The Peter Zeihan Podcast Series - And You Thought the Jones Act Was Dumb... || Peter Zeihan

Episode Date: October 8, 2025

If you tasked me with creating a list of the greatest threats to America, I'm not sure cabinets, name-brand drugs, and semi-trucks would be on there...but the President disagrees.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://bit.ly/3KBe3Mm

Hey all, Peter Zion here, coming to you from Colorado. Today we're talking about the newest hit to the American economy. We now have tariffs on cabinetry, semi-trucks, and what was the third one? Name brand drugs, all of which have been classified as national security threats. Cabinetry, that's an interesting one. Anyway, we could pick apart this all day, but I'm going to focus on the trucks because that's the one we're all going to feel soon and most deeply. Right now, about 90% of all cargo, all ton miles of cargo that are transported to the United States are transported on the roads by semi-trucks. Now, it didn't used to be this way.

If you go back to the Depression, we had something called the Jones Act, the Interstate Commerce Act, which said that any two, any cargo transported between any two American ports, regardless of where they were, had to be on a ship that was American-built, American captain, American crew. and American owned. As a result, we saw the cost of transport on the waterways increase in terms of cost per 10 mile by a factor of five. And we went from transporting most of our goods and especially most of our intermediate manufactured goods, especially in places like the Great Lakes in the Upper Midwest. We went from that being the dominant mode of transport to basically at whittling away to today in terms of ton miles. We only use our waterways for about 1% of our total cargo. It has been, in my opinion, the stupidest law that the United States has ever adopted, and it's now been in place for a century. As a result, things went to places where those restrictions were not in place,

first with train and now with truck. Now with the Trump administration policy, there's 100% tax on those trucks, of which about 80% of the imports come from Mexico, another 10% from Canada. And as with anything that involves NAFTA, nothing that's just made in one of the three countries. It's an integrated supply chain that uses all three. So basically what we're doing with this new tariff is saying this multi-step supply chain that we have where parts of the trucks go back and forth among the three countries. If the finished product is actually done in Mexico, which is the relatively low-cost work, we will then tariff the cost of the entire truck when it comes back. So in essence, we're tariffing American workers and American

companies who are making American products who just happen to have the bumper stamped on in Mexico. And since 90% of our cargo is transported by heavy truck, you're going to feel this in every sector. It doesn't matter if you're a hog farmer in Iowa sending your hogs to market or if you are just ordering something on Amazon. It's getting shipped across the country. The only people who will not feel this are the people who are in a physical position where, supply chains for imported goods do not use the trucks. And that means you would have to be in one of the major port cities that has a megaport. So those are New York, New Jersey, Miami, Houston, Savannah, Tacoma, and L.A. Long Beach. Anyone else, this is going to hit everything that you consume.

So I have long said that the Jones Act is the dumbest law we've ever had. But it's got some competition now.