Latest / International Flavor: Where the Truth Tastes Better / Tariff Takedown, Berlin’s Beijing Bend, and BRICS Bickering: Trump’s IEEPA Loss, Canada’s Hedge, and a Russian Music Coda

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Tariff Takedown, Berlin’s Beijing Bend, and BRICS Bickering: Trump’s IEEPA Loss, Canada’s Hedge, and a Russian Music Coda · International Flavor: Where the Truth Tastes Better

0:00
Hello, good morning.
0:01
Welcome.
0:02
I am Samuel Trapp coming to you live
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from the freezing cold Lake Ozark real estate
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of the art studio where I've got my
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uh parka on I've got uh several layers
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of warmth And it's just not working Um,
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well there you have it.
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That is where we are today.
0:31
Um, we have A lot of interesting topics
0:35
to get into today I wanted to start
0:37
with just because I thought it would be
0:39
fun A bit of an analysis if you
0:43
want to call it that.
0:44
Um on the old Trumpster and then i'm
0:51
gonna weave into You know the news of
0:53
the week I thought I'd do it in
0:55
reverse but I don't know There's a lot
0:58
of interesting stuff going on in the world
1:00
But I think yeah, you know like the
1:02
hospital ship Trump has sent in a hospital
1:06
ship to greenland.
1:08
How exciting is that?
1:09
Yeah, these people need a hospital ship because
1:11
they don't have anywhere to take care of
1:14
people basically And so well, why not?
1:19
send out a Ship And take care of
1:23
these poor poor greenlanders and then he was
1:27
rejected by jen's frederick nielsen He rejected the
1:31
president's offer to boost the island's health care
1:35
with a medical boat It's a it's a
1:41
mixed up muddled up shook up world except
1:45
for lola, of course, but Here we are
1:49
very strange events going on I wanted to
1:52
go into So according to supreme court opinion,
1:56
I went ahead and read it.
1:58
Uh Although that isn't my bag anymore, but
2:02
I still try to pay attention every now
2:04
and again.
2:05
Um If I don't drink warm coffee, it'll
2:10
turn into an ice cube while i'm sitting
2:12
in here So I have to drink it
2:13
before it hardens, you know But according to
2:18
the supreme court opinion the court did two
2:21
big things at once in this wonderful case
2:25
file which Let's see Supreme court united states
2:30
learning resources inc and others versus trump Donald
2:36
j won each president of the united states
2:40
and others There's a certiorari Uh before judgment
2:44
to the united states court of appeals for
2:47
the district of columbia circuit Argued august.
2:52
I'm, sorry argued november 5 2025 and decided
2:56
february 20 So you can talk about um,
3:01
I always like to put in but there
3:03
are such long questions presented um that they
3:07
are even and it's Oh, let's see if
3:11
I can read them all I just wanted
3:13
a short synopsis and the trouble is Is
3:16
all these guys are very proud of themselves.
3:18
And so therefore they will write these dissertations
3:21
They drag on and on and on and
3:24
they can't just tell you what the hell
3:26
they're doing and it's depressing So these things
3:30
go on for days so the question presented
3:34
is whether The international emergency economic powers act
3:39
otherwise known as the ieepa Authorized the president
3:44
to impose tariffs c 91 statutes 1626 shortly
3:50
after taking office president trump sought to address
3:54
two foreign threats the influx of illegal drugs
3:57
from canada mexico and china presidential proclamation number
4:03
10886 The president determined that drug influx had
4:10
created a public health crisis and that the
4:14
trade deficit had led to the hollowing out
4:17
quoted of the american manufacturing base and undermined
4:22
critical supply chains President declared a national emergency
4:27
as to both threats deeming them Unusual and
4:32
extraordinary and invoked his authority under the ieepa
4:37
to respond so he Said he was using
4:41
the international emergency economic powers act.
4:44
He imposed tariffs to deal with each threat
4:47
As to the drug trafficking the president imposed
4:50
a 25 percent duty on most canadian and
4:53
mexican imports And a 10 percent duty on
4:57
most chinese imports Uh-huh as to trade
5:02
deficit reciprocal tariffs The president imposed a duty
5:06
on all imports from all trading partners of
5:10
at least 10 With dozens of nations facing
5:15
higher rates Since imposing each set of tariffs.
5:20
The president has issued several increases reductions and
5:24
modifications Petitioners in learning resources and respondents in
5:29
vos selections filed suit alleging that ieepa does
5:36
not authorize reciprocal or drug trafficking tariffs the
5:42
learning resource plaintiffs Two small businesses sued in
5:46
the u.s. District court for the district
5:47
of columbia that court denied the government's Motion
5:51
to transfer the case to the u.s.
5:54
Court of international trade C.i.t and
5:58
granted plaintiffs motion God, there's such small type
6:03
Hello, how's the family?
6:04
How do I get to see it larger?
6:07
This is you know, not my computer.
6:09
Got it.
6:09
It's just driving me bananas Uh at any
6:14
rate, um Now I can't see where I
6:18
was uh Let's see the plaintiffs and granted
6:22
the plaintiff's motion for preliminary injunction Concluding that
6:25
ieepa did not grant the president the power
6:29
to impose tariffs Five other plaintiffs and 12
6:34
states sued in the Court of international trade
6:39
that court granted summary judgment for the plaintiffs
6:43
And the federal circuit sitting on bunk Affirmed
6:47
in relevant part that means on bunk means
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everybody the whole court not just three Uh
6:52
concluded that ieepa's grant of authority to regulate
6:57
importation Did not authorize the challenge tariffs which
7:02
are unbounded in scope amount and duration You
7:08
know what that actually makes sense, uh Strange,
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uh, the government filed a petition for certiorari
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to the uh I'm having trouble reading because
7:20
the type is so small the government filed
7:22
petition for certiorari in Vos elections and the
7:26
learning resources plaintiffs filed a petition for certiorari
7:30
certiorari before judgment the court granted the petition
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and consolidated the two cases rightly so Ieepa
7:41
does not authorize Held held.
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This is the ruling ieepa international economic emergency
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powers act does not authorize the president to
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impose tariffs the judgment In number 24 1287
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is vacated and the case remanded with instructions
8:02
to dismiss for lack of jurisdiction The judgment
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in number 25 250 is affirmed now, I
8:09
don't remember which one is which um, but
8:12
they they dismissed one and I believe they
8:14
said that the court of appeals didn't have
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uh, The district court did not but the
8:20
court of international trade did um, I don't
8:22
think it's vice versa But I think it's
8:23
that sorry.
8:24
I'm, you know, I read it late last
8:26
night Um at any rate article one section
8:29
a to the constitution Well, the chief justice
8:31
delivered the opinion in court with respect to
8:34
parts one and two way i'm not going
8:35
to read this Whole judgment to you.
8:37
It's too freaking small.
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I can't see it And I don't know
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what i've done here to jack it all
8:41
up, but I can't see it And it
8:44
won't let me enlarge.
8:45
So anyway, that is the Ruling that we
8:50
are talking about here today, and i'm going
8:54
to cover a little bit of uh, some
8:56
of that uh for you If we will
9:00
because i've got a lot of other topics
9:02
to get into as well, but I think
9:05
I was going to finish with this, but
9:07
I I decided to reverse it and What
9:11
I thought I would do was talk about
9:13
the dissenting views first.
9:15
Okay um The and what the dissenters said
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then they gave three broad pillars Uh, the
9:24
three of the the three dissenting justices They
9:27
said that ie epa's language is broader than
9:31
the majority admits Okay so the majority Said
9:34
no, it's not that broad doesn't say it
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if the court wanted to say it or
9:37
if the legislature wanted to say it They
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would have said it and they didn't say
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it now.
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That's something that I typically say i'm a
9:43
strict How do you want to put this
9:45
not that I matter but i'm a strict
9:47
constructionist?
9:48
Okay of of what um What is um?
9:53
What I believe that the constitution requires what
9:57
I believe everyone, uh, you know, I I
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believe in strict lanes You stay in your
10:02
lane The legislature does something it grants power.
10:07
You hear me lecture about this crap all
10:08
the time that the the lecture the the
10:11
lecture the uh legislature uh legislative branch Grants
10:18
authority they create the laws on behalf of
10:21
the people The executive branch blesses that creation
10:24
of the law and they have the right
10:26
to over to say no But once those
10:29
two have spoken the law is okay And
10:33
then the interpretation of that law goes to
10:36
the court And if the court comes back
10:38
and says look you guys jacked it all
10:40
up.
10:40
You either didn't give the authority you said
10:42
you were given or Uh, you gave too
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much authority.
10:45
I'm pretty strict in that.
10:47
I want it to say it.
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I don't even like the fact That sometimes
10:51
they they extend it to say well When
10:56
the supreme or i'm sorry when the legislature
10:58
was discussing this on the house floor in
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the senate chambers they were They discussed this
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part I'm a strict.
11:07
I want it in the text I want
11:08
to say here because you can discuss a
11:10
lot of crap, you know And then it
11:12
never ends up in your contract, you know
11:14
If you're sitting there talking to a contractor
11:16
comes to your house and you say geez
11:19
I need a new foundation poured And while
11:23
he's there you talk about um, you know,
11:27
I I like this foundation Uh idea and
11:30
I want to do it, but you know
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what?
11:32
I really want.
11:33
I want a new a new pad Done
11:36
over here where i'm gonna put a shed.
11:38
So I want that too If you don't
11:40
put the shed in the contract, you're not
11:43
getting it You know, that's just all there
11:45
is to it That strict construction It's got
11:50
to be in the wording of the contract
11:52
And by the way, this is how the
11:54
u.s screws the rest of the world,
11:56
you know, uh and says well We didn't
11:58
say that because it never ended up in
12:00
the treaty so and and notably and I
12:03
don't want to go back to my constant
12:04
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
12:17
then everybody goes.
12:18
Wait a minute.
12:18
That's not in the There's no treaty to
12:20
that effect.
12:21
We just said it that was a politician
12:23
saying stuff Politicians say stuff all the time.
12:27
You can't believe a word they say.
12:29
I mean everybody knows that what are you
12:30
talking about?
12:31
There should be a treaty and if you
12:33
really wanted it, you would have asked for
12:35
it in a treaty And so therefore you
12:36
didn't want it and therefore nato's in ukraine
12:39
on your doorstep.
12:40
That's your fault.
12:41
Not ours, you know, that's that's a That's
12:44
how people argue and it's a legitimate argument,
12:46
you know, if you really wanted it, why
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didn't you fight for it?
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but you know, I I don't agree with
12:52
it, you know that you should posture because
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uh We're supposed to be able to believe
12:56
the word of the king But you can't
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Remember that you can't trust the word of
13:02
the king.
13:03
So at any rate the the ieepa According
13:07
to the justices that dissented They say the
13:12
language is broader than the majority admits and
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they say the dissent Emphasizes that it authorizes
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the president to regulate and prohibit transactions involving
13:22
foreign Commerce during declared national emergency and he
13:26
declared a national emergency.
13:28
He's he he has the discretion to do
13:29
that They say that argue that tariffs are
13:33
functionally a form of regulation And They alter
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the conditions under which imports enter the country.
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They change the price structure They shape trade
13:42
flow and from that perspective a terrorist a
13:45
tariff isn't necessarily a tax In the narrow
13:49
revenue raising sense and this may this this
13:52
I like it can also be viewed as
13:54
a regulatory Mechanism designed to influence conduct.
13:58
Okay, and the president is supposed to influence
14:00
conduct more importantly to me is this is
14:04
You know that the Majority hung their hat
14:07
on it's a tax.
14:08
Therefore.
14:09
It belongs in in more strict regulatory language
14:12
of the of the legislative branch, right But
14:20
the dissent says well, but no this is
14:23
a regulation the president can put that in
14:25
and try to design, you know, or try
14:27
to influence people's behavior by improved by putting
14:30
in these These things so the dissent's point
14:33
is this if Congress gives the president the
14:35
power to regulate foreign commerce During emergencies, it's
14:39
artificial to carve tariffs out of that category
14:42
Just because they generate revenue in their view.
14:45
The majority is drawing a formal line that
14:48
Congress did not draw either way either way
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in my book the Congress didn't Wasn't detailed
14:57
enough and what they were gonna do and
14:58
that's scary because you know, they got these
15:01
10,000 page documents to take create and
15:05
there's not enough detail in them Okay, second
15:07
point Constitution gives Congress power over tariffs, but
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Congress can delegate that power The dissent does
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not deny that tariffs are rooted in Congress's
15:16
article 1 power what it disputes is the
15:18
idea that Congress failed to delegate that authority
15:21
here and So Congress enacted I EPA knowing
15:28
it concerned foreign economic threat it used sweeping
15:31
language.
15:32
It didn't carve out tariffs as prohibited It
15:36
did not restrict the president to asset freezes
15:39
only And so the dissent argues that when
15:42
Congress used broad language in the context of
15:44
foreign economic emergency Court should not narrow it
15:47
unless statute clearly excludes the disputed power They
15:51
view the majority's approach as judicial narrowing of
15:54
an intentionally flexible emergency statute Hmm.
15:58
Yeah, I could see that point.
16:01
Yep and deference in foreign affairs this one
16:05
I I if I the one I support
16:10
the most is probably this one so the
16:12
dissent stresses that the traditional judicial posture in
16:15
matters of foreign policy and National security is
16:19
this courts give the executive branch wide Latitude
16:23
so when the president declares a national emergency
16:25
tied to foreign contract the dissent believes courts
16:29
should hesitate Before second-guessing a chosen economic
16:32
response Especially when Congress has provided a statutory
16:36
framework for such emergency economic control, but from
16:39
this point The majority isn't interpreting a statute.
16:44
It is constraining the executives flexibility And by
16:48
the way taking over his power in foreign
16:51
affairs and you make that argument now, that
16:54
is an argument I can get behind okay,
16:57
and so the major questions doctrine skepticism Although
17:02
the majority doesn't scream major question doctrine and
17:05
giant letters It's logic tracks that line of
17:09
reasoning the dissent is wary of using that
17:12
doctrine too aggressively Because it warns that the
17:15
court can overuse major questions to strike down
17:20
executive actions that operate broadly within his delegated
17:25
authority So the dissent sees a majority as
17:28
rewriting the statute and that they don't like
17:32
I don't like under the banner of separation
17:35
of powers.
17:36
So they turned it into something constitutional and
17:39
so You know what they're saying is Congress
17:43
writes the tax law Emergency powers are not
17:47
blank checks.
17:47
That's the majority the dissent says wait a
17:50
minute Congress delegated a broad swath of powers
17:53
and that it should include these economic ones
17:57
courts shouldn't micromanage such emergency economic tools So
18:01
that disagreement isn't an academic deal.
18:04
It's two very different models of executive power
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model one Strict separation clear delegation limited emergency
18:13
Interpretation, which generally I support.
18:16
Okay, but then model two I'm actually somewhere
18:19
in between the two here It depends on
18:21
the issue but model two flexible delegation broad
18:25
executive discretion in foreign economic crises that's You
18:31
know, that's how it goes So Trump Praises
18:35
the dissenters and he says they're strong patriotic
18:38
understanding.
18:39
He characterized the majority as timid politically influenced
18:44
From a structural standpoint what he prefers is
18:47
the second model, of course maximum executive flexibility
18:51
in trade and economic confrontations and that preference
18:55
itself is part of the Instability narrative that
19:00
I wanted to talk about in today's show
19:03
so I Wanted to talk about this from
19:07
the point of view of allies and tariff
19:10
authorities I I did want to go into
19:13
what the the actual document said as far
19:19
as the procedural punchline because what the court
19:22
actually said the majority so I started with
19:25
the minority and What the Supreme Court ruling
19:29
actually said?
19:30
number one procedure The case came up from
19:34
federal district court DC Supreme Court said challenges
19:38
like this where you're essentially contesting tariffs duties
19:41
and related trade Belong in the specialized Court
19:45
of International Trade not a general district court
19:48
So the court vacated that judgment and sent
19:52
it back with instructions to dismiss Like we're
19:55
sending it back and you're you know You're
19:58
gonna enter an order in keeping with what
20:01
we're telling you and we're telling you you
20:03
don't have Jurisdiction and these must be taken
20:07
Before the Court of International Trade, so we're
20:11
ordering you to dismiss this case.
20:13
So that case will be dismissed So the
20:15
procedural outcome is dismissible is it isn't Trump
20:18
wins and plaintiffs win it's you filed it
20:20
in the wrong spot and the some substantive
20:23
holding was that I EEPA is not a
20:27
tariff gun.
20:28
So while booting the case on jurisdiction the
20:30
court said clear substantive rule very clearly IEEPA
20:36
does not authorize the president to impose tariffs
20:39
the end The reasoning is straightforward and Text
20:45
structure history according to them what I EEPA
20:49
actually authorizes is lets the president investigate Regulate
20:54
or prohibit Certain transactions and property interests tied
21:00
to a foreign country or national emergency The
21:03
courts logic is this these aren't emergency economic
21:07
controls blocking licensing freezing restricting not taxing a
21:14
Tariff isn't a regulation.
21:15
It's taxation by another name.
21:18
So the court is treating tariffs and duties
21:21
As A as a tax they operate on
21:25
importers raise revenue function as a branch of
21:28
taxing power That matters because the Constitution puts
21:31
taxing and tariff policy Fundamentally in Congress's hands
21:36
and if Congress wanted to hand the executive
21:38
something that sweeping it would do So clearly
21:42
and not via vague emergency verbs like regulate
21:46
So the major question flavor which they you
21:50
know They were talking about is the court's
21:52
instinct is we're not reading a sweeping global
21:55
tariff authority into IE EPA's general language So
22:00
when an agency or the president?
22:02
Claims the power of vast economic and political
22:05
significance the court expects a clear statement from
22:08
Congress put it in the contract IE EPA
22:11
global tariff wall fails that test on a
22:15
plain reading and unconstitutional structure and The historical
22:20
practice cuts against it.
22:22
They said the presidents have used ie EPA
22:24
for a lot of tools, but not for
22:26
tariffs and That absence matters is what they
22:31
say So the court's message is basically this
22:33
emergency powers let you choke off transactions and
22:37
access They don't let you print a tax
22:39
schedule And so what this means in practice,
22:42
you know The decision didn't kill tariffs as
22:46
a policy tool.
22:47
It killed one pathway it that the attempt
22:50
to use ie EPA as the legal basis
22:53
for the broad tariffs That they can't use
22:57
so I read something from a person named
23:01
enum anach and How the tariffs could survive
23:06
anyway is what it was called and this
23:08
person's from the Council on foreign relations Okay,
23:11
so yep the court knocked out ie EPA,
23:15
but Congress has already delegated other tariff authority
23:19
To you know other ways over decades and
23:23
those can be used as though they are
23:25
narrower More procedural and have their own built
23:28
-in limits, right?
23:29
So this this Replacement that she said that
23:34
she she or I don't you know what
23:36
I said, I don't know.
23:37
He she Didn't look it up, but I
23:40
didn't I the author let's call it the
23:43
author the CFR piece lays out the replacement
23:45
toolbox And it's basically a patchwork Quilt rather
23:49
than one, you know sweeping broom So here
23:53
are the four pathways that they can that
23:55
Trumpster can can keep these up section 122
23:58
of the Trade Act of 1974 it's a
24:02
quick baseline, but it expires this one allows
24:05
tariffs of up to 15% for a
24:07
hundred and fifty days Unless Congress extends that
24:10
if there's a large and serious Balance of
24:13
payments deficit this one's fast, and it doesn't
24:16
require a big formal investigation It's temporary and
24:19
has to be applied uniformly not targeted country
24:22
by country, right?
24:23
So you could slap on a short-term
24:26
across-the-board tariff But it's on a
24:28
timer and you can't punish Canada today Germany
24:32
tomorrow, you know stuff like that.
24:33
And I think it is a Applied uniformly
24:39
like well, it's supposed to be applied uniformly
24:42
I haven't pulled the actual section of yet
24:44
or reviewed it, but that's what the article
24:45
said and and I think that's correct But
24:48
I haven't reviewed it Section 232 of the
24:51
Trade Expansion Act of 1962 the national security
24:55
lever this one allows tariffs and quotas when
24:59
imports threaten national security But it requires an
25:03
investigation in a Commerce Department recommendation so the
25:07
CFR notes Code of Federal Regulations notes that
25:10
it's broad because National security is not tightly
25:14
defined and there's no statutory cap on the
25:17
tariff rate But it's in sections, you know
25:21
sectoral like, you know, I can do it
25:23
on I don't know oil products.
25:25
I can do it on Grains, you know,
25:29
whatever, but it doesn't create a universal everything
25:32
tariff like 122 Trade Act of 1974 does
25:36
and that one is it can't be targeted
25:39
country by country But this one allows you
25:42
to target but it also requires an investigation
25:44
of the Commerce Department So this is how
25:48
you tariff steel aluminum auto copper so on
25:51
it's big amp impact, but it can't be
25:53
a universal baseline So there's a third one
25:56
that one is section 301 of the Trade
25:58
Act of 74 the unfair trade practices machine.
26:01
This one is Investigation Findings and then remedies
26:07
that include tariffs It's powerful can be put
26:11
into place for years and has been used
26:13
heavily against China But it's slower and process
26:17
heavy up front and it's country-specific rather
26:21
than universal Okay, so if you want a
26:23
long war This is how you get it
26:26
section 301 of the Trade Act of 74
26:30
section 338 of the Tariff Act of 1930
26:34
the never used but legally spicy option This
26:39
allows tariff up to 50% on goods
26:42
from countries that Unreasonably discriminate is the word
26:47
against US trade Code of Federal Regulation says
26:51
major ambiguity, you know about what fact-finding
26:56
is required and Emphasizes that it's basically untested
27:00
and would almost certainly be litigated This one
27:04
is a broken-glass statute dramatic uncertain and
27:08
lawsuit bait So the bottom line is that
27:11
there's no exact replacement for Trump's sweeping IEPA
27:15
approach so when he rebuild is a patchwork
27:18
and the patchwork itself sustains global uncertainty because
27:22
partners Can't predict what's coming next or how
27:26
stable I?
27:31
I Wanted to go into what Trump said
27:34
about this, but I think I'm gonna leave
27:36
that for the end of where I go
27:38
today and I'm gonna go begin at the
27:43
beginning and What I did was oh that's
27:49
in Russian.
27:50
We're gonna skip that part I Thought I
27:57
created a different pathway for this but maybe
28:00
not Okay, so Basically, I
28:13
wanted to talk about Germany and This will
28:16
all come together.
28:17
I promise in in what I'm talking about
28:21
because Basically, there's an argument going around in
28:26
in in financial circles and otherwise that Germany
28:32
symbolically and economically Has hit a wall and
28:37
is being forced into making a bit of
28:40
a China pivot toward China not because Berlin
28:45
suddenly loves Beijing, but because Europe's Assumptions the
28:51
old world order are collapsing under pressure and
28:56
Germany is weak industrial no growth industrial decline
29:04
unstable exports transatlantic relationships that are less Reliable
29:10
than they have been for decades so Mertz's
29:14
trip recently to Beijing now remember everybody's been
29:18
headed to Beijing lately Carney went there to
29:22
make some stuff Ursula it was at Ursula
29:26
one of the heads of the EU a
29:28
lot of European leaders are headed to China
29:30
and there I say Considering other options.
29:37
Okay, then the United States and I say
29:40
they're doing that because We in the form
29:44
of President Donald Jevich are Unstable or Unstable
29:53
is not the right word Unpredictable, you know,
29:56
he's he's all over the map, you know,
29:59
and and and I don't say that mean
30:01
Meanly, I'm just it's true guys all over
30:05
the map I One day one thing one
30:08
day one thing the next and he's too
30:10
volatile he calls people, you know morons and
30:13
idiots and is always yelling about this and
30:15
that and and he's insulting to people and
30:18
People don't like to work with that and
30:20
that's really truthfully my biggest beef with the
30:24
guy is you know You're in a position
30:29
That that people expect some level of decorum
30:32
out of and that's my really my biggest
30:36
Complaint about the guy I'm allowed to be
30:39
an asshole personally.
30:40
That's me I'm not the president United States,
30:43
but if I was a president, you know
30:45
You have to get along a little bit
30:47
better, you know, I don't have to that's
30:49
it's only affecting me but when you're acting
30:52
on my behalf damn it quit being so
30:56
Offensive across the board just stop it.
30:59
I mean, you know, we we believe you're
31:01
the greatest person on the planet Okay, let's
31:04
just get past that you are the greatest
31:06
person on the planet quit saying it every
31:08
10 seconds and quit beating up on anybody
31:11
who claims otherwise, you know, just Deal with
31:15
it and move on.
31:16
Okay, I Don't believe you're allowed to do
31:19
that Anyway, his trip to Mertz's trip to
31:22
Beijing was a different from routine diplomacy.
31:25
He isn't going alone He took a major
31:27
economic delegation So Berlin and Brussels are seeing
31:32
this visit as pivotal maybe even decisive The
31:35
claim is simple China is shifting from important
31:39
market to strategic necessity for a lot of
31:43
Europe especially for Germany Because the US EU
31:47
relationship is more strained Access to the American
31:52
market can no longer be treated as guaranteed.
31:56
No, I'm not saying that I'm saying that
31:58
several of the arguments I've heard This is
32:02
what other people are saying around the world
32:04
and it's important to know what other people
32:06
are saying around the world So big rhetorical
32:10
move in the commentary That people are giving
32:13
is remember when you know only a couple
32:15
years ago Germany was talking decoupling from China
32:19
And now it's reversing course.
32:21
It's the old 180 or or if you're
32:25
Kaya Callas the 360 Actually that was on
32:34
a verbok, wasn't it?
32:35
That's sorry.
32:35
That wasn't sorry.
32:36
I didn't mean I always beat up on
32:37
callus I just got in but that was
32:40
Annalena verbok or whatever her name is anyway,
32:43
this reversal of Germany's domestic economic problems are
32:47
like a profound economic decline and Deindustrialization shutting
32:53
down Volkswagen plants.
32:55
That's unheard of the argument.
32:57
Is it ideology and values?
32:59
Talk, which is all over Davos the last
33:03
couple of weeks.
33:03
They can't feed or I'm sorry the Munich
33:06
economic Security conference last week.
33:09
Oh, geez Global rules based order, you know
33:13
that that doesn't help you in an economic
33:16
decline So ideology and values talk won't feed
33:19
an export driven economy So when factories and
33:22
supply chains are hurting that, you know, such
33:24
lofty goals are replaced by practical efforts You
33:29
know raw material stable supply chain market access
33:32
So marriage's Beijing trip was less of a
33:34
grand strategy and a more of a forced
33:37
retreat from the You know world as it
33:41
used to be so economics is a first
33:44
-order driver Germany's model has always relied heavily
33:49
on export and industrial strength auto sector Has
33:54
been the backbone that is now facing a
33:56
serious structural decline Not just in Europe but
34:00
around the world mostly in China and that's
34:02
important China isn't an external customer anymore.
34:05
It's a competitor Well, it is a customer
34:08
but not at the level it used to
34:10
be that has been eating the margins market
34:12
share of traditional European industrial champions and China
34:16
remains a huge market, but it's not the
34:18
market where European firms automatically dominate anymore.
34:22
So But you know when you look at
34:25
that and then you look at the EU's
34:27
militarization agenda, you know that Europe can achieve
34:32
Militarization goals, you know, they want to go
34:34
to war with Russia by 2030, you know,
34:36
that's that's a stated goal These are morons,
34:40
you know, we want to go to war
34:41
and how are we gonna go to war
34:43
if we can't supply ourselves?
34:44
We can't just keep buying buying u.s.
34:47
Weapons that triple the price, you know We
34:49
got to manufacture our own and if we
34:51
don't have any manufacturing capacity how in the
34:54
world are we gonna do it if China
34:55
has all the capacity we have to switch
34:58
and make some sort of a trade arrangement
35:00
with them and so You know, you can't
35:05
talk about strategic autonomy defense expansion and geopolitical
35:10
You know issues that you want to control
35:14
if your economic base is dead So that's
35:18
why merits would like to seek a better
35:22
terms with China, especially if u.s. Tariffs
35:25
and political friction under Trump reduce European sales
35:29
opportunities in America China has to become an
35:33
alternative outlet and so this cold math, you
35:36
know This is all it is and so
35:39
but the trip isn't purely economic You know,
35:41
they're also trying to figure out some they
35:44
want to be part of something related to
35:46
Ukraine And they think that China can put
35:50
significant pressure on Russia.
35:51
So merits wants to press Beijing about Moscow
35:55
and With the Western strategy, you know limit
35:59
their alignment with Russia They want to they're
36:02
trying to pick off BRICS countries one by
36:05
one, you know, they go to India and
36:09
That's what's happening.
36:10
So Results are mixed, you know BRICS isn't
36:14
fracturing, you know BRICS isn't fracturing and if
36:18
anything, it's you know, more confident more assertive
36:22
because of the the Shit show going on
36:26
around the world.
36:27
Otherwise, you know, it's as far as trade
36:30
and especially in the Trump realm you know
36:32
because it's Support or don't support to me.
36:37
It's not important.
36:37
I don't control it.
36:38
So what difference does it make to me?
36:41
I don't necessarily Dislike, but I don't necessarily
36:47
like, you know, what is going on and
36:49
what Trump is is creating over there I
36:51
think he's creating instability and You know, maybe
36:54
that's Art of the deal, you know, that's
36:56
what everybody tells me.
36:57
Oh, it's just art of the deal He's
36:59
making a deal every time he goes somewhere
37:00
Well, you know good for him, but that's
37:02
making the rest of the world make deals
37:05
in other places so divide and conquer, you
37:08
know is is what the Structure has been
37:13
regarding Any BRICS countries they're trying to make
37:19
friends with Brazil separately India separately China separately,
37:25
so I've read an article yesterday that said
37:28
that Trump After he lost this tariff deal
37:33
that over the weekend China who has been
37:37
A Targeted with these tariffs and that the
37:43
tariffs are going to be overturned and can't
37:45
be charged Trump is scrambling to cover them
37:49
But China has already said well, that means
37:52
we're gonna cancel the deals and go back
37:55
to the deals that we originally had Especially
37:57
relative to soybeans.
37:59
This was a long article on soybeans and
38:02
they said soybean farmers in the United States
38:05
We're just Hurting until Trump came along and
38:10
figured out this tariff deal and That the
38:16
tariff deal wasn't necessarily to Make money for
38:20
the United States.
38:21
It was to guide certain trade in certain
38:23
directions and part of that was Trying to
38:27
guide it toward Away from Brazil, which is
38:32
a huge I'm not sure what's going on
38:37
trying to get some heat going here Anyway,
38:42
sorry to interrupt myself, but that after the
38:44
tariff deal with the Supreme Court that over
38:47
the weekend China Cancelled a lot of contracts
38:52
with US soybeans.
38:54
I don't know the truth of this I
38:55
just saw an article on it and you
38:56
know It may have been clickbait and I
38:59
didn't have time to go out and research
39:00
it, but it would certainly make sense That
39:04
if they got to pay triple for US
39:06
soybeans Why wouldn't they go to the bumper
39:08
crop of Brazil last year in soybeans and
39:11
buy cheap soybeans from Brazil?
39:13
Which was their intent initially and so, you
39:16
know I'm not make sense to me.
39:20
So, you know divide and conquer all these
39:23
things another theme in this was Europe's, you
39:27
know Independent pole, you know that they want
39:29
to be more independent from you know being
39:34
under the thumb of America, right and They're
39:38
not you know, they're not Independent at all.
39:41
And so he's described as wanting to Mertz's
39:45
anyway as wanting Europe to function as an
39:48
independent strategic pole in a world that is
39:50
no longer Unipolar and he's implying his own
39:53
willingness to create some distance from Washington if
39:56
necessary but Mertz doesn't want to break the
40:00
alliance Europe can't afford it But so it's
40:02
more about redefining and rebalancing than outright separation
40:06
the example that I heard was that Mertz
40:09
is warning the United States against escalating tariff
40:12
wars and Signaling that Europe will not automatically
40:15
follow Washington if trade policy remains a geopolitical
40:20
weapon of choice of Trump's term.
40:23
So, you know, it's There's so much going
40:28
on in this respect that one Court ruling
40:32
that it's where there's number of questions So
40:35
does China see Europe as a serious strategic
40:38
actor or as a divided and weakened block
40:41
that still depends on America?
40:43
For everything security wise.
40:45
It's not just a rhetorical You know poke
40:48
in the face It's a it's the hinge
40:50
of an argument if Beijing believes Europe isn't
40:53
strategically autonomous I don't believe it is if
40:56
Europe cannot credibly act independently then China has
41:00
less incentive to make concessions to Germany and
41:04
more incentive to simply wait out Europe while
41:07
pursuing its own agenda and That makes sense
41:11
to me and I believe you know, they're
41:13
smart enough to play that and at the
41:15
deepest level, you know People are asking the
41:18
way where the the center of gravity is
41:20
really shifting Toward Asia and away from the
41:24
West I say it is it might take
41:26
a long time to get there but it's
41:29
gonna go, you know when you talk about
41:31
de-dollarization it isn't you know, the the
41:35
British pound survived for many many decades after
41:41
As a as a command currency is one
41:44
of the largest Forever it isn't anymore.
41:47
You know the British pound nobody cares anymore
41:50
You know everybody's buying the euro or the
41:52
dollar and the pound is no longer You
41:55
know after they lost their global influence, which
41:58
is basically gone Well in many realms anyway
42:03
Their currency stayed around for a long time
42:06
and that's the same thing That's eventually in
42:09
my opinion gonna happen with the dollar because
42:12
people are creating alternative structures So I may
42:16
be wrong about that and we will guess
42:18
we'll see in a hundred years long after
42:20
I am pushing up daisies, so D&D
42:26
industrialization In Germany Germany can talk values all
42:31
day long But it's industrial base needs some
42:34
kind of energy materials and markets and where
42:37
they gonna get it They can pay double
42:39
to Trump or they can switch and China
42:45
Canada China France China Eastern Europe China Germany
42:51
and China many others are actually becoming key
42:57
economic Partners, you know China's belts and roads
43:01
and all of that stuff China isn't Auditioning
43:06
to be Europe's partner Europe is auditioning to
43:10
remain relevant Because in an increasing world where
43:15
the the Southeast Asia is taking precedence They
43:20
aren't and so this is this is and
43:23
in an era of globalism declining You know
43:28
one size fits all Declining I'm not so
43:33
sure that you know that that it's not
43:36
going to Snowball into a larger and greater
43:41
collapse in a quicker fashion.
43:43
So there you have it So the argument
43:47
that Germany is isn't pivoting toward China They
43:53
say that it's not done out of enthusiasm
43:55
it's out of necessity So and it's based
43:59
upon Germany's economic slowdown the broader stagnation hitting
44:04
Europe and You know if the American market
44:09
is politically unpredictable and the Chinese market is
44:14
more stable and it's But massive it's almost
44:19
I mean seriously, it's the largest PPP personal
44:25
per I'm sorry purchase parity measure of GDP
44:31
is China is the largest economy in the
44:35
world With what you can buy with your
44:38
money China is it and we're like number
44:40
two or something So China's export driven economy
44:46
needs 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 inside Europe at
44:55
all and so In my view The economic
45:01
argument is that economic survival is pushing the
45:05
rest of the world Eastward instead of towards
45:08
the US.
45:09
That's what's happening.
45:11
And we have become a I Don't know
45:15
a an economic warfare Type of type of
45:20
country, especially under Trump, you know, this is
45:22
what I'm not saying it's wrong indifferent anything
45:25
But that's how the rest of the world
45:28
views it, right and there's a broader global
45:31
layer again It's bricks in the shifting center
45:34
of gravity in the global economy Western policymakers
45:37
approach emerging powers individually Engaging China here Brazil
45:44
there keep pressure on Russia Navigate relations with
45:47
China in ways that try to prevent them
45:50
from consolidating into a unified bricks organization but
45:55
that the multipolar shift is accelerating regardless of
45:59
Western strategy is certainly a valid argument and
46:04
You know picking them off one by one
46:06
might work for a while But it's still
46:09
the the changes are coming non dollar transactions
46:13
are growing Everywhere and so an Asia's economic
46:19
growth rate outpaces Europe's Supply chains flow through
46:23
Asian hubs instead of European hubs Technology innovation
46:27
is no longer Western predominated and if that
46:34
trend Continues which it will then Europe has
46:37
to decide does it may remain rigidly opposed
46:42
to the east and Has to stay aligned
46:45
to the West or do they engage with
46:48
rising centers of power and that same thing
46:51
goes to the discussions I've been having about
46:52
Carney for a couple of weeks now and
46:55
what he's doing because there was some massive
46:58
discussion about That boy over the weekend there
47:01
were some interesting stuff on that and I
47:04
wonder if that's my next part because it
47:07
was a You know the open-ended questions
47:10
of bricks I think is where I was
47:12
gonna go after that because that was the
47:13
next part, but I might skip it and
47:15
go on to Carney because you know that
47:18
part isn't it is almost an absolute, you
47:22
know, I think I Don't know at late
47:27
laying out the case that Europe may be
47:29
drifting toward China Out of necessity and Then
47:36
discussing the possibility that bricks does Represent a
47:40
growing multi-polar counterweight like I do There's
47:44
another argument entirely and it goes like this
47:47
because I read this to Bricks is supposed
47:51
to be a great challenger kind of an
47:53
alternative to the g7 a nucleus of a
47:57
post dollar Post-western economic order, but maybe
48:00
it's not Maybe it never was People are
48:05
going what did you say that Sam?
48:07
No, I'm giving you a counter argument Okay,
48:12
bricks, you know, Brazil, Russia, India, China, South
48:15
Africa is a Group of large emerging economies
48:20
and it's growing faster than the traditional Western
48:23
powers It's not a military alliance or even
48:28
a geopolitical block It's a recognition of demographic
48:32
weight economic potential and long-term growth So
48:37
over time, it's evolved into something a little
48:40
more political the idea being that these countries
48:44
Oh, did you see and by the way
48:47
this?
48:48
Jai Shankar the the foreign minister for India,
48:53
oh my god.
48:55
He was on the same dice at the
48:56
economic forum I'm sorry the security forum in
48:59
Munich with guess who I saw this over
49:02
the weekend and it was Lindsey freaking Graham
49:07
and Graham got up in the middle of
49:11
the presentation and left He said his piece
49:14
and Jai Shankar started beating up on him
49:17
I really wanted to play that whole piece
49:19
and I didn't but he started beating the
49:22
hell out of him Verbally going, you know,
49:25
I don't know what you're talking about Lindsey
49:26
Graham got up and left and it's like
49:28
you need to support Ukraine and they did
49:31
the same thing to billory Hillary Clinton and
49:34
it took her took her down to the
49:36
but that one has been more publicized the
49:40
I Think he was to check check foreign
49:43
minister.
49:44
Anyway, I digressed there a little bit, but
49:47
it was it was a Certainly the skeptical
49:50
view because we like to go around the
49:53
world and and and dictate and dominate and
49:57
Say ridiculous things that nobody people go.
50:00
Why did he just say?
50:02
No idea what Lindsey Graham is talking about.
50:05
Well, you always know a Lindsey Graham's gonna
50:07
say more war more war, please we need
50:10
more Let's bomb the hell out of somebody
50:13
you could just cookie cutter his speech anywhere
50:16
But anyway bricks has expanded it represents half
50:19
the world's population and A significant share of
50:23
the global GDP.
50:25
It's like 42% now and That does
50:28
matter but it doesn't necessarily mean they're ready
50:32
to take over the planet tomorrow So the
50:34
core argument is in this second perspective is
50:37
that bricks faces structural limitations?
50:40
That mean it's far less capable of reshaping
50:43
the global systems So because they have internal
50:47
divergence China and India have the long-standing
50:49
border tensions Brazil's political direction shifts with each
50:55
election cycle Russia's under sanctions South Africa's domestic
50:59
economic strain and internal Problems big-time.
51:04
These are not countries that share unified strategic
51:07
vision they Are frustrated with Western dominance that
51:13
they have but that doesn't mean they have
51:15
a coherent alternative And the other one is
51:17
the dollar question.
51:18
So for years people predicted the death of
51:21
the dollar I haven't predicted the death I've
51:24
predicted the slowdown of it the dollars dominance
51:27
is tied to what if you don't understand
51:30
this Maybe you should World War two institutions
51:33
Bretton Woods the IMF the World Bank Deep
51:36
capital markets and the sheer size and liquidity
51:39
of US financial systems so the argument is
51:43
straightforward there isn't a ready replacement a Reserve
51:49
currency isn't just about trade settlement.
51:51
It requires trust deep bond markets legal predictability
51:57
Transparency and scale the euro Can't displace the
52:01
dollar the yuan is tightly managed the hypothetical
52:05
bricks currency Which doesn't exist would require countries
52:09
to surrender monetary sovereignty to a shared framework
52:12
But they haven't done that remember and when
52:16
when I listen to this, I thought it
52:17
was interesting, but I think he missed the
52:21
point that The the there isn't a bricks
52:25
currency.
52:26
They're trying to create a bricks Exchange system
52:30
and I've explained how that works before so
52:33
I don't believe this guy knew as much
52:36
Or as deeply about what they were trying
52:39
to create maybe because he wasn't at a
52:41
bricks conference and and what they've been trying
52:44
to create and it is Successful so far
52:52
it is the ability to trade in their
52:57
own Currency and not using the dollar and
53:02
if they don't use the dollar it actually
53:04
props up their own Currency when they trade
53:08
in their own currency because why is the
53:11
US able to do with the dollar and
53:13
Dominate the planet for as long as it
53:16
has is because everybody's using the dollar So
53:19
they have to have we just keep printing
53:20
more and sending it all around the world
53:22
But the more people choose to use their
53:25
own currency that means Ultimately the less they're
53:29
going to use of the US dollar and
53:31
so we can't finance our growth on the
53:35
backs of dollars Sent abroad and that's what
53:38
we've been doing for ever since Bretton Woods.
53:41
Was that 46 or something?
53:44
I don't remember that year specifically.
53:46
So don't quote me on that.
53:48
So Although you can talk about De-dollarizing
53:52
or reducing your dollar dependence creating an alternative
53:56
is a different matter.
53:58
So even within bricks You know, there isn't
54:01
a unified currency trade settlements.
54:04
Yes Expanded use of local currency.
54:08
Yes, but a genuine Replacement for dollar disk
54:12
dollar dominance so far not This Guy made
54:18
an argument it actually makes some sense that
54:21
China towers economically over the rest of all
54:25
the bricks countries And that's probably well it
54:28
is true and that creates its own friction
54:31
smaller members might want some kind of a
54:34
Situation, but they don't want to replace Washington
54:38
with Beijing either and for India in particular
54:42
they're the largest country in the world and
54:46
they consider themselves a rising civilizational power and
54:52
The natural leader of the global South and
54:55
that doesn't automatically align with China so the
54:58
argument is this is bricks less a cohesive
55:02
block and more economic platform a Diplomatic forum
55:07
where countries signal their dissatisfaction with Western structure
55:11
but stop short of binding commitment that truly
55:15
disrupts the West and There's also the question
55:18
is more importantly for me Anyway is the
55:22
question of u.s. Behavior the more aggressive
55:25
Washington talks about punishing bricks or threatening tariffs
55:29
or anything about Dedollarization the more attention and
55:33
legitimate legitimacy it gives to the block itself
55:38
So public warnings about a bricks currency elevate
55:41
the concept even if the currency is only
55:44
theoretical That's hard in it the u.s.
55:49
Still accounts for roughly a quarter of global
55:51
GDP more importantly it remains central to global
55:54
capital markets, so the thought is that it's
55:57
going to be a Very difficult to Step
56:02
back from that I agree with that so
56:05
but if bricks wants to evolve beyond a
56:07
diplomatic forum You know where they're working together.
56:10
They have to coordinate a monetary policy they
56:13
have to integrate their payment systems, and they
56:15
gotta have a deep cross-border capital market
56:17
and then shared strategic goals I Say they've
56:23
got the shared strategic goals for the most
56:25
part I say they're creating the integrated payment
56:29
systems, but taking a long time to do
56:31
it Just because it will they don't have
56:33
deep cross-border capital markets although they are
56:37
definitely investing in infrastructure where The West you
56:42
know at least in America.
56:43
We are not We're not doing anything Anybody
56:47
and I'd love for somebody to tell me
56:49
I'm wrong in that is there any infrastructure
56:51
stuff going on at all But I know
56:55
that changed the topic a little bit, but
56:57
bricks will continue to grow in membership and
57:00
symbolism But it's not going to automatically translate
57:04
into into power right now, especially in Munich
57:07
and over the last year what they've been
57:11
talking about is Changing modifying updating amending
57:21
the UN especially the Veto powers of certain
57:31
Actors and I'm not sure that that it'll
57:36
ever happen, but India has been bitching about
57:38
it forever.
57:39
You know when are you gonna?
57:41
Fix this we're the largest country in the
57:43
world, and we don't have a seat at
57:45
any table You know we're the wicked stepchildren
57:48
over here.
57:48
We're the evil children that are you know
57:50
wet the bed over here we're the bedwetters,
57:53
and 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.
58:02
It's whether it transforms from a rhetorical symbol
58:05
of multipolarity Into an operational mechanism capable of
58:10
delivering it Because you know they keep swinging
58:14
back and forth so right now that transformation
58:16
is anything But certain so if you merge
58:21
this was what Germany was saying You know
58:24
and about where they're headed to China, and
58:26
they're hedging their bets Canada hedging their bets
58:30
What you can say is on one side.
58:33
There's an argument that the West is weakening
58:35
economically and That's pushing Europe toward China Accelerating
58:41
multipolarity and strengthening bricks, but on the other
58:44
hand there's an argument to be made that
58:47
bricks doesn't have cohesion lacks monetary integration Lacks
58:51
institutional depth to displace Western dominance at least
58:56
for the foreseeable future Well, I'm trying to
59:00
find out when the India Because I believe
59:03
bricks Conferences in India this year, and I'd
59:06
love to go I'm trying to figure out
59:07
when when that is and see what I
59:10
got to do to get a visa I
59:12
have to send away my passport to get
59:13
a Russian visa again because mine expires in
59:17
three days So I shall be sending it
59:20
away again to get a new new Russian
59:22
visa Anyway The center of gravity is moving
59:31
east the other side says well, maybe that
59:33
is but that doesn't equal Governance you know
59:37
that did the gravity of economic gravity is
59:40
moving, but governance is gonna stay in Washington
59:44
One side can talk about De-dollarization gathering
59:47
momentum, but the other one says show me
59:49
their bond market.
59:50
You know don't show me a press release
59:54
One side says multipolarity is solidifying and the
59:57
other one says well, you know that's Fragmentation
1:00:02
Masquerading as unity and So this is where
1:00:05
it's interesting in my view both arguments can
1:00:09
be partially true at the same time The
1:00:13
West is weaker than it was before, but
1:00:16
it's still institutionally dominant bricks is politically louder,
1:00:22
but still operational in operational realm anyway somewhat
1:00:29
I Don't incoherence the wrong word unstable maybe
1:00:36
Disorganized would be better and the dollar is
1:00:40
gradually eroding in relative terms But it's still
1:00:44
unrivaled.
1:00:45
You know so the real question isn't about
1:00:48
whether bricks is dead or not It's about
1:00:50
whether global power really is reorganizing in a
1:00:54
way that makes traditional US Western dominance less
1:00:59
absolute If anything I think the way Trump
1:01:03
acts internationally is Pushing that faster he's pushing
1:01:10
the carnies and the Mertz's and the Macron's
1:01:12
of the world into the arms of China
1:01:14
and India and sending them over there so
1:01:18
and I'm you know, that's just that's just
1:01:20
a function of what he's doing That's not
1:01:22
I dislike Trump.
1:01:24
I don't care.
1:01:25
You know, I shouldn't say that I do
1:01:26
care, but it's not like I can control
1:01:28
any of it and I'm not making a
1:01:30
judgment except for the way he acts Like
1:01:33
I've already done But I think there's an
1:01:38
Might be a better way to scramble an
1:01:40
egg, but perhaps I'm not president.
1:01:44
That's possible.
1:01:45
And so therefore, you know, that's where the
1:01:48
debate is standing.
1:01:49
So is is Are we watching the collapse
1:01:53
of a system or the slow diffusion of
1:01:58
this system the slow?
1:02:00
Disorganization of it is bricks the embryo of
1:02:03
a new order Or just a pressure valve
1:02:06
for dissatisfaction with an old one.
1:02:08
So that's where the debate is right now,
1:02:11
and that's where Island right in the middle
1:02:15
of that, you know, and I Think it's
1:02:20
important to talk about So if we talk
1:02:22
about whether bricks is rising or stalling whether
1:02:25
Europe is drifting toward China Then you know,
1:02:28
we have to come back to North America
1:02:30
Right and the world order isn't changing because
1:02:34
emerging emerging powers are rising it's changing because
1:02:38
traditional alliances are being destabilized from within and
1:02:44
That one example that I talk about all
1:02:47
the time is Canada or at least for
1:02:48
the last month or so For decades the
1:02:51
US and Canada have maintained one of the
1:02:53
most deeply integrated bilateral relationships in the world
1:02:57
Longest international border unguarded defense supply chains intertwined
1:03:03
intelligent networks fused We have five eyes.
1:03:08
No rad jointly managing North American airspace the
1:03:12
longest undefended border in human history 70%
1:03:16
of Canadian exports flow south It's not diplomatic
1:03:21
goodwill.
1:03:22
It's structural Integration and Now let's talk about
1:03:26
these tariffs to which we started this with
1:03:28
this whole show The repeated Richard refrain by
1:03:33
Trump is that the tariff is a punishment
1:03:37
tariff is leverage tariff is discipline tariff is
1:03:42
Retaliation and the argument is that this mindset
1:03:46
this permanent transactional posture Fundamentally alters how allies
1:03:53
Everywhere calculate the risk now, you could say
1:03:57
what the hell do we care about Germany
1:03:58
hanging out with China?
1:04:00
What do we care?
1:04:01
They're far away.
1:04:02
They don't matter but Canada's in our backyard
1:04:05
and Canada's right here.
1:04:08
So the argument is that this permanent transactional
1:04:12
posture alters Risk for all of us So
1:04:16
when a country depends heavily on access to
1:04:18
US market and suddenly faced with a 25
1:04:21
% blanket tariff threats of economic penalty question
1:04:25
of defense contribution you're disloyal and even rhetorical
1:04:28
talk of annexation We're taking Ontario We're gonna
1:04:36
we're gonna vote to join us.
1:04:38
Hey governor.
1:04:39
So and so wasn't it Trudeau?
1:04:43
Is Not interpreted as campaign theatrics, it's interpreted
1:04:48
as risk and Risk in finance has to
1:04:52
be hedged And so that's how the banker
1:04:56
Mark Carney is looking at it I don't
1:04:59
believe he's looking at it emotionally.
1:05:01
He certainly wasn't in Davos.
1:05:03
He's not talking about it from a standpoint
1:05:05
of ideology He's talking although he prefers democracy
1:05:09
and you know, whatever form that he feels
1:05:11
it is today So when a leader with
1:05:15
a background in central banking and crisis management
1:05:18
hears persistent threats from Donald Jevich and Sees
1:05:23
trade weaponized against his country.
1:05:26
The response is not to shout back He's
1:05:30
diversified and so his Davos speech Which I
1:05:34
shared with you in its entirety is important
1:05:37
in this framing So public acknowledgment is that
1:05:41
the post-world war to bargain tolerating American
1:05:44
dominance in exchange for stability is No longer
1:05:47
stable Because of Trump that middle powers can
1:05:53
no longer assume a predictable behavior from Washington
1:05:56
That economic integration itself can be weaponized now
1:06:00
see it used to be our allies didn't
1:06:04
bitch about instability or Randomness of leadership in
1:06:10
America.
1:06:11
They just dealt with it because they knew
1:06:14
overall they were all together But under Trump,
1:06:17
they don't see that in the in the
1:06:18
instability before the failure to enforce rules only
1:06:23
applied to other countries You know Europe had
1:06:27
never say anything about that.
1:06:28
But wait a minute That's not what we
1:06:30
do if it's any one of us or
1:06:32
the u.s. We only you know, why
1:06:34
are we doing that against?
1:06:36
I don't know Sri Lanka.
1:06:37
Why are we doing that against Morocco?
1:06:39
It's like well because the u.s. Said
1:06:41
so, you know, we know you would do
1:06:42
it against China And you know, we'd be
1:06:44
all over, you know jumping up and down
1:06:46
too, but but Spain's our friend.
1:06:48
Why are you doing that Spain?
1:06:50
well, they wouldn't say anything but now they
1:06:53
are and that's the instability now, so Joining
1:06:58
the European Union security action for Europe program
1:07:03
150 billion dollar defense financing mechanism designed to
1:07:07
reduce European dependence on American supply chains This
1:07:13
is the first Discussion of all of this
1:07:17
this is Canada becoming the first non-european
1:07:21
country admitted to European Union security action for
1:07:26
Europe so participating in euro group level discussions
1:07:30
reserved for eurozone members and Without the United
1:07:35
States, by the way and advancing multilateral defense
1:07:39
financing structures.
1:07:40
They talked about that at the Munich conference
1:07:44
last week to Canada's reassessing major procurement contracts
1:07:49
submarines fighter jets They're looking toward Europe and
1:07:53
Asian suppliers rather than defaulting to American manufacturers
1:07:57
So in isolation each move is looks, you
1:08:01
know technical, but if you add them all
1:08:03
up It looks like a redesign is what
1:08:06
I say 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 Allies
1:08:14
are beginning to hedge against America because it's
1:08:17
unpredictable then the shift toward multipolarity isn't Necessary
1:08:25
And it isn't necessarily unified bricks of activity
1:08:30
currency alternative reserve system Doesn't matter.
1:08:35
It's just diversification diversification away from Reliance on
1:08:40
the dollar which is what Canada is signaling
1:08:42
big-time.
1:08:43
There was some argument over the weekend as
1:08:45
well about that bridge again the the Gordie
1:08:49
Howe bridge, I think it's called that Carney
1:08:54
and whatever the guy's name the Premier I
1:09:00
think they call him and Man was it
1:09:06
Ottawa that is Saying that they're opening it.
1:09:10
Anyway, and Trump's not gonna stop it.
1:09:12
We'll see about that I don't know what's
1:09:14
gonna happen But polarity can emerge or multipolarity
1:09:18
can emerge not from coordination But from everybody
1:09:21
heaven hedging their bets and that's what's going
1:09:23
on So at the same time the argument
1:09:25
doesn't claim that Canada's leaving the United States.
1:09:29
I mean no rads Continuing intelligence sharing continues
1:09:32
trade does continue, but the nature of the
1:09:35
relationship is definitely changing Trump with everything with
1:09:40
Trump is transactional Relationship is only a transaction,
1:09:44
you know, you don't want to have a
1:09:46
wife if that relationship is transactional if you
1:09:50
know what I mean, and you know a
1:09:52
strange bedfellows, right if Washington treats alliances as
1:09:57
a transaction allies are gonna reciprocate and that
1:10:00
has consequences so defense supply chains Once procurement
1:10:05
contracts shift toward German South Korean Swedish firms
1:10:08
the relationships become embedded for decades You got
1:10:12
maintenance infrastructure that they build they have training
1:10:15
pipelines Ecosystems adapt right and those structures don't
1:10:20
revert simply because of future administration softens its
1:10:24
rhetoric capitalists following infrastructure and architecture So the
1:10:29
argument says that Tara first diplomacy accelerates structural
1:10:33
diversification among allies That's what's going on And
1:10:39
this is where the world order conversation is
1:10:41
more serious because the issue isn't simply whether
1:10:44
China rises it's whether US policy pushes allies
1:10:48
toward building parallel arrangements and It is doing
1:10:52
that right now.
1:10:54
That's what Canada is doing No, I don't
1:10:56
mean gee the sky is falling, you know,
1:10:58
everybody get an umbrella, but these are Realities,
1:11:04
you know that that we are facing so
1:11:06
the Trump doctrine is clear trade deficits signify
1:11:10
weakness Tariffs are corrective actions economic integration is
1:11:14
leverage everything with him is leverage everything and
1:11:19
everyone is transactional we're not in this because
1:11:23
we like you we're in this because we
1:11:25
expect this and We're not in this because
1:11:28
we share common goals.
1:11:30
We're in this because you need us more
1:11:32
than we need you.
1:11:33
So get on board or You know get
1:11:37
off and fall behind is Trump's continual argument
1:11:41
now That's one way to run a railroad.
1:11:44
I question whether it's the correct way long
1:11:47
term You know, everybody says he's just trying
1:11:50
to steer this for a little bit and
1:11:52
correct all the BS that's happened over the
1:11:55
previous years well The strain may be too
1:11:59
much Correction might equal blowing up.
1:12:03
I don't know we shall see and and
1:12:05
I'm not claiming I'm God's gift to the
1:12:08
planet on understanding these issues, but I certainly
1:12:11
see a different a different point of view
1:12:13
than many Counterparts, but the counter argument from
1:12:17
middle powers is equally clear over reliance equals
1:12:22
vulnerability You know according to Trump, it's all
1:12:25
transactional But these guys are look if we
1:12:27
have to rely only upon you Obviously if
1:12:30
we rely and you decide to pull the
1:12:32
rug out from under us look what's happening
1:12:35
Dependence they have to reduce it hedging is
1:12:38
a rational decision in that environment So in
1:12:41
both sides adopt transaction logic alliances lose their
1:12:46
strategic elasticity and the broader implication extends beyond
1:12:52
China right, I mean Canada if especially with
1:12:57
China going in Canada going into China so
1:13:02
if Europe sees tariffs as political instruments to
1:13:04
which they do if Asian partners see export
1:13:08
access as Conditional which they do if middle
1:13:12
powers conclude that US market is no longer
1:13:15
reliably open Which they do Then diversification is
1:13:20
their own survival strategy.
1:13:22
They're trying to survive They're trying to diversify
1:13:25
to de-risk for their own population their
1:13:28
own form of nationalism Everything Trump is doing
1:13:31
arguably he's doing for us to make America
1:13:34
great again, right?
1:13:36
Well, wouldn't the other countries necessarily try to
1:13:40
make themselves great again or make themselves?
1:13:44
Or paint themselves in the best possible light
1:13:48
for their own children and their own populations
1:13:51
Well, of course, we've seen a rise in
1:13:54
nationalism Globally and the diversification is their own
1:13:59
survival strategy diversification necessarily includes having Alternative
1:14:05
pathways to get the same thing done.
1:14:07
It's not anti-american it's Protectionism of their
1:14:14
own brand so this goes right back to
1:14:17
the Bricks debate Even if bricks lacks cohesion
1:14:21
Even if no common currency emergence Even if
1:14:24
dollar dominance is intact the erosion of trust
1:14:28
among Western allies Accomplishes something bricks could never
1:14:32
do alone it's fragmenting the Institutional core of
1:14:37
the post-war order even though the u
1:14:41
.s. Still represents 25% in global GDP
1:14:45
75% is still elsewhere and if that
1:14:48
75% Starts to trade more with itself
1:14:52
Europe with Asia Canada with Europe India with
1:14:55
China regional brought blocks Cross-linking which they
1:14:59
are the relative weight of the u.s.
1:15:02
Declines not through collapse, but through Diffusion and
1:15:07
tariffs will accelerate that Environment that diffusion And
1:15:14
there's another structural layer here energy and technology
1:15:17
the AI race electrification data centers these need
1:15:21
enormous energy input US energy position is strong
1:15:25
compared to most countries But scaling AI infrastructure
1:15:29
is going to require sustained power expansion Other
1:15:33
regions particularly parts of Asia are building energy
1:15:36
capacity at scale nuclear everywhere Russia's building nuclear
1:15:41
reactors in India lots of them if technology
1:15:47
competition intersects with trade Fragmentation which it is
1:15:51
the incentive to be self-sufficient Regionally is
1:15:56
just going to grow so that brings us
1:15:58
back to the central claim the world order
1:16:00
isn't unraveling in a single dramatic rupture It's
1:16:06
just being reworked repriced Discounted Allies are calculating
1:16:14
the risks emerging powers are testing Institutional alternatives
1:16:20
middle powers are exploring parallel groups Tariffs might
1:16:25
achieve a short-term success in concession But
1:16:28
they also send a long-term signal and
1:16:32
long-term signals alter long-term Behavior, so
1:16:36
if the most integrated bilateral defense relationship in
1:16:39
the world begins building parallel supply chains and
1:16:42
if the closest intelligence partners begin framing the
1:16:46
relationship as Transactional and if hedging is normalized
1:16:50
which it's becoming in the architecture of Western
1:16:53
Alliance changes quietly and durably for the future
1:16:56
and that change feeds into the broader multipolar
1:17:01
debate and continuation because Multipolarity doesn't require anti
1:17:07
-western block it requires Decentralization from the first
1:17:12
one and that's it It requires middle powers
1:17:15
deciding that no single partner is indispensable and
1:17:17
that what makes The world great isn't one
1:17:22
member.
1:17:23
So the shift isn't a dramatic headline.
1:17:25
It's a spreadsheet It's a contract.
1:17:28
It's a multilateral financing framework.
1:17:30
It's an invocation to a new table of
1:17:33
Germany seat sitting down in China with China
1:17:38
It's a hedge all of it.
1:17:40
So when you combine all of these Germany
1:17:42
recalibrating toward China brick struggling between symbolism and
1:17:46
cohesion Canada restructuring risk exposure in response to
1:17:50
tariff politics and with Trump Still rising above
1:17:56
it all as the tariff God.
1:17:58
He's gonna you know, he's doubled down He's
1:18:01
well instead 10% Let's make it 15
1:18:03
worldwide and I'm gonna use I'll just use
1:18:05
a different way They haven't taken all my
1:18:07
tools and they're dummies anyway Basically, so that's
1:18:12
the argument now.
1:18:13
I want to do this before I leave
1:18:15
leave today.
1:18:15
I've been trying to share with you some
1:18:17
culture and I've finished up a tiny bit
1:18:21
early, so I'm gonna go ahead and do
1:18:22
it and See where I go because I
1:18:26
like music of all kinds and varieties there's
1:18:30
even some country and Western that I that
1:18:35
I like and I Like big band, I
1:18:39
like Debussy I like all kinds of music
1:18:45
and I've been listening and when I'm riding
1:18:50
in my car, I've like I Can't remember
1:18:53
how many songs I have on my on
1:18:57
my iTunes Playlist but last last time I
1:19:02
remember looking it was about 18,000 songs
1:19:05
of different varieties and so I get a
1:19:09
lot of Variety that just pops up and
1:19:14
One of them came up that it's a
1:19:17
Russian song again.
1:19:19
It's a Russian one and I forgot all
1:19:20
about this song and This is a this
1:19:23
is a great.
1:19:24
It's it's a really good song I like
1:19:26
it and you won't understand a word of
1:19:28
it if you don't speak Russian, but it's
1:19:30
a It I like the beat of it
1:19:34
and I'm going to if I can find
1:19:38
the damn thing.
1:19:39
I'm going to share it With you just
1:19:42
because and if you don't like to beat
1:19:45
well, I apologize up front That's how it
1:19:49
goes sometimes Here let's see there it is
1:19:55
I have found it and I like this
1:19:57
song.
1:19:57
So here we go.
1:19:58
We're gonna play it No interruptions from the
1:20:00
old Sam and then we'll ease on out
1:20:04
of here after that
1:20:37
Oh
1:21:07
As if you were looking for your love's
1:21:10
pier As if you and I had never
1:21:15
parted As if in that spring we never
1:21:19
parted As if you were waiting As if
1:21:23
you were looking for your love's pier Well,
1:21:29
here's my house What a pity Maybe we
1:21:33
should go in?
1:21:35
Make an appointment Don't look Let's go Sit
1:21:41
a little Together It's a lesson for us
1:21:47
Funny You're lonely already For a long time
1:21:52
Love can't be deceived Well, yes And if
1:21:56
I return everything Back As if you and
1:22:01
I had never parted As if in that
1:22:05
spring we never parted As if you were
1:22:09
waiting As if you were looking for your
1:22:12
love's pier As if you and I had
1:22:18
never parted As if in that spring we
1:22:22
never parted As if you were waiting As
1:22:26
if you were looking for your love's pier
1:22:35
As if
1:22:48
you and I had never parted As if
1:22:51
in that spring we never parted As if
1:22:55
you were waiting As if you were looking
1:22:58
for your love's pier As if you and
1:23:04
I had never parted As if in that
1:23:08
spring we never parted As if you were
1:23:10
waiting As if you were waiting As if
1:23:13
you were looking for your
1:23:15
love's pier
1:23:57
As if we were still together, basically And
1:24:00
it's kind of a cool thing It's basically
1:24:04
a guy and a girl Going through a
1:24:07
park or something And they bump into each
1:24:09
other And 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?
1:24:17
Can I walk with you?
1:24:18
And then they walk and then they're going
1:24:20
Why aren't we together again, basically?
1:24:24
I just like the beat It was an
1:24:27
interesting song Anyway, I hope you don't dislike
1:24:30
that I do that every once in a
1:24:32
while I just throw out some songs out
1:24:34
there That I particularly care for And this
1:24:36
was one of them And they have another
1:24:38
one called Something About Mouivre de Vaillant We
1:24:43
Are Together And they have something else And
1:24:48
I really like that one, too But that's
1:24:51
a pretty good song And I always had
1:24:54
this complaint About some U.S. artists I
1:24:57
always used to really like Who was the
1:25:01
guy that spoke Really deep voice And just
1:25:06
strange I wish I could remember who he
1:25:09
was But they had maybe one or two
1:25:12
albums But he always spoke really, really deep
1:25:15
And just strange topics That didn't necessarily make
1:25:20
a lot of sense And man, I wish
1:25:23
I could remember what it was But he'll
1:25:24
cycle through on my...
1:25:27
God Shuffled His Feet Whoever that guy was
1:25:31
After seven days He was quite tired So
1:25:35
God said Wanted to have a picnic Or
1:25:39
something else after that Anyway, that guy I
1:25:43
always liked to listen to as well But
1:25:45
all of his songs tend to sound the
1:25:47
same Because he has that one dramatic voice
1:25:50
Well, these guys Kruk and Bryansiv Their songs
1:25:56
tend to sound the same And they always
1:25:58
play off each other And they've got those
1:26:00
And so I've got a couple of favorites
1:26:02
But it's not like I'll listen to them
1:26:03
all the time Because they kind of sound
1:26:08
all the same Kind of like the God
1:26:09
Shuffled His Feet dude Although I really like
1:26:12
the songs I'm not sure I could handle
1:26:14
ten of the same exact songs Anyway, I
1:26:17
believe that is going to end it for
1:26:20
me today I hope you enjoyed the show
1:26:24
Wait a second, look at this Hold on,
1:26:26
check this out Let's do this for just
1:26:29
a second Just because I saw it Here's
1:26:31
another one This is a football game Great
1:26:53
will Great word Your heritage For all
1:27:03
times Glory to God That's like watching for
1:27:11
me That's like watching What the hell was
1:27:14
her name The one who died That had
1:27:16
such a beautiful voice And she would go
1:27:20
out At a football game Or wherever Oh
1:27:25
my God And you'd listen to it And
1:27:29
it just, you know It's freaking awesome And
1:27:31
here she is out there doing the same
1:27:33
thing They do the same thing culturally that
1:27:35
we do In other parts of the world
1:27:37
And so it's interesting to see that stuff
1:27:41
And that is The Russian What do they
1:27:46
call it National Anthem That's the Russian National
1:27:49
Anthem Looks like it's a club Moskva Looks
1:27:55
like it's the Russian National Soccer Team playing
1:27:58
And the stadium's full You know, it's a
1:28:02
big-ass stadium Full of people They do
1:28:05
the same stuff that we do And watching
1:28:07
it is pretty cool And they have the
1:28:09
same Same or better cars The same sorts
1:28:12
of things They have, going through the stand
1:28:15
Oh, there's a guy with some long hair
1:28:16
You know, they have the same types of
1:28:20
Anyway, 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 got
1:28:28
today I'm Samuel Trapp Happy Monday to every
1:28:31
single one of you And I've very much
1:28:35
enjoyed my weekend It's a freaking cold Still
1:28:40
In the real estate Of the art studio
1:28:44
Freezing my Little doodads off And I don't
1:28:48
really like that It's not good It's not
1:28:52
even And I'm still sniffling So it's not
1:28:55
good The Anyway Join me again tomorrow Join
1:29:02
me every day At the Lake Ozark real
1:29:05
estate Of the art studio You can listen
1:29:08
to all of our Recorded shows at Demradio
1:29:12
.com Forward slash podcast You can go out
1:29:17
to Internationalflavor.com And repeat them Because we
1:29:24
like it when you do that You have
1:29:26
a very nice day And once I can
1:29:29
figure out What the hell I'm doing I
1:29:30
can log out of here And see you
1:29:34
later Thanks for being with us This morning