The Duran Podcast - Tariff wars and peace talks w/ Jeffrey Sachs (Live)

Episode Date: April 8, 2025

Tariff wars and peace talks w/ Jeffrey Sachs (Live)

Okay, we are live with Alexander McCurris in London, and we are waiting for Professor Jeffrey Sachs. He is traveling. And right now he's in, where did he say, Alexander in New Delhi, right? He's in Delhi. He's in India. In India, probably held up in the traffic there, which I'm extremely congested. Yeah. But we organize the time.

And for him, it's, I believe it should be 12. Yeah. 12 o'clock or 1230. Yeah. His time. Yes. Yeah. Midday.

But he goes a meeting. Yes. Yeah. So we're waiting for Professor Sachs. We're waiting for Professor Sacks. But we said we jump on and. Exactly. I was probably talk about what we need to talk about.

What we need to talk about? What should we talk about? What should we talk about? Let's say hello. So let's say hello to everyone. Absolutely. Absolutely. First of say hello to everyone that's watching us on Odyssey, on Rockfin, on Rumble, and YouTube,

and of course our locals community, the Duran, thatlegals.com. And to shout out to our moderators, Alexander. We got Peter in the house moderating. And we got Zabriel in the house moderating. And that is it for today. Those are our moderators for today. Later on this evening, we will be having a live with VDS, who is the European Parliament member, the EU Parliament member, who is a completely independent, 100% independent member of the European Parliament. That will be taking place at 1845 Brussels time, which is...

18, you're one hour back from Brussels, right? Alexander. That's right. 1745. Okay, so you're 1745. Okay, one hour back. Yeah, 1745. We'll have another live stream today. Anyway, Alexander, as we wait for Professor Sacks, let's talk about tariff wars and peace talks. Yes, I know. Tariff Wars and Peace Talks. Well, indeed. We'll wait for Professor Sacks to jump on when he gets to his hotel or wherever he's going to join us from.

Indeed. Very interesting to find out which hotel, by the way. I've never been to Delhi where I believe he is. So it'd be quite interesting to find out where he's been and what he's doing and who he's meeting. Because, of course, India is also affected by all of this. And if we're talking about tariffs, India is one of those countries that has now tried to finally to negotiate with the United States, with Trump, with the administration. Vietnam has done.

and Vietnam has been shown the door. They came along, they said they were prepared to offer zero tariffs on American goods, and the Americans came back and said that's not good enough. Zero tariffs doesn't mean anything. It's the non-tariffs restrictions on imports of American goods that is the problem. And of course, the Vietnamese are going to find it impossible, I think, ever to climb that particular barrier. And I think all of these countries that expect and assume that Trump is going to actually cut deals with them are going to find that they're mistaken because I think Trump believes in this policy. Apparently, he was given a menu of options at what level to pitch for tariffs and he chose the toughest one.

and he's not bent in response to it. He's defied the storm. Apparently, his electoral base for the moment is standing by him. There's been no massive collapse in the polls. You find all kinds of people in America who are very upset and very angry about that, but they don't seem to be coming from his electoral base. And I think this, what we're seeing, is going to be there forever. at least when I say forever, for as long as Donald Trump is president.

And I would add that today we are very likely going to see another 50% on top of the existing 54% slapped on China, on Chinese goods, trying to enter the United States. China retaliated two days ago. Trump said that there would be consequences if they didn't back. down. There was a defiant editorial in Global Times yesterday saying that China is never going to back down. It's likely, therefore, that we're going to get another 50% tariffs slapped on Chinese goods. It looks to meet that China and the US are now in full-scale collision, and the Chinese are already talking about the end of the trading relationship between China and the United States.

$300 billion of trade. Jeffrey Sachs is jumping on, but just go on and finish your point, Alexander. So this is, this is huge. I mean, it is enormous. And as I said, we're seeing the world change. And here is Professor Sachs. Thank you for joining us, Jeffrey.

Yeah, with great apologies. I had a one hour time. No, no, no, no. Never apologize. We're just delighted to have you. We know, we know, you know, you know, the calls on your time. Meetings overrun.

I know you're going for one meeting to another. And, well, for all we know, all sorts of other reasons. So don't apologize. Don't explain. We don't know how long we have. Let's just keep rolling with it. Alexander, Professor Sachs,

Alexander was talking about, obviously, the tariffs. He was talking about the Chinese retaliation, and then the Trump. The Trump retaliation. So Alexander, Professor Sachs, let's just jump right in. Let's go in, because I don't know how long we have you on. Yeah, we have at least 30 minutes if we like.

So we're going to. Let's do 30 minutes. But since it's only 30 minutes, and since we have a colossal topic to discuss, you've written a superb piece about this, which you can find in various media outlets, consortium use for one who's republished it, but there are other places about tariffs, perhaps you can go straight in, tell us what you think about this new tariff system that is being

suddenly launched upon the world. Apparently he chose the toughest tariffs that he could come up with. I was saying that I don't think he's going to change his policy on this. He seems to be, he seems to believe in it. But give us some idea of what you think about it and what you think the economic consequences of this again to me. Good. Great, great topic. Obviously, the whole world is trying to figure this out. I think we have to start with the proposition that the end result is still unclear. Will these tariffs stay or not stay? Is this Trumpian kind of tactic or to negotiate some kind of outcome? Or is it really a new? trade system for the United States. So maybe we start with the latter assumption that it's a new trade system just for purposes of understanding. And then we can work backward to say, well,

is there something more devious in this or is this a prelude to some big deals? If, in fact, the U.S. is moving to trade protection against a very broad range of countries so that these tariffs vis-a-vis Europe, China, India, and basically almost the rest of the world will stick. This is an extraordinarily misguided policy on every count. it will accomplish, in my view, nothing desirable for the United States. Again, assuming that these tariffs stay. There are multiple arguments given for the tariffs, which also make it a little bit difficult to discuss because the purpose that is stated for the tariffs varies day to day and

varies according to who is speaking on behalf of the administration. But let's take Trump at his word. First, he says that the reason for the tariffs is that the rest of the world is ripping off the United States. And the evidence that he gives for that is that the U.S. runs large trade deficits vis-a-vis the rest of the world. Let's start with some basic economics. The trade deficits have nothing to do. I will say nothing to do with the trade policies of the rest of the world. They have no indication whatsoever that anybody is ripping off anybody, especially that the rest of the world is ripping off the United States. What a trade deficit means, pure and simple, is that a country, is spending more than it is earning. That's all. Technically, we would say a comprehensive measure of that imbalance is the current account balance and the U.S. runs a large current account deficit.

The current account means trade in goods, trade in services of all kinds comprehensively measured. Now, a country runs a current account deficit when it spends more than its national income or equivalently when it invests more than it saves. It's not about the trade policies. You can have a current account deficit in a world in which there are no trade barriers at all, no tariffs. Just country A, the United States, spends more than it produces. and therefore buys more from the rest of the world than the rest of the world buys from that country. No trade policy at all involved in that. And that is what economists call an identity, meaning it's definitional.

To run a current account deficit, again, that's the term for the comprehensive imbalance of trade and goods, and services means by a statistical identity of the national accounts that the country is spending more than its income. Now, why would a country do that? Well, there are many reasons. Sometimes the country has great investment prospects and it has limited domestic savings, so investment pours in from abroad and that is used to make physical investments in the country. That's not the case with the United States. The case with the United States is that the U.S. government is a little bit like a credit card for the domestic economy in that the U.S. government runs large deficits chronically to transfer income to the private economy to the national.

non-government sector. And because the government is running debt on behalf of the nation, if you want to put it that way, the nation as a whole spends more than it earns or more than it produces, essentially. And so we have a large budget deficit, nearly 7% of the gross domestic product. We spend it on wars, as we know. We spend it on incessant tax cuts that both parties like to give for their donor base especially, but also for their voters before election time. We spend it on social security and health care. We spend it on interest payments. Those are the big ticket items. The U.S. government does not like taxes. The donor base wants low corporate taxes, so they've almost disappeared from our economy.

And with the corporate profits booming and very little taxation, the government has run chronic deficits for 20 years, and that has shown up on the imbalance internationally as countries, lending to the United States essentially buying U.S. Treasury bonds and the U.S. as a whole, both the public and private sector combined, spending more than earnings year after year after year. Trump calls that a rip-off. It's a little strange. I say it's like a person who goes on a shopping binge, runs a current account deficit against all those stores that he went to make purchases and then blames the shops for those imbalances, saying they wrecked me. They ruined me. They tricked me. Their unfair trade policies were all they were doing was selling goods that Americans wanted to buy. So this is the first point.

The diagnosis is flaky. Can I put it that way? Completely flaky. I taught international monetary economics for 22 years at Harvard. In the second day of the undergraduate course, I explained that a current account deficit was an imbalance of spending and production, essentially, not a measure of trade policy. That was a different semester, the microeconomics of tariffs and trade. This was a macroeconomic imbalance that in the U.S. comes from the other deficit, the budget deficit. In fact, we call this the twin deficits problems, that you have a large budget deficit. That shows up as a large trade deficit.

So it's a kind of twin deficit. This is a chronic characteristic of the U.S. Trump then says, I will put on tariffs to end this rip-on. forcing trade to be balanced with every country. Now, this is also primitive, I'm sorry to say. If you want balanced trade for whatever reason, in other words, if you want to export as much as you import, a kind of naive target, but if that is the target, you don't have to do that country by country, with some you could run surpluses and others you would run deficits. But Trump says, no, no, no, we're going to have balance with every single country.

Okay, bizarre. Now, then he says we're going to calculate tariffs to get that balance. Now, this is also another little digression is needed. Trump said that he would impose reciprocal tariffs. Everybody quickly figured out that this is not what happened a few days ago. The U.S. Trade Representative's Office that issued the paper said, we don't know what the tariffs are on the other countries. We can't figure that out. And there are non-tariff barriers.

And it's very complicated. So we'll apply a formula. The formula is very primitive. But it basically says if we have a trade imbalance, well, that must mean that the other countries are ripping us off in some hidden or overt way. And we will calculate the size of the tariff that we need to close that imbalance. That's essentially what they said. Now, the calculation of what would be needed to close the imbalance is not only primitive. It's just primitive and wrong.

It has a simplistic idea that you raise the tariff to one particular country, and all that happens is that you lower the imports from that country without any spillovers to importing more from any other country or exporting less to any other country. So the, to use the jargon, the so-called general equilibrium effects, but I don't want to use jargon. I want to say all the things that will happen in the economy when you put on a tariff are ignored except one simplistic idea that a tariff will be applied to another country and therefore the imports from that country will diminish at a certain relation to the size of the tariff. And then a utterly naive calculation was made because they had to do something, I suppose, to satisfy the boss. And they came up with the list of numbers of what tariffs should apply to which country. Again, let me say these tariffs have zero relationship to anything that those countries are actually doing in their trade policy vis-a-vis the United States. they are a kind of primitive measure that indicates a trade imbalance with the country, not the trade policy of the other country.

So the next step, this naive set of calculations then goes into the so-called reciprocal tariffs, the misnamed reciprocal tariffs. Will this actually reduce the trade deficit of the United States? No. This is also a basic point. It won't because the trade deficit is a reflection of a budget deficit that is not going to be changed by this tariff policy, not changed in any significant way. First, the revenues from the tariff will be small. They will be small in part because imports will go down.

so the tax base on which the tariff is collected is small. And second, they will be small because the share of imports in the U.S. economy is very modest, just a little over 10% of GDP. So even a sizable tariff rate doesn't produce much in revenues compared to a 7% of GDP budget deficit. Add in the fact that Donald Trump's greatest dream is to, sustain tax cuts for the corporations and the high-income Americans, and these tariffs will be offset by the continuation of expiring tax cuts. So there will be no solution to the budget deficit in any event. The long and the short of it is the trade deficits will be sustained. Now,

why is that? If tariffs go up, why wouldn't the trade deficit go down? Because exports are going to go down. This is the most simple point of the basic macroeconomics. And exports are going to be going down for two reasons. One plainly obvious and the second a little bit more subtle. The plainly obvious one is that many countries, starting with China, but not limited to China, will retaliate. So they will impose barriers to U.S. exports. So, So the whole idea that the U.S. exports will remain unchanged is naive because it doesn't even consider the offsetting policies of other countries. But there's a more subtle and actually even more important economic point.

And that is that as demand shifts from foreign goods to domestic goods, that demand prices U.S. goods. out of the export markets, it drives up U.S. prices and makes U.S. goods uncompetitive. Or to see it another way, the auto industry in the United States would have exported some cars. Now Americans are going to buy more U.S. produced cars, and that's going to leave less for exports. So there's a direct economic effect that if you shift U.S. demand from imports to domestic goods, you also reduce the exports that the U.S. otherwise would have had. In fact, in a basic analytical model of the kind that we write down little mathematical equations for rather robust cases, if, you impose a tariff, you don't change the trade balance at all. You just get an offsetting

reduction of exports. And so the difference of the reduced imports and the reduced exports is a persistence of the trade imbalance. All of this is to say, because the imbalance has deeper routes than trade policy, trade policy doesn't end the imbalance. Okay, let's wipe that slate clean. That was the motivation given. That was the argument. The argument is we're being ripped off. We will therefore stop the rip-offs by imposing tariffs. And that will end the rip-offs defined as a trade imbalance, which isn't a rip-off to begin with. Now, there are other arguments that are given, of course. Another argument is this will raise the living standards of Americans and notably of industrial workers. This two is fundamentally false because U.S. workers actually have living

standards in part because they can buy goods from abroad that are relatively inexpensive. You raise the price of those goods, several thousand dollars, for example, for automobiles. Are you really raising living standards of American workers? The answer is, in general, certainly not. Well, what about the wages of the workers just in the industrial sector where the protection will be greatest? Will you raise those wages? Probably not. Even there, even in the limited part of the economy, understanding that the industrial employment is only around 10 percent of the U.S. labor force. Most people work in the service economy, and their incomes are really going to go down in real terms because of the inflation on imported goods. But what about the protected industrial sector? Surprisingly,

even there, the wages are likely to go down in real terms because production in the United States is actually complementary to production abroad. In other words, certain parts of the production process take place in Mexico or take place in China or take place in Vietnam or take place in Canada. And then those intermediate products are important. to the United States and turned into finished goods. It's plain that this has hollowed out the U.S. industrial sector. Not quite so.

What it has done is put the lower skilled, lower wage work abroad so that Americans can earn more in the higher productivity parts of the value chain. In other words, what is being produced in Mexico or in China or in Vietnam is not the same thing that's happening in the United States. And what's happening in the United States is higher end production, more skilled work, typically workers with the much more educational attainment. The labor-intensive, low-productivity work is being done elsewhere. that is being brought into the United States at an intermediate stage. Now, suppose you say, no, no, we're not going to do that anymore. Americans have to do all of it.

That's not going to raise their living standards. That's going to push workers into the labor-intensive, low-skilled sectors in this value chain. That lowers living standards. It doesn't raise it. it also makes American industry completely uncompetitive with any other country that uses an international value chain. Take another country that does the low-cost production work in low-cost places, finishes the skilled work in skilled places. That's going to be a lower production cost than what the United States is going to end up with by not taking advantage of the global division of labor.

So in the end, living standards in the U.S. will fall even in the industrial sector. In other words, Trump is breaking things. He is not going to reduce the trade deficit. He is lowering the living standards of the American people. he is breaking the supply chains and lowering the profitability and the market capitalization of American industry as well, which is why the U.S. stock market has shed more than $5 trillion of wealth in the last few days, and worldwide stock markets have shed another $5 trillion approximately during the same period for something like a $10 trillion loss.

So where are the gains? Who's one? Well, interestingly, nobody. This isn't a transfer game. This is losing what we call the gains from trade. Here's an idea, unfortunately, that Donald Trump does not understand truly. And that is that trade is mutually beneficial, both sides of trade and benefit. And if you then say, no, we're not going to have trade, both sides can lose.

It's not a transfer from the rest of the world to the U.S. or a transfer from the U.S. to the rest of the world. It's a stock market bloodbath everywhere. And add in the short-term macroeconomic consequences, the likelihood of sharp cutbacks of consumption by households and investments by businesses. And you add in what's now being factored in a very real possibility of a recession in the United States in the coming months in the year 2025, something rather shocking relative to where expectations were just 10 or 12 weeks ago. All in all, if the case is that these tariffs are here to stay for a deep restructuring of the U.S. economy, I see nothing but a deeply self-inflicted, self-inflicted deep wound,

I should say, to the U.S., that raises the other possibility that you were discussing. just as I came in, which is that this is a game, that this is a negotiating game, that now country by country will come on bended knee and say, we open our markets, we invest in your country. That may be what Trump has in mind, although the claim is no, I want to bring industry back to the United States and this is how it's going to be done. He and it is true that supposedly dozens of countries, I say supposedly because it's all on claim right now from the U.S. government, but dozens of countries supposedly have rapidly come forward saying we'll open up, we'll make concessions, we'll do whatever we want to preserve

access to the U.S. market. China obviously has said we're not even playing that game. In the first day out, China announced countervailing measures of 34 percent tariffs. And then, of course, Trump has threatened that as of tomorrow, the U.S. is basically going to cut China entirely. Of course, the U.S. production depends enormously on China's sector after sector, and U.S. industry depends extremely heavily on the Chinese market for the end products of U.S. goods. The U.S. sells a lot of goods, a lot of high-tech goods to China as well. So China's not playing the negotiating game. one wonders whether maybe either by design or by the drift of events, the U.S. play will be to try to bring Europe to the American side.

And Europe imposes terror protection against China with the fear of the Chinese exports, once destined for the U.S. will now flood Europe, and so that Europe and the United States will get together. The West will defend itself against the Chinese threat, and that this will be the real purpose, if I could put real, in quotation marks, the real purpose of these policies. Maybe. It's a little unclear, but that may be what at least somebody has in mind on this. I'm in India today. Interestingly, the senior Indian official is quoted as saying yesterday that all of this is China to blame.

If China hadn't entered the World Trade Organization, if China hadn't flooded the world economy with its cheap goods, we wouldn't have this problem. So we want to deal with the United States. It's China that is the enemy. Interesting. Maybe that is part of the geopolitical game here. We know that most of the American political class is obsessed with China is determined somehow or another to wreck China. And that may be an underlying reason.

It's a strange way to make friends, I would say, by smashing everybody in the face. And then coming back and saying, we love you when you bend and kowtow and do all the rest. But maybe that is Trump's play. All in all, I'll just go back to the basics of economics, which I think are valid and real in this. The last time the United States did something like this, as you've been saying in recent days, absolutely correctly, was in 1930. when Congress in that case passed the so-called Smoot-Hawley-Kerif. Without question, the protectionism of 1930 in the United States was an accelerant and a direct feedback that gravely weakened the world economy and prolonged the Great Depression,

all the way through the 1930s. There is a wonderful, old, classic book by an MIT economic historian that I always recommend, a book by a great late historian named Charles Kindleberger called The World in Depression 1929 to 1939. We read it as students decades ago.

There is a web chart showing the implosion of world trade in the 1930s, triggered by the Smoot-Hawley tariff of 1930. The United States has a propensity to mess up the world on occasion. It did it in 1930. It did it in 2008. Maybe it's about to do it again in 2025. Professor Sachs, thank you for that very masterly explanation. Just a few quick things.

One of the things that really, I have to say, annoys me about much of this narrative that the world has gone out to cheat the United States is that it doesn't recognize that the trading system that we have is one that the United States itself created. It deliberately created it. Now, very briefly, back in the 1980s, one of the assignments I had as a student was to look at the economic consequences of the Vietnam War. And I spent a great deal of time over that. And I remember very well that one of the problems at that time was that the United States set out to win the war in Vietnam. It was also conducting the space program. It was doing one very good thing, which is many of the social programs of that era, the things that are bundled together as the great society programs. It was also competing with the Soviet Union in weapons,

of the nuclear arms race. All of this, all of this together, particularly the armament side of it, was costing a huge amount of money. And it was diverting American industry from the production of civilian goods to military goods as well. Now, that was creating trade deficits. And because the United States government was very unwilling to raise taxes, in fact, there was an inclination to cut taxes. It's all very familiar. it was running deficits. It was running current account deficits already in the 1960s in exactly the way that you've outlined. And eventually what happened, it was very interesting was that people in the United States, the people within the government of the United States got together and started saying, how are we going to deal with this? And we've got to deal with this by creating an economic and trading and financial system.

which will result in investment in funds flowing into the United States so that we can continue to do these things that we want to do, compete with the Soviets in terms of strategic weapons, wage wars in all kinds of places, not mainly specifically Vietnam, but other places, live beyond our means, if you like, max out our credit card if you prefer, you can use all of these terms, but go on doing that basically indefinitely. And, well, you know, one doesn't want to say that everything was done, you know, structurally and, you know, planned out and things of that time because it never is. But eventually that was what led us to the world that we have.

And you could say that there were things before then. This system was one that the United States, or at least the government of the United States, deliberately, devised for itself this system of chronic current account deficits. And you don't even have to go into discussions about you need to run deficits in order to have reserve currencies. It was actually talked about then in the 70s. I mean, you go back to the debates that took place then. I remember because I remember the struck by, and this was in the 1980s that I was

remember reading all of this. So that's one thing I wanted to say, just by comment. The second is what you have described as a possible reason for these tariffs, basically to mobilize the world against China. Now, that looks to me not so much as a tariff policy, as a policy of economic war. And you've mentioned you've taken us all the way back to the 1920s and 1930s. And again, one of the books of economics, which I led very long ago,

I don't pretend I remember it very well, but it was by Keynes, which is the economic consequences of the peace, which is about the policies that were followed at the time of the Versailles Conference against Germany, which were basically to sort of also wage a kind of economic war against Germany through reparations. And of course, the point was that that undermined the whole structure of trade relations and undermined peace. Now, if you're going to start economic wars, economic wars are not going to create peace. And I'm talking about actual peace in the way that we popularly understand it. It is going to undermine peace. It is inevitably going to divide the world into economic blocks.

And when you get economic blocks that are rivalrous and hostile to each other, they will involve inevitably into competing geopolitical and military blocks as well. Now, that doesn't secure peace, that undermines peace. Anyway, am I right about these things or am I wrong about these things? No, no, you're very much on point on both of them. And let me discuss both of them briefly. First, because of the heavy spending and the trade. deficits and the printing of money or cheap credits at the end of the 1960s.

We actually had a breakdown of the monetary system of that period, which was a dollar-based system called the Bretton Woods system. It had established the dollar as the formal center of the international. international monetary system with other currencies pegged to the U.S. dollars. So we did not have floating exchange rates. We had stable or fixed exchange rates. That system ended in 1971 because the U.S. was issuing too much credit. And the dollar-based system was predicated on the idea that other countries could take the excess dollars they were receiving and convert them into gold because the U.S. government would exchange dollars for gold at a fixed price.

The U.S. was running out of gold step by step as countries were coming forward saying, we don't really want the dollar reserves. We want gold reserves. The dollar backing by gold was causing an outflow. flow of gold, and the gold convertibility was suddenly suspended by Richard Nixon in 1971, and the currencies in Europe, in Japan, began to float against the dollar. I mentioned all of this, because this kind of crisis also turns into a basic change in the monetary system. And that's going to happen again in the next years, the central. So what happened, by the way, after this was that oil prices soared in an inflationary period in the early 1970s.

And the U.S. made an agreement with Saudi Arabia, very interesting, that oil would be denominated in dollars for sales internationally. And the dollars would be deposited in dollar accounts, which became called the euro dollar system because the accounts were generally in banks in London. And so the dollars were recycled in a sense or the oil proceeds were recycled into dollar reserves. So we had floating exchange rates, but the dollar remained the central. currency for payments and settlements. And that has remained true until today. It's going to end, most likely, especially if this new trade policy is sustained, again, that big if of what the purposes are. But countries are seeing this doesn't make sense for us to hold our reserves

in dollars. That's very risky. A U.S. economic policy is unstable. The U.S. economy is unpredictable. The trade policies are unpredictable. And the weaponization of the dollar in confiscating Russian reserves, Venezuelan reserves, Iranian reserves, Afghan reserves, and so forth means that if you have some trade dispute or foreign policy dispute with the United States, you're likely to get your money confiscated. And more than that, with all these threats and sanctions that pour out of the White House every day, the dollar is a vehicle for enforcement. Because what the United States says is if you don't listen to us, your banks are going to be cut out of the dollar-based payment system.

So all of this is to say that just as you point out, that events similar to this of the late 1960s, early 70s led to big geopolitical change and financial change. They led to big monetary change. And I'm predicting that the U.S. dollar will diminish markedly in its role in the next 10 years, that we truly will have not only a multipolar world, but a multi-currency world as well, especially with the rise of the Remmen B as an alternative. Now, Trump knows that's very adverse to U.S. prerogatives. And so he has gone out of his way to threaten China and threaten the bricks. Don't you dare think about doing anything to dethrone the dollar. But can the United States really use its threats, its bluster, its trade barriers and so forth to prevent

other countries from taking preventative or remedial actions? And my feeling is, is that they cannot do so. The second point you raise is also extremely important. My whole career, I would say, has used relentlessly the book that you mentioned, the economic consequences of the piece, which was written in 1919 by a young John Maynard Keynes, who had been part of the British negotiating team at the Versailles Treaty. and became deeply disillusioned by the economic warfare, the harsh reparations, and the other barriers that were going to be imposed on post-World War I Europe.

And what made the book so incredibly important from my own thinking for decades is that he said a harsh peace or this kind of economic, warfare does, as you said, conduce to war. And he predicted that within a generation, the even worse demons will rise in Europe if Europe persists in these harsh settlements, these demands on Germany and the other losing side of Europe. And indeed, of course, he was utterly right. So all my whole career of economic, policymaking from the 1980s onward has been to say, don't enter economic wars. Don't be harsh.

Be magnanimous in the event that an adversary faces difficulties because if you are harsh, it will come back to haunt you. And I think that that was the wisdom of John Maynard Keynes, the most brilliant political economist of the 20th century. in that warning. The U.S. is out for blood with China. You could say that in a metaphorical sense, but I fear that many view it in a literal sense also,

expecting war, preparing for war, thinking that war will come. Nothing could be more reckless, horrendous, dangerous, insane for this world than to think in those terms. But the animus towards China is startling. It's only rivaled by the irrational animus towards Russia, which has been a persisting fact for almost two centuries in the British case and for decades in the U.S. case. But it comes to the same thing. China is a mortal threat to U.S. primacy. China's a mortal threat to U.S. dominance.

China's a mortal threat to U.S. power. So it must be contained, maybe even broken. And while the trade policies of the last few days are ostensibly against the 100-plus countries with which the U.S. is running trade deficits, this absurdity that we discussed, there is an underlying sense that China is target number one. And I do think people should understand how deliberate this policy is and how much it's part of a U.S. deep state strategy, just as NATO enlargement was a 30-year project of the United States, maybe coming to an end. We can't even be sure of that, given the massian

nations in Washington. But so too, the idea of somehow breaking China's rise is not a Trumpian idea. It is a Washington deep state idea. And the best way to understand such things is to look at what is being written by so-called strategists. In the case of NATO enlargement, we always discuss. It's Big New Britschinsky, who spelled out all the arguments in 1997 about why NATO should expand and why Russia would not be able to resist. And in the case of China, I refer often to a document written for the Council on Foreign Relations by Robert Blackwell and Ashley Tellis in 2015, which is entitled something like a grand strategy towards China. And the argument is China's rise is no longer in America's interest.

It must be stopped, in other words, a shocking idea. We must do damage to another side, not because they threaten us, but because they are too big. And therefore, they undermine U.S. hegemony. That's literally the argument in the paper, not a list of nefarious actions by China, but the mere fact as Blackwell so directly points out in this paper, remarkably so. The grand strategy of the United States since its inception, in essence, is primacy. The United States must be number one. And so we must prevent any challenge, not whether they're doing harm, not whether they're actually a threat, but simply by their size and success. And this is the motivation for much of what's happening from 2015, the attempt to form in crazy ways, new trade groups in Asia that don't include China.

the export bans on technology, the attempt to destroy companies like Huawei and ZTE on rumors and machinations of all sorts of imagined dangers, the unilateral tariffs that Trump imposed, not on the world in his first term, but specifically on China, and now the very punitive tariffs on China and the threats essentially made yesterday and perhaps something that will happen tomorrow or as so many things with Trump won't happen tomorrow despite the claim the idea of massive punishing tariffs because China dares to stand up to the United States and say, no, you can't unilaterally destroy our trade. So all of this is to say there is a China animus that is an impelling part of what we're observing.

How central? Hard to tell. But definitely one of the deeply motivating forces and extremely dangerous because it is deeply enmeshed in military buildups, in military alliances, in East Asia, in saber-rattling every day about Taiwan. And basically, with the real risk that Taiwan turns itself into the next Ukraine, by making the same kind of bets on U.S. protection that Ukraine made that ended up destroying so much of Ukraine, the same thing could happen in Taiwan. But if it does, the war is going to be even more dangerous for the world, potentially utterly catastrophic.

And with the instability of U.S. economic and political leadership combined with the deep state animus towards China, it's pretty risky. Professor Sachs, thank you so much for taking up our time. I wouldn't by myself be too concerned, actually, about what Indian officials say. I think they're in the midst of trying to negotiate some kind of waiver. I'm sorry for India, by the way. I'm particularly sorry for Vietnam, Lesotho, all of these poor countries that have been dragged into all of this. People there who work very hard to build up their businesses and to make a living. They're all going to be hit by all of this.

I think I can understand why some people in India are talking it this way. But I very much doubt. And it may be that the biggest negotiations are a moment. this small group in Washington that doesn't understand each other and that contradicts each other by the hour. So maybe this is another part of what we're watching. Exactly. But I myself think on the contrary, that ultimately when everything starts to settle down, countries like India will probably say to themselves, we have to actually forge even closer links with China and other countries like that because that is a predictable relationship, whereas what the Americans are offering

is a coercive one. And nobody ever likes to be trapped inside a coercive relationship. That, I think, is almost definable. That's a statistical, that's a scientific law, if you like in history. That's what I would say. You are so correct. You've got it a thousand percent right. But anyway, Professor Sacks, a brilliant discussion. Thank you very much again for coming and join you. Of course. Great. Great to be with you. Before you go, I know you're short on time, Professor Sacks. One question before you go from Spark. Sure, sure, sure. Professor Sacks, wouldn't it help if the U.S. would at least admit they practically forced China to take over U.S. manufacturing, beginning in earnest in the 1990s? Well, the U.S. companies ran towards China. They didn't force them to.

to, but they ran towards China, in part because at the time, China offered very low wages and efficient, diligent, capable production. Now China, of course, is a cutting-edge, remarkable manufacturing ecosystem, I think second to none in the world. But that's China's doing. Massive investment, incredible upgrading of skills, massive innovation and advancement in R&D and science and technology. But in the 1990s, U.S. companies saw a lot of profits to be made. Again, I want to say, and I do want to be clear about this, that a global supply chain, meaning that certain things get done in certain countries and other things get done. done in others is mutually beneficial for that whole supply chain. It does not mean the hollowing

out of America. It means that American workers engage in higher productivity areas. If again, just to emphasize this point, Trump's policy really is to push Americans to do the entire supply chain, because barriers will break apart the global supply chain, Americans are going to find themselves doing a lot of low wage, very unpleasant work that they didn't want to do and that they, the American economy left behind decades ago. This will be forced back. It will not raise living standards. It will lower living standards. One more point I do need to emphasize if I might, which is something general about trade that I didn't mention that should be mentioned. It is true, though it's subtle for the reasons I've tried to emphasize in terms of impacts.

Trade can hurt parts of an economy, some groups of workers, some sectors that face particular import competition and help others. The general proposition quite robust in history as well as in concept and theory is that the overall benefits are positive so that in principle those who win can compensate those who lose and the whole country can still come out way ahead. If you run the kind of politics that the United States has run for the last 40 years, which is a deeply plutocratic politics governed by the laws of campaign finance rather than by the determination of the common good, you don't have that kind of compensation in the American scene. Our society is very harsh.

It's rather nasty. The richest people, perhaps often are the nastiest to the poorest people. their billions are not enough for them. And what that means is that those who do lose not only from trade, but from technology changes, from other change in the economy, don't get helped in the American scene. They get tossed into the rubbish bin quite often. We have an underclass that persists and that grows, that has addictions and poor health and falling living standards and falling life expectancy.

American society is very harsh. No one comes to their rescue. Carriffs do not save them, believe me, not even remotely, not even remotely. But the political underpinnings of some of this support for Donald Trump is the claim that he will help them because no one else has helped them. The Democrats didn't help them. The past Republicans didn't help them. So people come to Trump, help us. And he tells them, yes, I will punish China. That will be your salvation.

I will punish those who are ripping us off. That will be your salvation. He peddles myths. He peddles economic ignorance. But he peddles something to people who want an answer that they haven't heard from normal politics. So I think this is just one more point that really does need to be emphasized. Thank you, Professor Sacks, for joining us. Professor Sacks, thank you very much.

Great. Thank you so much. Bye-bye. Take care. Bye-bye. You there, Alexander? Absolutely. Here I am.

You have time, Alexander? Yes, I do. You have to do a hard stock. Yes, I do. Let's go through the questions. At 10 o'clock, so we've got. Yeah, let's go through the questions and then we'll reconvene later this evening as well. All right.

Sir Mug's game says, good morning, gents. Ralph Steiner says Trump, just jacked tariffs. on imported Chinese goods, up to 110% of the Americans scream that they defend Korea and Japan. In Germany, for free, they are leaving. Yeah, I agree, actually. By the way, I don't think we're going to get

the Europeans coming on side with the Americans. I think the Americans, the Trump people, are as antagonistic to the Europeans, though in a different way than as they are to... to China as well. So I don't think there's, we are going, the Americans are leaving. They're leaving altogether.

And they're hiding, and they're going behind the wall, you know, the fortress walls. Anyway, there we go. If you go by what Peter Ciato said, Europe's going to get smashed. Absolutely. From China and from both sides. If you go by what Siakta is saying. Jungle Jin says, who will run first, China or the US? No, the Chinese are not going to run.

Who are rushed. Sorry, who will rust first. Who will rust first. I don't want to see the America rust. I hope not. I think it will find its way through. It always does in the end. But it will be difficult.

And it will be difficult for China as well. But China is a millennial civilization. It will absolutely come through this. Hath and Klags says, thanks Alex is for all your hard work. Thank you for that. Ratchez, thank you for your super sticker. Ralph Steiner says, now that Americans said they are going to leave Germany and Japan, as these freeloaders are

useless allies that always exploited the USA. What's next? Well, what is next? Fortress America. I think that is where we're heading. I mean, that seems to me, we talked about this. Fortress America withdrawing behind its own sphere of influence. Greenland, Canada, Mexico, Panama, all of those places. We've talked about this, but what do we know? Our analysis is always wrong. I'm now reading, I'm now reading all sorts of places in the mainstream media, also talking about spheres of influence and all of that. Spheres of influence. It's the end of globalization. I know. Yeah. The industrialization. All these things. We've been talking about this forever. But now they're using all these terms. All right. Pause more. Even Stammer. Even Stammer.

You know, the great. globalists is going to lead us into the post-globalist future. I mean, it really is. I mean, it makes you want to choke, frankly. Pazmoe says, please, how Russia's economy is stronger than any time since 1985, especially for workers after the world embargo, but USA must fail with modest tariffs. Yeah, I think one of the key things to understand is that the Russians, the Russians, First of all, this was not a tariff policy that they imposed on themselves.

It was a sanctions policy which was imposed upon them. Now, they were already previously pursuing an industrialization strategy. They used the opportunity created by sanctions to accelerate the industrialization strategy, which they had already prepared for. They'd prepare the financial systems. They'd prepare the messaging systems. They did all of those things. But if you go back to 2022, which of course I did, I mean, I remember because I follow Russian economic policy very, very carefully.

At that time, one of their major concerns was that because of the sanctions, there had been a severe decline in import. And the Russians went out of their way over the next couple of years to do trade deals with various countries, with China, with India, with Turkey, with countries like that, with Egypt, to replace essential imports they weren't getting from Europe by importing from those countries. In other words, they continued to pursue and still pursue a relative. open system of trade. So, I mean, the comparison that some people make is not exact. There are elements of similarity, but there are also differences. And, of course, one should also remember that the Russian economy is in a very, very different place anyway from the American one.

The American one is a very mature economy. The Russian economy is a growing industrial economy, which is already. re-industrializing and has been on a re-industrialization curve since the early 2000s. Hats and Clogs says, Alex, can you explain the context of the Greek quote, might makes right, the strong will do what they can and the weak must do what they must. It's from Thucydides. It is often this quote in. It is based, it derives from Thucydides's famous book. on the Philippinesian War, the war between Athens and Sparta. And there was a Greek, there was an Athenian vassal state,

which was the island of Melos, which tried to break away from Athens, from the Athenian alliance. So the Athenians would not accept that, and the sent of army and a fleet to bring Melos back into line. And the Melians said, why are you doing this? We have our right as an independent. and city-state, an island to pursue our own course. And according to Thucydides, the Athenians responded that you cannot do that

because of the gods we believe and of men we know that the strong do as they will and the weak do as they must. So that was what Fucydides said that the Athenians said to the island, to the people of the island of Melos. Now, he wasn't, in my opinion, setting out some kind of law of human nature. He was actually condemning the policies of his home city,

which was Athens, which he thought brought Athens to destruction and also moral destruction. Because of course, what then happened was that the Athenians defeated Melos. They murdered all the men and they took the women and children into slavery. And Thucydides, I think, felt that that was abhorrent. And I think he felt that this moral decline in Athens combined with the political decline was what eventually led to Athens' defeat in the Polyphanian War. So I'll give me a long explanation.

I think the city is very misunderstood. Sorry. Can you repeat that quote one more time if you can? Yes. Yes. The gods. Of the gods we believe and of men we know that the strong do as they will and the weak do as they must. Fantastic.

All right. Elza says, Mr. Sachs, what has Germany's economy to expect in the upcoming years? How grim is the outlook? Well, I can speak, I think, for Professor Saxia. You know the German economy. Absolutely, backwards. It is very, very grim indeed, because the Germans are now quarreling with the Americans, the Germans are quarreling with the Russians,

the Germans are quarreling with the Chinese. They're quarreling with absolutely everybody. And they have no real economic plan that is designed for the problems, the challenges that they can. currently face. What they're doing is they're retreating into massive type of overspending, exactly of the kind that Professor Sachs was talking about. They're eventually going to run a big current account deficit. That will lead inevitably to the kind of deficits that the United

States now has, because German industry is going to be diverted towards rearmament, in which, by the way, it will fail for all kinds of structural reasons. The money that is going to be spent is going to be misspent because of the way it is going to be spent. That is going to suck in imports into Germany. That is going to create deficits, trade deficits in Germany. It's going to result in huge rises in debt levels in Germany. And ultimately, it will undermine the German economy and it will destroy the euro. But Posmo asks on his previous question that he asked, I asked you, how come America can't increase prosperity with tariffs, which are less harsh?

Well, can I just say, I'm not personally someone who fundamentally has some kind of massive objection to tariffs. The problem is, are you running a strategy of economic and geopolitical war, which is what Professor Sachs suggested it might be? Are you running a tariff policy, in which case all you're doing is trying to protect your domestic industries, in which case the risk you run is that you're going to end up with the kind of industrial museum, which is what British industry became. as I very well remember from the 1980s. I used to visit British factories at that time,

and I saw Victorian and Edwardian machine tools still being used. Or are you going to run a dynamic manufacturing economic policy of the kind that countries like Russia have done and the United States itself did in the late 19th century, at which time tariffs were only a part of, you know, whole system. I see no evidence so far that the United States has developed that kind of dynamic economic plan. By the way, on the subject of tariff policies by the United States in the late 19th century and early 20th century, a topic which by the way, I also studied though a long,

long time ago, one of the things I most clearly remember about that policy is that American advocates of protection were strongly opposed to reciprocal tariffs. They said reciprocal tariffs are a horror. You cannot set tariffs against specific countries. You must have a single tariff which is intended to complement your domestic economic policy. Now, if you want to see somebody, you want to go somewhere, somebody who spoke out strongly against reciprocal tariffs. Henry Clay, you know, some people may know Henry Clay, major American political figure of the early 19th century, one of the major advocates of protection,

a Hamiltonian to his fingertips. He actually did a speech in the Senate in which he said that reciprocal tariffs are absolutely the wrong way to go. And that was the economic orthodoxy amongst protectionists throughout the 19th century and early 20th century history of the United States. Pazmosis, please just ask about that in congruity. Okay, that's a bit, okay. That's a message, I guess, within the chat.

But Mamalaska says U.S. rely on imports, tariffs equal tax on U.S. citizens. Andrea says, will economies subject to heavy tariffs switch to trading? with one another over time in order to bypass them? Well, of course they will. That's exactly what's going to happen. We're going to see economic blocks emerge and parallel trading systems. This whole set of decisions is going to give Bricks an enormous boost. And it is also going to give the Russian-Chinese partnership an enormous boost.

I don't know whether Trump realizes this, but he has just thrown away whatever remaining leverage over Russia, he might thought he had. I mean, oil prices are anyway tanking. But I mean, the idea that you can stop other countries buying Russian oil, they're going to need Russian oil even more now because of these problems in the trading system that we're going to see develop. And the Chinese are now incentivized to strengthen their relationship with Russia because of course they now feel that the pressure is on them. Alan Shepard says Orban-made military alliance with Serbia. Does he have inside information from Trump that the USA is withdrawing from NATO? I wouldn't be surprised. We'll see.

Nikos says, I saw your video with Stanislav Kravivnik. It seems that every nation in Europe and especially Finland wants to settle the score with Russia. Well, no, actually. the elite, the European elite, wants to settle the school with Russia. I've been to Finland many times. Finland is the one Scandinavian country. I know reasonably well. When I was used to go there, which is not so long ago, but after the start of the Ukrainian crisis in 2014,

I found that most people actually have positive views of Russia. We have a European elite, which has gained control in Finland, which has hostility to Russia because the Brussels elite hates Russia. And look what they're doing. They're trying to lock up. Ultimately, that's what they get to try and do. They're going to try and stop, well, they stop Georgessica from standing in the election. In Romania, they're going to go and try and lock him up.

They're coming after Le Pen. They're now trying to deprive Hungary of its voting rights. They are talking incessantly now, increasingly now, about banning the IFTA in Germany. This doesn't suggest that every European country has a beef with Russia. Just certain elites do. Sir Muggeme says a major theme of all three Godfather films is the peacemaker negotiator is your true enemy.

Trump is Don Barzini, Don Antebelo, or dare I say, Hyman Rob, Zelensky is Fredo, of course. Well, good. Nico says, Russia doesn't have the population of the Soviet Union this time, and they won't use nukes. We need to stop denying it. They are not willing to do that. Who's questions? Russia doesn't have the population of the Soviet Union this time, and they won't use nukes.

We need to stop denying. denying it they are not willing to do that well what are you what are you suggesting that the russians should threaten nuclear war i mean i i they are winning the war in ukraine i would we've just discussed this well we've discussed this many many times why would they want to use nukes and and precipitate world war three and the destruction of their own country if they're already winning the war. This massive spasm we are getting across the West is a product, it is a direct product of a Russian victory in Ukraine,

of the failure of the American project, of the NEACON project in Ukraine, and we're seeing this enormous recalibration take place in response to it. We should be grateful for the fact that. grateful of the fact that the Russians are exercising the restraint that they are. Nico says they've just started to recover their population, and in the case of Ukraine, they gained more people via refugees and the Dombas, about five million. Russia can't lose the same amount of people as in World War II, because they'll never recover. If Stanislav is correct and Merz is going to make the Fourth Reich and invade via Finland,

how can Russia fight against that without nukes? Well, if we get into those kind of situations, if Germany tries to invade Russia, then we are in a World War III type situation, World War III between Germany and Russia. Russia would survive because it's huge. Germany wouldn't. It's as simple as that. I mean, it would be the end of Germany if they tried to do something like that.

Every German war against Russia has ended in disaster, without exception, including the First World War, which Germany against Russia sort of won because there was, as we know, revolutionary change in Russia. But it weakened Germany to the point that it was unable to win the war in the West. K.M. says, Professor, what U.S. blueprint to get Medicare for all? Well, you can do all kinds of things with health systems. I'm not going to discuss the health system in the United States,

which is Byzantine and labyrinthine. and I don't pretend to understand it very well. But there can be all kinds of changes done to the health system of the United States, which would provide with a much more equitable and efficient one. My favourite speech, by the way, of President Kennedy's by far are not the ones that he used to make on foreign policy. It is one that he made in Madison Square Garden in, I think, 1962, talking about health politics.

And he talks with knowledge and an understanding of it to a American working class audience. And you see he's incredible understanding and affinity with that audience. And he's a way of explaining things to them. And it is superb. Dong, it says Trump does things like a bull in a China shop, but it always seems to work out. He might just surprise everyone. could he just want to end globalism? Thanks, everyone.

Love the podcast. Yeah, I mean, absolutely. I mean, with Trump, everything is so unpredictable. And again, I think another point I would like to make, which, you know, it does not contradict Professor Sacks's points, which was that you can be, you can make all of the criticisms of Trump that Professor Sacks made. And they would be true. It is still the case that the system. that existed before was ultimately an unsustainable one, that it was eventually going to break down anyway. You have to look for a change.

Now, maybe the way that this has been done is wrong. Maybe this should have been a work of years. Maybe all sorts of people should have been drawn in, consulted and spoken about them. You could have found other ways to do it. In America today, deeply polarized as it is, with a deep state so embedded with all these issues, trying to do things methodically and gradually and effectively probably wouldn't work because the system is designed to prevent change.

Nico says, I don't know about you, Alex, but Mertz really reminds me of Samaras here in Greek. Our politicians are idiots, but Samaras was pure evil, same as Mertz. Alex probably remembers Samara's better than me. I was actually in Britain at the time. My brother has negative things to say about him. But I'm not going to make those comparisons. Ralph Steider says,

Alexander, how, due to tariffs, embargoes, has Russia's economy literally been better than any time since 1985, but it will destroy America's? I think I've already answered this question. Russia did not impose tariffs. Russia has been sanctioned by the West. That precipitated a major economic mobilization in Russia. They are very strong and effective planning mechanisms.

They'd already prepared for this day before. And their economic system and industrial base is quite different. And they have pursued trade with various other countries, with China, with India, with Turkey, with Vietnam, whose leader, by the way, was recently in Russia and who is also coming to the Victory Day parade shortly with the Latin American countries, with Africa, with the Arab states. In 2022, it was a matter of serious worry to the Russians that imports into Russia had ended. Yeah, a concerned citizen says Trump is now death camp Donald.

Well, no, I think that is, I mean, let's not rush into the other extreme of language. I mean, that is, I mean, that's not wrong. That's not really wrong. I mean, it's, it's incredibly unfair. Andreas Ferensky says, wouldn't it even make more sense to put a tax on U.S. private and public debt? I know it's a crazy idea. Well, my own personal view is that there are lots of things that could be done in the United States. I personally think, for example, that for the United States itself to straightforwardly pursue a policy of ending the reserve currency position of the dollar would be a good thing.

I think that a lot of the problem is caused by the reserve currency status. of the dollar. It's made it possible for the United States to run this enormous credit card there. I also think that working towards agreements with other countries to sort out trade issues. I used to think in Trump's first term that what Trump was seeking was an amicable divorce from China. I still think that would have been an intelligent and a proper approach to take. I personally

think that if he'd become president in 2021, that is probably the course he would have taken. I think these things could have worked out. One of the things about Trump this time

is I sense that he is in a hurry, that he's feeling urgency. to do all of these things quickly because he doesn't think he has much time. He's only going to be president for four years. He wants to embed his legacy as

quickly as possible because he is uncertain of what his enemies might do and that is causing haste which is explaining some of the way some of these decisions

are playing out. Nico says, I also saw your podcast with vidias, Alex. I remember when you told us he won a seat in the EU. He's a bit weird, but I think he has taken it seriously. I like his ideas about youth and technology. Well, we'll be speaking to him again this evening. We'll speak to him soon. Ralph Steiner says, cheap and affordable goods are not the American dream, said Scott Besant. Drawing on the decline of the UK now is the pain of high inflation worth it. Well, I don't think the United States should go the way that the UK did.

We made one economic mistake after another. I think that America is at least trying to respond to its economic challenges, whether it's going about it and anything like the correct way is another question. Nico says, how do you feel about Fideas? It was also really nice to hear you speak Greek for two hours. Now let's hear Alexander speak Greek.

His accent, I'll give you 20 if you do it. I'll do you something. I will tell you something, Nico. when I go to Greece and I speak in Greek, because I always speak with an English accent, they assume I'm English, and I don't know what to say. So it's always sounded all very embarrassing. But anyway, I look forward to our programme with Fiddeus because, well, as far as I'm concerned, one of the few sane people left in the European Parliament, one of the voices of reason in a Parliament which is populated by people who are completely irrational.

Nico says here's a 20 anyway for reading my columns and not banning me for annoying you. Thank you, Buck. Oh, no, you're never, you're never annoyous, Nick. Junkled Jit says, Larry Johnson thinks that Trump is using tariffs in a bid to refinance the U.S. debt at a lower rate, your comment. Yeah, I mean, he may be right. He may be right, but will it succeed? Will it work out in the way that you will? Professor Sacks gave us with the authority of a very, very far.

economies, an explanation of why it won't work. Just saying. From Ralph Steiner is working three jobs and living in a car, the USA dream. Well, you made a good point because to repeat again, the present or rather the previous economic model was not working and was not sustainable. That is why we got Donald Trump. That's why he was elected. Dimitra, thank you for the memberships. Sparky says, Professor Sacks,

shouldn't President Trump replace Scott Bessett with Brown universities, Mark Blythe? Blythe seems to know how to recover an economy without subjugating people to crippling austerity. Well, I'm not able to discuss these things. I mean, I don't know these people. Doggonnet says,

when you've tapped out your credit cards, you don't keep doing the same thing. You try to pay them down. 36 trillion in debt, maybe not buying junk from China is a good thing for all of us. Well, perhaps a more effective way of controlling things is actually to spend less, spend less on empire, vast fleets and bases and looking for quarrels with all sorts of people to pursue a policy of peace, just to say. Doing some of those things might actually work out better and releasing all that productive capacity in the United States, which is being

misallocated to incredibly expensive and inefficient weapons production, to more efficient and cheaper production of consumer goods, which the American people might actually be able to make use of just saying. Anon Khorisian, thank you for that super sticker. O'era Marston says, thank you, gentlemen, for the information. valuable insight. Bill Rose says Professor Sacks, the EU and US neocons brought us to the brink of World War III. Is it not worth directing a heat check at them, seeing as they have the most to lose from these tariffs? I'm sure he would agree with you. Tree Three Three Climber says, what is Jeffrey

Sacks's solution? Well, we didn't talk about solutions. We talked about the actual policies that we have been implemented at the moment. But I can tell you what I think Professor Sachs' solution would be peace, actual peace, attempts to end the conflicts with Russia to stop this constant policy of pushing and driving economies everywhere, driving economies elsewhere and to the ground everywhere, looking for a balanced system of world trade and the reserve currency status of the dollar, which is going to end anywhere. I agree with him completely about that, by the way. Putin says, Jeffrey, you are dipping your bucket into a dry will when you talk to these two

Trump adherents. You can't say anything rational about Trump. You can't say anything rational about this. You're saying rational if you try to analyze Trump. You're a Trump, you're a Trump adherent. You're right. You're rather for him at 100%. Yeah.

Exactly. There's no middle ground. There's no analyzing. No. All emotion. Emotion is not always a good thing. No. Getting too emotional.

Added calories. I think you for that super sticker. Ralph Steider says why Germany wants 1,200 tons of gold back from the USA. Well, because they're afraid that if they don't, if they leave it there, they won't get it back. Anyway, we'll see. Exactly. Iranian kiddo. Thank you for those memberships.

Patty Irishman says, can Professor Sacks comment on the story that Gorbachev in an interview said NATO moving further east was never discussed with the US. He's actually discussed that many times. I don't know if you want to just comment quickly on that. Gorbachev said that, I think, at a time when he was trying to get a job in the US. He was very short of money at the time. The point is there is absolutely no doubt whatsoever that the Western powers repeatedly told the Russians. Gorbachev and Yeltsin, by the way, that NATO would not expand eastwards. I mean, we now have it all confirmed in archives in all sorts of places. James Baker said

it, the US Secretary of State, George W. H.W. Bush said it. British Prime Minister John Major said it. Hans Dietrich Gensher, the German Foreign Minister, said it. Helmut Cole said it. I remember at the time, Hans Dietrich Genshire, going on British television, giving an interview, and saying, you know, the Russians really don't need to worry about anything because once German unification is completed, we will not move NATO one inch east.

I remember it. I was watching it. I saw it happen. Yeah, tree three climber. Thank you for the Duran membership. Elza says the media is reporting that Germany wants to get their gold back from the USA. Haven't they tried it before when they were more powerful and failed? You know, there's a famous story.

There's a famous story, which by the way is completely untrue, but it's still the opposite of this, which is with Spain's gold. During the Spanish Civil War, the Spanish Republican government, there's a story that he sent Spain's gold reserves to the Soviet Union. And allegedly, Stalin said, well, it's their gold like their ears, but they'll never see their gold again, just as you can never see your ears. Sparky says, Jeff, when you're hanging out with your beloved colleagues, Clinton Newland, do you discuss geopolitics or just office gossip?

That's actually a good question to ask. That's actually sparky. There's an extraordinary article, by the way, in the London Times, which touches on this, which is by our foreign secretary, our former foreign secretary, William Haig, who was also a time leader of the Conservative Party, died in the wall, furtied near com, by the way. Anyway, he talks about how as foreign secretary, he used to have a phone, he used to have direct line to Hillary Clinton,

and how they used to meet with Egypt. other and a joke together and gossip about other world leaders. So there you go. From Nikos, I respect Professor Sachs. He is one of the best, but he needs to understand that Europe is a cancer. They need to pay their debt to the world. Salim, thank you for that super chat. Ralph Steiner says, will Trump be standing with Xi and Putin on Red Square? Yes. Oh, no, no, no, no. He won't be. I mean, he's already ruled that out. And I think he should go actually i think it would be most unwise to go to red square now yeah jungle jinn says stee putin lula the the leader of uh of yetnam all kinds of other leaders are going to be there too

it's going to be quite a lot of jungle jinn says china and india have kissed and made up ralph steiner says has the post 1945 usa world now officially ended i think we're very close to that point probably yes and we shouldn't you know regret it. The US gave an awful lot of good things during that time, as I can remember, but everything has its time. Ralph Steiner says, what about the 304 girls earning money on chats? I'm not sure I know about this. I'm sorry. Sparky says, Professor Sacks, would it help if President Trump ended the war on small business?

Well, I think you're probably asking me, asking us about things that are going on in the United States, which I simply don't know enough about to be able to say. Dan Walda says, I disagree. I work for GM. They just scheduled Saturdays for this summer that brought back Chevy Blazer from Mexico. Okay. Chevy Blazer, yeah. So they brought back. I guess Dan is saying that they're going to be working on Saturdays on Chevy Blazer. Okay. Thank you for that, Dan.

Frank Mercer says, good day. Can you guys do a program with someone who is tapped into Australian politics, please? Yes, absolutely. I think we should do. Yeah, absolutely. Elza says, you hear it here at her first gentleman. You are the best. Thank you, Elsa. William says, if Stammer had not dissed Trump helped Harris

and persistently tried to sabotage the U.S. Russia peace, could we have gotten a UK exemption to the terrorists? Who knows? Possibly. David Zuckero, welcome to the draft community. Raphael says, if I were Macron, I will chill for a bit. Putin is coming after him, and this time it is personal. Putin said he is the one who tried to. to take him out is what rach i'll say mac uh putin loaths macron it's it's strange that

mccron doesn't get it just a second um and and this del an actis says when would you say the world will return to some sort of normality what is normality in international relations i mean some people would say war is normal in international relations i don't know what normality is But I would like to see a world which was at peace. The world I was born into in the 1960s was more at peace than today's world is, even though we have a cold war. Raphael says 44 months is not one day. L.L.L. Good job, guys. Thank you. Thank you, Raphael, so much for that.

Ralph Steider says, what is the British storm? Stomners, storm troopers. When are the British stormtroopers invading Russia? or what if the British storm to keep in British I think Putin will send in the police to arrest them that's what I think we'll have and this Telanaki says

as a UK resident do we stand the slightest chance that the UK will not turn itself into the third world country as we know it will the UK preserve its relevance in the world stage if we were to change our policies conduct a major political reform

in Whitehall and start putting together gather a government that was purposeful and was really focused on British national interests, then we could pull it around. Unfortunately, we don't have that government. Bad boy boo says, I slowed down to let you win. Thank you for that. And from David Zuckerer, what is the geopolitical outlook for Australia,

resulting from the unraveling of the post-World War II order? I think Australia needs to make some very, very, important decisions about where it's going and what it's going to do. And I'm going to suggest that it needs to start thinking of itself again as a sovereign state. And the first thing it needs to do is to make itself a republic. Just a second. Amanda Crossfire says, why was Madagascar hit so hard with tariffs? You tell me, I don't know. Maybe because they're vanilla exports. They make the best vanilla, by the way. The best vanilla pods come from Ban, Madagascar. Maybe they were, you know, registering a big trade surplus for Madagascar. I don't know.

Doggan, it says, by U.S. law, you walk into the emergency, you get treatment. The U.S. citizen ends up paying the cost. Trump feels like he is, he, that, like he only has till the midterms. Trump feels like he only has till the mid-term. I think so. I think, I think this is exactly right. He feels the pressure of time on him. and that's why he's racing. Yeah, the commander crossfire says, if Trump wanted to give the U.S. taxpayers a hand, he could stop spending billions bombing Yemen.

Rolling back the MIC might be more helpful than tariffs. I agree. Sparky says Mark Blythe. Mark Blythe is a Scottish economist. The U.S. poached from the UK like so many great RADA actors, RADAAAAA. Thank you for Scottie. And Ed Burns says, thank you both for such amazing commentary on the craziness of the world.

Mercuris, the shoe rack, is a mess. It certainly is. I'm going to replace it. And what final one from Andy Stellanox says, if you would have to move to a country, which country would you consider as your final destination in current geopolitical circumstances? I never think of it in those terms. I mean, I love my country very much, Britain. and I love Greece also very much.

That's my other country. Those are my two countries. And I can't imagine myself living anywhere else, to be honest. Anyway, I don't want to think beyond that. I mean, I can't really think of other places where I would want to be permanently. There are cities that I love. I love St. Petersburg, which may be visiting fairly soon. I like Munich.

I used to love Paris very much. I haven't been there for many, many years, and I've heard that it's changed and not for the best. Turin, just to say, other places like that. But I want to stay basically where I am. Final question from Ralph Steiner comment. Has King Charles becoming a Muslim affected the UK? I don't think many people in Britain pay much attention to King Charles, just to say, I think people outside Britain overestimate the effect and influence of the royal family here.

I mean, they're basically, they're basically interesting for the gossip pages. You know what Prince Harry and Mark, we're done. We're going to wrap up Alexander, but is it true about Orthodox King Charles? No, not really. I think his father was. was Philip, Prince Philip, the husband of the late queen, he of course began as orthodox. Then in order to marry her, he converted back to Anglicanism. But in the last years of his life, the last 20, 30 years of his life, he quietly moved back to orthodoxy, as has only now been disclosed and he became an ardent risophile by the way and regularly visited Russia and had many, many contacts with the Russian Orthodox Church and with the Greek Orthodox Church. So he was an

interesting man, very misunderstood, but he absolutely did go back to orthodoxy. Interesting. All right. G.B. Thank you for that super sticker. All right, Alexander. Final thoughts as I just do a quick check and we'll wrap it up. Well, I mean, we're living through a period of extraordinary turmoil and revolution. One thing I want to say, absolutely, I do completely agree with. The days of the dollar as the world's reserve currency are now definitely coming to an end. We are going to move into a world of spheres of influence and economic blocks. And this, I personally, definitely believe that this is for real.

this is not some great negotiating pitch that Trump is doing. He means these tariffs. He's not going to negotiate them away. They are here to stay. And I think they will outlast Trump. All right. Thank you to everyone that joined us on Odyssey, Rafin, Rumble, YouTube and locals. Thank you, of course, to Professor Jeffrey Sachs.

I will have his information down below as a pinned comment. And thank you to our moderators, Zairel and Peter we're moderating today. And we will see everybody later on this evening with another live stream with Fidesz from the European Parliament. Commander Crossfire says Canada says we will be the new leader of the free world. Absolutely. Thank you for that. Commander Crossfire. Take care. Take care. Thank you, everybody.