7-28-25 - 8am - Trump Trade Deals

Episode Transcript

Speaker 1 (00:00):
Morning boys.

Speaker 2 (00:01):
Hey Mike, this is just another example of mentally and
emotionally weak people. It's just the way society is gone.
I'm not gonna grab myself by the boot straps, pull
myself up, take care of my family, my friends, and
my responsibilities. I'm just going to go scream at a

(00:23):
puddle of water because it makes me feel better. It's ridiculous,
have a good.

Speaker 1 (00:27):
Day, it really it's ridiculous is a good word, but absurd,
I think is the better word. It is just totally absurd.
I I can't keep up with the guy Trump. We
now have a new European trade deal, which, based on

(00:51):
what little bit I read about over the past say,
well maybe twenty four hours, is that it's apparently one
hell of a d and a lot of European countries
are upset with the President of the EU because she
she capitulated to Trump's every whim. May it may not

(01:13):
be true. I don't know, because I've been too busy
trying to figure out exactly what the trade agreement is
with Japan that was announced about a week ago, and
I feel I kind of feel like I can now
talk about it, at least with some degree of understanding

(01:34):
what it really means. And the more I've read about it,
the more I've come to the conclusion that, well, obviously
it's been many things to many people. It's it's been
some people say it's controversial, some people say it's bold,
some people say it's unprecedented. But here's here's the conclusion
I've come to. I think it's pretty brilliant. It probably

(01:58):
and I don't know. What I haven't ascertained is whether
or not there is any sort of particular like, Okay,
we've got a list of ten trade agreements we want
to get done. Have we prioritized them, do we have
a particular chronological order in which we want to do

(02:20):
them or announce them, which is two separate things, or
are we just boom? We've got them all out there,
and I've got Howard Latnick and the Trade rep and everybody,
and Scott Bessen and everybody's just everybody's just doing everything
trying to see, you know, and which everyone comes out
first is fine, Which everyone comes out second's fine. The

(02:43):
point is just get them all done without any particular
chronological order. This one, however, the Japanese agreement, and in
a general sort of way, redefines the entire arc texture
the entire framework of global trade, and it establishes a

(03:06):
model that I think other deals would probably be smart
to try to emulate. So Trump and Commerce Secretary Howard
luckmank created something strikingly novel, in my opinion, a virtual
sovereign wealth fund. But it's not capitalized, it's not funded

(03:29):
by the taxpayers. Instead, it's going to get funded by Japanese.
That's amazing. I like the idea of a sovereign wealth fund,
but I've always been leary of sovereign wealth funds because

(03:49):
it's taking the wealth of our nation through any number
of means, taxation primarily being one of those, and creating that.
And I don't really trust them with my tax dollars.
I've been burned too many times by my tax dollars
being used on really stupid stuff. That if you want

(04:11):
to create a sovereign wealth fund which can be used
for some really good things, then go capitalize it yourself.
Go figure out a way to do it. Well they did.
They figured out a way to do it. And it's
not just diplomatic optics, and it's not bureaucratic tinkering. It's
truly an economic transformation with almost a metaphysical depth and

(04:34):
a reconfiguration of what it means to negotiate on behalf
of a sovereign nation as the leader of that sovereign nation.
And it's I don't want to get off the details
of the agreement itself except to say this for just
one moment. The difference between this term and the second

(04:58):
term is trump one in terms of personnel, because personnel
is policy. If you want your policies of you know,
whether you run a small business, medium large business, you
run a county, you run a state, you run a nation.
Personnel is how you get your policies your culture created.

(05:23):
And Trump has done that with the people that he
has selected. Now on the left over here, it's like
Chester with my right hand. Weirdly, on the over here
on the left, they're screaming that they're all sycophants, that
they're all just yes men. I don't think that's true
at all. I think that they take what Trump says. Okay, guys,

(05:45):
here's what I'd like to accomplish X y Z. Whatever
it may be. I kind of like to see. And
he may he may, because he's such a deal maker,
he may have some specific things in x y Z
that are subsets that he wants to make sure they're
in x y Z. But beyond that, he says to
that team, go forth and do it, and by golly,

(06:08):
they're doing it. And I don't really care. To address
the left's concern about sycophants. I really don't care if
they're sycophants, if they're caring it, even if they disagree
with Trump, even if they might have some disagreement. I
think they've got with everyone. They've got enough. Trump's established,

(06:34):
I think through Susie Wilds and Steven Miller and for
that matter, to some degree, jd Vance. But I really
do think jd Vance is kind of over here just
being vice president. There's just you know, a warm bucket
well piss According to the original quote, I think they
have the cajones to say, well, we disagree with you

(06:57):
about this. What if we looked at x y Z.
I don't think they have come to him and say
we just disagree, because that's not gonna fly with Trump.
Trump's gonna be okay, well you disagree, tell me why,
and tell me what you have that you think it's
a better option. I'm willing to look at that. I
really think that's how this White House is operating. And

(07:17):
I find it utterly fascinating having been in the White
House myself and seeing how the Bush White House operated,
which wasn't always exactly that way. Oh, I felt like
I could disagree with Bush, and I did on many occasions,
and sometimes I won, sometimes I lost. When I was
in those meetings, either in the Cabinet room, Roosevelt Room,

(07:38):
in the situation room, there really was an effort to
get descent on the table. Bush really wanted to hear
the descents. Even if he laughed at it, he still
wanted to hear it. Okay, well, all right, well thanks
for the idea. I think that's stupid. What's your idea?
Of course, to the next person is like, well, my idea,

(07:59):
of I think is actually dumber than his idea. But
here it goes, that's the way I want them to operate.
So screw the media, screw the cabal. In terms of
whether they're second us or not, they're accomplishing things.

Speaker 3 (08:16):
Now.

Speaker 1 (08:17):
I think that trade deficits, let's just go back. Let's
go back to some of the fundamentals. Trade deficits have
long haunted our politics and trade deficits often serve as
a cudgel wielded by opposing factions. Economists debate their significance,

(08:42):
politicians weaponize deficits. And meanwhile, you and I is just
citizens rightly sense that there is an imbalance when goods
flow in and factories shut down. It goes back to
Ross Perrot in that debate with Bill Clinton Georgia Bush.
I should have pulled that up where he describes, you know,

(09:05):
if this deal goes through, you're going to hear you know,
I've got a company, and I can manufacture my widget
here at you know, eight dollars an hour at the
time or whatever it happened to be, or I can
go south of the border and my labor costs are
fifty cents an hour. Well, it's not going to take

(09:25):
long before you're going to hear what yes, that giant
sucking sound. And you and I have sat and watched
this while politicians, you know, make a bunch of noise
about it, but nothing ever happens. And so we have
sense that there is an imbalance, but we've never seen

(09:49):
anybody come forth and try to do anything about it. Now,
trade deals, traditional trade deals, to be more specific, try
to fix that by offering something in the future. You know,
we'll give you increased access to our markets, or we
will eventually try to level the playing field. But that's

(10:12):
all a paper tiger. It's easily ignored, it's impossible to enforce.
So Trump in the Japan deal inverted that pattern completely.
Instead of asking for concessions in the future, he demanded
compensation up front, a five hundred and fifty billion dollar
infusion of Japanese capital to finance American infrastructure and industry.

(10:40):
That is a paradigm shift. Howard Lutnik un Fox News.

Speaker 4 (10:46):
So what's special about the deal with Japan is this
is not traditional investment. This isn't like the government's in
old Toyota is going.

Speaker 3 (10:54):
To invest in America.

Speaker 4 (10:56):
This is literally the government of Japan giving Don Trump
and the American people five hundred and fifty billion dollars
to invest at his direction on things that are important
to America and national security. So I'll give you an example,
generic antibiotics. We don't make antibiotics. So Donald Trump could say,

(11:19):
let's go build antibiotics, and we build generic antibiotics, and
the Japanese government finances it for us. We want to
build power and energy nuclear. We want to finish out
the Alaska pipeline five hundred and fifty billion dollars at
the discretion of Donald Trump. This is the National Security

(11:40):
Sovereign Fund given to us because Donald Trump created this
amazing tariff structure, and the Japanese understood they wanted to
get down to fifteen percent, and Donald Trump drove. Really,
when we were negotiating, flee word negotiating. Donald Trump was negotiating.

Speaker 3 (11:57):
And I was watching, and it was the star.

Speaker 1 (12:01):
And so it's a paradigm shift. Imagine if you will,
a wealthy guest who has overstayed their welcome and they're
consuming more than contribute. Maybe it's a roommate who knows.
But finally, yeah, okay, I'll help you renovate dragon. All help,
all help, I've stayed too long, and I'll help you
fix that light fixture in the bathroom. Well, that's what

(12:25):
Japan's agreed to do. Rather than merely apologizing for the
trade and balance they they did in essence of signing bonus.
And that signing bonus then allows Trump to reinvest in,
reinvest in itself without begging Congress for a nickel. It's
now I'm not going to go down the political science

(12:47):
aspect of it, but he has in essence, as the
executive said to the legislative branch, Yeah, you go over
here and tinker with taxes and you go do all
of that. Meanwhile, I got somebody else over here to
float them money in exchange for you know, a reduced tariff,
and I'm going to take that money, and as Luckinick says,

(13:08):
We'll go build a generic drug factory somewhere. Now. The
very first thing that I thought was why, why would
you pan do that? And then it became the more
I read about it, the more it became kind of clear. First,

(13:29):
Trump's judicious application of a fifteen percent tariff on Japanese
imports a strategic retreat from his higher rates that he
was threatening, signaled to the Japanese credible resolve. I'm an
immovable object. I ate too many cheeseburgers from McDonald's, and

(13:51):
I'm pretty much immovable. I got fat ankles, I got
swollen hands. It hurts, I'm pissed off. I'm making up
for lost time. I might fall over dead of a
heart attack tomorrow. You want it, or you don't let
me know. I kind of think that's kind of how
he feels right now. Then the other thing that happened

(14:15):
is you have to understand where Japan is. Japan is
facing threats from China. They understand the geopolitical states stakes.
A strong, self sufficient United States is going to be
the lynchpin of security in the Indo Pacific. So by

(14:39):
financing American energy, American manufacturing, our AI research and facilities,
that's not charity. That's Japan's insurance against Chinese hegemony, against
Chinese controlling everything. But again you still have to go

(15:02):
back to the structure of the deal. That actually may
I mean, all of what I just said is true,
but you still have to look at the structure of
the deal itself. Lot to explain that it's not a
conventional investment where Japan chooses projects or demands some sort
of managerial control. Instead, the United States selects the infrastructure

(15:22):
priorities nuclear plants, liquid natural gas terminals, some roads, and
ia lab shipyards. We definitely need shipyards. Then the Japanese
capital follows the American blueprint, not the reverse, and then
once built, those assets are at least to American operators,

(15:45):
ensuring that the control the innovation, the job creation all
remains domestic. Then there is a profit sharing arrangement. Japan's
got to get something out of it, right, grants ninety
percent of the profits to the United States, two percent
of the profits to Japan. Now that's the success of
Trump's strategy. Go empower the Secretary of Commerce to craft

(16:11):
the framework, and then you step in personally to secure
terms that overwhelmingly favor the people that you care most about,
the American public. And here's where the analogy to a
sovereign wealth fund, I think becomes appropriate. Almost every nation

(16:32):
has a sovereign wealth fund funds investment vehicles like let's
take Norway and Saudi Arabia's example, they fund those kinds
of investments that I just talked about using oil revenues
tax surpluses like in Singapore. The United States has long
lack the sovereign wealth fund, and for good reason, because

(16:55):
in trusting vast capital to Washington bureaucrafts, well, that's like
asking you know, the fox to guard the hen house.
That it's just stupid. Well, Trump's model seems to resolve
that problem by using foreign capital coupled with American discretion,

(17:17):
merging strategic capital allocation with democratic accountability, So the American people,
you and I, through our elected executive, determine how the
funds are used, and unlike typical deficits spending, this model
actually produces an asset, not a liability. Let's go back

(17:38):
in history. Let's go back to nineteen forty seven. You've
heard of the Marshall Plan. Let's think about that for
just a second.

Speaker 3 (18:02):
I'm just like that fart bopped in through the room.
Nobody knows who tells it, but.

Speaker 1 (18:07):
You can admit it. It smells a little bit sweet,
you know, if I'm ever like. But maybe you know
a mall or a retail store, a grocery store.

Speaker 3 (18:21):
Who knows.

Speaker 1 (18:21):
Well, I'm just walking down the sidewalk, you know, walking
the dog and enjoying myself. And I hear like off
to the side or behind me, I hear that laugh.
I'm reaching for my weapon immediately, no question, no question.
I'm just gonna drop to my knees, grab the gun,
and put my head on the swivel and start looking around.
Maybe just start firing randomly, just you know, just just

(18:43):
for the ell of it. No, I would never do that.

Speaker 5 (18:47):
Good grief.

Speaker 1 (18:48):
Now I'll get a text messages.

Speaker 3 (18:51):
Why do you think you are a Walmart stabber?

Speaker 1 (18:53):
Or was it Cleveland? Or since? Where?

Speaker 3 (18:57):
Where? Where?

Speaker 1 (18:58):
Where was the couple attacks? Where was that one? I
good grief? I mean, I'm so sick of this stuff.
Nineteen forty seven, Secretary of State Georgia Marshall thirteen billion
dollars to rebuild postwar Europe. That's a boatload of money
in nineteen forty seven. But here was the reasoning behind it.

(19:21):
Help our allies who had been involved in a multi
year war for their very survival stabilized. And that will
benefit us because now we'll have global stability and we'll
have a lot of trade going on. Well, Trump looked

(19:42):
at at being a student of history, he looked at
the Marshall plan and said, and this is what fascinates
me about Trump. You know some I heard somebody where
did I hear this? Somebody said they they had talked
to is like one of these roving reporters, you know,

(20:02):
a man on the street interview that they had heard
or maybe somebody maybe when you use sent me this text,
but they had heard a woman like in a convenience
store or something that was listening to the radio. And
Trump was speaking and the woman was oblivious to the customer,

(20:25):
and the customer finally said do you like Trump or
not like Trump? And she her response was something to
the effect that she she didn't really know yet. And
this person said, well, I can't stand him as an individual.
I can't stand the guy, but I absolutely love what
he's doing. And she goes, yeah, maybe that's it. That's

(20:54):
that's a leader. You don't necessarily like the leader, but
you like the way the leader treats you. You like
the way the leader creates the culture, creates the environment,
and says, we're gonna take this hill, and here's why
we're gonna take the hill. And when we take the hill,
we're all gonna benefit from it. Some of us might

(21:17):
get shot going up the hill, but we're gonna go
up the hill. Well, I think Trump, in a way
is a tr in that regard to Theodore Roosevelt, he
he flips the script because now instead of us investing

(21:39):
in our allies, it's our allies who are investing in us,
and that's gonna stabilize our strength as a bulwark against
global disorder. You know how much disorder is in the
world right now? If you don't know how much disorders
in the world right now. You're really not paying attention.
It's why I listen to so many podcasts. Some do

(22:00):
so much reading the Financial Times, the Times of London,
the Times of India. Why do I read these newspapers?
Because there is termoil? Are you even aware of It
may have been settled, but since overnight, Hey, are you
aware of the war going on right now between Thailand
and Cambodia. There are hotspots everywhere. So Trump is like,

(22:27):
we've got to strengthen ourselves, and I got to figure
out way to do that because Congress is over here,
you know, beating that debt. And in fact I just
saw up and tell on the TV monitor CNN is
talking about that dead horse that I've not mentioned today.
By the way, I've not mentioned it, So shut up
and sit down. Trump flips the script. So it's our

(22:50):
allies who are investing in US, and that's stabilizing the
United States as a bulwark against all this disorder that's
going on around the world. Instead of some sort of
vague hope of future returns. The deal provides hard assets
and measurable profits, and we're going to do profit sharing
with the Japanese. But don't ignore the multiplier effect. Any

(23:14):
road that might get paved, every plant that might get constructed,
every ship that's going to get built, is going to
generate what domestic employment. And when you have domestic employment,
what does that do that It increases tax revenue. It
also creates all the technological advancement that goes along with that.
You know what that is. That's an industrial policy. But

(23:37):
that's an industrial policy that's not Marxist, that's not centrally planned.
It's capitalism without the cronias. Foreign capital, domestic execution, American profits,
Japanese security, and all of its orchestrated by a team

(24:01):
that understands that power, res respects leverage, not a bunch
of platitudes. As somebody say on the text line, it's
an administration of doers. Oh yes, we've got four years,
max two years. Maybe let's get our asses in gear now.

(24:26):
Compare that to the EU's habitual dithering, or think about
South Korea and their continuous ongoing efforts to renegotiate trade
terms without putting any skin in the game whatsoever. Trump's
model demands. I want performance now. I don't want a

(24:47):
bunch of long term evasion. So the Japan Deal is
not merely a one off victory. It's a precedent. And
I'm really kind of I know, nerdy, but I'm kind
of excited to really understand THEE the EU Deal because
I want to see how many parallels I can find
between the EU Deal and the Japanese deal, Because, as

(25:08):
I said, Secretary Lutnik has rightfully signaled that this model
will be applied to our other allies, compelling them to
repay all these decades of trade imbalances with real capital,
not just yeah, well we'll think about doing this with that.
Is it economic coercion? Is Japan truly a willing partner

(25:32):
or are they capitulating under pressure? That question presumes a
false dichotomy. In geopolitical terms, coercion and consent almost always coexist.
When we impose tariffs. It wasn't outspite, it was to

(25:54):
realign incentives. Japan understands that maintaining access to American markets
requires some sort of reciprocity. That's not coercial, that's negotiation.
And I don't think that we ought to worry that
this somehow he raids, He raids, erodes free markets. They

(26:17):
actually prevent the kind of managed trade that the bureaucrats
and all the multilateral organizations that they that's what they
all want. What's not included in this agreement No World Bank,
no International Monetary Fund, no World Economic Forum, no committee

(26:37):
of unelected technocrats that somehow I think they know better
than we do about how to conduct our business, determining
how billions of American tax dollars ought to be spent.
This is simply a sovereign nation asserting its interests and
then saying to our allies, do you want to invest
in something that's mutually beneficial. We understand what's going on

(26:58):
with China. We understand the situation you face. We understand
that you're trying to rebuild your defenses. You're trying to
go from defensive posture only talking about the Japanese, from
a defensive posture only to an offensive posture. And we
understand the realities of why you're doing that. So let
us help you. Let us lower tariffs, you can sell

(27:22):
more goods. You making an investment in US that allows
us to become a leader in all these areas where
China is competing with us. You're actually helping us by
investing with us, so we can compete against China. No,
we're sitting around with Senate committee hearings, House hearings about

(27:42):
AI about you know, what are we going to do
about shipbuilding or anything else.

Speaker 3 (27:47):
Just do it.

Speaker 1 (27:49):
Just do it, with all due respect to Nike, just
do it. You know, when you think about American sovereignty,
doesn't this seem to be a trait through everything that
Trump's done so far? Immigration, American sovereignty, trade American sovereignty,

(28:12):
because Trump recognizes that so long as we remain so
heavily dependent upon foreign goods, foreign capital, foreign goodwill, that's
not a sovereign nation. That's not the leader of the
free world. So flip the shrip, as I said, restore
our sovereignty, not just in rhetoric, but actually indeed, infrastructure

(28:37):
built with foreign money, controlled by American operators, yielding profits
to American taxpayers. That's self determination. That's nationalism at its best.
So it's you know, patriotic capitalism, not crony capitalism, and
certainly not isolationists. It's making genuine partners out of countries

(29:02):
like the Japanese. And I hope when I study the
EU Trade Agreement that I find exactly the same thing.

Speaker 5 (29:11):
This US veteran in Kentucky truck driver listening live on
the iHeartRadio app Enjoy your show, and Dragon tell Michael
not to go talk to people about the hurricane. They're
going to drag him into a hole that he won't
be able to get out of.

Speaker 1 (29:32):
Michael, don't talk about the hurricane.

Speaker 3 (29:35):
You know.

Speaker 1 (29:36):
I listen right, you know I hear them right. Just
want to make sure no, actually don't. I don't hear
them all because this play them all.

Speaker 3 (29:46):
You hear the ones that are played on air right.

Speaker 1 (29:48):
All the others, all of them get put in their
own separate podcast.

Speaker 3 (29:52):
So enjoy.

Speaker 1 (29:55):
The reason I mentioned sovereignty is because what you're about
to hear is, I believe truer today than even when
it was first spoken.

Speaker 3 (30:11):
That were intended for us by the founding Polies.

Speaker 6 (30:14):
Not too long ago, two friends of mine were talking
to a Cuban refugee, a businessman who had escaped from Castro,
And in the midst of his story, one of my
friends turned to the other and said, we don't know
how lucky we are, and the Cuban stopped and said,
how lucky you are. I had some place to escape too,
And in that sentence. He told us the entire story.
If we lose freedom here, there's no place to escape to.

(30:36):
This is the last stand on earth, and this idea
that government is beholden to the people, that it has
no other source of power except the sovereign people, is
still the newest and the most unique idea in all
the long history of man's relation to man. This is
the issue of this election, whether we'd believe in our
capacity for self government, or whether we abandon the American

(30:57):
Revolution and confess that a little intellectual elite in a
far distant capital can plan our lives for us better
than we can plan them ourselves. You and I are
told increasingly we have to choose between a left or right. Well,
I'd like to suggest there is no such thing.

Speaker 3 (31:12):
As a left or right. There's only an up or down.

Speaker 6 (31:17):
Man's own old age dream, the ultimate an individual freedom
consistent with law and order, or down to the ant
heap of totalitarianism. And regardless of their sincerity their humanitarian motives,
those who would trade our freedom for security have embarked
on this downward course in this boat harvesting time.

Speaker 3 (31:37):
They use terms like the great.

Speaker 6 (31:39):
Society, or, as we were told, a few days ago
by the President, we must accept a greater government activity
in the affairs of the people. But they've been a
little more explicit in the past and among themselves, and
all of the things I now will quote have appeared
in print. These are not Republican accusations. For example, they
have voices that say the Cold War will in through

(32:00):
our acceptance of a not undemocratic socialism. Another voice says,
the profit motive has become outmoted. It must be replaced
by the incentives of the welfare state, or our traditional
system of individual freedom is incapable of solving the complex problems.

Speaker 3 (32:16):
Of the twentieth century.

Speaker 6 (32:18):
Senator Fulbright has said at Stanford University that the Constitution
is outmoded.

Speaker 3 (32:23):
He referred to the President as our.

Speaker 6 (32:25):
Moral teacher and our leader, and he says he is
hobbled in his task by the restrictions of power imposed
on him by this antiquated document. He must be freed
so that he can do for us what he.

Speaker 3 (32:38):
Knows is best.

Speaker 6 (32:40):
And Senator Clark of Pennsylvania, another articulate spokesman, defines liberalism
as meeting the material needs of the masses through the
full power of centralized government.

Speaker 3 (32:51):
Well, I, for one, resented when a representative of.

Speaker 6 (32:53):
The people refers to you and me, the free men
and women of this country, as the masses. This is
a term we haven't applied to our ourselves in America.
But beyond that, the full power of centralized government. This
was the very thing the Founding Fathers sought to minimize.
They knew that governments don't control things. A government can't
control the economy without controlling people, and they know when

(33:17):
a government sets out to do that, it must use
force and coercion to achieve its purpose.

Speaker 3 (33:22):
They also knew, those Founding.

Speaker 6 (33:23):
Fathers, that outside of its legitimate functions, government does nothing
as well or economically as the private sector of the economy.

Speaker 1 (33:33):
Yeah uh, really true. The last place for free better
keep it