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Goldman found, according to its research, that consumers in The U. S. Have absorbed about 22% of tariff costs, businesses 64%. You're saying that's just not true. The only entity which has less respect in terms of their data than the BLS these days is Goldman Sachs. I just don't trust their numbers. And the reason why the American public shouldn't trust their numbers is because their numbers are usually wrong. I had to fight Cohen every day when he was there because he kept saying, Mr. President, these tariffs are bad. They're going to cost consumers. They're going to slow everything down. They never did, and Cohen left with his tail between the legs because he was always wrong. But the point, Joe, is you can't trust your eyes.

The economy is facing serious issues despite record high stock markets. A recession was projected for late 2023, and while government spending temporarily boosted the economy, real wage growth is down 2%, reminiscent of past election years during recessions. The current economic indicators suggest an impending crisis, with manipulated statistics masking the reality. Although Wall Street remains optimistic for now, signs point to increased volatility and widening credit spreads soon. Historical patterns indicate that easy money leads to fraud, and the current situation mirrors past economic collapses. If Trump takes office, his policies may mitigate some pain, but significant challenges lie ahead as the truth about the economy becomes apparent.

The IMF predicts that global inflation will continue for years, with 2023 inflation projected at almost 7% worldwide and 2024 at almost 6%. The IMF also forecasts slow global growth, particularly in Germany, Italy, the UK, and Japan. The problem lies in the central banks' decision to crush the private economy instead of reducing government spending, which has led to strangled credit and deepening stagflation. The IMF, however, blames tight labor markets and inflation expectations. The IMF's recommendations for more government spending, particularly in the green transition and improving food security, will likely exacerbate inflation and slow economic growth. In conclusion, expect slower growth and higher inflation for years to come.

In April, many predicted a recession, possibly global, due to investment stops. Concerns about a recession are rising, with some claiming economic circumstances suggest a recession is likely. One person is accused of predicting a recession and taking their shoe off to emphasize the point. GDP is too early to give a final verdict. It's too early to assess the long-term effects of tariffs. Economic data is being read. Trade deals are called garbage. Disagreement arises over comparing past predictions (40-60% chance of recession) to current estimates (15%). The initial predictions were part of a strategy to negotiate and create leverage.

The speaker argues the current trade system has failed, leading to a wealth transfer from the U.S. overseas via trade deficits due to other countries' industrial policies. To rectify this, tariffs are needed to offset the fundamental unfairness and enforce global trade balance, penalizing countries with persistent surpluses. While adjustments to supply chains and temporary price increases may occur, systemic inflation is unlikely. Increased U.S. production will offset inflationary pressures. The speaker dismisses models predicting inflation from tariffs, citing past experiences and China's deflation despite trade barriers. The speaker believes the President's program of tax cuts, spending cuts, deregulation, more energy and tariffs will be anti-inflationary. The speaker views China as an existential threat, citing its military expansion, espionage, and global ambitions. The speaker advocates for strategic decoupling, balanced trade, independent technology development with allies, and regulated investments to protect American interests.

The U.S. can no longer continue a policy of unilateral economic surrender. Donald Trump intends to punish anyone outside the country producing goods that America should produce for itself, raising revenue and protecting American jobs. Trump's game is "America First," and he claims to have the backbone to get it done. This is a proven economic formula. Mortgage rates and inflation have come down, with trillions of dollars in investment and companies expanding operations, creating nearly a quarter of a million new jobs. Consumer prices dropped, which never happened under Joe Biden. Inflation is at 2.4%. The dollar is shooting up over 2,000 points. Energy costs, groceries, and gasoline are down, with gasoline way under $3. This is described as the most aggressive effort at pro-American growth in American history.

Mario and the Professor discuss the scale and spread of the current oil and energy shock and its broad economic and geopolitical ripple effects. - Severity and scope: The Professor calls the crisis “pretty catastrophic,” possibly the biggest oil crisis experienced, potentially surpassing the 1970s shocks. He notes a gap between Washington rhetoric and underlying economic reality and emphasizes the war’s effects beyond oil, including fertilizer and helium, all of which pass through the Strait of Hormuz or related chokepoints. - U.S. economic backdrop (before the war): The Professor provides a pre-war table: - U.S. GDP growth in 2024 was 2.3%, 2025 about the same after a dip in 2024 to 2.2%. - Jobs: 2024 added 2.2 million; 2025 added 185,000, with tariffs contributing to a manufacturing job loss of 108,000. - Productivity declined from 3% to 2.1% in 2025. - He argues the U.S. economy was already slowing and that the war exacerbates existing weaknesses rather than creating a boom. - Immediate physical and downstream effects: - The closure of the Strait of Hormuz affects more than oil: up to 20% of world oil, a third of fertilizer, and helium used in chip manufacturing (notably in Taiwan) pass through the strait. - The closure’s ripple effects include fertilizer shortages and higher prices (fertilizer up about 50%), and broader supply chain dislocations as related infrastructure and inventories (oil, fertilizers, helium) become depleted and must be rebuilt. - Relative impact by region: The U.S. is more insulated from physical shocks than many others, but financial markets (stocks and bonds) are hit, with higher interest rates and a rising 10- and 30-year bond yield. Europe and Asia face larger direct physical disruptions; India, Taiwan, and others bear notable hits due to fertilizer and helium supply constraints. - Global energy and political dynamics: - The U.S. remains a net importer of oil, though it is a net exporter of petroleum products; fertilizer reliance and pricing reflect broader global constraints. - The professor highlights the political costs: protectionism (tariffs), militarism (increased defense spending and involvement), and interventionism (policy actions). He notes polling is negative on these directions, suggesting policy headwinds for the administration. - The escalation and motivations for war: - A theory discussed is that the war was driven by a belief in decapitating Iran’s leadership to force regime change, a strategy the professor says many experts have warned against. He cites New York Times reporting that Mossad and Netanyahu supported decapitation, but that former Mossad leadership and U.S. intelligence warned it would not work; the escalation suggests a divergence between theory and outcome. - He acknowledges another view that controlling Hormuz could economically benefit the U.S., but ranks it as a lesser driver than regime-change objectives. - Possible outcomes and scenarios: - If the Houthis control the Red Sea and the Strait of Hormuz remains closed, and the Beber/Mendeb is blocked, the consequences would intensify; the professor describes a “freeway turned into a toll road” scenario in Hormuz and greater disruption in the Gulf, including potential attacks on desalination plants. - The economic signaling would likely worsen: downward revisions to growth, higher import prices, and increased financial market strain; a prolonged closure would intensify these effects. - The escalation ladder and endgame: - The professor warns that escalating with boots on the ground would favor Iran and could trigger widespread disruption of Gulf infrastructure, desalination, and regional stability. He suggests Russia would be a clear beneficiary in such a scenario. - He concludes with a stark warning: if Hormuz and the Beber/Mendeb remain closed, and desalination and critical infrastructure are attacked, the situation could resemble or exceed the scale of the 2008 financial crisis—“look like a birthday party” compared with what could unfold. - Overall takeaway: The crisis is multi-faceted, with immediate physical shortages (oil, fertilizer, helium) and cascading financial and political costs. The duration and depth depend on how long chokepoints stay closed and whether escalation occurs, with the potential for severe global economic and geopolitical consequences.

Speaker 0 cites an MIT economist study indicating a 20% tariff on China led to a 0.7% price level increase over four years during President Trump's first term. Speaker 0 notes the drop in oil prices and expects mortgage applications to increase due to low interest rates. Speaker 1 claims that President Trump's tariffs cost Americans nearly $80 billion in new taxes, increasing prices on goods like washing machines and tires. Speaker 0 disputes this, reiterating the aggregate price increase was 0.7%. Speaker 0 adds that households saw real net wages increase during that time.

When this president showed up to the White House, the six month annualized core inflation rate was 3.7%. Today, six months later, the six month annualized core inflation rate is 2.4%. Inflation will be tracking at 1.9%. And then I would also point to that report this morning showing that small business optimism has reached a five month high. We inherited an economic mess from the previous administration, but this administration is focused on fixing it every day. And part of that is signing the largest tax cuts into law to put more money back into the pockets of these small business owners.

The tariff on China will increase to 25% because China retaliated against the U.S. More than 75 countries have contacted the White House to negotiate better trade deals. There will be a 90-day pause on reciprocal tariffs during negotiations, and the tariff level will be reduced to a universal 10%. According to the Treasury Secretary, President Trump's negotiating strategy has brought more than 75 countries forward to negotiate. Countries that do not retaliate will be rewarded with a 10% baseline tariff. China's tariff will be raised to 25% due to their insistence on escalation.

The Federal Reserve just said that the expectation is higher inflation and higher unemployment in 2025. In support of our goals, today the Federal Open Market Committee decided to leave our policy interest rate unchanged. The risks of higher unemployment and higher inflation appear to have risen, and we believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments. So it's primarily being driven by the tariffs. If the large increases in tariffs that have been announced are sustained, they're likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment. The effects on inflation could be short lived, reflecting a one time shift in the price level. It is also possible that the inflationary effects could instead be more persistent.