97. Empty Ports, Price Surges & a Hidden Recession Signal

Episode 97: Empty Ships, Soaring Tariffs & the Supply Chain Squeeze

This week on Drunk Real Estate, we unpack the economic storm forming at U.S. ports—where incoming ships are arriving nearly empty, and retailers are bracing for a 40% increase in import costs due to new tariffs on Chinese goods.

While inflation headlines cool off, the real pressure is building where it matters most: logistics, trade, and the price tags on everything we buy. From shipping slowdowns and job risk at ports to retail panic and the Fed’s silent struggle, this episode connects the dots that most people are missing.

🛳️ Empty port data from Long Beach & Los Angeles
💥 The 145% tariffs and how they’re already hitting costs
📉 Why the CPI data hasn’t caught up with reality
📦 How Amazon, Macy’s, and U.S. retailers are preparing for Q3
🧠 What this means for inflation, the Fed, and the risk of recession

Grab a drink and join the crew as we call out what’s not making the headlines—but should be.

📩 Subscribe to the daily economic newsletter: http://dredaily.com
🧠 Learn from Mauricio: https://coachingwithmauricio.com
📚 J Scott’s books: https://www.amazon.com/stores/author/B00KQK5PI6/allbooks
🎥 AJ’s YouTube: https://www.youtube.com/@AJOsborneOfficial
📷 BadAshInvestor on Instagram: https://www.instagram.com/badashinvestor

🎙️ If you enjoy the show, leave a 5-star review and share it—it helps more than you know!

Episode Transcript

(00:00):
Did you work on the docks or something?
Works you like a a ship docker?
What were you?
He still does.Syndications have been down.
Mauricio used to work on the docks.
You've been on strike.
He's down on it. Yeah.
I used to do some maritime work,
and I used to spend a lot of times downin the port of Long Beach.
Port of la.

(00:26):
Welcome to fresh real estate.
Grab a drink and enjoy the show.
Hey, there.
Welcome to episode 97 of DrunkReal Estate.
I am Kyle Wilson, Ashley Wilson's husband,and I'm joined
by my three co-hosts, starting with Mr.
Jay Scott.
Hey, how are you now?
I am doing the best giving.
I don't give a.

(00:52):
Jay's taking it on the chin today.
I, I, I think Kyle's already drunk.
No, it's all we're doing.
We're doing let it being AJ,we're doing letter Kenny quotes.
It's a quote from letter Kenny.
Sorry, Jay.
How's it going.
Canadian to appreciate that show?
It helps. It definitely helps.
You got to be Canadian or you got to be.
I've lived in a small town.

(01:14):
Fair enough. You're a city boy.
Yeah, I can tell.
I'm from downtown Baltimore.
Yeah.
How's it going, man? Good.How are you guys?
I can't complain.Are you drinking. Tonight?
I picked up the rest of the bottleof stones
and bones from, from last week.
Hopefully it's still fresh, and I know.
Marisha.What are. You drinking? A week old wine?

(01:36):
I am I oh,my gosh, you. Really don't care.
Do you have one of those, like, preserverat least. No.
Look at it.
Just just straight uncappedand everything.
Oh my gosh, that is that is just gross.
No, it's actually not too bad.
Jay, what's what's on your face?
I'm growing out the beard.
So I, I have a wedding.

(01:57):
I have a family wedding in, two weeks,so I have a week
and a half to decide if, if it's somethingthat's going to take or not.
So next Tuesday night, actually,let's do this next Tuesday night.
You guys can get the thumbs upor thumbs down if I keep it.
Jay, nobody gives a.
Raise.
Yo what's up buddy?
Dude I am pumped man.

(02:18):
I am excited to find out whatwe're talking about in today's episode.
What are we? I don't have no ideawhat's going on a minute.
We're smart guys. We'll find something.All right.
I'm doing good, man.I'm, I'm actually pretty jacked.
I don't know if you knew this,but my number one all time
social media post happened last week,and I'm still riding the high.
It's like it was like
I just posted something, and now I knowwhat going viral for me anyway.

(02:40):
Well. What was it about?
I got 200 views instead of my usual 20,so I was very, very excited.
You know, anytime I post about Cog
and how everybody screws that up,it just gets a lot of attention.
So I might just start a channelcalled a cop show or something.
Now people must be getting interestedin Syndications.
Here we go. There we go.

(03:00):
Well AJ what's up man?
How's it going buddy? Doing good.
Yeah. Yeah.
Got my diet Cokebread solo cup, as per usual.
Chillin with Ernie?
Yeah.
Chillin with Ernie. He's doing good too,aren't you, buddy?
Albert boy, I feel like I feel I feel.
Like that could be its own segment.
Kill him with Ernie. Chillin with Ernie.

(03:22):
Last time, actually,
he's been.
Chilling with Ernie, though.You need a haircut.
AJ, what's going on there? It'sgetting a little out of control.
I tried literally, I tried today twice.
Two different locations I gotta take, man.Why you gotta rub that, Emery?
So you don't have it.You don't have a guy or a girl.
I do.
But hey, Jay,you're a successful businessman. Just.
They should have.They should be coming to you.
They should be coming to the office.

(03:43):
That's what I told them.
They asked me not to come back.
I don't get your time is too valuable togo frickin window shopping and place. It.
As a flex.
AJ, you should have them, comewhile you're doing a podcast.
Sometimes. Just be talking.
Just get in your hair. Hold on. So.
Getting in.
Yesterday I couldn't get in yesterdayfor some reason.

(04:04):
I think it's, popular haircutor something.
You're those guys who just schedulehaircuts the morning off and just wait.
No. I have an hour free, and I call,and I say, are you available right now?
Yeah, that's what I do.
And if the answer's no, then I just waittill the next time I have an Annabella.
Jay, do you get your haircut at Costco?
No, but she.

(04:24):
She she's actually right next to Costco.
He's there so often.
That's why you could just pop in and see.
I need to complain for a second.
So I haven't been to Costco in monthsbecause my Costco is part of this mall.
It's right next to me.And they just tore down the mall.
They left the Costco,but they tore down the mall.
And so the they hadthey changed the entrance.

(04:46):
So it's like a temporary entranceand the parking lot is all messed up.
I refuse to go to court.
I will not be going to Costcountil August.
Holy cow.
Just cause the parking lots messed up.
The parking lots messed up and the.
It's a temporary entrance,so it's hard to get in and out of there.
And that's what I do.
That's that's a risky movebecause in August
the tariffs will be back up to like 300%.

(05:07):
And you're going to be paying waymore than you went today.
Not not just that,but because of this whole mall thing,
they closed down the food court.
So I can't get anything at the food court.
And my wife told me today,they just announced that they're
going to be discontinuing the rotisseriechickens until August.
J you're so soft, you're ten ply, bud.
Okay,

(05:27):
we haveto listen to this the whole episode.
I got lost.
Oh. All right.
Well, actually, no, I got to tell, I'mI, I actually like this wild turkey
last time,so I'm doubling up on two episodes.
A oh, I'll turkey one on one.
And ag, I don't know if you noticed.
I'm rocking your shirt like I did.
I'm proud of you.
I had to bring it out sometime. Actually.

(05:48):
Fits me kind of.
Well, not I don't I don't hate it.
Oh. I'm going to, like,when I go up to Canada.
I'll put it on. We'll see how that goes.
Thereyou go. It depends on where you're at.
Yeah. No it doesn't anywhere in Canada.
They will, they will.
I'll get a stern talking to.
They might even swear at me.
Got Alberta. All right.

(06:08):
As Marissa said, we don'treally know what we're talking about,
so, just, we want to just start talkingabout something like CPI or.
My show. Has a topic.
Starting. I wanna start with you.I want to see. What you got.
What what are your thoughts on the economyright now?
J CPI, tariffs.
Everything is still cruising along.
So CPI inflation came out today and

(06:31):
looking good. Good number.
The 12 month moving average is 2.3%,
which is the lowest it'sbeen since beginning of 2021.
Is that right? That's right.
So it came in at just under 0.2,which annualized is at about 2.4.
Actually, I think it annualized to 2.3.
Which is rightabout where the fed wants it to be.

(06:52):
So inflation is looking good. Yeah.
Nobody wanted to.
Did it go up.
Now it's not 2% anymore.
It's 2.42.
I mean it's. Between 2 and 5 off.
Target between. Two and ten.
As long as it's between 2and 10 we're good.
So I. Mean J goes out.
Good enough for Kyle to complain.About it.
Historically.
Historically in this country,

(07:12):
inflation has been at 3.1%over the last hundred and 20 years.
So that whole 2% thingand we've talked about this before,
but the 2% thing came from the factthat about a decade ago,
the fed was actually concernedthat inflation was too low,
not that it was too high.They weren't trying to get down to two.
They were actually trying to get up to 2%.

(07:32):
And so they picked that 2% target
because I think they thoughtthat was reasonable to get it up to that.
It wasn't it.
Like New Zealand was using it
as their targetand they were like, oh, that sounds good.
Yeah, I've heard that too.
I don't know if that's true, but whatever.
I mean, regardless,it was a number. On the internet.
It was on the internet.I think al Gore said it. It must be true.
If al Gore said itand he created the internet, then yeah.
It's kind of the Taylor Swift song.
So it's a long story short.

(07:55):
I mean, three, 3.1%,that's the historical average.
So it's kind of crazythat we're we're freaking out over, over
two, 2.5% or two and a half to 3%.
So anyway inflation's looking good.
Later this week we'll get peopleyes Thursday the day this is released
we'll get PPI inflationwhich is the wholesaler inflation.

(08:15):
Like what would businesses pay.
Hopefully that'll be pretty low too.
We're going to get retailsales numbers this week.
So that'll be pretty tellingfor last month.
We're going to get a bunch of housing datawe can talk about this next week.
But homebuilder confidence is coming in.
Housing starts data housingpermits data is coming in this week.
So we're going to geta lot of good data this week.

(08:35):
Stock markets up on the year.
Stockmarket is finally back up on the year.
All right, I'm gonna I'm not I'm notgonna let you off the hook on this one.
Like, if you're going to start usinghistorical numbers, like what did you say,
like the 150 years or three point,what was the number like one.
Hundred and 153 years? 3.1%.
Like like you got toyou got to use the same data.

(08:55):
Like we can't use datafrom like even 30 years ago.
And the way we calculate the CPIis completely different than today.
And if you go back 100 years,who knows what the CPI was like
a little bread and fish and whatever.
So if you're going to go do thatthen let's recalculate and let's use
the same denominator
versus just throwing out these statisticsand looking like you're smart you know.
But the point I think my point is.

(09:16):
Alternative themratio instead of just on his data.
What's your datasay. We'll get back to you.
I mean I think the important.
Point is here is that, I mean, we canwe can calculate this
to as many significant figuresas you want.
Yeah. 2.63842.
But in reality it's probably nowhereclose to the actual data.

(09:36):
So I mean, the fact that the factthat we're somewhere in the twos,
is, is probably a good sign,whether it's low twos,
high twos, because in realityit's probably closer to five,
the way it's always been.
So I don't think it's important.
Like again, as far as I'm concerned,the important thing is that we
calculate itrelatively consistently over time.

(09:58):
Yeah, it's changed a few timesover the years, especially since the 90s.
I mean, in the 90s, it changed a bunch,but it's been built up.
It's like, I agree with you, obviouslyI'm having a hard time,
but the one thing I do want to thing is
because we were talking about it todayon the chat, like, you know,
I think this was you.
So I'm going to pick on you on this one.
Like, hey, look,the numbers came down as 2.4.
Like, you know, Kyle's been right.
Like it's timefor the fed to start cutting rates.

(10:20):
And my response was like,there's a lag to all this.
Right.We're looking at 2.4 and it's all great.
But we still haven't seen the effectsof these tariff moves.
Like I just was reading like last FridayI think was the first the first shipments
that came in from China at 145%.
Tariffs are starting to hit the ports.
So and there's a lag effect right here.

(10:40):
So the interesting things gonna be overthe next really the next month
really to see what the effect of thesetariffs have been on and on on the CPI.
Yeah I think we're going to seea bunch of different stuff.
I mean, I was just reading a few minutesago in preparation for the topic
you're going to do,and I'm not gonna I'm not to a topic.
But interestingly, 10%,over 10% of, of the,

(11:01):
the employees in Southern Californiaare tied to, to the ports and to shipping.
And so, I mean, I can imagine that we'regoing to see some it may be temporary.
If things get fixed in it,it may go, it may fix itself quickly.
But I imagine we're going to seesome bad unemployment data
for at least a month or twobecause there's going to be some hit,

(11:21):
changing the subject.
Well, I think there's a couple things
I think that are obviously importantabout the data.
Everything. It lags. Yes.
But also when you lookat the overall numbers,
it's amazing to mehow disconnected they are
to the noise in the market,which is always how it works.

(11:42):
Right?
Perfect example is like insider trading.
Like if you see the CEO selling,that's the best time to buy.
They are the number one indicatorsof the worst timing of the market.
So they always sell at the bottom.
And people are like,how could they be so dumb?
Well, it's actuallyhas nothing to do with that at all.
It has to do with timingin which they can legally announce.

(12:05):
And it goes so they sell at the top.
The problem isthey can't sell the day they sell, right?
So they are regulated by the SEC.
There has to be a certain amount of timethat goes on until they can sell.
But the.
Schedule.
AJ there's a schedule tothey have to literally say,
hey, this monthI'm going to sell this much
or this quarter next quarter next year,like they have to.

(12:26):
Get us up.
They start to do that.
But it doesn't go into effect.
So it looks like they're bad timing,but they're not.
They were doing itwhen the market was high. Right.
But when you look at the overall marketand it's disconnect to,
I think reshuffling the cardsand the noise versus the signals,

(12:46):
this was a classic dislocationto the signal versus the noise.
Lots of noise.
But the meat of it,even like we were looking,
we were talking about the GDPthat was revised down.
Right.
When you look at the the overall revisionsand what goes down, we have a huge thing

(13:07):
with the mix up of the,the Or not the mix up, but the tariffs.
Right. That obviously brings unknowns.
That brings a whole bunch of stuff.
But it caused the overall, marketto freak out, even though
the core GDP numbers that we look atwere not only healthy, they were growing.
And the companiesthat got hit were universal,

(13:32):
they weren't actual companiesthat would be impacted.
This is the stuff that I lovebecause I'm a value based investor.
But companies that had nothing to do withtariffs
were getting slammedbecause of tariff noise.
And, this tends to be pretty true evenin like real estate and other markets.
So if you're an investor, right,keeping a cool head

(13:56):
and investing when the noise is crazyand knowing the signals
to look out for thatreally, really pays off.
And I think investing in one of thoseslumps right now where people are.
There's there's somebodysomeone's getting super rich here.
And I'm don't want to point fingers,but I'm guessing
it's someone who knows Trump very wellbecause even even over last weekend,

(14:17):
like you're looking at itand you see the news and you're like, oh,
okay, first thingMonday morning, the stock market.
And I said to my wife,stock market's going to rip 3 to 5%
first thing over the course I want to do.
It went up.
It went up came back a little bit down.
But it's still finished up 3%.
Like there's there's somebody who knowswhat's going to happen in the front

(14:38):
running all this stuff.
It's such a grift that it's likethere's there's going to be people
who are getting so rich off of this,this noise.
You're not.
I am. So.
You're you're getting a lot of money.You're playing the daily.
You're playing the daily stock market offof when there's going to be a now
it's like, oh,we have a trade deal with China.
Oh, we have all these different thingslike I'm

(14:58):
sorryI don't have the inside track on that.
When the or when Trump'sgoing to tweet the.
Daily ones you don't need it doesn'tneed to be daily to do market corrections.
Load up on stocks when theythere are overextended
like that and buy some optionsand then plus by other asset classes.
Oh for. Sure.
But like I, I'm choosing to stay out of it
because all of a sudden one tweetcould erase everything that I just did.

(15:21):
So like.
But that's what I'm saying.Anyone who knows
what's going to get tweetedlike they're making a lot of money.
So here's a perfect example.
I was reading this the other day
and I haven't verified this myself,but I've no reason not to believe it.
It was it was some, analysts blog,
that was saying the Trumpcoin, the crypto coin that Trump made,

(15:42):
98% of people who have purchasedthe coin have sold it at a loss.
Of the 2%
that have made money on it, only 58 people
have made more than $10,000.
And combinethose, 58 people have made 170 million.
So, there is a very small group of people

(16:03):
that is getting very rich,while the other 90.
Eight literally.
Described capitalism.
But that's not.
That's the stock market.
Oh, no.
The stock market fluctuations tied todifferent announcements, everything else.
That absolutely is.
I mean, you can look at anythingyou want to do,

(16:24):
any Bitcoin, anything else like that,which I don't care about that stuff.
But the vast majority of people
sell at the bottom and buy at the top.
It's not 98%.
So before we before we start to,we've been saying all this good things
about the economy right nowbefore we start saying the bad things,
because I feel like that's what Marissais going to get into the shipping.

(16:46):
I feel like we should mention one more
good thing here, guys,that the US budget surplus now,
surged to a 258 billion in April.
A deficit topped 1 trillion.
So I mean good things tariffs tariffs
aren't necessarily, necessarilyall a bad thing right.

(17:07):
They brought in 9 billion of that 258billion surplus.
So sorry.
So the treasurer reported the customsduties in April totaled 16 billion.
Now I'm sorry, I'm going off memory.I thought it was nine.
Okay. 16.
The vast majority of that was that
the IRS brought in a lot more moneythan they expected last month.

(17:30):
So that's a good thing.
Because they had brought inless the month before.
But last month was the big month.
April is always the big month for,for people submitting their their taxes.
Governmentspending was down a huge amount.
And you want to know the
do you want to know my favorite thingabout the government spending being down.
Everybody's like, oh Dodge.
No, it has nothing to do with Dodge.

(17:51):
So the my this is my favorite statisticI'll show you guys here.
This is like just amazing.
It's amazing because it's so ridiculous
that it shouldn't be a thing.
But the only thing we had to doto cut hundreds of billions.
Let me share this from the government.
Spending real quick was ask the government

(18:16):
to simply track where the money goes.
So a lot of people don't know this,but and tell this administration
basically said, hey,we have to know where the money's going.
That's all we're asking.
Now, this was actually the main thing
that got the governmentin an uproar about.

(18:38):
They wanted to make sure that governmentthat was allocated,
that Congress allocated could be tracked.
They didn't even have the abilityto do that.
Nobody knew the moment they tracked it,
the government spending dropped.
It says it dropped, but it nothing
that was purposely allocated went away.

(19:01):
Yet government spending contracted.
So what they did is say,all right, we now implemented a new system
that tracks money where Congress is sayingit's supposed to go.
Is it going there?
Every single agencycould not provide a record of money spent.
They none of them passed.

(19:21):
They couldn't tell where tens of billionsand hundreds of billions were going.
Nobody could track it. Nobody even knew.
So they, they, put in the traceable
right rules where it saidyou have to track it immediately.
Hundreds of billions of dollarsstopped being spent.

(19:42):
But it wasn't funds that were allocated.
This isn't just like,oh, we're going to allocate.
We're not going to allocate funds anymore.
It shows a lot of what's going onwithin the government.
Right. And this newfound transparency.
And everybody'strying to keep an eye and a look out on.
And I wonder how much of this willhopefully continue.

(20:03):
But whether they spend or not,just more transparency, a way
for the publicto actually know, to question
instead of it being like a bank,an investment bank that has this ginormous
black box of derivatives that the CEOsdon't even know what's going on.
But I mean, any huge businessis the same thing, right?
That's why every few years they got to gothrough a whole forensic accounting.

(20:26):
Because the government doesn't have.
To find millions of dollars.
In this new.
Well, what is that new thingthey're trying to put in,
which actually requires themto go through a forensic accounting
for the government.
And I don't and. This isn't new.
I mean, every so oftenI keep hearing this idea of like,
hey, let's let's just like,you know, the pork barrel.
Let's, let's look at allthe money that's being wasted
and we're spending money in thisand spending money on that.
But I have been thinking about thisquite a bit lately,

(20:47):
which is now that we have the technology,there's really no excuse or no reason why
government agenciesor anybody really specifically government,
can't trackexactly where dollars are going.
And and it could be a,
it could be like a public websiteto the public can go on the website
and look at the department and say,
hey, this, this is what these, thisour government is spending their money on.

(21:07):
I don't thinkthat's outrageous in today's.
But the law.
Of Congress to try to increase Congress
and the DC in general, the absolute uproar
that we want to be able to see
or trackthat it is like a attack on democracy.
I think that's really telling all the.

(21:27):
Year old, when you give them 20 bucksand you ask, did you see the change
after they go and buy ice cream?
Don't ask me that, but I have heardsome uproar and I'm part of me.
Feels like I wonder itnot feels but wonders whether I don't know
where are those payments really goinglike it is some of that payment
kind of go back ten years?
It's actually not that surprising,like it's in that any
major business always has that thingyou always hear about,

(21:50):
when they go in and, oh, they have
4000, subscriptions to,
to Microsoft
Teams and they only have 2000 employees.
You know,there's always these, these that.
Kind of run through with my company.
And, you know, we had like seven people.
And I was like, how do we have.
How do we have like. Nine zoom accounts?

(22:11):
And there's only like four.But it wasn't that.
It wasn't that this is money,though, that didn't have an allocation.
Hundreds of billions of dollarsthat weren't oh, we were wasting it.
This isn't waste.
This isn't like this was something stupidand we can argue about it.
This was on.
My, my one buddy.
I'm not going to call him out,

(22:32):
but he, he worked in government,and he worked, in it.
And so his division gets a budgetevery year, right?
And he has to spend it allbecause if he doesn't spend it all, when
they look at the budget for the next year,they're going to give him less, right?
So he would go in and he would get closeto the final quarter of the budget.
And he's just spending shit.

(22:53):
It's not ridiculoushow how how obscene is that?
I'm tell.
So every every private companyworks as well that I've ever worked for.
Or is that how far down works.
Like if you've got a little extra moneyat the end of the quarter, like, oh,
we got to spend our wages, we're not goingto get money from investors.
We to be making money
more easier to do that.

(23:13):
I mean.
Seriously, some of these are likeI think that's why people get upset.
It's like common sense.
Like obviously if we're going to give you
a $100 million budget,we want to know where $100 million goes.
And the idea that you have a hundredmillion and then you only needed 70,
which is great.
And then you're like, well, crap,
I better spend this $30 millionand go to some,
like really fancy restaurantsor go buy some stuff I don't really need,
so that next year I can get anotherhundred million 110 million.

(23:36):
It just sounds ridiculous.
Well, fun fact, Mauricio, it's actually
typically much easierdepending on the year.
Obviously can go the complete oppositeway of this, but recently it's much easier
to get a Fannie or Freddie commercial loan
at in the final quarterbecause the same thing happens.
They have an allotmentof how many, you know,

(23:57):
how many billions of dollars that aresupposed to be sending out every year.
And if they're not going to meettheir quota
and their quotais going to go down the next year.
So that the end of the year
it's much easier, actually, they'reunderwriting a lot easier on deals.
Again, Fannie and Freddieare basically government backed,
but I mean, in any other business,it's a profit for profit
trying to maximize revenue,minimize expenses and reinvest.

(24:21):
That sounds like the dumbest thingI've ever heard.
Yeah.
I'm still I'm trying to find
more informationabout the traceability stuff.
Why don't you guys argue about thatnext week when you guys are prepared?
Because obviously you guys aren'tprepared to discuss the feasibility.
I just I can't findI don't know anything about it.
So I'm, I'm trying to find like

(24:42):
when this went into effectand what it does and what it requires.
And so this was a huge double blowMississippi like went up against them.
I love that hubbub blue.
And it goes in coordinationwith Mississippi.
It just seems right.
But like seriously, Mississippi got upset.
They considered it like an overreach.

(25:02):
Whereasthe fact that the federal government
was wanting to know like allocation.
So you had states that didn't like it.
The it
which is weird to me,but they consider it an.
Extra work. Right?
Like it's extra work that they're goingto have to go and account for everything.
They're going to have to figure it out
if and there's absolutely no upsidefor them.

(25:25):
Like the upside is everything was correct.
And they're like, okay. And they move on.
The the downside is they figure outthat something was going wrong in the
you get yelled at.So I could see why people would be upset.
But it makes sense to me.
Yeah, thatso it really went into because the
it was March.
Right that it in March when the

(25:47):
they started it in the futureenforcement of the rules came in.
So the overall they have two accounts.
DOJ's is not thiseverybody keeps confusing that with a
it's not this is from the Treasury.
They should have tried to claim it.
Then they would have had some.
More when they could have been like, yeah,we saved 200 billion.
That would have been amazing.

(26:08):
Where we don't know.
We should make this a topic.
I, I'd love to spend some time digging inbecause this is an intro.
This is interesting.
And so I'm, I'm, I'm admittedly.
Ignoring what happens when you justyou just decide a wing things on a random
week like this is what happens, right?
You when they try to research on the spot.
Great subject.Kyle. I'll take some control over here.

(26:33):
All right.
I know Morris here just wants to gettalking about his talk, so let's talk.
That's not what to talk about.
My topic at all.
I'm enjoying my wine.
My first calories in, for the day.
I don't know if I told. Youthat it was kind of big news.
Obviously over the weekendthat our negotiator and head guy.
That trade deal struck between.

(26:53):
And I'll put that with quotes.
Actually a trade deal, struckbetween China in the US pausing the 145%
tariffs for 90 dayswhile negotiations continue.
That's in linewith what he did with other countries.
The 90 day pause, the,
that's a major reprieve, obviously,for some U.S retail
because you're seeing all online,
all all kinds of U.S retailersthat were basically months

(27:17):
from going out of business.This should help.
But they're not other woods.
145% was basically an embargo.
But there's still currentlywhat was it, 30%, I think still,
and we're still already seeing emptyships.
Empty ports, especially in the West Coast.
And, luckilywe have a West Coaster in this crew.
And not only that, Marist,you work on the docks or something?

(27:39):
Weren't you like a a ship docker?
What were you?
He still does.Syndications have been down.
Yeah. Various.
You used to. Work on the docks?
Yes. Been on strike.
There's dead. On it. Yeah.
No, I used to, you know,I used to be a little bit of, I.
Used to do some maritime work,
and I used to spend a lot of times downin the port of Long Beach.
Port of LA,

(28:00):
usuallyinvestigating, like Long Shore fake
injuries or like, you know, cargo shipsfalling off the ships.
Or here's my favorite.
Here's my favorite.
Actually, not my favorite,but like, the saddest one, I was like,
you know, it's
so brutal out there that they wouldyou know, I dealt with all the stowaways,
which were peoplethat would sneak onto the ships
from one country to get into the UnitedStates and trying to get in illegally.

(28:20):
So primarily from like South America.
So my Spanish ability, I wasI would handle all of those.
But what's your Mauriciolike sitting at the docks
and like people getting off ships and himhanding pamphlets, being like,
if you need representation.
Here you go. Here's my car.
No, I would literally get to the ships,but I had to wait for customs

(28:40):
to to go in there first and clear it.
And so I had to wait in my caruntil they got off the ship.
And then I could go in thereand start talking to people
and figure out what's going on.
But a lot of these stowaways, I was justlike a little bit off the subject,
but a lot of these always a diedlike in the ship, like older folks
that would be livingin such terrible conditions,
they would literally come out of hidingbecause they were having a heart attack

(29:01):
and then some.
And I won't say what countries,but some ship, ship
crew would find stowawaysand they would throw them overboard
because they don't want to dealwith the consequences
of having to deal with getting to shorebecause it's international waters.
There's no laws, and they wouldliterally throw people overboard.
So yeah, anyway, that was my world.

(29:22):
So that's that's kind of mya little bit of a maritime background.
So I know the ports really well,especially the port of Long Beach in LA,
which is kind ofwhat I, I got most of my stats from.
I know there's what's what sucksis that there is actually a very great
there's a great website for the port of LAI'm looking at right now.
They come out with data
in the middle of the month, andthe last data that was still showing March

(29:44):
and the April numbers should be coming outliterally any second now.
And I was hoping itwould come out before this month,
because I think that'swhere you'll see the stuff.
But before the trade stuff,before the tariff,
you know, thing that happened earlierthis week.
And I want to definitely talk about
that because that's important that I wantto get you guys opinion on that.
But before that, before this trade dealsounds like this 30%
was was working everywherebecause the port of L.A.,

(30:07):
everybody was talkingabout how they were expecting a 30% drop,
or about a third drop in, cargo shipmentsarriving in the port of L.A..
Now, a port of LA is responsiblefor about a third of all.
You know, international shipmentsthat comes in
via water comes through the port of LA.
So portabella is a good barometer.
It's not the only port, obviously.
There's ports on the East Coast,as you know,

(30:27):
Texas and Louisiana is a bunch of them.
But a third ofit comes through the West Coast.
And there everybody was reporting aboutexpecting to have about a third of a drop.
The Washington Post actually reportedthat the number of shipping containers
that arrived at, inthe port of LA was about a third lower.
During the same time last year,the port of LA executive director

(30:48):
Jeanne Soroka, who's been in the newsquite a bit, had predicted prior
to the tariff dealthat he expected about a 35% drop in,
container ships coming intothe port of L.A., interestingly enough.
And I want to talk about this, too.
He still expects even post deal,that they're going to see about
a 25% drop in container shipscoming in in the month of May.

(31:10):
Right.
So maybe he says there's a little bitof a reprieve for like, critical
goods, like, you know, health careand all that kind of stuff
and maybe some of the holidaygifts, like toys.
But when it comes to like refrigeratorsand computers and smartphones
and microwaves and televisions, he's like,that's not really going to do much.
Port of Long Beach chiefExecutive Officer expected a 30% drop.

(31:31):
And what's interesting now is
that you're
seeing a little bit of a dichotomy ora little bit of a, of a split of opinion.
And right nowit's really obviously it's anybody's
guess what's going to happenin the next 30, 60, 90 days.
But like half of that, not half.
But there's a there's a, a group of peoplethat are saying, hey,
like after the initial sort of reprieve,okay, great.
We've got a little bit of relief here.
We're going from 145 down to 30.

(31:52):
There's like a mad rush to getas much of as you can from China.
And they're talking about having,
you know, increased shipping costsnow because obviously there's a limited,
you know, limited supply of, of shippingand warehousing of imports.
Everything is like limited.
So they're like expectinga, like a little like a 10% hike in cost.
So you add the 30% to the 10%hike in shipping costs.

(32:15):
Now you're at like 40%.
A lot of retailers who, by the way, sellto a lot of the major
like Macy's and Jcpenney'sand all these Amazons,
they're like, it's going to cost us 40%more to bring in these goods from China.
So their prices have to go up.
So there's a lot of that going on.
But there's also a lot of like,you know, again, this Jean Soroka guy,
a guy he's Gene Sorokawho obviously is, he's

(32:38):
an executive directorat the Port of Long Beach.
If I was going to believe anybody,I would probably lean towards his opinion.
He still believes that, yes,there'll be a little bit of a rebound
from where we would have beenhad the terrorists remain at 145.
But he's still expecting a major dropin shipping containers again.
He's still saying 25%,which is going to result in higher prices

(32:58):
at your local stores, Amazon,you know, all those places.
And, obviouslythere's some job implications going on.
I mean, the Puerto
I mean, Jay, you said right before we cameon, you were telling us that.
What did you say?
Like a third of all Californians,I have some connection to the 11%.
And what was the percentage?
11%. Yeah.
So 11% of every in Californiahas some connection to the port,

(33:21):
whether it's,you know, directly with the port,
whether it's dockworkers, truck drivers,warehouse workers, distribution centers,
like all of those things,they there's some connection.
So you got job loss potentials,which, by the way.
Once you had it,you had a timeline too, right?
Because like so it was cargo
ships from China loaded after April 9th.

(33:42):
Yeah, right.
We're the ones that have the 145% tariff.
And by the way,they're just coming on board, right.
Those those ships just literally arrivedlast Friday.
Yeah.
Took it takes about 30 days for shipsto get here and then another 1 to 2 weeks,
for that cargo to get moved
from the West coast, where most of itcomes in, across the country.

(34:02):
Right.
So last Friday we had the first,like the seven ships, literally seven
ships, 12,000 containers that came in thathave that 145% tariffs.
But China already paid for those tariffsbefore they ever left.
Right.
No, no,the tariffs get paid when they arrive.
I kind of doesn't pay for the tariffs.
AJ let me explain how trade works.

(34:23):
Since you obviously don't own a businessand don't know anything about trade.
Let me explain to you like you're I'mlike you like you're a golden retriever.
The tariffs are paid when they arrive.
Hey hey heyhey, don't insult my golden retriever.
Well, if you want to seeif you guys want to see a real time one.
So I.
I have this, for my home security system.

(34:44):
I use this company called Wyze.
So they're cheap stuff,but it's pretty good.
All x Google employees made it,and they posted.
$67,000. Isn't cheap. Okay?
They posted on their Twitterthat they put in a, a requisition order
from overseas for their productsthat, like they always do,
and the value of the product was $167,000.

(35:07):
And then theythey posted that they got a duty bill
for 255,000.
So I have it up on the screen herethat they sold their,
their total bill, from duty was 255,000for on their $167,000.
I don't I.
Don't understand why you have evena security system to begin with.
Nobody wants to break in your home.

(35:28):
Let me assure you
that, like, nobody's interestedin stealing anything that you have.
Just just want to make sure that's clear.
But anyway, it's interesting
because like, we went from literallyon on Friday of last week
because obviously this happenedover the weekend.
We went from Friday where there was likethis doom and gloom and oh my goodness.
And then suddenly some of the sentiment,you know, starting this week was
like a 180 flip.
Like now it's like,Holy crap, we have a rush now.

(35:50):
Some products do still make sense at 30%because don't forget,
we're still at frickin 30%.
I mean, in any other circumstance.
This is why I think sometimesnot something like Donald Trump gets
he knows what he's doing, right.
Like if you just look at the facts,we went from whatever
the tariffs were before all this happened.
So now we're at 30%, which is crazy.
Like that'sstill equals amount of tariffs.

(36:11):
But so so like what if like a countrylike, like Vietnam comes out like it just
starts banging on Trump's door like, hey,let's let's get these tariffs way down.
What do we got to do?
And they strike some crazy deal.
Like they can't be that far offas far as cost is concerned from China.
There's a lot of overlap
and some of the products that gosome from Vietnam, some from China.

(36:32):
And so like there's they're
I know there's got to be other countriesout there
who's who are going to start undercuttingChina.
Right. Oh absolutely.
That's the point of itto drive other countries.
So we take away from China over time.
Right.
Because something like so like I was goingthrough all the things and, and talking
to my wife like, oh, should we bebuying school supplies like right now?

(36:55):
Because that was one of the things that,like most of it comes from China.
But like I
saw that 58% of all U.Sfootwear imports come from China.
So like shoes, like if this had stayed
like the cost of shoesis just going to like triple.
And there's, there's just other certainones.
The anecdote that I saw was actuallya specific shoe retailer, and that's

(37:16):
the one that was talked about havingI got a 30% tariffs.
Plus I got probably another 10% increasein shipping cost
because everybody's rushing to front
load this because nobody knowswhat's going to happen in 90 days.
So it's like okay, 30% stocks.
But as long as I can
eke out a profit at 30, it'sbetter than whatever the alternative is.
And so they're saying, look,this is an importer that literally resells

(37:37):
to Macy's, Jcpenney's, Nordstrom's,Amazon like these big retailers.
And they're like look my pricemy cost is going to go up 40%.
I'm going to have to raise priceswhen it comes to the fall season.
And that's a given.
So I still kind of going full circle.
The what we talked about earlier,
the debauchery that was going on20 minutes ago
is that when you look at the inflationnumbers, once

(37:58):
these shipping containers make it to port,make it through the system.
To Jay's point,they got to get off the ship.
They got to get off the containers,get on trucks, get on the warehouse,
get the distribution centers,and eventually make it to Walmart.
Well,eventually make it especially for you.
J Costco.
Although you're not going to goto Costco anymore,
it's going to make it all these retail.
That's the.
Real reason Jay's bought itself. Time.

(38:18):
He's he's waiting for the tariff stuffto get figured out.
And I still send my wife to Costco.
You just don't.
Want to wait in the car trying to get in.
A. Hundred percent.
That's a that's a good.
Question, though,
because like these logistics companiesat right after the trade deal was struck,
they they kind of came out and saidthey anticipate a surge in freight
containers over the next 4 to 6 weeksfor people trying to front load this.

(38:43):
But like at the same time, like
do we knowis the trade deal going to be better.
So like if they do
work something out in the next 60,90 days,
is itgoing to be better than what we have now?
Is it going to be worse?Is it going to go back up?
He said.
It's not going to go back up to 145,but it could go to 80.
Like if you're if you're a company rightnow, like what do you do?

(39:04):
How do you plan for this?Do you bring in more products?
Do you kind of wait it out?
Do you likeand how do you quote 90 days out like the
in our business a lot like in constructionand things like that.
Like you put in ordersfor like 90 days out and like,
how do you get a quoteon some of these products
that are coming from Chinaor coming from overseas, like if you if
if someone comes to you and says, hey,I need a quote for 90 days from now, like,

(39:26):
what do you say? What do youwhat do you do?
Well, I just suspended well over
$50,000 in ordersfrom one of my companies in one week
because the tariffs associated
from us, we manufacture it here.
We send them to all over the globe.

(39:46):
The tariffs associated with that.
So the the bigger retailersthey're buying large bulk.
We package them up.
We send them over the feesassociated with them.
We're like crazy stagger them out.
So we literally just sent outcommunications
to all those and said, listen,you can either pay it or we're not,

(40:06):
but we're not going to cover this forfor you guys.
So you either have to pay it or we'll justcancel your orders and resend.
And we just canceled most of their orders
because it doesn't make economic sense.
And that's
I mean,that goes back to the original point,
which I'd love to get your feedback on it.
But like, we haven't heard any detailsfrom this weekend.

(40:27):
Like, I don't know, they keep saying
progress is made, but like,there's nothing
that's come out that the any concessions,anything has happened other than let's
just get 90 more days to figure this outbecause,
yeah, that's a little bitbetter to go from 145 to 30.
But it's not like, oh, we're.
China's at ten, we're at 30.
And that's basically all we know. Well.

(40:47):
And then they they did reportthat like China was basically
like they were like banningcertain exports completely.
So like the rare earthminerals was a big, big thing in the news.
And so they're turning that back onwas kind of the report too.
Yeah. Turning that back onespecially after Ukraine.
Yeah.
I just feel I mean, again,I think nothing really came out

(41:08):
from what I and what I can seeand I've read a lot,
I don't see anything concretethat any progress is made.
And so to your point,I think, Kyle, you were talking about
front running and tweetsand this and the other, it's like
you're going to get some statement fromChina saying, oh, nothing really happened.
And suddenly, you know, marketsare going to tank gold is going to go up.
And it's like it just it's so fragileright now. Right?

(41:29):
So fragile.
Well, even even today, Tuesday,China made some statement
kind of poking at us right about like,oh, a bully ends up alone kind of thing.
So I it's the the problem is, is that
most political leaders are going to be.
Well, there's a reason it's calledpolitically correct. Right.
They're going to

(41:49):
they're going to come outand say the right things,
and they're going to care about whattheir constituents say.
And China's a wild card, man.
You don't know it like theyhe doesn't have the answer to anyone. So,
that's that's going to be a tough one,I think.
Who knows.
In 90 days, like we already saw itwhen they paused it with China.
Let's say they figure it out.
Let's say that they're like,oh, this work,
who's going to be doing businesswith China now?

(42:12):
Like, seriously,let's say they find out a new agreement.
We all worried that Trump gets madand he immediately changes it on China
even though they had an agreementthree months later.
He's like, you know what, I,
I don't like it because my fortunecookie said something bad.
And China's like,we don't make fortune cookies.
That's like an American thing.And he's like, I don't care.

(42:33):
I don't like my fortune cookie.
So 50% tariffs right.
They get I'm convincedhe wants to reopen Alcatraz
because they were showingreruns of the Rock on TBS or something.
We watched it. Yeah.
So I like to do business with China.
I think that the damage honestlyhas really been done.
They're going to patch things upand everything but business investment

(42:56):
and working.
I don't think it'll ever bethe same again.
I think it's I think it's the same withevery every country on the planet, though.
I mean, every country on the planetrealizes that at the drop of a hat,
Trump can decide, okay,I want to put tariffs back in place.
And so every country is going to bethe same way.
They're going to be waryof working with us.
And they will as much as theyabsolutely have to.

(43:18):
But they're going to startlooking for alternatives.
And at some point,there's going to be global trade
with us as a much more minor playerthan, than we were three months ago.
Demand is demand, though,so it's us deciding that
we're not going to invest in therewhen we're sending the billions.
And our corporations are the ones
that are building the production and theinvestment over, and they're deciding it,

(43:41):
and we're buying the stuffthey're going to people sell.
We made this comment last timelike, money's still green, right?
Like if
we're if we're going to buy the shipfrom them, they're,
they're going to sell it to us. Yep.
They got countriesthat are hoping to take China spot.
Right.
But then it goes back to not
that I'm going to ask you guysfor a prediction on a recession.
But like if a recession does happenthis year, doesn't that change things?

(44:02):
So like there's one thing to be liketalking tough about like long term.
But like if we're in a recessionand people are like that,
that pressure of a recession,I think will weigh on the ability
to just be like,oh, I'm going to slap this one.
I don't even know.What recession means anymore, though.
Everyone talks about a recession like it'slike a switch off point, a switch off.
Yeah.
Like we're either a good economyor we're this recession.

(44:23):
Like there's there'sdefinitely shades of that.
And then there's a gradual processand it's like like
you don't need majority of the timeyou don't know you're in a recession.
Is not to me either. It's to me.
To me, the
the important recession at this point iswhen it consumes the news cycle.
Like, you know, unemployment is high.
People are like, it's in the news,like we're the stock market's down.

(44:44):
Like just the newscycle is such that it's harder
for anyone to be like,oh, you know what, screw this.
I'm going to go from 30% to 100%.
I'm going to start messing,pulling the strings that you can do in a
in today's economy.
But can you do itwhen things aren't going well?
That's that's my only point.
But if you watch the news cycle,I mean, I wonder if you polled Americans
right now, how many Americans doyou think would say we're in a recession

(45:07):
because of the news cycle,even though we're not 50%?
Yeah, opposite 50%.That said, we were six.
Month to 0% of the Republicans and aand the majority of Democrats.
Right.Which is the opposite of six months ago.
You know, I didI did hear an interesting stat.
I think it was a CNBCbecause I've told you guys before,
if for some reason I'm listening to alot of talk radio in my in my car lately,

(45:29):
but they were saying that the,the equity markets like the stock
market is about 60, like they have pollsand everything of all the major players.
Like, right.
It's not just the retail investor,but like 60% of people
in the equity markets are Democratsand 40% of Republicans.
So depending on the news comingin, they'll filter it one way.
But then if you go to the bondmarket, it's flipped.
Like in the bond
markets, 60% are more Republican rightleaning than than Democrats.

(45:53):
And I thought that was an interestingbecause clearly people filter information
as they come in.
And depending onwhat side of the political aisle you are,
you will react one way or another,depending on, you know, where you are.
So I thoughtthat was an interesting comment.
Not sure how relevantit is to this discussion,
but we were kind of goingin that direction.
Karl, what's going on?
Well, so I did want to point out one thingin that

(46:16):
whenever things like this happen,
disruptions,we we can always talk about the bad stuff.
But there's always like
there is new businessesand new things come out of this.
And one crazy thing that I found out aboutthat I'd never heard of,
and you guys can tell me, maybe,you know, the guy who worked on the docks
and knows about this, but there's there'ssomething called a foreign trade zone

(46:39):
that it's a U.S.
thing.
And so basically,you can get characterized
like it's a warehouse or a,like a storage area in the U.S where it's
specifically designated secured storage
on manufacturing sites approved by U.S.
customsto allow temporary avoidance of tariffs.

(46:59):
So you could basically ship productsin from like China
and put it into this foreign trade zone
or FTC, as they say, or in Canada. Z
put it in there and then you don't
pay the tariffs until you pull itout of that designated area.
So that area is kind of like,I don't like international waters.

(47:20):
Like a free trade,almost like a free trade.
Like like everybody's Google.
Everybody's googling it right now.It was like, oh, I want free trade.
So it was. Crazy to like likeit just seemed like a smart thing.
And the problem is it's it's expensiveto set up and it's like,
you know, all the red tapeand all this thing.
So not a lot of people did,but apparently it's, it's quite popular
for certain, businesseswhere they have products where there's

(47:41):
a different tariff on the components
of whatever they're buildingversus the end product.
So they can actually have partof their factory designated
as this FTC bringing all these,these components manufacture it.
And when it comes outit's the finished product.
So it gets tariff at a different ratethan those small products

(48:02):
that would have come inbecause those small products never entered
technically the U.S.,they went right into this FTC.
Well, now apparently memberships surged.
It's an all time high now
because people are figuring this outand it's like a whole new business.
And anybody who was on the front run ofthat, like it created a whole new business
just because of these tariffsand these issues right now.

(48:22):
And I just thought it was interestingthat, like whenever you create problems,
peopleare going to find solution in capitalism
and they're going to create new businessesand everything's going to shift.
And it's the whole same idea.
Like, okay, when we have AI, what,we're going to lose all these jobs.
It was going to create more jobsand it's going to
so it's we're definitely goingto see maybe a new landscape,

(48:42):
but we're we're going to have other thingspop out of this.
I guess that's the point of it.
This is a shifting landscape.
We are changing and a lot.
And the shifting landscape will havewinners and losers like it always has.
You can't avoid that.
That's not like avoidable.
So I think that these changescan be economically violent.

(49:04):
And there's obviously
good ways to handle themand there's very bad ways to handle them.
Maybe tweeting every five secondsisn't the best way to handle it.
But the overall shift in those things,right, it will set a new order.
And, I think that's the purposeand the goal, obviously.
And what a lot of people want isthey're like the last

(49:28):
the final stages of the last orderwasn't working.
So we want change and that's rough.
Well.
Mauricio got anything else he keeps that.
You keep asking mehere before we wrap this up.
No, I'm actually I'm just
honestly, I don't I don't have an answer,but it's just interesting to see the two,
different viewpoints of what's goingto happen over the next even 30 days.

(49:51):
Like some people think there'sgoing to be a surge in imports coming in.
And it sounds like there'sa little bit of surge of imports
coming in, which will offset the expected30 to 35% drop.
But not it's not likewe're going to go back to normal, right.
We're going to go instead of being down30%, 35% were going to be down 2,025%.
Only time commitments, right.
So they're going to have to like fulfillcertain commitments and deal with it.

(50:13):
But then they're alsodefinitely looking for.
I just I just it's.
Hard for me.
Look, you know, we're all business owners.
It's just hard for me to wrap my mindaround this idea that you suddenly add a
30% cost to my balance sheet,
and somehowwhatever we just continue is normal.
Like that, to me, doesn't make anything.
The question becomes, how many businessesout there have a 30% margin?

(50:36):
Correct.
And I'm going to guess the majorityof businesses other than bar down
investments.
I know bar down has like a 75%,you know, gross margin.
But like everybody else, usually 30%is about as high as you're going to get.
When you're dealing with goods, it'susually much less nothing than that.
But yeah, we're good. Yeah,that's a good point. Yeah, yeah.
On a good you're right on time in servicebusiness. Yeah.

(50:58):
If you were. Yeah.
That's right.
If you're looking at actual goodsyou're way lower than that.
So I but that.
But it's passed on to the consumer.
That's so it's not them.
It's all of us that pay it. Right.
And so that's the question is how muchwhat the.
Elasticity of the price.
Like how much can you raise the priceon the US consumers
and still get away with it.
Because if you could raise prices 30%,that is it's not an issue.

(51:21):
Well, the biggest issue though is likethere are certain small businesses
where it's just crushing them right.
Like it'sthere's like I, there's obviously
they're cherry picking news stories,but like some of them are heartbreaking.
Where whether one woman was createdher own, it was like a for for babies.
It's it was a really cool idea.
We're like it sticks on the matand makes like you could attach absolutely

(51:42):
everything that the baby would useso it doesn't fall on the ground.
And it was a cool idea. But you know what?
She picked a supplier from Chinaand that's her only supplier.
She's not big enough to have suppliersfrom multiple countries,
and all of a sudden, like herbusinesses is just her business is done.
And then as obviouslythey cherry pick the story.
So she went out
and took an SBA loan backed by her houseto try and get through this.

(52:06):
So but if Trump doesn'tfigure out this thing in the next 90 days,
her entire life is going to explode.
And I have I have family, I do have.
Look, I get thatand this is a good point to emphasize.
And I don't want to do this
when most people thinkof small businesses,
they think of like your example like,oh, it's me and nine people
and three people and it's just me or theI've got a maybe a 25 people or whatever.

(52:29):
The official definition of a smallbusiness is
somebody has less than 500 employees.
You can have 499 employees in your smallbusiness, which is which is ridiculous.
So when we think of small businesses,I think of, you know,
it's like a family owned thing.
You got maybe ten, five,ten, 15, 20 employees.
Those are the ones that are absolutely.Going to me.
It's just any business at that levelwhere they don't have the luxury

(52:50):
of being able to diverse ifytheir supply chains and
like they basically they have a productand they get it from one supplier.
Because it's been standard practiceto diversify
supply chain for most of these companiesfor a long time.
Like they have them backup ones 2 to 3,because,
I mean, you got to remember what happenedin like with, tsunami,

(53:12):
like for all the people that had
one supplier in Taiwan.
Right.
They're gone.
Their businesses here were gone overnight.
So, like, you had, few things.
You had the tsunami, right?
And then Covid was obviously a huge one
where having backupsuppliers in the world, they

(53:34):
you've got to do it.
Like, if not, it's not only about Trumptweeting tariffs.
I mean natural disasters.
You're talking about governmentunrest like
it's it's a big deal.
Yeah. Sometimes you can't though.That's the.
Problem. Yeah. Exactly.
Like you've got to think of like
there's small businessesI almost want to think

(53:55):
of like a new definitionof like a micro business.
Like know like if you're a businessthat has a store, a retail for
a, you have three employeesand you have one,
you know, one Chinese, many like,you know, wholesale, if you.
Have two. Even even.
If you have like three optionsand they're all in China, you're still.
Right. That's right.
And that's the only way worksbecause you need that.
That's your whole businessmodels like, oh, I buy this from China.

(54:17):
I get it for a dollar,I sell it for a dollar.
If it is your business model, I'mtelling you, if you go so go to Alibaba.
There's actually features you can do this.
So you can take your blueprints.
Everything else most I'm talking99% of all products
can be turned around and manufacturedright within a certain location
or in a certain time.So this is a real issue.

(54:38):
People are having.
And I work with not only our companyand other companies as they're doing this,
but you don't need to be a big businessto have backup manufacturers.
And I think that that's a trap.
And I don't want anybodylistening to this fall into it.
So you can work withand you can actually send out,
you can do RFPs, all sorts of stuff,and you should diversify

(55:00):
it based upon continent, not individualpeople or even like even continent.
You should diversifying its standardpractice too.
And you can go inand find the different manufacturers.
1st May not be,
may be a little higher pricethan you want somewhere else,
but that's why you have themit as a backup.
They'll give you their the startup time.

(55:20):
So here's what we need to start it up.
Here's how long it will take.
And you would be shockedat how fast these people are.
So anybody listening to thisyou can immediately go and start looking.
And you should on Alibaba know it's crazythat we have to look up tariffs
things like that.
But like I would suggest anyonelistening to do that is.
100% Chinese. The reasonor is that a marketplace with other.

(55:43):
Oh it's a marketplace that's on
and that's just onethere's there's more to pull up.
This the reason I bring it upis I actually used to,
I used to actually have an Amazon businessand I would import I actually had a
it was like a not surprisinglya wine business.
And I would, I would actually I would goto Alibaba and I would buy wine openers.
Right. So I would, I would white labelwhite wine openers.

(56:03):
I would buy them for like literally $2a wine opener.
You pay for the shipping and the tariffsand now you're at like $6.
Then you payfor the packaging that your $8.
And then I would retail it for like $11.Right.
So that's all Alibaba.
So to your point though should peoplelike right now if I was in that business.
Right.
If my my cost was now is like 30% morelike instead of costing me $2

(56:24):
it would now cost me.
I'm like.
Where do you if you're going to diversify,where do you diversify too?
Because like, I brought up Vietnama couple times there 45% right now.
Yeah.
But AJ's point, which is good oneis I always associate Alibaba with just a
and mymy supply was in Shanghai like in China.
But to AJ's point,if Alibaba has other countries
then just make surewhatever you're importing

(56:44):
and white labeling or whateveryou're importing,
whatever they're doing just fine. Other
countries right now like.
India, there's.
India, you have, okay,so there's the Philippines, India,
Taiwan, Mexico, there's and there could.
Be those.
Countries that like most of them,
they all had high tariffs put on them, twothat are just currently like paused.
You have no ideahow this is going to work.

(57:06):
No 160%. Right.
But now now China's down to 30.
So like what do you pick.
Like I guess that's the thing.
Like if you're like
if you're trying to diversify,I guess these countries, you have no idea
what the countries are going to end upfor these trade agreements now.
Hence the reason why you have to havemultiple because we don't know.
So like if you're in this positionas a business,

(57:27):
once againyou need to diversify continent, right?
You need to be looking at this Chinaobviously,
because I think that's the big one thatpeople should be really worried about.
The other ones are a littlemore straightforward, and they're just not
as big in the ranges and big,but you don't know.
And because you don't know,you need to be very diversified in this.
I think it's you and we won't know.

(57:48):
Nobody's going to know. Right?
We can say there's a 90 day pauseor we think, but nobody here knows.
We don't knowif they jack a 200% tariff on it.
So because we don't know, you needto make sure you have multiple backups.
I mean, one guy in this podcast thoughtit was going to be over in three days.
So like, you know, no one really knows.
We should get a new that guy should be,you know,

(58:09):
replaced ASAP.
All right.
That is good advice though, AJ, I like,that's, that's something I didn't know.
I've never done shippingor anything from overseas in bulk, so,
little fun fact there.
Appreciate that one.
So you make this short episode, guys.
Yes, yes, I I'm, I'm voting for.

(58:29):
Hey, if you were listeningto this on YouTube, drop a comment.
Shorter, longer. The same. I want to know.
Yeah, it'll be interesting.
All right, top ten.
Wait, I thought we were.
I thought we were going to skip the topten on this episode.
It was gonna be a shorter episode.No top ten.
We're going to go straight into.We will either.
Have we mentioned skipping the topten here today?
We did talk about just making the top tenonly Letterkenny jokes,

(58:52):
but I've just sprinklea couple in instead.
I got more
if you want.
All right.
Top ten baby names.
It's not, in the US.
What does this have to do with tariffs?
What does this have to do with tariffs.
What does it do.With just the fun top ten.
What is one of you ever complainabout whether what has to do with tariffs.

(59:13):
Sometimes I mean I mix it in.
But some of the.
Times the ten baby names of babiesimported from China.
It just came out.
It was just released.
The 2024 top ten Baby names.
And I was reading itand I thought it was interesting.
Not necessarily the actual top ten.
The actual top tenis not that interesting.
Like boy names were Liam,Noah, Oliver, Theodore, James, Henry.

(59:33):
Like it was like,you know, okay, let's let's okay.
Names.
And then the girls were Olivia, Emma,Amelia, Charlotte, Maya, Sophia, Isabella.
Like, they were just like normal names.
But then they also released The Rising,the fastest in popularity names.
And that's where my.
Why? I got my attention was caught.
So here is the top five

(59:55):
baby boy names that are rising the fastestin popularity in 2024.
Number five.
Mauricio.
Isaiah's spelled a z
I h I assume that's, I don't know.
That's some descent from somethingI don't know.
Number four. Hello?
As a name.

(01:00:16):
Number three Brier. Okay.
Number two, Colson.
And number one truce.
So apparently the fastest rising babyboy name is truce.
So I thought that was interesting.
That's fascinating.
Another interestingone of the baby girls was Scotty.
Scotty, apparently, is one of the toprising female baby names.

(01:00:40):
That's awesome.
Hey, can I can I what I.
Am me doing in a band every Sunday?
Can I, can I, can I give.
Away, can I give away a freebiefor some of our listeners?
I've got to get ridof some of my books here.
And I've got an autographed copyof, tax free.
Well, for my buddy Tom will write.
I will give that away.
If anyone in the comments in on YouTube

(01:01:02):
can drop the name of AJ for AJ Osborne,
if you know what AJ standsfor, drop it in the comments. And
Can I do it right now?
Can I go oh no. No no no no no.You can do next week.
Whoever correctly does that if there'smore than one, which I doubt, I don't.
I'm not even sure.
No, I.
Like your nameAJ, you should use your actual name or.

(01:01:23):
I will get you an autographed copyof, tax free.
Well, now,my actual name, AJ, was my actual name.
My my grandmother was the head nurse.
She wouldn't sign off the documents.
I'm from a small town in Idaho
to release me from the hospitalbecause she said AJ
isn't her real name, sothey actually had to give my other names,
which I won't mention to mefrom AJ get released the other way around.

(01:01:46):
Yeah.
That's awesome.
So she would release me from the hospital.
All right, I think I might evenI wasn't sure what it is, I guess.
No no no you can'tbecause then you'll know. You'll ruin it.
You know, I don't know. Well,
once we get off the show after the show,we can chit chat about what it is.
Anyway, I.
Didn't mean to throw you off there, but,
I mean, I mean, giving away books, modes,and I got to go with some of my books.
Actually, that I bought on the way.

(01:02:08):
AJ here it.
Is. Aardvark Jr that's my that's my. Yes.
How did you get that?
I also wanted to reward the listenerswho have.
Stuck around for an hour and ten. Minutes.
We can reward.
I just put in the chat too though.
We all the manufacturing directoriesand everything.
This is a really important one.
We'll put that in the show notes,send it over to Kyle.
So anybody that is going throughthat kind of stuff and struggling,

(01:02:31):
they can work and go on therebecause it is a big deal.
So that's a give me for sticking aroundto listen to us.
Yeah. Awesome.
You make it into a blog.
Get ChatGPT to write it for you.
Yeah.
We should call it like something like,
I don't know, greenvery daily would be a good idea.
Really great. Name.
You should do that.You should do that. Anyone done that. Yet?

(01:02:53):
I don't know,Jay. Take the lead on that. Jay.
Jay, you got any
hypothetical situationsyou've been slacking on those?
I think I had one, but I'm.
I'm drawing a blank.
There's what we got to come up witha I'll.
I'll come up with right now.
AJ, I mean, AJ doesn't work for age. AJ

(01:03:13):
$20 million,
or you can never have wine ever again.
You know what?
Bypass the wine.
I'll, I'll do that.
20 million bottles of Diet Coke.
But remember, remember, remember.
Wait wait wait.
Remember,if you're like religious and Catholic,
you wouldn't be able to take communionor drink the wine from the church.

(01:03:37):
I I'm not.
I might even for 20 million tax free,I assume.
Right?
How is that going to move the needle,Kyle?
It will because like,I feel like 20 is a good number.
And if you use Maurizio thing,if you can invest that at 8%,
you're getting 1.6or whatever the number is.

(01:03:58):
Then I feel like, like that's
enough that I thinkI might even give up alcohol for that.
I, you know, I love me alcohol.
I do it.
Yeah, I think I, I think I would do thatjust because I probably don't need
to drink as much wine as I do.
I haven't really experimented with drugsmuch, but I feel like if I have to
give up alcohol, I could find somethingto give me that thing.

(01:04:20):
Maybe for like 20 million
or nevergo to be able to go to Costco ever again.
But I can send somebody to Costco, right?
No, no, no,you cannot consume. You cannot.
Oh, I'm not giving.
I'm not giving up.
Not many products from Costco.
I don't think I could give up Costco pizzaif I'm there shopping
and I'm, like,walking by and it's dinnertime,

(01:04:41):
I'll just pick up the phoneand call my wife.
Should I just bring a pizza home? Yeah.That's right.
So okay, be honest.
J how often do you get the dollar50 hotdogs special?
Never. I don't eat hotdogs.
Never. Never.
I've never had I.
Want I've never had a Costco hotdog.
Neither. Right. But
I wish I have I every time I go by

(01:05:02):
I think So last week guys
Kyle you did the,100 guys versus a gorilla.
Did you see what the new one has? Now?
It's not much of an argument,but 100 Americans
versus, guys versus 100 Brits.
That's been pretty funny to watch. Really?
Thanks. I eat, the Brits agree. All right.

(01:05:22):
Yeah. We're not, we're not.The Brits will be drunk.
We'll be drunk. First of all, brothers.
I think the thing about Americanslike you could get 1999 duds,
but there's going to be one crazy.
One crazy dude.
That's the best that Americaget out of 100.
Your people like it.
I've been waiting for this.
Yeah, they they've they're going to be.

(01:05:42):
This is going to be the highlightof their life. No, it's
as long as there's not too.
Many AJ's in there.
Because if there's like a bunch of agesin there, we've got problems.
Oh, my God,I thought you going to say Asians?
That was.
I, I for some reason, I'm remembering
the time we were talking aboutlike a fight between AJ and Kyle or
AJ and Jay, and you're like,they just need to push me.

(01:06:05):
Push this doctor can't walk.
Just, like, gently push me. I'm
all right.
I don't know.I saw you running the other day.
AJ, there's, you're getting there,but surely you're going to be good.
I may not be.
That much of a runner, but I can bite, so.
Oh, there we go.
We got one third of the triathlon.

(01:06:27):
All right, it's all I got, guys.
We all back next week?
Yep. Same bad time, same bad channel. Yep.
Well, I don't know about you guys,but my drink's gone.
Go hit the head.
I will see you next Thursday. So. Yeah.
See you next Thursday, guys.