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Speaker 1

00:00

-♪ ♪ -♪ ♪ Trade, the basic system of barter and exchange that you have to do really carefully, or you'll end up with Dwight Howard. Seriously, parents, talk to your children about trade. You don't want them going to school with pizza Lunchables and coming home with Dwight Howard. You think he's gonna add a three-point shot to his game now, kid?

Speaker 1

00:20

Grow up. No. Trade. Trade is a subject on which our current president considers himself particularly expert.

Speaker 2

00:27

Trade. That's what I'm... I'm gonna do so good. I'll take those trade deals and make them so good.

Speaker 2

00:32

That's what I do. I love taking bad deals and making them good. I love trade. You know, trade's always been my thing.

Speaker 2

00:36

I could name 10 different forms of trade. I know every 1 of them. Hey, the Wharton School of Finance right here.

Speaker 1

00:42

Yeah, I can name 10 forms of trade. There's a free trade, Fair trade, rough trade, Trader Joe's, that's what, 8? Then there's human trafficking, that's like trading for people.

Speaker 1

00:50

We'll round it up and call it 10. Wharton School of Finance, right here. Trump has talked a big game on trade for decades, and he spent this year slapping tariffs on products from China, Canada, the EU, and others, prompting them to retaliate with tariffs of their own. And this trade war has escalated fast, from tariffs on just 18 products at the start of the year to now over 10,000.

Speaker 1

01:10

So things have gotten pretty serious, and American workers are already being impacted, particularly in agriculture.

Speaker 3

01:16

We're feeling a lot of pain right now in the farm sector.

Speaker 4

01:20

It's affecting farmers in a negative way.

Speaker 5

01:23

I always hope that 1 morning, President Trump's just gonna wake up and send out that 3.30 in the morning tweet that says, tariffs are gone.

Speaker 1

01:33

Wow. That is a depressing thought. That guy's livelihood depends on a tweet that says, tariffs are gone. And even if Trump does end up doing that at 3.30 in the morning, you just know it'll say, tariffs ape goon, and we'll all have to decide what he meant by that.

Speaker 1

01:47

So, tonight, before things get much worse, let's take a look at this trade war, because it's tempting to think that Trump has a plan. After all, trade is his thing. And he's tweeted, trade wars are good and easy to win. But for years, his strategy on that seems to have been based around little more than tone of voice.

Speaker 2

02:04

So easy. I drop a 25% tax on China. And...

Speaker 2

02:12

And, you know, I said to somebody that it's really The messenger. The messenger is important. I could have 1 man say, we're gonna tax you 25 percent. And I could say another, listen, you motherfuckers, we're gonna tax you 25 percent.

Speaker 2

02:28

-...-Oh,

Speaker 1

02:30

I see. Okay. So the tone is important.

Speaker 1

02:33

So if I were to say to somebody, that's not how trade negotiations work, that would be 1 thing. But if I were to say, that's not how trade negotiations work, you dumb motherfucker, that would be much more effective. That's good for me to know because, for all Trump's confidence, there are some very basic things about economics that he seems genuinely confused by. Take tariffs.

Speaker 1

02:53

Trump once tweeted that if the trade war doesn't end, other countries will pay us vast sums of money in the form of tariffs. We win either way. But that's not how tariffs work. Tariffs are taxes designed to make foreign goods more expensive, therefore making domestic products more appealing.

Speaker 1

03:10

Other countries don't pay us tariffs. Importers here do when they receive the goods, and they usually pass that cost along to the consumer. So when Trump imposes a tariff on an item, you are probably going to pay more for it, as reporters have been trying to explain in the most literal way possible.

Speaker 4

03:26

Here in the kitchen, made-in-China utensils and appliances like stoves and refrigerators are being targeted. Upstairs in the bathroom, everyday items like shampoo, nail clippers, makeup, and towels.

Speaker 6

03:36

It could mean higher prices for things like instant coffee and this Harley Davidson motorcycle.

Speaker 7

03:41

Everyday items like the iPad could be hit. The tablet has a chip from Intel, which could be a target. E-scooters have taken off this year.

Speaker 7

03:50

Now they face a 25% tariff.

Speaker 1

03:54

Okay, I hate to admit this, but if 1 of the key casualties of this trade war is E-scooters, I actually think I'm fine with that. They are basically if Dane Cook somehow became transportation. And it's not just tariffs that Trump seems to misunderstand, there's also our trade deficit.

Speaker 1

04:11

Basically, the number that expresses how much more we buy from other countries than they buy from us. Trump talks about it all the time, usually like this.

Speaker 8

04:20

Our trade deficit ballooned to 817 billion dollars. Think of that. We lost 817 billion dollars a year over the last number of years...

Speaker 8

04:38

-...in trade. -...in trade. In other words, if we didn't trade, we'd save a hell of a lot of money.

Speaker 1

04:46

Okay, okay. So there is a lot to unpack there. First, our trade deficit is actually 552 billion, so he was off by a quarter trillion dollars.

Speaker 1

04:55

What a school of finance right there. Second, trade deficits aren't actually always bad, And many economists believe, for very complex reasons involving savings rates and the dollar's special status as the world's reserve currency, that America's trade balance might be more or less where it should be. And finally, and this is important, when we have a trade deficit, we don't lose money. It's not a big pile of cash that we handed over, we bought things that we received.

Speaker 1

05:19

And I'm not saying that it was all valuable. Does anyone really need the pony-up daddy saddle, which allows your child to symbolize their newfound dominance over your life? No, no, I didn't need it, but I wanted it, and honestly, it's brought my dad and me closer together. And...

Speaker 1

05:34

And even the world leaders that Trump has been fighting with seem alarmed by how little he understands trade. EU chief Jean-Claude Juncker reportedly met Trump armed with a series of colorful, simple flashcards to explain the trade war. And the word that really gets me there is colorful. Because that means, that means that they had some simple flashcards and thought, no, too wonky, let's get some big fun baby colors on those things, let's give him a chance.

Speaker 1

06:00

And Angela Merkel struggled to explain something even more basic.

Speaker 6

06:04

The independent newspaper citing an unnamed senior German official, 10 times, Trump asked Ms. Merkel if he could negotiate a trade deal with Germany. Every time she replied, you can't do a trade deal with Germany, only the EU.

Speaker 6

06:16

On the 11th refusal, Trump finally got the message, oh, we'll do a deal with Europe then.

Speaker 1

06:21

So, he understood, but only after the 11th refusal. Just listen to what that sounds like.

Speaker 9

06:30

Deal with Europe. Ha! Deal with Europe.

Speaker 9

06:31

Ha! Deal with Europe. Ha! Deal with Europe.

Speaker 9

06:34

Ha! Deal with Europe. Ha! Deal with Europe.

Speaker 9

06:36

Ha! Deal with Europe. Ha! Deal with Europe.

Speaker 9

06:39

Ha! Deal with Europe. Ha! Deal with Europe.

Speaker 9

06:41

Oh, okay, I'll

Speaker 1

06:42

deal with Europe then. Honestly, I'm just amazed that after the fifth time, Angela Merkel didn't turn to her translator and say, -"Okay, you're fucking fired. You can't possibly be translating this right." And look, I am not saying that it's easy to understand trade.

Speaker 1

06:54

It's 1 of the most complicated issues there is, technically, politically, and emotionally. Over the years, free trade has been criticized from all sides. People argue that unfettered trade can reward the worst behavior of multinational companies and exploit countries with fewer protections for labor. And that has unquestionably happened.

Speaker 1

07:13

But Trump generally confines himself to arguing that trade is responsible for the death of U.S. Manufacturing jobs. And while there is some truth in that, automation is the far bigger culprit. We actually still make a lot of things in America.

Speaker 1

07:26

U.S. Factories now manufacture twice as much as they did in 1984, but they do it with one-third fewer workers. And the overwhelming consensus among economists is that trade between countries, generally speaking, can create jobs, lower costs, and be a net benefit to both nations. Essentially, think of trade like sex.

Speaker 1

07:45

If you're doing it right, it can be good for both partners, though the odds of that happening plummet as soon as Donald Trump gets involved. And the problem, the real problem, with Trump not understanding trade is that he therefore doesn't understand its consequences. For instance, 1 of the first major shots he fired in this trade war was putting tariffs on steel and aluminum. That was great news for the people working in those specific industries, like this worker in a Missouri aluminum plant.

Speaker 10

08:12

You think that his policies are kind of why you have a job today? I know it is. You know it is?

Speaker 10

08:18

Yeah. I wouldn't have this job if I... If it didn't happen, wish I could mate him. I'd give him a big old hug.

Speaker 10

08:26

You know?

Speaker 1

08:27

Yeah, I do know. And I honestly get why he wants to hug him. Trump got him his job back.

Speaker 1

08:32

It's 1 of 2 possible explanations for that man wanting to hug Donald Trump. The other, of course, being that if, during the early stages of the campaign, Trump and Melania were driving through Missouri on a stormy night and their car broke down. Donald's not getting out, so Melania ends up climbing out into the rain and opening the hood as that aluminum worker comes driving down the highway. He rolls down his window and asks if he can help, to which Melania gratefully asks, maybe a flashlight?

Speaker 1

08:53

And just as the aluminum worker is handing the flashlight over, it gets struck by lightning and they switch bodies. So, now, Donald is living in the White House with an aluminum worker who feels understandably weird about holding his hand, while Melania is forced to pine after her husband from the factory floor, her heart aching for him every second of every day, knowing full well that revealing her true identity would just complicate things for everyone, but that's bullshit, Melania! You go to him! The world will accept your love.

Speaker 1

09:19

That aluminum worker clearly isn't in love with him. Everyone can see it. It explains so much. Look, the point is...

Speaker 1

09:28

The point is... For that... For that individual guy in that individual job, things have improved. But when it comes to trade, nothing happens in isolation.

Speaker 1

09:38

And there are downstream effects to those tariffs. Not too far from where that guy works, there is a nail factory, which suffered because, thanks to Trump steel tariffs, the price of their raw material, steel, skyrocketed. Sales dropped in half, and they've laid off over a hundred workers, and those that remain are worried.

Speaker 8

09:56

Some of these people, this is the only income they got. Just like me, this is the only income I got, and I gotta put another daughter through school. You know, it's gonna be hard.

Speaker 1

10:06

Yeah, it is. That's the problem here. Protecting steel helps steel, but it hurts anything made from it.

Speaker 1

10:13

And you have to balance those consequences. By 1 estimate, Trump's tariffs may create 26,000 jobs in steel and aluminum, but could cost over 400,000 jobs across the rest of the economy. So if Trump's trying to create jobs, almost anything would be a better idea than tariffs. He'd be better off dressing a turtle up like David Bowie and throwing him into a pool full of milk.

Speaker 1

10:36

Will that create jobs? Of course not, but it won't actively lose hundreds of thousands of them. Plus, it'll be the highlight of Ziggy Shell Dust's life. And listen, listen, We're still only scratching the surface of how complicated this is.

Speaker 1

10:50

Because distinguishing between a foreign product and an American job can be a lot trickier than you'd think. Take some of Trump's favorite villains when it comes to foreign companies.

Speaker 2

11:00

They sell Mercedes and BMW, and the cars come in by the millions. And we hardly tax them at all. We can't do this stuff anymore.

Speaker 2

11:08

We protect Germany. Germany, who doesn't have a BMW? We're gonna tax Mercedes-Benz, we're gonna tax BMW, We're gonna tax all of those beautiful Mercedes Benzes that are coming in, and we're gonna tax BMWs that are coming in.

Speaker 1

11:24

Trump is furious with German cars. And here is the thing about that. In the clip where he said, who doesn't have a BMW to the crowd in his classic man-of-the-people way.

Speaker 1

11:34

Trump is actually in North Augusta, South Carolina, and just 2 hours' drive away is a place called Spartanburg County, well-known for this.

Speaker 11

11:43

Spartanburg is home to the largest BMW plant in the world. Last year, they made more than 370,000 luxury SUVs, employing 10,000 people, pumping billions into the state's economy.

Speaker 1

11:55

Yeah, it seems Trump didn't know that. And look, everyone knows He doesn't know a lot of things. But occasionally, it's important to remember that he also doesn't know anything.

Speaker 1

12:05

It's true. It's true. I'll show you. Everyone, close your eyes right now and think of something.

Speaker 1

12:11

That thing you're thinking of, he doesn't know that. -♪ ♪ -♪ And since the trade war began, Spartanburg County is actually double-fucked because they'll be affected by higher costs for the steel that they use to build the cars, and when they try to ship them to China, they'll be hit by Chinese tariffs. So they are in complicated trouble, or as Trump might put it, listen, you motherfuckers, You're getting taxed twice. So, if a trade war could be this disruptive, and the net benefits are likely to be this negative, why is Trump doing this?

Speaker 1

12:40

Especially because members of his own economic team seem against it. Gary Cohn reportedly left over the proposed tariffs, and Steve Mnuchin, Treasury Secretary and white hot sex bomb, has tried to do some damage control by claiming we're not actually in a trade war at all.

Speaker 6

12:57

This has been a trade dispute all along. It never was a trade war. It's a trade dispute.

Speaker 1

13:02

Oh, I get it. It's not a war, it's a dispute. You know what, I almost bought that bullshit because I was so distracted by this lava-rich sex volcano's looks.

Speaker 1

13:11

The guy's hypnotic. I must have a bad case of the Manuchies right now because he's looking like an absolute snack. So, so who is, who is telling the president that this is a good idea? Well, by most accounts, the driving force is Peter Navarro, head of the Office of Trade and Manufacturing Policy.

Speaker 1

13:30

He's Trump's trade guy. Isn't that right, Peter? I'm the trade guy. Thanks, Pete.

Speaker 1

13:35

So, just for the record, let's all get our Trump administration role straight. We've got trade guy, liar lady, nothing boy, Jesus pleaser, word ghoul, crime nymph, drunk grandpa, and daughter wife. It's a well-oiled machine he's running. Now, Navarro is the author of a series of get-rich-investment books.

Speaker 1

13:54

And like Trump, he's obsessed with trade deficits in general, and China in particular, saying trade with China is a zero-sum game, meaning 1 country can only win if the other country loses. And it is hard to overstate just how rare his views are among economists. When the New Yorker profiled him, they asked Navarro to help them find even 1 colleague who agreed with him. He gave them 2 names.

Speaker 1

14:17

1 was Peter Morisi, a University of Maryland professor who said of Navarro, he has a rather severe position, that zero-sum statement, -"I have a problem with that." -$PROBLEM WITH THAT. -"Where's his proof?" -$PROOF. And the other was a blogger named Alan Tunnelson, who Navarro described as a fine economist, to which Tunnelson replied, -"I do not hold an economics degree." -$1,000,000. And I'm guessing Tunnelson also doesn't hold a degree in web design because this is the photo on the about page of his blog.

Speaker 1

14:46

So, if you are understandably wondering at this point, then how on earth did Navarro get a job at the fucking White House? Well, it is way dumber than you are thinking. Apparently, Jared Kushner was tasked with finding Trump experts on Chinese trade. And this is how he went about it.

Speaker 12

15:05

So Jared went on Amazon. He fired up his computer and he found some of Peter Navarro's books and he asked him to come to the White House. That's how Peter Navarro ended up in the White House.

Speaker 12

15:13

-...HEROES

Speaker 1

15:14

LAUGHING... -...Yeah. Jared looked for experts on Amazon. That was his rigorous process.

Speaker 1

15:21

So, when Jeff Sessions does get fired, be prepared for him to be replaced by Crystal Caswell, author of the erotic fiction novel, Dangerous Rock, a dangerous noise novel, because for whatever reason, that is honestly the first thing that came up when we typed good law person, parentheses, smart, into Amazon. Now, the Navarro book that Jared found was called Death by China, and it paints the U.S.-Chinese trade relationship in apocalyptic terms. Because while there are some legitimate complaints about China's unfair practices, they've deliberately depressed their currency, they violate intellectual property rights, and arguably skirt WTO rules, this book goes way further, with chapter titles featuring phrases like, "'Shanghaing the gene pool' and "'Look, Ma, there's a death star pointing at Chicago.'" Navarro actually turned the book into a movie that 1 critic called, the documentary equivalent of a raving street corner derelict. Which seems harsh until you see how the movie begins.

Speaker 13

16:19

The film you're about to see addresses 1 of the most urgent problems facing America. It's increasingly destructive trade relationship with a rapidly rising China.

Speaker 1

16:32

It starts like that! Its warm-up is a literal knife being stabbed into the heart of America. And if you're worried that that leaves it with nowhere to go, please don't be concerned, because there are even less subtle animations to come, which depict China's trade practices as guns and bombs that blow up American factories, and stunningly deceptive moments like this.

Speaker 13

16:53

China has stolen thousands of our factories and millions of our jobs. Multinational corporation profits are soaring, and we now owe over 3000000000000 dollars to the world's largest communist nation.

Speaker 1

17:07

Look, I'm not saying that that large ball isn't very convincing, but our trade deficit isn't the same as what we owe to China. Those are 2 different numbers, and neither of them is anywhere close to 3000000000000 dollars. And when something that central to your movie has something that wrong with it, you usually have to replace it with Christopher Plummer.

Speaker 1

17:27

So... So... So Navarro is not someone who any legitimate economist takes seriously, and yet, he seems to be the only person the president is listening to. Trump has called Death by China, right on, and lauded its facts, figures, and insight.

Speaker 1

17:42

And Navarro returns the compliment, saying of his own job, that, my function really as an economist is to try and provide the underlying analytics that confirm Trump's intuition, and his intuition is always right. And that is simply terrifying! Because an economist shouldn't be finding ways to confirm the intuitions of someone who doesn't know what they're talking about. It's like a builder working for a child saying, my job is to build this house he designed, which is shaped like an ice cream cone, with a window that's also a door, and the size of the sun and a dog.

Speaker 1

18:14

His intuitions are always right. No, they aren't! You need to stop that child before someone gets fucking hurt! -♪ ♪ -♪ In fact, if you want to get a sense of just how little Navarro understands the game he's playing, consider this.

Speaker 1

18:27

Since this trade war began, China has imposed $37 billion of tariffs on the U.S. Now, take a look at what Navarro said back in March.

Speaker 2

18:36

Are you expecting China to come back with retaliation?

Speaker 3

18:39

I don't believe any country in the world is gonna retaliate for the simple reason that we are the most lucrative and biggest market in the world. They know they're cheating us, and all we're doing is standing up for ourselves.

Speaker 1

18:51

It's just breathtaking to see someone be that confident and that wrong. He's basically Leonardo DiCaprio in Titanic yelling, I'm king of the world. Except You're not, are you, Leo?

Speaker 1

19:00

You're just an amateur sketch artist who's about to be murdered by ice.

Speaker 9

19:04

And when you put all of

Speaker 1

19:06

this together, what you're left with is this. We're engaged in an escalating trade war that almost no legitimate economist supports, led by a man who honestly doesn't seem to fully understand the mechanics of what he's doing, getting advice from the human equivalent of an all-caps email from your uncle. And the crazy thing is, the effect of all this is the exact opposite of what Trump says he wants, because if you want to create jobs, you don't do that by cutting off American companies, markets, and suppliers.

Speaker 1

19:30

And if you want to curb the abuses of countries like China, you don't do that by pissing off the leaders of every other nation on Earth. And I know that none of what I'm saying right now will get through to Trump. So, maybe it's time to take a page from 1 of the only people he's actually listening to and give him some basic economic lessons in the only language he seems to understand.

Speaker 14

19:50

The film you're about to see addresses 1 of the most urgent problems facing America. The destruction of basic economic knowledge by... Stupidity.

Speaker 14

19:59

And the consequences of it could be disastrous. So let's review a few fundamental facts. First, a trade deficit isn't a giant pool of money that you've lost to another country. That's idiotic.

Speaker 14

20:10

Second, if you think you can use tariffs as a weapon, you should understand A tariff isn't something other countries pay you, it's a tax you're forcing your own people to pay, which might end up hurting them a lot less than it hurts you. And third, our economy is massively interconnected, and you can't just tamper with 1 thing without considering what the wider consequences could be. Unfortunately, misunderstandings just keep getting bigger while basic knowledge is shrinking. And the result is, stupidity is increasing at an unsustainable rate.

Speaker 14

20:45

Listen, economics is incredibly complicated. And at the very least,

Speaker 9

21:00

You