00:00 Speaker A
Certainty and uncertainty feel like they mean different things now, Kevin. And what I mean by that is even if the administration came out tomorrow and said we screwed up. Obviously, this is not going to happen, but even if they did, even if they came out and said, we messed up, we’re not going to, we’re going to do 10% and that’s it. That’s across the board. Um, would have they done enough to damage their credibility that it wouldn’t make it wouldn’t reassure the market?
00:32 Kevin
I think that’s the ultimate question, and I, you know, unfortunately, I don’t think we’ll have clear answers to that until you get well into the summer. And I say that because whether this is now something that has its own momentum, and and the risks to the downside for the economy have sort of snowballed on their own, and it doesn’t necessarily matter what the administration says from here. I think there is a risk at some point where businesses just don’t take those announcements seriously, because if it is this on again off again, you know, the rules of the game are constantly changing scenario, that is basically the worst place you could be for a business trying to plan, put together some sort of CAPEX plan, or put some, put together some sort of hiring plan. Um, if businesses don’t know the rules of the game, then they’re not going to play. So the the reality is such that the back and forth and the constant changing of of the rules is probably in our opinion what’s going to contribute to more of a slowdown. So I think, you know, in that scenario, let’s say they do come out with some sort of baseline and they keep it at that. I think that you do probably just move into a stagnation, not an outright recessionary phase, but um that’s not the best place to be. That means you probably stay in the low hiring, low firing environment. It probably means that business investment slows and you don’t get any um sort of progress on any front that anyone’s going for, whether it’s bringing manufacturing back to the US, whether it’s trying to close the trade deficit. I I would think in that scenario probably none of that gets accomplished.
02:03 Speaker A
Yeah, I mean it’s hard to imagine a long-term situation in which the tariffs on China are 54%, or Vietnam are 46%, et cetera.
02:12 Speaker B
Well, I don’t think they’re going to be. Look, we already saw over the weekend, Vietnam, Taiwan, even Japan is sending a delegation to the White House because they’ve already said they want zero rates. They’re willing to negotiate.
02:23 Speaker A
Right, but we’ve been hearing from some people in the White House, no, thanks. We’re not interested. So, what do you do with that?
02:29 Speaker B
That’s confusing, because on the one end they’re getting what they want, and then they say, “Well, we’re not interested.” What does that?
02:36 Speaker A
But they’re not getting what they want if what they want is to even up the trade deficit, which makes no sense for a country of Vietnam’s size to buy as much from us as we buy from them.
02:49 Speaker B
Correct. Which is why you need to have that conversation, and I do think, I mean, Scott best inside, I absolutely think that they’re negotiating, they will negotiate. I don’t I don’t buy the Peter Navarro thing saying, no, we’re not negotiating. I don’t think that’s true. I just don’t think it’s true. I I I I’m in Scott’s case where he said, “Look, it may be long, but we’re going to negotiate. We’re going to try to get this right.” And I think that is what’s going to happen. According to the White House, there are 50 countries that came up and said, “Look, we’ll come over and we raise our hand, we’ll come over, we’ll have these negotiations.” I’m not going to say everyone’s going to get exactly what they want, but if they’re willing to negotiate and there’s some, a new trade agreement that’s that’s that’s made with these countries, then I think ultimately that’s bullish.