2-7-25 - 8am - Trade War with China and The DOGE Team

Episode Transcript

Speaker 1 (00:00):
On a fair face.

Speaker 2 (00:01):
Morning Ding dong, guys. I know you hate dead air,
but to avoid the cackle, Yes, I'm still here.

Speaker 1 (00:21):
No, we don't want to cackle. Have a nice day,
a bunch of smart ass goobers, I swear, I don't know.

Speaker 3 (00:36):
I'm sure our bosses are probably freaking out just a
little bit because I think I don't think that was
quite long enough to trip the silent censors. But I
think it was hilarious.

Speaker 1 (00:46):
Thank you. And I was counting one Mississippi, two Mississippi,
three Mississi. It got close a couple of times, but
I don't think it quite because I think it's six
for some reason, I think six seconds.

Speaker 3 (01:00):
I think it's a little bit longer because Jack and
Jerry with the Rockies.

Speaker 1 (01:04):
Oh yeah, that could be right. Although I guess even
with Jack and Jerry, they still have because assume assuming
the glasses open on the on the on the uh
on the box, they the background.

Speaker 3 (01:18):
You know, Jesse does his job and makes it makes
the stadium sound great. Oh yeah, there's always some crowd
noise or something. But but there's a dB limit too,
so yeah, true, yeah, true.

Speaker 1 (01:33):
There's a bout we were kind of talking about Canada, Mexico,
and I and I casually mentioned China in that last
segment about Trump's strategy of dealing with our friends and
our allies. Well, it's the Chinese New Year. What I
forget what it is this year? It's not the horse.

(01:53):
Maybe a snake is a snake. I think it's snake too.
Beijing wasted no time the minute Trump even mentioned he
was thinking considering an additional ten percent tarif on Chinese goods.
Beijing didn't waste any time and hitting back at that.
For now, though, it's just a skirmish. It it's not

(02:13):
a trade war. It's not. It hasn't escalated blown up
into a flow blown trade war yet, but it could yet,
I think, lead to some sort of negotiation and some
sort of an agreement. And we saw that obviously in
Mexico and Canada. But there is a risk. But it
may not be the risk that you think it is,

(02:35):
but it's it's a risk that I think has a
lot of tentacles to it that we ought to consider.
Have you ever really legitimately have you ever? Have you
ever truly done this? You're I don't care you're at
Walmart or you're at Sam's, you're at Costco, you are,
you're at some small retail store, You're at a boutique somewhere,

(02:57):
or you order something from Amazon, or there's something in
your house. Just go to your house, in your house
and look at the labels Pancho and Mexico. Made in China,
Made in China, made in China, made in China. The

(03:19):
risk is that while the North American neighbors and supposedly
our allies, China is an adversary. China is an enemy
of the United States of America. Yet you look at
everything we buy, some that's quality. Now. I don't know

(03:40):
where my particular iPhone was made. My iPhone may have
been made in Vietnam. They're building a I think Fox
Cohn is now building a gigantic plant in India, So
I don't think it was built in India yet. But
it's more likely than not that my iPhone was manufactured

(04:01):
in China. I bought a new Mac Mini a few
weeks ago, and I know for a fact it was
made in China because the tracking started out in san
Zhong or whatever it is. Trade conflict between US and

(04:22):
China is actually a symptom of deeper political and economic tensions.
But the problem for China is that its economy is
not positioned where they can very easily weather a major
external shock. A ten percent tariff increase on China probably

(04:44):
would have a minor impact. That might, according to some sources,
subtract about two tenths of one percent from Chinese gross
semestic product this year. And when they have an eighteen
trillion dollar economy, that's a fairly trivial amount. It's not

(05:04):
really going to do much. But nonetheless, you have to
understand the Chinese Communist Party and Ggingping in particular, well
not even g ging Ping in particular, but you have
to understand their culture. They cannot be seen losing face.
And so since they have already said that there will

(05:26):
be countermeasures and that it would file a complaint with
the World Trade Organization WOO, it will also lift tariffs
on February ten by ten percent on American coal, American
liquefied natural gas, at the same time that they will

(05:46):
levy a fifteen percent tariff on crude oil, agricultural equipment,
and large automobiles. But even so you take into account
all of those, that barely accounts for fourteen billion dollars
or less than ten percent of imports from the United States.
So they're trying to act tough, but when you really

(06:09):
look at the raw numbers, it's really you're trying to
avoid a trade war, which is going to get to
my point in a minute. And China, don't forget you
talk about eleving fifteen percent on crude oil. Where else
can China get crude oil? Now, obviously all crude oil
is bought in an international market. But if they really

(06:31):
wanted to, they could just say to the Russians, say
we went to buy your oil. In fact, Russia would
love to sell them even more oil because that helps
fund their war in Ukraine. Because China has fewer imports
American imports on which to do something. It's pretty noticeable
that it announced investigations into Google, Intel, and in Nvidia

(06:55):
for possible breach of anti monopoly laws, along with export
controls untungsten and two other dozen rare earth minerals. These
initial moves by both countries, Yeah, I don't think that
qualifies as a trade war yet because none of those

(07:17):
tit for tats yet will have a serious impact on
the world's two largest economies, and any of them can
be suspended at any time, and just like Trump did
with Mexico and Canada, they can be dialed back at
any time if there was a sudden willingness sugges everybody
take a deep breath and discuss at least some temporary
ways of addressing some mutual concerns. And we got a

(07:38):
lot of mutual concerns. We have human rights concerns. We've
got Taiwan, We've got the South China Sea, We've got
the Philippines, We've got South Korea, We've got Japan. We've
got all of these huge geopolitical concerns that China is infiltrated. Well,
not just geopolitic, we've got domesticans turns too. I don't

(08:01):
care whether it's TikTok or it's whatever cameras that they
can use to surveill us, it's whatever they're sending in.
These Chinese nationals that are coming here illegally, what the
hell are they doing? And I understand, don't get me wrong,
I understand that some of these Chinese nationals may be
coming because they have slipped the bonds of communists China

(08:22):
at least gotten into the United States. But you have
to ask yourself. It seems to be a fairly coordinated
run of Chinese nationals coming into this country. But there's
the butt if Trump or is negotiators take offense and

(08:44):
escalate further, there's no question in my mind that China
is going to react, and they'll react by allowing their
currency to decline and perhaps with targeted measures on exports
of sensitive materials. But any move that they make is
going to have to be carefully weighed. Beijing would dearly

(09:08):
relish it if the president's attention were to remain focused
on his closer neighbors, obviously Canada and Mexico, along with
those who yet feel the slap of a tariff, think
Europe or the United Kingdom. It's not hard to imagine
that nothing would please China more than to watch the

(09:31):
NATO countries descend into a bunch of disharmony and distrust
over any course of tariff policies of Trump or of
our country. And that's pretty easy to do because you
have not only tariffs on the EU, or tariffs on
the member states the member nations of the EU, or

(09:54):
on the United Kingdom, and then you have all of
the infighting going on that is going on with the
Ukraine Russia war because it that war is exposing how fragile.
In fact, my guess is the European Union may not
last much longer. There are at last counts. Don't hold

(10:18):
me to the exact number, but some seventeen different like
tank systems or anti ballistic missile systems or you know,
whatever kind of systems or weapon weaponry is being used.
There are about seventeen different kinds. Because the EU has
no broad general agreement on how each country is going

(10:42):
to defend itself, nor do they have the military industrial
complex or the defense contractors or the manufacturing means to
somehow suddenly they let's all agree on a uniform system
as the EU and NATO. So those are real serious
cracks in the EU and in NATO. And China knows that.

(11:05):
So China said, they are hoping that what we actually
do is that we focus more on them and not China. Yet. Ultimately, though,
and here's the bottom line, Ultimately it is the fracturing
of the Chinese US relations that will be the major
axis on which the world is eventually going to pivot.

(11:26):
It's not Russia. It's not Russia Ukraine, it's not us
in the EU. It is not us in the in
Latin America, South America. But stop and think about have
you ever wondered why suddenly do you think Marco Rubio
ran to Panama and is going to all these other
South American and Central American countries because he speaks fluent Spanish, No,

(11:53):
or for that matter of Portuguese, if he's going to Brazil. No,
it's because if we get into some sort of armed
conflict with China, South America is going to be key
to that. And South America has been making inroads into
China with all their infrastructure programs, all of their road

(12:20):
and brick brick and road initiatives, and so both countries
are treading really gingerly for now because it's inevitable that
as both China and we struggle for global dominance, which
is what Trump, That's what I want, they will throw

(12:43):
down the trade in commercial gauntlet from time to time.
And those tensions are a symptom of our adversarial relationship
with each other. So as the world order shifts, and
it is definitely shifting, it is certainly going to intensify.
But here's what's more important, though, beyond the spat over

(13:03):
tariffs is a far more consequential trade story which has
been playing out over the past i would say, a
couple of decades and has really deep and deleterious roots.
If you look at the IMF International Monetary Fund, China's
balance of payment surplus in twenty twenty five is expected

(13:26):
to be about one and a half percent of their
GDP or roughly three hundred billion dollars. This is most
probably a considerable underestimate since it was just a year
ago in the region of six hundred to seven hundred
billion dollars or about three and a half percent of
their GDP. And we don't really know the true numbers

(13:48):
because you don't get true financial statements from where is China.
You just don't know. CIAE spends an ordinate amount of
time trying to get real financial numbers about what's really
going on in the Chinese economy so that we can
prepare and understand what we need to do if we
were ever engage in an actual, you know, armed conflict

(14:11):
with them. Plus, it's information that our our companies, our
manufacturing sector, our trade partners with China need to know too.
In actual fact, China's trade surplus probably reached about a
trillion dollars last year, Chinese exports growing four times more

(14:34):
than the stimated three percent increasing world trade. And that
matters why Because in a properly functioning trade system, countries
produce and export what they're good at, and they import
where they have shortcomings. In China's case, exports are booming
partly because China is uniquely well funded industrial policies, their

(14:55):
communist policies. They're planned economy. That's the cornerstone of their
and political strategy. That's communists, it's communism at work. And
partly also because China is able to because they don't care.
They don't care about the environment, they don't care about wages,
they don't care about work or health and safety. So
they're able to, you know, produce evs, batteries, wind and
solar equipment. They're able to do it cheaply. So that

(15:19):
focus on production and capacity boasted by boasted, bolstered by
serious communists, centrally planned industrial policies which stress self reliance.
That contrives all together to push exports from China at
breakneck speed, and it keeps their imports subdued. What's the

(15:42):
consequence of that that's an imbalance that is far far away,
not even near being an engine of world growth or
world dominance as they like to claim. China is actually
one of the biggest drags on the internationally, coming on

(16:03):
the world finances as the whole. Let me put it
another way, countries that sell more to the rest of
the world than they buy or forcing other nations to
import more, which ultimately subtracts from their growth. So while
countries that buy more than they sell, like we do
or the United Kingdom we are, we're offering stronger export

(16:23):
opportunities for other countries and that adds to economic growth worldwide.
So the reason that imports are so weak is twofold.
China owns the entire supply chain in a large number
of goods, so does that any need to import either
intermediate or component products. But I think more important is

(16:45):
the fact that household incomes and consumer demand in China
are flat lacked, virtually dead, and the government cannot figure
out a way. I don't think it has the desire
either to recalibrate their ecole me can bout pgping is
holding on by a threat and if anything that Trump

(17:06):
does makes it even worse for Chinese just citizens. They'll revot.

Speaker 4 (17:13):
Mike. Sorry, this isn't one of your subjects. But there's
a car dealer in the Springs that has a couple
of Lambergers and one of them has been chosen to
be at the Westminster Show in New York City, the
American Kinnel Club. And I thought that was kind of

(17:34):
interesting because you always talk about your Limburgers. They were
on TV. They are beautiful dogs.

Speaker 1 (17:44):
Yes, they are. Inact. I told Dragon that I'm going
to it's supposed to be nice today, it's Friday. I'm
in this kind of mood. I think I'm gonna go home,
change clothes, put on some just you know, walking shoes

(18:06):
or something, load them up in the jeep. I'm gonna
take the lion Berger's to the dog park or maybe
up in the mountains and just go walking or hiking,
and then maybe we'll just find I don't know, maybe
an in and out Burger or I don't know, maybe
I'll maybe I'll be so desperate I'll stop at McDonald's
and just that that's gonna be my from ten thirty

(18:29):
to say, twelve thirty day to That doesn't sound too bad,
That sounds pretty good, doesn't it. Yeah, Leenn Berger's I
love Leonberger's the yesterday on Brett Bear on what's his
show called whatever it is? See, I don't pay that
much attention to what the names of the shows are.

(18:52):
They had an interview and they were talking about Elon
Musk and all of this hyped up controversy about Musk
having access to the Treasury Department's payment systems, which is
not a BFD at all. In fact, you might, I

(19:14):
think you can make an argument that we should all
have access to that. Now you may recoil that idea
because you think that that means I have access to
every check that you get from the government. No, that's
not what it is. It's in big tranches, like here's

(19:36):
what the Treasury transferred to the Social Security Administration to
send out the checks. Or here's what they sent to
HHS for salaries, you know, in a big lump to
go to HHS to pay the employees of the NIH.
Or here's what the Pentagon had sent to it up

(20:00):
for you know, it starts out with big amounts like
you know, for different program offices, but no, not necessarily
your Social Security number. But it then kind of fell
into because Oh, what's your name? She it'll kind of

(20:25):
her name will be mentioned. She's a she's a Democrat strategist.
Leslie Marshall. Leslie Marshall decides that it's really about these
kids are too young.

Speaker 5 (20:35):
I'm sorry, can I interchect here, Leslie?

Speaker 1 (20:38):
I'm sorry.

Speaker 5 (20:39):
I was twenty when I was the political appointee of
the Bush White House in HHS. I had access to
all sorts of things along these same lines. I don't
know what you're talking about in terms of this ageist
idea that because people who are young and smart, who
have been vetted by some of the same you know,
people who've been named this cabinet, have no ability to
do their job and try to make the functioned better.

(21:01):
We've just emerged from a period in which we had
our government run by the most decrepit, you know, White House,
the most out of touch and you know, you know,
eldest in terms of leadership. I don't think they did
a very good job, and I'd like to see some
young blood in there. And the idea that you can't
do that when you're twenty twenty one, especially when you're
coming with the kind of resumes that these people have,
is absolutely absurd.

Speaker 6 (21:21):
I don't say anything about the age, and I don't
think you're calling I don't think it's twenty You just
tostrey yourself as Big Balls is one.

Speaker 1 (21:28):
Of these She mentioned it twice in the interview about
all these young twenty somethings that are all, you know,
following musk around. Has she ever been in Silicon Valley?
Has she ever seen the age of most of these
people that are writing code and coming up with new
ideas of house buy on you and all this, I mean.

Speaker 5 (21:52):
Especially when you're coming with the kind of resumes that
these people have, is absolutely absurd.

Speaker 6 (21:57):
I don't say anything about the age, and I don't
think you're college. Don't think it's twenty for yourself as
Big Balls, as one of these individuals has online and
continues to.

Speaker 1 (22:08):
I'm sorry you brought up the age thing.

Speaker 5 (22:10):
So I mean, I just think it has to be addressed.
There are lots of people who are in their twenties
who work in government on Capitol Hill and in these agencies,
who have access to all these different pieces of information.
I think that this is in the nineteenth and I
think it's out of touch.

Speaker 1 (22:22):
That's the best argument they've got is that, oh my gosh,
they're too young, and of course that they have access
to all of this information they shouldn't have access to. Well,
the Treasury Secretary Bescent debunks all the lies by the Democrats.
Take a listen.

Speaker 7 (22:39):
There is widespread concern about the DOSEE teams access to
sensitive payment systems. Are you worried at all that that
access and that tinkering of the payment systems could affect
the Treasury's market or cause any disruption?

Speaker 1 (22:54):
Good?

Speaker 8 (22:54):
Well, Soileiah, thank you for asking me about that, because
there's a lot of misinformation out there. First of all,
when you say the Doche team, these are Treasury employees,
very employees, one of whom I personally interviewed in his
final round. There is no tinkering with the system. They
are on read only. They are looking. They can make

(23:18):
no changes. It is an operational program to suggest improvement.
So we make one point three billion payments a year.
And this is two employees who are working with a
group of long standing employees.

Speaker 7 (23:33):
Elon Musk just.

Speaker 1 (23:34):
A few m wow, that's it.

Speaker 7 (23:38):
Half an hour ago tweet it out that Treasury needs
to stop approving certain payments. Has your staff tried to
block any payments here at Treasury.

Speaker 1 (23:47):
We have not, and I'm glad you asked that too.

Speaker 8 (23:49):
And just to put in perspective, Elon and I are
completely aligned in terms of cutting waste and increasing accountability
and transparency for the American people. I believe that this
DOSE program, in my adult life is one of the
most important audits of government or changes to government structure.

Speaker 1 (24:10):
We have seen that.

Speaker 8 (24:12):
When I was in my twenties, we had the Grace Report,
and there's some great suggestions that came out of that
never implemented under Clinton and Gore. I think it was
to government efficiency or reduce government. Nothing happened. So President
Trump came in. There's a big agenda and I think

(24:33):
that there are gigantic cost savings for the American people here.
And I think it's unfortunate the way the media wants
to land putin what is going on. These are highly
trained professionals. This is not some roving band going around
doing things. This is methodical and it is going to
yield big savings.

Speaker 1 (24:54):
Wow. There you have the Treasury Secretary. They're highly trained,
they're efficient, they're mostly Treasury employees. There are two members
of the DOGE team, which by the way is has
and has been established as an office in the Executive
Office of the President. So it's not like just anybody

(25:16):
off the street can come in and look at this
stuff and they're looking at what what do you say,
one point some billion payments that are made every year. No,
we're not looking at we're not looking at individual Social
Security payments. We're not looking at individual you know, Social
Security numbers. We're looking at wad giantic tranches of payments

(25:36):
that go out in these giant categories, and then we're
trying to look at the subset of those to see
what's this really going for. That's what an audit does,
and audit's not just about the top line. The audit
is about, Okay, the top line number is let's just
say one billion dollars. What's the one billion dollars going for,

(25:58):
and let's just say it is Social Security. Well, you
have administrative costs, you have overhead costs, you have printing costs,
you have all of the costs that go into whatever
it does to transfer payments from the federal government to
a Social Security recipient. We'll just look at all those costs.
Is there a way to streamline that? Is a way
to make it better, more efficient. They're looking at those

(26:19):
sorts of things. They don't care about the individual check
that's going to grandma or granddad. But again, if we
started the entire program out today about misinformation, here's another
example about the kind of misinformation is getting spread around
and everybody just seems to go backcrap crazy over it.
There was something else that happened yesterday that I think

(26:41):
is worth listening to.

Speaker 9 (26:46):
Everybody. You know, if you'd like to gather around me,
I think I'm going to be.

Speaker 1 (26:57):
Spreading around your secrets, worried about that. We have to
worry about that. We have big problem. Okay, and you
want to have au me. You want to do this?
What's what I do?

Speaker 8 (27:12):
And then I'm gonna give you some pens.

Speaker 1 (27:13):
Okay, are you ready? What a nice picture this is? Uh, Governor,
you're ready. We'll do a good job. Way lett impress
that I want to make this a really good signature
because this is you know.

Speaker 9 (27:30):
This is a big one, right please, Oh, I think
we have a ten.

Speaker 1 (27:39):
We have a ten, pretty good, huh.

Speaker 9 (27:57):
Okay, But now you're gonna go out and in those events, right,
Nice to see you all. Nice, great going everybody, thank
your kids.

Speaker 1 (28:08):
Here, I'll get somebody thank you so much?

Speaker 9 (28:20):
Where's where's Riley?

Speaker 1 (28:33):
They're all getting picked. You never let anybody's time, You
never kissed any every and you haven't touch any of them.
He just talked about how great they look, these kids. Yes, yeah,
think about the change in that simply saying, you know what,

(29:00):
we have Title nine and I'm going to enforce Title
nine and biological men cannot compete in women's sports, and
if you do, we're gonna come after you. Now I've
heard that the NCAA and some others have said, well,
we're still going to allow them to practice, they just
can't compete with them. Hmm, all right, Well, if you

(29:22):
have a women's soccer club or a women's whatever it
might be, do you have a separate room for them
to shower and get dressed and get their uniforms on.
What are you gonna do with these trans women, these
trans girls that are going to be playing. And seems

(29:43):
to me that while the rest of the world is
going this direction and saying no more of this stuff,
we have a super Bowl coming up? Isn't that this weekend? Dragon?

Speaker 3 (29:53):
I don't know, you also have a break coming up.

Speaker 1 (29:55):
We have a break. Okay, we'll do a break right now.
I'll be right back, Michael.

Speaker 10 (30:08):
We need to remind those bonehead Democrats that when they
complain about these twenty one and twenty two year old
kids working and doing a great job for duges, they
were the ones that suggested sixteen year olds get to
vote height.

Speaker 1 (30:24):
Well, and we forget too that many of the ones
that are bitching and moaning about, you know, a twenty
one year old, some of them were, well, you have
to be twenty five or something you get elected to Congress,
and you had to be thirty five to be president.
Some of them have been there. They're now eighty years old,
and they've been there sixty years, so you started out

(30:49):
young at one time too. I just don't get the
whole I mean, Leslie Marshall is I mean, I know
Leslie Marshall's kind of not very well but kind of.
This is another example of how they don't have any response,
any substantive response to what's going on inside the belway.
Now they it's like this paradigm shift is occurring and

(31:14):
they can't they can't handle it, so they're just grasping
its straws we Chuck Schumer, we will fight. We will fight,
you know, Elizabeth Warren, you know, we're gonna take it
to the streets. Maxine Water, We're gonna take you to
the streets. That's that's that's all they got. That's all
they go. And you're too young. Oh and you're unelected,
and we're gonna you know, we're gonna. Uh it's a

(31:35):
I love this one. Keen Jefferies and the others talked
about how what doge is is Trump is out there
establishing a shadow government now talking about cognitive dissonance. What
Doze in that team is doing is they're trying to
eliminate the shadow government. It's just amazing. So we had
Google Meta, including Facebook, Instagram, and you know all the

(31:57):
subsidiaries of Meta. We had Amazon, we have Apple, We've
had I think, uh Chase, some of the most of
the big banks, We've had a lot of major corporations
throughout the country say that, uh you know, and it's
almost like Trump gets elected and they immediately start dumping

(32:21):
their DEI programs because they never wanted them in the
first place. Do you think that whether it's JP Morgan, Chase,
or if it's Apple or Google for Google. I don't
care whether you hey Google love Google. Do you think
that any of those CEOs want to hire people to

(32:41):
run divisions or to even be working on the design?
You know of a new product that is hired not
because of merit, but is hired because of some stupid
category that that these ashes have put in place. I
don't think so. And so you the you you have

(33:04):
the super Bowl coming up, and and to me, there's
no other category of businesses that ought to be focused
on meritocracy than professional sports. How do you become dragon?
How do you become an NFL football player?

Speaker 3 (33:25):
A hard work and talent?

Speaker 1 (33:27):
Huh?

Speaker 8 (33:28):
What was?

Speaker 1 (33:28):
You got to be the best of the best. Yeah,
so if you're a really good high school player, your
odds of eventually becoming an an NFL player are.

Speaker 3 (33:41):
Still slim, but slim. But you know, if you put
in the hard work and the effort and you got
some talent behind it, sure yeah you can do it.
But it's still minuscule number if you're talking about the
amount of all high school players versus all NFL players.

Speaker 1 (33:53):
So you seem to be telling me that it's the
NFL is based on merit. Yes, that a coach or
a recruiting team, a scouting team, whatever it is. When
they go out and they're watching a high school or
a college player, they're looking for someone who has talent.
Are they looking for someone who is gay or straight
or by or who is black or Asian or white

(34:15):
or is that what they're or you know, they're looking
for talent, right, yes, huh? Then why is the NFL
doubling down? According to the Commissioner Goodell, we got into
diversity efforts because we felt it was the right thing
for the National Football League, and we're going to continue

(34:37):
to do those efforts. We're not in this because it's
a trend to get into or a trend to get
out of. Why don't you think about that when you're
watching or if you're watching the super Bowl this weekend,
because you're supposedly watching the best of the best