April 3, 2025 • 39 mins
After the opening bell, the stock market fell sharply following President Trump’s announcement on “reciprocal” tariffs Wednesday. Included in the new tariffs is a 10% baseline tariff on all imports. It’s unclear what the full impact of the tariffs may be, but some financial analysts worry the measures could drive up consumer prices and strain global trade relationships. Gregory Stoller, professor at Boston University Questrom School of Business joined us.
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Episode Transcript
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Speaker 1 (00:01):
It's nice with y.
Speaker 2 (00:03):
I'm telling you easy Boston's Radio.
Speaker 3 (00:07):
All right, thanks very much, Dan Watkins.
Speaker 4 (00:09):
We are going to open up our conversation that we
started last night about the I'll call them the Trump tariffs.
Will be alliterative with me. Is hold on for one second, Rob,
hold on for one second.
Speaker 3 (00:30):
Tomorrow?
Speaker 5 (00:31):
All right?
Speaker 3 (00:33):
All right?
Speaker 4 (00:35):
You never know who calls you when you leave the
phone on here on the radio. It just kind of
kind of works that way anyway, Sorry for that. Pardon
that interruption. PT I with me is Greg Styller. Greg
is teachers at the Questrum School of Business at Boston University.
Uh and I can't think of anyone who has as
(00:56):
much knowledge about some of the foreign countries who have
been mentioned prominently in the last few days. Greg, Professor Staller,
welcome back to Night's Side.
Speaker 5 (01:09):
Thank you, Dan, it's going to be back on the show.
Speaker 4 (01:12):
So for those who do not remember our previous conversations.
You have taught business, entrepreneurship, international business for how many years?
Tell us explain to us the type of business that
you talk about and that you teach, and that you've
(01:32):
lived now for what twenty twenty five years?
Speaker 5 (01:35):
Yeah, so I'm about to conclude my tenth year. Bu,
I am also concluding my twenty fifth consecutive year teaching,
and I can't think of a better way to spend
my time.
Speaker 4 (01:48):
Yeah, and amongst your travels, and you travel quite a
bit with your students. You have your MBA from Harvard
and you're at Cornell undergrad and you travel the world
with students. Write, You read and write, and you speak,
(02:09):
read and write seven languages. I'm always amazed at that capability.
I have trouble speaking one. Greg, And you have traveled
to China since nineteen ninety four, thirty years. You've been
over there approximately twice a year. You've been there at
least fifty times during this period of thirty years, most
(02:32):
often bringing undergraduates with you, interacting with Chinese companies. So
I think that more than establishes your your bona fides
to comment on tariffs. So is there anything else that
you'd like to add here for people to understand your
experience that I haven't touched upon.
Speaker 5 (02:54):
No, thank you, I mean I just want to preface
this by saying that I appreciate being back and night
I'm taking a non part as an approach to this.
I want to go over the facts from you know,
from President Trump's perspective, from the US consumers perspective, and
I'm hoping to have some interesting callers.
Speaker 3 (03:11):
Yeah, I suspect we will.
Speaker 4 (03:14):
So the question here and I'll give you a question
that I think will is a fair question. This appears
to me to be a gamble by President Trump that
will either mark his presidency as one of the most
(03:38):
significant presidencies in the history of the country or it
will doom him to be sort of put in that
hall of presidents that Hoover, Herbert Hoover is the most
is the most prominent former president.
Speaker 3 (03:55):
I mean, it seems to me he's this is a huge, huge,
huge sea.
Speaker 4 (04:01):
Change in the way are not only the tariffs, but
what else is going on as well. I'm he's he's
promised to do this, But for him to try to
get all of this started within the first one hundred
days of his administration, it seems to me to be
(04:23):
either a brilliant move or he's bitten off much more
than he can chew. Let's let's look at it. What
are the pluses for him, the potential pluses that are reasonable,
and what are the what's the potential downside, he only has,
you know, a little more than well three and a
half years left in this office, so it's not as
(04:43):
if he's starting the potential for eight years.
Speaker 3 (04:46):
He'll and I.
Speaker 5 (04:46):
Would also argue that he probably only has a year
and a half with the midterm election come.
Speaker 4 (04:51):
Oh of course, Oh absolutely, he has what I would
I called last night a very short runway. But let's
talk about what do you think looking at it from
his perspective, what do you I think is motivating him?
What do you think he is trying to accomplish.
Speaker 5 (05:04):
Yes, I think that if you look at the numbers,
the trade gap contracted by a little bit over six
percent between January and February to one hundred and twenty
two point seven billion dollars. So he is asserting, and
he said this for a long time, that the United
States doesn't stand for enough, that we are a debtor nation,
(05:27):
a nation. He specifically is saying that people are ripping
us off, and he's trying to even the score by
generating government revenue. I mean, because at the end of
the day, that's what a tariff is, right, It's a
federal tax set by Congress that is applied to goods
at the border. The difference is that, you know, unlike
(05:49):
incomer sales taxes, it varies by product and by the
originating country. That's what he is his saying. And he
is going through history, and he is invoking the i
ee PA, the International Emergency Economic Powers Act in nineteen
seventy seven, to address what he refers to as the
(06:10):
large and persistent trade deficit.
Speaker 3 (06:13):
Right.
Speaker 4 (06:14):
But you and I know that this trade deficit has
existed for decades, for decades, and I can remember when
it was talked about in the nineteen nineties, the Bush
Clinton years and on into the Clinton years as this
horrible problem. But it sort of disappeared from the headlines
(06:37):
as if it had been solved.
Speaker 3 (06:38):
It hadn't been solved.
Speaker 4 (06:40):
Why is it being resurrected at this point by Donald
Trump as such an important hill to die on if
you will.
Speaker 5 (06:53):
I think I hild a die on as a very
good phrase. I mean, if you think about what happened
in his first he tried a bunch of stuff, I mean,
Visa VI tariffs. It was modest gains and steel jobs, right,
And I think he realizes that unless he is able
to change the Constitution, he's only got one term left,
(07:16):
so he's trying to, as I look at it, go bigger,
go home, and try and right this wrong. And you know, again,
I'm a numbers guy. Right by the numbers, the United
States has the largest GDP in the world. Right, that's
not news to anybody. It's twenty almost twenty eight trillion dollars.
The next closest country is China, and that's only eighteen
(07:38):
of that twenty eight trillion, and then Germany is four
point five trillion. So it's not like we're in a
tight race here between the second or third countries in
the world. But he is taking the tack, as I
said earlier, going bigger, going home.
Speaker 4 (07:55):
That I that I do understand. But when you talked
about the teriffs, the tariffs are going to be paid.
Let's just talk about the structure. So Vovo has just
announced that they are increasing their and you may have
seen this story. They're they're increasing their manufacturing in Mexico
(08:17):
from seven hundred million to a billion, which I think
is a message from Vovo to this a Swedish company.
I'm not sure who owns Vovo at this point. I
don't believe there are they owned by China. At this point,
although they obviously thought of as a as a as
a as a sweet.
Speaker 5 (08:39):
They are owned by a property that's called jerji On
Gully Holding Group Limited or colui as Geely Holding.
Speaker 4 (08:47):
Correct, So, so that is a message from China again.
Reuters is reporting tonight that Vovo to boost its Mexico
plant investment to one billion dollars. I assume that that
is not the sort of response that President Trump was
(09:11):
hoping to hear on the first day.
Speaker 5 (09:14):
After correct, I mean, you asked me to start with
the pros, we'll move on to the cons.
Speaker 3 (09:18):
Right.
Speaker 5 (09:18):
I think the biggest uncontrollable con that nobody can predict
is the effect of reciprocal tariffs. And I think that
President Trump was sort of hoping that, and this is
his negotiation strategy, right, that if he is able to
throw the power of the United States around and convince
(09:39):
other countries to change what they're doing to appease the
United States, he'll take that as a win. And if
you think about what he did with Columbia with the
federal funding and everything else, Columbia changed its policy because
they didn't want to lose the federal fundings. The problem
with the reciprocal tariffs is that he's not in control.
And to your point, Dan, a few minutes go, if
(10:00):
he says X, these other countries are going to say
why and and now you literally are deep in the
throes of a reciprocal trade war.
Speaker 4 (10:10):
My guest is Professor Greg Staller. He teaches at the
Questroom School of Business at Boston University. I have a
bunch more questions. He's very clear and concise in his answers.
If you have any question at all, I'm coming back,
but I'll open up the phone line six one, seven, two, five,
four ten thirty six one seven, nine, three one ten thirty.
(10:34):
This is really a time of questions. If you if
you want to challenge, I think you'd be making a mistake,
but feel free to at least try to phrase it
in the context of a question. And we may spend
the eleven o'clock hour, uh, just on your reactions. But
(10:54):
but I want to get this clarified so people understand
how this is possibly going to play out, either for
good or for bad. And that's why we're talking with
Professor Greg Staller. Spent a guest in this program dozens
of times in the last decade and delighted to have
him tonight back on Nightside. More conversation and your questions
(11:15):
right after this. If you're on night Side with Dan Ray,
I'm w Boston's News Radio with us is Greg Staller,
Professor Greg Staller, he teaches at the Questrum School of
Business at Boston University. What I'd like to do in
this segment is explain the concept of tariffs so people
(11:37):
can understand exactly what it is.
Speaker 3 (11:39):
So let me begin the process.
Speaker 4 (11:41):
Let's assume Vovo or any car dealer is going to
now import cars that will be the subject of a tariff,
so that tariff, depending upon what country it comes in from,
could be as high as a twenty five percent tariff.
Speaker 3 (11:57):
Am I corrected in.
Speaker 5 (11:58):
That absolutely correct. There's a ten percent universal tariff that's
going to effect two days from now, on April fifth.
But all of these tariffs that are created equally. The
EU is getting hit with twenty percent, Mexico and Canada
escaped the whirlwinds yesterday but are still going to be
(12:19):
subject to twenty five percent, and China please, you know,
strap yourself in for this number over fifty percent.
Speaker 4 (12:26):
Okay, So let's keep it simple for a second. So
Let's assume that there is a car that comes in
from a country, a foreign country, and the tariff is
on it.
Speaker 3 (12:38):
So who pays the tariff?
Speaker 4 (12:41):
The tariff, I assume is paid by the US company
that imports the vehicle.
Speaker 5 (12:50):
Correct, So again, a tariff is a tax. Yes, So
ostensibly President Trump's objective is to generate more tasks revenue
for the United States and to ship away at the
trade deficit. But you hit the nail on the head,
jan right. No car that's made right now is from
one specific country. And if you think about something like
(13:12):
Toyota Motor Corporation, right, they have a very large plant
in Lexington, Kentucky. How do you think through something like that.
You know that they are finishing the car in Lexington, Kentucky,
but a lot of the parts are originally going to
come from Japan because Toyota is a Japanese manufacturing organization.
So how do you mitigate that. That's what makes this
(13:34):
self complicated. It's not just a widget. It is considered
to be forty or fifty widgets, and some of those
widgets are manufactured of the United States. Others of those
widgets are manufactured well outside of the United States.
Speaker 4 (13:47):
Okay, so it's going to be the money that gets
gets handed over. The tariff is paid by the importer,
correct in this case, in most cases going to be
a US company. Right, So they they bring the vehicles
in and they pay that they pay the tariff that's
(14:07):
going to increase the cost of the car when it
hits the showroom, bingo, And that increase of cost in
the car will be made up by the company that
imports the car or the company that pays the tariff.
It'll be passed on to the consumer, which therefore is
pretty clear attacks right.
Speaker 5 (14:28):
But the idea is that if that's the case, and
a non American widget is now costing thirty percent more
than it would have a week ago, it is going
to incentivize people to buy American products because those American
products are obviously not subject to tariffs.
Speaker 3 (14:46):
I got it, I got it.
Speaker 4 (14:48):
But so so so whatever the money that eventually will
be is in effect paid.
Speaker 3 (14:57):
It may be paid.
Speaker 4 (14:58):
By the importer, but the importer recoups the money from
the consumer. So in effect, that is how we look
we characterize it as a tax on consumers. That money,
which in effect goes to the US Treasury, is used
to reduce the federal debt, but it's it's being paid
(15:22):
in effect by US citizens.
Speaker 5 (15:26):
Oh one hundred percent. The way I look at it
is it's like gambling in a casino. Right when you lose,
obviously one hundred percent of your lost money goes to
the casino. But casinos never pay true odds, right. You know,
on a roulette wheel there might be I don't know,
thirty eight slots. Even if you bet the right number
on the Roulett wheel, most casinos are going to pay
(15:47):
thirty two or thirty three to one. So even when
you win, you're paying a subsidy to the house. That's
exactly what is concerning me about this is that, yes,
prices are going to go up, and you might generate
more money for the treasury, but the average consumer is
going to get caught in the crossfire. Not to mention,
by the way downstream, what it could potentially do about inflation.
(16:10):
And I think that's what concerns me is that, you know,
President Biden, President Trump again, I'm trying to look at
this from a non partisan perspective, have really tried hard
to camp down inflation and cause us to not go
into a recession and keep things steady as she goes.
And you know, up until a couple of weeks ago,
the doll was doing pretty well. I mean, granted, you know,
(16:32):
in the first quarter was the lowest since twenty twenty two,
but you know there were pockets of good, good numbers
here or there. This is potentially going to eviscerate all
of those games.
Speaker 4 (16:45):
So then my final question for this segment is once
people start to see that the terroriffs, they associate the
tariffs which increase prices, that is going to have to erode.
I don't think that's going to help the president's popularity.
That is going to erode his popularity, not only across
(17:05):
the board, but even within his own party. At what
point does that loss of popularity force him to change
directions or is he so deep in at this point
he can't change directions.
Speaker 3 (17:19):
And if it's I'm going.
Speaker 5 (17:20):
To push back, I'm going to push back for a second.
Dan Again, I'm trying to look at this from objective perspective.
Right if you are a union worker and if you
are in a Republican state, you're a huge fan of
Donald Trump right now, sure, because he is hoping that
there are enough Republican states out there, they're going to
(17:41):
cause people to buy American products. And let's stick with
the auto industry example. And if people buy Americans, then
guess what, there are not going to be any layoffs
or any worker shortages that are going to be needed
at car manufacturing companies because they're going to be, in theory,
fully employed because people can't afford foreign imports.
Speaker 3 (18:02):
Okay, so okay, that's fair. That's fair.
Speaker 4 (18:05):
So if that if the cookie breaks that way, then
it helps him.
Speaker 5 (18:11):
If it doesn't break that way, exactly to your point
a few seconds ago, he is in deep you know what,
because now people are going to say, what did we
vote for? Why did we how did this happen? And
all of a sudden people are going to say, I
don't want to spend fifteen percent more for what I
want to buy. And again, one could argue that cars
are not you know, weekly purchases, right, but think about cannabis,
(18:36):
think about running shoes, think about iPhones. I mean, all
of this stuff is going to go up in price.
And that's to your point, that is going to be
the fly in a very very complicated political ointment.
Speaker 4 (18:49):
The other issue, and again, I'll just take this very
quickly there was a time thirty years ago when the
American and again, automobiles are the biggest private ticket anyone's
going to buy, right, And so there was a time
twenty thirty years ago where foreign made cars were considered
(19:12):
to be much better than American made cars, and that
devastated the US auto industry.
Speaker 5 (19:19):
Correct And by the way, I would add to that
analysis that if you think about the cost of the
tension plans that a lot of these US companies have
to bear in compliance with ARISSA, that is also arbitrarily
or not arbitrarily, artificially inflating the cost of a US
made car, which is further eroding our advantage compared with
(19:41):
foreign imports. So you're absolutely right, right.
Speaker 4 (19:43):
So the question is can American cars very quickly resuscitate
their reputation and prove to the American consumer that the
American car now is not only going to be less
expensive than many of the foreign brands, but the American
(20:03):
car is as good or better than the foreign cars.
Speaker 5 (20:08):
And if you're going to take President Trump's perspective on this,
that was the platform that he campaigned on, and that
was what he promised the voters he would do. He
promised that if you voted him in for a second term,
that people are going to be better off financially, and
if you work for those companies and if you purchase
(20:30):
American products, then in theory, you're not going to see
any price increase and you're going to be happier. But
to your point now, for the third time, that's a
really big risk that he's running.
Speaker 4 (20:41):
My guest is Professor Gregg Staller. Professor Staller teaches at
the Questrum School of Business at Boston University. He's very
much involved in international law, very much involved in taking students,
specifically to places like China and Vietnam with exchange programs.
(21:01):
I'm going to open up phone calls, uh and Professor
Staller will stay with us until eleven. But after that,
if you want to talk to a business school professor,
you got one right here. And he explains it to
me so clearly. Six one, seven, two, five, four ten
thirty six one seven, nine, three, one ten thirty. Coming
(21:22):
right back on night side, we're talking about tariffs and we're
trying to break it down so everybody understands how this
game is going to play out. Whichever group you're rooting for,
If you're on the Trump team, or if you're on
the team that hopes that perhaps this has been a
mistake that the president has launched whatever, you got to
(21:45):
understand how it works, and that's what Professor Staller is
here for.
Speaker 3 (21:48):
Phone lines are lighting up.
Speaker 4 (21:49):
The only line open right now is six one, seven, nine, three, one,
ten thirty back on night Side.
Speaker 2 (21:57):
It's Night Side with Boston's news radio.
Speaker 4 (22:02):
Well, Professor Staller, we have full lines. We're going to
get to Folk grows my guess. Professor Greg Staller, he
teaches in the Question School of Business at Boston University,
and we'll get to as many callers as we can
and look more for questions. Let's understand it. That's that's
what I would prefer. Let's see how we do his
Alan Saugus Al you were first this hour, Professor Stalin Hi, so.
Speaker 6 (22:27):
In my mind you are thirty five trillion reasons why
Trump is doing this. But I want to ask the professor,
could we have kept on, kept an on or was
there a dead end or a light at the end
of the tunnel, a train going to run us over?
Could this have kept going on? This deficit and debt?
Speaker 5 (22:43):
So, if you're a supporter of Trump you have. By
the way, thanks for calling you. Al, If you're a
supporter of Trump, you are sick and tired of the
status quo. And you're saying, there's been a logjam in
Washington for years, and everyone says they're going to do
something once they get into the old office, and nobody
actually takes any action. So he's trying to keep his
(23:04):
electorate happy and try and really a lot move the
needle a great deal. Once again, to your point, Al,
if we did nothing, we know survived in this situation
for years. And by the way, the trade deficit came
(23:25):
down from January February anyway, even before tariff, So you're
absolutely right.
Speaker 6 (23:32):
Why why the non level playing field with tariff's nation worldwide?
People try to push one world government this in world
economic formula. Why is there the disparity in teriffs? Why
why don't we have a level playing field?
Speaker 5 (23:45):
So he is saying that the US dollar is too
strong and as a result, it's not benefiting the US economy.
But to your point, not all countries are created equally
from an economic perspective. So if you look at and
I mentioned this a few moments ago, if you just
look at the top five GDPs in the world. Right,
India's coming in at five to three point six trillion.
(24:08):
The United States it's twenty eight trillion dollars. You can't
say that the that the Indian economy is on par
with the US economy. So that's why the tariffs are
not being distributed equally.
Speaker 4 (24:21):
So I just want a quick follow up question, Al,
excuse me Al's question. I thought this particularly interesting because
when I was in school and you learned a little
bit of economics, when you're your debt, your nation's debt
was more than one hundred percent of the GDP that
(24:42):
was considered banana republic territory.
Speaker 3 (24:46):
Why was that not.
Speaker 4 (24:47):
Considered banana republic territory in terms of the US Professor Staller?
And why weren't people more excited about getting ready? I mean,
this has increased under Democrats Republicans almost at the same
rate in terms of doubling. I know that when Bill
Clinton left, the debt was five trillion. When George Bush left,
(25:08):
it was ten trillion, doubled, when Barack Obama left, it
was eighteen trillion. When you know, so it just keeps
going up. Was the concept of banana republic territory. Did
people just say forget about that concept because that was
I mean.
Speaker 5 (25:25):
I don't necessarily think banana republic is the right term,
because Japan, by the way, in January twenty twenty five
has debt which is two hundred and sixty percent of GDP. Well,
so yeah, I mean a US situation, I think dan
that I would en now. I think I would answer
(25:46):
that by saying, for anybody who plays golf, good putting
cures a lot of problem shots in the fairy right,
So if you are a good putter, you can make
up for a lot of lost round. If the economy
is going up and consumer confidence is high, then why
are you going to worry about Why are you going
to worry about a deficit? Why are you going to
(26:08):
poke that there? The Fed has everything under control. We've
got monetary policy, we've got fiscal policy. Everybody's happy. It's
just an outgrowth of an economy that's growing.
Speaker 7 (26:20):
Last question, please go ahead, out last quar We have
a two trillion we're paying two trillion pretty soon on
interest on the debt or deficit, more than the military expensure.
Speaker 6 (26:31):
Who do we actually owe that.
Speaker 3 (26:32):
To a lot a lot of countries? And a lot
of ourselves.
Speaker 1 (26:37):
Go ahead, Greg, I mean I that's a that's a
politically charged question, because I will tell you and Dan,
you know, I appreciate the opportunity to be on your shelves.
Speaker 5 (26:50):
But in literally hours of research, shy to hold approximately
seven hundred and sixty billion dollars of US Treasury debts.
Speaker 8 (26:59):
Yeah, which which is a mere pittance compared to the
thirty seven trillion. So people will say to you, well,
that's less than two percent of our debt that's owed
to China, right, and so you.
Speaker 5 (27:11):
Know exactly, so you know again, Al, I'm not ignoring
your question. I think it's a very reasonable question. But
I go back to what I said that depending on
who you ask, and again, try to be no part
of it. If it ain't broke and everyone's happy, why
are you gonna put bother fixing it?
Speaker 4 (27:26):
But at some at some point, at some point, someone's
got to pay it down if it continues to grow.
And I've always looked at it, and Greg, if my professor,
my if my view is not a good a good no,
I know, but on the show, you're a professor, you're
a profession because what I'm looking at myself and saying
(27:48):
that the baby boomers, we're all going to be dead
when uh when when the bills come due, but we're
passing it on to our kids and our grandchildren.
Speaker 5 (27:57):
And that's exactly how I would have answered it. I mean,
I think the more reasonable question is what the heck
is Japan doing they had the last decade of the nineties.
Hasn't anybody solved that problem? And I think there is
a fealing, especially with a second term president, you can
pretty much do whatever you want till the midterm elections,
and to an extent, you're kicking that can down the road.
(28:19):
And by the way, that has been the issue of
social security for years. But you know, social security has
been the third rail of US politics. Nobody wants to
deal with the geriatric population. Nobody wants to deal with
an aging population, so everyone takes a pass and just
moves on to something else.
Speaker 4 (28:37):
I just want to carry your golf metaphor down the road,
and that is that. Just as I don't want to
be on the golf courst behind a quartet of people
who spend most of their times in the woods trying
to find their golf balls.
Speaker 3 (28:52):
I don't know that I want to follow Japan metaphor.
Speaker 5 (28:57):
I agree as.
Speaker 3 (28:58):
A model.
Speaker 5 (29:00):
The way Dan, you know, and I agree with that
Japan is still the world's third or fourth largest economy. No,
I know if he is, you know, four point five
trillion dollars, they aren't doing too badly. Now, I agree
with you. If you dissect it under a microscope, it's
the fiscal hawks and the PCs would not be happy.
But they're doing just fine. Kama, Thank you very much.
Speaker 3 (29:22):
All right, thank you much, great question.
Speaker 6 (29:23):
Thank you.
Speaker 3 (29:26):
Go ahead, quickly, go ahead.
Speaker 2 (29:28):
When it comes to the United States and golf, I
got you.
Speaker 6 (29:31):
A lot of countries say, oh that's a gimme, that's
a gimme when you got nukes and a big stick,
not gonna make your.
Speaker 3 (29:37):
I guess, so I guess, So you got it. Thanks you.
Good one, good one, quick break.
Speaker 4 (29:41):
I'm going to get to as many calls as we
can between now and eleven.
Speaker 3 (29:46):
Uh.
Speaker 4 (29:46):
I think Greg's one of my favorite guests because not
only does he talk about serious topics and make them understandable,
but he has a sense of humor.
Speaker 3 (29:54):
Back on Night's Side, right after this.
Speaker 9 (29:57):
It's Nights Eye with Dan Ray and w Boston's News radio.
Speaker 4 (30:02):
All right, we got full lines here, so let's keep right.
Gotta go next to Mario in Wilmington. Marrio, you gotta
be quick for us, Please go right ahead.
Speaker 3 (30:15):
Okay.
Speaker 4 (30:15):
If Mary is not there, we'll put Mario on hold,
which is fine, and we're gonna go next to John
and Boston.
Speaker 3 (30:20):
John, you gotta be quick place.
Speaker 2 (30:22):
Yeah. Hi, Good evening, Professor, Good evening, Dan. I guess
a couple of quick questions I've been trying to find
out now. Biden put one hundred percent tariff on Chinese
electric cars. Does that also cover gasoline or diesel vehicle
cars if they wanted.
Speaker 5 (30:37):
To bring them here? Or is that only for electric cause?
Speaker 2 (30:40):
Second question is what is the average always wait, let's.
Speaker 4 (30:45):
Take them in John, John, John, let's take them one
of its first question, Professor, I.
Speaker 5 (30:51):
Mean, I would say it really depends on the scope
of the tariff. That's what makes some strategy interesting. It's
not a blanket tariff on every good coming into the
United States. It's selected by country, and it's selected by products.
Speaker 2 (31:07):
Well, in the case of Biden, he put one hundred
percent pariff on Chinese electric cars, keeping byd out because
they'd white General Moys and Tesla in Porto because they
have a fifteen thousand dollars electric car that you could
buy new. And does that only cover Biden's characteres that
only cover electric cars or does that not cover gasoline
(31:28):
diesel cars?
Speaker 5 (31:29):
Yeah, I do not know the answer to that, John.
I know I can look it up an email, Dan,
but I don't on the air giving an opinion.
Speaker 2 (31:37):
I prefer to give you no problem, no problem. What
is the wage of the Chinese factory worker.
Speaker 5 (31:43):
I think it's about.
Speaker 2 (31:45):
As a matter of.
Speaker 5 (31:46):
Fact, I can answer that I was just in Hong
Kong and Vietnam with twenty four our undergraduate students, and
part of our visits in Hochiman City was to a
US multinational and I can tell you that they are
one tenth of what the US worker makes, and that's
part of the allure of why these US companies are
(32:07):
outsourcing well.
Speaker 2 (32:09):
And I want to mention, I want to ask the
audience is there any factory in Boston in massachutt I
know no factories in Boston or Massachusetts. And I wonder
if any of your students, when they grow up and
get out of school, want to work in a factory.
Nobody wants to work in a factory. If want I understand,
Professor am I correct and saying that the Chinese worker
works from nine to the moine, nine to night, six
(32:31):
days a week. And what American is going to do that?
No Americans so very live again.
Speaker 5 (32:36):
If you're a Trump supporter, that is exactly what he
wants to hear. If he's going to say, we need
to bring manufacturing back to the United States, we need
to provide our workers with a living wage. We need
to make it pleasant for them with union protections to
be able to work here.
Speaker 2 (32:54):
And that's going to mean higher price.
Speaker 4 (32:56):
By the way, John John, John hold On, by the way,
that is where Trump is taking the Republican Party. And
had a lot more union support, uh and and some
support from minority groups. That that stunned everybody last November
because those are sort of union have traditionally been democratic.
(33:17):
And he made some inroads in you with union members
and he's he's now following he's following through on his words. John,
I got a pass. Let me what about all, John John,
You're a veteran caller. I got people hanging on the line,
Please give give give them an opportunity. I want to
give them a couple of minutes too.
Speaker 3 (33:36):
Is that okay? With you?
Speaker 4 (33:37):
Thank you, thank you, good night, Donna. In framing Hi,
I'm going to get you in here quickly, Donaga, right ahead.
You gotta be quick for me though.
Speaker 9 (33:45):
First of all, you and I are not good Americans,
damned because you love Volvo's and I love Toyota cam Re's.
Speaker 3 (33:52):
Well, I'll tell you this. I used to be a
big fan of Vovo.
Speaker 4 (33:54):
I think Volvo now that it's owned by a Chinese company,
I think it is it is not as great a
car as it was ten, fifteen, twenty years ago. And
again I'm not going to ask Professor h. Staller about that.
That's my comment, not his. Go ahead, what's your question?
Speaker 9 (34:09):
Okay, Well, I'll continue. I saw on the news tonight
the Volkswagon when the cars come to America. Now, when
you look at the sticker, you know, on the on
the window there on the side, the passenger's side, they're
going to have an line item on the sticker that
(34:32):
shows you why you're what you're paying extra?
Speaker 3 (34:36):
Okay? Is that a question? That's a question? Is that?
Is that information or a question? Donna?
Speaker 9 (34:42):
Oh, that was just the information.
Speaker 3 (34:43):
Do you have a question. Do you have a question
from my guest comment? Okay, Donna hold On, whoever Professor
Staller would like.
Speaker 5 (34:52):
To prepare for tonight. I actually went to two automotive dealerships,
one domestic one that specializes in foreign reports. Donna is
absolutely right. Is that for the cars that are currently
on the lot, there is a blank section on those stickers,
and there is a section that's been set up that
you will understand what you're paying for post April fifth.
(35:15):
So she's absolutely right. And obviously, if the domestic dealership
that I went through there was no such sticker, only
if the dealership that specialized in foreign imports.
Speaker 3 (35:24):
Interesting, Donna, go ahead, if you have a question, feel for.
Speaker 9 (35:27):
Well, yeah, just one more thing. I appreciate that acknowledgement
from a brilliant professor. That sounds pretty good to me.
One about something like coffee, because Dan was talking about
Dungan Donuts before. There's some things we can't make in
the United States. We don't have a climate.
Speaker 5 (35:44):
And once again, once again this is putting a wedge
between the Republicans and the Democrats. Yet again, someone who's
a supporter of President Trump is going to say, well,
maybe we should subsidize the US coffee industry, and maybe
we should start growing coffee, or maybe if it's coming
from Colombia, that maybe we're going to make it too
(36:07):
expensive from Colombia. We're going to import it from another country.
That's his plan, and the problem is that we're not
talking about widgets. We're talking about products that are complex. Now,
branded coffee isn't as complex as a car, but still
when you if you're decapitated coffee or cappeitated coffee, it
gets very confusing very quickly.
Speaker 3 (36:28):
All right, Donna, appreciate Donna.
Speaker 4 (36:32):
I pushed John to make sure I could get you.
Now I'm going to push you so I get one
other person too. Okay, thank you very much. Trying to
be fair very quickly, Doreen, do you have a quick question.
We only get less than two minutes for Professor Staler.
Speaker 10 (36:46):
All I want to say is, I'm proud of myself.
I'm a Ford's product, upon the at product, and Cadillacs
were my first car. I'm very proud of me. Well,
goodbye to American name brands. Okay, good and I'm so
ari that you bought what you think you do. But
I understand what Trump's trying to do. Even though I
(37:06):
get involved with Trump, I'm neutral and I like Biden too.
Speaker 5 (37:12):
Don't get me wrong, I do it.
Speaker 2 (37:14):
Okay, I get it and brought up you know what
I mean.
Speaker 4 (37:17):
I'm all right, Doreen. I appreciate it. I just got
to wrap up with Professor Staller. Thank you for your comments.
Appreciate it, Greg Staller, Professor Gregg Staller, once again, you
definitely always prepare for the hour and it shows and
I run.
Speaker 3 (37:32):
I'm going to help my audience. Thank you.
Speaker 4 (37:35):
I'd like to tap in in the next few weeks
as this goes along with you kind of on a
on a regular basis or a semi regular basis, because
I think that you are able to call it for
us as an umpire as to how it's going, if
it's going well or going badly. I did notice that
gas prices and oil prices today dropped a little bit
(37:56):
kind of a countertrend against what the market did today.
Speaker 3 (37:58):
Can you give me a quick comment on that.
Speaker 5 (38:00):
Yeah, I think that everybody's in a holding pattern. I
wouldn't put too much faith in any metric that we're seeing.
And you and I had spoken off the air earlier
today and I said, yeah, the Dallas currently down. This
was four or five hours ago, thirteen hundred plus points,
and you said it's going to come back. And I
agree with you. I think that the term whipsaw is
(38:22):
probably the best adjective we can use at this point
in We just have to keep the faith and not
go to look at your four oh one k on
a daily basis, not look at your gas prices on
a daily basis. It's going to drive all of us crazy.
And by the way, we're all of the same boat,
including me. We just have to look at this on
(38:42):
a monthly basis or even a quarterly basis, because in
my opinion, that's the only way that's fair to look
at it.
Speaker 4 (38:48):
Couldn't agree with you, boy, Greg Staller, Professor Staalin, thank
you so much for your time. You'll be back with us.
The next invitation will issue a lot more quickly than
the last one. Thank you so much.
Speaker 5 (38:59):
Okay, as often as you'd like, So thank you.
Speaker 4 (39:01):
Thanks Professor Greg Staller of the Questroom School of Business
at Boston University. Now we will open it up for
all of you. We have an hour left. Let's talk
fourteen fourteen hundred points seventeen hundred points today. That's a
big drop. Feel free to chime in. Are you maintaining
(39:24):
your faith and belief in President Trump or are you
losing it? Whatever you'd like to talk about. It's opened lines,
but it's on tariffs for the next hour.
It's nice with y.
Speaker 2 (00:03):
I'm telling you easy Boston's Radio.
Speaker 3 (00:07):
All right, thanks very much, Dan Watkins.
Speaker 4 (00:09):
We are going to open up our conversation that we
started last night about the I'll call them the Trump tariffs.
Will be alliterative with me. Is hold on for one second, Rob,
hold on for one second.
Speaker 3 (00:30):
Tomorrow?
Speaker 5 (00:31):
All right?
Speaker 3 (00:33):
All right?
Speaker 4 (00:35):
You never know who calls you when you leave the
phone on here on the radio. It just kind of
kind of works that way anyway, Sorry for that. Pardon
that interruption. PT I with me is Greg Styller. Greg
is teachers at the Questrum School of Business at Boston University.
Uh and I can't think of anyone who has as
(00:56):
much knowledge about some of the foreign countries who have
been mentioned prominently in the last few days. Greg, Professor Staller,
welcome back to Night's Side.
Speaker 5 (01:09):
Thank you, Dan, it's going to be back on the show.
Speaker 4 (01:12):
So for those who do not remember our previous conversations.
You have taught business, entrepreneurship, international business for how many years?
Tell us explain to us the type of business that
you talk about and that you teach, and that you've
(01:32):
lived now for what twenty twenty five years?
Speaker 5 (01:35):
Yeah, so I'm about to conclude my tenth year. Bu,
I am also concluding my twenty fifth consecutive year teaching,
and I can't think of a better way to spend
my time.
Speaker 4 (01:48):
Yeah, and amongst your travels, and you travel quite a
bit with your students. You have your MBA from Harvard
and you're at Cornell undergrad and you travel the world
with students. Write, You read and write, and you speak,
(02:09):
read and write seven languages. I'm always amazed at that capability.
I have trouble speaking one. Greg, And you have traveled
to China since nineteen ninety four, thirty years. You've been
over there approximately twice a year. You've been there at
least fifty times during this period of thirty years, most
(02:32):
often bringing undergraduates with you, interacting with Chinese companies. So
I think that more than establishes your your bona fides
to comment on tariffs. So is there anything else that
you'd like to add here for people to understand your
experience that I haven't touched upon.
Speaker 5 (02:54):
No, thank you, I mean I just want to preface
this by saying that I appreciate being back and night
I'm taking a non part as an approach to this.
I want to go over the facts from you know,
from President Trump's perspective, from the US consumers perspective, and
I'm hoping to have some interesting callers.
Speaker 3 (03:11):
Yeah, I suspect we will.
Speaker 4 (03:14):
So the question here and I'll give you a question
that I think will is a fair question. This appears
to me to be a gamble by President Trump that
will either mark his presidency as one of the most
(03:38):
significant presidencies in the history of the country or it
will doom him to be sort of put in that
hall of presidents that Hoover, Herbert Hoover is the most
is the most prominent former president.
Speaker 3 (03:55):
I mean, it seems to me he's this is a huge, huge,
huge sea.
Speaker 4 (04:01):
Change in the way are not only the tariffs, but
what else is going on as well. I'm he's he's
promised to do this, But for him to try to
get all of this started within the first one hundred
days of his administration, it seems to me to be
(04:23):
either a brilliant move or he's bitten off much more
than he can chew. Let's let's look at it. What
are the pluses for him, the potential pluses that are reasonable,
and what are the what's the potential downside, he only has,
you know, a little more than well three and a
half years left in this office, so it's not as
(04:43):
if he's starting the potential for eight years.
Speaker 3 (04:46):
He'll and I.
Speaker 5 (04:46):
Would also argue that he probably only has a year
and a half with the midterm election come.
Speaker 4 (04:51):
Oh of course, Oh absolutely, he has what I would
I called last night a very short runway. But let's
talk about what do you think looking at it from
his perspective, what do you I think is motivating him?
What do you think he is trying to accomplish.
Speaker 5 (05:04):
Yes, I think that if you look at the numbers,
the trade gap contracted by a little bit over six
percent between January and February to one hundred and twenty
two point seven billion dollars. So he is asserting, and
he said this for a long time, that the United
States doesn't stand for enough, that we are a debtor nation,
(05:27):
a nation. He specifically is saying that people are ripping
us off, and he's trying to even the score by
generating government revenue. I mean, because at the end of
the day, that's what a tariff is, right, It's a
federal tax set by Congress that is applied to goods
at the border. The difference is that, you know, unlike
(05:49):
incomer sales taxes, it varies by product and by the
originating country. That's what he is his saying. And he
is going through history, and he is invoking the i
ee PA, the International Emergency Economic Powers Act in nineteen
seventy seven, to address what he refers to as the
(06:10):
large and persistent trade deficit.
Speaker 3 (06:13):
Right.
Speaker 4 (06:14):
But you and I know that this trade deficit has
existed for decades, for decades, and I can remember when
it was talked about in the nineteen nineties, the Bush
Clinton years and on into the Clinton years as this
horrible problem. But it sort of disappeared from the headlines
(06:37):
as if it had been solved.
Speaker 3 (06:38):
It hadn't been solved.
Speaker 4 (06:40):
Why is it being resurrected at this point by Donald
Trump as such an important hill to die on if
you will.
Speaker 5 (06:53):
I think I hild a die on as a very
good phrase. I mean, if you think about what happened
in his first he tried a bunch of stuff, I mean,
Visa VI tariffs. It was modest gains and steel jobs, right,
And I think he realizes that unless he is able
to change the Constitution, he's only got one term left,
(07:16):
so he's trying to, as I look at it, go bigger,
go home, and try and right this wrong. And you know, again,
I'm a numbers guy. Right by the numbers, the United
States has the largest GDP in the world. Right, that's
not news to anybody. It's twenty almost twenty eight trillion dollars.
The next closest country is China, and that's only eighteen
(07:38):
of that twenty eight trillion, and then Germany is four
point five trillion. So it's not like we're in a
tight race here between the second or third countries in
the world. But he is taking the tack, as I
said earlier, going bigger, going home.
Speaker 4 (07:55):
That I that I do understand. But when you talked
about the teriffs, the tariffs are going to be paid.
Let's just talk about the structure. So Vovo has just
announced that they are increasing their and you may have
seen this story. They're they're increasing their manufacturing in Mexico
(08:17):
from seven hundred million to a billion, which I think
is a message from Vovo to this a Swedish company.
I'm not sure who owns Vovo at this point. I
don't believe there are they owned by China. At this point,
although they obviously thought of as a as a as
a as a sweet.
Speaker 5 (08:39):
They are owned by a property that's called jerji On
Gully Holding Group Limited or colui as Geely Holding.
Speaker 4 (08:47):
Correct, So, so that is a message from China again.
Reuters is reporting tonight that Vovo to boost its Mexico
plant investment to one billion dollars. I assume that that
is not the sort of response that President Trump was
(09:11):
hoping to hear on the first day.
Speaker 5 (09:14):
After correct, I mean, you asked me to start with
the pros, we'll move on to the cons.
Speaker 3 (09:18):
Right.
Speaker 5 (09:18):
I think the biggest uncontrollable con that nobody can predict
is the effect of reciprocal tariffs. And I think that
President Trump was sort of hoping that, and this is
his negotiation strategy, right, that if he is able to
throw the power of the United States around and convince
(09:39):
other countries to change what they're doing to appease the
United States, he'll take that as a win. And if
you think about what he did with Columbia with the
federal funding and everything else, Columbia changed its policy because
they didn't want to lose the federal fundings. The problem
with the reciprocal tariffs is that he's not in control.
And to your point, Dan, a few minutes go, if
(10:00):
he says X, these other countries are going to say
why and and now you literally are deep in the
throes of a reciprocal trade war.
Speaker 4 (10:10):
My guest is Professor Greg Staller. He teaches at the
Questroom School of Business at Boston University. I have a
bunch more questions. He's very clear and concise in his answers.
If you have any question at all, I'm coming back,
but I'll open up the phone line six one, seven, two, five,
four ten thirty six one seven, nine, three one ten thirty.
(10:34):
This is really a time of questions. If you if
you want to challenge, I think you'd be making a mistake,
but feel free to at least try to phrase it
in the context of a question. And we may spend
the eleven o'clock hour, uh, just on your reactions. But
(10:54):
but I want to get this clarified so people understand
how this is possibly going to play out, either for
good or for bad. And that's why we're talking with
Professor Greg Staller. Spent a guest in this program dozens
of times in the last decade and delighted to have
him tonight back on Nightside. More conversation and your questions
(11:15):
right after this. If you're on night Side with Dan Ray,
I'm w Boston's News Radio with us is Greg Staller,
Professor Greg Staller, he teaches at the Questrum School of
Business at Boston University. What I'd like to do in
this segment is explain the concept of tariffs so people
(11:37):
can understand exactly what it is.
Speaker 3 (11:39):
So let me begin the process.
Speaker 4 (11:41):
Let's assume Vovo or any car dealer is going to
now import cars that will be the subject of a tariff,
so that tariff, depending upon what country it comes in from,
could be as high as a twenty five percent tariff.
Speaker 3 (11:57):
Am I corrected in.
Speaker 5 (11:58):
That absolutely correct. There's a ten percent universal tariff that's
going to effect two days from now, on April fifth.
But all of these tariffs that are created equally. The
EU is getting hit with twenty percent, Mexico and Canada
escaped the whirlwinds yesterday but are still going to be
(12:19):
subject to twenty five percent, and China please, you know,
strap yourself in for this number over fifty percent.
Speaker 4 (12:26):
Okay, So let's keep it simple for a second. So
Let's assume that there is a car that comes in
from a country, a foreign country, and the tariff is
on it.
Speaker 3 (12:38):
So who pays the tariff?
Speaker 4 (12:41):
The tariff, I assume is paid by the US company
that imports the vehicle.
Speaker 5 (12:50):
Correct, So again, a tariff is a tax. Yes, So
ostensibly President Trump's objective is to generate more tasks revenue
for the United States and to ship away at the
trade deficit. But you hit the nail on the head,
jan right. No car that's made right now is from
one specific country. And if you think about something like
(13:12):
Toyota Motor Corporation, right, they have a very large plant
in Lexington, Kentucky. How do you think through something like that.
You know that they are finishing the car in Lexington, Kentucky,
but a lot of the parts are originally going to
come from Japan because Toyota is a Japanese manufacturing organization.
So how do you mitigate that. That's what makes this
(13:34):
self complicated. It's not just a widget. It is considered
to be forty or fifty widgets, and some of those
widgets are manufactured of the United States. Others of those
widgets are manufactured well outside of the United States.
Speaker 4 (13:47):
Okay, so it's going to be the money that gets
gets handed over. The tariff is paid by the importer,
correct in this case, in most cases going to be
a US company. Right, So they they bring the vehicles
in and they pay that they pay the tariff that's
(14:07):
going to increase the cost of the car when it
hits the showroom, bingo, And that increase of cost in
the car will be made up by the company that
imports the car or the company that pays the tariff.
It'll be passed on to the consumer, which therefore is
pretty clear attacks right.
Speaker 5 (14:28):
But the idea is that if that's the case, and
a non American widget is now costing thirty percent more
than it would have a week ago, it is going
to incentivize people to buy American products because those American
products are obviously not subject to tariffs.
Speaker 3 (14:46):
I got it, I got it.
Speaker 4 (14:48):
But so so so whatever the money that eventually will
be is in effect paid.
Speaker 3 (14:57):
It may be paid.
Speaker 4 (14:58):
By the importer, but the importer recoups the money from
the consumer. So in effect, that is how we look
we characterize it as a tax on consumers. That money,
which in effect goes to the US Treasury, is used
to reduce the federal debt, but it's it's being paid
(15:22):
in effect by US citizens.
Speaker 5 (15:26):
Oh one hundred percent. The way I look at it
is it's like gambling in a casino. Right when you lose,
obviously one hundred percent of your lost money goes to
the casino. But casinos never pay true odds, right. You know,
on a roulette wheel there might be I don't know,
thirty eight slots. Even if you bet the right number
on the Roulett wheel, most casinos are going to pay
(15:47):
thirty two or thirty three to one. So even when
you win, you're paying a subsidy to the house. That's
exactly what is concerning me about this is that, yes,
prices are going to go up, and you might generate
more money for the treasury, but the average consumer is
going to get caught in the crossfire. Not to mention,
by the way downstream, what it could potentially do about inflation.
(16:10):
And I think that's what concerns me is that, you know,
President Biden, President Trump again, I'm trying to look at
this from a non partisan perspective, have really tried hard
to camp down inflation and cause us to not go
into a recession and keep things steady as she goes.
And you know, up until a couple of weeks ago,
the doll was doing pretty well. I mean, granted, you know,
(16:32):
in the first quarter was the lowest since twenty twenty two,
but you know there were pockets of good, good numbers
here or there. This is potentially going to eviscerate all
of those games.
Speaker 4 (16:45):
So then my final question for this segment is once
people start to see that the terroriffs, they associate the
tariffs which increase prices, that is going to have to erode.
I don't think that's going to help the president's popularity.
That is going to erode his popularity, not only across
(17:05):
the board, but even within his own party. At what
point does that loss of popularity force him to change
directions or is he so deep in at this point
he can't change directions.
Speaker 3 (17:19):
And if it's I'm going.
Speaker 5 (17:20):
To push back, I'm going to push back for a second.
Dan Again, I'm trying to look at this from objective perspective.
Right if you are a union worker and if you
are in a Republican state, you're a huge fan of
Donald Trump right now, sure, because he is hoping that
there are enough Republican states out there, they're going to
(17:41):
cause people to buy American products. And let's stick with
the auto industry example. And if people buy Americans, then
guess what, there are not going to be any layoffs
or any worker shortages that are going to be needed
at car manufacturing companies because they're going to be, in theory,
fully employed because people can't afford foreign imports.
Speaker 3 (18:02):
Okay, so okay, that's fair. That's fair.
Speaker 4 (18:05):
So if that if the cookie breaks that way, then
it helps him.
Speaker 5 (18:11):
If it doesn't break that way, exactly to your point
a few seconds ago, he is in deep you know what,
because now people are going to say, what did we
vote for? Why did we how did this happen? And
all of a sudden people are going to say, I
don't want to spend fifteen percent more for what I
want to buy. And again, one could argue that cars
are not you know, weekly purchases, right, but think about cannabis,
(18:36):
think about running shoes, think about iPhones. I mean, all
of this stuff is going to go up in price.
And that's to your point, that is going to be
the fly in a very very complicated political ointment.
Speaker 4 (18:49):
The other issue, and again, I'll just take this very
quickly there was a time thirty years ago when the
American and again, automobiles are the biggest private ticket anyone's
going to buy, right, And so there was a time
twenty thirty years ago where foreign made cars were considered
(19:12):
to be much better than American made cars, and that
devastated the US auto industry.
Speaker 5 (19:19):
Correct And by the way, I would add to that
analysis that if you think about the cost of the
tension plans that a lot of these US companies have
to bear in compliance with ARISSA, that is also arbitrarily
or not arbitrarily, artificially inflating the cost of a US
made car, which is further eroding our advantage compared with
(19:41):
foreign imports. So you're absolutely right, right.
Speaker 4 (19:43):
So the question is can American cars very quickly resuscitate
their reputation and prove to the American consumer that the
American car now is not only going to be less
expensive than many of the foreign brands, but the American
(20:03):
car is as good or better than the foreign cars.
Speaker 5 (20:08):
And if you're going to take President Trump's perspective on this,
that was the platform that he campaigned on, and that
was what he promised the voters he would do. He
promised that if you voted him in for a second term,
that people are going to be better off financially, and
if you work for those companies and if you purchase
(20:30):
American products, then in theory, you're not going to see
any price increase and you're going to be happier. But
to your point now, for the third time, that's a
really big risk that he's running.
Speaker 4 (20:41):
My guest is Professor Gregg Staller. Professor Staller teaches at
the Questrum School of Business at Boston University. He's very
much involved in international law, very much involved in taking students,
specifically to places like China and Vietnam with exchange programs.
(21:01):
I'm going to open up phone calls, uh and Professor
Staller will stay with us until eleven. But after that,
if you want to talk to a business school professor,
you got one right here. And he explains it to
me so clearly. Six one, seven, two, five, four ten
thirty six one seven, nine, three, one ten thirty. Coming
(21:22):
right back on night side, we're talking about tariffs and we're
trying to break it down so everybody understands how this
game is going to play out. Whichever group you're rooting for,
If you're on the Trump team, or if you're on
the team that hopes that perhaps this has been a
mistake that the president has launched whatever, you got to
(21:45):
understand how it works, and that's what Professor Staller is
here for.
Speaker 3 (21:48):
Phone lines are lighting up.
Speaker 4 (21:49):
The only line open right now is six one, seven, nine, three, one,
ten thirty back on night Side.
Speaker 2 (21:57):
It's Night Side with Boston's news radio.
Speaker 4 (22:02):
Well, Professor Staller, we have full lines. We're going to
get to Folk grows my guess. Professor Greg Staller, he
teaches in the Question School of Business at Boston University,
and we'll get to as many callers as we can
and look more for questions. Let's understand it. That's that's
what I would prefer. Let's see how we do his
Alan Saugus Al you were first this hour, Professor Stalin Hi, so.
Speaker 6 (22:27):
In my mind you are thirty five trillion reasons why
Trump is doing this. But I want to ask the professor,
could we have kept on, kept an on or was
there a dead end or a light at the end
of the tunnel, a train going to run us over?
Could this have kept going on? This deficit and debt?
Speaker 5 (22:43):
So, if you're a supporter of Trump you have. By
the way, thanks for calling you. Al, If you're a
supporter of Trump, you are sick and tired of the
status quo. And you're saying, there's been a logjam in
Washington for years, and everyone says they're going to do
something once they get into the old office, and nobody
actually takes any action. So he's trying to keep his
(23:04):
electorate happy and try and really a lot move the
needle a great deal. Once again, to your point, Al,
if we did nothing, we know survived in this situation
for years. And by the way, the trade deficit came
(23:25):
down from January February anyway, even before tariff, So you're
absolutely right.
Speaker 6 (23:32):
Why why the non level playing field with tariff's nation worldwide?
People try to push one world government this in world
economic formula. Why is there the disparity in teriffs? Why
why don't we have a level playing field?
Speaker 5 (23:45):
So he is saying that the US dollar is too
strong and as a result, it's not benefiting the US economy.
But to your point, not all countries are created equally
from an economic perspective. So if you look at and
I mentioned this a few moments ago, if you just
look at the top five GDPs in the world. Right,
India's coming in at five to three point six trillion.
(24:08):
The United States it's twenty eight trillion dollars. You can't
say that the that the Indian economy is on par
with the US economy. So that's why the tariffs are
not being distributed equally.
Speaker 4 (24:21):
So I just want a quick follow up question, Al,
excuse me Al's question. I thought this particularly interesting because
when I was in school and you learned a little
bit of economics, when you're your debt, your nation's debt
was more than one hundred percent of the GDP that
(24:42):
was considered banana republic territory.
Speaker 3 (24:46):
Why was that not.
Speaker 4 (24:47):
Considered banana republic territory in terms of the US Professor Staller?
And why weren't people more excited about getting ready? I mean,
this has increased under Democrats Republicans almost at the same
rate in terms of doubling. I know that when Bill
Clinton left, the debt was five trillion. When George Bush left,
(25:08):
it was ten trillion, doubled, when Barack Obama left, it
was eighteen trillion. When you know, so it just keeps
going up. Was the concept of banana republic territory. Did
people just say forget about that concept because that was
I mean.
Speaker 5 (25:25):
I don't necessarily think banana republic is the right term,
because Japan, by the way, in January twenty twenty five
has debt which is two hundred and sixty percent of GDP. Well,
so yeah, I mean a US situation, I think dan
that I would en now. I think I would answer
(25:46):
that by saying, for anybody who plays golf, good putting
cures a lot of problem shots in the fairy right,
So if you are a good putter, you can make
up for a lot of lost round. If the economy
is going up and consumer confidence is high, then why
are you going to worry about Why are you going
to worry about a deficit? Why are you going to
(26:08):
poke that there? The Fed has everything under control. We've
got monetary policy, we've got fiscal policy. Everybody's happy. It's
just an outgrowth of an economy that's growing.
Speaker 7 (26:20):
Last question, please go ahead, out last quar We have
a two trillion we're paying two trillion pretty soon on
interest on the debt or deficit, more than the military expensure.
Speaker 6 (26:31):
Who do we actually owe that.
Speaker 3 (26:32):
To a lot a lot of countries? And a lot
of ourselves.
Speaker 1 (26:37):
Go ahead, Greg, I mean I that's a that's a
politically charged question, because I will tell you and Dan,
you know, I appreciate the opportunity to be on your shelves.
Speaker 5 (26:50):
But in literally hours of research, shy to hold approximately
seven hundred and sixty billion dollars of US Treasury debts.
Speaker 8 (26:59):
Yeah, which which is a mere pittance compared to the
thirty seven trillion. So people will say to you, well,
that's less than two percent of our debt that's owed
to China, right, and so you.
Speaker 5 (27:11):
Know exactly, so you know again, Al, I'm not ignoring
your question. I think it's a very reasonable question. But
I go back to what I said that depending on
who you ask, and again, try to be no part
of it. If it ain't broke and everyone's happy, why
are you gonna put bother fixing it?
Speaker 4 (27:26):
But at some at some point, at some point, someone's
got to pay it down if it continues to grow.
And I've always looked at it, and Greg, if my professor,
my if my view is not a good a good no,
I know, but on the show, you're a professor, you're
a profession because what I'm looking at myself and saying
(27:48):
that the baby boomers, we're all going to be dead
when uh when when the bills come due, but we're
passing it on to our kids and our grandchildren.
Speaker 5 (27:57):
And that's exactly how I would have answered it. I mean,
I think the more reasonable question is what the heck
is Japan doing they had the last decade of the nineties.
Hasn't anybody solved that problem? And I think there is
a fealing, especially with a second term president, you can
pretty much do whatever you want till the midterm elections,
and to an extent, you're kicking that can down the road.
(28:19):
And by the way, that has been the issue of
social security for years. But you know, social security has
been the third rail of US politics. Nobody wants to
deal with the geriatric population. Nobody wants to deal with
an aging population, so everyone takes a pass and just
moves on to something else.
Speaker 4 (28:37):
I just want to carry your golf metaphor down the road,
and that is that. Just as I don't want to
be on the golf courst behind a quartet of people
who spend most of their times in the woods trying
to find their golf balls.
Speaker 3 (28:52):
I don't know that I want to follow Japan metaphor.
Speaker 5 (28:57):
I agree as.
Speaker 3 (28:58):
A model.
Speaker 5 (29:00):
The way Dan, you know, and I agree with that
Japan is still the world's third or fourth largest economy. No,
I know if he is, you know, four point five
trillion dollars, they aren't doing too badly. Now, I agree
with you. If you dissect it under a microscope, it's
the fiscal hawks and the PCs would not be happy.
But they're doing just fine. Kama, Thank you very much.
Speaker 3 (29:22):
All right, thank you much, great question.
Speaker 6 (29:23):
Thank you.
Speaker 3 (29:26):
Go ahead, quickly, go ahead.
Speaker 2 (29:28):
When it comes to the United States and golf, I
got you.
Speaker 6 (29:31):
A lot of countries say, oh that's a gimme, that's
a gimme when you got nukes and a big stick,
not gonna make your.
Speaker 3 (29:37):
I guess, so I guess, So you got it. Thanks you.
Good one, good one, quick break.
Speaker 4 (29:41):
I'm going to get to as many calls as we
can between now and eleven.
Speaker 3 (29:46):
Uh.
Speaker 4 (29:46):
I think Greg's one of my favorite guests because not
only does he talk about serious topics and make them understandable,
but he has a sense of humor.
Speaker 3 (29:54):
Back on Night's Side, right after this.
Speaker 9 (29:57):
It's Nights Eye with Dan Ray and w Boston's News radio.
Speaker 4 (30:02):
All right, we got full lines here, so let's keep right.
Gotta go next to Mario in Wilmington. Marrio, you gotta
be quick for us, Please go right ahead.
Speaker 3 (30:15):
Okay.
Speaker 4 (30:15):
If Mary is not there, we'll put Mario on hold,
which is fine, and we're gonna go next to John
and Boston.
Speaker 3 (30:20):
John, you gotta be quick place.
Speaker 2 (30:22):
Yeah. Hi, Good evening, Professor, Good evening, Dan. I guess
a couple of quick questions I've been trying to find
out now. Biden put one hundred percent tariff on Chinese
electric cars. Does that also cover gasoline or diesel vehicle
cars if they wanted.
Speaker 5 (30:37):
To bring them here? Or is that only for electric cause?
Speaker 2 (30:40):
Second question is what is the average always wait, let's.
Speaker 4 (30:45):
Take them in John, John, John, let's take them one
of its first question, Professor, I.
Speaker 5 (30:51):
Mean, I would say it really depends on the scope
of the tariff. That's what makes some strategy interesting. It's
not a blanket tariff on every good coming into the
United States. It's selected by country, and it's selected by products.
Speaker 2 (31:07):
Well, in the case of Biden, he put one hundred
percent pariff on Chinese electric cars, keeping byd out because
they'd white General Moys and Tesla in Porto because they
have a fifteen thousand dollars electric car that you could
buy new. And does that only cover Biden's characteres that
only cover electric cars or does that not cover gasoline
(31:28):
diesel cars?
Speaker 5 (31:29):
Yeah, I do not know the answer to that, John.
I know I can look it up an email, Dan,
but I don't on the air giving an opinion.
Speaker 2 (31:37):
I prefer to give you no problem, no problem. What
is the wage of the Chinese factory worker.
Speaker 5 (31:43):
I think it's about.
Speaker 2 (31:45):
As a matter of.
Speaker 5 (31:46):
Fact, I can answer that I was just in Hong
Kong and Vietnam with twenty four our undergraduate students, and
part of our visits in Hochiman City was to a
US multinational and I can tell you that they are
one tenth of what the US worker makes, and that's
part of the allure of why these US companies are
(32:07):
outsourcing well.
Speaker 2 (32:09):
And I want to mention, I want to ask the
audience is there any factory in Boston in massachutt I
know no factories in Boston or Massachusetts. And I wonder
if any of your students, when they grow up and
get out of school, want to work in a factory.
Nobody wants to work in a factory. If want I understand,
Professor am I correct and saying that the Chinese worker
works from nine to the moine, nine to night, six
(32:31):
days a week. And what American is going to do that?
No Americans so very live again.
Speaker 5 (32:36):
If you're a Trump supporter, that is exactly what he
wants to hear. If he's going to say, we need
to bring manufacturing back to the United States, we need
to provide our workers with a living wage. We need
to make it pleasant for them with union protections to
be able to work here.
Speaker 2 (32:54):
And that's going to mean higher price.
Speaker 4 (32:56):
By the way, John John, John hold On, by the way,
that is where Trump is taking the Republican Party. And
had a lot more union support, uh and and some
support from minority groups. That that stunned everybody last November
because those are sort of union have traditionally been democratic.
(33:17):
And he made some inroads in you with union members
and he's he's now following he's following through on his words. John,
I got a pass. Let me what about all, John John,
You're a veteran caller. I got people hanging on the line,
Please give give give them an opportunity. I want to
give them a couple of minutes too.
Speaker 3 (33:36):
Is that okay? With you?
Speaker 4 (33:37):
Thank you, thank you, good night, Donna. In framing Hi,
I'm going to get you in here quickly, Donaga, right ahead.
You gotta be quick for me though.
Speaker 9 (33:45):
First of all, you and I are not good Americans,
damned because you love Volvo's and I love Toyota cam Re's.
Speaker 3 (33:52):
Well, I'll tell you this. I used to be a
big fan of Vovo.
Speaker 4 (33:54):
I think Volvo now that it's owned by a Chinese company,
I think it is it is not as great a
car as it was ten, fifteen, twenty years ago. And
again I'm not going to ask Professor h. Staller about that.
That's my comment, not his. Go ahead, what's your question?
Speaker 9 (34:09):
Okay, Well, I'll continue. I saw on the news tonight
the Volkswagon when the cars come to America. Now, when
you look at the sticker, you know, on the on
the window there on the side, the passenger's side, they're
going to have an line item on the sticker that
(34:32):
shows you why you're what you're paying extra?
Speaker 3 (34:36):
Okay? Is that a question? That's a question? Is that?
Is that information or a question? Donna?
Speaker 9 (34:42):
Oh, that was just the information.
Speaker 3 (34:43):
Do you have a question. Do you have a question
from my guest comment? Okay, Donna hold On, whoever Professor
Staller would like.
Speaker 5 (34:52):
To prepare for tonight. I actually went to two automotive dealerships,
one domestic one that specializes in foreign reports. Donna is
absolutely right. Is that for the cars that are currently
on the lot, there is a blank section on those stickers,
and there is a section that's been set up that
you will understand what you're paying for post April fifth.
(35:15):
So she's absolutely right. And obviously, if the domestic dealership
that I went through there was no such sticker, only
if the dealership that specialized in foreign imports.
Speaker 3 (35:24):
Interesting, Donna, go ahead, if you have a question, feel for.
Speaker 9 (35:27):
Well, yeah, just one more thing. I appreciate that acknowledgement
from a brilliant professor. That sounds pretty good to me.
One about something like coffee, because Dan was talking about
Dungan Donuts before. There's some things we can't make in
the United States. We don't have a climate.
Speaker 5 (35:44):
And once again, once again this is putting a wedge
between the Republicans and the Democrats. Yet again, someone who's
a supporter of President Trump is going to say, well,
maybe we should subsidize the US coffee industry, and maybe
we should start growing coffee, or maybe if it's coming
from Colombia, that maybe we're going to make it too
(36:07):
expensive from Colombia. We're going to import it from another country.
That's his plan, and the problem is that we're not
talking about widgets. We're talking about products that are complex. Now,
branded coffee isn't as complex as a car, but still
when you if you're decapitated coffee or cappeitated coffee, it
gets very confusing very quickly.
Speaker 3 (36:28):
All right, Donna, appreciate Donna.
Speaker 4 (36:32):
I pushed John to make sure I could get you.
Now I'm going to push you so I get one
other person too. Okay, thank you very much. Trying to
be fair very quickly, Doreen, do you have a quick question.
We only get less than two minutes for Professor Staler.
Speaker 10 (36:46):
All I want to say is, I'm proud of myself.
I'm a Ford's product, upon the at product, and Cadillacs
were my first car. I'm very proud of me. Well,
goodbye to American name brands. Okay, good and I'm so
ari that you bought what you think you do. But
I understand what Trump's trying to do. Even though I
(37:06):
get involved with Trump, I'm neutral and I like Biden too.
Speaker 5 (37:12):
Don't get me wrong, I do it.
Speaker 2 (37:14):
Okay, I get it and brought up you know what
I mean.
Speaker 4 (37:17):
I'm all right, Doreen. I appreciate it. I just got
to wrap up with Professor Staller. Thank you for your comments.
Appreciate it, Greg Staller, Professor Gregg Staller, once again, you
definitely always prepare for the hour and it shows and
I run.
Speaker 3 (37:32):
I'm going to help my audience. Thank you.
Speaker 4 (37:35):
I'd like to tap in in the next few weeks
as this goes along with you kind of on a
on a regular basis or a semi regular basis, because
I think that you are able to call it for
us as an umpire as to how it's going, if
it's going well or going badly. I did notice that
gas prices and oil prices today dropped a little bit
(37:56):
kind of a countertrend against what the market did today.
Speaker 3 (37:58):
Can you give me a quick comment on that.
Speaker 5 (38:00):
Yeah, I think that everybody's in a holding pattern. I
wouldn't put too much faith in any metric that we're seeing.
And you and I had spoken off the air earlier
today and I said, yeah, the Dallas currently down. This
was four or five hours ago, thirteen hundred plus points,
and you said it's going to come back. And I
agree with you. I think that the term whipsaw is
(38:22):
probably the best adjective we can use at this point
in We just have to keep the faith and not
go to look at your four oh one k on
a daily basis, not look at your gas prices on
a daily basis. It's going to drive all of us crazy.
And by the way, we're all of the same boat,
including me. We just have to look at this on
(38:42):
a monthly basis or even a quarterly basis, because in
my opinion, that's the only way that's fair to look
at it.
Speaker 4 (38:48):
Couldn't agree with you, boy, Greg Staller, Professor Staalin, thank
you so much for your time. You'll be back with us.
The next invitation will issue a lot more quickly than
the last one. Thank you so much.
Speaker 5 (38:59):
Okay, as often as you'd like, So thank you.
Speaker 4 (39:01):
Thanks Professor Greg Staller of the Questroom School of Business
at Boston University. Now we will open it up for
all of you. We have an hour left. Let's talk
fourteen fourteen hundred points seventeen hundred points today. That's a
big drop. Feel free to chime in. Are you maintaining
(39:24):
your faith and belief in President Trump or are you
losing it? Whatever you'd like to talk about. It's opened lines,
but it's on tariffs for the next hour.
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