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Breaking Down the China Tariff Pause: What It Means for the Economy & Markets · Earn Your Leisure

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  Speaker 2: So let's get into this tariffs conversation. So last night
• 1:56
  Speaker 2: early this morning, they announced that pause on China tefts.
• 2:02
  Speaker 1: That was a big one.
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  Speaker 2: I mean, they had tariffs across the whole world, but
• 2:05
  Speaker 2: they dropped at least had ninety day paws for most countries,
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  Speaker 2: but China was the one that they really everybody was
• 2:10
  Speaker 2: waiting on to see what was gonna happen. Obviously is
• 2:12
  Speaker 2: the biggest economy in the world, and it was raised.
• 2:18
  Speaker 2: The tariffs were raised to one hundred and forty five
• 2:20
  Speaker 2: percent and it was lowered to ten percent, so for
• 2:25
  Speaker 2: ninety days, with an additional twenty percent for any products
• 2:31
  Speaker 2: related to fit and all. So most products are twenty
• 2:37
  Speaker 2: or ten percent. If it's a fin or related product,
• 2:41
  Speaker 2: which is like a lab, anything that has something to
• 2:44
  Speaker 2: do with chemicals, labs, things of that nature, then it's
• 2:46
  Speaker 2: an additional twenty percent, which will bring the tariffs to
• 2:48
  Speaker 2: thirty percent. But for most most products it would be
• 2:52
  Speaker 2: it's a ten percent rate across the board for at
• 2:57
  Speaker 2: least a ninety day period and then in ninety days
• 3:00
  Speaker 2: we'll see what happens after that. So where we started
• 3:05
  Speaker 2: with this before, before anything even by the administration, was
• 3:08
  Speaker 2: around three percent. So effectively we went up seven percent,
• 3:15
  Speaker 2: which is not bad because seven percent it might sound
• 3:19
  Speaker 2: like a little bit, but it adds up, and you're
• 3:22
  Speaker 2: talking about billions of dollars, so possibly trillions of dollars.
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  Speaker 2: So seven percent is not a number to just sneeze
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  Speaker 2: at for sure, but it's a it's a big difference
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  Speaker 2: from one hundred and forty five percent. So someone would say, Okay, well,
• 3:36
  Speaker 2: you know it was done intentionally to raise the price,
• 3:41
  Speaker 2: to actually lower the price. Now, I just think that
• 3:45
  Speaker 2: it could have possibly done in the bet could have
• 3:47
  Speaker 2: been done in a better manner because even just looking
• 3:49
  Speaker 2: at stocks were still not at the point.
• 3:51
  Speaker 1: Where where we were.
• 3:53
  Speaker 2: But there's a lot of other things that got affected,
• 3:54
  Speaker 2: and there's real life businesses. And I was talking to
• 3:56
  Speaker 2: business owns the other day who actually sells merchandise, and
• 3:59
  Speaker 2: they had their product sitting for a month in China
• 4:02
  Speaker 2: because they couldn't bring it over to America because one
• 4:04
  Speaker 2: hundred and forty five percent teriffs was too too much.
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  Speaker 2: So just the delay in thirty days could really hurt
• 4:09
  Speaker 2: somebody's business as far as shipping and have it not
• 4:12
  Speaker 2: having product on the store. So there's been a lot
• 4:14
  Speaker 2: of people that's actually it's been a lot of real pain.
• 4:16
  Speaker 2: That's that's already been done within a four week timeframe.
• 4:20
  Speaker 2: Where I think that if potentially he would have just
• 4:23
  Speaker 2: said ten percent from the beginning, he might have been
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  Speaker 2: able just to push that through because it is already
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  Speaker 2: at three percent. So if you just say, okay, look
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  Speaker 2: we I have a new policy in place, and we're
• 4:33
  Speaker 2: going to raise our tariffs seven percent and now instead
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  Speaker 2: of three percent is going to be ten percent, I
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  Speaker 2: don't think that that would have been something that would
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  Speaker 2: have been too difficult to get through, but I just
• 4:42
  Speaker 2: feel like you didn't have to go about it as
• 4:44
  Speaker 2: far as putting tariffs on the whole world and then
• 4:48
  Speaker 2: erasing the tariffs on the whole world, and then raising
• 4:51
  Speaker 2: tariffs on China from fifty to eighty two one hundred
• 4:55
  Speaker 2: and twenty five two hundred and forty five back down
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  Speaker 2: to ten. That's a one hundred and forty five to
• 5:03
  Speaker 2: ten is almost a ninety seven percent decrease. So that's
• 5:06
  Speaker 2: remendous drop in terrorists, right, which also even negotiating later on,
• 5:13
  Speaker 2: like how do you even get taken seriously when in
• 5:16
  Speaker 2: within a month you lowered in ninety seven percent. But
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  Speaker 2: I still think that it's a good thing that they
• 5:22
  Speaker 2: did as far as the administration, because it's not helpful
• 5:25
  Speaker 2: for the American economy or the Chinese economy to have
• 5:29
  Speaker 2: a trade war going on. So stocks rally on news
• 5:33
  Speaker 2: of this. Obviously, everybody's been happy about the news because
• 5:38
  Speaker 2: everybody was waiting for some level of compromise on this
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  Speaker 2: on this deal, But what does this mean for the
• 5:45
  Speaker 2: broader economy and the broader stock market going forward?
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  Speaker 3: I think he broke it down perfectly to have a
• 5:52
  Speaker 3: penalty of one hundred and forty five percent then go
• 5:54
  Speaker 3: to ten. It goes to show that the plan was
• 5:58
  Speaker 3: not thought out well enough.
• 6:00
  Speaker 1: And I get standing front, like being a parent.
• 6:02
  Speaker 3: If I tell my son you can't play PlayStation for
• 6:06
  Speaker 3: two years and then in three days, I'm like, hey,
• 6:09
  Speaker 3: bring all your friends over and have a Fortnite party,
• 6:12
  Speaker 3: He's not gonna take me serious. And I think while
• 6:15
  Speaker 3: we're fighting for America to keep his edge with bricks
• 6:19
  Speaker 3: closing that gap, I think we're laughing stock right now.
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  Speaker 1: To be very honest, if you're gonna.
• 6:25
  Speaker 3: Play hardball and you step down in one month. While
• 6:28
  Speaker 3: it's great for the market, I don't know how much
• 6:32
  Speaker 3: he's gonna need to do to recover what was lost.
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  Speaker 2: And I'll say this, I do think because I don't
• 6:37
  Speaker 2: want to be fair here, and I know we've been
• 6:39
  Speaker 2: tremendously hard on Trump and his administration, but he's doing
• 6:44
  Speaker 2: some things that I think are helpful. It's just hard
• 6:48
  Speaker 2: to champion him too much because every he does something
• 6:51
  Speaker 2: positive and then he says like white people in South
• 6:54
  Speaker 2: Africa are having a genocide and you want to bring refugees.
• 6:58
  Speaker 2: You know, It's just it's very difficult step forward in
• 7:00
  Speaker 2: three back. Yeah, he's he's he's very erratical with to
• 7:03
  Speaker 2: his behavior. He does very questionable things, but he's done
• 7:06
  Speaker 2: some good things, for sure. And I feel like there
• 7:09
  Speaker 2: was a need to tighten up trade deals for sure,
• 7:13
  Speaker 2: because there's a need, there's a need for it. So
• 7:17
  Speaker 2: he's not wrong in his thought process of getting more
• 7:22
  Speaker 2: for America. But like I said, I just feel like
• 7:25
  Speaker 2: it was an unnecessary whiplash that we still haven't fully
• 7:28
  Speaker 2: recoverage yet, we don't know the long term effects of it.
• 7:31
  Speaker 2: And just to do this and to abort missions so quickly,
• 7:35
  Speaker 2: you can't really say it's a win because if the
• 7:39
  Speaker 2: goal is to bring manufacturing jobs back to America, ten
• 7:43
  Speaker 2: percent is not going to do that at all. Right, Like,
• 7:46
  Speaker 2: if it's ten percent, if that's the number that we're
• 7:48
  Speaker 2: going to stay at, that's not drastically bringing all of
• 7:51
  Speaker 2: these manufacturing jobs back to America, which we knew that
• 7:54
  Speaker 2: was a sham anything. But but that's not a win
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  Speaker 2: for America in my opinion. It's more money that's brought in.
• 8:03
  Speaker 2: That's positive, for sure. But if it's like a blockbuster, Okay,
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  Speaker 2: we broke China and we created a new global infrastructure
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  Speaker 2: with trade, how you lowered. You cut everybody's terriffs across
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  Speaker 2: the board to basically nothing. The biggest one, the biggest
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  Speaker 2: three that makes the most difference in our trading partners
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  Speaker 2: is Mexico, China, and Canada. You cut Mexico and China.
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  Speaker 2: I mean, you cut Mexico and Canada early relatively nothing.
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  Speaker 2: Now you cut China to relatively nothing. So where's the win.
• 8:39
  Speaker 1: You doesn't get thrown on the office? Yeah, I mean,
• 8:44
  Speaker 1: I think there was a consensus. Even when we have
• 8:46
  Speaker 1: people come on, it was the consensus of we agree
• 8:50
  Speaker 1: with what he's trying to do, how he's doing it.
• 8:55
  Speaker 1: Most people didn't agree with it. I think there's there's
• 8:59
  Speaker 1: some matria to what you're saying in into the laughingstock piece,
• 9:02
  Speaker 1: because even though they are suspended, there's still just like
• 9:07
  Speaker 1: ninety day thing, Like we've been watching ninety days seventy
• 9:12
  Speaker 1: five day thing go on since January when it was TikTok,
• 9:15
  Speaker 1: and then it gets moved back and it's another ninety
• 9:18
  Speaker 1: So like what happens at the end of this ninety
• 9:20
  Speaker 1: days right, like we could keep doing this but again
• 9:24
  Speaker 1: and seeing the market rally like it did to day. Yeah,
• 9:27
  Speaker 1: there's plenty of optimism, but there's still a slight bit
• 9:30
  Speaker 1: of uncertainty, right because if you met in Geneva for
• 9:34
  Speaker 1: three straight days and you ironed out a deal, why
• 9:37
  Speaker 1: is it a ninety day deal? Why is only good
• 9:39
  Speaker 1: for three months? Why so when we get into the
• 9:42
  Speaker 1: summer months and it's like, all right, they did something
• 9:44
  Speaker 1: that we didn't like, or they did vice versa. We
• 9:47
  Speaker 1: can reniggle it, or we can go back to the
• 9:49
  Speaker 1: one hundred and forty five. It's just like this level
• 9:51
  Speaker 1: of uncertainty is really unnecessary if you're going to come
• 9:54
  Speaker 1: together for a deal to make the do right, Like
• 9:58
  Speaker 1: now we have to watch the clock and say, all right,
• 10:00
  Speaker 1: what happens now? What happens would send me's directly? Right?
• 10:04
  Speaker 1: Does that get suspended as well? Like that taft that
• 10:07
  Speaker 1: you were going to specifically put on that sector? I know,
• 10:09
  Speaker 1: fund you just signed it, the farmer legislation? What does
• 10:13
  Speaker 1: that look like? Right? Like there's all these executive orders
• 10:16
  Speaker 1: that get these deadlines, and then when the deadline comes like,
• 10:19
  Speaker 1: well maybe we'll stand it again, which leaves more uncertainty,
• 10:22
  Speaker 1: which means like in business, what are we really doing? Well?
• 10:24
  Speaker 2: I think to his credit, it's going to be extremely
• 10:27
  Speaker 2: difficult to work out a comprehensive deal in three days.
• 10:30
  Speaker 2: So you stopped the bleeding because there's obviously pain on
• 10:33
  Speaker 2: both sides.
• 10:33
  Speaker 1: But I don't I don't think that, just to rebebt
• 10:36
  Speaker 1: with just saying I don't even think it was just
• 10:38
  Speaker 1: these three days. I think that these negotiations have been
• 10:41
  Speaker 1: going on.
• 10:42
  Speaker 2: They said it hasn't, so we can only go on
• 10:44
  Speaker 2: what they tell us. So they say that this is
• 10:46
  Speaker 2: the first time that they actually had face to face negotiations.
• 10:48
  Speaker 2: That's what they said, That's what both countries said, but.
• 10:50
  Speaker 1: That's what So to that, he was saying that, remember
• 10:53
  Speaker 1: three weeks ago they were saying, we're negotiating with China,
• 10:55
  Speaker 1: and China say, now, we're never supposed to on.
• 10:57
  Speaker 2: Right exactly, you can't. So assuming that they just started
• 11:02
  Speaker 2: negotiating real negotiations this week, you can't negotiate a deal
• 11:06
  Speaker 2: in three days. That's hard to negotiate a comprehensive deal
• 11:09
  Speaker 2: that is going to be years in three days. So
• 11:14
  Speaker 2: I think that they did the right thing as far
• 11:15
  Speaker 2: as the ninety day pause, because it was better to
• 11:17
  Speaker 2: do this than to negotiate for three months and just
• 11:21
  Speaker 2: have this turmoil last for three months, so I'm not
• 11:23
  Speaker 2: necessarily I don't think that that's an irresponsible thing that
• 11:26
  Speaker 2: he did. As far as the ninety day situation, We'll
• 11:28
  Speaker 2: see what happens after the ninety days, but at least
• 11:29
  Speaker 2: they have three months to have comprehensive, real negotiations to
• 11:33
  Speaker 2: kind of figure out what the final deal. What's important
• 11:37
  Speaker 2: is what the final deal looks like. And the final
• 11:39
  Speaker 2: deal looks like then this then you know, they kick
• 11:43
  Speaker 2: the can down the road and they cause a lot
• 11:44
  Speaker 2: of unnecessary paying for We'll see if that's seven percent
• 11:48
  Speaker 2: over the course of time was worth it. Maybe it
• 11:50
  Speaker 2: is maybe seven percent what is going to be worth
• 11:52
  Speaker 2: all of the pain that was caused in the last month.
• 11:55
  Speaker 1: I don't know.
• 11:56
  Speaker 2: Only time will tell, But I do feel that they
• 11:58
  Speaker 2: did the right thing because they made a mistake. The
• 12:02
  Speaker 2: biggest thing into life is to correct your mistakes. Everybody
• 12:04
  Speaker 2: makes mistakes.
• 12:06
  Speaker 1: For sure.
• 12:06
  Speaker 2: They could have just dragged this dog down the road
• 12:10
  Speaker 2: for months and just I feel like, all right, they
• 12:14
  Speaker 2: screwed up. They recognized that they screwed up, and they said, okay,
• 12:19
  Speaker 2: let's think this thing through. Koula heads will prevail. We'll
• 12:23
  Speaker 2: see what happens in ninety days.
• 12:24
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