Just Another TACO? Trump Lobs Fresh Tariff Threats Against The EU, Canada, And Mexico | Hakimian - video Dailymotion

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On "What's Moving Your Money with Spencer Hakimian," Spencer breaks down President Trump's new tariff threats against the EU, Canada, and Mexico, and discusses how it will affect the market, and whether this will be another "TACO" scenario.  Read the full story on Forbes:   Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Hey guys, this is Spencer Kimian with What's Moving Your Money.

00:04On today's episode, our pilot episode, we're going to talk about Liberation Day 2.0,

00:10all the tariffs that we've announced so far on, specifically this episode will be about Europe,

00:16Canada, and Mexico's trade tariffs that we've announced, what this means for markets,

00:22what this means for the economy. Is this just another negotiation tactic? Is this another bluff?

00:26Are we going to see another taco scenario here? So we're going to get right into it very quickly,

00:32so stay tuned and enjoy the episode.

00:37So over the weekend, Trump announced a 30% tariff on all goods coming out of Europe, Canada, and Mexico.

00:48So just to put this into a little bit of context for you, we do roughly $1 trillion of trade with

00:54the European Union. So that's all the members of the European Union, not including the United

00:58Kingdom, the UK, per year. We do around $750 billion a year worth of trade with Mexico,

01:05and we do $700 billion worth of trade with Canada. These are our three largest trading blocks,

01:12and you put them together, this equals roughly $3 trillion out of $7 trillion worth of trade,

01:21or roughly just about 40% of all the trade that the United States does. Needless to say,

01:28and we don't have to get into it in so much detail in this episode, a 30% tariff is just going to

01:33halt trade. If it doesn't halt trade, it's going to make trade so expensive such that you will get

01:38shortages and all those things, inflation, all those things that we spoke about in April. But we don't

01:44have to talk about that this episode because we already know all the negatives of if we actually go

01:50through with these tariffs. My worry is something about markets and market pricing and signals that

01:59the president might not be getting. So if you guys recall back in April, what made Trump back down

02:05on those tariffs? What made him pause the tariffs? It was that the stock market fell 20% in four or five

02:12trading days. It's that bond yields surged roughly 50 basis points in three or four trading days.

02:17It's that the dollar was falling in unison with all of these events, which was highly atypical

02:23during all of these things. For all intents and purposes, we had a mini financial crisis in April

02:28and the cumulative impact of all of those simultaneous crises was that Scott Besant,

02:36you know, whoever else that may have been in the White House, they were able to get Trump to walk

02:41off the ledge and do a 90 day pause on the tariffs to negotiate whatever you want to call it. Bottom

02:47line, he paused the tariffs and it did not go into effect. We've since passed that 90 day deadline and

02:52we've extended it to August 1st. So we all know the narrative of Trump taco. Trump will always chicken

02:58out. Don't worry about him. He's too afraid of markets. Just stay invested. And I agree for the most

03:04part, you should stay invested within your risk parameters. But, and this is really important and

03:10unique to this event, and no one's talking about it for whatever reason. Markets are not reacting to

03:17Trump. That could actually be a problem. Follow me here. The stock market is nearly at an all-time

03:24high, just off an all-time high. Bond yields are not in crisis territory. The dollar isn't doing well,

03:29but it's not like in free fall or anything. You know, home prices are at an all-time high. Unemployment

03:35is holding up for now, right? So Trump in his brain may not be getting the signals from the market of how

03:43devastating 30% tariffs on Europe, Canada, and Mexico would actually be if he went through with it, right?

03:49And if he does not get that signal from the market, what if he goes through with it? We know this guy has

03:55been speaking about tariffs for 50 years. For better or for worse, whether he's right or he's wrong,

04:00I clearly don't believe he's right on this. But he truly believes in tariffs as a tool, right? He only

04:07backs off when stuff hits the fan, right? If stuff is not hitting the fan, what do we do, right? If we

04:16don't get a correction in markets, does he go ahead with these tariffs? Because if he does, you can wipe

04:22right in the second half of 2025. There's no way to do it. There's no way to do commerce. There's no

04:27way to do trade with these trade barriers in place. This is effectively an embargo that we are placing

04:32on countries like Europe, Mexico, Canada, let alone China, let alone Brazil, let alone whoever else has

04:38been tariffed in recent days, South Africa, whoever it may be. So we're at a little bit of a catch-22

04:46here. Either the market, in my opinion, has to sell off a little bit here, or Trump believes these

04:54tariffs are a good idea, goes through with them, and then markets sell off anyway, because earnings

05:00are going to get revised down. We saw back in April how quickly recession became consensus before Trump

05:06backed down. We saw how quickly companies were guiding him. We have a few weeks of inventory left,

05:12and then our shelves will be there. Walmart, Target, Home Depot, Lowe's, you name it, companies, auto

05:18companies, GM and Ford, they were saying we cannot do commerce if this is going on. So we have to look at

05:25this. Now my next part of this podcast, I want to just talk a little briefly about what are we doing with

05:33all these tariffs, right? Why do we keep doing this, right? I, myself, I'm not a Republican, I'm also not a

05:41Democrat. I'm just, I think of myself as an independent, I just like to call balls and strikes.

05:46I see it how I see it. Sometimes I criticize the U.S. government, sometimes I praise the U.S.

05:51government. But what are we doing with these tariffs? We're just bluffing nonsensical numbers,

05:58randomly generated numbers on countries. We did it in April, now it looks like we're doing it all again

06:04now. We clearly cannot go through with this. Nobody, by the way, is coming to negotiate.

06:12Look, they had 90 days to negotiate a deal. They got one lousy deal done with the U.K.

06:16And it wasn't even much of a deal. I don't even know what they negotiated at the end. Does anyone

06:19know? You can comment if you really know what they negotiated. I don't know. I didn't really see much

06:25that was so immaterial to the market. But please comment if you did. But my point is, why are we

06:33doing this? Like, we are wasting time as a country. Like, why are companies having to focus so much

06:41on tariff rates that are changing with a three in the morning true social post? This is no way to do

06:47business. And we're seeing that somewhere like dollar. I think foreigners are saying, why would we

06:53waste our time with this country? This is psychopathic. This is not normal how this

06:58country is behaving. Why would we can go to 100 different countries? We can go to the UAE.

07:02We can go to Singapore. You know, we can go to Australia. We can invest anywhere. Why would we

07:08deal with this craziness? So that's just a concern of mine that we have to actually have a plan with

07:15these tariffs. It's not enough to go out and put psychotic, crazy numbers out every three months.

07:21Nothing materializes. Extend pauses and then say, we're going to do more. Right. And also,

07:29I think we're noticing this right now. I think Trump has boy who cried wolf syndrome. Right. No one cares

07:36what he says anymore. No one's even trading on this anymore. That's not good. First of all,

07:40it's not good for the prestige of our country that the president of the United States says really

07:45material economic statements and markets don't even flinch on them because they don't take him

07:50seriously. Right. But beyond that, what happens when he actually has to get a message across when

07:58he has to actually do something? What if another COVID crisis, as an example, came around? How do we

08:04know that he's going to keep his word on things like fiscal stimulus that may happen? Right. If the

08:10market doesn't believe him anymore, you know, trust is like an eraser. The more you wither away at it,

08:15eventually it's gone. There's no more eraser left and you can't use it anymore. So that's just a

08:20philosophical take that I've had. And again, my personal belief is that at the end, he's going to

08:27back down on these tariffs again. Right. He's got people that are smart in the Oval Office that no,

08:32he cannot go through with this. Right. First of all, there's not even much of a reason to be

08:36tariffing countries like this. As an example, with the European Union, we have,

08:40let's say, a hundred billion dollar deficit on a trillion dollars worth of trade. But guess what?

08:47The United States, we are the one that we're selling them financial services. We're selling

08:52them tech software. Right. We're selling them Goldman Sachs advisory work. We're selling them

08:58software subscriptions at 60 percent profit margin. They're sending us back Volkswagens at six percent

09:04profit margins and bottles of wine at five percent profit margins and tourism in the summer at maybe

09:10even zero percent profit margins because, you know, hotels are very cyclical. So I just don't see

09:16what is the need to negotiate with all these peoples. I agree with the president. Some things

09:22we can likely achieve with tariffs. As an example, I think we can use tariffs for advanced chips to get

09:31countries to not want to cooperate with China. We can put export controls as an example. We can do

09:37things in certain ways if they are targeted and they're coalition based that they would work. But

09:43just again, I don't know why it feels like we're back to Liberation Day. Every country in the world

09:48gets a true social post with a randomly generated number of their tariffs. So look, we have to look

09:53into this. We're going to monitor this all closely. It's coming up. I want you guys to let me know in

09:58the comments what do you guys think is going to happen? Do you guys think we're going to go through

10:02with these tariffs? Do you guys think we're not? Do you support tariffs? Do not support tariffs? A big

10:06part of this show for me and why I do this is I want to hear all your voices, whether you agree

10:12with me, whether you disagree with me, I want to hear what you have to say. And I promise I'm going

10:17to try my best to always respond in the comments to all of you. If you follow me on Twitter, you see

10:22that I respond to comments nearly all the time. So with that being said, I hope you guys enjoyed this

10:28episode and please tune in tomorrow. We have a very interesting episode about Brazil copper targeted

10:35tariffs, specifically targeted tariffs on raw commodities and what that can mean for inflation

10:41going forward. So have a good day, guys, and I'll see you guys tomorrow.

Just Another TACO? Trump Lobs Fresh Tariff Threats Against The EU, Canada, And Mexico | Hakimian

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