The Dispatch Podcast - Destroying Global Trade | Interview: Ryan Peterson

Episode Date: April 14, 2025

Ryan Peterson, CEO of Flexport, a platform for global logistics, joins Jamie Weinstein to discuss the effects of President Trump’s tariffs and how companies are being swallowed by the trade wars. The Agenda: —Understanding the executive orders —Businesses are devastated by losses —How brands like Walmart are coping —Dealmaking with China —What is the end game? —Invasion of Taiwan and likely trade scenarios —Update on Houthi attacks —Advising President Trump The Dispatch Podcast is a production of The Dispatch, a digital media company covering politics, policy, and culture from a non-partisan, conservative perspective. To access all of The Dispatch’s offerings—including members-only newsletters, bonus podcast episodes, and regular livestreams—click here. Learn more about your ad choices. Visit megaphone.fm/adchoices

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My guest today is Ryan Peterson. He's founder and CEO of Flexport, a global logistics company that helps other companies with end-to-end supply chain management services, including freight forwarding, customs brokerage, and trade financing, among other things.

But for our purposes, he is an expert on kind of the tangible effects, that are happening on the ground as result of President Trump's Liberation Day tariffs. So we talked to him about what his customers are telling him about the effects of tariffs, what he has seen as a result of the in global shipping as a result of tariffs, what he would recommend to President Trump and much more. I think you're going to find this really informative. So without further ado, I give you Ryan Peterson. Ryan Peterson, welcome to the Dispatch podcast.

Ryan, I've been following you at least since COVID, and you have provided most of my insights into the world of logistics, which I think is pretty crucial at the moment. But for those in our audience who may not know, can you say, you know, tell us what Flexport is. is what you guys do and why you're relevant to the world of logistics. So Flexport is a global logistics company built around modern technology stack, I guess is a simple way to say it. We help companies move cargo around the world. The way that we use

tech to do this is to coordinate with all the parties in the chain and give people much better visibility and control and ultimately data to make decisions and then increasingly help them make those decisions for them with algorithms and AI to make it. These decisions can be how to load containers to optimize, eliminate empty space, the best way to route them to save money and all kinds of other things. How many units to buy make that simple for people so they can run more efficient supply chains. We're now the third largest freight forwarding company in the United States with the ambitions to be number one in the next few years. Let's see. We might be gaining market share right now as the market shrinks if we can hold on. So not the way we want to get to be

number one. We want to get there through pure growth, but it is a market share driven games, logistics, very scale-driven industry. And so our goal is to be number one in the world in terms of number of containers moved, not amount of air freight moved, and ultimately the most customers. Well, obviously, logistics has become, you know, one of the top news stories since April 2nd, Liberation Day, as the president called it. Before we get to the tariff announcements, Were your customers planning in any way before April 2nd? You know, what was those discussions happening before they heard exactly what the tariffs were? What were they doing before that?

And what was the logistic landscape, you know, before the president made his big speech on April 2nd? Yeah, of course. I mean, people are always planning. Tariffs have been high on China for a while. I mean, it went way higher, obviously, in the 5X in the last few last week. But ever since we've seen some. supply chain shifting ever since Trump's first term, we really accelerated with people moving manufacturing to other countries. And then once he got reelected, people saw this was coming. And on January 20th or 21st,

the day after he got nominated, he put out an executive order, which did say that a liberation day was coming on April 2nd. And then so people knew that there would be new rules on China coming out that day. So people knew for the last two, three months that this was coming. And they started really forward shifting inventory. It's too late at that point to shift your factory in time to a different country. But if you have multiple factories, they started putting more orders into the other factories instead of the ones in China. And then they started really shifting inventory in advance. So people are pretty well stocked right now. And that's part of why I've seen a big decline of ocean freight flows this week in bookings. It's not just because the tariffs are breaking

business models, but also because people are well stocked. Did some, I remember during COVID, there was a lot of ideas with industrial real estate that they needed more space because they needed greater ability to have supply in cases of a catastrophe like COVID. Has that helped in any way? Do people have larger supplies than, let's say, before COVID stored up?

Only because of those last few months, no, COVID didn't have anything to do with that. No lessons were learned from COVID anywhere. Oh, that is interesting. By anybody, as far as I can tell, any industry. Well, you know, I remember during the moment because, you know, I have my podcasting political world hat and I have a real estate hat and I had an industrial problem. I remember all the real estate firms were saying that this is going to change the industrial real estate landscape forever where you're going to need all these big, you know, technology sellers are going to need more space in case something like this happens in the future. And I guess what you're saying is that never really came to fruition. The problem is inventory, safety stocks, You don't need them, you know, and they sit there looking ugly on your P&L and your balance sheet. You know, you have cash tied up in inventory that's not just in case something happens.

And that one in case might only happen every 10 years. And then nobody can sit there in stomach losses for nine and a half years until the one day when you need it. So it's a classic problem. Wall Street, all the CEOs in the world trained on the business school where they told you inventory is evil and balance sheet, financial engineering, don't keep any extra stock, and they're kind of right. I mean, so it's a difficult thing to do. It's why, by the way, the asset owning business is always like this. So like the ocean carriers is the big assets in our industry, people that own the ships.

And those guys lost money for 20 years before they printed $150 billion in two years. During COVID, they made a ton of money. And no one has, Wall Street doesn't have the heart for that. So all these businesses are family-owned people who just, like owning ships and can stomach the losses for a long period of time. And then once in a while, they just make a ton of money. That's not like the profile that a public market investor can stomach. So April 2nd, the president gives this speech.

What is your initial reaction when you're hearing and you're seeing what is going to be implemented? What was the initial reaction? Well, it's sort of a bit of it. We knew it was coming. I mean, on some level, I wouldn't say I told you so, but I'd been telling a lot of people that there were going to be high tariffs on Southeast. Asia, India, and other countries.

And I didn't know the extent. I didn't know how it would be balanced, country to country, but it just seemed obvious to me that it wasn't just China. Now, of course, maybe now I've been proved wrong. They undid some of those tariffs. But it just seemed to me that the Trump administration has been very serious about trade and balances of all kinds and not just Chinese trade. So that was the first reaction.

It was like, yep, I figured that would probably happen. Second was, yeah, the extreme nature of the tariffs. I would call it when it's not really extreme on China. I can't say surprise. Nothing will surprise me at this point, but didn't, you know, couldn't have predicted exactly how that would play out. And then immediately it was, okay, what does this mean for our customers? What do we do?

So I started digging in to read the actual executive orders myself to understand things. Discovered a bunch of stuff in there. Diminimus being banned. Diminimus is what lets you import goods duty free if they're under $800. Does that end? But just to stop, is it end something like shit? Is that, what happens to a company like that? Well, I won't end them as a company,

but it'll end the ability to ship the goods duty free. And that starts on May 2nd, so we've got about three more weeks. So we'll see what happens for companies that have been doing that. So when your customers reach out to you after April 2nd, are some of them in precarious positions where they don't know what to do?

I mean, what is the situation? I mean, we hear these stories, and mainly I think our audience often hears at a high level of, free trade versus not free trade, but what it means for the actual businesses on the ground, the clients that are talking to you describe the situation that they're in. Yeah, I mean, especially those, I mean, if you're imported from China right now, you're in somewhere between despair and hopelessness.

And, well, there's hope. People are hoping for a deal to get cut. I don't know if they're optimistic, but they're hopeful. But in the meantime, yeah, there's a sense of desperation, of anger. the uh i've got a customer right now i talked to yesterday they have 100 over 100 containers of furniture in china that they've already purchased that they now are going to pay 100 and i'm trying to remember around 150% duty no i think sofas are 170% duty so just a massive hit to the P&L that they didn't expect they'd have to figure out what to do do you cancel the order and hurt your reputation

with your factory do you import them and just lose money um difficult well that's an interesting point right so there was a lot of businesses that it's not like it starts on April 2nd and you're making business plans from there and that's when you have to figure out the duties. They had purchases that were under the old regime in contract. And I also saw you tweet somebody who is saying that he has a contract with one of the, someone he knows is a contract of Walmart at a certain price. And, you know, he was negotiated that price under what he thought was the old tariff regime. You know, what happens in that position? I mean, I mean, is Walmart going to change what they're willing to pay for it?

Or is he going to have to eat it? Or is he going to go out of business? How does that work? It's all negotiation. At that point, not much does Walmart value you in your relationship? And you know, I go forward basis, they're going to have to pay the higher prices. But there's this period here where it's a negotiation. You've got a contract and it's maybe legal.

There might be forced major in there, but probably not. They might be able to force it, break the contract. as a result of this? I don't think it should come, well, my own way I would prefer to do business. I don't think it should come down to the lawyers. I mean, you should sit down and figure this out. It's a repeat game business. So somebody might be able to screw the other side over,

but then you'll never work together and you'll have a bad reputation. And you'll definitely come out worse in life. So hopefully they can all sit down and work these things through. But yeah, you're going to see some, you're going to see businesses go bankrupt from this for sure. Look, my personal prediction, I'm on the record. I believe that there will be a deal with China that will bring these duties way down

and I couldn't tell you how fast but I would say sometime in the next 90 days. How fast does it have to happen so you don't see a wave of businesses going bankrupt? I mean, how much can some of these businesses withstand the tariffs

as long as they last? I mean, can they withstand 90 days? Can they withstand 45 days? I don't know. I mean, it's just depends on the size of the business, how to capitalize they are, out what their margins have looked like. But beyond 90 days, I think you're going to start seeing some serious

bankruptcies of small business in America, especially people who are small, medium-sized businesses, the most badly hit. Bigger ones will have time to adapt and have balance sheets to ride this out and figure things out. Customers will value them more. There's a lot of reasons why they'll, they're big B-to-B customers, that is, like we'll not try to screw them over as much. So that's why I think a deal gets done.

I don't think Donald Trump wants to. that to be his legacy, that in his first quarter, as president, he caused a mass wave of unemployment in our country. I assume that he's trying to cheat the opposite. So what do you think a, I mean, do you have an idea what you think a deal would look like with China or any of the other countries that are still under negotiation? I mean, you follow this pretty close. China is the hardest one because there's much more strategic issues at play that have nothing to do with trade. So that's the hardest one to settle. So we can talk about that last. The other

countries, it's, yeah, a bunch of them have already offered to drop their tariffs, but the administration's been very clear that this is not about the other country's tariffs, that that is a factor, but one of many and that the other ones are much bigger. And that the other factors are things like currency manipulation, as they would call it, allowing their currencies to be much less valuable than they would be if they were more, if they were less influenced by the governments. So, for example, Vietnam, the Vietnamese Dong is, appreciated in the last few years. Oh, sorry, it's depreciated.

The Vietnamese dog has gotten cheaper, even as their economy has grown 8% annually. And tons of dollars are flowing in. They grew manufacturing like 40% or something in the last couple of years. And yet their currency got cheaper. I mean, that's just not how it would work in a free market where these currencies were not being manipulated or not being purchased by governments and set pegs and stuff. Because, yeah, so many dollars are flowing in. You have to, it would, it would cause the currency to appreciate.

The other things besides currency are industrial policies. So subsidies for local manufacturing, subsidies in the terms of land, buildings, cheap credit, money, environmental, they don't have the same environmental policies that we have. They have, in many countries, repressed organized labor or otherwise done things. These, I'm not, like, these are the administration's case that they, Those are the issues that they would like to see a result. You know, for years during Korea's rise, they had a six-day work week mandated by the government. That would be awesome if we had that in America, but I don't really want that to be forced by our government.

And that is sort of an unfair practice. And then my favorite one was what Joe Wiesenthal from the Oddlott's podcast post talked about was that in Europe, for example, their roads are so narrow that the F-150 won't even fit down. This is just not fair for American automakers. Well, maybe they don't want, I mean, I guess, I mean, the argument would be they don't want, obviously, or need the F-150, I guess. How are we going to compete? It's not fair. So they have a long list. Those are all things that might get addressed. Not the roads, I'm joking.

But the other things, you know, things that they might want to address. Like Europe, actually, the big ones for Europe are going to be things like what the administration calls non-scientific standards on health and safety. So, for example, they ban genetically modified foods. So our corn in the United States, we can't sell most of our ag products in Europe because we have a lot of genetically modified products. But the science says that, you know, the way that these things work is they, Starlinked corn, for example, is a breed of corn that doesn't need pesticides applied. And so it's actually good for the environment. And it uses an enzyme that prevents, it's basically a natural pesticide, although it's genetically modified. And that enzyme can't be digested by humans, so it's harmless, but Europeans ban it nonetheless.

And so they would argue that this is a non-tariff barrier to trade. of which there are many, many, many in Europe that prevent U.S. ag from coming over. So those are all things that will get negotiated in the next 90 days. We'll see where it comes out. The access to the American consumer is probably worth it for most of these countries, not to open up the markets

and allow that to be more balanced. China's a much harder one to crack because of all the strategic aspects to it. China being a rising power, they've built a Navy that's larger than the U.S. Navy now. and all kinds of other things. But a deal still, I mean, the current deal is just going to cause mass bankruptcies

in the United States. So even if Trump would love to play the long game, our system only gives them four more years, three and a half more years. So I'm not sure that he's ready to ride that out and ride through waves of bankruptcies and unemployment that could last his entire presidency in order to achieve his longer-term ambitions,

but on that strategic grounds and the economics and ultimately kind of cultural, too. We'd like to see America become more of a nation of builders instead of financial engineers or whatever else we're going on right now. You mentioned Vietnam. I guess she will be traveling to Vietnam on the invitation of the Vietnamese government

in the next week or so. Is there, I mean, as obviously we, the Americans consume more than other countries. Is there an alternative for Vietnam to sell their goods? Is there, you know, are they able to sell elsewhere or do they have no choice to come to some sort of deal with the United States? The U.S. consumer is just undefeated. It would be very hard for, you're not going to replace the U.S. consumer.

The same way that America is not going to replace China's factories. You know, Vietnam's not a big enough country to replace all Chinese factories. So the two seem pretty mutually dependent in that sense. There's not, there's no other market out there. So if they don't have access to the U.S. market, they're all just going to be a lot poorer. Not long ago, I saw someone go through a sudden loss and it was a stark reminder of how quickly life can change and why protecting the people you love is so important. Knowing you can take steps to help protect your loved ones and give them that extra layer of security brings real

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free quote at ethos.com slash dispatch. That's E-T-H-O-S dot com slash dispatch. Application times may vary, rates may vary. Maybe it's Mabelene is such an iconic piece of music. Hit the check. Everyone in the studio that I worked on this jingle with all had like childhood stories or memories around either watching these commercials on TV or sitting with our mom. while they were doing their makeup, and it became really personal for us. Maybe it's Maple Lane. Maybe it's Maple Lane. This episode is brought to you by Squarespace.

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It's a single hub for managing your work and reaching your audience, with, without having to piece together a bunch of different tools. All seamlessly integrated. Go to Squarespace.com slash dispatch for a free trial. And when you're ready to launch, use offer code dispatch to save 10% off your first purchase of a website or domain. If the president announced on April 2nd a year before these would kick in, giving manufacturers more time or businesses more time, would that have changed anything meaningfully? yeah he would have helped a lot but at the same time you know it it'd be very hard to know with this

the big problem in all of this is the speed at which it's executed one but also just the uncertainty is this is at the end game or is there another one and what's going to change now between now and a year and so it'd be hard to plan because the pace it one of the impressive things about this administration so far has been the pace of it all I mean it's just every couple of days there's a new thing it's like impressive from the sense of like well they're working hard they're um they're running really fast Udao loop, so they're leaving, you know, anyone. It's been actually very hard for the Democrats in Washington in general to fight back because they're just not used to this pace.

Like by the time they fight on the one thing, he's already off to the next issue, the next day. And you're like, you can't find a, it's like a blitzkriek. You can't find any ground to which to retreat to and say, okay, we're going to hold the line here. You're like, he's already blown past that line and on to the next thing. And so that, but the downside of that, there are many downsides, but one downside. from a business standpoint is like we have no certainty at all. So if they said a year, you'd be like, okay, but next week they're going to say something else and then something else.

So at this pace, you know, at least those of us in our industry are just hoping they'll get it over so that we can have some certainty and start to plan. I think people can adapt and make money, find, you know, the businesses will make money. Some will die, but new ones will form. We will find a way that's our job as business people. The government sets the rules of the game and then we go play the game and try to out-compete each other and make money. and build a great company.

But if the rules are constantly changing, then it's just like you sort of get a little bit of paralysis. And I think a lot of supply chains are experiencing that right now. What does a 145% tariff or 150% tariff on the U.S. side and I guess almost equal or more now on the Chinese side mean, is that just mean that trade is functionally stopped from China? Or is there a workaround?

We're going to see the next few weeks. It's a great question for us that we're all, I mean, is the question for our business. is we're about 35% of flexports volume goes from China to the U.S. It's a big, it's a big deal. And we're kind of modeling at least a 50% hit, but that's the suspiciously round number that somebody made up. So we'll see.

You can do the math a little bit for yourself. Now, it depends on the product category. But take the iPhone, which this is not any sensitive data that I have access to here, but rather just reporting off of some of these analysts, like Gene Munster, is he still active? Some of these Apple analysts have done these breakdowns of what the actual cost of the iPhone is. And I want to say, I haven't read one of those in a few years,

but it used to be like, oh, the phone that sells for $1,000 costs $300 to make or something, something like that. And so your 1445% duty is on the $300. So your $1,000 iPhone is now going to cost $1,400. And so you can ask yourself how many, you know, right now, maybe you buy an iPhone every year, every two years, everyone's got their own, you know, what can they afford and how much do they care to what's their upgrade cycle on their phone? But I buy one every year and I'll still buy one at that price. But other people are going to go, you know what? I used to buy it every two years.

I think I'm going to skip this cycle and, you know, two more, maybe I'll wait two years. And if everybody went from buying it every two years to every four, Apple sales would fall in half. And that's Apple. Apple has pricing power, brand power, you know, It's a must-have. You've got to have a phone. So these are, and you just got to kind of do that for every consumer and every product, and the aggregate will get you some demand forecast. But no one really knows.

Usually people will know what would happen to their, they can model what happens to their sales if they increase price. But that's in an environment where you're increasing prices and the rest of the world stayed the same. But in a world where everybody has to increase prices at the same time, you know, maybe it's okay for some products. still buy your stuff. They don't have an alternative, but a lot of products, you know, a good example I've been using is we have a, we have a bunch of customers that make

pizza ovens like for your backyard. And they're made in China, some of them in very high duty rates now. And you have a literal alternative, which is just go to a restaurant and eat some pizza. And that's made in America. So what is, what that's like, you don't have to buy, you know, something made in America in the same category. You might travel. more, you might spend your money, you might have less money because you're unemployed because your company went bankrupt. I mean, there's a lot, it's a, economies are very complex and hard to model as a result. And that's why they should not be centrally planned, because it's impossible to plan this thing for a couple guys in the White House. Is there any retaliation from China that

concerns you the most? Is there an escalation from here that could make things even worse beyond just raising rates? Of course. They could blockade or invade time. Taiwan would be the worst thing that could happen. And then probably to be the most extreme and then many, many things between that. And the escalations on tariffs, you know, the U.S. is really bad for American ag exports a lot to China. China is one of our biggest export partners. We export about $200 billion a year worth of stuff to them. So that would hurt American companies.

It does hurt American companies not being able to export there. But actually, and then I guess. the bigger one is things like, yeah, she's going to Vietnam on Monday. He's negotiating right now, potentially access to European market for their cars, duty-free, or some kind of an agreement to allow Chinese cars. So if the U.S. sort of lost reserve currency status and if people stop trusting us as a partner and China gains that upper hand there, that seems bad to me. I'd like to see a world where everybody's trading with everybody freely. That's the world I want to live in, but I'm selling my own book, too.

Tariffs and things are bad for Flexport. You brought up a few issues I want to touch on. First, before I get to modeling, if you've modeled anything about an invasion of Taiwan, which has been the theme of this show, we discussed that a lot as a potential risk point. Is there a way around, or has it been closed in this new April 2nd, Liberation Day rules, could someone ship something to a different country and then do the United States from China to a different country and then the United States, would that avoid the tariff? Or is there provisions to stop that? Well, no, because the country of origin is where

the goods are made. So it doesn't matter if you ship it somewhere else first. You have to it's called substantial transformation. There's rules about what has to happen in terms of and they're a little probably too complex for this audience, but you have to send it substantially to transform the product if you want to say it's no longer a Chinese good. And there's standards for what percent of the value has to come from the local country that you're claiming, et cetera. So that was the same as beforehand. And you will see probably more.

I mean, maybe that's why she wants to go down to Vietnam and say, hey, can we set up a deal here where we export stuff to you guys, you transform it and ship it to the U.S. That already happens quite a bit. So that's not going to be an easy loophole. The easier one that has been going to go crazy. is, you know, people often say, oh, you know, the importer pays the duty. So this is a tax on Americans, not a tax on China or somewhere else. Well, that's actually not true in the United States.

In the United States, a foreign company can import goods into the United States without registering an entity or having any employees here. It's called a foreign importer of record. It's very, very common. Most of the goods on Amazon are imported by foreign companies into the U.S. They have no entity in the United States. And they are, and those companies are. A lot of them are set up as shell companies that,

and then they can just cheat and lie about the value of the goods. And if customs busts them, they just disappear. And then another shell company will appear magically importing, very similar, the same goods. And they actually, Amazon lets them keep their account with all the reviews and everything. So that to me is like one of the most obvious egregiously loopholes in the world that Amazon and the U.S. government should partner somehow to go like, you have to pay your customs duties.

That's like the ultimate non-level playing through the field. American companies selling on Amazon have to pay duties and be subject to U.S. laws, but foreign companies don't. You mentioned obviously the ultimate escalation would be China to either embargo Taiwan or take over Taiwan. A, have you heard any chatter as a potential? That is something people are really worried about in this moment because of the back and forth.

And B, have you modeled that at Flexport? outside of these tariffs, what would happen to exports globally if China would decide to go and launch an invasion of Taiwan? We chatter, I, you know, I'm not privy to anything that you don't see, you know, you see the same chatter that I do. I think a lot of people are concerned about it, don't have any inside view of what's likely to happen there. And if we modeled it, I haven't done a lot of modeling for what happens on the macro scale

at the world we have our own plans for like how we would what would what we need to do to ensure business continuity at flexport um but i'm not i haven't done like sophisticated modeling and the what would what the world would do is i you can point people to uh peter zihon's uh his interpretation and then there's probably some others of different people who've got who've done some work on this but what are what are the tech CEOs telling you um you're in that i think i first saw you on the all in podcast i believe he made an appearance there years ago uh yeah so you And you're familiar with that world. Have you talked to a lot of the CEOs out there?

And what are they telling you about what this does to their businesses? On the tariff side of things? Yes. They are relatively immune from it. Tech tends to not really have to worry about physical world too much, sadly. I mean, that's part of our problem in America. We have, like, tech and finance and not much of physical world stuff. So it's more tech people asking me what's happening.

I would say the carve out they got text thus far as kind of dodged a bullet they had a carve out for semiconductors in the Taiwan tariffs but it's kind of interesting because earlier in his administration Trump did say they were going to tax the chips from Taiwan so people are taking that carve out to mean maybe David Sachs and his crew in the AI czar winning because America is trying to win the AI war and if you're going to tax chips like probably not going to happen So maybe that's what we can read into it. The other possibility is they just haven't gotten around to the chips part of the tariffs yet, and that might come soon.

You just don't know. Another issue we're dealing with before the tariffs was the Houthi attacks, which affect shipping as well. Has that changed at all? Have the strikes from America stop those? Have people begun going through near Yemen again, or are they still rerouting all around? the Cape of Africa.

Yeah, so the Houthis are, it's the government of Yemen now. They took it over and backed, it seems to be a, everyone says they're a proxy group for Iran, terrorist sort of a terrorist group and been attacking ships since October of 23. So a year and a half now. And that has forced all the container ships in the world to abandon the Red Sea and go around. Huge percentage of the world's maritime traffic was going through beforehand. I think 30% of all the container ships travel through there each year. So that's a massive blow to global trade, continue to go around.

The U.S. Trump has ramped up attacks, but it's going to take a lot before the ocean carriers will return. So we're not really modeling that into any kind of forecast. We predict they'll continue to go around for the foreseeable future. One issue we used to hear about that we don't hear about anymore is the Somali pirates. Is that no longer an issue for trade, or are they still there? Seems not to be, although there's, you know, Somalia and Yemen are just across the water from each other. So there was some, when the Houthis first sprang up a year and a half ago, there was a couple that seemed like they were related. There's Somali pirate attacks.

I haven't seen much from it. I don't, it has, it's been a non-issue, so I can't really comment to it. I haven't tracked like what exactly happened down there, but it's been a non-issue for the last couple years. Ryan, let me close on this. I should say, not as you. If you got fucking taken, I apologize if your family was taken by the pirates. I don't know. It didn't surface on my personal radar.

Well, there's been no movies about it recently, so I don't think it has nothing to. Let me close on this, Ryan. If President Trump were to call you and ask you for your advice on what to do and what are the risks of not coming to deals or what type of deals should he make with some of these countries, what would you advise him? Well, it would be difficult because I'd be very, very. much trying to sell what's good for Flexport as my first priority, and I'd probably have to tell them that right away. I think you always want to look at when you argue, someone argues against

their own interests is probably the areas that you should listen to them the most. And that's hard for me to do in this particular domain. I do think that the foreign importer of record is one that I would just immediately work on. I'm not sure if he can do it with an executive order or if it requires an act of Congress. I'm not a lawyer enough to understand that. That seems like an obvious loophole that he should be all over than not allowing foreign companies to just skirt the customs laws and pay duties. Someone needs to put that on his desk because he should fix that.

The other things, you know, like he's not going to listen to me on tariffs. That's his whole thing, his tariffing. He says the most beautiful word in the English language. So I don't know why he'd listen to the guy who gets hurt by tariffs. But I think they have some noble goals. I think the shipbuilding one is another thing that's pretty misguided. They're trying, like a lot of what they're doing is noble outcome that they're pursuing, but it's kind of central planning that's likely to fail.

And the shipbuilding one is the worst of these where in that regard where they're going to ban, they're going to require that U.S. exports travel on a ship made in the United States, at least 15% of U.S. exports will have to go on a U.S. made ship accrued by American citizens. That sounds good. They want to promote American-made shipbuilding, but they're doing it by punishing our exporters. And like, if you're trying to promote industrialization, punishing exporters is like the dumbest idea you can do.

So there's a couple of rules that they've got in the pipeline that just make no sense, to my view. And in general, if you're trying to re-industrialize, you need to promote exports. Because if all you do is protect your imports, protect your domestic producers from imports, then, yeah, you might be able to make some companies that are successful, but if nobody wants to buy their products internationally,

you know that their products are not competitive, you know that their companies that you're making are not competitive, and pretty soon you'll find out that you've just punished Americans by they're forcing them to buy inferior products. And the Jones Act that protected American shipping, so Jones Act says that ships that travel between domestic ports, So carrying cargo between two ports in the United States have to be made in America and crewed by Americans. And that, you know, what is these ships?

This is going from California to Hawaii and Alaska, from the domestic, from the mainland down to Puerto Rico. Those ships have to be made in America and crude by Americans. And, well, first of all, those people of those overseas territories and states really suffer. They pay way more for, it's part of why Hawaii is so expensive. Everything has to get shipped there on a Jones Act ship, and it costs 20 times more to ship something to Hawaii than it does to ship it to China, even though China's further if you look at the map.

So number one, and number two, it did not actually protect American shipbuilding. We didn't make a single container ship last year. We're not going to make any container ships this year. So it just doesn't work. And the ships that we do make are 20 times more expensive than the arrivals from Korea, Japan, and China. So it's just like a failed policy.

And now they're talking about let's do this, for every industry. Like, you can't buy stuff from overseas. You've got to buy it from an American company. But what if the American company sucks? Then, you know, you just stuff. Your American consumers are going to suffer. Now, the way to prove that the American company doesn't suck

is to have them export their products and people in other countries want to buy their stuff. If nobody buys it, it's probably not the best. And so you're failing. So how do you make sure that as you do this, companies are actually exporting so you can prove that American companies, are competitive and successful.

That's the bar that you need to clear to prove that this is working. With that, Ryan Peterson, thank you for joining the Dispatch podcast. My pleasure. Thank you.