones close to him, know that he can ever admit that he's wrong, right?

Right.

So how do you, how do you, let's say that you're a Trumpian of the Trumpians and you're the Trump whisperer and you know the president is wrong, but you just witnessed this cabinet meeting of this sort of incredible obsequiousness, and you're sitting there.

How do you get him out of this situation?

Like, how do you unpaint him from the corner that he himself put himself in?

Well, I think there are questions now about how much he can do that, Anthony, honestly.

I mean, I've been speaking to economists this week who say

that some of the damage is done.

I mean, this phrase that Andrew Rosorkin

of the New York Times and on CNBC has been using this week about the toothpaste is out of the tube.

And so questions about the Trump administration's competency and even if he were to talk to the Chinese and manage to de-escalate with China, even look, let's remember, there are still 10% across the board tariffs.

on America's trading partners, which is already high.

Even if he were to somehow negotiate that,

People are looking, as you started the program by saying, people are looking elsewhere for economic alliances and trading partnerships.

So I don't know on this one

how, I mean, certainly de-escalation with China would be a big help.

Getting the Europeans back into the American camp to shore up those alliances would be a big help, but I don't know that he can do that.

I seriously think the

perception of the United States, which is why you're seeing the bond market so nervous as a safe haven economically and as a zone of competence economically, is being damaged.

And guess what the Chinese are doing?

They are doing an excellent job.

One economist pointed this out to me.

China's doing a very good job at the moment of painting itself as the more reliable superpower.

I mean, think about that.

The Chinese are saying, well, actually, we are the ones that will build a trading relationship with you and stick to it.

We are the ones that will promote free trade.

We are the ones that are investing around the world in international development to shore up relationships because the Americans are pulling back.

So they're using soft power and economic power to portray themselves as the desirable superpower.

That's remarkable.

Yeah, I mean,

I'm just flummoxed by the lack of...

And again, I don't even understand what the fear is.

So, Mr.

President, sorry, this doesn't work for me.

Okay, you're fired.

Okay, big deal.

Okay, so at least you saved yourself this hardship, this personal hardship.

But for a couple of quick things, Caddy, I want to thank all the new members on here.

I'm looking through this live chat, lots of new members.

So, thank you guys so much.

Uh, uh, Caddy is going to be in the UK the whole month of July.

Is that correct?

You're going to be in London the whole month of July.

I'm going to be, yeah.

And so, I'm going to come over.

Hopefully, we're going to do a live show together.

And so, new members, you'll get the access to that before everybody else.

So extent you want to come, please join us as a new member.

The one thing I want to say here is Greg Imp wrote a great book called The Little Book of Economics.

There's a question up here about the bond market.

Anthony explained the bond market just 30 seconds.

Just 30 seconds on this.

Europe.

You're in a situation where the United States is a debtor country.

We've been borrowing to finance our deficits.

We do borrow from ourselves, but we also borrow from around the world.

And what's happened here is the United States has pulled the trading plug from the rest of the world.

And again, even though he did a 90-day pause, you still have 25% tariffs, most places, 10% tariffs across the board.

And a result of which our trading partners have said, hey, that's okay.

We're going to sell your treasuries now and we're going to find other things to buy.

Gold is at an all-time high.

Believe it or not, Bitcoin has a reasonable bid right now.

And so our 10-year treasury, which is is our benchmark treasury, that's the one that we borrow the most with, Caddy.

We had an auction yesterday.

$39 billion was borrowed by the American government, and we had to raise the interest rate.

So in other words, to encourage people to borrow for us to get their money into this country, we had to take our interest rates up now.

So America's having to make its product more.

appealing because people are thinking, why would we buy that product otherwise?

Correct.

And so somebody was derisively saying to me, well, you work for China because I'm saying true things.

And my response back to them is, actually, we all work for China because they own a lot of our treasuries and our tax dollars, which I do work for and pay my taxes,

they go towards paying this interest.

But what the President's actually done here is he's increased the interest rate that the U.S.

is now paying.

We were at 4%.

We're now at 4%.59.

We've increased by 59 basis points.

So that makes servicing the U.S.

debt more expensive, actually.

Doesn't that then make it harder to deal with the debt, which is what I thought all of the Doge and the cuts were all about?

Exactly.

So there were these Silicon Valley guys that were saying, you know, I think this was at not the 19D chess.

I think this was at the 5D chess still.

At 5D chess, Trump is riling everybody up to drop rates.

below 4% so he can refinance the $7 trillion that's coming due.

But what usually has happened in a crisis, Caddy, is that our bond yields go down as people flood into the treasury market.

When we were kids, we were told that was the risk-free rate of return.

But what Trump has done is he's destabilized that market.

And so people are looking around saying, wait a minute, I don't want to be in those treasuries.

I can't trust the American government like I used to.

Again, a bipartisan commitment on free trade, a bipartisan commitment on NATO, a bipartisan commitment on trying to help the rest of the world with rising living standards.

Now, Donald Trump has said, no, we're taking the American football and we're pulling ourselves out of the game and we're going to go home and I guess we're going to sit in the White House and pout about this.

And so the other players, what do you think they're going to do?

They say, okay, I got to find other partners to work with.

And that's what's going on.

But if you want to read a great book about this, it's a Greg Ibs book.

I love the book of economics.

Wall Street Journal, he's a great reporter.

Okay, a question for you about what the Fed chair Jerome Powell does in response to all of this, because it seems to me, and thank God, listen, I'm the person that studied medieval French and Italian literature, so I'm never going to claim to be an economics major.

But it's pretty clear that, even to me, that Jerome Powell has a couple of options.

He can raise rates

further if he's worried about inflation, or at least not drop them if he's worried about inflation.

if he starts thinking, oh my God, this is having an impact on hiring in the country, business is cutting back, we're already seeing that orders for Trans-Pacific shipping are down.

There's a report in the Wall Street Journal today on Friday about a guy who makes kitchen manufacturing equipment in California who's already thinking he's going to have to lay people off because he can't import the parts he needs to make the goods that he makes in America because they come from China.

So if you start getting layoffs and Jerome Powell starts thinking, oh my God, as you've got, you know, people on Wall Street saying the prospect of a recession or even a depression in the United States is increasing.

So then he may want to lower rates, which is what Donald Trump wants him to do.

I've even heard people say that if Trump, if...

Jerome Powell doesn't lower rates, Donald Trump could use this as an excuse to fire him for not being in line with administration policy.

I think that would be catastrophic for confidence in the administration and in the American economy.

But if you were Jerome Powell right now, what are you thinking?

Well, I'm thinking that Trump is going to try to fire me.

He's gone to the Supreme Court.

He's asked them for permission to fire him.

And he's thinking, you know what, if I'm going to go out, I'm going to go out in an independent blaze of glory.

And so I'm not going to do anything that Donald Trump wants me to do.

I'm going to do what I think is the right thing, which is to wait on these things because, Caddy,

inflation, if inflation is going higher, he can't lower rates right now.

If we're heading into a recession and this slips into deflation, he does have time and he does have bullets in the chamber because with the tenure where it is and where the overnight rates are, he can drop rates several hundred basis points to create more liquidity in the economy.

But

I don't think he's going to do anything.

But here's the thing I'm super worried about, if you don't mind me sharing this with everybody, what I'm super worried about is

it gets out of control to the point where we can't stop it.

And so when the Archduke of Ferdinand, when the Archduke of Ferdinand was shot, there was an opportunity.

In Sarajevo at the beginning of the First World War.

Yeah, there was an opportunity not to have that war.

But the bellicosity of the rhetoric ratcheted up.

It ratcheted up the cause of nationalism.

And then, boom, we went into a kinetic situation.

And so, I guess what I'm worried about is there's somebody in the country that can calm Donald Trump,

can help us

stop this

disaster that's about to happen.

I don't know the answer to that.

We're going to take a break and take your questions, but one

thing that does occur to me is that Donald Trump

doesn't ever want to look like he backed down.

We know this from the art of the deal.

We know this from

his business dealings in New York over the decades.

And he's already conscious of the fact that he's being portrayed as having blinked with this 90-day pause.

He's going to find it very hard to back down with China now.

Xi Jinping likewise has portrayed himself as a strong, tough leader who doesn't broker opposition.

That is now his narrative for his political image back in China.

It's very hard for him him to back down because he doesn't want to be seen as weak.

Against that, Donald Trump, I'm told, is pretty pragmatic as well.

He doesn't want to be the president who presides, you know, Hoover-style over a depression.

And so he,

you know, he's weighing those two kind of impulses.

And we saw him this week go for the pragmatism, but only, but not enough.

He may have to be,

I know we're taking a break, but after the break, can you talk about the U.S.

service surplus?

Yes.

After the break.

I want you to describe that to people.

All right, we're going to be right back.

This is a paid ad for better help.

In moments of stress, we tend to turn to whoever's in reach.

That flatmate in the kitchen, the barista on a slow morning, the stranger who simply asks you how you're doing.

It can help, but being heard isn't always enough.

And the more confidently people speak, the more we mistake it for wisdom.

But if you're dealing with anxiety or loss or something that's been weighing on you what you need isn't noise it's actual experience somebody who really knows their craft.

BetterHelp has spent over a decade helping people find that match.

A short questionnaire sets your preferences and they'll connect you with a therapist who fits.

It's completely online, it's fully flexible and if your first counselor doesn't really feel right for you, you can switch at any time.

There's no pressure, no extra cost.

As the largest online therapy provider in the world, BetterHelp gives you access to credentialed mental health professionals with a wide range of expertise.

Our listeners get 10% off their first month at betterhelp.com/slash tripus.

That's betterhelp.com/slash t-r-i-p-us.

There's only one place where history, culture, and adventure meet on the national mall.

Where museum days turn to electric lights,

Where riverside sunrises glow and monuments shine in moonlight.

Where there's something new for everyone to discover.

There's only one DC.

Visit Washington.org to plan your trip.

This episode is brought to you by Progressive Insurance.

Do you ever find yourself playing the budgeting game?

Well, with the name Your Price Tool from Progressive, you can find options that fit your budget and potentially lower your bills.

Try it at progressive.com.

Progressive Casualty Insurance Company and affiliates.

Price and coverage match limited by state law.

Not available in all states.

This is something that I think has been very interesting.

And it's not, and we, I promise you we're going to get your questions because there was other big news as well.

And there's a great question here about the Supreme Court, which I want to talk about.

But just briefly on the service side, I've been

asking over the last few weeks, why does Donald Trump only really talk about trade deficits, which are deficits in goods?

Why is he so focused on manufacturing when actually America has a service surplus with many countries, with the European Union, for example?

Things like banking services, tech services, accountancy services, tourism, travel.

Every time a foreigner comes and stays in the United States, in a hotel in New York, and all of you have been to hotels in New York, that is an export for the United States.

Now, those things are harder to put a tariff on.

I mean, you could put, I suppose, a hotel tax on foreigners on a simplistic, that's a sort of simplistic way of looking at it, but American services are harder to put a tariff on.

But Donald Trump just doesn't seem to factor those.

And one economist said to me that he, who knows Trump quite well, said he just thinks that's the way it should be.

That

he's so, he's really, I mean, let's be, you know, it's kind of cars, right?

He's focused very much on cars and manufacturing factories.

But Americans actually would like to work in the service industry.

If you look at

people at the dropout rate of industries, and Gary Cohen, the former advisor to Donald Trump in the first administration, kept telling Trump this.

All of the data is showing us americans would much rather work in an accountancy firm they would much rather work in a service industry than sit in front of a burning furnace or put together a car and stand for 10 hour days in a factory assembly line and we know that i mean the whole the whole point of kind of being this wealthy country is that you give people these jobs which have a higher quality of life.

And it was absurd when we heard somebody in the White House a couple of weeks ago saying we're going to bring back the kind of people who put the screws into iPhones.

That's not what Americans want to do.

This has become a service, a largely service economy country.

And those are valid exports.

Those bring money to the United States, but he doesn't really count them.

And they don't seem to be part of these negotiations.

And I've never really understood why.

I think it's just he believes it.

It's something he holds dear.

It's almost emotional for him.

And I don't think there's any arguing him out of that, is my impression.

Yeah, I mean, again, I wanted you to bring all that up because I think

it's a part of the equation that other people are not talking about.

You won't see that discussion on a financial news channel as an example.

And I think it's a brilliant thing that you've uncovered through

your investigative journalism.

There was a question here by Gabriella Anna just quickly.

Does Trump want to devalue the U.S.

debt?

Yes.

Yes, he does.

He would like a very cheap U.S.

dollar, and he would like to monetize the debt.

And so, but again, you can't have everything because if you go to cheapen the dollar, it has other consequences.

It'll knock up rates.

It'll hurt parts of the economy that you actually don't want to hurt.

Moreover, I just want to remind everybody: the Ren Me is actually tied to the U.S.

dollar, and it has been tied to the U.S.

dollar since the days of Richard Nixon.

So lower dollar means lower Ren MB.

Guess what happens?

Better exporting environment for the Chinese to our former trading partners that we're fighting with.

Okay, question from Melanie Roberts.

I like this one.

Much of U.S.

trade is an abundance of U.S.

consumption.

Is one of the unintended consequences a reduction in environmentally questionable items, fast fashion, non-essential plastic crap?

Look, Melanie, there is much more of a debate in Europe, and I don't know where you're writing this from, but you may be writing this from the UK.

But every time I travel to Europe, I'm aware of the fact that there is much more of a debate about

the need for all of us to live in a more sustainable way, less travel, less consumption of fashion, more recycling,

more kind of promotion of things that are better for the planet.

and economies that are better for the planet.

There's not much discussion of that, honestly, here in the US.

People are not thinking, I'm not going to go to H ⁇ M and fill my bags with cheap Chinese fashion, although that may change now that there's tariffs on these things.

I don't know that it's America is not like Germany, which has a saving culture.

And actually, that's been a problem for Germany.

They probably need to stimulate consumption.

America is a very high consumption country.

It's a very low savings country.

Now, whether the tariffs will change that,

It might change it temporarily while the tariffs are in place, but I think it's a cultural thing.

I don't think you're going to suddenly get Americans not buying more sofas, which is part of what's driving up the American trade deficit.

And that is what America wants.

I mean, this is why Donald Trump points this as, paints this as cheating.

But as Larry Summers, the former Treasury Secretary under Bill Clinton has been saying this, under,

Clinton has been saying this week, look,

we want to buy cheap things.

It's not cheating if somebody makes those for us.

We're the consumers and we have to recognize that we want to buy those things.

Like, you know, Anthony's lovely action comedy t-shirt for those of you who aren't watching.

I bet, I wonder where that was made.

Absolutely.

Probably China, right?

Probably action comics.

Probably made in China.

I mean, that'll be more expensive for you, so you may not

hats are

made in China.

By the way, the

finance minister

put out on her Twitter feed MAGA hats now up 25%

from the original price as a result of the tariffs that are going on.

But

I guess I want to ask you this question,

and I want you to put your UK hat on or your European hat on.

Be a European leader for a second.

We have a 90, be Macron for a second.

We have a 90-day pause, but you've still rocketed us with tariffs, 25% tariffs, 10% tariffs on certain things.

So what do you do?

So you're going to pick up the phone now.

You're going to call Donald Trump?

Are you going to ignore Donald Trump?

Obviously, that's my advice.

But what we go ahead, you're in a European cabinet room somewhere, and European leaders are saying, okay, what should we do?

And what should they do?

Texting with European officials in the last couple of days, and one of the things they are adamant about is that whatever they do, the EU will stick together, that they will have a united front, that they realize the risks of a trade war.

They don't want to get into a trade war.

America is Europe's biggest export market.

So they want to be able to carry on and they know that Donald Trump is tricky to deal with.

One thing that they have realized is that he can blink, that he can row back.

They are hoping

that,

you know, whoever has the kind of saner heads in the White House from a terrorist point of view, that the Scott Bessants prevail.

They're watching what happens to Peter Navarro.

They're watching all of this.

This is one thing that does strike me.

They're watching very closely who is up and who is down in the White House.

Is it the trading hawks or is it the ones who are more open to trying to do deals?

One thing that I have heard from somebody who's in contact with the President is there's some feeling that the White House might try to pick off individual European countries or individual European economies.

Would they try and pick up the phone to Georgia Maloney and say, listen, let's deal with you separately.

But my understanding is that that's not viable, that that's not legal.

The European Union has to stand as a block and negotiate as a bloc.

So they may be thwarted in that endeavor.

I'm just curious, because I think Macron is out there tweeting.

One of our viewers pointed that out.

I did see that tweet earlier.

Peter Grief is asking a question, which is a great question.

Trump stiffs everybody.

We know that.

He doesn't pay people.

He foregoes on debt.

He foregoes on contractor bills.

Is that the long-term game plan here?

And Peter, it might be from Trump's perspective, but remember,

the debt is denominated in U.S.

dollars.

So we could actually proverbiably make the $37 trillion coin and pay off all the debt.

So there would be no need to do that.

I mean, I think the more appropriate thing for the U.S.

to do is get its fiscal house in order, create a glide path to reduce the percentage of debt to our GDP, and then let the economic growth, the AI revolution eclipse everything and then slowly pay down the debt.

The irony is this SOB,

he entered the, took the oath of office.

He entered with a 4% unemployment, 2.9% economic growth, and inflation trending down.

He's blown up $14 trillion in the global stock market.

He's pushing a policy that only he believes in.

It's a 40-year-old policy.

It was blocked by his tougher group of people like the Gary Cohens and the Stephen Mnuchins in Trump term one.

He has nobody like that in Trump term two.

So now this 40-year-old crazy, this is like a batshit crazy idea from a crazy uncle coming down from the attic and saying, hey, I'm going to take control of the American economy.

Every decision that was made was stupid.

I'm the only smart one.

And he's going to implement something that is absolutely insane.

Everybody knows it's insane.

His willing sycophants won't tell him that.

And so now we're 80 days into this thing.

Lots of destruction have happened.

And the question is,

are they going to pull back, Eddie?

I don't know.

Are we going to pull back?

And what does that even look like?

I mean, you know.

Okay, so Petran has a question.

Howdy from Dublin, Ireland.

Is there anyone from the administration who is actually worth listening to from a trustworthiness point of view?

I mean, that's a great question, Petran, because yes, there are, if you're talking about kind of, if we're talking just narrowly about about tariffs and economic policy here, there are certainly good people in the administration.

Kevin Hassett is a smart economist.

Before you, I just said,

Halco, how

Halco How.

I just love you, Halco.

Howard,

I'll say it, Katie.

You don't have to.

Howard Nutlick.

Halco, I'm just letting you know.

I don't know where you are out there, but I just want to thank you for being a founding member on behalf of the whole trip US and for coming with Howard Nutlet.

That is my co-anchor.

And I just want Halco Hal to know that I will be using that, and I will do my best to footnote you and give you credit for it.

But that was truly fantastic.

Halco, I just want to thank you for that.

That's great.

That's up there with the statue.

But I would not be listening to Howard, okay?

Because Howard is the sycophant of sycophants.

So I think, I mean, look, Kevin Hassett, I think, is is smart.

Scott Bassent, but the point is, yes, there are people who are trustworthy and good economists and who, as Antony keeps saying, know better, but they have to manage Donald Trump.

And you saw it in that cabinet meeting, the degree to which Donald Trump does not want.

I mean, I've been told that one of the things Donald Trump likes is to have lots of different points of view.

And it's described as scorpions in a bottle.

And then you let them fight it out.

You didn't see that at that cabinet meeting.

That was not a team of rivals.

That was a team of sycophants.

And I don't know that he is getting all of the different points of view.

And if people are afraid of being squeezed out, or pushed out of power, or pushed out of the inner circle, and whether it's for valid reasons that they might think to themselves, look, I need that access to try and keep this ship on the right course, which was certainly the argument for them the first term.

The grown-ups around him said, Listen, I have to be there to be the guardrails.

And I'm sure Scott Bersent is saying that right now.

But if you can't be the guardrail and you can't say what is needed, then

you've forfeited some of your credibility and trustworthiness.

Okay, this is a question I want to get to.

It's not on tariffs, but this has been an important week on the legal side as well.

Andy N103 is asking, is it naive to be reassured by the Supreme Court order?

ordering the return of Kilmar Abrego Garcia.

So just to fill you in on this, guys, on Thursday evening, the Supreme Court, in one of its, what's known as an emergency docket, it has several of these cases that it's looking at at the moment from the Trump administration,

said that the government, the Trump administration, had to facilitate the extradition from this El Salvador sort of maximum security, gulag type prison

because the guy had been sent there erroneously.

There was no evidence that he had committed a crime.

And this is being seen

by

critics of the administration and its immigration policy as a win for the rule of law.

I think a couple of things that were important about the Supreme Court ruling, it was nine to zero.

All nine justices, including the three conservative Trump-appointed justices, agreed with this.

The second is that it's a little technical and quite narrow.

And what they have said, they have not said, is that when President Bukele of El Salvador, who's actually visiting the White House next week, comes to America,

Kilmar Abrego Garcia must be sat in a seat on that plane and must be returned to the United States.

That is not what they're saying.

They're saying that the administration has to facilitate getting him out of that prison.

It hasn't said where they're going to send him.

So that's the other technical thing.

But this is being seen broadly as a message to the White House, along with other emergency docket rulings.

And I think there have been six cases that have been heard so far.

There are four more that are pending on this kind of subject.

That what the Supreme Court seems to be saying is you cannot just pick people up off the street and whisk them to an airport and get them out of the country without due process.

You have to prove they are a gang member, prove they are here illegally, prove whether they had a crime or not.

So they are what's called in legal circles, you know this better than me because you're a lawyer, I'm just a literature grad.

They are temporizing is what I'm being told.

They are trying to slow the whole process down and re-establish the principle that anyone who is in this country has access to due process.

Is that a good summary?

I think it is a win for due process.

It's not the win that some immigration advocates had hoped where they're saying you've got to get this guy out of this prison and back into the United States.

Yeah,

I think it's gradualism on their part.

I think they're giving Trump a few wins, which are non-consequential.

This is more of a human rights issue, and so he's losing on this case, which I think is a benefit.

But

I guess the thing I'm the most concerned about right now is not necessarily the Supreme Court, but it's the treasury market and the Fed, Caddy.

That's the thing I'm most concerned about because if you bust the global economy, Trump wants, obviously, you know, if you break it, Trump can't fix it because he doesn't know how to fix it.

It would be a very big problem.

Someone asked a very smart question here: Is there anybody out there, maybe a Tim Cook, that could bridge the Xi Trump situation?

It's actually Steve Schwartzmann could do it.

He's the CEO of Blackstone.

Remember, his company, 10% of it, was owned by the Chinese Sovereign Wealth Fund before he devolved that a few years back.

He has a scholarship over there.

It's called the,

it's almost like a Rhodes Scholar for China at Shinghua University.

It's the Schwartzmann Scholars.

And he's very close to the leadership there, and he's close to Donald Trump.

Hopefully, he'll intervene.

He'll find a way to intervene and calm things down.

Hopefully.

Okay, we're going to leave it there.

We'll be back on Monday with another live stream.

Do join us for that.

If you would like to.

It is for our founding members, so you can join us and the team at the restispoliticsus.com.

I'm just checking what time it is on Monday.

It is at 3 p.m.

Eastern 8 p.m.

UK time.

So join us and put your questions in.

And of course, then we'll be back next week with our regular

podcast because who knows how much more will have changed.

I mean, it's been the most wild ride.

I don't know how Anthony's still looking so calm, given that he is in the business of Wall Street.

But anyway, I was ready.

I was ready.

I hedged the portfolio prior to April 2nd because I knew the guy was a nut.

I was ready for this.

I mean, it's just unfortunate how much pain it's going to cause to people that voted for Donald Trump.

Caddy, that's the irony.

Well,

people that voted for Donald Trump are getting racked right now, and higher prices are coming, and they're scratching ahead.

They're waiting for their news anchors on certain propaganda shows to explain to them the 5G 5G chess that's going on.

I feel really bad for a lot of people who are facing retirement or on the prospect of retirement or

who have a little bit of their savings invested in the stock market and could not afford to lose them.

And people lost an awful lot of money.

We're treating this as a political story and as a financial story, but we really...

We both have talked about this to each other.

And we're very conscious that people who needed those savings and relied on them have lost a lot.

How happy are the single, the signal gate guys, Caddy?

How happy are the signal gate guys?

Think about how that is such old news now, right?

These guys are putting out war plans on social media sites, but they've been eclipsed by the Trump insanity.

I don't know.

Okay, we will see you next week, guys.

We'll leave it there.

Have a great weekend.

Happy Friday, everybody.

See you next week.