Are Trump's tariffs causing the US to collapse from within? | Four Corners Documentary

0:00 [Music] The word tariff properly used is a beautiful word. For close to 40 years, Donald Trump has been declaring his love for tariffs. One of the most beautiful words I've ever heard. It's music to my ears. But the way the US president has introduced his second term tariffs has sent shock waves across the world. When I first saw that sign, I wasn't sure if it was real. It was just unbelievable. People weren't expecting those kind of numbers. I just shook my head. My wife was shaking her head and just what's next?

0:47 There was a huge shock across the markets. Nobody thought it was going to be this extreme. These tariffs were supposed to protect American workers and businesses. The terrorists now have caused me to work one day a week, two days a week, robbing from Peter to pay Paul. You have a lot of job losses. You'll get lower wages. You'll get higher prices. And you'll get no solution to the problems that these people face. Donald Trump has announced over 50 new or revised tariff policies causing chaos and paralyzing investment. This is the beginning of making America rich again. People don't feel confident about the future because the future is uncertain. We don't know if there going to be high tariffs, low tariffs, or something in

1:32 between. There's only one way to go about it. It has to be a bold bold shock and awe move. Four Corners has been on the ground in the US investigating the impact tariffs will have on Trump's heartland. We would have been paying about $50,000 for the park and we were going to be paying $84,000 for the tariff and fees and a trade war that could lead to even more global instability. The Chinese have a lot more tools at their disposal to withstand the pain than the Americans do. The worst case scenario is that it spills over from trade war into actual war. Donald Trump has torn up the rule book

2:18 in his second presidential term, defying the courts, the Congress, and the Constitution. But it was here on Wall Street that he met his match when panic selling on the bond market forced him to pause his so-called reciprocal tariffs. So what next for Donald Trump's whiplash inducing trade policy? Will he listen to those voices telling him that his tariffs are a colossal act of self harm? Or will he crash through with his protectionist policies that he says will make America great again [Music]

3:06 on April 2. Donald Trump gathered steel workers, auto workers, and other supporters for what would be one of the most momentous announcements of his second term. My fellow Americans, this is Liberation Day, waiting for a long time. April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again, announcing over 180 countries and territories that would be hit by his so-called reciprocal tariffs, ranging from 10 to 50% in what seemed like an act of vengeance.

3:55 Foreign leaders have stolen our jobs. Foreign cheaters have ransacked our factories. And foreign scavengers have torn apart our once beautiful American dream. President Trump bypassed Congress, declaring the trade deficit a national emergency. Answer the question on Australia. Longtime adversary Russia wasn't hit by a tariff, but long-term ally Australia was. We have a trade surplus with Australia. We have a free trade agreement. Why? They are incredibly important national security partner. Why were they whacked with a tariff? Senator, despite the agreement, they ban our beef. They ban our pork. They're getting ready to

4:41 impose measures on our with the idea that we are going to whack friend and foe alike. and particularly friends with this level is both I think insulting the Australians, undermines our national security and frankly makes us not a good partner going forward. In the week after Liberation Day, stock markets slumped. The stock market suffering major losses on the heels of the president's tariffs. The US and indeed much of the world may be on a collision course with a recession. A trade war escalated between the US and China, the world's two largest economies. Then, remarkably, a sell-off on the US bond market. Once we started to see the bond markets start to rattle,

5:27 that was fairly clear indication that we're on the on the edge of a cliff. We're ending the inflation nightmare. The Trump's tariffs had brought the world to the brink of a financial crisis within the first 100 days of his administration. In 100 days, we have delivered the most profound change in Washington in nearly 100 years. I read it is almost unheard of that the safest asset in the US would be heading to a fire sale and that unnerved the financial markets, the bond markets, the equity markets and it would have been a disaster that would have spread very quickly to most countries. And I want to just congratulate Donald Trump used executive orders to introduce his radical tariffs and had a cabinet and a team of advisers that either agreed with him or buckled to his will. The Trump

6:14 administration operates much more like a royal court. You have a king, you have various concentric circles of courters around them, and everybody sort of shuffles in and out of the Oval Office waning to hear the musings of the king and just implement it. Peter Navaro. A key architect of Trump's tariff policy is his trade adviser, Peter Navaro. Yeah, I think you folks just want to know if you can see my maggot tattoo I got there. There are days when Peter Navaro, who is a radical protectionist, perhaps the only economist in the world who agrees with Trump's idea of reciprocal tariffs, gets into the Oval Office and has the president's ear. Tonight I'm here with you in this beautiful city of Milwaukee.

7:01 Navaro is a demonstrably uninformed guy. This is some guy who was unknown who somehow got recruited by Trump in 2016 and really doesn't know how anything works. Peter Navaro has also done time in jail as a self-styled martyr for MAGA. Every person who has taken me on this road to that prison is a freaking Democrat and a Trump hater. He served 4 months for defying a subpoena from the House Select Committee that investigated the January 6 attacks on the US capital. With panic setting in on the bond markets, the Commerce Secretary Howard Lutnik and the Treasury Secretary Scott Bessant realized they had to get Peter

7:47 Navaro away from the president. So Peter Navaro was pulled to another part of the West Wing and in his absence, Lutnik and Bessant unannounced, unscheduled, went to meet with Trump. They told him why they believed he needed to announce an immediate pause and to change course lest the economy fall into utter collapse. He agreed. Lutnick and Bessant waited and stood by him as he typed out a truth social post announcing the pause and then Bessant and the press secretary for the White House immediately went to the cameras to announce it. The backdown was portrayed

8:34 as a master stroke. Many of you in the media clearly missed the art of the deal. You clearly failed to see what President Trump is doing here. Donald Trump had now dialed back virtually all of his reciprocal tariffs to 10%. Giving 90 trading partners 90 days to renegotiate new trade deals. Well, 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. Now, Navaro only found out after the fact and he was shocked. It was a huge moment. It was a huge day. Donald Trump's tariffs on China remained in place and had escalated to a staggering 145%.

9:21 President Xi had retaliated with 125% making it now effectively a trade embargo. [Music] Molson Hart is one of the hundreds of thousands of business owners caught up in the chaos of Trump's tariffs. We don't know what's going to happen tomorrow. We don't know what's going to happen in the next couple of months. There could be shortages of certain goods depending on how soon we make a deal. If we make a deal. Molson manufactures children's toys in China and imports them to the US. These are our plush animals that come from China. When we visited his warehouse in Austin,

10:06 Texas, the tariff on imports from China was at 145%. So, this particular container actually left Asia and got on the water a couple of days before those tariffs were implemented. Every production that we had in China that would have had to pay that 145% tariff, we stopped because 145% is just a massive increase of cost. After the Liberation Day tariffs were announced, Molson needed to move quickly to shift his manufacturing base out of China. I'm really tired to be honest. I wake up in the morning and my routine is now like check we chat for all the Chinese suppliers, check WhatsApp for

10:52 all the Southeast Asia suppliers. Then I work the full day and then at night it's back to the same apps every day over and over. Why? We're trying to shift our production outside of China to Southeast Asia. It's enormously difficult. like it takes 6 months to a year to properly move production depending on what you're making. Obviously, the more complex it is, the harder it is to do. In some cases, it's not even possible to do. The US toy association says nearly 80% of toys sold in the US are made in China, and the industry is predicting price rises, supply shortages, and bankruptcies.

11:39 We've actually had to pause production in China. So, at some point, we're going to start to face inventory shortages for some of the products that we make there. And a lot of these things are it's still up in the air as to whether or not we'll be able to transition production from China to to Southeast Asia before we run out of stock. Before we run out of stock. At the end of last year, Molson built a second warehouse to rent out to a manufacturer, but he can't find a tenant. People don't feel confident about the future because the future is uncertain. We don't know if they're going to be high tariffs, low tariffs, or something in between. So, that's the first kind of blow that was dealt to business

12:24 confidence. The second is that all these importers need to get that extra money to pay the tariffs. And when there's less money to go around for things, confidence in business in general declines. Farming communities are going to be hit hard by Trump's tariffs. Decisions made by the president are upending the lives of families who have relied on agriculture for generations. The tobacco industry dominated North Carolina for 150 years. Reedsville became known as the lucky city after the billions of Lucky Strike cigarettes that were made here.

13:14 John Ash and his forefathers have a long history of growing tobacco in this region. Not many families can say this, but black families that is, but we've been here for over a hundred years. My greatgrandfather, my grandfather on both sides, and my father were all farmers. Like many farmers in this area, John relies on another crop, soybean, for his livelihood. A crop worth 13 billion a year in US exports to China. I would say that 40 to 45% of my soybean crop is exported directly to China.

14:02 When we visited John's farm, he was sewing his first soybean crop of the season. I'm going to plant about 50% less than I would normally because I don't know what the price is going to be. I don't want to take the risk of putting even more out there and I'm cutting back. I I'm just cutting back. Soybean farmers were hit by tariffs in Trump's first term, which helped Brazil overtake the US as the world's largest soy producer. John is worried it's going to be even worse this time. I'm concerned that they're going to find other places around the world that can fulfill their needs. Sometime, you know,

14:47 you find another grocery store you like, you don't go to your old grocery store anymore. And I'm concerned about that. The tariff chaos means he doesn't even know what crops to sew. You never know how to plan. you hear they got working on trade with this one or that one. Next thing you know, they're not working on trade with this one or that one. I've never seen anything like this before. And it changes from lunchtime to to set Scott news down the road from John's farm. Trump's supporters are keeping the faith. Well, I think that it's going to be a little pain up front. At this gun show in

15:35 nearby Greensbor, it was hard to find anyone who didn't think the pain of the tariffs were worth it. But I think that eventually it's going to pay off. And he's uh one of the things I like about Trump is he's a businessman, so he understands how to negotiate and stuff. I think it's a good idea to try may not be in four years, but to eventually bring jobs back to the United States, and that's what we're all hoping. So I'm I'm standing behind him until that. I think it might hurt first, but I think we'll benefit from it in the long run. I think anything it's new sometimes you hurt from it, but if you recoup from it and it benefits, I think in the long run you come out ahead.

16:23 One of the titans of the US steel industry agrees that some pain is necessary. And yet there's going to be pain. But when you go to a doctor and he tells you he has cancer and he says there's a treatment, it'll cure you, but it's going to hurt like hell. What's your decision? To experience that pain to get healthy again? Yes. Dan Demo was CEO and chairman of the US's largest steel manufacturer, New Core. In 2016, he served as a trade adviser to Donald Trump alongside Peter Navaro. And we've allowed ourselves to lose our manufacturing sector. Four or five million jobs, middle class, working class destroyed, become a fentanyl channel for the Chinese Communist Party to so they can play their opium wars on

17:09 us. Our working class has been decimated and they got nothing out of it. That's stopping. We're going to rebuild that middle class. We're going to bring manufacturing back. And this is a message to the entire world. Trump is sending out one message to the entire world and he's sending out a huge, huge message to the Chinese Communist Party. Dan Demo is adamant that Trump's tariffs will bring back manufacturing to the US. Watch the jobs come back because we've created the incentives for people to build here and make it here. Is anyone going to build at the moment though? There is so much There already are. There's so much uncertainty. Who would invest when tariffs are bouncing around and no one knows what the future's going

17:55 to be? I I will tell you quite categorically as you and I speak, there's deals being cut to build manufacturing plants in every critical industry that we've lost in this country today, and many of them are already breaking ground. Economists who have evaluated Trump's tariffs say they will create more losers than winners. The president is very happy to pronounce which firms are coming. The answer will be how many firms exit relative to those that are coming in. The actual overall impact on the economy is going to be a loss of of capital and therefore a loss of jobs. So without further ado, Warrick, I would like to welcome you to the podium. Warrick McKibben is internationally renowned as an economic

18:41 modeler having made accurate predictions around the outcomes of the global financial crisis and the co pandemic. How much revenue do we think you would get from the tariffs that are being proposed? There's a new definition. He says the tariffs will harm not protect manufacturing workers output falls about manufacturing employment will be down between 5 and 10% by the middle of next year. So you have a lot of job losses, you'll get lower wages, you'll get higher prices uh and you'll get uh no solution to the problems that these people face, which is structural adjustment that has never been dealt with and is not dealt with by this presidency. In May, the month after the tariffs were introduced, the manufacturing sector shared 8,000 jobs. Pennsylvania was once part of the

19:27 industrial heartland of the US. It was in Harrisburg in 2017 at the Ames manufacturing plant that Donald Trump parked the presidential desk on the shop floor and celebrated his 100th day in office. It's wonderful to be at as an incredible company. It was here that he signed executive orders aimed at keeping manufacturing jobs in the US. I think what I'm going to do is give this pen to Peter Navaro. Is that okay? This plant has been operational since 1876. Ames was producing over 1.5 million wheelbarrows a year, but now they're

20:13 made in China. They were a customer of ours for probably the last 30 years or more. Then they made the decision that they're going to send their manufacturing overseas to China. It was very sad to see them go. Dan Turner runs a hydraulics company in nearby Carlile. We employ about 40 45 people and uh we're in the hydraulic component repair and uh systems design and fabrication and installation business. It actually started in the backyard of my parents in 1978. When the Turner's business started, around 20% of American workers were employed in manufacturing. That's now dropped to around 8%.

20:58 I believe in bringing manufacturing back to the United States and supporting manufacturing because it's really a staple of of civilizations. I think that that we need to make things. I uh did vote for Donald Trump in the last election. Uh he was in my mind the more pro business candidate. But Dan's already been stung by Donald Trump's tariffs. In January, he ordered a component from China worth $48,000. Days after the product was shipped, the new tariff regime was brought in and the cost escalated to around $130,000. We were told that the tariffs were 145%,

21:46 but there was still that 25% from 2018. So the tariff total was going to be 170%. To suck $70,000 out of a business with no good reason is is very detrimental. It's been a similar story in businesses across the country. Successful manufacturers rely on Chinese inputs to make their products. The tariffs actually don't promote economic efficiency. They do the opposite. If you don't believe me, look at the countries that tried this. Economic historian Sil Ferguson says the US can't turn the clock back to its manufacturing past. Adam Smith wrote The Wealth of Nations,

22:33 published the same year the United States was founded. And Smith said, "Free trade is superior to protection in all kinds of ways." And Donald Trump picked a fight with Adam Smith. Adam Smith is going to win that fight. Even if manufacturing jobs came back to the US, would American workers want them? The US Labor Department estimates that there are close to half a million jobs in manufacturing that are currently not filled. I don't know if he realizes I don't think we have a labor force to possibly manufacture as we did in the 60s here. the people today, they don't want to work in a

23:19 manufacturing. It will take some training and some time and uh possibly some sort of like mental adjustment period for Americans to start doing some of the jobs that are done in China. They're really hard. Would modern day American workers want to work in factories like they used to? Absolutely. Absolutely. Are they up to the job? Yes. Absolutely. You know, because we 35,000 teammates. Where do you think they come from? The United States of America. They come from the rural areas. They come from the cities. They come from all over the place. While the US waits to see whether tariffs will bring back manufacturing jobs, many workers in Donald Trump's heartland are already hurting.

24:09 [Applause] I'm third generation trucker peer what what we call a peer rat. I love this industry. It it runs in my blood. Uh the tariffs have basically slowed down our our uh our means to make money. Uh uh the tariffs are affecting us uh drastically. Uh especially in the beginning with the uncertainty and everyone is struggling. I speak to hundreds of companies and everybody is hurting. Mark Neves has worked in transportation for over 40 years in operations management, in supply chain, in safety, and as a truck driver. He normally picks up loads from the ports of New York and New Jersey. In May, the

24:55 work started drying up due to the trade war with China. Empties, these are empties that have come back to the port uh without a destination. So, the numbers don't match. When that's full, this uh this should be full, and it's not. There are over 3.5 million truck drivers in the US, and many of them voted for Donald Trump, but in early May, the president didn't seem too concerned about the impacts his tariffs were having on truckers. We're seeing as a result the ports here in the US the traffic has really slowed and now thousands of dock workers and truck drivers are worried about their jobs. That means we lose less money. You

25:42 know when I see that that means we lose less money. So when you say it's slowed down that's that's a good thing not a bad thing. I saw his interview with the news media and and how he uh they asked him, "Hey, truckers in the ports are really struggling, right?" And his response was good. Uh at least at least China's not stealing from us. It's not about China. It's about us. The tariffs now have caused me to work one day a week, two days a week, robbing from Peter to pay Paul. The supply lines have basically dried up. It makes me want to cry sometimes. Mark is running as a Republican candidate for the Union County Commission in New Jersey and hopes to be a voice for truck drivers.

26:27 The country has spoken and he is our president and I support him 100%. However, I think he could have handled it much better. In what way? Uh again, he should have gotten the consultation of real people who who who live this industry, who who know this industry. With supply lines choking, President Trump may not have been listening to the little guys, but the big retailers did have his ear. The CEOs of Walmart and Target got into the Oval Office and they said, "Mr. president, there will be empty shelves in our stores if you cut off all trade with China. Because in effect, Trump had imposed an embargo on trade with China. I don't think it was the truck drivers or the farmers or anybody else uh that

27:13 got to Trump. It was Wall Street and it was the big retailers. On May 12, Treasury Secretary Scott Bessant announced there would be a 90-day pause on the extreme tariffs between the US and China. Both sides on the reciprocal tariffs will move their tariffs down 115%. Rule number one for dealing with China is accumulate as much leverage as possible. And as far as I can tell, Donald Trump started a trade war with China without having accumulated any leverage whatsoever. And now we've negotiated a 90-day ceasefire. And not only have we not accumulated any leverage, we've just signaled that we

27:58 lack resolve. This is a very dangerous point for the United States. If you think of the game of chicken uh from the famous James Dean movie, Rebel Without a Cause, two crazed teenagers are driving their hot rods towards a cliff edge, and the game of chicken is who swerves first. Well, in this game of chicken, uh, Trump did open the door, uh, by sending Treasury Secretary Bessant to Switzerland to negotiate with his Chinese counterpart, Hurley Fang, and reduce the tariffs. In the game of chicken, it was the US that lost. Number one, we have to get after losing that game of chicken, Donald Trump became the subject of ridicule. Mr. President, Wall Street analysts have coined a new term called the taco trade.

28:45 They're saying Trump always chickens out on your tariff threats and that's why markets are higher this week. What's your response to that? Oh, isn't that chicken out? I've never heard that. You mean because I reduced China from 145% that I set down to 100 and then down to another number and don't ever say what you said. That's a nasty question. The backdown on China was good news for Dan Turner. Sit down. Tell us the difference between these two documents. If the ship bringing in his component had landed two days earlier, he would have paid $84,000 in tariffs. We just got this this morning. That's courtesy of the ultimate deescalation. Uh yes, you're still paying $27,000 in tariffs on a product worth what 48,000. Uh yeah. Yeah. Yeah.

29:33 So yeah, we're paying 55%. And and so the news is all saying I think like 30%. Well, no, there's still a 25 on there. So people don't really understand the full impact. It's still existing. Uh and and so now we're we're still underwater, but but way better than if we were at the full rate. The uncertainty remains. With the tariffs bouncing around, Dan doesn't want to risk ordering any more components from China. We are on hold with ordering anything from China. If we order now as our last shipment took four months. So we would be in the same boat as we are now if we order now. What's your thoughts about how long this uncertainty is going to

30:20 last? Maybe another 3 and 1/2 years. Warrick McKibben says that his modeling shows the tariffs will increase the cost of living. We find around 1 and a.5% in higher inflation in 2025 as a result of the tariffs. A lot also depends on how the Federal Reserve responds. If you ask who buys a lot of stuff made in China, it tends to be Americans lower on the income scale. The tariff on China, it's a direct tax on basically the consumption baskets of working Americans. [Music]

31:07 One of the primary reasons Donald Trump is in power is because he promised to reduce the cost of living. that his tariffs will increase costs, including on the coffee sold at the Trump Cafe inside Trump Tower, which will be subject to a 10% tariff. [Music] The US is the world's largest importer of coffee, and historically, it's tariff-free here. You can't grow coffee beans in most parts of the US, so there's no domestic industry to protect. But under Donald Trump's plan, coffee beans will be tariffed. So this coffee bought from the Trump Cafe will soon cost around $830. That's close to 13 Australian dollars. And it's a similar issue with bananas,

31:54 which are difficult to grow in most parts of the US. What's the tariff on bananas? Americans, by the way, love bananas. We buy billions of them a year. Generally 10%. Correct. 10%. Walmart has already increased the cost of bananas by 8%. As countries do deals with us, that will go to zero. There's no uncertainty. If you build in America and you produce your product in America, there will be no tariffs. We cannot build bananas in America because of the the damage to the United States steel industry that with Donald Trump now announcing tariffs by presidential decree, there are concerns he will abuse that power to enrich his family. Tariffs were always seen as a source of corruption when they were central to US

32:40 fiscal policy in the late 19th century. Fantastic job. But at that time it was Congress uh and not the president uh who controlled tariffs. The corruption has therefore moved inevitably to where the power is uh to the White House. Vietnam was one of the countries hit hardest by Trump's reciprocal tariffs. Vietnam great negotiators, great people. We're going to charge them 46% tariff. During the tariff negotiation period, Vietnam's prime minister hosted Eric Trump to announce that a $1.5 billion luxury residential complex would be developed by the Trump Organization. It's been reported that the government fasttracked the project after an intervention from President Trump.

33:26 I think if the Republicans lose the midterms and the Democrats gain control of the House of Representatives, we'll see a third impeachment. Trump and his family are giving the Democrats so much to work with here that they will be spoiled uh for choice. It is shocking uh to have this kind of flagrant oligarchical behavior in the United States. Uh but I think the consequences will not be uh completely trivial uh for President Trump if his power waines. [Music] On a picturesque bend of the Ptoac River is the well-hill DC district of Georgetown. It's here that Donald Trump Jr. and other investors are reportedly setting

34:11 up an invitationonly club called the executive branch that costs around half a million dollars to join. It's designed for business leaders and tech moguls who want to hold private meetings with members of the Trump administration. When you combine a new tariff system that's changing all the time with an administration that you can buy access to, you get what the Democrats are calling an invitation to corruption. The levels of corruption that we are seeing today in this administration, including when it comes to trade, are off the charts and have completely broken the norms and are probably grossly illegal.

34:57 So, could the Trump tariff chaos spread to Australia? We are currently facing the universal 10% tariff as well as the 50% tariff on steel and aluminium. We sell a lot of commodities to the US. We sell a lot of beef to the US and those things we can sell elsewhere. We're not going to be impacted by tariffs as much as other countries might be. Uh we can easily pivot to Asia. Warrick McKibben thinks that tariffs on China will have a minor impact on Australia. So the US puts a tariff on China, the Chinese economy slows down. Australia's iron ore exports will go down as a result. The Australian outcomes are not very bad at all. It's about a quarter% on inflation and about a2% on GDP loss.

35:45 It's big tech that's emerging as a battleground for Australia. The news media bargaining code, which forces the big tech companies to negotiate deals to help fund Australian news content, is seen by the Trump administration as a barrier to trade. And the tech bros want action on this and other matters. I think that they will be asking for terms that give them absolute discretion regarding the decisions that they make when it comes to your data and my data and all the data that is being generated around the world every second of every day that fuel their ability to profit

36:31 and to dominate not just in the marketplace but also in the political sphere. and to shape our experiences as human beings. Katherine Tai was the US's top trade representative under Joe Biden. She says the Australian government has already shown courage to push back against the big tech companies and they will need to find some more. When you see Elon Musk standing there taking a press conference next to the Resolute desk in the Oval Office, when you have seen Bezos for Amazon, Zuckerberg for Meta and the Google CEOs

37:16 with better seats at the inauguration than the president's own cabinet secretaries, be very, very careful about what you negotiate in a digital agreement because I guarantee you even more So today than in the past, that agreement will be catering to every wish on those CEO and those companies list. [Music] Donald Trump has started a trade war with China that could have ramifications for global security, strategic alliances, and the economic world order for decades to come. We're at a unique moment, a hinge moment in international politics in which the

38:03 distribution of power among countries globally uh is shifting. Despite the reductions in Trump's extreme tariffs on China, this trade war is far from over. 30% is not a low tariff. My best estimate is that a 30% tariff will cut US trade with China by 65%. That doesn't sound to me like trade peace. This trade war is not just about tariffs. China controls the processing and supply of rare earths and is now restricting exports to the US. There are critical commodities like gallium, germanmanium, antimony. These are things that could go into specialty magnets.

38:50 These are things that are used in defense production in which China has a monopoly importantly in both the mining and the processing. And so the Chinese cut cut off exports of those to the United States. [Music] Evan Madios is a former director for China on the US National Security Council and served as President Obama's principal adviser on the Asia-Pacific. He says China has been preparing for this trade war since the first Trump administration. China has created a series of what I like to call precisiong guided economic munitions. Its use of export controls, its use of antitrust investigations, its use of the unreliable entities list.

39:40 The US has in turn cut the sales of key technologies to China relating to aircraft and semiconductors. If you bring that in and you start showing China that I can choke you here too, what you have potentially is a choking contest and honestly in that kind of a context I don't know who wins. Xiinping doesn't have to worry about being reelected. Xiinping can do a lot better at mobilizing and allocating resources to account for the shortages caused by the trade war. So at least over the short term, the Chinese have a lot more tools at their disposal to withstand the pain than the Americans do. As an authoritarian state, China is able

40:25 to control and plan its economy in a way democratic countries can't. Over the past decade, President Xi has redirected investment into advanced industries while cutting off foreign investment and competition. So the Chinese in 2015 adopted a strategy called made in China 2025 where they very deliberately chose 10 different sectors where they wanted to become a world leader and the government said we are going to invest in companies in these sectors. And it included EVs, batteries, clean energy, but also included other sectors, ship building, uh, biofarma, advanced communication technologies, 5G,

41:12 6G, and then of course chips and artificial intelligence. China now produces around 30% of the world's manufactured goods. In achieving such dominance, it's been accused of abusing the rules of global trade. The Chinese market has become less and less favorable to foreign participants. There are many cases in which we strongly detect evidence that China is not playing by the letter of the rules on subsidies, for instance, under the WTO. Rather than working with allies to contain China, Donald Trump is alienating them.

42:00 When it comes to trade, there are no allies. You need to understand that there are no allies. Everybody manages their trade for their country to their best advantage except us. [Music] Critics also worry that by moving away from a rules-based free trade system, Donald Trump is making the world a less prosperous and more dangerous place. I don't think the trade war is going to end. I I think the issue is that does the trade war escalate into something bigger and more dangerous? How much damage does it do to all the economies concerned? I think it's likely headed to a period of long-term multipolarity in which you have multiple power centers

42:46 that are constantly competing for prosperity and security. And if there's one thing that the history of international relations tells you is that multipolarity is usually an inherently unstable system. So more chances of wars, do you think? Absolutely. At some point it's conceivable that so much pressure is being exerted on the Chinese economy which after all relies very heavily on exports that Xiinping decides you know what let's also bring national security into this debate and makes a move on Taiwan. I'm not talking about an invasion or a blockade, but it's perfectly plausible that at some point he says, "You know what? Talking of trade, we're going to start collecting customs on goods going into Taiwan, which after all, the Chinese consider a

43:32 province of China." That will be the moment that we leave the domain of of trade and enter the domain of geopolitics. We leave behind trade war and we run the risk of real war. On July 8th, Trump's 90-day pause on reciprocal tariffs expires, and with it, the deadline for any trade deals. So far, his radical economic policy has unleashed chaos. His supporters say it's all part of the master plan. Donald Trump is playing four-dimensional chess while everybody else is saying, "Where's your plan?" While others argue there's no coherent plan behind the policy. I think it's really just the Mara strategy. Just trust me and I will deliver. I'm a

44:19 businessman. I know what I'm doing. It's a belief. It's a religion. There's nothing about Donald Trump's policym that looks even remotely well thought out. If officials are chosen because of their loyalty to Trump and the incentives within the royal court are to affirm the leader, you get policy decisions like uh the trade war. We need to have some certainty and some sort of plan for where we're going. Otherwise, we can't adapt our businesses to this crazy uncertainty. One of the countries didn't have any people on it. It was just an island with penguins. That just showed me that, you know, there's not a lot of thought going in this process. I hope he has a master plan that I don't understand, but I

45:06 don't I don't have that confidence at this time. [Music] [Applause] [Music]