Latest / International Flavor: Where the Truth Tastes Better / Supreme Court Blocks Trump’s IEEPA Tariffs + Germany’s China Pivot, BRICS Reality, Canada’s Hedge

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Supreme Court Blocks Trump’s IEEPA Tariffs + Germany’s China Pivot, BRICS Reality, Canada’s Hedge · International Flavor: Where the Truth Tastes Better

• 0:00
  Hello, good morning. Welcome. I am
• 0:03
  Samuel Trap coming to to you live from
• 0:06
  the freezing cold
• 0:10
  Lake Ozark real estate of the art studio
• 0:14
  where
• 0:15
  I've got my uh parka on.
• 0:19
  I've got uh several layers of uh warmth
• 0:24
  and it's just not working.
• 0:28
  Well, there you have it. That is where
• 0:30
  we are today. Um, we have
• 0:33
  a lot of interesting topics to get into
• 0:36
  today. I wanted to start with just
• 0:38
  because I thought it would be fun, a bit
• 0:41
  of an analysis, if you want to call it
• 0:43
  that, um, on the old,
• 0:48
  uh, Trumpster and, uh, then I'm going to
• 0:51
  weave into, you know, the news of the
• 0:54
  week. I thought I'd do it in reverse,
• 0:55
  but I don't know. There's a lot of
• 0:58
  interesting stuff going on in the world,
• 1:00
  but I think yeah, you know, like the
• 1:02
  hospital ship. Trust Trump is sending a
• 1:06
  hospital ship to Greenland. How exciting
• 1:08
  is that? Yeah, these people need a
• 1:10
  hospital ship cuz they don't have
• 1:13
  anywhere to take care of people
• 1:15
  basically. And uh so well, why not uh
• 1:19
  send out a uh ship and take care of
• 1:23
  these poor poor Greenlanders? And then
• 1:26
  he was rejected by Jen's Frederick
• 1:29
  Nielsen.
• 1:30
  He rejected the president's offer to
• 1:33
  boost the island's healthc care with a
• 1:36
  medical boat.
• 1:39
  It's a It's a mixed up, muddled up,
• 1:43
  shook up world, except for Lola, of
• 1:46
  course. But here we are. Very strange
• 1:50
  events going on. I wanted to go into
• 1:54
  So, according to the Supreme Court
• 1:56
  opinion, I went ahead and read it. Uh
• 1:59
  although that isn't my bag anymore, but
• 2:02
  I still uh try to pay attention every
• 2:04
  now and again. Um
• 2:08
  if I don't drink warm coffee, it'll turn
• 2:10
  into an ice cube while I'm sitting in
• 2:12
  here. So, I have to drink it before it
• 2:14
  uh hardens, you know. But according to
• 2:18
  the Supreme Court opinion, the court did
• 2:20
  two big things at once in this wonderful
• 2:24
  case file which uh let's see Supreme
• 2:29
  Court United States Learning Resources
• 2:31
  Inc. and others versus Trump
• 2:36
  Donald J. One each President of the
• 2:39
  United States and others. This is a
• 2:42
  cersiary uh before judgment to the
• 2:45
  United States Court of Appeals for the
• 2:47
  District of Columbia Circuit.
• 2:50
  Argued August uh I'm sorry, argued
• 2:53
  November 5, 2025 and decided February
• 2:57
  20.
• 2:59
  So you can talk about um I always like
• 3:02
  to put and but there are such long
• 3:04
  questions presented
• 3:06
  um that they are even and it's let's see
• 3:11
  if I can read them all. I just wanted a
• 3:13
  short synopsis. And the trouble is is
• 3:16
  all these guys are very proud of
• 3:17
  themselves and so therefore they will
• 3:19
  write these dissertations that drag on
• 3:22
  and on and on and they can't just tell
• 3:25
  you what the hell they're doing and uh
• 3:27
  it's depressing. So these things go on
• 3:30
  for days. So the question presented is
• 3:34
  whether the International Emergency
• 3:37
  Economic Powers Act otherwise known as
• 3:40
  the EA
• 3:43
  authorizes the president to impose
• 3:46
  tariffs C91 statutes 1626. Shortly after
• 3:51
  taking office, President Trump sought to
• 3:54
  address two foreign threats. the influx
• 3:56
  of illegal drugs from Canada, Mexico,
• 4:00
  and China. Presidential proclamation
• 4:02
  number 10886.
• 4:07
  Uh the president determined that drug
• 4:09
  influx had created a public health
• 4:12
  crisis
• 4:13
  and that the trade deficit had led to
• 4:16
  the hollowing out quoted of the American
• 4:20
  manufacturing base and undermined
• 4:23
  critical supply chains. President
• 4:25
  declared a national emergency as to both
• 4:28
  threats, deeming them unusual and
• 4:32
  extraordinary and invoked his authority
• 4:35
  under the EA to respond. So he said he
• 4:41
  was using the International Emergency
• 4:43
  Economic Powers Act. He imposed tariffs
• 4:46
  to deal with each threat. As to the drug
• 4:48
  trafficking, the president imposed a 25%
• 4:51
  duty on most Canadian and Mexican
• 4:54
  imports and a 10% duty on most Chinese
• 4:58
  imports.
• 5:00
  Uhhuh. As to trade deficit reciprocal
• 5:03
  tariffs, the president imposed a duty on
• 5:07
  all imports from all trading partners of
• 5:11
  at least 10%.
• 5:13
  With dozens of nations facing higher
• 5:16
  rates
• 5:17
  since imposing each set of tariffs, the
• 5:21
  president has issued several increases,
• 5:23
  reductions, and modifications.
• 5:26
  Petitioners in learning resources and
• 5:28
  respondents in VOS selections filed suit
• 5:33
  alleging that EA does not authorize
• 5:37
  reciprocal or drug trafficking tariffs.
• 5:41
  The learning resource plaintiffs, two
• 5:44
  small businesses, sued in the US
• 5:46
  District Court for the District of
• 5:47
  Columbia. That court denied the
• 5:50
  government's motion to transfer the case
• 5:54
  to the US Court of International Trade,
• 5:57
  CIT, and granted plaintiff's motion.
• 6:00
  God, this such small type. Hello, how's
• 6:04
  a family? How do I get to see it larger?
• 6:07
  This is, you know, not my computer. Got
• 6:09
  it. It's just driving me bananas.
• 6:13
  Uh, at any rate, um, now I can't see
• 6:17
  where I was. Uh, let's see. The
• 6:21
  plaintiffs and granted the plaintiff's
• 6:23
  motion for preliminary injunction,
• 6:25
  concluding that EA did not grant the
• 6:28
  president the power to impose tariffs.
• 6:32
  Five other plaintiffs and 12 states sued
• 6:36
  in the Court of International Trade.
• 6:39
  That court granted summary judgement for
• 6:41
  the plaintiffs
• 6:43
  and the federal circuit sitting on bunk
• 6:46
  affirmed in relevant part that means on
• 6:48
  bunk means everybody the whole court not
• 6:51
  just three uh concluded that's
• 6:55
  grant of authority to regulate
• 6:57
  importation
• 6:59
  did not authorize the challenge tariffs
• 7:02
  which are unbounded in scope amount and
• 7:05
  duration
• 7:08
  You know what? That actually makes
• 7:10
  sense. Uh, strange. Uh, the government
• 7:13
  filed a petition for Cersiari to the
• 7:17
  uh I'm having trouble reading because
• 7:20
  the type is so small. The government
• 7:22
  filed petition for Cersiari in uh VOS
• 7:25
  selections and the learning resources
• 7:27
  plaintiffs filed a petition for
• 7:29
  cersiarity cersiari before judgment. The
• 7:33
  court granted the petition and
• 7:35
  consolidated the two cases rightly so.
• 7:40
  EA does not authorize uh held held this
• 7:44
  is the ruling. EA International Economic
• 7:49
  Emergency Powers Act does not authorize
• 7:52
  the president to impose tariffs. The
• 7:54
  judgment in number 241287
• 7:58
  is vacated and the case remanded with
• 8:01
  instructions to dismiss for lack of
• 8:04
  jurisdiction. The judgment in number
• 8:06
  25250
• 8:08
  is affirmed. Now I don't remember which
• 8:10
  one is which. Um but they they dismissed
• 8:13
  one and I believe they said that the
• 8:15
  court of appeals didn't have uh uh the
• 8:18
  district court did not but the court of
• 8:20
  international trade did. Um I don't
• 8:22
  think it's vice versa but I think it's
• 8:23
  that. Sorry, you know, I read it late
• 8:25
  last night. Um, at any rate, article
• 8:28
  one, section A to the Constitution. Oh,
• 8:30
  well, the Chief Justice delivered the
• 8:32
  opinion of court with respect to parts
• 8:34
  one and 28. I'm not going to read this
• 8:36
  whole judgment to you. It's too freaking
• 8:38
  small. I can't see it. And I don't know
• 8:40
  what I've done here to jack it all up,
• 8:42
  but I can't see it and it won't let me
• 8:45
  enlarge. So anyway, that is the ruling
• 8:50
  that we are talking about here today.
• 8:54
  And I'm going to cover a little bit of
• 8:55
  of uh some of that uh for you uh if we
• 9:00
  will because I've got a lot of other
• 9:01
  topics to get into as well. But I think
• 9:05
  I was going to finish with this, but I I
• 9:08
  decided to reverse it. And uh what I
• 9:11
  thought I would do was talk about the
• 9:13
  dissenting views first. Okay. Um
• 9:18
  the and and what the dissenters said
• 9:21
  then they gave three broad pillars uh
• 9:24
  that that three of the the three
• 9:26
  dissenting justices they said that EA's
• 9:29
  language is broader than the majority
• 9:31
  admits. Okay. So the majority said no
• 9:34
  it's not that broad doesn't say it. If
• 9:36
  the court wanted to say it or if the
• 9:37
  legislature wanted to say it, they would
• 9:39
  have said it and they didn't say it.
• 9:41
  Now, that's something that I typically
• 9:42
  say. I'm a strict, how do you want to
• 9:44
  put this? Not that I matter, but I'm a
• 9:47
  strict constructionist, okay? Of of what
• 9:50
  um what is um
• 9:54
  what I believe that the constitution
• 9:56
  requires, what I believe everyone uh you
• 9:59
  know, I I believe in strict lanes. You
• 10:01
  stay in your lane. the legislature does
• 10:05
  something. It grants power. You hear me
• 10:07
  lecture about this crap all the time
• 10:09
  that the the lecture the the lecture the
• 10:12
  uh legislature
• 10:15
  uh legislative branch grants authority.
• 10:19
  They create the laws on behalf of the
• 10:21
  people. The executive branch blesses
• 10:24
  that creation of the law and then they
• 10:26
  have the right to over to say no. But
• 10:29
  once those two have spoken, the law is
• 10:32
  okay. And then the interpretation of
• 10:35
  that law goes to the court. And if the
• 10:37
  court comes back and says, "Look, you
• 10:39
  guys jacked it all up. You either didn't
• 10:41
  give the authority you said you were
• 10:42
  given or uh you gave too much
• 10:45
  authority." I'm pretty strict in that. I
• 10:47
  want it to say it. I don't even like the
• 10:49
  fact that uh sometimes they they extend
• 10:53
  it to say well
• 10:56
  when the Supreme or I'm sorry when the
• 10:58
  legislature was discussing this on the
• 11:00
  House floor in the Senate chambers they
• 11:03
  were they discussed this part. I'm a
• 11:06
  strict I want it in the text. I want to
• 11:08
  say here because you can discuss a lot
• 11:10
  of crap you know and then it never ends
• 11:12
  up in your contract. You know, if you're
• 11:15
  sitting there talking to a contractor
• 11:17
  comes to your house and you say, "Geez,
• 11:19
  I need a new foundation poured um and
• 11:23
  while he's there, you talk about um you
• 11:26
  know, I I I like this foundation uh idea
• 11:30
  and I want to do it, but you know what I
• 11:32
  really want? I want a new a new pad done
• 11:36
  over here where I'm going to put a shed.
• 11:38
  So, I want that, too." If you don't put
• 11:40
  the shed in the contract, you're not
• 11:43
  getting it. You just all there is to it.
• 11:47
  That strict construction. Oh, it's got
• 11:50
  to be in the wording of the contract.
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  And by the way, this is how the US
• 11:55
  screws the rest of the world, you know,
• 11:57
  uh, and says, "Well, we didn't say that
• 11:59
  because it never ended up in the
• 12:00
  treaty." So, and and notably, and I I
• 12:03
  don't want to go back to my constant
• 12:05
  bitching, but but it goes, uh, you know,
• 12:08
  George W. Bush can say, you know, NATO
• 12:10
  won't go another inch to the east in
• 12:14
  1991 all he wants and say that and then
• 12:17
  everybody goes, wait a minute, that's
• 12:19
  not in the there's no treaty to that
• 12:21
  effect. We just said it. That was a
• 12:23
  politician saying stuff. Politicians say
• 12:26
  stuff all the time. You can't believe a
• 12:28
  word they say. I mean, everybody knows
• 12:30
  that. What are you talking about? There
• 12:31
  should be a treaty. And if you really
• 12:33
  wanted it, you would have asked for it
• 12:35
  in a treaty. And so therefore, you
• 12:37
  didn't want it. and therefore NATO's and
• 12:39
  Ukraine on your doorstep. That's your
• 12:41
  fault, not ours. You know, that's that's
• 12:42
  a that's how people argue and it's a
• 12:45
  legitimate argument. You know, if if you
• 12:47
  really wanted it, why didn't you fight
• 12:49
  for it? But, you know, I I don't agree
• 12:52
  with it. You know, that you should
• 12:54
  posture because uh we're supposed to be
• 12:56
  able to believe the word of the king.
• 12:58
  But you can't remember that you can't
• 13:01
  trust the word of the king. So at any
• 13:04
  rate, the the EPA according to the
• 13:09
  justices that dissented, they say the
• 13:12
  language is broader than the majority
• 13:14
  admits. And they say the descent uh
• 13:16
  emphasizes that it authorizes the
• 13:18
  president to regulate and prohibit
• 13:21
  transactions involving foreign commerce
• 13:24
  during declared national emergency. And
• 13:26
  he declared a national emergency. He's
• 13:28
  he has the discretion to do that.
• 13:31
  They say that tar argue that tariffs are
• 13:34
  functionally a form of regulation
• 13:37
  and they alter the conditions under
• 13:39
  which imports enter the country. They
• 13:40
  change the price structure. They shape
• 13:42
  trade flow. And from that perspective, a
• 13:44
  terrorist a tariff isn't necessarily a
• 13:47
  tax in the narrow revenue raising sense.
• 13:50
  And this may this I like. It can also be
• 13:54
  viewed as a regulatory mechanism
• 13:56
  designed to influence conduct. Okay. And
• 13:58
  the president is supposed to influence
• 14:00
  conduct. No, more importantly to me is
• 14:03
  this is uh you know that the majority
• 14:06
  hung their hat on its attacks.
• 14:08
  Therefore, it belongs uh in in more
• 14:11
  strict regulatory language of the uh of
• 14:15
  the uh legislative branch. Right?
• 14:19
  But the disscent says well but no this
• 14:23
  is a regulation. and the president can
• 14:24
  put that in and try to design you know
• 14:27
  or try to influence people's behavior by
• 14:29
  impro by putting in these uh these
• 14:32
  things. So the desense point is this. If
• 14:34
  Congress gives the president the power
• 14:35
  to regulate foreign commerce during
• 14:39
  emergencies, it's artificial to carve
• 14:41
  tariffs out of that category just
• 14:43
  because they generate revenue. In their
• 14:45
  view, the majority is drawing a formal
• 14:48
  line that Congress did not draw.
• 14:51
  Either way, either way, in my book, the
• 14:54
  Congress didn't uh uh wasn't detailed
• 14:57
  enough in what they were going to do.
• 14:58
  And that's scary because, you know, they
• 15:00
  got these 10,000page documents to take
• 15:04
  create and there's not enough detail in
• 15:06
  them. Okay. Second point, Constitution
• 15:09
  gives Congress power over tariffs, but
• 15:10
  Congress can delegate that power. The
• 15:13
  descent does not deny that tariffs are
• 15:15
  rooted in Congress's article one power.
• 15:17
  What it disputes is the idea that
• 15:19
  Congress failed to delegate that
• 15:21
  authority here. And so Congress enacted
• 15:26
  EA knowing it concerned foreign economic
• 15:30
  threat. It used sweeping language. It
• 15:32
  didn't carve out tariffs as prohibited.
• 15:36
  It did not restrict a president to asset
• 15:39
  freezes only. And so the descent argues
• 15:42
  that when Congress use broad language in
• 15:44
  the context of foreign economic
• 15:45
  emergency, court should not narrow it
• 15:47
  unless statute clearly excludes the
• 15:49
  disputed power. They view the majority's
• 15:53
  approach as judicial narrowing of an
• 15:54
  intentionally flexible emergency
• 15:56
  statute.
• 15:59
  Yeah, it's I could see that point. Yep.
• 16:02
  Uh and deference in foreign affairs.
• 16:05
  This one
• 16:07
  I I I if I the one I support the most is
• 16:11
  probably this one. So the descent
• 16:13
  stresses that the traditional judicial
• 16:15
  posture in matters of foreign policy and
• 16:18
  national security is this. Courts give
• 16:20
  the executive branch wide latitude. So
• 16:23
  when the president declares a national
• 16:25
  emergency tied to foreign conduct, the
• 16:27
  disscent believes courts should hesitate
• 16:30
  before second-guessing a chosen economic
• 16:32
  response, especially when Congress has
• 16:35
  provided a statutory framework for such
• 16:37
  emergency economic control. But from
• 16:39
  this point, the majority isn't
• 16:42
  interpreting a statute. It is
• 16:44
  constraining the executive's flexibility
• 16:48
  and by the way, taking over his power in
• 16:51
  foreign affairs. and you make that
• 16:53
  argument. Now, that is an argument I can
• 16:56
  get behind. Okay? And so, the major
• 16:59
  questions doctrine, skepticism, although
• 17:02
  the majority doesn't scream major
• 17:04
  question doctrine in giant letters, it
• 17:07
  it logic tracks that line of reasoning.
• 17:10
  The descent is wary of using that
• 17:12
  doctrine too aggressively because it
• 17:15
  warns that the court can overuse major
• 17:18
  questions to strike down executive
• 17:21
  actions that operate broadly within his
• 17:24
  delegated authority. So the descent sees
• 17:27
  the majority as rewriting the statute
• 17:31
  and that they don't like I don't like
• 17:33
  under the banner of separation of
• 17:36
  powers. So they turned it into something
• 17:37
  constitutional.
• 17:39
  And so uh you know what they're saying
• 17:42
  is Congress writes the tax law.
• 17:45
  Emergency powers are not blank checks.
• 17:47
  That's the majority. The disscent says,
• 17:49
  "Wait a minute. Congress delegated a
• 17:52
  broad swath of powers and that it should
• 17:55
  include these economic ones. Courts
• 17:57
  shouldn't micromanage such emergency
• 18:00
  economic tools." So that disagreement
• 18:02
  isn't an academic deal. It's two very
• 18:05
  different models of executive power.
• 18:07
  Model one, strict separation, clear
• 18:10
  delegation, limited emergency
• 18:13
  interpretation, which generally I
• 18:16
  support. Okay. But then model two, I'm
• 18:19
  actually somewhere in between the two
• 18:20
  here. It depends on the issue. But, uh,
• 18:23
  model two, flexible delegation, broad
• 18:26
  executive discretion in foreign economic
• 18:28
  crisis.
• 18:30
  That's, you know, that's how it goes. So
• 18:34
  Trump praises the dissenters and he says
• 18:37
  they're strong, patriotic,
• 18:39
  understanding. He characterized the
• 18:40
  majority as timid, politically
• 18:43
  influenced. Uh from a structural
• 18:45
  standpoint, what he prefers is the
• 18:47
  second modable of course maximum uh
• 18:50
  executive flexibility in trade and
• 18:52
  economic confrontations.
• 18:55
  And that preference itself is part of
• 18:57
  the instability narrative that I wanted
• 19:00
  to talk about in today's show.
• 19:03
  So,
• 19:06
  I wanted to talk about this from the
• 19:08
  point of view of allies and tariff
• 19:10
  authorities. I I I did want to go into
• 19:13
  what the um the actual document said um
• 19:18
  as far as the procedural punchline
• 19:21
  because what the court actually said the
• 19:23
  majority. So I started with the minority
• 19:26
  and uh what the Supreme Court ruling
• 19:29
  actually said number one procedure. The
• 19:33
  case came up from federal district court
• 19:35
  DC Supreme Court said challenges like
• 19:38
  this where you're essentially contesting
• 19:40
  tariffs, duties, and related trade
• 19:43
  belong in the specialized court of
• 19:45
  international trade, not a general
• 19:47
  district court. So the court vacated
• 19:50
  that judgment and sent it back with
• 19:53
  instructions to dismiss. like we're
• 19:56
  sending it back and you're, you know,
• 19:58
  you're going to enter an order in
• 20:00
  keeping with what we're telling you and
• 20:02
  we're telling you, you don't have
• 20:04
  jurisdiction and these must be taken
• 20:07
  before the uh Court of International
• 20:09
  Trade. So, we're ordering you to dismiss
• 20:12
  this case. So, that case will be
• 20:14
  dismissed. So, the procedural outcome is
• 20:16
  dismissible. Is it isn't Trump wins and
• 20:19
  plaintiffs win, it's you filed it in the
• 20:21
  wrong spot. And the sub substantive
• 20:24
  holding was that EA is not a tariff gun.
• 20:28
  So while booting the case on
• 20:30
  jurisdiction, the court said a clear
• 20:32
  substantive rule very clearly. EA does
• 20:37
  not authorize the president to impose
• 20:39
  tariffs. The end.
• 20:42
  The reasoning is straightforward and um
• 20:45
  text structure history. According to
• 20:47
  them, what EA actually authorizes is it
• 20:52
  lets the president investigate, regulate
• 20:55
  or prohibit certain transactions and
• 20:58
  property interests tied to a foreign
• 21:00
  country or national emergency. The
• 21:03
  court's logic is this. These aren't
• 21:06
  emergency economic controls. Blocking,
• 21:09
  licensing, freezing, restricting, not
• 21:12
  taxing. A tariff isn't a regulation. its
• 21:16
  taxation by another name. So the court
• 21:19
  is treating tariffs and duties
• 21:21
  uh as a as a tax. They operate on
• 21:25
  importers, raise revenue, function as a
• 21:27
  branch of taxing power. That matters
• 21:30
  because the constitution puts taxing and
• 21:33
  tariff policy fundamentally in
• 21:35
  Congress's hands. And if Congress wanted
• 21:37
  to hand the executive something that
• 21:40
  sweeping, it would do so clearly and not
• 21:43
  via vague emergency verbs like regulate.
• 21:47
  So the major question flavor, which
• 21:49
  they, you know, they were talking about
• 21:51
  is the court's instinct is we're not
• 21:54
  reading a sweeping global tariff
• 21:56
  authority into EA's general language. So
• 22:00
  when an agency or the president claims a
• 22:03
  power of vast economic and political
• 22:05
  significance, the court expects a clear
• 22:07
  statement from Congress. Put it in the
• 22:09
  contract i.e. EA global tariff wall
• 22:13
  fails that test on a plain reading and
• 22:17
  unconstitutional structure and the
• 22:20
  historical practice cuts against it.
• 22:22
  They said the presidents have used EPA
• 22:24
  for a lot of tools but not for tariffs
• 22:28
  and uh that absence matters is what they
• 22:31
  say. So the court's message is basically
• 22:33
  this emergency powers let you choke off
• 22:36
  transactions and access. They don't let
• 22:38
  you print a tax schedule. And so what
• 22:41
  this means in practice you know the
• 22:44
  decision didn't kill tariffs as a policy
• 22:46
  tool. It killed one pathway. it that the
• 22:49
  attempt to use EA as the legal basis for
• 22:53
  the broad tariffs that they can't use.
• 22:58
  So I read something from a person named
• 23:01
  Enu Manak
• 23:04
  and uh how the tariffs could survive
• 23:06
  anyway is what it was called. And this
• 23:08
  person's from the Council on Foreign
• 23:10
  Relations. Okay. So, yep, the court
• 23:13
  knocked out EA, but Congress has already
• 23:16
  delegated other tariff authority um to
• 23:20
  you know other ways over decades and
• 23:23
  those can be used though they are
• 23:25
  narrower more procedural and have their
• 23:28
  own built-in limits right so this this
• 23:31
  uh replacement that that she said that
• 23:34
  she she or I don't you know what I I
• 23:36
  don't know he she I didn't look it up
• 23:39
  but I didn't I I the author, let's call
• 23:42
  it the author. The CFR piece lays out
• 23:45
  the replacement toolbox and it's
• 23:46
  basically a patchwork uh quilt rather
• 23:49
  than one, you know, sweeping broom. So,
• 23:53
  here are the four pathways that they can
• 23:55
  that Trumpster can can keep these up.
• 23:57
  Section 122 of the Trade Act of 1974,
• 24:02
  it's a quick baseline, but it expires.
• 24:04
  This one allows tariffs of up to 15% for
• 24:07
  150 days unless Congress extends that if
• 24:11
  there's a large and serious balance of
• 24:13
  payments deficit. This one's fast and it
• 24:16
  doesn't require a big formal
• 24:17
  investigation. It's temporary and has to
• 24:19
  be applied uniformally, not targeted
• 24:22
  country by country, right? So you could
• 24:25
  slap on a short-term across the board
• 24:27
  tariff, but it's on a timer and you
• 24:29
  can't punish Canada today, Germany
• 24:32
  tomorrow, you know, stuff like that. And
• 24:34
  I think it is a u um
• 24:38
  applied uniformally like well it's
• 24:41
  supposed to be applied uniformly. I
• 24:42
  haven't pulled the actual section of it
• 24:44
  yet or reviewed it, but that's what the
• 24:45
  article said and uh and I think that's
• 24:47
  correct, but I haven't reviewed it. uh
• 24:49
  section 232 of the trade expansion act
• 24:53
  of 1962, the national security lever.
• 24:56
  This one allows tariffs and quotas when
• 24:59
  imports threaten national security, but
• 25:02
  it requires an investigation and a
• 25:04
  commerce department recommendation.
• 25:07
  So the CFR notes uh code of federal
• 25:10
  regulations notes that it's broad
• 25:11
  because national security is not tightly
• 25:14
  defined and there's no statutory cap on
• 25:17
  the tariff rate but it's in sections you
• 25:21
  know sectoral like you know I can do it
• 25:23
  on I don't know oil products I can do it
• 25:26
  on uh grains you know whatever but it
• 25:30
  doesn't create a universal everything
• 25:32
  tariff like 122 trade act of uh 1974
• 25:36
  does and uh that one is it can't be
• 25:39
  targeted country by country but this one
• 25:41
  allows you to target but it also
• 25:43
  requires an investigation of the
• 25:45
  commerce department.
• 25:47
  So this is how you tariff steel aluminum
• 25:50
  auto copper so on it's big impact but it
• 25:53
  can't be a universal baseline. So
• 25:55
  there's the third one that one is
• 25:57
  section 301 of the trade act of 74 the
• 25:59
  unfair trade practices machine. This one
• 26:02
  is uh uh investigation, findings, and
• 26:06
  then remedies that include tariffs. It's
• 26:09
  powerful, can be put into place for
• 26:12
  years, and has been used heavily against
• 26:14
  China, but it's slower and process heavy
• 26:18
  upfront, and it's country specific
• 26:21
  rather than universal. Okay? So, if you
• 26:23
  want a long war, this is how you get it.
• 26:26
  Section 301 of the Trade Act to 74.
• 26:30
  Section 338 of the tariff act of 1930,
• 26:34
  the never used but legally spicy option.
• 26:39
  This allows tariff up to 50% on goods
• 26:42
  from countries that unreasonably
• 26:45
  discriminate is the word against US
• 26:48
  trade code of federal regulation says
• 26:52
  major ambiguity you know about what
• 26:55
  factf finding is required and emphasizes
• 26:59
  that it's basically untested and would
• 27:02
  almost certainly be litigated. This one
• 27:04
  is a broken glass statute. Dramatic,
• 27:06
  uncertain, and lawsuit bait. So the
• 27:10
  bottom line is that there's no exact
• 27:12
  replacement for Trump's sweeping EA
• 27:15
  approach. Sweny rebuild is a patchwork
• 27:18
  and the patchwork itself sustains global
• 27:21
  uncertainty because partners can't
• 27:24
  predict what's coming next or how
• 27:27
  stable.
• 27:31
  I wanted to go into what Trump said
• 27:34
  about this, but I think I'm going to
• 27:36
  leave that for the end of where I go
• 27:38
  today. And uh I'm going to go begin at
• 27:43
  the beginning. And what I did was
• 27:48
  uh Oh, that's in Russian. We're going to
• 27:51
  skip that part. Um
• 27:54
  la
• 27:57
  created a different pathway for this but
• 28:00
  maybe not.
• 28:02
  Um,
• 28:05
  okay. So
• 28:08
  basically
• 28:12
  I wanted to talk about Germany
• 28:15
  and this will all come together I
• 28:17
  promise uh in in in in what I'm talking
• 28:21
  about because
• 28:23
  basically there's an argument going
• 28:25
  around in in in financial circles and
• 28:29
  otherwise that Germany symbolically and
• 28:33
  economically
• 28:35
  um has hit a wall and is being forced
• 28:38
  into
• 28:39
  making a bit of a China pivot toward
• 28:43
  China. Not because Berlin suddenly loves
• 28:46
  Beijing, but because Europe's
• 28:49
  assumptions, the old world order are
• 28:53
  collapsing under pressure and Germany is
• 28:57
  weak. industrial
• 29:00
  uh no growth,
• 29:02
  industrial decline, unstable exports,
• 29:06
  transatlantic relationships that are
• 29:09
  less re reliable than they have been for
• 29:12
  decades. So Merch's trip recently to
• 29:16
  Beijing. Now remember, everybody's been
• 29:18
  headed to Beijing lately. Uh Carney went
• 29:22
  there to make some stuff. uh Ursula, was
• 29:25
  it Ursula, one of the heads of the EU, a
• 29:28
  lot of European leaders are headed to
• 29:30
  China and they're
• 29:33
  I say considering other options, okay,
• 29:37
  than the United States. And I say
• 29:40
  they're doing that because
• 29:43
  we in the form of President Donald uh
• 29:47
  Jovich are
• 29:50
  unstable or unstable is not the right
• 29:54
  word. Unpredictable, you know. He's he's
• 29:57
  all over the map, you know. And and and
• 30:00
  I don't say that mean meanly. I'm just
• 30:03
  it's true. The guy's all over the map.
• 30:06
  and uh one day one thing one day one
• 30:09
  thing the next and he's too volatile. He
• 30:11
  he calls people you know morons and
• 30:13
  idiots and is always yelling about this
• 30:15
  and that and and he's insulting to
• 30:17
  people and people don't like to work
• 30:20
  with that. And that's really truthfully
• 30:23
  my my biggest beef with the guy is, you
• 30:26
  know, you're in a position that that
• 30:30
  people expect some level of decorum out
• 30:33
  of. And that's my really my biggest
• 30:36
  complaint about the guy. I'm allowed to
• 30:39
  be an personally. That's me. I'm
• 30:41
  not the president of the United States.
• 30:43
  But if I was a president, you know, you
• 30:46
  have to get along a little bit better.
• 30:48
  You know, I don't have to. That's it's
• 30:50
  only affecting me. But when you're
• 30:51
  acting on my behalf, damn it. Quit being
• 30:54
  so
• 30:56
  offensive across the board. Just stop
• 30:58
  it. I mean, you know, we we believe
• 31:01
  you're the greatest person on the
• 31:03
  planet. Okay? Let's just get past that.
• 31:05
  You are the greatest person on the
• 31:07
  planet. Quit saying it every 10 seconds
• 31:10
  and quit beating up on anybody who
• 31:12
  claims otherwise. You know, just deal
• 31:15
  with it and move on. Okay?
• 31:18
  I don't believe you're allowed to do
• 31:19
  that. Anyway, his trip to Mertz's trip
• 31:22
  to Beijing was different from routine
• 31:24
  diplomacy. He isn't going alone. He took
• 31:27
  a major economic delegation. So, Berlin
• 31:30
  and Brussels are seeing this visit as a
• 31:33
  pivotal, maybe even decisive. The claim
• 31:36
  is simple. China is shifting from
• 31:39
  important market to strategic necessity
• 31:43
  for a lot of Europe, especially for
• 31:44
  Germany because the US EU relationship
• 31:48
  is more strained.
• 31:50
  Access to the American market can no
• 31:53
  longer be treated as guaranteed. Now,
• 31:56
  I'm not saying that. I'm saying that
• 31:58
  several of the arguments I've heard
• 32:02
  this is what other people are saying
• 32:04
  around the world and it's important to
• 32:06
  know what other people are saying around
• 32:07
  the world.
• 32:08
  So a big rhetorical move in the
• 32:10
  commentary uh that that people are
• 32:12
  giving is remember when you know only a
• 32:15
  couple years ago Germany was talking
• 32:17
  decoupling from China and now it's
• 32:20
  reversing course. It's the old 180 or or
• 32:25
  if you're kayakalis the 360.
• 32:30
  Well I shouldn't say stuff like that. Uh
• 32:33
  actually that was on a verbach wasn't
• 32:35
  it? Sorry that wasn't sorry I didn't I
• 32:37
  always beat up on callus I just got in
• 32:38
  but that was Analina Verbach or whatever
• 32:41
  her name is. Um anyway this reversal of
• 32:44
  Germany's domestic economic you know
• 32:47
  problems are like a profound economic
• 32:50
  decline and de-industrialization
• 32:53
  shutting down Volkswagen plants that's
• 32:55
  unheard of. Uh the argument is that uh
• 32:58
  ideology and values uh talk which is all
• 33:01
  over Davos the last couple of weeks they
• 33:04
  can't feed or I'm sorry the Munich
• 33:06
  economic or security conference last
• 33:09
  week. Oh jeez uh global rulesbased order
• 33:13
  you know that that doesn't help you in
• 33:15
  an economic decline. So ideology and
• 33:18
  values talk won't feed an export-driven
• 33:20
  economy. So when factories and supply
• 33:23
  chains are hurting the you know such
• 33:25
  lofty goals are replaced by practical
• 33:28
  efforts you know raw material stable
• 33:30
  supply chain market access so Merit's
• 33:33
  Beijing trip was less of a grand
• 33:35
  strategy and a more of a force retreat
• 33:38
  from uh the uh you know world as it used
• 33:42
  to be. So economics is a first order
• 33:45
  driver. Germany's uh model has always
• 33:48
  relied heavily on export and industrial
• 33:50
  strength. auto sector
• 33:53
  has been the backbone that is now facing
• 33:56
  a serious structural decline
• 33:59
  not just in Europe but around the world
• 34:01
  mostly in China and that's important
• 34:02
  China isn't an external customer anymore
• 34:05
  it's a competitor
• 34:07
  well it is a customer but not at the
• 34:09
  level it used to be that has been eating
• 34:11
  the margins and market share of
• 34:13
  traditional European industrial
• 34:15
  champions and China remains a huge
• 34:17
  market but it's not the market where
• 34:19
  European firms automatically dominate
• 34:21
  anymore. So,
• 34:24
  you know, when you look at that and then
• 34:26
  you look at the EU's militarization
• 34:28
  agenda, you know, that Europe can't
• 34:30
  achieve militarization goals. You know,
• 34:33
  they want to go to war with Russia by
• 34:35
  2030. You know, that's that's a stated
• 34:38
  goal with these immorons. You know, we
• 34:41
  want to go to war. And how are we going
• 34:42
  to go to war if we can't supply
• 34:44
  ourselves? We can't just keep buying
• 34:46
  buying US weapons at triple the price.
• 34:49
  you know, we got to manufacture our own.
• 34:51
  And if we don't have any manufacturing
• 34:53
  capacity, how in the world are we going
• 34:54
  to do it? If China has all the capacity,
• 34:57
  we have to switch and uh make some sort
• 35:00
  of a trade arrangement with them. And
• 35:02
  so, uh you you know, you can't talk
• 35:06
  about strategic autonomy, defense
• 35:08
  expansion, and geopolitical,
• 35:11
  you know, issues that you want to uh
• 35:13
  control if your e economic base is dead.
• 35:18
  So that's why uh merits would like to
• 35:21
  seek better terms with China, especially
• 35:24
  if US tariffs and political friction
• 35:26
  under Trump reduce European sales
• 35:29
  opportunities in America. China has to
• 35:33
  become an alternative outlet. And so
• 35:35
  this is cold math, you know, this is all
• 35:37
  it is. And so but the trip isn't purely
• 35:40
  economic. um you know they're also
• 35:42
  trying to figure out some they want to
• 35:45
  be part of something related to Ukraine
• 35:48
  and they think that China can put
• 35:50
  significant pressure on Russia. So
• 35:52
  merits wants to press Beijing about
• 35:55
  Moscow and with the western strategy,
• 35:58
  you know, limit their alignment with
• 36:00
  Russia. They want to they're trying to
• 36:03
  pick off BRICS countries one by one. You
• 36:06
  know, they go to India and
• 36:09
  that's what's happening. So uh results
• 36:12
  are mixed. You know, BRICS isn't
• 36:14
  fracturing. You know, bricks isn't
• 36:17
  fracturing. And if anything, it's, you
• 36:19
  know, more confident, more assertive
• 36:22
  because of the the
• 36:25
  show going on around the world
• 36:27
  otherwise, you know, it's uh as far as
• 36:30
  trade and especially in the Trump realm,
• 36:32
  you know, because it's uh support or
• 36:36
  don't support. To me, it's not
• 36:37
  important. I don't control it, so what
• 36:39
  difference does it make to me? Um, I
• 36:42
  don't necessarily
• 36:44
  dislike, but I don't necessarily like,
• 36:48
  you know, what is going on and what
• 36:49
  Trump is is creating over there. I think
• 36:51
  he's creating instability and uh, you
• 36:54
  know, maybe that's uh, art of the deal.
• 36:56
  You know, that's what everybody tells
• 36:57
  me. Oh, it's just art of the deal. He's
• 36:59
  making a deal every time he goes
• 37:00
  somewhere. Well, you know, good for him,
• 37:02
  but that's uh, making the rest of the
• 37:04
  world make deals in other places. So
• 37:07
  divide and conquer you know is is what
• 37:09
  the structure has been regarding
• 37:16
  uh any BRICS countries they're trying to
• 37:19
  make friends with Brazil separately
• 37:22
  India separately China separately so I
• 37:26
  read an article yesterday that said that
• 37:29
  um Trump
• 37:31
  after he lost this tariff deal uh that
• 37:34
  over the weekend
• 37:36
  China who has been
• 37:39
  uh targeted with these tariffs and that
• 37:42
  the tariffs are going to be overturned
• 37:44
  and can't be charged. Trump is
• 37:47
  scrambling to cover them. But China has
• 37:51
  already said, "Well, that means we're
• 37:53
  going to cancel the deals and go back to
• 37:55
  the deals that we originally had,
• 37:57
  especially relative to soybeans." This
• 38:00
  was a long article on soybeans and they
• 38:02
  said soybean farmers in the United
• 38:04
  States were were just hurting until
• 38:08
  Trump came along and figured out uh this
• 38:12
  tariff deal and
• 38:15
  that the tariff deal wasn't necessarily
• 38:18
  to make money for the United States. It
• 38:21
  was to guide certain trade in certain
• 38:24
  directions. And part of that was trying
• 38:27
  to guide it toward
• 38:30
  uh away from Brazil, which is a huge
• 38:35
  I'm not sure what's going on. Trying to
• 38:38
  get some heat going here.
• 38:41
  Anyway, sorry to interrupt myself, but
• 38:43
  that after the tariff deal with the
• 38:46
  Supreme Court that over the weekend,
• 38:48
  China um cancelled a lot of contracts
• 38:52
  with US soybeans. I don't know the truth
• 38:55
  of this. I just saw an article on it and
• 38:56
  you know it may have been clickbait and
• 38:59
  uh I didn't have time to go out and
• 39:00
  research it but it would certainly make
• 39:02
  sense that if they got to pay triple for
• 39:05
  US soybeans why wouldn't they go to the
• 39:08
  bumper crop of Brazil last year in
• 39:10
  soybeans and buy cheap soybeans from
• 39:13
  Brazil which was their intent initially
• 39:15
  and so you know
• 39:18
  I'm not makes sense to me so you know
• 39:22
  divide and conquer all these things
• 39:23
  another theme in This was uh Europe's,
• 39:27
  you know, independent poll, you know,
• 39:29
  that they want to be more independent
• 39:32
  from uh, you know, being under the thumb
• 39:35
  of America, right? And they're not, you
• 39:39
  know, they're not independent at all.
• 39:42
  And so he's described as wanting to,
• 39:45
  Mertz is anyway, as wanting Europe to
• 39:47
  function as an independent strategic
• 39:49
  pole in a world that is no longer
• 39:51
  unipolar. and he's implying his own
• 39:53
  willingness to create some distance from
• 39:55
  Washington if necessary. But Merz
• 39:59
  doesn't want to break the alliance.
• 40:01
  Europe can't afford it. But so it's more
• 40:03
  about redefining and rebalancing than
• 40:05
  outright separation. The example that I
• 40:08
  heard was that Mertz is warning the
• 40:10
  United States against escalating tariff
• 40:12
  wars and signaling that Europe will not
• 40:15
  automatically follow Washington if trade
• 40:18
  policy remains a geopolitical weapon of
• 40:21
  choice of Trumpster. So you know it's
• 40:27
  there's so much going on in this respect
• 40:30
  that one uh court ruling that is where
• 40:33
  there are number of questions. So, does
• 40:36
  China see Europe as a serious strategic
• 40:38
  actor or as a divided and weakened block
• 40:41
  that still depends on America for
• 40:43
  everything security-wise? It's not just
• 40:45
  a rhetorical,
• 40:47
  you know, poke in the face. It's a it's
• 40:49
  the hinge of an argument. If Beijing
• 40:52
  believes Europe isn't strategically
• 40:54
  autonomous, I don't believe it is. If
• 40:56
  Europe cannot credibly act
• 40:58
  independently, then China has less
• 41:00
  incentive to make uh concessions to
• 41:03
  Germany and more incentive to simply
• 41:05
  wait out Europe while pursuing its own
• 41:08
  agenda.
• 41:09
  And that makes sense to me and I
• 41:12
  believe, you know, they're smart enough
• 41:13
  to play that. And at the deepest level,
• 41:16
  you know, people are asking whether the
• 41:19
  center of gravity is really shifting
• 41:22
  toward Asia and away from the west. I
• 41:25
  say it is. It might take a long time to
• 41:28
  get there, but it's going to go. You
• 41:30
  know, when you talk about
• 41:31
  ddollarization, it isn't, you know, the
• 41:34
  the the
• 41:36
  British pound survived for many many
• 41:39
  decades after as a as a command currency
• 41:43
  as is one of the largest forever. It
• 41:46
  isn't anymore. You know, the British
• 41:48
  pound, nobody cares anymore. you know,
• 41:51
  everybody's buying the euro or the
• 41:52
  dollar and the pound is no longer uh you
• 41:55
  know, after they lost their global
• 41:57
  influence, which is basically gone. Um
• 42:01
  well, in many realms anyway,
• 42:04
  uh their currency stayed around for a
• 42:06
  long time. And that's the same thing
• 42:08
  that's eventually in my opinion going to
• 42:11
  happen with the dollar because people
• 42:13
  are creating alternative structures. So,
• 42:16
  I may be wrong about that. We guess
• 42:18
  we'll see you in 100 years long after I
• 42:21
  am pushing up daisies. So
• 42:25
  deind industrialization
• 42:28
  uh in Germany. Germany can talk values
• 42:31
  all day long but it's industrial base
• 42:34
  needs some kind of energy materials and
• 42:36
  markets and where are they going to get
• 42:38
  it? They can pay double to Trump or they
• 42:42
  can switch and China uh Canada, China,
• 42:46
  France, China, Eastern Europe, China,
• 42:50
  Germany and China many others are
• 42:54
  actually becoming key economic partners.
• 43:00
  You know, China's belts and roads and
• 43:02
  all of that stuff. China isn't
• 43:05
  auditioning to be Europe's partner.
• 43:08
  Europe is auditioning to remain relevant
• 43:12
  because in an increasing world where the
• 43:15
  the Southeast Asia is taking precedence,
• 43:20
  they aren't. And so this is this is and
• 43:23
  and in an era of globalism declining
• 43:28
  in a one-sizefits-all
• 43:30
  declining
• 43:32
  I'm not so sure that uh you know that
• 43:35
  that uh it's not going to
• 43:39
  snowball into a larger and greater
• 43:41
  collapse in a quicker fashion. So there
• 43:44
  you have it. So the argument that
• 43:47
  Germany is isn't pivoting toward China
• 43:50
  um
• 43:53
  they say that it's not done out of
• 43:55
  enthusiasm, it's out of necessity.
• 43:58
  So and it's based upon Germany's
• 44:01
  economic slowdown, the broader
• 44:03
  stagnation hitting Europe. And you know
• 44:07
  if the American market is politically
• 44:10
  unpredictable
• 44:12
  and the Chinese market is more stable
• 44:16
  and it's
• 44:18
  a massive it's I mean seriously it it's
• 44:21
  uh the largest PPP uh personal per uh
• 44:25
  I'm sorry um purchase parity uh measure
• 44:30
  of GDP
• 44:32
  is uh China is the largest economy in
• 44:35
  the
• 44:36
  with what you can buy with your money.
• 44:39
  China is it and we're like number two or
• 44:41
  something. Um,
• 44:44
  so China's export-driven economy needs
• 44:47
  buyers and it needs stable supply chains
• 44:49
  and it needs access to raw materials and
• 44:52
  growth isn't currently coming from
• 44:54
  inside Europe at all. And so
• 44:58
  in my view the economic argument is that
• 45:02
  economic survival is pushing the rest of
• 45:05
  the world eastward instead of towards
• 45:08
  the US. That's what's happening. And we
• 45:11
  have become a
• 45:14
  I don't know a an economic warfare type
• 45:19
  of type of country especially under
• 45:21
  Trump. you know this is this is what I'm
• 45:23
  not saying it's wrong indifferent
• 45:25
  anything but that's how the rest of the
• 45:27
  world views it right and there's a
• 45:30
  broader global layer again it's bricks
• 45:33
  and the shifting center of gravity in
• 45:35
  the global economy western policy makers
• 45:38
  approach emerging powers individually
• 45:42
  engaging China here Brazil there keep
• 45:45
  pressure on Russia navigate relations
• 45:47
  with China in ways that try to prevent
• 45:50
  them from consolidating into a unified
• 45:53
  bricks organization,
• 45:55
  but that the multipolar shift is
• 45:58
  accelerating regardless of western
• 46:00
  strategy is certainly a valid argument.
• 46:04
  And uh you know picking them off one by
• 46:06
  one might work for a while but it's
• 46:09
  still the the changes are coming.
• 46:12
  Non-dollar transactions are growing
• 46:15
  everywhere and so and Asia's economic
• 46:19
  growth rate outpaces Europe's supply
• 46:22
  chains flow through Asian hubs instead
• 46:25
  of European hubs. technology innovation
• 46:28
  is no longer um western predominated.
• 46:33
  Um and if that trend continues, which it
• 46:36
  will, then Europe has to decide does it
• 46:38
  ma remain rigidly opposed
• 46:42
  to the east and has to stay aligned to
• 46:45
  the west or do they engage with rising
• 46:49
  centers of power? And that same thing
• 46:51
  goes to the discussions I've been having
• 46:52
  about Carney for a couple of weeks now
• 46:55
  and what he's doing because there was
• 46:56
  some uh massive discussion about uh that
• 47:00
  boy over the weekend. There were some
• 47:02
  interesting stuff on that and I wonder
• 47:05
  if that's my next part because it was a
• 47:08
  you know the opened questions of bricks
• 47:11
  I think is where I was going to go after
• 47:12
  that because that was the next part but
• 47:14
  I might skip it and go on to uh Carney
• 47:17
  because you know that part is an is
• 47:20
  almost an absolute you know I think um
• 47:26
  I I don't know lay laying out the case
• 47:28
  that Europe may be drifting toward China
• 47:33
  out of necessity.
• 47:36
  And then discussing the possibility that
• 47:38
  bricks does represent a growing
• 47:41
  multipolar counterweight like I do.
• 47:44
  There's another argument entirely and it
• 47:46
  goes like this because I've read this
• 47:48
  too.
• 47:50
  Uh BRICS is supposed to be a great
• 47:52
  challenger, kind of an alternative to
• 47:54
  the G7, a nucleus of a postdoll
• 47:58
  post-western economic order. But maybe
• 48:00
  it's not. Maybe it never was.
• 48:04
  People are going, "What did you say that
• 48:07
  Sam?" No, I I I'm I'm giving you a
• 48:09
  counterargument.
• 48:11
  Okay. bricks, you know, Brazil, Russia,
• 48:14
  India, China, South Africa is a a group
• 48:18
  of large emerging economies and it's
• 48:21
  growing faster than the traditional
• 48:23
  Western powers. It's not a military
• 48:26
  alliance or even a geopolitical block.
• 48:30
  It's a recognition of demographic
• 48:32
  weight, economic potential, and
• 48:35
  long-term growth. So, over time, it's
• 48:39
  evolved into something a little more
• 48:40
  political.
• 48:42
  The idea being that these countries Oh,
• 48:45
  did you see? And by the way, this Jai
• 48:48
  Shankar the uh the um uh foreign
• 48:51
  minister for um India. Oh my god, he was
• 48:55
  on the same dis at the economic forum uh
• 48:58
  uh I'm sorry the security forum in
• 49:00
  Munich with guess who? I saw this over
• 49:02
  the weekend and it was Lindsay freaking
• 49:06
  Graham
• 49:08
  and Graham got up in the middle of the
• 49:11
  presentation and left. He said his piece
• 49:15
  and Jai Shank Carr started beating up on
• 49:17
  him. I really wanted to play that whole
• 49:19
  piece and I didn't. But he started
• 49:21
  beating the hell out of him verbally
• 49:24
  going, you know, I don't know what
• 49:25
  you're talking about. And Lindsey Graham
• 49:27
  got up and left and it's like, you you
• 49:29
  need to support Ukraine. And they did
• 49:31
  the same thing to Billery um Hillary
• 49:33
  Clinton and uh took her took her down to
• 49:36
  the but that one has been more
• 49:38
  publicized. Uh the I think it was the
• 49:42
  Czech uh Czech foreign minister. Anyway,
• 49:44
  uh I I digressed there a little bit, but
• 49:47
  uh it was it was certainly the skeptical
• 49:51
  view because we like to go around the
• 49:53
  world and um and and dictate and
• 49:56
  dominate and say ridiculous things that
• 49:59
  no people go, "What did he just say?"
• 50:03
  I have no idea what Lindsey Graham is
• 50:05
  talking about. Well, you always know
• 50:06
  what Lindsey Graham's going to say. More
• 50:07
  war. More war, please. We need more.
• 50:11
  Let's bomb the hell out of somebody. you
• 50:13
  could just uh cookie cutter his speech
• 50:16
  anywhere. But anyway, bricks has
• 50:18
  expanded. It represents half the world's
• 50:20
  population
• 50:22
  and a significant share of the global
• 50:24
  GDP. It's like 42% now.
• 50:28
  And that does matter, but it doesn't
• 50:30
  necessarily mean they're ready to take
• 50:32
  over the planet tomorrow. So the core
• 50:34
  argument is in this second perspective
• 50:37
  is that bricks faces structural
• 50:39
  limitations that mean it's far less
• 50:41
  capable of reshaping the global systems.
• 50:45
  So because they have internal
• 50:47
  divergence, China and India have the
• 50:49
  long-standing border tensions. Brazil's
• 50:52
  political direction uh shifts with each
• 50:55
  election cycle. Russia's under
• 50:57
  sanctions. South Africa's domestic
• 51:00
  economic strain and internal problems
• 51:03
  big time. These are not countries that
• 51:06
  share unified strategic vision.
• 51:09
  They
• 51:10
  are frustrated with western dominance
• 51:13
  that they have but that doesn't mean
• 51:15
  they have a coherent alternative. And
• 51:17
  the other one is the dollar question. So
• 51:19
  for years people predicted the death of
• 51:21
  the dollar. Um I haven't predicted the
• 51:24
  death. I've predicted the slowdown of
• 51:26
  it. The dollar's dominance is tied to
• 51:29
  what? If you don't understand this,
• 51:30
  maybe you should. World War II
• 51:32
  institutions, Brettton Woods, the IMF,
• 51:35
  the World Bank, deep capital markets,
• 51:37
  and the sheer size and liquidity of US
• 51:40
  financial systems. So, the argument is
• 51:44
  straightforward. There isn't a ready
• 51:47
  replacement. A reserve currency isn't
• 51:50
  just about trade settlement. requires
• 51:52
  trust, deep bond markets, legal
• 51:55
  predictability,
• 51:56
  transparency, and scale. The euro can't
• 52:01
  displace the dollar. The yuan is tightly
• 52:04
  managed. The hypothetical bricks
• 52:06
  currency, which doesn't exist, would
• 52:08
  require countries to surrender monetary
• 52:11
  sovereignty to a shared framework, but
• 52:13
  they haven't done that. remember um and
• 52:15
  and when when I listened to this I
• 52:17
  thought it was interesting but
• 52:20
  I think he missed the point that the the
• 52:24
  there isn't a bricks currency. They're
• 52:26
  trying to create a a bricks exchange
• 52:30
  system and I've explained how that works
• 52:32
  before. So I don't believe this guy knew
• 52:35
  as much or as deeply about what they
• 52:38
  were trying to create. maybe because he
• 52:41
  wasn't at a bricks conference and uh and
• 52:43
  what they've been trying to create and
• 52:47
  it is
• 52:49
  uh successful so far um it is the
• 52:54
  ability to to trade in their own
• 52:58
  currency and not using the dollar and if
• 53:02
  they don't use the dollar it actually
• 53:04
  props up their own currency when they
• 53:07
  trade in their own currency.
• 53:10
  Because why is the US able to do with
• 53:12
  the dollar and dominate the planet for
• 53:15
  as long as it has is because everybody's
• 53:17
  using the dollar. So they have to have
• 53:19
  we just keep printing more and sending
• 53:21
  it all around the world. But the more
• 53:24
  people choose to use their own currency
• 53:27
  that means ultimately the less they're
• 53:29
  going to use of the US dollar. And so we
• 53:32
  can't finance our growth on the backs of
• 53:35
  dollars sent abroad. And that's what
• 53:38
  we've been doing for ever since Breton
• 53:40
  Woods. Was that 46 or something? Um I
• 53:45
  don't remember that year specifically,
• 53:46
  so don't quote me on that. So although
• 53:50
  you can talk about ddollarizing or
• 53:53
  reducing your dollar dependence,
• 53:55
  creating an alternative is a different
• 53:57
  matter. So even within bricks, um you
• 54:01
  know, there isn't a unified currency.
• 54:03
  Trade settlements, yes. uh expanded use
• 54:07
  of local currency, yes, but a genuine
• 54:11
  replacement for dollar dis dollar
• 54:13
  dominance. So far, not. Um
• 54:17
  this guy made an argument. It actually
• 54:20
  makes some sense that China towers
• 54:22
  economically
• 54:24
  over the rest of all the BRICS
• 54:26
  countries. And that's probably well, it
• 54:28
  is true. And that creates its own
• 54:31
  friction. smaller members might want
• 54:33
  some kind of a situation but they don't
• 54:36
  want to replace
• 54:38
  uh Washington with Beijing either and
• 54:40
  for India in particular they're the
• 54:43
  largest country in the world and uh they
• 54:47
  consider themselves a rising
• 54:49
  civilizational power and the natural
• 54:53
  leader of the global south and that
• 54:56
  doesn't automatically align with China.
• 54:58
  So the argument is this is bricks less a
• 55:01
  cohesive block and more an economic
• 55:04
  platform, a diplomatic forum where
• 55:08
  countries signal their dissatisfaction
• 55:10
  with western structure but stop short of
• 55:13
  binding commitment that truly disrupts
• 55:15
  the west. And there's also the question
• 55:18
  this more importantly for me anyway is
• 55:21
  the question of US behavior. The more
• 55:24
  aggressive Washington talks about
• 55:27
  punishing bricks or threatening tariffs
• 55:29
  or anything about ddollarization,
• 55:32
  the more attention and legitimate
• 55:34
  legitimacy it gives to the block itself.
• 55:38
  So public warnings about a bricks
• 55:41
  currency elevate the concept even if the
• 55:43
  currency is only theoretical.
• 55:47
  That's hard, isn't it? The US still
• 55:49
  accounts for roughly a quarter of global
• 55:51
  GDP. more importantly it remains central
• 55:54
  to global capital markets. So the
• 55:56
  thought is that it's going to be a very
• 55:59
  difficult to u step back from that. I
• 56:04
  agree with that. So but if bricks wants
• 56:06
  to evolve beyond a diplomatic forum you
• 56:09
  know where they're working together they
• 56:10
  have to coordinate a monetary policy
• 56:13
  they have to integrate their payment
• 56:14
  systems and they got to have a deep
• 56:16
  crossber capital market and then shared
• 56:20
  strategic goals.
• 56:22
  I say they've got the shared strategic
• 56:24
  goals for the most part. I say they're
• 56:27
  creating the integrated payment systems
• 56:30
  but taking a long time to do it just
• 56:32
  because it will. They don't have deep
• 56:34
  crossber capital markets although they
• 56:37
  are definitely investing in
• 56:39
  infrastructure where the west you know
• 56:42
  at least in America we are not we're not
• 56:45
  doing anything. Anybody and and I'd love
• 56:48
  for somebody to tell me I'm wrong in
• 56:49
  that. Is there any infrastructure stuff
• 56:52
  going on at all? But uh I know that
• 56:55
  changed the topic a little bit, but
• 56:57
  bricks will continue to grow in
• 56:59
  membership and symbolism,
• 57:02
  but it's not going to automatically
• 57:04
  translate into into power. right now,
• 57:06
  especially in Munich,
• 57:09
  and and over the last year, what they've
• 57:11
  been talking about is uh changing,
• 57:17
  modifying,
• 57:19
  updating, amending the UN, especially
• 57:24
  the the veto powers
• 57:28
  uh of certain uh actors.
• 57:32
  And
• 57:34
  I'm not sure that that it'll ever
• 57:36
  happen, but India's been bitching about
• 57:38
  it forever. You know, when when are you
• 57:40
  going to fix this? We're the largest
• 57:43
  country in the world and we don't have a
• 57:44
  seat at any table. You know, we're the
• 57:47
  wicked stepchildren over here. We're the
• 57:49
  evil children that are, you know, wet
• 57:51
  the bed over here. We're the bed
• 57:53
  wetters. You know, you won't even let us
• 57:54
  in the room. And and and you know,
• 57:57
  there's a point to that. So the question
• 58:00
  isn't whether bricks disappears, it's
• 58:02
  whether it transforms from a rhetorical
• 58:04
  symbol of multipolarity
• 58:07
  into an operational mechanism capable of
• 58:10
  delivering it because you know they keep
• 58:14
  swinging back and forth. So right now
• 58:16
  that transformation is uh anything but
• 58:19
  certain. So if you merge this with what
• 58:22
  Germany was saying, you know, and about
• 58:24
  where they're headed to China and
• 58:26
  they're hedging their bets, Canada
• 58:29
  hedging their bets, what you can say is
• 58:32
  on one side there's an argument that the
• 58:34
  West is weakening economically
• 58:37
  and that's pushing Europe toward China,
• 58:40
  accelerating multipolarity and
• 58:42
  strengthening bricks. But on the other
• 58:44
  hand, there's an argument to be made
• 58:46
  that BRICS doesn't have cohesion, lacks
• 58:49
  monetary integration, lacks
• 58:52
  institutional depth to displace
• 58:54
  dominance, at least for the foreseeable
• 58:57
  future. We're I I'm I'm trying to find
• 59:00
  out when the India uh because I believe
• 59:03
  BRIC's uh conference is in India this
• 59:05
  year and I'd love to go. I'm trying to
• 59:07
  figure out when when that is and see
• 59:09
  what I got to do to get a visa. I have
• 59:12
  to send away my passport to get a
• 59:14
  Russian visa again cuz mine expires in 3
• 59:17
  days. So, I shall be sending it away
• 59:20
  again to get a new uh a new Russian
• 59:22
  visa.
• 59:24
  Uh anyway,
• 59:29
  the center of gravity is moving east.
• 59:32
  The other side says, well, maybe that
• 59:33
  is, but that doesn't equal um
• 59:36
  governance. you know that the the
• 59:38
  gravity of economic gravity is moving
• 59:41
  but governance is going to stay in
• 59:43
  Washington. One side can talk about
• 59:45
  ddollarization gathering momentum but
• 59:48
  the other one says show me their bond
• 59:50
  market you know don't show me a press
• 59:52
  release.
• 59:54
  Uh one side says multipolarity is
• 59:56
  solidifying and the other one says well
• 59:59
  uh you know that's fragmentation
• 1:00:02
  masquerading as unity.
• 1:00:05
  And so this is where it's interesting.
• 1:00:07
  In my view, both arguments can be
• 1:00:09
  partially true at the same time.
• 1:00:13
  The West is weaker than it was before,
• 1:00:16
  but it's still institutionally dominant.
• 1:00:19
  BRICS is politically louder, but still
• 1:00:23
  operational
• 1:00:25
  in operational realm anyway. Uh somewhat
• 1:00:31
  I don't incoherence is the wrong word,
• 1:00:33
  unstable. um maybe disorganized would be
• 1:00:38
  better. Um and the dollar is gradually
• 1:00:41
  eroding in relative terms, but it's
• 1:00:44
  still unrivaled, you know. So, the real
• 1:00:47
  question isn't about whether BRICS is
• 1:00:49
  dead or not. It's about whether global
• 1:00:51
  power really is reorganizing in a way
• 1:00:54
  that makes uh traditional US western
• 1:00:58
  dominance less absolute.
• 1:01:01
  If anything, I think the way Trump acts
• 1:01:04
  internationally
• 1:01:07
  is pushing that faster. He's pushing the
• 1:01:10
  cares and the merits and the Mcron of
• 1:01:13
  the world into the arms of China and
• 1:01:16
  India and sending them over there. So,
• 1:01:18
  and and I'm, you know, that's just
• 1:01:20
  that's just a function of what he's
• 1:01:22
  doing. That's not I dislike Trump. I
• 1:01:24
  don't care. You know, I shouldn't say
• 1:01:26
  that. I do care, but it's not like I can
• 1:01:28
  control any of it. And I'm not making a
• 1:01:30
  judgment except for the way he acts,
• 1:01:33
  like I've already done. Um, but I I
• 1:01:37
  think there's an uh might be a better
• 1:01:39
  way to scramble an egg, but uh perhaps
• 1:01:43
  I'm not president. That's possible. And
• 1:01:46
  so therefore, you know, that's where the
• 1:01:48
  debate is standing. So is is
• 1:01:51
  are we watching the collapse of a system
• 1:01:55
  or the slow diffusion of the system, the
• 1:01:59
  slow disorganization of it? Is bricks
• 1:02:02
  the embryo of a new order or just a
• 1:02:05
  pressure valve for dissatisfaction with
• 1:02:08
  an old one? So that's where the debate
• 1:02:10
  is right now and that's where
• 1:02:14
  uh I land right in the middle of that
• 1:02:16
  you know and I I I think it's important
• 1:02:20
  to talk about so if we talk about
• 1:02:23
  whether brrics is rising or stalling
• 1:02:25
  whether Europe is drifting toward China
• 1:02:27
  then you know we have to come back to
• 1:02:29
  North America right and the world order
• 1:02:33
  isn't changing because emerging emerging
• 1:02:35
  powers are rising it's changing because
• 1:02:38
  traditional alliances are being
• 1:02:41
  destabilized from within.
• 1:02:44
  And one example that I talk about all
• 1:02:47
  the time is Canada or at least for the
• 1:02:49
  last month or so. For decades, the US
• 1:02:51
  and Canada have maintained one of the
• 1:02:53
  most deeply integrated bilateral
• 1:02:55
  relationships in the world. Longest
• 1:02:58
  international border unguarded,
• 1:03:01
  defense supply chains intertwined,
• 1:03:04
  intelligent networks fused. Um, we have
• 1:03:08
  five eyes. NORAD, jointly managing North
• 1:03:10
  American airspace, the longest
• 1:03:12
  undefended border in human history.
• 1:03:15
  70% of Canadian exports flow south. It's
• 1:03:20
  not diplomatic goodwill. It's structural
• 1:03:23
  integration.
• 1:03:25
  And now let's talk about these tariffs
• 1:03:27
  to which we started this with this whole
• 1:03:30
  show. The repeated ret refrain by Trump
• 1:03:34
  is that the tariff is a punishment.
• 1:03:37
  Tariff is leverage. Tariff is
• 1:03:39
  discipline. Tariff is retaliation.
• 1:03:43
  And the argument is that this mindset,
• 1:03:47
  this permanent transactional posture
• 1:03:50
  fundamentally alters how allies
• 1:03:54
  everywhere calculate the risk. Now, you
• 1:03:56
  could say, "What the hell do we care
• 1:03:58
  about Germany hanging out with China?
• 1:04:00
  What do we care? They're far away. They
• 1:04:03
  don't matter." But Canada's in our
• 1:04:05
  backyard and Canada's right here. So,
• 1:04:09
  the argument is that this permanent
• 1:04:11
  transactional posture alters risk for
• 1:04:15
  all of us. So when a country depends
• 1:04:17
  heavily on access to US market and
• 1:04:19
  suddenly faced with a 25% blanket
• 1:04:22
  tariff, threats of economic penalty,
• 1:04:24
  question of defense contribution, you're
• 1:04:27
  disloyal, and even rhetorical talk of
• 1:04:29
  annexation.
• 1:04:33
  We're taking Ontario.
• 1:04:35
  We're going to they're going to vote to
• 1:04:37
  join us. Hey, Governor so and so, wasn't
• 1:04:40
  it Trudeau? um
• 1:04:44
  is not interpreted as campaign
• 1:04:46
  theatrics. It's interpreted as risk and
• 1:04:50
  risk in finance has to be hedged. And so
• 1:04:54
  that's how the banker Mark Carney is
• 1:04:58
  looking at it. I don't believe he's
• 1:05:00
  looking at it emotionally. He certainly
• 1:05:02
  wasn't in Davos. He's not talking about
• 1:05:04
  it from a standpoint of ideology. you st
• 1:05:07
  although he prefers democracy in you
• 1:05:09
  know whatever form that he feels it is
• 1:05:12
  today. So when a leader with a
• 1:05:15
  background in central banking and crisis
• 1:05:17
  management hears persistent threats
• 1:05:21
  from Donald Javich and sees trade
• 1:05:24
  weaponized against his country, the
• 1:05:27
  response is not to shout back. He's
• 1:05:30
  diversifying. And so his Davos speech
• 1:05:34
  which I shared with you in its entirety
• 1:05:36
  is important in this framing. Um so
• 1:05:40
  public acknowledgement is that the
• 1:05:41
  postworld war II bargain tolerating
• 1:05:44
  American dominance in exchange for
• 1:05:45
  stability is no longer stable
• 1:05:49
  because of Trump that middle powers can
• 1:05:53
  no longer assume a predictable behavior
• 1:05:55
  from Washington. That economic
• 1:05:58
  integration itself can be weaponized.
• 1:06:00
  Now, see, it used to be allies didn't
• 1:06:04
  about instability or uh randomness
• 1:06:09
  of leadership in America. They just
• 1:06:12
  dealt with it because they knew overall
• 1:06:15
  they were all together. But under Trump,
• 1:06:17
  they don't see that in the in the
• 1:06:19
  instability before the failure to
• 1:06:21
  enforce rules only applied to other
• 1:06:24
  countries.
• 1:06:26
  You know, Europe would never say
• 1:06:28
  anything about that. But wait a minute,
• 1:06:29
  that's not what we do if it's any one of
• 1:06:32
  us or the US. We we only, you know, why
• 1:06:34
  are we doing that against uh I don't
• 1:06:36
  know, Sri Lanka. Why are we doing that
• 1:06:38
  against Morocco? It's like, well,
• 1:06:40
  because the US said so, you know, we
• 1:06:42
  know you would do it against China and
• 1:06:44
  you know, we'd be all over, you know,
• 1:06:45
  jumping up and down, too. But but
• 1:06:47
  Spain's our friend. Why are you doing
• 1:06:48
  that, Spain? Well, they wouldn't say
• 1:06:51
  anything, but now they are. And uh
• 1:06:55
  that's the instability now. So, joining
• 1:06:58
  the European Union Security Action for
• 1:07:01
  Europe program, a $150
• 1:07:04
  billion defense financing mechanism
• 1:07:07
  designed to reduce European dependence
• 1:07:09
  on American supply chains.
• 1:07:13
  This is the first uh discussion of all
• 1:07:16
  of this. This is Canada becoming the
• 1:07:20
  first non-European country admitted to
• 1:07:24
  European Union security action for
• 1:07:26
  Europe. So participating in Eurogroup
• 1:07:30
  level discussions reserved for Eurozone
• 1:07:32
  members and without the United States by
• 1:07:36
  the way and advancing multilateral
• 1:07:38
  defense financing structures. They
• 1:07:40
  talked about that at the uh uh Munich
• 1:07:44
  conference last week too.
• 1:07:46
  Canada is reassessing major procurement
• 1:07:49
  contracts, submarines, fighter jets.
• 1:07:51
  They're looking toward Europe and Asian
• 1:07:53
  suppliers rather than defaulting to
• 1:07:55
  American manufacturers. So, in
• 1:07:58
  isolation, each move is looks, you know,
• 1:08:02
  technical, but if you add them all up,
• 1:08:04
  it looks like a redesign is what I say.
• 1:08:07
  And here's the larger strategic tension
• 1:08:09
  that connects back to bricks and what I
• 1:08:11
  was talking about this global shift. If
• 1:08:13
  allies are beginning to hedge against
• 1:08:16
  America because it's unpredictable,
• 1:08:19
  then the shift toward multipolarity
• 1:08:21
  isn't u necessary
• 1:08:25
  and it isn't necessarily a unified
• 1:08:28
  bricks um activity, currency,
• 1:08:32
  alternative reserve system doesn't
• 1:08:34
  matter. It's just diversic
• 1:08:36
  diversification
• 1:08:38
  away from reliance on the dollar, which
• 1:08:41
  is what Canada is signaling big time.
• 1:08:43
  There was some argument over the weekend
• 1:08:45
  as well about that bridge again, the uh
• 1:08:48
  the Gordy How uh bridge, I think it's
• 1:08:51
  called that
• 1:08:54
  uh Carney and whatever the guy's name,
• 1:08:57
  the the uh um Premiere, I think they
• 1:09:00
  call him. And uh and u
• 1:09:04
  um
• 1:09:05
  man, was it Ottawa that is um saying
• 1:09:09
  that they're opening it anyway and
• 1:09:10
  Trump's not going to stop it. Uh we'll
• 1:09:13
  see about that. I don't know what's
• 1:09:14
  going to happen, but uh polarity can
• 1:09:17
  emerity can emerge not from coordination
• 1:09:20
  but from everybody having hedging their
• 1:09:22
  bets and that's what's going on. So at
• 1:09:24
  the same time, the argument doesn't
• 1:09:26
  claim that Canada's leaving the United
• 1:09:28
  States. I mean no rads continuing
• 1:09:31
  intelligence sharing continues trade
• 1:09:33
  does continue but the nature of the
• 1:09:35
  relationship is definitely changing
• 1:09:38
  Trump with everything with Trump is
• 1:09:40
  transactional
• 1:09:42
  relationship is only a transaction you
• 1:09:44
  know you don't want to have a wife if
• 1:09:46
  that relationship is transactional
• 1:09:49
  if you know what I mean and uh you know
• 1:09:52
  strange bedfellows right if Washington
• 1:09:56
  treats alliances as a transaction allies
• 1:09:59
  are going to reciprocate and that has
• 1:10:01
  consequences. So defense supply chains
• 1:10:04
  um once procurement contracts shift
• 1:10:06
  toward German, South Korean, Swedish
• 1:10:08
  firms, the relationships become embedded
• 1:10:11
  for decades. You got maintenance
• 1:10:12
  infrastructure that they build, they
• 1:10:15
  have training pipelines, uh ecosystems
• 1:10:18
  adapt, right? And those structures don't
• 1:10:20
  revert simply because a future
• 1:10:22
  administration softens its rhetoric.
• 1:10:25
  Capital is following infrastructure and
• 1:10:28
  architecture. So the argument says that
• 1:10:30
  tariff first diplomacy accelerates
• 1:10:33
  structural diversification among allies.
• 1:10:37
  That's what's going on. And this is
• 1:10:39
  where the world order conversation is
• 1:10:41
  more serious because the issue isn't
• 1:10:43
  simply whether China rises. It's whether
• 1:10:46
  US policy pushes allies toward building
• 1:10:49
  parallel arrangements. And it is doing
• 1:10:52
  that right now. That's what Canada is
• 1:10:55
  doing. Now I don't mean gee the sky is
• 1:10:58
  falling you know everybody get an
• 1:10:59
  umbrella but these are uh realities you
• 1:11:04
  know that that we are facing. So the
• 1:11:06
  Trump doctrine is clear trade deficits
• 1:11:10
  signify weakness. Tariffs are corrective
• 1:11:12
  actions. Economic integration is
• 1:11:15
  leverage. Everything within is leverage.
• 1:11:18
  Everything and everyone is
• 1:11:20
  transactional.
• 1:11:22
  We're not in this because we like you.
• 1:11:24
  We're in this because we expect this.
• 1:11:27
  And we're not in this because we share
• 1:11:29
  common goals. We're in this because you
• 1:11:32
  need us more than we need you. So get on
• 1:11:35
  board or, you know, get off and fall
• 1:11:38
  behind is is Trump's continual argument.
• 1:11:41
  Now, that's one way to run a railroad. I
• 1:11:45
  question whether it's the correct way
• 1:11:47
  long term. You know, everybody says that
• 1:11:50
  he's just trying to steer this for a
• 1:11:51
  little bit and correct all the BS that's
• 1:11:54
  happened over the previous years.
• 1:11:57
  Well, the strain may be too much.
• 1:12:00
  Correction might equal blowing up. I
• 1:12:03
  don't know. We shall see. And and and
• 1:12:06
  I'm not claiming I'm I'm God's gift to
• 1:12:08
  the planet on understanding these
• 1:12:09
  issues, but I certainly see a different
• 1:12:12
  uh a different point of view than many
• 1:12:15
  uh counterparts. But the counterargument
• 1:12:17
  from middle powers is equally clear.
• 1:12:20
  Over reliance equals vulnerability.
• 1:12:24
  You know, according to Trump, it's all
• 1:12:25
  transactional. But these guys are look,
• 1:12:27
  if we have to rely only upon you,
• 1:12:30
  obviously if we rely and you decide to
• 1:12:32
  pull the rug out from under us, look
• 1:12:34
  what's happening. Dependence, they have
• 1:12:36
  to reduce it. Hedging is a rational
• 1:12:39
  decision in that environment. So when
• 1:12:41
  both sides adopt transaction logic,
• 1:12:44
  alliances lose their strategic
• 1:12:47
  elasticity
• 1:12:48
  and the broader implication extends
• 1:12:51
  beyond China, right? I mean Canada if if
• 1:12:56
  and especially with China going in
• 1:12:59
  Canada going into China. So if Europe
• 1:13:02
  sees tariffs as political instruments
• 1:13:04
  too, which they do, if Asian partners
• 1:13:07
  see export access as conditional, which
• 1:13:10
  they do, if middle powers conclude that
• 1:13:13
  US market is no longer reliably open,
• 1:13:17
  which they do, then diversification is
• 1:13:20
  their own survival strategy. They're
• 1:13:22
  trying to survive. They're trying to
• 1:13:24
  diversify to derisk for their own
• 1:13:27
  population, their own form of
• 1:13:29
  nationalism. Everything Trump is doing,
• 1:13:32
  arguably he's doing for us to make
• 1:13:34
  America great again, right? Well,
• 1:13:37
  wouldn't the other countries necessarily
• 1:13:40
  try to make themselves great again or
• 1:13:43
  make themselves or paint themselves in
• 1:13:46
  the best possible light for their own
• 1:13:49
  children and their own populations?
• 1:13:52
  Well, of course, we've seen a rise in
• 1:13:54
  nationalism globally, and the
• 1:13:57
  diversification is their own survival
• 1:14:00
  strategy. Diversification necessarily
• 1:14:03
  includes having alternative pathways to
• 1:14:06
  get the same thing done. It's not
• 1:14:08
  anti-American.
• 1:14:10
  It's
• 1:14:12
  protectionism of their own brand. So,
• 1:14:15
  this goes right back to the bricks
• 1:14:17
  debate. Even if bricks lacks cohesion,
• 1:14:21
  even if no common currency emergence,
• 1:14:24
  even if dollar dominance is intact, the
• 1:14:27
  erosion of trust among Western allies
• 1:14:30
  accomplishes something bricks could
• 1:14:32
  never do alone.
• 1:14:34
  It's fragmenting the institutional core
• 1:14:37
  of the postwar order. Even though the US
• 1:14:41
  still represents 25% of global GDP,
• 1:14:45
  75% is still elsewhere. And if that 75%
• 1:14:50
  starts to trade more with itself, Europe
• 1:14:53
  with Asia, Canada with Europe, India
• 1:14:55
  with China, regional blocks
• 1:14:58
  cross-linking, which they are, the
• 1:15:00
  relative weight of the US declines not
• 1:15:03
  through collapse but through dusion
• 1:15:06
  and tariffs will accelerate that um
• 1:15:10
  environment, that diffusion.
• 1:15:13
  And there's another structural layer
• 1:15:15
  here. Energy and technology. The AI
• 1:15:17
  race, electrification, data centers.
• 1:15:20
  These need enormous energy input. US
• 1:15:24
  energy position is strong compared to
• 1:15:26
  most countries. But scaling AI
• 1:15:29
  infrastructure is going to require
• 1:15:30
  sustained power expansion. Other
• 1:15:33
  regions, particularly parts of Asia, are
• 1:15:35
  building energy capacity at scale.
• 1:15:38
  Nuclear everywhere. Russia's building
• 1:15:41
  nuclear reactors in in uh India, lots of
• 1:15:44
  them. If technology
• 1:15:47
  competition intersects with trade
• 1:15:49
  fragmentation, which it is, the
• 1:15:52
  incentive to be self-sufficient
• 1:15:54
  regionally, is just going to grow. So
• 1:15:57
  that brings us back to the central
• 1:15:59
  claim. The world order isn't unraveling
• 1:16:02
  in a single dramatic rupture.
• 1:16:06
  It's just being
• 1:16:08
  reworked, repriced,
• 1:16:10
  um, discounted.
• 1:16:13
  Allies are calculating the risks.
• 1:16:15
  Emerging powers are testing
• 1:16:18
  institutional alternatives. Middle
• 1:16:20
  powers are exploring parallel groups.
• 1:16:24
  Tariffs might achieve a short-term
• 1:16:26
  success in concession, but they also
• 1:16:29
  send a long-term signal. And long-term
• 1:16:33
  signals alter long-term behavior. So if
• 1:16:36
  the most integrated bilateral defense
• 1:16:38
  relationship in the world begins
• 1:16:40
  building parallel supply chains and if
• 1:16:43
  the closest intelligence partners begin
• 1:16:45
  framing the relationship as
• 1:16:47
  transactional and if hedging is
• 1:16:49
  normalized which it's becoming then the
• 1:16:52
  architecture of western alliance changes
• 1:16:54
  quietly and durably for the future and
• 1:16:57
  that change feeds into the broader
• 1:17:00
  multipolar debate and continuation
• 1:17:04
  because multipolarity doesn't require a
• 1:17:07
  anti-western block. It requires
• 1:17:10
  decentralization from the first one and
• 1:17:12
  that's it. It requires middle powers
• 1:17:15
  deciding that no single partner is
• 1:17:16
  indispensable and that what makes uh the
• 1:17:20
  world great isn't one member. So the
• 1:17:24
  shift isn't a dramatic headline. It's a
• 1:17:26
  spreadsheet. It's a contract. It's a
• 1:17:28
  multilateral financing framework. It's
• 1:17:31
  an invitation to a new table of Germany
• 1:17:34
  seat sitting down in China with China.
• 1:17:38
  It's a hedge all of it. So when you
• 1:17:41
  combine all of these, Germany
• 1:17:43
  recalibrating toward China, bricks
• 1:17:45
  struggling between symbolism and
• 1:17:46
  cohesion, Canada restructuring risk
• 1:17:49
  exposure in response to tariff politics,
• 1:17:52
  and with Trump still rising above it all
• 1:17:57
  as the tariff god. He's going to, you
• 1:17:59
  know, he's doubled down. He's, well,
• 1:18:02
  instead of 10%, let's make it 15
• 1:18:04
  worldwide. And I'm going to use I'll
• 1:18:05
  just use a different way. They haven't
• 1:18:06
  taken all my tools, and they're dummies
• 1:18:08
  anyway.
• 1:18:10
  basically. So, that's the argument. Now,
• 1:18:13
  I want to do this before I leave leave
• 1:18:15
  today. I've been trying to share with
• 1:18:17
  you some culture
• 1:18:19
  and uh I've finished up a tiny bit
• 1:18:21
  early, so I'm going to go ahead and do
• 1:18:22
  it and uh see where I go because I like
• 1:18:27
  music of all kinds and varieties.
• 1:18:30
  There's even some country and western
• 1:18:34
  that I that I like. And uh I like big
• 1:18:39
  band. I like uh debusy. I like all kinds
• 1:18:44
  of of music. And I've been listening uh
• 1:18:49
  and and when I'm riding in my car, I
• 1:18:51
  have like uh I I can't remember how many
• 1:18:54
  songs I have on my on my iTunes um
• 1:18:59
  playlist, but last last time I remember
• 1:19:02
  looking it was about 18,000 songs of
• 1:19:06
  different varieties. And so I I get a
• 1:19:09
  lot of um variety that just pops up. And
• 1:19:15
  one of them came up that it's a Russian
• 1:19:18
  song again. It's a Russian one and I
• 1:19:20
  forgot all about this song. And uh this
• 1:19:23
  is a this is a great it's a really good
• 1:19:25
  song. I like it. And you won't
• 1:19:27
  understand a word of it if you don't
• 1:19:29
  speak Russian. But it's a uh it I I like
• 1:19:32
  the beat of it. And uh I'm going to if I
• 1:19:37
  can find the damn thing, I'm going to
• 1:19:40
  share it with you just because. And if
• 1:19:44
  you don't like the beat, well, I
• 1:19:46
  apologize upfront.
• 1:19:49
  That's how it goes sometimes.
• 1:19:53
  Here, let's see. There it is. I have
• 1:19:55
  found it and I like this song. So, here
• 1:19:58
  we go. We're going to play it. No
• 1:19:59
  interruptions from the old Sam. And then
• 1:20:03
  we'll ease on out of here. Uh after that
• 1:20:29
  back.chech.
• 1:21:09
  every
• 1:21:43
  Foreigne
• 1:22:13
  preacher.
• 1:22:26
  is
• 1:22:28
  Every young
• 1:22:52
  Fore!
• 1:23:03
  Foreign! Foreign!
• 1:23:13
  The Buddha is gone.
• 1:23:39
  I like that song. Um that is uh Arena
• 1:23:42
  Kru and Alexe Briansil
• 1:23:47
  and uh it's from their album Lubia
• 1:23:50
  which is favorite songs and that one is
• 1:23:54
  called
• 1:23:56
  Mua um as if we were still together
• 1:23:59
  basically and and and it's kind of a
• 1:24:02
  cool thing. It's basically a guy and a
• 1:24:05
  girl uh going through a park or
• 1:24:07
  something and they bump into each other
• 1:24:09
  and uh they haven't seen each other in
• 1:24:11
  seven years and they used to date and
• 1:24:13
  they talk about you know hey you know
• 1:24:16
  what's going on can I walk with you and
• 1:24:18
  then they walk and then they're going
• 1:24:20
  why aren't we together again basically
• 1:24:22
  and it's I I just like the beat and uh
• 1:24:26
  the it it was interesting song anyway I
• 1:24:29
  hope you don't uh dislike that. I do
• 1:24:31
  that every once in a while. Let's throw
• 1:24:33
  out some songs out there that I
• 1:24:34
  particularly care for. And this was one
• 1:24:37
  of them. And they have another one
• 1:24:38
  called um
• 1:24:41
  Something About Mome. We are We Are
• 1:24:44
  Together. And they have something else.
• 1:24:46
  Uh but and I really like that one, too.
• 1:24:50
  But uh uh that that's a pretty good
• 1:24:51
  song. And uh like I I always had this
• 1:24:54
  complaint about some US artists. Uh, I
• 1:24:57
  always used to really like um
• 1:25:00
  who was the guy that spoke uh really
• 1:25:04
  deep voice and and he he just strange
• 1:25:07
  song, just really weird. I wish I could
• 1:25:09
  remember who he was, but they had maybe
• 1:25:11
  one or two albums, but uh he he always
• 1:25:14
  spoke really really deep and uh just
• 1:25:16
  strange um topics that that didn't
• 1:25:19
  necessarily make a lot of sense. And uh
• 1:25:22
  man, I wish I could remember what it
• 1:25:24
  was, but he he'll cycle through on my um
• 1:25:27
  God shuffled his feet. Whoever that guy
• 1:25:29
  was
• 1:25:31
  uh after seven days, he was quite tired,
• 1:25:35
  so God said, you know, um uh wanted to
• 1:25:39
  have a picnic or something else after
• 1:25:40
  that. And um anyway, that guy I always
• 1:25:44
  liked to listen to as well, but all of
• 1:25:46
  his songs tend to sound the same because
• 1:25:48
  he has that one dramatic voice. Well,
• 1:25:51
  these guys, uh, Krug and, um, uh,
• 1:25:54
  Brians, their songs tend to sound the
• 1:25:57
  same, and they always play off each
• 1:25:59
  other, and they've got those. And so,
• 1:26:00
  I've got a couple of favorites, but it's
• 1:26:02
  not like I'll listen to them all the
• 1:26:04
  time because
• 1:26:06
  they kind of sound all the same. Kind of
• 1:26:09
  like the God shuffled his feet dude. And
• 1:26:11
  although I really like the songs, it's
• 1:26:13
  I'm not sure I could handle 10 of the
• 1:26:15
  same exact songs. Anyway, I believe that
• 1:26:18
  is going to end it for me today. I hope
• 1:26:21
  you enjoyed the uh the show. Wait a
• 1:26:25
  second. Look at this. Hold on. Check
• 1:26:26
  this out. Um let's let's do this for
• 1:26:29
  just a second just because I saw it.
• 1:26:30
  Here's another one.
• 1:26:34
  This is a
• 1:26:36
  football game.
• 1:26:52
  My goodness.
• 1:27:10
  That's like watching for me. That's like
• 1:27:12
  watching um the hell was her name? The
• 1:27:14
  one who died the that had such a
• 1:27:17
  beautiful voice.
• 1:27:20
  And she would go out at a football game
• 1:27:23
  or wherever. Oh my god. And and uh you'd
• 1:27:27
  listen to it and it just, you know, it's
• 1:27:30
  freaking awesome. And here she is out
• 1:27:32
  there doing the same thing. They do the
• 1:27:34
  same thing culturally that we do in
• 1:27:36
  other parts of the world. And uh so it's
• 1:27:39
  interesting to see that stuff. And that
• 1:27:41
  is the Russian um
• 1:27:46
  uh what do they call it? National
• 1:27:48
  anthem. That's the Russian national
• 1:27:49
  anthem being sung at uh uh looks like
• 1:27:53
  it's a club Mosva. Looks like it's the
• 1:27:55
  the Russian national soccer team
• 1:27:58
  playing. And stadium's full, you know,
• 1:28:01
  it's a big ass stadium full of people.
• 1:28:04
  They do the same stuff that we do. and
• 1:28:06
  and watching it is is pretty cool. And
• 1:28:09
  they have the same same or better cars,
• 1:28:11
  the same sorts of things. They have uh
• 1:28:14
  going through the stand. Oh, there's a
• 1:28:16
  guy with some long hair. You know, they
• 1:28:17
  they they have the same types of Anyway,
• 1:28:21
  we're we're far more similar than we are
• 1:28:23
  not or dissimilar. That's what I have to
• 1:28:26
  say about it. Anyway, that's all we've
• 1:28:28
  got today. I am Samuel Trap. Uh happy
• 1:28:30
  Monday to every single one of you and
• 1:28:34
  I've uh very very much enjoyed my
• 1:28:36
  weekend. It's a freaking cold uh still
• 1:28:40
  in the real estate of the art studio
• 1:28:44
  freezing my little dads off and I don't
• 1:28:48
  really like that. Um it's not good. Um
• 1:28:51
  and I'm wearing a coat even and I'm
• 1:28:54
  still sniffling so it's not good. the um
• 1:28:59
  uh anyway, join me again tomorrow. Join
• 1:29:02
  me every day at the Lake Ozark Real
• 1:29:05
  Estate Studio. You can listen to all of
• 1:29:08
  our uh recorded shows at uh
• 1:29:11
  damradio.com/mpodcast.
• 1:29:16
  You can go out to
• 1:29:17
  internationalflavor.com
• 1:29:19
  and get all of my shows
• 1:29:23
  and repeat them because we like it when
• 1:29:25
  you do that. Um, you have a very nice
• 1:29:27
  day and once I can figure out what the
• 1:29:29
  hell I'm doing, I can uh log out of here
• 1:29:33
  and see you later. Um, thanks for being
• 1:29:38
  with us this morning.