Breaking Points with Krystal and Saagar - 4/8/25: Markets Rebound Expecting Trump Negotiations, China Preps All Out Trade War, Elon Begs Trump To Stop Tariffs

Episode Date: April 8, 2025

Krystal and Saagar discuss markets rebounding expecting Trump negotiations, China preps for all out trade war, Elon begs Trump to stop tariffs.   Pisco: https://www.youtube.com/@PiscosHour Andrew Chen: https://www.3sixteen.com    To become a Breaking Points Premium Member and watch/listen to the show AD FREE, uncut and 1 hour early visit: www.breakingpoints.com   Merch Store: https://shop.breakingpoints.com/See omnystudio.com/listener for privacy information.

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We got a lot of things to get into. We're going to gush about the random stuff we can't stop thinking about. I am high key going to lose my mind over all things Cowboy Carter. I know. Girl, the way she about to yank my bank account. Correct. And one thing I really love about this is that she's celebrating her daughter. Oh, I know.

Listen to High Key on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Hey, guys. Oh, I know. perspectives from the left and the right that simply does not exist anywhere else. So if that is something that's important to you, please go to BreakingPoints.com, become a member today, and you'll get access to our full shows, unedited, ad-free, and all put together for you every morning in your inbox. We need your help to build the future of independent news media, and we hope to see you at BreakingPoints.com. Good morning, everybody. Happy Tuesday. Have an amazing show for everybody today. What do we have, Crystal? Indeed we do. So we are not spending the entire show on tariffs,

but we are spending the show on tariffs. So we're going to give you the very latest. Trump made a bunch of comments yesterday, where the markets are, all that good stuff. We've also got new reporting. Apparently Elon Musk and Scott Besson made personal appeals to Trump, Besson to change the messaging on tariffs,

Elon Musk to change the actual reality of the tariffs. We're taking a deep dive into China's response and what that could mean for them and for us and for the world. CEO of a clothing company is joining us to break down specifically just nuts and bolts, how he's thinking about the tariffs, how it will impact his business, so we can get kind of like the granular real world impact in the sense of that. Same time, Bibi was at the White House yesterday yesterday. Yes Trump pushed his chair in for him. No worries It's all taken care of this comes on the same day that we learned that the Israelis killed an American citizen in the West Bank So there's obviously a lot to discuss there Trump

Also announced in that said that same I wasn't calling it a press conference, whatever he called it I'm a lawless spray.ay. He announced direct talks with Iran. So this comes at a time of deep concern that we could be headed towards a war. So maybe, maybe this is an off ramp. We can all be really hopeful about that. And the Supreme Court handed the Trump administration a big win yesterday on the Alien Enemies Act. YouTuber Pisco, who happens to also be an attorney with deep knowledge of these issues, is going to join us to break down what exactly this ruling means,

both for the people who are already in El Salvador and for the future of the Trump administration's use of this controversial approach. So a lot to get to, as I said in the show today. Yes, that's right. Jam-packed. But thank you, by the way, to all of our premium subscribers. We really appreciate you. And you guys got a taste of what some of it looks like. We had our AMA yesterday where we

fell for the trolling from Mr. Walter Bloomberg, who has a completely fake account. But we all lived that together live, and so that's what you're missing out on. Although we did post a little bit of a preview. BreakingPoints.com. If you can't afford a premium membership or anything like that, don't worry. You can just help us like and subscribe the video or take this podcast, if you're listening to

it, send it to a friend. It's really helpful. Take your favorite episode. Maybe the yesterday's, the tariff episode. I thought that one was particularly good. As Crystal said, let's go ahead and get to the tariffs. Some major comments from Donald Trump doubling down, tripling down, quadrupling down, despite a lot of the cope that is out there right now. While he was in the Oval Office, here's what he had to say. They want you to be open to a pause in tariffs to allow for negotiations. Well, we're not looking at that. We have many, many countries that are coming to negotiate deals with us, and they're going to be fair deals. We're going to have one shot at this, and no other president's going to do this, what I'm doing. And I'll tell

you what, it's an honor to do it because we have been just, just destroyed what they've done to our system. Sending millions and millions of cars into the US, but we don't have a car that's been sold to the European Union or other places, but let's go for the European Union and it's not going to be that way. It's got to be fair and reciprocal. It's got to be fair. It's not fair. If you look at what's happening, you're going to see this today. I said, we're going to try and get groceries down, right?

An old-fashioned term, but a beautiful term. Eggs. So when I got in, the press went absolutely crazy the first week. They said, eggs have quadrupled in price. I said, I just got here. Tell me about it. And Brooke Rollins and our team did a great job, and eggs are down now 79 percent, and they're all over the place.

The Press Do you expect any of these deals to be made before April 9th? And secondly, there have been some mixed messages from your administration. You're talking about negotiations, and yet others in your administration are saying that these tariffs are actually permanent. What is the action? Well, it can both be true. There can be permanent tariffs, and there can also be negotiations, because there are things

that we need beyond tariffs. We need open borders. You know, we almost had a deal with China. They can be permanent, or they can be held for negotiations. They can be permanent, and they can be negotiations. That clears that up for us. They can be permanent and they can be negotiations. That clears that up for us, Sagar. This is part of the problem. This is why the markets are all over the place. We can go ahead and put the current screenshot of the markets. The current S&P 500 futures are up some 2.5%.

And the Japanese Nikkei Index rallied about 6% last night on the hopes of tariff relief. But the thing is, is that the message is incredibly unclear and everybody is just completely grasping for straws because for all of the talk of negotiation from Secretary Besant, from Donald Trump there, there's also the undertone of also it may not matter at all and what the timeline of that obviously still has massive ramifications as all of these tariffs

continue to come into place. For example, if you're a country and you're watching Peter Navarro talk about the removal of reciprocal tariffs from, say, Vietnam, you really have no idea what to do. Let's take a listen to that. When you have a country like Vietnam, let's take Vietnam. When they come to us and say, we'll go to zero tariffs, That means nothing to us because it's the non-tariff cheating that matters. Let's do Vietnam, Joe. They sell us $15 for every $1 we sell them. About $5 of that $15 is China transshipping to Vietnam to evade their tariffs. Why don't you just go after those shippers?

I think the thing we're all trying to understand is then if there are going to be negotiations and you're saying zero is not enough, what is enough? Zero is a small first start. OK, what is it? What is enough? And let me ask you, but related to that, let me answer that question. Let me answer. Let's take them one at a time. We have plenty of time. So what is enough? OK, you take any given country. They're like fingerprints. They all cheat us in a different way. So here are the things they cheat us on. Some of them engage in currency manipulation. Some of them have a hefty VAT tax. All of them dump into our markets. All of them engage in heavy export subsidies and government subsidies. All of them

put up these phony technical and phytosanitary barriers to our ag products and our autos and everything in between. Many of them steal our intellectual property. A lot of them run sweatshop labor, including forced child labor. They have pollution havens. So when you say to me, Ed, what do we want from them? We want fairness. So negotiation and zero is not enough. This is the difficulty. Now, what are we doing here? I would also point out, yes, it is true, Vietnam is a haven of trans-shipping.

Part of the problem is that we actually told companies, we're like, don't produce in China, you should go to Vietnam. Yeah, we wanted that situation. We literally wanted that to happen because Vietnam is a much better ally to us and actually has pretty good relations. So now what? Another example of that is Apple has moved some significant portion of their iPhone manufacturing to India. Yeah, I know. Same reason because they were, okay, you guys aren't happy with China. We got it.

We got it. India is an ally. We'll move some of our production there. India got hit. There are like 50% tariffs as well. 50% tariff. That got it. India is an ally. We'll move some of our production there. India got hit. Well, they're like 50 percent tariffs as well. That's right. So, yeah, I mean, all of this, many of these dynamics were actually created by intentional American policy to move manufacturing out of China to other allies. And now it's like, OK, well, they're going to have huge tariffs as well. You can see from the stock market, they are clearly betting that Trump is bluffing.

They are betting that, no, he doesn't really mean it when he says that they're, you know, permanent. And this is, by the way, according to the reporting from Jeff Stein, from Andrew Ross Sorkin, from other people who are talking to people in and around Trump's orbit, he's saying the same things publicly that he's saying privately. He's saying, no, I don't intend to roll these all back. And not only do you have Peter Navarro there who says, no, 0% tariffs, that's not good enough. That's not good enough.

You also had Trump in that press conference saying the EU had offered zero for zero tariffs. Also, not good enough. So I'm not sure what gives them the confidence that they feel like he's imminently going to, you know, announce some, oh, 50 countries have made a deal and look at these amazing things that I won. Maybe, maybe they're right. It's certainly possible. Trump has put tariffs on and backed off, you know, in just the past few months, we have seen this all play out. But I do think the market is not pricing in enough uncertainty about how Trump may ultimately handle this because I think he's loving all of this. I think he loves being in the, what do they call it, the catbird seat and having all of these people have to come to him and CEOs calling him and begging for relief and trying to petition the king and all of these countries blowing up his phone.

He loves this. So, like I said, we'll see. I also think it's important to keep in mind, you know, in the same way that Trump after like he does January 6th, he basically gets away with it. He has all these criminal charges. He's found guilty of multiple felonies. He still gets elected president of the United States. He has zero Fs to give. Like he thinks all these people told me I was wrong before and they were proven wrong. And here I am. And they don't know anything. And rather than having people like, you know, serious people like Bob Lighthizer in there, he has like clowns like Howard Letnick. So he intentionally constructed a circle that was never going to tell him no on anything that he's ultimately doing.

And Peter Navarro probably has a similar mindset. I mean, this is a man who was in prison for contempt for refusing to testify to Congress about, again, January 6th. So he has really emerged as the most sort of like ideological hardline pro-tariff figure within the Trump administration. And so I think, you know, his mentality probably plays into this dynamic as well. There's no question. I mean, Navarro also, people need to remember the origins of the first term. He was effectively banned from the Oval Office for almost a year, the first year of the Trump administration, when Trump really handed a lot of the reins over to Jared Kushner, to Gary Cohn, to a lot of those types of folks,

which did everything they could to keep him out of that, out of the decision-making process. Even during COVID, there was a lot of Navarro efforts to try and to bring some manufacturing, not have so much reliance on PPE and personal protective equipment for hospitals, ventilators, things like that. Jared Kushner completely put the kibosh on that. Well, Kushner's not here this time around, neither is Gary Cohn. Trump does see a central failure of his presidency to not be able to do many of those first things in the first term. And so he wants to listen. And then second is, I have noticed this, the best way for people like Navarro and others to ban him, et cetera, everything can be forgiven if you are willing to back him on stop

the steal. In the two cases, those two cases I just mentioned, they literally went to jail, basically, rather than to turn and to testify against Donald Trump. There can really be no greater expression of literal loyalty. At the same time, what the markets are hoping and grabbing onto right now is this right here. Let's put it up there on the screen. So Secretary Besant apparently flew to Florida to lobby Donald Trump on the tariff message over the weekend. And this explains some of the talk that we saw yesterday. Secretary Besant urged Trump, quote, to focus his message on negotiating favorable deals or risk the stock market cratering further. Besant, who, quote, landed with the President of the White House on Marine One Sunday night, told Trump that markets would remain in peril unless he started putting more emphasis on talking about his endgame with the tariffs, winning deals with other countries.

So that's part of the reason at least the word negotiation has crept back up into the White House lexicon yesterday. But it's one of those where it's so muddled that people really are grasping at something I do not see right now. For example, they've said, oh, well, we've had leaders of 70-some countries call the White House. I'm like, first of all, that sounds super inefficient. But second is how are you going to get this resolved on a reasonable enough time frame? I want people to understand the stakes. So a friend of mine, Ryan Peterson, the Flexport guy, the CEO of Flexport, you know, he just revealed yesterday, quote, on April 17th, the U.S. Trade Representative's Office is

expected to impose fees of $1.5 million per port call for ships made in China, and for 500,000 to a million if an ocean carrier carries a single ship made in China, or even one has on order from a Chinese shipyard. Now, does anyone want to guess how many ocean container ships were built by the United States of America last year? The answer is zero, just so everybody knows. Quote, there are actually only 23 American-made and crewed container ships in the entire world today. They are all servicing domestic ocean freight. They are, quote, tiny compared to today's megaships,

and they are not even allowed to sail to overseas ports. So what do you think is going to happen? If you make a company pay a million five every time they dock, what are you going to do? You're going to dock less. Go somewhere else. Or you're going to dock once. So what does that mean?

That means a lot of these smaller ports, Baltimore and a few others, yeah, see you, longshoremen, good luck. I hope that you enjoy not working. They'll just go to one big port. They're going to a few others. Yeah. See you. Longshoremen, good luck. I hope that you enjoy not working. They'll just go to one big port. They're going to go to LA. And truck everything. Even worse, what happened during COVID? Does anyone remember all of that nightmare in the port of Los Angeles?

That's what caused, in part, massive inflation. Massive inflation. So it's like you can see this stuff coming from a mile away. And guess what? Guys, that's coming in nine days. Does anybody think that that is going to be solved in nine days? And this is a country, China, which has actually called our bluff multiple times. We're about to talk about this in a little bit on China.

I think what I would really hope everybody from this show can take away is to get away with the boomer mindset of these are some backwards. No, no, no. We are dealing with a hyper sophisticated global powerhouse, one that has levers of power that we could only dream of in the United States of America. And so when I look at this and then I see the president talking about a 104% tariff that is going to be played not only on all Chinese goods, but then this $1.5 million port call. I am looking at a literal mass explosion of supply chain disruption, COVID level, supply side inflation. And then also, do we not want more union worker jobs, not just in Los Angeles? I want them in Baltimore, right over here.

That's right. We don't. They're going to skip it. And no one's going to say, oh, you're giving into the Chinese guys again. You know, the problem is we have not spent any money building ships or boosting our shipyard industry for 35 years. They have been pouring money into they beat us just because they paid for it. We can't just come in at the very last minute and be like, oh, sorry. All 35 years of rectifying decisions or bad decisions and all that, we expect all this stuff to over.

Do you know how long it even takes to build a ship? I beg people to go and look at these things. I took a trip once down to the Panama Canal. You can't even wrap your head around how big some of these mega container ships are. Some of them are so big, they still can't fit through the canal. Wow. That's what we're talking about. It's insane. Yeah. And I mean, listen, you're still also relying on capitalists to take a look at that, you know, state of affairs and be like, oh, that makes me really want to manufacture in the U.S. And like, first of all, as we've discussed ad nauseum at this point, like with the on again, off again, this guy's a madman.

The next administration may do something totally different. No one is going to. And also, according a global recession, like a lot of big investments don't really get made in when you have a recessionary environment. And, you know, the chaos of it means that, yeah, everybody is just going to freeze into place. So when you don't pair it with any sort of concerted government spending and directed effort at industrial policy to, you know, strongly encourage the capitalists to do the thing you want them to do, then you are unlikely to get the results that you want because you can't just wave a magic wand and suddenly there are a bunch of American container ships. Also, with regard to that, I saw that yesterday and it also triggered for me like, okay, well, that does not seem like an administration that is ready to back off of their maximalist like terrorist protectionist position. That seems like an administration, like a president who is all in on this direction. So, you know, again, look, maybe the Wall Street, maybe they're going to

be right. Maybe they're going to prove Jeff Stein wrong for once. By the way, there were people in Jeff Stein's timeline yesterday who were like, thank you. You know, I saw you on breaking points and I listened to you and I saved a bunch of money by, you know, moving things around or taking money out of the stock market, et cetera. But maybe this time, Jeff Stein is going to be wrong and the Wall Streeters are going to be right. But I don't know where they're getting their confidence. A couple last things. We have Larry Fink. He sounded off about how he thinks very likely we are already in a recession.

This is the CEO of BlackRock. Let's go ahead and take a listen to what he has to say. Are we headed for a recession? Are we in a recession? I, you know, most CEOs I talk to would say we are probably in a recession right now. Right now. Right now.

And it's not just him. So he says most, not just him, most CEOs I talk to think we are in a recession right now. You can rest assured this is a man who talks to a lot of CEOs. Let's put this, CNBC did their like polling of their, the CEOs that are in a recession right now. You can rest assured this is a man who talks to a lot of CEOs. Let's put this CNBC did their like polling of their the CEOs that are in their network. One CEO said this is the Trump recession with tariff price increases, job losses coming. And a majority of the CEOs that they reached down to 69 percent expect a recession.

Three quarters of those CEOs expect a recession to be moderate or mild. So they're not saying Great Depression kind of thing, but rather than severe. But, you know, this still is an extremely pessimistic view of the economy and directly directly attributable to the policy decisions of Donald Trump. Yes. And this also what now you might say, don't you hate BlackRock and all these other people? Yeah. But guess what? They are the market. Larry Fink literally is the market. So we should listen to what they're – because, again, you may not like these people. You may like to see them cry, and I think that's great as long as it doesn't affect you.

But the problem is in the way that our world is set up today, specifically our country, our capital markets, those people, when they say there's a recession, it becomes a self-fulfilling prophecy. That's right. Those people are going to go from $10 billion to $ to 5. You're going to go from, what, negative 5 to minus 5,000. And that's a lot more dismaying for a lot of people that are out there. Camp Shane, one of America's longest-running weight loss camps for kids, promised extraordinary results. Campers who began the summer in heavy bodies were often unrecognizable when they left. In a society obsessed with being thin, it seemed like a miracle solution.

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of 34% on top of their already record-setting tariffs, non-monetary tariffs, illegal subsidization, I can't say that, of companies, and massive long-term currency manipulation, despite my warning that any country that retaliates against the U.S. by issuing additional tariffs above and beyond their already existing long-term tariff abuse of our nation will be immediately met with new and substantially higher tariffs. Therefore, if China does not withdraw its 34% increase of their already long-term trading abuses by tomorrow, that would be today now, April 8th,

the U.S. will impose additional tariffs on China of 50% effective April 9th. That would be tomorrow. Additionally, all talks with China concerning their requested meetings with us will be terminated. Negotiations with other countries, which have also requested meetings, will begin taking place immediately. Thank you for your

attention to this matter. So, Sagar, assuming that these new tariffs on top of the original tariffs go into place, you're talking about a more than 100% tariff on- 104 specifically. Yes, specifically 104% on China. Yes. Man, that must be really tough actually for the enforcers because you can't just double it whenever you come to the price. You actually have to multiply for the 104. All right, let's go through some of the thing. And this is, again, we need respect for China. We can be in terms of onshoring and all of this, and we can acknowledge many of the sins of the past about stealing technology, trade barriers, currency manipulation. All of that is old news. Now we are living in 2025,

in a world where they have one of the world's best car companies, our net exporter, and have some of the best manufacturing, high-tech and low-tech, in the entire world. So let's go and put this up there on the screen from the Financial Times. I was genuinely amazed reading through all of this. The Chinese know exactly how to destroy us, and they have a whole of government approach. They don't need to mess with the Federal Reserve. They don't have to deal with Congress. They are basically doing everything we would want to do if we wanted a coherent tariff strategy. So let's start with the first thing. Not only did they impose the 34% reciprocal tariff, or sorry, yeah, 34% in terms of what we put into place, they immediately also held back several things that they could use for maximum pain on the US. So first example is control of rare earth minerals. Some 90% of rare earth minerals,

so-called rare earth minerals, as Ryan likes to say, come from China. At the very least, the finished refined products, over 90 percent, all of them coming to the United States require an export license. Those export licenses, yeah, you can basically say goodbye to that if something like this goes into effect, even with the tariff. They'll simply just not export it. Number two, there was a theory that this would destroy the domestic Chinese economy. Well, unlike this stupid country, what are the Chinese doing? They're saying, okay, well, we control our central bank, and it's all controlled by a single entity, the CCP. We will then move to immediately lower borrowing costs for all domestic business in China. We will basically facilitate a boom in terms of liquid money. Number two, we will pump as much money into the domestic

economy as necessary to boost domestic demand and spending and to make sure that our citizens do not have a decrease in quality of life and that business circle remains squared. Those are all the things that they are doing and can do like this. All of those, we have to rely on some sage in the Federal Reserve to wake up from his nap three months from now. Hope and pray. We also, if we want any stimulus, what do we have to wait for? Mike Johnson. Yeah, I'm sure we're going to get on top of that tomorrow.

They're going in the opposite direction. They're actually going to cut some air. Right, exactly. So let's think about who you would rather be. Would you rather be the person who has like full control over your entire economy, has deeply studied its enemy, who has studied now four years of stupid sanctions on Russia, the country which mindlessly scrolls TikTok and which buys Shein and Temu products and is literally addicted to it. I think I know which one I'd rather be. Yeah, which at the center of our social contract is these cheap goods. Like our public has not been primed to be willing to experience any pain around consumer goods as, you know, I mean mean we saw in inflation how much that hurt people and how

Much of a major political issue it became and soccer to add to your list You know another thing that the Chinese government has going for it and I fully understand us authoritarian government It's hard to know exactly what public opinion is but Harvard did a study of public sentiment visa v the government and it's extremely popular I'm talking like 95% saying I'm either satisfied or highly satisfied. They have a lot more unity around their government than obviously here. Trump is very divisive. He is pretty. He is quite unpopular.

He's, you know, net underwater at this point. You have massive protests that were happening in the streets last weekend. So you have a society that is not at all bought in on this project whatsoever. And, you know, I think that also gives them a tremendous advantage in terms of what they can ask their public to accept. And, you know, we also like, I think a lot of our mental models are very outdated. I was just thinking about the, you know, the example of BYD. Like BYD, this giant Chinese automaker, seller of EVs globally and hybrid models as well. And we don't buy their cars. Like they don't rely on the U.S. domestic market.

And guess what? BYD is growing like gangbusters. They are now selling more cars than Tesla does. In 2024, they sold 4.27 million vehicles. So it is an instance of, hey, guess what? They didn't need us. They didn't need us for this company to be successful. They didn't need us for this company to grow wildly.

And they have the whole rest of the world that they can sell to. And I think your point about Russia is also a really important one, just in terms of how I've been thinking about this. Every mainstream economist thought that the devastating sanctions we put on Russia would be so destructive to their economy. I mean, we really tried to give them the financial death penalty. That's why we don't even have tariffs on them, because we have no trade. That's right. Yeah, we literally cut them off. All-out economic warfare against Russia. And guess what? Like, I'm not going to say it didn't hurt them.

And they also have the wartime economy to help to compensate. But it did not end them. It did not destroy them. They were able to figure it out because they had been thinking for a while and planning for a while, knowing that we are fickle and that they are an adversary and knowing that this eventuality could be playing out. China has also been thinking and preparing and is in a much better position to shoulder such an economic blow than Russia is. So I think that if the Trump people think that they're going to be able to bully and punish China into submission here, I think they

are completely wrong about that. 100%. So let's return to the shipbuilding thing that I was thinking about. Nice little statistic here from our friend Arno. In 2024 alone, CSSC, the Chinese State Shipbuilding Corporation, built more commercial ships by tonnage than the entire U.S. shipbuilding industry has built since the end of World War II. Okay, so let's let that sit in. Let's say that we have, you know, this trade war, 1.5 million port call in America's shipbuilding industry, which is defunct and basically rotting from rust. We're going to spin that up miraculously over a five-year period where we'll continue to produce nothing. As I said, in 2024, we produced not one. They produced more in one

year than we did for the entire period of the last 75 years. And we eventually, miraculously, are able to churn one out. We are still 75 years behind where they are. Now, let's again think about capital markets and efficient market hypotheses and all of these other things. I will remind you of my favorite stat from Joe Weisenthal. The Chinese Stock Exchange in Shanghai is flat to 2009. We are up over, even with the dip, some 100% to 80% just over the last five years. Are you more materially wealthy as a country by having that 80% bump in the S&P 500? Obviously no. We are a massive service-based dominated economy. And I agree, of course, with the idea of bringing back manufacturing. However, you cannot just simply

flip a switch. The amount of money it would require to reach even 10% of the CSSC's shipbuilding capacity would make Mike Johnson and Rand Paul have a heart attack. That's just to reach 10%. They don't agree. That's the truth. So if you don't agree, then just simply condemn us, you know, to our current fate of consuming OnlyFans and pornography and sports betting and Timu and Sheehan. But don't do some half-assed shit, which is what we're doing right now. Because now we're just going to be poor and addicted. Poor, addicted, and your wages are going to be lower. You're going to have less of a safety net. Like, it is the worst of all worlds. It's taking things that were bad

and making them worse. That's the direction that they are headed in with all of this. We have to say, though, Socrates, they are borrowing some from Chinese thought. There's some strong Maoist sentiments being expressed from the Treasury Secretary himself, Scott Besant. This was pretty entertaining to listen to. He went on with Tucker Carlson. Take a listen. What we are doing, on one side, the president is reordering trade. On the other side, we are shedding excess labor in the federal government and bringing down federal borrowings.

And then on the other side, that will give us the labor that we need for the new manufacturing. And we're going to re-lever the private sector. So the private sector, in essence, has been in recession during the Biden years. And this is an opportunity to right-size the federal government and unleash the private sector again. So what he's talked about is how these federal government workers who were laid off, you know, the people who were like researching cancer or whatever, they can now go to work in the new factories online, which, again, very reminiscent of the efforts to, you know, cultural revolution, cultural revolution, put the intellectuals and the scientists to the reeducation camp, sent them into the factory.

Of course, to your point, there's no actual investment in creating those factories. So the factories aren't actually going to come. It's just going to mean we're going to have less cancer research and people will be poorer. Yeah, it is funny. Although if you read The Three-Body Problem, you do know there are, of course, benefits. As somebody who wants aliens revealed to be to the United States, That was the only benefit of the Cultural Revolution from that book. Sorry, I guess I just spoiled it, but whatever. It's still worth reading.

It's been out since 2006. They made a Netflix document or a Netflix thing about it. Get them at this point. I can't get any more. But you should read the book. Yeah, it's amazing. And again, almost to defend Mao and all these people, they even had a program at least to facilitate that. They had the Red Army, whatever it was called, the Red Guards and others to facilitate the movement of these mass intellectuals and state capacity, etc.

And they had quotas and they had a system. It didn't always work, obviously. You had to come up with the fake things. I do recommend, if anybody ever wants to, you should read Ezra Vogel has a biography of Deng Xiaoping. And Deng specifically was purged and was one of these people

who was purged and actually sent to go work in a factory. And his period during the Cultural Revolution and the Great Leap Forward is absolutely fascinating to actually go and to study. It eventually informed the modern Chinese model of where we are today.

So, yes, if we would like to repeat the mistakes of China, I guess we can. You know, maybe our Deng is somewhere out there. He's a fired NIH worker who will be stitching, what was it, screwing the tiny little screws. Yeah, the little, little screws into the iPhones. And 15 years from now, he will come and save us or she. Well, he's going to be replaced by a robot. So anyway, that's right. Also, according to Lutnik. Maybe we need an AI D. Or she. Well, he's going to be replaced by a robot. So anyway. That's right. Also, according to Lutnik.

Maybe we need an AI ding job. Honestly, we could do worse than AI ding jobs. Listen, I'm coming around to the view that maybe we do need to just accept our fate with the AI overlords because the current human model is not going all that great in my personal estimation. But to show people, I believe in humanity. It's a joke. I believe in humanity. I believe in humanity. It's a joke. I believe in humanity. I believe in democracy, but you can't help but look at the Chinese model and be like, this is obviously

better. Like it's obviously working better than what we have right here. I'm not saying it would work here. Obviously wouldn't. We don't have 1 billion Han Chinese, 75 or what more, 80 years of PSYOP population to believe in all this. We're not ethnically the same. Yes, we don't have a 10,000-year history or whatever, or 2,000-year history of civilization and all that. All that said, you can clearly see that there are major advantages to this well-executed authoritarian model, and that when we're going up against them with a lot of the weaknesses that we have as a result of degenerate capitalism, that we really are the caricature in some ways of what they think of us and how they justify their authoritarianism

over their population. If you look at many of the results, our own consumer results, our entertainment results, what Americans spend and choose to do their time, obesity, the constant chase of dopamine hits. Like that is what this country is ultimately all about. I was really thinking about that with cars. Like what distinguishes the American car? Jeeps, which are pieces of shit with coolers and heated seats that are gigantic,

that break down every two to three years. They're big and comfy. Yeah, they're big. They're comfy. They have all these dumb ass features, tailgating seats, right, that they charge you $75,000. And somebody who makes $60,000 a year is like, yeah, let me get a 25% APR on that, and I'll pay them monthly at a bare minimum rate for the next 420 months. I'm not even making this shit up. This is reality. This is literally what America, what it looks like. Or, you know, you could have something different. But well, I will steal Ryan's point. He's like, listen, one of the reasons I love this country is like our rights, like the freedom of speech. And increasingly, like you can't feel comfortable to speak out on some key

issues, like, for example, Israel, Palestine, and think that that right is still intact. So if we're going to not even have that, like, what are what doing here? What are we getting out of this arrangement at this point? Camp Shane, one of America's longest-running weight loss camps for kids, promised extraordinary results. Campers who began the summer in heavy bodies were often unrecognizable when they left. In a society obsessed with being thin, it seemed like a miracle solution. But behind Camp Shane's facade of happy, transformed children was a dark underworld of sinister secrets. Kids were being pushed to their physical and emotional limits as the family that owned Shane turned a blind eye. Nothing about that camp was right. It was really actually

like a horror movie. In this eight-episode series, we're unpacking and investigating stories of mistreatment and reexamining the culture of fatphobia that enabled a flawed system to continue for so long. You can listen to all episodes of Camp Shame one week early and totally ad-free

on iHeart True Crime Plus. So don't wait. Head to Apple Podcasts and subscribe today. Over the past six years of making my true crime podcast hell and gone, I've learned one thing. No town is too small for murder. I'm Katherine Townsend. I've received hundreds of messages from people across the country begging for help with unsolved murders. I was calling about the murder of my husband at the cold case. They've never found her.

And it haunts me to this day. The murderer is still out there. Every week on Hell and Gone Murder Line, I dig into a new case, bringing the skills I've learned as a journalist and private investigator to ask the questions no one else is asking. Police really didn't care to even try. She was still somebody's mother. She was still somebody even try. She was still somebody's mother. She was still somebody's daughter. She was still somebody's sister. There's so many questions that we've never

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on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Binge episodes one, two, and three on May 21st and episodes four, five, and six on June 4th. Add free at Lava for Good Plus on Apple Podcasts. Let's go ahead and get to some of the cracks maybe that are emerging in the MAGA coalition. We can put the first one up on the screen. This is certainly the biggest deal with regard to, you know, who has the most power with Trump at this point. Washington Post reporting that Elon Musk made direct appeals to Trump to reverse sweeping new tariffs over the weekend as he was launching a barrage, they say, of social media posts. We covered this yesterday, criticizing Peter Navarro, one of the lead White House advisors for President Trump's aggressive terror plan.

Musk was going over that same official's head and making personal appeals to Trump. The attempted intervention, confirmed by two people familiar, has not brought success so far. No kidding. Trump threatened Monday to add new 50 percent tariffs on imports from China, which we also just covered. Musk, meanwhile, posted a video to X in which the late conservative economist Milton Friedman touted the benefits of international trade cooperation, the impersonal operation of prices, as he put it, breaking down the sources of the materials that go into a simple wooden pencil. They go on to say that this is, of course, the highest profile disagreement between the president and one of his key advisors. So, you know, Musk, as we pointed out yesterday, has been kind of like posting a little passive aggressively on Twitter about this. We know that he's look, he's a he was praising Malay previously for rolling back tariffs. He said that thing publicly

about how he wants there to be zero tariffs between the U.S. and the E.U. and apparently is also trying to make his pitch directly to the president. So far, hitting his head against a brick wall at this point. Look, his problem is that Trump only cares about a few things.

Basically, actually, it may even be one. I'm not even particularly convinced he cares all that much about immigration. But whenever it comes to- I think he thinks that's politically beneficial for him. Yeah, but he does not actually pay attention to that. Yeah, he outs all that much about immigration. But whenever it comes to— I think he thinks that's politically beneficial for him. Yeah, but he does not actually pay attention to that. Yeah, he outsources that to Stephen Miller. Yeah.

And to Tom Homan. And he's like, you guys do a good job, and I'll back you up rhetorically, even though our deportations are basically flat to wherever the Joe Biden administration. But on trade, it's like the one thing that he does care about, so he's not going to listen to Elon. And Elon confused that, you know, with Doge, as we said before, Trump never cares particularly about Doge. It's all rhetorically useful. Coalitionally, he can see there's some people who are jazzed up about it. He's like, yeah, OK, whatever. He likes that the Libs are freaking out about it. That's all they care about. He feels like the bureaucracy was opposed to him. So he feels like this is an enemy that's being sort of like defenestrated by Elon. So it's useful for him.

Bingo. Exactly. This time around though. And actually we shouldn't rule out Elon's ego in this either. Guess who's nobody's talking about right now? Elon. Unless it's as a tertiary story to the tariffs. True.

Doge is like what? You know, for people who pay attention to politics, it's like, we're not even paying attention to Doge right now. We should. It will come back. I can guarantee you that. But that just feels like a very been there, done that thing. And if any way, if anything, this is Trump reasserting himself into his own presidency. But in a sense, doing it in not only what I think will eventually become a very unpopular and poisonous move for his own presidency, but he's doing it in a way that splits the coalition previously that was able to really bring him. He could be all things to all people as long as he was just kind of floating in the clouds. He got the tech right, the barstool right, MAGA right, who obviously will back him no matter what.

This is like the first time he's staking something out. the tech right, the barstool right, MAGA right, who obviously will back him no matter what. This is like the first time he's staking something out. And so, as you said, you begin to see the cracks that are forming. For example, here we've got Dave Portnoy. He says he's riding with Trump for now, but he said he's lost some $20 million. Let's take a listen. I went super viral when I said I lost $7 million. I'd kill to be back to losing $7 million. I haven't even looked. If I had to guess them down in these last three days, probably close to 20.

I don't know, like 10, 15% of my net worth, poof. But I'm still here. That's the game. That's what I'm in. Like, do I like it? No. Am I crying? Am I like, oh, whoa, it's me. I wish, do I like it? No. Am I crying? Am I like, oh, whoa, it's me.

I wish I voted for Kamala. No. Do I wish this didn't go down like this? Yes. Am I in this to make money? Yes. Do I wish I had that money in my back in my investment portfolio? Yes.

So we'll see. Will cracks begin to emerge? Yeah, it must be nice. He had also said, like, everyone's going to vote for Democrats, myself included, in the midterms. Oh, did he say that? He did say that. That might have been in the rant when he had only lost $7 million, not the $20 million. Like, Jesus Christ. Well, as we get closer to $40, $50 million, what do you think that's going to be? He's going to be putting his pronouns in his bio here pretty soon. Yeah, I've seen that joke. Bill Ackman will be doing land acknowledgments by that time. Let's go to the next one here. This is Kevin O'Leary from Shark Tank begging Trump to back off.

Let's take a listen. Kevin, your analysis of what's going on, please. It's all Euro right now because this is the test case right here. I think this is a really huge opportunity for Trump to find an off-ramp here in the administration because it's not Vietnam. That's not big enough. But EU has a huge aspect that is so important, and that's on automotive. Because if you think about how restricted it's been in Germany alone or in Switzerland or France about getting U.S.

cars into those markets, they've been so punitively oppressed with tariffs, and they're willing to wipe those out. So what you get to say is, lookly oppressed with tariffs, and they're willing to wipe those out. So what you get to say is, look, in the interim, while we're building our own factories in the U.S. on whatever it is you want to look at, I'm going to show you how it's done with euro. And the eurozone has been brought to its knees. It's willing to go zero zero and open its markets up. And that's the key, Stuart. The idea that you would open up the markets and set the path for every other negotiation of the other 59 countries, whether it's Penguin Islands or whatever, it doesn't matter.

This is the opportunity. This is the moment. And if Navarro sees it that way and advises Trump and whether Lutnick sees it, but that's what the market's holding onto right now. The volatility's going to remain extreme. But this Eurozone deal is the beginning of a beautiful outcome, if you want to put it that way.

And then you get to say to everybody, look, it was a lot of volatility, but I got us there. This is the moment. Yes, it was a lot of volatility, but I got there. It's like, yeah, I'm not thinking that's happening anytime soon. The way they talk to this man, they're so like, oh, he'd be a beautiful mug.

That is part of the game. I know. Yes, when you deal with it. Think about, for anybody out there, I'm sure this has never occurred before, where you've ever worked

for some shithead boss. How do you deal with it? And they're the most egomaniacal, annoying people on the planet. You gotta suck up to them a little bit. You gotta just say,

oh, you know, flatter their ego. You know, just up to them a little bit. You got to say, oh, you know, you flatter their ego, you know, just be able to work them towards a solution and make sure they think it's their idea. That's basically what we're dealing with here. Trump is that boss for the entire country. It's more how I dealt with my kids

when they were like four years old, to be honest with you. You make them feel like it's their idea. Yeah, there you go. Present them with choices, but only the choices you want them to go with. Yeah, it's a similar strategy. Bingo. All right.

Let's now let's flip the coin. What does it really look like for a lot of the supporters here? We got Fox and friends back in Trump up. Let's take a listen. This is precisely what Donald Trump said he was going to do, which is always a shock when a politician does that. But and it's what he's been saying for literally decades, that this is what needs to be done to to save the American economy. And I just bring up this. Go ahead. Well, I was just going to say you have to just let him do what he's going to do.

Give him some time because he is a businessman. He's a billionaire. He knows what he's doing. And when does America say we're tired of paying the most? We're tired of paying and paying and paying and doing what every administration has done. When do we say we're standing up for ourselves and we're going to make free and fair trade? If you're charging us this amount, we're going to charge you that amount. That is not what we're doing. That is not what we're doing. You just got to let the – yeah, actually, that's the real problem is anybody – because as you and I know, there are well-meaning people out there. And they trust their president. They voted for him. And he tells you it's a reciprocal tariff.

And they're like, yeah, okay, it's a reciprocal tariff. It's not a reciprocal tariff. We can break it down, the fake formula and all of that, all you want. But empirically, it's not reciprocal. It is something. It's a trade deficit tax, basically. Okay, you can sell it that that, all you want. But empirically, it's not reciprocal. It is something. It's a trade deficit tax, basically. Okay, you could sell it that way too if you want. Doesn't sound so different.

It sounds a little different though. Yeah. I think whenever you do. Trade deficit tax. The trade deficit tax, which is decades, and we're trying to make up for this, this, and this, and it's actually not reciprocal. And actually, even if they drop the tariffs to zero,

then we still are not going to take that into account. You're like, hmm, okay, all right. Well, I'm feeling a little bit differently about this now, aren't I? For example, we also have a new MAGA version of the World Economic Forum. Let's put this up there on the screen. I genuinely love this one. You do not need the new iPad. You do not need the new cell phone. You do not need the new video game console. You want them. There's a big difference. If you look at the people whining about tariffs, I challenge you to ask how their lives have been affected in any way.

In other words, you will live in a pod and you will eat bugs. You will eat the bugs and you will love it. I feel complicated, right, because I kind of agree with him. I mean, is your life all that materially better because of the new iPad, the new cell phone, the new video game console, all the new products, electronic products that we've been able to purchase since the Great Recession. I don't think so. I think we're a much poorer country, actually. But, you know, as we always say, if that's the only social contract that's on the table and you're going to screw with that, that's a big problem unless you're offering something very, very different. I mean, really, what you, I think a good middle ground or whatever for America would say, yeah, you can still have

your iPad. We're going to try and build it here. Here are all the steps that we're going to be able to do. It's a win-win. You can still have your consumerism. We can still have it made here on the cell phone point. I mean, what do we really want? Me? I want competition. I want to see something interesting and something new. That's part of the thing that's exciting about BYD is finally you're like, at least it's different. I haven't seen a different new novel thing prop up technology-wise other than AI since the invention of the iPhone. That's it. And even with the AI thing, it's now all commoditized basically across the spectrum, and it all seems to be going the same way of monopolization and of being rolled up. That's

a great thing about America, about entrepreneurship, but we don't see a lot of that. And I don't know, just looking at this, I just know in my bones, I did my whole rant about degenerate capitalism, but like that's who we are right now. And, you know, it takes a literal cultural revolution to be able to move away from it. It took us 75 years to get here. It'll probably take us, I would say, 50 to get out. You got to start small and you got to give people buy-in. Otherwise, this will be an aberration. My current prediction is that America will be the most neoliberal country on earth in 2029. Like in 2029, after Donald Trump is gone, we will be like the Gen Z is going to be the most neolibbed Milton Friedman out generation. That is so possible.

I'm telling you, I can see it coming from a mile away. I mean, I think, I can't remember who it was that made this point, but it was a good one. It was people's mental model is that Trump is trying to bring us back to the 50s or 60s, but he's, that's not what he's saying. He has consistently this campaign and into this administration and at his inauguration, he wants to bring us back to 1900. He wants to bring us back to the era of McKinley. That is a very different landscape. You're talking about before the introduction of the income tax, which of course is aspirationally progressive and which was put in place specifically so that the government in World War I and then World War II

would be funded more by the rich than tariffs land, of course, squarely on the working class. He's just implemented with the tariffs the largest regressive tax on the working class in American history. You're also talking during the Gilded Age. This is a time before you have, you know, child labor laws. It's a time before you have significant union rights and labor organizing and workplace protections. This is before the New Deal. So you don't have the social safety net built out.

You don't have even things like Social Security and Medicare in place. So I do think it's important for people to have that mental model of that's the thing he's going for, not some 50s or 60s ideal. And if we think about the time period when American manufacturing was at its height, I mean, first of all, the world was just a lot different place, right? Much of the world was devastated by World War II. It gave us this unique advantage where we were sort of the only game in town. And the other two pieces of that that are often overlooked is, number one, you did have a really strong labor movement. So people were able to achieve relatively high wages, relatively stable employment, and secure pensions, too, by the way,

secure retirements. You also had the build-out of the FDR social safety net. And housing was way more affordable. Health care, way more affordable. Healthcare, way more affordable. Education, way more affordable. And this was also before you have now this advent of increasing levels of automation so that the same factory can produce much, much more with many fewer human beings required, which is another thing that Lutnick says. So there's no going back either to 1900 or to the 50s or 60s or 70s or whatever your, you know, period of peak manufacturing American Renaissance is going to be. And the fact that they have no interest in, I mean, Trump is busting unions. He's, you know,

consistently been a union buster his entire life. He's taken that into this administration. They're cutting the social safety net. There are zero efforts in place to improve the cost of housing. In fact, the tariffs will only increase the cost of housing. No efforts in place to reduce the cost of education. No efforts in place to reduce the cost of healthcare. In fact, some of the very mild reforms put in place by the Biden administration have been rolled back on that front. So that's the landscape that you're actually looking at here. But I did enjoy this particular, this was more of a creative, I think, attempt to spin the tariffs in a positive light. Congressman Roger Williams, who apparently is a car salesman, says that one good thing

about the tariffs is that now used cars are going to be more expensive. So this he sees as a positive. Let's take a listen to that. And people with used cars or used cars are going to be worth a little bit more. And when it's worth more, they have more down payment, they have more equity, and they can make their payment less than it was. So there you go. Used cars are going to be more expensive. So, you know, that's a good thing, right?

That was actually a great landscape for all of us in 2022. Oh, that was awesome. It was really awesome. Yeah. At a time when car loan defaults are actually spiking and at, I think, an all-time high. They've definitely gone up significantly. Let me just quickly split the difference on 1902. Let's make the case for at least some of the time of McKinley.

You know what was nice? We were not the global preeminent country that ran the entire world. It was a lot cheaper, actually, to be a country that was not the capital of the global— But McKinley was moving us in that direction. Yes, he was, but we weren't there yet. He was the beginning of the American empire. Let's take it was moving us in that direction. Yes, he was, but we weren't there yet. He was the beginning of the American empire. Let's take it all the way back to, let's say, 1900, right? In the beginning of the progressive era, literally pre the true expansion of, or at least the total expansionism that was

eventually embraced with the conquest of Cuba and of the Philippines. At that time, what was America's like actual, what was America's goal? America's goal was to secure its place amongst the global, you know, it was to have some respect, but it was not to replace the German Empire or the British Empire. It was one which wanted some reciprocity in the world of trade. It was one where 40% of our, you know 40% of our revenue at that time would come from customs duties. But broadly, it was a country very similar to some of the issues that we have now. We had major fights about immigration. We had big fights about the transition to industrial capitalism. We were an inward-focused country that needed to hash out all of those types of problems before we eventually became this player in the middle of World War I.

I'd also say, and this is a common thing too, you know, yes, you know, we can talk about the nobility of income tax and all that, but the true necessity of income tax was to fund the war machine. I mean, it's not a surprise. The first income tax ever instituted in the history of the United States is during the American Civil War when they need money. And so a lot of it was actually not just about correcting some gilded age, you know, wealth imbalance. But that was part of it.

That was part of the intellectual case that was made to the public about it. The reason they needed the money in the first place was to build bombs and weapons to send 200,000 Americans to die for what? To preserve the British Empire during the First World War? That's why I get really annoyed at people who get so furious at the Americans of 1920s and 1930s for passing Smoot-Hawley or for being isolationists. It's like, guys, literally 200,000 of their sons were murdered on the fields of France for Woodrow Wilson's idealism, and you got taxed, and you got a Great Depression, what did you get out of that? Of course you're going to be somebody who is deeply skeptical of internationalism, of

global trade. Anyway, I just think there is at least some things you can learn from that time of the simplicity of not being the seat of the global empire. Some of the benefits of what could that be. And you don't have to return to that era, but there are certain things about it, which were actually great. And, you know, so I just think that there's often this idea that we currently are living in where everything from that time period is like regressive and bad, but there are mental models which you can adopt and you can look at from that time and say,

yes, there are certain things that we should aspire to. And I think one of the things that we should at least try to aspire to is to move away from having to fund, let's say, I mean, Pete Hegsteth yesterday said that the next Pentagon budget is going to be $1 trillion. Yeah, that's right. A trillion dollars. Yeah. Well, and I guess that's why I see the, I see things differently. You're right. The full American empire had not built, been built out, but that was the direction. I mean, McKinley takes the first big steps in that direction. And, you know, just in terms of the

system of taxation, tariffs are deeply regressive. They land. If, if you are a working class person, much of your income is going to consumption. If you're a wealthy person, it doesn't. And that's why, it's like, you know, all these like flat tax libertarian people. That's why a flat tax is always wildly unpopular because people look at the fact of like, oh, I'm gonna get charged the same thing

as this billionaire. Actually, no, it's going to be a much larger percent of your income. And so, you know, the ideal of the income tax is that it would be progressive, that the burden would fall more heavily, you know, on the rich, where people would actually be taxed. We all know there's a million ways that there's loopholes and it's not lived up to its aspiration. But Trump consistently talks about getting rid of the income and going

back to that funding model altogether. And that would be a war on the working class. That would be requiring the working class to fund the $1 trillion defense budget and all of the wars, because it's not like they're rolling back, as we are about to discuss in some of our later foreign policy blocks. It's not like they're rolling back American empire. In fact, there's many expansionist plans that this administration is pushing at this point. The last piece I just want to quickly get to here, just in terms of where everybody in MAGA world is shaking out, you have another one of the billionaire Trump donors who is upset. Ken Langone, we can put this up on the screen, from the Financial Times said to them, among other things,

he said, I don't understand the goddamn formula. I believe Trump's been poorly advised by his advisers about this trade situation and the formula. He loved the formula. No, dude, this is Trump's formula. His advisers have been doing everything they can, except for Navarro, to push him in a different direction. But this is all him. But again, to your point, this is the way that they all deal with him because they don't want to get crosswise with the king. When you have a monarch, this is what happens. I'm Michael Kassin, founder and CEO of 3C Ventures and your guide on good company.

The podcast where I sit down with the boldest innovators shaping what's next. In this episode, I'm joined by Anjali Sood, CEO of Tubi. We dive into the competitive world of streaming. What others dismiss as niche, we embrace as core. There are so many stories out there. And if you can find a way to curate and help the right person discover the right content, the term that we always hear from our audience is that they feel seen. Listen to Good Company on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Over the years of making my true crime podcast, Hell and Gone, I've learned no town is too small for murder. I'm Katherine Townsend. I've heard from hundreds of people across the country with

an unsolved murder in their community. I was calling about the murder of my husband. The murderer is still out there. Each week, I investigate a new case. If there is a case we should hear about, call 678-744-6145. Listen to Hell and Gone Murder Line on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. High key. Looking for your next obsession? Listen to High Key, a new weekly podcast

hosted by Ben O'Keefe, Ryan Mitchell, and Evie Audley. We got a lot of things to get into. We're gonna gush about the random stuff we can't stop thinking about. I am high key going to lose my mind over all things Cowboy Carter. I know.

Girl, the way she about to yank my bank account. Correct. And one thing I really love about this is that she's celebrating her daughter.

Oh, I know. Listen to High Key on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts. This is an iHeart Podcast.