Jay Weber Show transcript 4-9-25 TWO SEGMENTS
On the ‘fast moving tariff’s front...
The Trump White House says South Korea’s leaders say they will not retaliate against US tariffs, and in fact, are excited to meet and cut updated trade deals, given how important we are to each other’s economy...
Get this: Taiwan- says they are looking at zero tariffs on America and are pledging more US investment.
Also-Japan- is sending a delegation to the US to negotiate, and president trump seemed very excited after speaking to their prime minister.
Folks-those are three of our most important global trading partners- all from the high tech and dynamic Asian region. This is ‘the art of the deal’ in action, as one pundit put it yesterday.
In just a few days you see new and better deals forming for America. This is on top of previous pledges for trillions of dollars in new foreign investments that have already been announced for the u-s.
China is escalating its trade war -for the moment-but other than that- virtually every one of these other trade partners is anxious to get together and rework deals and make trump happy.
Within a few more days- the trump team could be announcing some very positive new trade deals that help boost the markets up again-and take away some of this investor nervousness.
We have to watch that ‘Vietnam very closely-because they were the first country to rush to say they wanted a ‘zero tariffs’ reciprocal trade deal, but trump’s advisors say the real problem with Vietnam is when it comes to trade blocks they have on u-s goods...and so-called ‘pass-thru’ trade from China, that is diverted thru Vietnam so that companies don’t have to pay the Chinese tariffs to sell their goods here.
That country is more problematic than it sounds to the average person. But these other three Asian nations are great, long-standing trade partners. Those immediate deals would really be a boost and help calm markets.
I am feeling ‘no need’ to defend or boost trump here, when it comes to his tariff strategy. I’m just trying to be fair- and understand that he’s ‘working a plan’....as so many other of us longtime ‘free traders’ are...
But so far, what we are seeing is pretty darn positive.
Again yesterday, Trump’s stellar press gal, Karoline Leavitt, started off her briefing by ‘answering back’ on all of the ‘sky is falling’ negativity that the reporters sitting in front of her have wanted to foment over the last few days.
KAROLINE LEAVITT, TRUMP ADMIN: In total, since the Liberation Day announcement, nearly 70 countries have already reached out to the president to begin a negotiation. Countries are falling over themselves to reform their unfair trade practices and reopen their markets to our country. Why? These countries greatly respect Trump and his sheer power of the American market. These countries realize they have gotten filthy rich by imposing substantial tariffs on American-made products and ridiculous nonmonetary barriers to block out American industry.
The jig is up.
Past American presidents sat by and let this happen, but President Trump stood up for our country and is saying no more.
His message has been simple and consistent from the beginning: To countries around the world, bring us your best offers and he will listen. Deals will only be made if they benefit American workers and address our nation's crippling trade deficits.
America doesn't need other countries; other countries need us. Trump knows this. He will leverage the market and the country to the advantage of the people he was sworn in to represent.
On the other hand, countries like China, who have chosen to retaliate—doubling down on their mistreatment of American workers—have made a mistake. The president is made of steel. He will not break. America will not break under his leadership.
He is guided by the firm belief that America must produce essential goods for our people and export them to the rest of the world. A strong America cannot be solely dependent on foreign countries for food, medicine, and critical minerals. America must always retain a robust domestic supply chain. This is an essential national and economic security issue of the utmost importance to President Trump.
By focusing on supercharging the onshoring of American manufacturing, the president is already delivering on his promise to usher in an economic golden age for our country.
Leavitt went on to say- on the other hand-countries like China who have chosen to double down on their mistreatment of American workers- have made a mistake.
She said-Trump’s got a spine of steal and will not break. America will not break under his leadership.
I love that last line, especially given the ‘globally weak’ presidents that we have seen since Reagan. America will not break under Trump’s leadership.
It’s an important message to send both to our enemies and our allies-at this moment in history.
On a RealClearPolitics podcast yesterday, one of their contributors named Richard Porter was asked ‘how he thought trump’s tariff wars are going- about five days in’.
And here was his response:
"It is going the way I think he wanted it to go. The White House has apparently been contacted by 50 countries to negotiate lower tariffs. That was one of the big purposes of the reciprocal tariffs," Porter said. "China looks like the outlier, they responded in a negative way and slapped additional tariffs on. Remember, their tariffs and non-tariff barriers are already high, that's what the U.S. is responding to. So for them to react to this was missing the point. When he puts an additional 50% tariff on them, I think Xi will step back and see the point."
"They had a really terrible day in the stock market in China, while U.S. markets appear to be stabilizing," he said. "I think people are figuring out what Trump is up to here."
"There's really a multi-pronged strategy," Porter explained. "First of all, he's looking to lower the barriers to our exports so we have more places to sell American-made goods around the world. There aren't US cars in Germany. There should be."
"In addition to that, one of the president's long-term goals has been to reshore into the United States domestic manufacturing. That suggests a longer-term tariff strategy that is not zero, right? That suggests that there will be some more tariffs on at least selected industries, targeting certain countries to assure that the key industrial supply is still being manufactured in the United States."
"Think about steel. Think about autos. Think about pharmaceuticals. Think about chips. These are all things that the United States needs to manufacture, and they're currently not being manufactured in the United States," he said.
"I don't think anybody really expected or wants this scale of market falloff from this. But I do think that the market falloff is a result of the desire to shock-and-awe CEOs of the Fortune 1000 and get them focused on reshoring their production into the United States."
"But also our international competitors and friends, our trading partners, getting them focused on the reality that the trading environment has changed and we need to renegotiate onto a more level playing field. And so I think that they had to make this big enough that it really caught people's attention."
"I think as a result of this, we're going to see tariffs go down, the barriers to our exports, and we're also likely—we're already seeing—the reshoring of investment to the United States to make more products here, which will create more jobs, more demand for our labor, which should increase wages for the middle-income industrial worker and so forth," he said.
We- and the rest of the world- are starting to ‘see it’-
And I’ll tell you- what I see – more and more- is that this is really ‘all about China’.
I’m now convinced that this entire realignment in global trade relationships was really ‘all about China’.
What i mean is: trump and his team realized -coming into office-that they were going to have to have the ugly ‘trade showdown’ with China that Obama and Biden have refused to have. Trump, in his first term, put ‘some new level’ of taxation onto Chinese goods...but he didn’t deal with it as aggressively as he and some of his advisors wanted to- and knew they needed to.
Then Biden got into office and really ‘went weak’.
All we heard about was how Biden felt like he had a personal friendship with xi-Jinping. He had spent hours and hours with this guy-more than any other world leader.
Biden went so soft on China that he let them float a hot air balloon all across the Alaska, Canada, and the continental united states without ever demanding answers or shooting it down.
This was all playing out against the backdrop of the secret business deals that he and hunter had made with Chinese owned companies to enrich themselves during the Obama era.
Joe Biden was so compromised on China his name may as well be week- ling-dope.
So here comes trump: he’s got a worsening trade situation with China and a looming war over Taiwan that their ‘dear leader’ insists he wants fight in 2027, if not before-
Trump knows he needs to deal with China. And the best way-non-militarily- is to do so economically. He makes moves to force back their quiet efforts to take over the Panama Canal and the artic waters around Greenland....and moves to cripple their economy with massive tariffs.
But-
Hey-
It looks a lot less like an intentional, singular, targeted economic attack on China....if trump insists this is about ‘global’ trade realignment. Right?
That is what I think that I have finally figured out. I see Trump quickly coming to acceptable new tariff deals with these other important trade partners-
And yes- they still will fairer deal that are better for Americans-
But he’s not just killing two birds with one stone: he’s trying to kill a dangerous falcon...and pretending it’s not the intended target... By also killing a common sparrow. Distracting us all the way, too.
This is-really trying to cripple China, economically, and if the scheme leads to better global trade deals -a second problem that also needed to be addressed at some point-
Great. That’s what trump is doing.
This is about China. It’s about bringing manufacturing back here.
But it’s primarily about bringing ‘important’ ‘strategic’ manufacturing back here. It’s about steel, and vehicles, and ship building, and microchips. And drug-making.
All the important things we need to be doing here. In America. If we are going to be a strong nation, militarily.
And if trump pulls this off with only a little temporary market turmoil as a result- my God- what a huge win for the country it will be.
The best thing trump’s team can do is- not- reveal the clear plan...if trump has one that has the need for some subterfuge and savvy and keeping our opponents off balance.
That’s what I think we are seeing here, with the days’ worth of ‘mixed messages’ now.These tariffs are negotiable. No, they aren’t. Trump is serious about keeping them in place. No, he’s not.
Etc.
That all helps to keep trump’s negotiating opponents off balance-and it’s exactly the sort of thing that ‘private sector trump’ and ‘first term trump’ engaged if. When it came to trying to extract what he wanted...out of people.
I’ll end with the great economist Arthur Laffer-who was a main architect of the Reagan economy- along with the man whose show he was on: Larry Kudlow.
Laffer and Kudlow agreed that some of the claim Trump and his team are making are ‘BS’...
Like ‘trade deficits are bad’....and ‘the formula trump’s team used to calculate the trade imbalances with other nations was crap...
But... Laffer’s main takeaway was:
LARRY KUDLOW, FOX BUSINESS HOST: Joining us now is Art Laffer, former Reagan economist, co-author of the Trump Economic Miracle. Arthur, welcome. So, you know, this is one where the cause is just.
We've got to change these unfair trading practices. There's no question about that. The idea of reciprocity sounded like a good idea, but, Arthur, when you look at these rankings, I don't know that this is really reciprocity.
There's a part of this, when you look at it very carefully, I mean, it's the trade deficit divided by imports. That's an odd way to calculate reciprocity charges. It's kind of like a 25% tax on the world economy.
That's what troubles me. I'm a supporter of reciprocity, and I think that President Trump's whole crusade, his mission, his policy goal to stop this unfair trading, which has done a lot of harm to our heartland. I think he's right about that.
Not sure, as I look at it, Art, I'm not sure about the ways and means. You tell me what you're thinking here.
ARTHUR LAFFER, REAGAN ECONOMIC ADVISER: Well the calculations are completely a ruse. It's, they're wrong. They're bad calculations.
We know what the tariffs are. We know what the non-trade, the trade deficit is not a problem. If you get people to bring their businesses back to the U.S., to load up their machines in Mexico, to drive them up over the border so they now employ Americans and not Mexicans, if you do that because we have good policies, that's called a Mexican trade surplus and a U.S. trade deficit. Trade deficits are capital surpluses. That's when you bring the capital home. So anything that says the trade deficit is bad is completely wrong.
The U.S. needs a trade deficit because that's a capital surplus. When Reagan's tax cuts took effect on January 1st, 1983, the U.S. went into a huge trade deficit as the economy boomed beyond belief. Everyone was trying to invest in the United States, Larry.
And what do you want? Capital lined up in your borders trying to get into your country or trying to get out of your country? Of course you want them to come into the country, and that's what happened with Reagan.
And by the way, that's what's going to happen with Trump with its phenomenal policies. What he has done and all the rest of the policies are spectacular. I think he, I mean he was the best single president on economics, by the way, in his first term.
And if he does this right this time, he'll be the best president ever in economics. But it has to be, we need a big trade deficit, a big capital surplus while everyone brings their jobs back to America. That's what we need.
KUDLOW: But if you have, if you slash taxes, which is what's his policy, if you roll back all these onerous business regulations, if you produce more oil and gas, more energy in general, along with a fairer, friendlier trade policy, okay, if you do all that, I would suggest that the American economy, under Trump policies, will grow. I mean, it's going to be 3%, it could be 3.5%, who knows, could be 4% over the next 10 years. It could be much higher, Larry.
But the point I'm making is- It could be much higher. Yes, but the point I'm making, yes it could be, whatever you think it could be. But the point is, we will grow faster than the rest of the world, follow me, we will grow faster than the rest of the world, and in so doing, we will run a trade deficit.
And it's not a bad thing, it's the natural, we're going to grow faster than Europe, we're going to grow faster than Asia, we're going to grow faster than China even, for heaven's sake. So we're going to have a trade gap. I thought reciprocity was to bring down the tariff rates, okay, not an odd formula that looks at imports through the lens of trade deficits.
That's the problem I'm having with this.
LAFFER: And you're totally right, that's exactly the way I thought of it too, Larry. And then I thought of it as manufacturing, and I looked at the manufacturing issue, and you know, when I look at manufacturing in the U.S. and how we've been losing it, it's not China's fault or the rest of the world's fault, we should be looking in the mirror. The problem, as Pogo said, it's us.
If you look at the manufacturing states like Michigan, Illinois, Ohio, Pennsylvania, Indiana, Wisconsin, they're all the highest taxed states in the nation. Who wants to locate a new factory in Detroit? No one.
It's forced union, it's all these things, the taxes there are terrible. We don't have any problem with manufacturing here in Tennessee, believe me when I tell you. They're all coming here.
The problem is our states are pushing manufacturing out of this country in a way because of their very bad policies. You know, if we had good economic policies in the U.S. at the state and local level, as well as Trumponomics on the federal level, we'd have manufacturing coming to this country by the barrel. I mean, it would be amazing.
That's what we need to do is find the real problems, Larry, and then solve them. This is a phony one there of looking at the trade deficit that somehow it's bad. You know, it's not.
Reciprocity is the right thing to do. They should not tax our products more than we tax theirs. They shouldn't.
Neither one of us should tax any of them at all, and let's just get on with the game and compete and get going. And that's what we'll win the war every time.
KUDLOW: So therefore, it isn't exactly the reciprocity that we thought it was going to be. I think that wasn't. I mean, that's yeah, that's the trouble.
So now we do have a chart that shows the jump up in the average tariff. It's quite a large jump. It's within historical bounds, but it's a very large jump.
We'll get that up on the full screen while we're talking. But basically, our average tax rate is going to go up to about twenty five percent. It was as low as two and a half percent.
That's quite a large move. And I I think our you know, one reason for the stock market problems, there it is. You can see it on the far right side.
Now, it's not the worst we've ever had, by the way, but it is a big jump. It's it's almost like we got to we got the three hundred billion for the 10 percent baseline tariff and another three, four hundred billion on the so-called reciprocity, which really isn't reciprocity. I think that's what spooked the market.
You got to. And I hate to say it's not two for the price of run. Well, it's two for the price of two is what you got going here.
LAFFER: Yeah. Yeah. I was in the Nixon White House and we put it on the 10 percent surcharge and excluded foreign made capital from the job development credit there, which was really protectionist.
And you saw how the market collapsed. They did not withdraw it. I mean, you can also look at what happened when Kennedy cut tariffs.
We had the go go 60s when Reagan cut tariffs with NAFTA, when Bill Clinton signed it into law. We had a tremendously good economy. The economy responds there.
I believe, Larry, and I believe in my heart of hearts that Donald Trump is using tariffs as a tool to negotiate the elimination of tariffs and non-tariff barriers and get a much freer trade world just the way he did in his first term. And he did a beautiful job there. And I think he's going to do a beautiful job here.
And you're going to see incredible prosperity once those new, very low tariffs come into play. I think you're going to see a great economy. I'm just counting on Trump using his own skill and expertise and not those of some of his advisers and use those skill and expertise to create enormous prosperity in America.
KUDLOW: He is. He's the right guy to do it. He's a master negotiator.
Look, there's no question just on an average tariff basis. Look, India has significantly higher barriers than we do. Vietnam does.
China does. Taiwan does. South Korea does.
The European Union does. So he's right. I mean, I support the thrust of the policy.
I just don't think, though, that the called reciprocity, I agree with you, it isn't so much reciprocity now. It's become a trade deficit thing. And we're not going to wipe out trade deficits, even if that were desirable.
We're never going to wipe them out. So where does that leave us, Arthur? Where does that leave us?
LAFFER: Well, that leaves us with cutting tariffs and cutting trade barriers to trade all the way across the board, getting them to cut theirs way down to our level. That's great to negotiate that. But to call Elon Musk a car salesman, which is what someone on the weekend thinks, that's just outrageous.
And when you look at all of this, look at the facts, look at what happens when we do put on tariffs and look at what happens when we reduce them. And when we reduce them, it's under Kennedy and under Reagan. You write all that book.
And Clinton, the economy boomed when we raised tariffs under Nixon. The economy collapsed. And, you know, Larry, it's just it's just common sense.
Tariffs are a tax and we aren't going to collect any 700 billion dollars in tariffs to lower income taxes. That's silly. There's a Laffer curve effect there.
And let me tell you, when when it was done before, you saw the volume of trade drop like a stone. It's going to be a lose, lose, lose if they do something like that. And Trump's not going to let that happen.
He's just not going to let it happen.
KUDLOW: Well, I think the sooner the president takes over the negotiations himself. Yes. OK.
I mean, I think that's really like so maybe a half a dozen or a dozen misbehaving children have to come home to Papa. OK, that's the way I look at this. And it's going to show them what they have to do.
And once Papa shows them what they're going to have to do, then his whole economic growth plan kicks into place and the stock market's going to recover. And by the way, you know, the children are coming home. There's no question about that.
I'm just waiting for Papa to to negotiate through and tell them what they need, what they need to do. That's all.
LAFFER: You remember his old line on TV, Larry? You're fired.
KUDLOW: Yes. All right. Terrific.
Okay. If Arthur Laffer says that- and Kudlow agrees...it gives me some solace.
I hope they’re all right-come Christmas-if not before.
SEGMENT TWO
Greg- I’d like to start this segment by playing for a different audience- the cut we have of the great economist Arthur Laffer.
He was on Larry Kudlow’s show- and both were important forces behind Ronald Reagan’s great economy-which saved the country from Carter-era inflation.
And- they were both main architects of president trump’s first-term economy- which pulled us out of the ‘relative’ malaise of the Obama-era economy...and created the greatest economy-by every measure- since Reagan.
And now-they are mostly watching from the sidelines as trump has a different set of ‘second term’ advisors who-to most economists and free traders- don’t seem to know what they are doing.
So, what do the main architects of the two greatest economies of our time think about trump’s tariff maneuvers?
Well, both Laffer and Kudlow agreed that some of the claims Trump and his team are making are complete crap..... As in...
trade deficits are bad’....and ‘the formula trump’s team used to calculate the tariffs that other nations put on was also nonsense. Not at all calculated correctly.
But they agree on the desperate need for these trade agreements to be updated and rebalanced, so they are more favorable to Americans.
So, they like Trump’s ‘mission’ here...and hope it works out...like the rest of us.
I admit hearing that from Laffer and Kudlow...just days after we heard it from Stephen Moore...whose opinion I also have come to respect.
Okay.
Now i can believe that the optimism being expressed here by trump and his team isn’t just ‘hopeful bloviating’.
They really do see an important mission underway using what they believe is a smart strategy. Good.
I also said earlier: i have come to understand, over the last few days, that this is really ‘all about China’.
I’m now convinced that this entire realignment in global trade relationships was really ‘all about harming China economically...while pretending it’s not trump’s ‘only target’.
I’m convinced that: coming into office, trump and his team realized that they were going to have to have to have an ugly ‘economic showdown’ with China...to try to avoid an even uglier ‘military showdown’ later.
Trump’s trying to soften and weaken China before xi Jinping moves against Taiwan and the u-s military must get involved.
Trump knows he needs to deal with China. He knows he must weaken them, economically. He also has known-for decades- that Americans are getting screwed in a major way by virtually all our top trading partners-
And so- why not two kill birds with one stone?
If we are going to engage in a disruptive trade war with China- why not try to ‘reset things’ globally...
Which also has the effect of making it look like this action isn’t just ‘all about China’. When it really is.
That’s my theory-and I’m sticking with it.
You probably saw that China is basically the one country whose leaders have decided to escalate in a big way.
Within a 24-hour period- the chi-coms had slapped a retaliatory 35 percent tariff on US goods...banned the sale of seven important rare earths to the u-s....which are important in manufacturing technology.
Xi Jinping threatened to ban US movies. And insisted- China will not back down here. And I will never relent.
Okay- so- I’d call this a genuine trade war.
In return for that little tantrum- President Trump slapped an additional-and immediate- 50 percent tariff on all Chinese goods- meaning that just since trump has been in office again- the new tariffs he’s slapped on China are now at 104 percent.Oof.
So, Trump is giving xi an off-ramp. A way to de-escalate. Which is only smart.
Trump also said, hey, there’s no reason for us to flinch- because we lose almost nothing by China raising tariffs on us. U-s companies don’t export much there- compared to what they ship here.
As a ‘China expert’ puts it: the numbers Trump has come up with here- for China- were meant to create shock and awe.
He claims it’s not even really about the tariffs. It’s about stopping China’s shipping tactics-and the increasingly central role they play in the global supply chains.
The aim is to isolate China and rewrite the rules of global trade- so they are more favorable to the u-s again.
This guy says: it’s not personal with any other country- except China. It is an increasing threat to America that-over the last 50 years- these trade situations have enriched and strengthened China- as it has weakened American manufacturing. To the point that some of the things that would be critical. Critical. To our national defense in a major war-
Not only- do we not mine or make here- but- it now turns out- China! - is the main global provider of those things. Whether it’s steel, ships, microchips, pharmaceuticals.
We must bring this very important and strategic manufacturing back to America-and weaken it in China.
That! Is what this tariff scheme is about.
Folks, if xi Jinping really is going to move to take back Taiwan in 2027...or sometime soon...there are real benefits to resetting the US and global economy now.Encouraging more of that ‘war time’ manufacturing. Refinancing our debt, if that can be a byproduct of this...etc.
Trump is making proactive moves.
And maybe that’s what ‘throwing us off’ so much, as Americans: we aren’t used to seeing u-s presidents make proactive moves....
And I’m not kidding.
Not since Reagan-
And so, during my entire adult lifetime, now- we have only ever seen ‘reactive’ presidents and ‘reactive government’. Every president since Reagan-whether it was Clinton, Bush, Obama, or Biden- and every congress during that time! - has led this country by only ‘reacting’ to events after the fact.
A great example is we had all sorts of warning signs related to 9-11 during the Clinton administration and early bush administration...but we never reacted to them. No one ever moved on them-at the highest levels of our government-
And then- after the worst terror attack on the history of the country- well then- the president and congress had something to ‘react to’...and by God...insisted we were going to ‘deal with this problem’...and ‘heal this nation’.
Why not be proactive....and thwart the terror attack, instead?
In that era- no one really thought of doing it.
Donald trump here- appears to be preparing for a military and economic showdown with China-if it’s coming-
And that means preparing for World War three- just in case things really get out of hand.
Moreover- as we’ve seen over the last three months- there seems to be a special ‘urgency’ with things now, given how useless, feckless, and asleep Joe Biden and his regime were- on all these things.
I also have time for this: as a great ‘byproduct’ of Trump’s tariff moves here- the price per barrel of Russian crude has fallen dramatically-and that means significant harm to the Russian economy.
Apparently, the Russian news media over the last few days has featured Vladimir Putin basically thanking Donald Trump for being ‘so stupid’. The claim is-these trade wars will revitalize the sagging Russian economy.
Global experts say, “bull plop.” Russia funds a massive percentage of its government-and its war effort- with money from their oil sales-
And if a price per barrel of Russian crude just fell from 70 dollars a barrel down to 50- ole’ Vlad and his war plans are the ones getting screwed, here.
And-of course-there’s less money to fuel the war effort against Ukraine.
And so- there’s a fun byproduct of all of this, tariff stuff, as well.
photo credit: Getty Images
audio version of the segment here>>>This is all about China
Kevin O'Leary thinks the tariffs on China should be higher!