MIA 042625

Preston Brashers is a Research Fellow for tax policy in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget.

Gordon Chang- American lawyer and political commentator

Episode Transcript

Speaker 1 (00:10):
This is Made in America with Rich Rothman.

Speaker 2 (00:15):
Welcome to this week's show. This is Rich Rothman and
we are all on Maide in America. Delighted to have
you here this week. You know, every week we were
just discussing it in the studio before the show started.
Every week is an exciting week because he really doesn't
know what's gonna go on. I mean, things happen that
you don't expect to have happened. And I'm looking at
the Bernie Sanders and AOC show and you know there,

(00:39):
and I can't believe when I'm reading. You know, maybe
I get Preston's view on this in a second, but
I mean AOC considered for the president. Oh my god.
This is why I consider going to New Zealand years
ago and live on lamb Chops because I thought that
might be a safer place to be if anyone like
that got in, Like Kamala just just blows me away.
This is how this is how whacked out things are

(01:01):
right now. Anyway, Welcome to mad in America. We are involved.
I gotta tell you. I you and I own companies
that have a bunch of employees and I listen to
them when they come in the office in the morning.
When they do come in the office in the morning,
and some of them are just you know, they're freaking
out because they're saying, oh, my god, I lost a
million dollars in the market. And someone said that to me,

(01:21):
one of my employees, I lost a million dollars in
the market. And I was saying, well, you didn't lose
it unless you sold it. But yes, you know, the
values went down. You have to do that. People kind
of flipped out about that. You know, they're trying to
understand where we're going with it, you know, on a
on a very main street pedestrian level, pardon the pun,

(01:44):
what this really means to them, and how in the
long run perhaps things are going to be much better.
And you got to go through a little you know
what if John let him say that pleasure of plane
pleasure and pain, no pain leads to pleasure, Pain leads
to pleasure. That's on rubber sult. So we are in
a very very strange place. But we have a great

(02:05):
show for you today. I'm really excited to invite you here.
We're gonna have our firstly, it is gonna be Preston
Brushers and Preston, of course, is with the Heritage Foundation.
He's the research fellow on tax policy. Later in the show,
we're gonna talk to an old friend, someone who's been
on the show many, many, many many times over the years,
Gordon Chang. And we all know that Gordon is pre eminent,

(02:27):
and we're gonna be talking about China because China, to
a degree, and I want to get Preston's view in
this too, China to a degree is really driving the market.
Good band in a different sideways doesn't make any difference.
When you talk about China, people freak out and they're
flipping out, and they're saying, oh my god, we're not
gonna get products, We're gonna have baron shells. I mean,
I was listening. I was in a meeting with the

(02:48):
World Trade Center down here in Miami for a while,
and they were talking about the effect of taris on
the world and products, and then of course they were
talking about real estate. A group of people Miami is
really driven by real estate. You all realize that going
back to nineteen twenty six, and they're saying, well, you know,
if the tire stay in, the cost of building a condo,

(03:10):
cost of bidding a home goes up dramatically. You can't
pay for what you contracted for, so a lot of
sales are going to fall through. And I'm listening to
all this stuff. It's starting to remind me of COVID
nineteen and where all these horrible thoughts came out and
people were convinced that the world's coming to an end.
Cats and dogs sleeping together, you know, everyone's in the
movie Ghostbusters and it's all whacked out. And at the

(03:31):
point of the matter is it may not be. You know,
there was a rhyme to the reason there are some
things that we really have to do. We were left
with from the Biden administration. I believe in many many
many others feel the same way, including our president. With
a really bad set of cards. You know, we're involved
with inflation, We're involved with supply chain, we're involved with

(03:51):
immigration problems, and that affects everything all the above. I mean,
we're left with the world situation that was relatively out
of control, you g situation was I mean, oh my god,
you know, this is like really something out of Isaac Asimov.
So here we are, here, we are on on at
the end of a week, practically and uh, and we're
talking to Preston Basher's and we're gonna discuss extending the

(04:15):
Trump tax cuts for small business provisions is critical from
main Street and we've been talking about this going back
to Trump's first first iteration as a president. So, Preston,
welcome to medid in America.

Speaker 3 (04:28):
Well, thank you so much for having me. Rich.

Speaker 2 (04:30):
We're delighted to have you here because I think what
you're talking about and what you do your research on
is absolutely crucial. Let's let's kind of set the landscape
a little bit so people don't understand. I like to
I'd like to bring it down to its simplest ideas
so people can kind of embrace it, and then we
can hit it with all the good stuff. What do
we mean when we say the Trump tax cuts is

(04:52):
good or good for the small business, you know, and
provisions for small business in general? Why is that really
and what has happened up to now? Negatively? I know
that you know, Biden's group is trying to do something
in the small business. What does it really mean to
the small business? Why is it so crucial that we
work with these people and make them give them a

(05:14):
sense of safety?

Speaker 3 (05:17):
Yeah? Well, the Trump tax cuts. They were passed in
twenty seventeen, and they were across the board tax cuts.
They were really good for the economy. If people remember,
the economy was doing quite well twenty eighteen twenty nineteen
in the aftermath, and then of course he had COVID
and then and that of course was crushing for the economy.
The lockdowns and the huge glout of spending that happened,

(05:39):
especially starting in twenty twenty twenty one, and all this
was really tough on small businesses. But of course that
the tax cuts were great for small small businesses. But
one of the things to keep in mind with with
what's happening here, we talked about extending the Trump task cuts,
and so people think of this as well, this is
just a tax cut. No, this is this is really

(06:00):
about avoiding a massive tax increase, and that tax increase
would actually be concentrated, especially heavily on the small businesses.
We're talking about overall US would be about a four
trillion dollar tax packages, how the government scorekeepers would would
rate it, and about more than a trillion that's going
to be hitting small businesses. So this is really heavily

(06:21):
hitting the small businesses. If it's allowed to expire. And
with all the small businesses have been through over the
last couple of years, and you know, the uncertainty of
tariffs and these other things, those aren't great for small businesses.
I think getting these tax cuts extended for small businesses
is just huge.

Speaker 2 (06:38):
Well, there's a history there. I mean, you were right,
this goes back to twenty seventeen, twenty eighteen. And what
we do know for a fact is that when this
was passed, the economy was booming. It really turned around, didn't,
I mean good things really and we inure good things
out of us.

Speaker 3 (06:57):
Yeah, we I think we take for granted a little
bit some of the things. I mean we were talking
about fifty year lows and unemployment. We haven't really even
through all the bad things that happened during COVID, it
wasn't nearly as bad as a lot of people had
projected at the time. If you're looking at at some
of the economic forecast, people were talking about great depression
level stuff early on. And I think this the Tax

(07:18):
Cuts and Jobs Act and some of these provisions for
small businesses really helped a lot of them get through that.
So getting if we want to get back to where
things were in twenty eighteen twenty nineteen. The last thing
we want to do is let these tax provisions expire.
You know, talking about small businesses paying twenty percent more
taxes in a lot of cases, and discouraging investment, discouraging

(07:39):
new purchases of equipment and machinery. There's all sorts of
things in here that it's just really a bad idea
if we let this expire.

Speaker 2 (07:47):
So let's look at some of that for a second.
Let's unpack some of that. So what are some of
the provisions? You know, I'm a small business owner. I
mean I only have you know, maybe fifteen full time people,
and they have about twenty six outsourced people. I've had
one hundred and thirty five, so I've but they're still
a small business still under the you know SMA rule.

(08:09):
But what what did I get? What? What did what
did a small family business get as a result or
a small manufacturing or a manufacturing plan even with four
or five hundred people, because that falls under the same rule.
What do they get out of that? Why is it
good for them when it comes to investment and expanding?

(08:29):
And then why is it if in fact they expire
we really, you know, clip the wings of these of
these organizations.

Speaker 3 (08:37):
Yeah, I'll give you a couple of things. And so
one of the big things that the Trump tax cuts
did is they is they stopped penalizing companies that were
investing in their own uh, their their own operations, their
own employees, their own communities by building out new equipment
and machinery in their companies. So the way that the

(08:58):
tax good used to treat that some of these things
is you get a deduction for buying some new machinery.
That deduction is spread out over twenty years. And when
you're talking about small businesses, many of them don't last
for more than four or five years. And so saying, oh,
well you get this deduction, but you know you're not
gonna be able to use the whole amount of it
for twenty years, Well, and that's just not the way
that we do things with the rest of the tax
that we should be taxing. Yeah, it could be absolutely, I.

Speaker 2 (09:23):
Mean a will this to the next generation. I mean
that you're right. I'm sorry I cut you off, but
I had to say that.

Speaker 3 (09:29):
Yeah, no, that's exactly right. And I think with big
business it's one it's a different thing because with big
comp corporations, they have a little bit easier access to capital,
and so you know, if they know there's a deduction
coming down the road, it's a little bit less of
of a penalty. But the other thing is that that
that does is, especially with all the inflation that we've
experienced over the last seven or four or five years,

(09:52):
is all that inflation, that means that the deduction that
they were able to they should be able to claim,
if they were given the same treatment as everything else
in the tax code, that's worthless and so they're being
taxed on more than what the actual profits are. And so,
you know, it's things like that we did that for
Also on the table, we have the same thing for
research and development. We want to get back to having

(10:14):
full and the media expensing for research and development. Some
of these provisions have already started to phase out, and
so it's really important that we kind of get these
back back in place, back to where they were in
twenty eighteen.

Speaker 2 (10:23):
Yeah, I think one of the things that you mentioned
is that and this is important, This is really important
to take to admortize a deduction over eighteen twenty years whatever,
It really doesn't help the small business. I'll tell you
why from my point of view, just for my industry.
I'm in the media business. I've owned a lot of magazines,

(10:44):
maybe more than a dozen magazines over the years. And
with the life of these companies, most of them fail.
They fail. It's a risk. You get an idea, you
go out and get the money. You know, do you
know your sec documents bring the money in your stuff.
But in my business about oh no, no, no, seventy five

(11:04):
percent of all new magazines, all new media really don't
make it, you know, past the first year because it's
so hard. I mean, it's bloody hard. What we in
the magazine business is very expensive. We are a shark,
cash eating animal. Every day. We eat lots and lots
of money to do what we have to do. And
it only gets worse because now you've got just the

(11:26):
printed magazine. You have a digital magazine, you have newsletters,
you have reels. I've got to hire extra people to
get out there, and I did. I had to expand
the company so I can do all the digital stuff
to me remain relevant, you know, in the twenty first century. Okay,
that's cool, but the point of the matter is seventy
five percent fail in the second year and in the

(11:46):
first year, and the second year almost you know, nineties.
The remaining almost fail as well. That's left. So that's
why there were so much money. If you can survive
a couple of three years when you kind of break
out and you do your thing. So anything that you
can get and do and function with and embrace and
bring into along the way AIDS and A bets your

(12:07):
ability to be successful. So being told, oh, yeah, you
can amortize, you know, whatever you have to do, and
I buy a lot of technology, so I get to
amortize all that over whatever whatever and deduct it. It's
it's important, and it also gives you the opportunity to
make that investment. And my concern is that that investment

(12:28):
may not be there because the company may not be
there in one, two, maybe three years, you know.

Speaker 3 (12:33):
What I mean.

Speaker 2 (12:34):
So we're gonna hang on to that thought. We're gonna
come right back. I really want to go back to
this concept that long term may not be the answer.
And of course what we want to do is to
stem the tax cuts now make them permanent, do the
right thing for the small business owner. We're gonna be
right back with the small business owner. Don't go anywhere. Okay,

(13:01):
we're gonna be right back now, we're here. That's right,
we are here. Welcome back to Mayd in America. This
is rich Roffman, your host, who are on the phone,
and we're talking to our good friend Preston Brush here.
He is a research fellow for tax policy at the
Heritage Foundation, and we work with them quite often over
the years, about fifteen, I guess about fifteen sixteen years

(13:21):
now that we've been doing this. So we're glad to
have you here, Preston, and I want to get back
to this idea. You know, it's very very hard small
businesses get assaulted so easily. You said it earlier. During COVID,
the big box stores got to pass even though they
had thousands of people in the store. Oh no, they
can be open, they can do their thing. But the
small business was told very very often in many many states,

(13:45):
particularly blue states, that they were unessential. Remember those words.
I took such umbrage when I heard that, Well, these
are essential. In other words, Walmart's essential, but the local
stores not essential, even though they may have been around
for thirty seven years. Grandfather started it and the family
owns it. It's very important to them. It provides their income,

(14:05):
it gives them a purpose, it's the reason they get
up every day. So we really want to encourage these
these these people. You know, you need risk takers, you know, pressing,
don't you You need risk takers to start a business,
don't you.

Speaker 3 (14:21):
Absolutely. I mean, when you're a small business owner and
you're starting out a new startup or sole proprietorship, partnership,
whatever you're doing, and you're and you're a new guy
on the on the block, you're taking all the downside risk.
And then of course you know, the government comes in
and they're gonna they're going to get their slice if
things work out well for you. And so just the

(14:44):
barriers of entry for small businesses. It's not just taxes, obviously,
It is the regulations, and it is there's kind of
regulatory capture where you know, the small small businesses don't
have the ear of of of lobbyists and congressmen quite
the same way. And so I think there is a
lot of things that make it very difficult, and so anything.
One thing to keep in mind too, with the Trump

(15:04):
tax cuts, they were really good that there were some
permanent changes that were made on the corporate side, most
of the small business provisions were made temporary, and so
it's just that much more critical now that we don't
kind of pull the rug out from under them. There
was also this twenty percent past their deduction where if
you were paying a thirty nine point six percent rate

(15:24):
or a thirty seven percent rate under the new individual rates,
that would be reduced down to twenty nine percent, which
would get you a little bit more competitive, help you
to compete with the big corporations. And that was kind
of the flip side of what happened with the corporate
rate cut. And so what we're talking about here the
last king I portray it is just being a big

(15:46):
giveaway to corporations and the rich. That's really not what's
happening here. This is really I think extending these especially
is just about making sure that things are bearable for
the small businesses and then they have a chance.

Speaker 2 (16:00):
Well, you're right, and that also, you know, people think
just because you own a business, you know things are
really cool for you because you can do what you
want to do, that you're a business and so forth
may tell you something. For a person who starts a
small business, you may not pay yourself for a long
period of time. I mean, I mean I've gone in
the businesses that I've owned. When I started different magazines,

(16:21):
I took no income, you know, for eighteen months months,
eighteen months. Try and do that. I mean, I know
how far you can push American Express eighteen months not
taking any income and then having a capital call along
the way because I had to keep the business going,
so all the partners had to put more money in.
So there are things that you have to do that

(16:41):
to remain in business. And there's a lot of sacrifice
that goes along the way. So anything the government can do,
anything that you can get out of that is a
really really good thing. Okay, now I want let's let's
talk about tax rate just for a second. And we
need to be competitive in the world with the corporate
tax rate. That's important, isn't it.

Speaker 3 (17:01):
Absolutely Well yeah, yeah.

Speaker 2 (17:04):
Yo, go ahead. I don't want to cut you off
because I know you may go with this. This is good.

Speaker 3 (17:08):
Go ahead. Yeah. So, So to your point, the left
is going to criticize it, and I don't want to
come off that I'm saying that the corporate rate cut
that happened in twenty seventeen was a bad idea. It
was actually quite necessary because if you looked at where
the corporate rate in the United States was relative to
the rest of the world, the US corporate rate was
actually either the highest or second highest among the developed

(17:30):
all the developed countries. And what what the TCGA did
was that it put it in line with the rest
of the world, but at the same time doing that
just for the corporations and then and then kind of
leaving things in place for the small businesses. You know,
that's that's I don't think that's the way we want
to go. And so making sure that the whole thing
is made permanent is just that much more critical. But
but you're right, you know, I don't want I don't
I don't think we should be about, you know, pitting

(17:53):
people against each other, or this business against that business.
I want I want this economy to be something that
works for everybody.

Speaker 2 (18:00):
So having said all of that, let's get back to
this point. You know, there are a couple of things
that I think are very important, and that's the death
I mean, we talked about, you know, the death rate,
the death rate of businesses that be out of business,
but also the death tax and a lot of small
businesses like farms. I went to Syracuse University. I spent
seven years, except for the first year outside of Syracuse,

(18:22):
living in the farmland with a bunch of crazy guys
and girlfriends and dogs and cats and right out of
Crosby Stills, Nash and Young can be perfectly honest, but
we lived in an environment that was small businesses. A
farm is a small business. It's passed down from one
generation to the next. I learned that the farmers are
the hardest working people I ever met in my life
and the most unappreciated people I ever met in my life.

(18:44):
They work seven days a week, hard to take a vacation.
Everything that they do can go down the tube, and
you know, one week when they have bad weather gets
wiped out and and very often that happens. Not good.
But one of the things that they try and do
is passing on from one generation to the next. That's
a nice thing. That's a good thing. So real correct
and the time we have left, could you just address

(19:06):
that for a second, and why the death tax really
needs to be addressed as well.

Speaker 3 (19:12):
Yeah. So one of the things CCGA did was that
it increased the exemption from the the death tax, and
the death tax is just an awful tax, just morally.
I think speaking the idea that that people that do
want to do the right thing, that are that are you,
that are prudent and that save, and they're trying to
have a legacy to pass on to their kids, whether
it's a small business or or a family farm or ranch.

Speaker 2 (19:35):
Listen, this has been great pressing. Thank you Pressing Brush
here with the research fellow with the Heritage Foundation for
Tax Policy. Thanks so much for being on Made in America.
We're going to get you back real.

Speaker 3 (19:46):
Since all right, it was a real flight here. Thanks Rich,
take care.

Speaker 2 (19:49):
We're going to be right back, but a lot more
Made in America. If you go anywhere, you're going to
miss it all. You might as well.

Speaker 4 (19:54):
Stay promoting American industry.

Speaker 1 (20:11):
This is Made in America with Rich Rothman.

Speaker 2 (20:15):
Welcome back to Made in America. This is Rich Roffman.
I'm your host on the wonderful show. We're delighted to
have you here today. Lots to talk about. You know, everybody,
no matter who you are, is talking about taxes. Everybody's
talking about tariffs, everybody's talking about their investments. And some
of their lack of investments and things disappearing, and how
the world's coming to an end. I mean, it's just

(20:37):
it's reminding me that this is an intellectual covid and
people are starting to react in a certain way. And
we'll get into that in a minute. On the show
with us right now is Gordon Chang's dear friend. Some
We have a tremendous amount of respect for Gordon's the
author of Plan Read China's project to destroy America. Sounds

(20:58):
like that I should be made into a major emotion,
by the way, and you can also follow Gordon at
X on X rather at Gordon g Chang, Gordon g
Chang on X. Gordon, welcome to Made in America. Thank
you so much for being here today.

Speaker 5 (21:13):
Oh well, thank you so much. I really appreciate it.

Speaker 2 (21:16):
Well, thanks for that, man.

Speaker 3 (21:17):
So listen.

Speaker 2 (21:18):
So I got to tell you, I have never seen
so many people so jazzed up. I mean I have.
I'm in the media business. I got all sorts of
editors and writers. They're all bloody opinionated. It's unbelievable. But
and it's exciting, and everyone has an emotionality about this
whole thing, and you're finding well, I mean, look at
some of the responses that we're getting. You know, Kevin

(21:40):
o'leray last week was saying, you know, China gets a
taste of its own medicine, delist their stocks from US markets.
I mean, that's a pretty strong statement. Then you have
the Bank of America CEOs as well, you know, the
highly anticipated Trump you know, Charish might actually calm the
market if in the fact he cuts deals and things
really happen and we can get China under control. That's

(22:01):
an interesting thing that was that from the CEO of
Bank of America, the former Home Depot CEO and Nardelli,
Bob Nardelli, who we've had on the show before. He
came out with a statement saying, you know, basically Trump's tariff,
the response to the market is an overreaction on you know,
and argue they will be beneficial for the economy going forward.

(22:22):
So you're getting all sorts of Steven Moore says basically
the same thing. You know, Art Laffer, Cudlow, all our
buddies out there are saying the same thing. But it's
certainly getting a lot of attraction, Gordon.

Speaker 5 (22:33):
Don't you think, Well, certainly, and it's important because the
United States has had essentially one way trade relationships with
many countries, and President Trump has said I don't want
to see any more of this, and so he's gone
after everybody at the same time, and that, of course
has gotten everybody's attention because everyone needs the US market,

(22:55):
which comprises almost forty percent of global consumer spending. So
everybody needs to sell to America, and that means everybody
needs to come to the table with America. And that
is going to be something that will sort of absorb
our attention until especially the end of the ninety day
pause and probably after that as well.

Speaker 2 (23:17):
Well you know what, Hey, Phil, can you do me
a favorite play cut one so Gordon can hear it.
I want to have a conversation, and this is President
Trump talking about what we need, this situation that we
need to go through and where we might wind up
on the other side. Go ahead and play that period
of transition, because what we're doing is very big. We're
bringing wealth back to America. That's a big thing, and

(23:40):
there are always periods of it takes a little time.
It takes a little time, but don't I think it
should be great for us? So how do you respond?
To that.

Speaker 5 (23:53):
I tend to agree with him, Oh absolutely. What he's
suggesting is that reordering of the global trading system, and yes,
that is going to take time. But also at the
other side, we cannot expect that, after three decades of
deeply injurious trade and deeply injurious China policies, that we're

(24:13):
going to get through this without any costs. So yes,
there will be but we have absolutely have to do
it because we cannot allow China to have one hundred
percent of the world's manufacturing capability, which is what China's
really looking for. And so yes, this will be painful.

Speaker 2 (24:31):
So it really just isn't just tariffs and stuff. I mean,
China has done and continues to do things that really
affect world trade that transcend tariffs. But there really are
in a way of attacks upon the ability to do
business in China, you know, And you've talked about this
over the years, and there's a number attached to this,

(24:52):
you know, intellectual problem. I mean, I did business in China,
and I got to tell you with a major major
health organization in South Florida, Basking Parmer, one of the
most well known eye institutes in the world based here,
we did a project with them. We spent two and
a half years working on it was for macula degeneration.
I was in Guangzhou with the head of They had
the largest eye clinic in the world is in Guanzhou's

(25:12):
gigantic They see thousands of people today, not just a
few thousands and thousands and thousands of people today. And ultimately,
you know what they did. They bought a very expensive
set of lenses that were made and they and that
was it. After two they and they tried to copy
it with one of the largest alphalmic organizations in China.
Couldn't do it. They couldn't get it right. It fell through.

(25:34):
But that was the bottom line and that was the result.
So when you look at the scenario that we're involved
right now, it's a lot more nefarious and just you know,
we're going to raise you this rate and we're going
to raise you that right, isn't it It's pretty insidious?

Speaker 5 (25:47):
Well, yes, because China's trade practices are insidious. I mean
they're not only predatory, but they're also criminal. And we
kind of recognized that. You know, President Trump's twenty eighteen
tariffs on China twenty five percent, they were imposed as
a remedy for the theft of US intellectual property, and
China has not stopped stealing our stuff since then, and

(26:09):
it steals hundreds of billions of dollars a year of
USIP and John Ratcliffe in December twenty twenty, just as
he was ending his term as the Director of National Intelligence,
actually put a number on it. He said, it could
very well be as much as five hundred billion dollars
a year, and that is just unsustainable. So obviously we

(26:32):
got to do something. We got to impose costs that
are greater than the benefits that China receives from stealing
our stuff. So, yeah, this will be this will be ugly,
but we have no choice though. We cannot allow the
current situation to continue. The status quo is just unsustainable.

Speaker 2 (26:54):
Yeah, you're very very right. So it's really like, you know,
the world class, you know, the chicken so to speak,
who's gonna blink first? And and you've got to have
a very you have to have resolve to do what
we're doing and see it through. Let let's let's get
back for a second. You were on the other day.
I was watching you, which inherently do mornings with Maria,

(27:16):
and you had a nice panel on I think you had.
Hannah Cox was on as well. I'm sure we all
know Hannah Cox with a Base Politics co founder, and
you were discussing some of the things that that could
work and couldn't work, and you made it kind of
clear that China may be in worse shape than we
think they are, and you know, a rollback is not

(27:39):
going to help, you know, they were discussing let's roll
back to tariff. That was about two days ago. The
President said, well, we may be lowering it, but not
sure when. And it worked everyone's benefit. They like us
to do it. I mean, everyone's positioning with words the
best way that they can get around it. And that
looked like they're bullying, but that was a term that
they used in China that they're they're in an inflationary

(27:59):
spiral in China. In China is basically, you know, in
desperateate and therefore maybe we really should be considering raising
the temperature intellectually on China. What did you think about that?
I mean, I was very interested in Hannah and I'm
not picking it because I like Hannah, but she said, well,

(28:20):
maybe there's a softer side. I mean, it's always like,
you know, sears, the softer side of sears. I don't
know if there's a softer side to China. What do
you think?

Speaker 5 (28:27):
No, there isn't. And when President Trump and Treasury Secretary
Bessant talked about maybe rolling back tariffs, I mean, what
did China do. It didn't reciprocate. What it did was
it just up the rhetorical pressure because they smelled weakness.
They thought Trump was caving, and so they didn't see

(28:48):
any need to reciprocate. But what we are hearing though,
and this is fascinating, is that China is actually not
imposing tariffs on US products that it needs. It's not
announcing it, but it's not it's not imposing the tariffs.
And that is they're folding. And you can understand why,

(29:10):
because they've got so many problems at the same time.
They have economy which is in a deflationary spiral. It's
probably contracting. It's an economy which has become more trade dependent.
You've got a lot of you got deglobalization occurring, which
isn't helping. You got all of these trends hitting China

(29:30):
at the same time, and so yeah, they're going to
have to They're going to have to cave. But their
only and their only path out of this is to
get Trump to preemptively surrender, and so they put a
lot of pressure on Wall Street, Main Street, Farmers c suites.
But you know, Trump's not the type of guy who's

(29:51):
going to give up. And I think Si Jimping is
in a lot of trouble right now.

Speaker 2 (29:55):
Well, you know what, to that point, I agree, And
I've heard that, you know, as listening to Michael Pillsbury,
somebody I know and I've spoken to him many times
over the last ten years, and he was saying the
same thing you're saying right now, that he felt that,
you know, he's in trouble, that he may be surrounded,

(30:15):
that this is coming out a really bad time for him.
Is that you think you kind of embrace that it.

Speaker 5 (30:21):
Is a really bad time for him because he's got
troubles in general. I mean, even before the tariff war,
as Beijen calls it, there's signs of severe infighting at
the top of the Communist Party, and that's because c
Jenping is being blamed for some pretty disastrous policies and
I don't think he's been able to lay off the
accountability for various reasons, internal reasons. And he's also boxed

(30:44):
himself in because he has configured the Chinese political system
so that only the most hostile answers are considered acceptable.
So he can't do what is rational, which is to
pick up the phone, called President Trump and say, look,
you know, let's come to a deal now. Trump said
that c jmpin called. I'm not entirely clear that he did,

(31:06):
but I do believe that Trump is right that the
Chinese and his administration are talking to each other, because
that seems to me to make a lot of sense.

Speaker 2 (31:15):
Well, I would think, and of course we wouldn't know
half the stuff anyway, but I would think they're talking somewhere,
you know, some person, third party somewhere. I mean, I
hate this sound like Bridge of Spies, you know with
Tom Hanks when they're really off the grid and they're
talking literally because the grid was in East Berlin. But
I would think that they're actually doing some discussion somewhere.

(31:38):
I mean, everyone's looking for an off ram this degree,
aren't they.

Speaker 5 (31:43):
Yeah, well, I think they are. Also the US and
China they normally talk to each other on a range
of issues. All the time. So when China said, as
it did just a few hours ago, oh, you know,
we're not talking to the United States about trade, that
did not seem to me to be credible. You know,

(32:05):
they can very well be right saying, well, we've done
not coming to a trade pact, and I think that's
gonna be really hard to do. But of course they're talking,
and so Trump is right about that, and it just
shows that China needs the US more than we need them.

Speaker 2 (32:24):
All right, We're going to be right back with Gordon Chang.
We're talking about China, and we're talking about tariffs, we're
talking about the realities, are actually trying to find a
geopolitical off ramp so we can achieve what we want
to achieve, and they and they walk away with their
head held high to a degree, We're going to be
right back with Gordon. Don't go anywhere, and with our

(32:51):
really really good friend, Gordon Chang. And we're discussing China.
And you see Gordon all the time on a million
different channels at night. Gordon, let's I want to talk
about what China does and what they're trying to do.
It looks like it's sort of like the Democratic Party
who got completely beaten seventy nine eighty percent of the
country voted for the other guy, and they're acting like

(33:11):
they won. I whan they're out there doing rallies or campaigning.
We know better, maybe except eighty percent of the country said, well,
we don't like what you have, but okay, we're out there.
They're doing your thing. I got to give them credit
for their I don't know what I would to call
it their arrogance of the whole thing, or at least
the strengthen what they believe in. They do that. China
does things like, oh, I don't know what about this

(33:32):
Boeing thing. I know that was addressed the other day.
They're returning jets. What's that all about?

Speaker 5 (33:39):
You know? They refuse to take delivery of Boeing aircraft
and Boeing has flown back two and is flying back
a third because the Chinese airlines won't take delivery. I
think President Trump should actually prohibit Boeing from selling planes
to China, and even more important, prohibit enough services and

(34:01):
the sale of parts. I mean, this is, if China's
going to do something like not take planes, then we
shouldn't be helping them service their flanes. You know, let
them ground their fleet and I think that would teach
them a lesson. And really this just goes to show
that most of what China does, it hurts China as
much as or more than it hurts anybody else. So yeah,

(34:23):
let Beijing throw a hissy fit. It's not going to
help them.

Speaker 2 (34:28):
Well, and they've also I mean, this is where the
COVID thing and I'm just watching people devolve into this
insanity sometimes. But we're saying that, well, you know, if
we continue down this route, we're going to have empty
store shells. You know that that's a throwback empty store shells.
I don't know if that's going to come Is that
going to come to anything? Like? I don't think that's
going to come to that, do you.

Speaker 5 (34:50):
Well, clearly we're not going to be buying some stuff
from China, and it's going to take a couple months
for companies to redirect their supply chain. So yeah, I
do expect shelves will be a little bit empty for
several months, and then companies will adjust and they'll buy stuff
from Instead of China, they'll buy it from Bangladesh or
Egypt or wherever, which has really sort of happened anyway.

(35:14):
I mean, if you go back fifteen years or so,
you know, everything in a Walmart and the closed section
was from China, and now it is basically maybe ten
percent of the closer from China and the rest are
from other places. Companies can adjust, and I think that
they will this time as well.

Speaker 2 (35:34):
So all right, so here we have the situation. We
may or may not have the shells situation. Who knows
what's going to happen with that. There's something else that's
out there that I found very intriguing what you said
the other day, and in very intriguing in very twenty
first century, The China Lunar program. China lunar program is

(35:58):
a very frightening thought to me, sent to your words
and what you said. He who controls the Moon and
controls the space, as you defined it on the Mornings
with Maria, really controls what's going on on planet Earth
to a degree. How real is that? And how sincere
are the Chinese and doing that? I mean they are
spending the money to do this.

Speaker 5 (36:18):
Well, they certainly are spending the money to do it. Yeah.
The control of the Moon confers control of what's known
as cislunar space, that's the area between the Moon and
the Earth. If you control cislunar space, you obviously control
low Earth orbits that's where and also medium and high

(36:38):
Earth orbits that's where we have our satellites that, for instance,
you know, help us do so many things on Earth.
But it also where our satellites for early warning of
ballistic missile attacks. So if we didn't have our satellites,
the Chinese could pummel us without fear of retaliation. This

(37:00):
is really really bad for us. And so we've got
and we have a very influential person whose name happens
to be Elon Musk, who says we shouldn't go to
the Moon, we should just skip it entirely and go
to Mars, which is I think a would be disastrous
for the United States, but you know there it is.

(37:22):
He controls a company called SpaceX, which basically is the
only reason why we'll get to the Moon is because
of the SpaceX. I don't like this situation at all.

Speaker 2 (37:32):
Well, yeah, I mean, I'm an aficionado of everything you're
talking about, Saint. I'm a kid that grew up in
the fifties and I watched the Space program from the well,
I watched the space program from the day that I
was in elementary school, and I came out with new math,
and they all freaked out because Sputnik went up in
fifty seven and all of a sudden, the entire educational
says it was being revamped and we're all going to

(37:54):
become engineers and mathematics, you know, mathematicians. So things really
really changed, very very serious. Space race was important, incredibly important.
I agree. I think what you're saying is absolutely correct.
It's just as important as being in in in the
Arctic and Antarctica to protect us from things that could
happen on the planet. I think I think the Moon

(38:14):
is crucial, and not only that, the Moon is actually
a great was station for us to leap into the
rest of the universe for all the reasons that Musk
and all of us have talked about for a long
long time. So I think it's it's a brilliant idea
that we should be doing that. But it is scary
to me that you know, they're very sincere about you know,
what they're doing. I'm excited about the things that you've

(38:38):
been saying. I'm wondering, you know what do you what
do you suspect next? What I find amazing in all
of this, Gordon, is the confusion. It's like the ying
to the yang, like what you just said, now the
you know, someone said Trump got a phone called, Trump
said they got a phone called. Then someone said he
didn't get a phone call. It coming from China. Or
we're having meetings, we're making forward and then they're saying, well,

(38:59):
we're not making forward progress things here? I mean, what
is with is this planned craziness? This seems like this
can't be by accident because it seems so confused at times,
and that seems to drive the market insane.

Speaker 5 (39:13):
Yeah, well, I think what what President Trump's trying to
do is the right thing. His strategic goals are correct,
his implementation needs a lot to be desired, and so
you know, there is that craziness, and the markets don't
like craziness. Eventually, I think we'll sort things out and
things will be okay. But Trump needs to basically get

(39:36):
control of this process because he holds, as I mentioned,
the high cards. He just needs to play them a
lot better.

Speaker 2 (39:42):
Well, I agree, I just wish he had I don't
want to say, you know, the fireside chat everyone, you know,
reverts back to FDR, but at least the FDR talked
to people. I'm not a great FDR fan, by the way,
I'm just not there, but but I wish he had
hold someone's hand a little bit intellectually, say listen, we're
going to go through this in sanity for a while,
but it's really good. This is a good thing and

(40:04):
we're all going to have great benefit. And I'm going
to talk to you along the way so you're not alone.
I think that that's what I would say to mister
Gordon listened. Delighted to have you, always delighted to have
you on the show. We're excited to have you here again.
Don't forget you can always catch Gordon Chang on X
and that would be at Gordon g Chang. And of

(40:28):
course get his book Play Red China's Project to Destroy America.
We need to read that. We need to know where
we're at. Gordon, thanks again, man, thanks so much for
being on the show.

Speaker 5 (40:37):
Oh well, thank you. These topics are really so important
and I'm glad you're covering them, so thank you.

Speaker 2 (40:43):
It was great to have Gordon on the show today.
You know, he's been a friend for so many years
of Made in America, and he's such a calming influence.
But he really knows what he's talking about. And I
pay serious attention to Gordon's words, and I think you
should too, get ahold of his book. I think that's
going to be a great opportunity for all of us.
So we're kind of at the end of the show,
but I wanted to talk a little bit about the

(41:05):
reality of where we're at. And I'm not joking when
I said, well, this reminds me of COVID nineteen and
everybody was panicking, and everybody had to start doing things
that they thought was right but didn't know if it
was right. You know, we shut down, we did this,
we see questered, we kept people away, we killed people along.
I mean, it was just insane of what was happening.
So I want to just tell everyone just sit back,

(41:27):
take a deep breath, and I want you to think
for a second. Steve Moore was on the other day
on one of the channels, and he was talking about
the things that we don't talk about, and you should
look into that for this week. You know, the cutting
of taxes that Trump has done, the pro American gas policy,
that Trump is put in place the DOGE saving five
hundred billion to a trillion dollars. That's money right back

(41:48):
in our pockets, you know. And he secured the border
and along the way, you know, we are making America better.
We are making things better in America. We're making ourselves
better in him America. So when someone starts panicking with
me and saying, well, you see what's going on. He's
driving the market crazy and I have this loss, all
this might take a deep breath. All will be well,

(42:11):
presumably all will be well. There is a plan to this.
This isn't just knee jerk, responds. This is something that
needed to be done and it's going to get done.
And the good news is we have a very strong
president and a very smart administration, and I think we
have to be at the right place at the right time,
with the right people. So keeping that in mind, I
want you to know that all will be good as

(42:31):
long as it's made in America. And with that, I'm
going to say see you next week. Get your ideas together.
If you have any thoughts for me, any questions you
want on the show, email me Rich at rich Roffman
dot com and I'll respond to you not to worry.
See you next week.

Speaker 1 (42:48):
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Speaker 2 (43:02):
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Speaker 1 (43:44):
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