We're going to dive straight in with our main story this week, which concerns the ongoing chaos of Trump's tariffs. It's been an emotional roller coaster since Trump rolled them out last week with the help of the single dumbest chart in human history. That prompted the Dow to drop by nearly 4,000 points in two days.
So by Monday, everyone was understandably freaking out, only for Trump to dismiss anyone concerned as panickans, which he said was a quote new party based on weak and stupid people. Though I'd argue the weak and stupid demo is, if anything, way over represented in government right now. Then on Tuesday, Trump gave a speech to Republican donors where he floated major new tariffs on pharmaceuticals, told the audience, "I know what the hell I'm doing.
" And claimed this. I'm telling you, these countries are calling us up, kissing my ass. They are they are dying to make a deal.
Please, please don't make a deal. I'll do anything. Yeah, I'm sure some have been pretty nice to him.
The same way that you try to be nice if you suddenly found yourself in the same room as a monkey with a gun. Hi, monkey. Good monkey.
Strong monkey. Please, I'll do anything. By Wednesday morning, though, Trump's reassurances were getting more desperate as he at one point posted, "Be cool.
everything is going to work out well. A sentence that's never been true in human history. That is the phrase you hear before someone skateboards off a roof, shows you their homemade water slide, or asks you to hold the camera while they climb into the alligator exhibit to do something hilarious.
Just a few hours later, Trump announced a 90-day pause on most of his biggest tariffs. And he did it so abruptly, it caught some key members of his own administration by surprise. The sudden change in policy came as Democrats grilled his top trade representative on Capitol Hill.
It looks like your boss just pulled the rug out from under you and paused the tariffs, the taxes on the American people. There's no strategy. You just found out 3 seconds ago sitting here.
We saw you. That's true. That's true.
That congressman later tweeted out this photo showing what it looked like to watch that guy get the news. And how do you think he found out? a push notification, a work email, or 32 concurrent messages on the office group text where one guy goes, "What the What the What the fuck?
" And another goes, "Holy shit. " Another's like, "L K, I guess. " And the guy who's always ask dumb questions like, "Wait, what's happening?
" And then the first guy sends the link to the Times article. And the dumb one's like, "Oh my god, what the hell? Did this just happen?
" And then everyone at the same time texts, "Yes, Cody. " This week was total chaos. At one point, the daily trading range of the S&P 500 was more than 5% for six straight days.
The previous times that happened were in March 2020 during COVID, late 2008 during the housing crisis, and October 1987, which if you are too young to remember, was a stock market crash so massive, Night Line felt like it needed to do this to explain it to people. Here once again to help us, my good friend Kermit. Take it, Dad.
Can you tell us what is a bare market? Yes, Ted. Well, thank you.
Being a bear myself, that is one of the first things we bears are taught in the caves. If I recall, a bare market is where prices are going down for a long period of time. So, one would wish, I suppose, for a bull market to drive the bears out.
No, no, we don't want that. We never want said that. [Music] Yeah.
They explained a complicated financial crash with muppets. A sentence so this showcoded I'm genuinely surprised that we didn't think of it. Honestly, if Ted Cppel had a British accent, glasses, way less gravitas, and occasionally referred to COVID as a bonafide swamp snack, I couldn't tell the difference there.
And the thing is, the turmoil isn't over because what Trump's left in place, including a baseline 10% tariff on all imports and a 145% tariff on China, is still a monumental shift in US trade policy. And despite what some in the White House claim that the 90-day pause was part of the strategy all along, Trump himself seemed to admit that he did it in reaction to the market's panicking. I thought that people were uh jumping a little bit out of line.
They were getting yippy, you know. They were getting a little bit yippy, a little bit afraid. Hold on.
A little bit afraid is a massive understatement. People were freaking out about their 401ks. There were grandmas looking their retirement plan and getting ready to open an Only Fans to get through the next 5 years.
And it wasn't just ordinary investors. One financial analyst wrote after talking to fund managers, "A few have quietly wondered if the president might be insane. " Which is fair.
Everyone knows the right time to ask if someone might be insane is 5 months after you elect them president. Look, this week was incredibly stupid. But it's important to understand exactly how stupid it was because we're not out of the woods yet.
And the damage the president's already done to confidence in our economic system could have lasting repercussions. So tonight, let's talk about Trump and his tariffs. Let's start with the fact that none of this should have been a surprise.
Not only did Trump bring up the idea of 10% universal tariffs repeatedly on the campaign trail, he's been obsessed with the idea of punishing other countries with tariffs for years now. In fact, when he touched off a trade war with China in his first term, we spent 21 minutes unpacking it. And the arguments hold up pretty well, although I clearly do not, as evidenced by a YouTube comment from this week, which said, "I thought this was a new episode until I noticed John's hair was darker and face looked younger," which is both hurtful and fair.
But that piece featured this clip of Trump back in 2011 laying out his whole fantasy of how tariffs could work. Somebody said, "Well, what would you do? What can you do?
" So easy. I drop a 25% tax on China. And and you know, I said to somebody that it's really the messenger.
The messenger is important. I could have one man say, "We're going to tax you 25%. " And I could say another, "Listen, you we're going to tax you 25%.
" Okay, putting aside how striking it is to hear the word on C-SPAN, I kind of wish you just kept doing the voices there. You could have one guy say, "Listen, we're going to tax you 25%. " And you could have an Australian guy say, "Or you bloody dingo, we're going to tax you 25%, mate.
" Or you could have Buork say, "I would tax you 25 butterfly rainbow sneezes in happiness shoop. " There's all sorts of way that you can do it, but the tariff is the important part. The point is, Trump has long believed that tariffs can fix our trade problems.
And that's coupled with his insistence that trade is zero sum. That if we buy more from another country than we are selling to them, we're somehow getting ripped off. But that is just not how it works because we are getting things in return.
As one Nobel economist jokingly said, I run a chronic trade deficit with my barber. He never buys a damn thing from me. which is just a classic economist zinger.
Nevertheless, Trump applied both those beliefs to his initial tariff plan, imposing massive penalties on countries indexed to the size of our trade imbalance, which led to some of the incredibly stupid calculations on Trump's chart. Perhaps the dumbest of which was actually explained pretty well by Jim Kramer. Let's go to the southern African nation of Lutu, which had the misfortune of being one of the two most highly tariffed nations on Trump's list.
They're being hit with a 50% duty on their exports to America. That happened because Lutu only imported $2. 8 million worth of US goods last year, whereas we imported roughly $240 million worth of stuff from them.
Now, the thing is, Lutu is a really tiny country. Virtually everything we buy from them is either apparel or diamonds. But because it's a very poor country, they can't afford to buy much from us.
So what happens now? To start, we're going to have to pay a lot more for any apparel or diamonds from Lutu. Maybe we can replace the apparel with diamonds.
I mean, that's a lot harder. And the only way for Ludu to get out of this jam is by importing more stuff from America, which it it can't do because it doesn't have any money. So the president has likely just made things more expensive for Americans and not really change the behavior of our trading partners.
He's right. Jim Kramer was right. I think I'm going insane.
And quick side note there, if you are thinking, hold on, did he say Lutu's sitting on top of a load of diamonds, but they still don't have any money. I know, but we don't have time. That's a different story that I'm sure we'll do one day.
I put a post-it note on my computer and everything. And while Trump's temporarily paused those huge tariffs on Lutu and others, it is worth asking what exactly is his endgame here. And it depends on who you ask.
When the tariffs first came down, some in the White House insisted they'd be permanent trade barriers intended to raise revenue and bring jobs back home, while others claimed they were a scare tactic designed to help us negotiate more favorable deals. But those are two very different goals with different consequences for businesses and workers who badly need to know which to plan for. So let's take each scenario internally.
Let's start with the idea that these tariffs are designed to shut out foreign competition and ensure stuff gets made here. There are a few issues with that. Starting with the fact that lots of things aren't produced in the US, sometimes because they simply can't be at any kind of commercial scale.
Even Trump's Secretary of Commerce, Howard Lutnik, pictured here rocking a little bob, seemed to understand that last month when he said this. Certain products, if I put a tariff on a mango, right, we we can't grow mangoes in America. the the it just can't grow a mango.
If you put a tariff on a mango, the mango would be more expensive. So then that's just like another version of income tax. How do you how do you Okay, so the idea is to not do that, right?
The problem is when the tariffs were announced, mangoes weren't exempted, so we did do that. And sometimes it feels like the best way to ensure Trump does something is to tell him not to do it. He's like a toddler.
Both because his brain is unable to grasp negations, and also because he has a short torso, huge head, always look like he's about to fall over, and won't let anyone brush his hair. That same logic applies to other crops like coffee and bananas. But that is not all, because it's also not easy to make electronics here.
Take the Nintendo Switch 2. The company paused pre-orders for it this week because they didn't know how it would be affected. as this analyst explained.
They got to figure out what they're going to get charged. Do they charge 50% more? Do they charge double?
Do they even ship them? How much of this is made in the US? None of it.
None of it. That is a good point, but an even better delivery of it. I want that guy on hand to respond to all other situations.
How much birthday cake is left in the break room? None of it. How much of the severance goat plot did you actually understand?
None of it. How much of Trump's trade briefing did he genuinely read? None of it.
And if you think, well, hold on, why don't we just build a switch factory here? When it comes to high-tech goods, key components have to be sourced from complex global supply chain. So, it's not a matter of simply building a factory.
There is a lot more to it. How much would it cost them to start manufacturing switches here in the US? Tens of billions of dollars.
Billions. That's because of a supply chain that's been built over decades. It would take four to 5 years to even build and get done a factory here in the US.
And the reality is the assembly, the supply chain in Asia. If you just build a factory here in the US, where are you getting all the parts from? Still in Asia.
Exactly. And some of those components are presumably about to be subjected to heavy tariffs. And quick side note, among the many things that I'm mad about right now is the fact that I have to spend time talking about how tariffs will impact the Switch instead of what I really want to talk about, which is that I only just learned the president of Nintendo in America is named Bowser.
That man, I don't you even a tiny bit, is called Doug Bowser. Now, if you don't know, Bowser is quite famously the primary antagonist of Mario, the face of Nintendo. Now, in the comedy world, the president of Nintendo being named Doug Bowser is like someone gently setting a ball on a tea, handing you a bat, and saying, "Please have fun and swing away.
" But unfortunately, because this guy doesn't understand economics, I have to look at real Nintendo President Doug Bowser and say, "Sorry everyone, no time for that. We've got math to do. " It's a truly sad state of affairs.
Or to put it another way, oh no. Exactly. The point is, if these tariffs stand, they could have the opposite of the intended purpose.
As some business owners might realize, it's now cheaper to have a factory outside the US and not have to deal with tariffs. But let's say that despite all of that, we still want all those manufacturing jobs that we lost to come back home. First, as we've discussed before, a lot of them simply don't exist anymore because they've been automated.
And second, even if we wanted to build brand new factories, it's worth knowing these new tariffs mean higher material and equipment costs for manufacturers wanting to do that. And in fact, tariffs swollen building costs have already helped to kill a $300 million plastics recycling plant in Eerie, Pennsylvania, which is a real shame for multiple reasons, including that it would have helped make Erie, Pennsylvania known for something other than the town that boiled a revolutionary war general's corpse in order to separate his flesh from his bones so they could ship him back to his hometown. The idea, the idea there being, they reassembled the skeleton once he was in his final grave site.
But you guessed it, some bones wound up falling out of the wagon on the trek as bones I want to do. It's an incredible story. And thanks to the foil recycling plant remains the only thing I will ever know about Eerie, Pennsylvania.
And even if we do end up bringing some manufacturing jobs home, you also have to factor in that other countries will put tariffs on our goods in return, which will hurt other industries. The current massive tariffs on China are incredibly worrisome for people like this soybean farmer in Tennessee. That trade relationship with China was built over decades and decades.
Will Hutchinson, a fourth generation Tennessee farmer, says he is very concerned. This is going to have a immediate and drastic impact to our ability to compete on the global marketplace for our goods that we produce here in this country. Yeah, that literal soy boy is right.
This is pointless. If I wanted to watch long-standing relationships destroyed in an instant, I'd just go to a basketball game to see which couples act weird when they end up on the jumbotron. You can enjoy relationships falling apart without jeopardizing the global economy.
And at this point, I'm sure some Trump supporters are saying, "Well, these were never intended to be permanent. " It's that second possibility that you mentioned earlier that the tariffs were always just a way to give Trump leverage to renegotiate bad trade deals. And after he announced that 90-day pause, that was definitely the message getting sold.
This is the art of the deal. This shows how strong our president is. A huge win for the president, a huge win for the country.
His biggest accomplishment of the second term. Trump won. He's doing exactly what he said he would do.
He's a genius in negotiating. He is very calculating in how he negotiates. He understands the art of the deal better than anyone.
and he's gotten results in a very short period of time. I don't know what's more desperate there, the shameless sucking up, or the needs to put the words, "We told you not to freak," at the bottom of the screen, which is funny coming from Fox News of all places, considering most of their broadcast feature messages like why you should absolutely freak about the green Eminem. But let's at least consider the possibility this was all about gaining leverage for negotiating new deals.
That was definitely the White House's spin after the pause was announced with Trump's Treasury Secretary claiming it had happened because the tariffs brought more than 75 countries forward to negotiate. But a couple of things about that. First, the White House said it will not be releasing a list of the countries that had allegedly done that.
So, you know, and and remember Trump's openly admitted the key reason for his climb down was people got the yippies. And remember, even with the pause, we still have 10% tariffs on nearly every country in the world, which is still massively disruptive both to them and to us. And that includes countries like Singapore where we're going to struggle to get a much better deal given that we face no tariffs there and actually have a trade surplus.
And I'm not saying there aren't countries where we have legitimate trade disputes because there are most notably China where there are major issues from their heavy subsidies for homegrown industries to their theft of US company's intellectual property. Resolving those issues is difficult. It requires diplomacy and a coordinated strategy with our allies.
But instead, we've alienated those allies and are going into any future negotiation, having provoked China into putting massive tariffs on our goods, too. But don't worry because Trump's charismatic Treasury Secretary doesn't seem to think they're going to be able to hurt us at all. It was a big mistake this Chinese escalation because they're playing with a pair of twos.
We are the deficit country. So what do we lose by the Chinese raising tariffs on us? The we we export to them of what they export to us.
So that that is a losing hand for them. Okay, setting aside that playing with a pair of two sounds like how you describe a threesome with Don Jr. and Eric.
That is incredibly simplistic because it ignores that China's leverage in a negotiation isn't confined to just tariffs. It can hurt us in other ways, too, including by cutting off access to rare earth elements we may badly need. Before you think rare earth elements are just some fancy powder Gwyith Paltro adds to a morning smoothie to enhance vaginal wellness, you should know they're actually essential for everything from wind turbines to computer chips to F-35 stealth fighter jets.
And incredibly, that Whoville tax accountant wasn't even the most reckless player in the Trump administration's messaging to China this week because JD Vance, true to form, was even more of a dick. What has the globalist economy gotten the United States of America? And the answer is fundamentally it's based on two principles.
Incurring a huge amount of debt to buy things that other countries make for us. And to make it a little bit more crystal clear, we borrow money from Chinese peasants to buy the things those Chinese peasants manufacture. Wow.
I know it is hard to take from someone with this accent, but you are really not supposed to use the word peasants anymore. That is incredibly insulting, especially coming from the man who remember is next in line to run the country if anything were to happen to Elon Musk. So, it is no wonder those comments went down pretty badly in China.
The government's response swift and scathing. It's both astonishing and lamentable to hear this vice president make such ignorant and disrespectful remarks on China's tightly controlled internet. Government sensors are allowing Vance's interview to go viral, amplifying the outrage, igniting anger and sarcasm.
Have you said thank you for the money we lent you? A reference to China being the second largest foreign holder of US government debt and that infamous Oval Office exchange with Ukraine's president. Yeah, that's a pretty solid burn.
And I guess in a way it's reassuring to know that despite our differences, the American and Chinese people can come together to agree that it is fun to dunk on this cursed cabbage patch And look, you can say, "Well, that's all well and good, but I still trust Trump to make a deal. " But here's the thing. We actually know what happens when he starts a trade war because remember, he did a version of this in his first term and it didn't go great.
If you look back at his tariffs back then, protecting specific products and industries like washing machines and steel, they might have worked in a narrow sense by creating modest job gains. They're credited with creating or saving several thousand jobs in the steel industry and creating around 1,800 jobs manufacturing washing machines. But in the broader sense, those jobs cost us a lot.
Trump's tariffs wound up raising prices to the point where it's estimated American consumers and businesses had to pay more than $900,000 a year for every steel job created and over $800,000 a year for each job making washing machines, putting the total cost of those jobs in the billions of dollars. And that's before you get to the fact that because his tariffs on metals drove up costs for other industries, one study estimated they actually resulted in as many as 75,000 fewer manufacturing jobs. And when it comes to China in particular, his first home tariffs did bring in billions by raising the costs of their goods here.
But the broader damage to American farmers after China retaliated was so severe that 92% of what we collected went right back out the door in the form of bailouts to them. And the kicker is we didn't get much out of all of that because after a trade agreement was reached, Trump excitedly bragged he'd got China to commit to purchase an additional $200 billion in US products. But later analysis showed it effectively bought none of those goods.
None of them. But but please don't worry. I'm sure Trump definitely learned his lesson.
And this time he's going to get an empty promise for 500 billion. Fool him once. Shame on him.
Fool him twice. That's basically what everyone does. And remember, Trump's first term tariffs are absolutely dwarfed by what he's done over the last two weeks.
And it's not like he's negotiating from a particularly strong position right now because everyone knows he just blinked. The bond markets got the yippies and he blinked. And again, it's good that that happened.
I'm glad he blinked, but it's weird to claim it's a brilliant negotiating tactic when you've already backed down before a single deal is reached. And the thing is, this could all cost us an awful lot. Because maybe the most striking thing over the past two weeks has been the degree to which it's become clear the world's trust in America has been shattered.
This isn't just the ordinary give and take of negotiations. Countries are openly saying things are different. Now, Canada's prime minister actually summed it up pretty well the day after Trump's initial round of tariffs were announced.
The global economy is fundamentally different today than it was yesterday. The system of global trade anchored on the United States that Canada has relied on since the end of the Second World War. A system that while not perfect has helped to deliver prosperity for our country for decades, is over.
Well, this is a tragedy. It is also the new reality. Wow, that is a bleak thing to hear.
Tragedy is the new reality is a grim summation of the state of world affairs, but also I'm just going to say it kind of a bar. Honestly, you slap that title on a new Fallout Boy album, the girls are going feral. And it's not just world leaders.
Investors are making it clear they no longer have the trust they once did in the stability of the American economy. Usually, when the stock market drops, the market for US government bonds improves because they're seen as a safe investment. This week though, they both went down, which is a terrible sign.
As one economist put it, investors and central banks are selling treasuries and dollars due to a loss of confidence and credibility in American assets. Financial chaos has its cost. That is bad.
And by the way, that is from Friday after the pause was announced. And that is the thing. While everyone may want to pretend that this crisis is past us, it's just not.
Even Chuck Schumer seemed to miss that point when he tweeted out, "History will remember April 9th, 2025 as America's actual liberation day, the day that President Trump backed down from his ridiculous tariff fiasco. But it's not over, Chuck. We dodged a bullet, but the monkey still has a gun.
" And incidentally, if anyone watching this is close to Chuck Schumer right now, please take his phone, take it out of his hand, and throw it into the ocean. So, so what do we do? Well, ideally, Congress would realize just how close we came to financial Armageddon and take away the president's power to unilaterally impose tariffs.
There's actually a bill in Congress right now, co-sponsored by Chuck Grassley, that would require the White House to justify tariffs and then give lawmakers the opportunity to reject them within 60 days of enactment, which seems more than reasonable. The problem is you're going to need 67 votes to beat a presidential veto. And Republicans like Senator John Kennedy are refusing to sign on using this logic.
I have not joined the Grassly bill. I'm not likely to join the Grassly bill. Um the Grassly bill will not pass and I just think it's a distraction.
Um the most immediate question for me is the president is a pit bull. He's won. He's caught the car.
The question is, what's he going to do with the car? That is a shitty answer in so many different ways, but the main one is the whole idiom, the dog that caught the car, is based on the fact dogs have no plan for what to do after they catch it. That is damning enough alone.
No one says he's like the dog that caught the car as phase one of the dog's long-term strategy to reshore manufacturing. Also, you're a co-equal branch of government. It is your job to stop that dog, not stand back and say, "I don't know, guys.
Let him cook. There's always the chance of an Airbud situation here. " Look, I don't know where things are going to go next.
We're taping this on Saturday. Who knows what's happened between now and when you are seeing this. Maybe Trump will have rolled the tariffs back even further.
Maybe he'll have put even bigger new ones on mangoes. What is clear is that he's destabilizing our economy with no real plan of action.
