The Peter Zeihan Podcast Series - You Mess with the Don, You Get the Tariffs || Peter Zeihan

Episode Date: April 7, 2025

Our next Live Q&A on Patreon is here! On April 9, Peter will join the Analyst members on Patreon for question time! In order to get in on the fun, join the 'Analyst tier' on Patreon before April 9.Join the Patreon here: https://www.patreon.com/PeterZeihanWell, it finally happened. Word got back to President Trump that Putin and the Russians were making a fool of him in their negotiations and peace talks, so the obvious next step is to throw some more tariffs at them...Full Newsletter: https://mailchi.mp/zeihan/secondary-tariffs-and-trump-gets-pissed-off

Hey, Al, Peter Zion here, come to you from Colorado. Just around the corner is question time. When our Patreon members get to grill me live, it'll happen on April 9. For those of you who are not members, this is kind of a hoot, especially considering it's happening just a few days after Donald Trump has announced Liberation Day slash Tariff Day, which is going to change the economic trajectory of the United States and of the world. So look at what's going on in the news, sign up for Patreon, get your questions ready,

and I'll see you soon. everybody, Peter Zion here coming to you from a sloppy Colorado. It's the 31st of March, and the news is over the weekend. Donald Trump gave an interview when he talked about how angry he was with Russian President Vladimir Putin. The term pissed off was used a couple of times. The issue is that the Russians have absolutely no intention of agreeing to a meaningful ceasefire, much less a long-term peace agreement, and they've been deliberately going out of their way to humiliate the American delegations in all of the peace talks because they can't go back to Donald Trump with nothing. And they've actually been upping the ante trying to embarrass Trump himself.

And apparently it finally sunk in that there is not going to be a deal that the Russians would possibly ever agree to. And Trump is starting to get aggroed. Now, you guys know my feelings on how the Russians negotiate. You know how I feelings on why the Russians are doing what we're doing. We'll put links to why there will never be a ceasefire at the end of this video. But the key issue, of course, is how Trump feels. Trump deliberately. chose his national security team like he did most of his team to not be competent simply to be loyal. And so just getting basic information about what's going on in the talks back to the top is a simplistic issue because nobody's communicating anything that they don't think their boss

is going to want to hear. Well, apparently it has gotten back to him that he's being made a fool of and it's not going over well. Now, I might not think very much about Donald Trump's negotiating tools and his negotiating record. However, he is the U.S. president. He is the most powerful person in the world, and that gives him array of options to implement even if imperfectly. And the one he has decided to settle on, at least at the moment, is something called secondary tariffs, which is something he just made up last week when talking about Venezuela. We'll link to that one as well. The idea is that anyone who purchases crude from the country in question, Venezuela last week, Russia this week, faces a 25 to 50%

tariff on anything that comes to the United States. Now, this hasn't been implemented. yet versus Venezuela, so we don't exactly know how it would work, but it would be potentially crushing. Now, the Russians themselves wouldn't care. They're not the ones paying the tariff, and even if they were, this war from them is about long-term national security needs. They feel until they can get Ukraine completely into their territories, plus Estonia, Latvia, Lithuania, Finland, parts of Romania, Poland, and Moldova, that they won't stop. They can't stop. They've already paid the price of a major war, and if they stop now, they will have paid that price without actually getting the strategic benefit of having a more securable external frontier. Now, until Trump came along, there was no way that the United States was going to send by and let this happen, because it would mean basically 100 million people, roughly half of which are allies, being on the wrong side of a new iron curtain.

But Donald Trump had a different view of things until apparently Sunday. So now the question is what happens next. the Russians won't do anything different. In fact, the Russian view, going back to the beginning of the war, is that even if the Europeans had stopped taking all Russian exports and energy cold Turkey, the Russians would have still done this. It's that important to them. So something coming out of the Trump administration now really isn't going to change their math. However, the Russians are not in this war alone. Iran is providing drones. North Korea is providing troops and artillery. And the Chinese are providing basically all the technical stuff that the Russians need to build everything

that they can build. So secondary sanctions on Russian crude would apply to China primarily. Well, secondary sanctions from Venezuela would partially apply to China. So we are in a position here where we might have a 50 to 75 percent tariff on China just because of secondary sanctions. That's on top of the 20 percent that Donald Trump has already put on. That's on top of whatever number he's going to make up when it comes to tariff day, which is April 2nd. which is just two days from now. So it's entirely possible, but by the end of this week, the Chinese will have over 100% tariff,

maybe even a lot more than 100% tariff, on anything that they sell into the United States. And that is going to change a lot. I don't want to say what the end result will be because there's a lot of other tariffs that are supposed to hit on the second. And until I know where they are relative, one versus the other, what I can tell you,

if it does get that high versus China, anything that you use that you plug into the wall is going to get very, very expensive almost overnight. And because there are no alternative supply chains anywhere in the world to the manufacture and assembly of electronics, this is something that's going to stick for years. It took 40 years to build out electronics processing and manufacturing in the China-centric system that we know now. If we did a breakneck process here in the United States, just the United States, That's easily another 15 years. If we include everybody within NAFTA and CAFTA,

we could probably shave that down to seven. But it is a big step. And in the meantime, we still need stuff. So we're going to get a very, very breakneck lesson in two things here. Number one, the impact of tariffs on inflation on a very grand scale from just this one country. And number two, we're going to find out if secondary tariffs are an interesting idea that is destined for the dustbin of history. or something more. And while the stakes are high, I gotta say, I'm looking forward to figuring out if this works or not.

Because we are definitely moving into a de-globalized world. Trump is absolutely right on that, which means we will need different tools and more tools than we've been using these last 80 years of globalized trade. Secondary tariffs are potentially one of them. And we're going to find out really soon if it works at all, or if it just screws us all over.