HE LOST! Trump folds again in trade war, Nobel economist breakdown

>> WE WILL HAVE A CRASH, AND WE

MAY LOSE A TRADE WAR THAT'S

ALREADY LOST. ACCORDING TO SOME,

PAUL KRUGMAN IS A NOBEL WINNING

ECONOMIST, LONG TIME AUTHOR OF

TEXTBOOKS, NEW YORK TIMES

COLUMNS, AND NOW THE PAUL

KRUGMAN SUBSTACK, WHERE HE HAS

CONFRONTED THIS SECOND TERM

TRUMP ADMINISTRATION WITH

CLARITY AND CANDOR. THE LATEST

PIECE, HOW WE LOST THE TRADE

WAR. WELCOME BACK, PROFESSOR.

YOU'RE BETTER AT THE COMPLEX

ECONOMICS. I, AS YOU KNOW, CAN

READ. SO I NOTICE THAT IT SAYS

LOST, NOT LOSING. LET'S START

THERE. WHY IS THIS, IN YOUR

VIEW, FACTUALLY ALREADY LOST?

>> OKAY. THINK OF THIS AS A

CONTEST OF OF.

>> OF WILLS.

>> CONTEST OF LEVERAGE. UNITED

STATES VERSUS CHINA. WHO WHO

WAS WHO BACKED DOWN.

>> REALLY.

>> AND THE ANSWER IS AMERICA

BACKED DOWN OR TRUMP BACKED

DOWN BECAUSE IT TURNED OUT THAT,

YEAH, THE TRUMP TARIFFS WERE.

>> A PROBLEM.

>> FOR CHINA.

>> BUT CHINA.

>> CUTTING OFF.

>> OUR ACCESS.

>> TO.

>> RARE EARTHS WAS. A BIGGER

DEAL.

>> AND ALSO THE CHINESE KIND OF

HAVE AN IDEA OF WHAT THEY WANT.

AND IT'S KIND OF.

>> YOU.

>> KNOW.

>> UNDER BIDEN, LOTS OF

CRITICISM.

>> BUT WE WERE PRETTY.

>> SERIOUS ABOUT.

>> CONFRONTING CHINA, TRYING TO

DENY THEM THE MOST ADVANCED

TECHNOLOGY. TRUMP IS APPARENTLY.

GOING TO.

>> LET THEM BUY.

>> ADVANCED CHIPS, AND IN

RETURN, THEY SAY THEY'RE GOING

TO BUY SOME SOYBEANS.

>> SO WE HAVE TRADED.

>> OUR REPUTATION, OUR OUR.

>> OUR LEVERAGE IN.

>> THE WORLD AND POSSIBLY THE

FUTURE. OF THE TECHNOLOGICAL

RACE.

>> FOR A HILL.

>> OF BEANS.

>> YEAH, HILL OF BEANS. DID

CHINA HAVE BETTER CARDS OR IS

TRUMP BAD AT PLAYING THIS CARD

GAME?

>> WELL, CHINA DID HAVE BETTER

CARDS. THE FACT OF THE MATTER

WHICH TRUMP SHOULD HAVE

UNDERSTOOD, YOU KNOW. SOMEBODY

SHOULD HAVE UNDERSTOOD, WHICH

IS THAT, LOOK, LOSING THE US.

SOME ACCESS TO THE US MARKET IS

HARD. BUT THERE ARE THE CHINESE

CAN TURN TO OTHER SOURCES,

CONJURING UP A STRATEGIC

INDUSTRY LIKE. RARE EARTHS.

>> FROM A.

>> STANDING START.

>> IS NOT SOMETHING YOU.

>> CAN DO RIGHT AWAY. SO WE

ENTERED THIS IN A WEAK POSITION.

>> BUT ALSO.

>> THERE WAS JUST NO CLARITY.

AND TRUMP DIDN'T NEVER HAD A

CLEAR A CLEAR. GOAL IN THESE

TARIFFS. AND ONE OF.

>> THE BIG STRENGTHS OF THE

UNITED.

>> STATES HAS ALWAYS BEEN THAT

WE HAVE ALLIES THAT ARE WE WERE

THE.

>> LEADER OF THE FREE WORLD.

>> AND IN.

>> A VERY REAL SENSE.

>> BUT WE HAVE NOW ALIENATED.

>> I GUESS.

>> TECHNICAL TERM IS OFF.

EVERYBODY WHO SHOULD BE ON OUR

SIDE HERE. I MEAN, AS ALL OF

THIS WAS GOING ON, TRUMP WAS

SLAPPING TARIFFS ON CANADA

BECAUSE THE CANADIAN PROVINCE

OF ONTARIO RAN A TV AD THAT

MADE HIM FEEL BAD. I MEAN,

WE'VE.

>> REALLY.

>> LOST OUR CREDIBILITY ON THE

WORLD STAGE COMPLETELY OVER

THIS.

>> YEAH. IT SOUNDS LIKE YOU'RE

SAYING HE HE WAS VERY EMOTIONAL,

WHICH IS NO WAY TO LEAD. WE'RE

TOLD. I WANT TO SHOW YOU WHAT

THE TRUMP OFFICIALS ARE SAYING.

AND, PROFESSOR, AS YOU KNOW, WE

FOLLOW THE EVIDENCE HERE AND WE

FACT CHECK AND WE HAVE A LOT OF

PEOPLE ON. SO IN THIS SECOND

TERM, WHICH WHICH HAS BEEN

ROCKY FOR THE REASONS YOU

MENTIONED, AMONG OTHERS, I'VE

HAD SEVERAL TRUMP OFFICIALS ON

THIS IS PETER NAVARRO, WHO'S

THE WHITE HOUSE TRADE OFFICIAL,

AND HE SAID ON THIS PROGRAM

THAT THERE IS REVENUE FROM THE

TARIFFS THAT THEY'VE BEEN DOING.

I WANT TO PLAY THIS FOR YOU AND

HAVE YOU WALK US THROUGH THE

ACTUAL ECONOMIC DATA AND FACTS.

TAKE A LOOK.

>> AT THE.

>> BEAUTIFUL THINGS THAT WE'VE

LEARNED ABOUT TARIFFS IS. THEY

ACTUALLY RAISE SUBSTANTIAL

REVENUES.

>> AND WE'RE.

>> TURNING WHAT LOOKED.

>> LIKE TO BE A FISCAL CLIFF.

AND A DEFICIT.

>> THAT WAS GOING TO GO.

>> OUT OF CONTROL.

>> INTO SOMETHING WE'RE.

>> GOING TO BE.

>> ABLE TO PAY DOWN TO THE TWO

AND THREE AND.

>> 4,000,000,000 TRILLION.

>> SO YOU FEEL. LIKE YOU FEEL

LIKE THIS IS WORKING FOR THE US,

EVEN THOUGH YOU DIDN'T GET ALL

THE DEALS THAT YOU VOWED. I

MEAN, WE DON'T HAVE 90 DEALS.

>> WELL, WAIT A MINUTE.

>> I THINK.

>> WE'VE DONE.

>> BEAUTIFULLY, PROFESSOR.

>> OKAY. TARIFF IS A TAX. TAXES

RAISE REVENUE. BIG SURPRISE.

YOU KNOW, INCREDIBLE

ACCOMPLISHMENT. IF, YOU KNOW,

IF SOMEONE, SOME PRESIDENT

IMPOSED A NATIONAL SALES TAX

AND IT RAISED SOME REVENUE,

WOULD REPUBLICANS BE

PRONOUNCING THAT AS A POLICY

TRIUMPH? AND THAT'S BASICALLY

WHAT THIS IS. IT'S A NATIONAL

SALES TAX JUST ON A SELECTED

SET OF GOODS, WHICH ARE ONES WE

HAVE TO BUY FROM ABROAD. WE

KNOW THAT FOREIGNERS HAVEN'T

PAID THE TARIFFS BECAUSE WE CAN

LOOK AT THE PRICES THAT

FOREIGNERS ARE CHARGING.

>> IT'S READILY AVAILABLE.

>> SERIES OF, YOU KNOW. IMPORT

PRICES AND IT HAS NOT GONE DOWN.

FOREIGNERS HAVE NOT CUT PRICES

TO OFFSET THE TARIFFS. SO ALL

OF THIS IS BEING BORNE PARTLY.

>> BY AMERICAN CONSUMERS.

>> PARTLY BY AMERICAN

BUSINESSES, WHICH HAVE.

>> ABSORBED SOME.

>> OF THE TARIFFS, ALTHOUGH

THAT WON'T GO ON FOR VERY LONG

BECAUSE THEY CAN'T AFFORD TO.

THIS IS, YOU KNOW, THE IDEA

THAT THERE'S SOME MAGICAL THING

THAT SAYING WE RAISE TAXES AND

WE GOT SOME REVENUE OUT OF IT,

AS IF THAT WAS A VICTORY.

>> ON THE WORLD.

>> STAGE. AND, YOU KNOW, IT

WOULD BE FUNNY, EXCEPT THAT

THESE ARE THE PEOPLE ACTUALLY

RUNNING THE COUNTRY.

>> YEAH. AND YOU MAKE THE POINT,

CLEARLY TURNING AWAY FROM

GOVERNMENT POLICY AND EVEN THE

POLITICS JUST GENERALLY AI HAS

BECOME A GIANT PART OF THE

EXPECTATIONS ON WALL STREET.

THE AI CHIPS WHICH POWER ALL

THESE THINGS, CHATGPT AND OTHER

PROGRAMS PEOPLE ARE FAMILIAR

WITH ARE PRODUCED BY ONE OF THE

BIG COMPANIES, NVIDIA, WHICH IS

THE FIRST COMPANY IN WORLD

HISTORY TO REACH $5 TRILLION. I

MEAN, IT'S HARD TO EVEN

UNDERSTAND WHAT THAT MEANS TO

MOST OF US. $5 TRILLION ON THE

ACTUAL STOCKS. ARE THEY IS IT

POSSIBLE TO SAY THAT THEY ARE

OVERVALUED? ARE YOU CONCERNED?

NICE CAT THERE. ARE YOU

CONCERNED? WALK US THROUGH HOW

YOU THINK ABOUT THIS. JUST IN

THE DOLLARS AND CENTS OF WHAT'S

HAPPENING IN THESE TOP TECH

STOCKS THAT ARE DRIVING MOST OF

THE CURRENT GAINS ACROSS THE

WHOLE MARKET.

>> OKAY. THE WAY I THINK OF

NVIDIA IS, YOU KNOW, THERE'S A

GOLD RUSH ON AND THEY ARE

BASICALLY SELLING PICKS AND

SHOVELS TO THE GOLD MINERS.

THEY'RE NOT THEY'RE NOT

ACTUALLY SELLING AI. THEY'RE

SELLING THE GEAR THAT YOU USE

TO PRODUCE AI. AND WHICH IS A

LITTLE.

>> BIT BETTER.

>> THAT THE FACT OF THE MATTER,

WE HAVE SEEN VERY LITTLE

EVIDENCE THAT THAT PEOPLE ARE

WILLING TO PAY A LOT FOR AI,

THE TECHNOLOGY, THERE'S A LOT

OF, YOU KNOW, NOBODY KNOWS JUST

HOW MUCH IT'S GOING TO DO. BUT

SO FAR, IT'S KIND OF HARD TO

SEE HOW THIS ENDS UP PRODUCING

REMOTELY ENOUGH REVENUE. NOW

THAT EVENTUALLY BLOWS BACK. YOU

KNOW, NVIDIA CHIPS WON'T BE

WORTH AS MUCH IF PEOPLE DECIDE,

OOPS, WE'VE BEEN BUILDING TOO

MANY DATA CENTERS. SO, YOU KNOW,

WE DON'T KNOW THAT. YOU KNOW,

IT'S ALWAYS, ALMOST ALWAYS

IMPOSSIBLE TO BE SURE THAT

SOMETHING IS A BUBBLE HOUSING

BUBBLE OR IS OBVIOUSLY A BUBBLE.

BUT AND THE.COM BUBBLE, THIS

ONE. IS A. LITTLE MORE

COMPLICATED. BUT THERE'S

DEFINITELY, YOU KNOW, I'VE BEEN

AROUND FOR A WHILE AND THERE IS

1999 VIBES HERE. CLEAR SENSE

THAT WE HAVE A GENUINELY

IMPRESSIVE TECHNOLOGY. BUT IT'S

REALLY HARD TO SEE HOW THIS

JUSTIFIES. THE VALUATIONS COULD

BE WRONG. BUT THAT'S.

>> I KNOW YOU A LITTLE BIT,

PROFESSOR. SO YOU'RE NOT

TALKING ABOUT PRINCE PARTY LIKE

IT'S 99. YOU'RE TALKING ABOUT

99 PRE-CRASH VIBE.

>> YEAH I'M TALKING ABOUT QUEST

RIDE THE LIGHT AND AND AND YOU

KNOW, PETS.COM AND ALL THAT.

BUT THE REALLY BIG STUFF WAS

THE TELECOMMUNICATIONS

COMPANIES, WHICH LIKE THE, LIKE

THE, THE AI SECTOR NOW WERE

POURING HUGE AMOUNTS OF MONEY

INTO INFRASTRUCTURE TO USE THIS

WONDERFUL NEW TECHNOLOGY, THE

INTERNET, WHICH WAS IN FACT A

WONDERFUL NEW TECHNOLOGY. BUT

MOST OF THEM WENT BUST.

>> YEAH.

>> BECAUSE IT'S IT WAS A GREAT

TECHNOLOGY, BUT THE PROFITS

TOOK YEARS TO MATERIALIZE AND

OTHER COMPANIES ENDED UP MAKING

A LOT OF MONEY OFF IT. AND THIS

AND IT IS SCARY JUST HOW MUCH I

MEAN, DEPENDING UPON EXACTLY

HOW YOU CUT THE NUMBERS. BUT

BASICALLY THE US ECONOMY WOULD

BE CERTAINLY BORDERLINE