00:00I think a lot of it's going to depend on the broader macroeconomic situation.
00:03You know, if we enter into a recession, if we start to see the indicators really turn south,
00:08I think they will reconsider it. And we've seen, you know, we've seen the administration be
00:12sensitive to affordability issues. It's also possible the midterms, if the president doesn't
00:16perform well, that could lead to a pivot. I'm just not convinced they view tariffs as a problem.
00:20Okay, but that's where I wanted to go, because I'm reading the, there's a definitive one volume,
00:23folks, on ready, President McKinley. Okay, so Ryan, forget about the drama of 1901 or whatever.
00:30It was McKinley started adjusting his tariff certitude based on congressional elections.
00:37Do you think these guys will do a McKinley and adjust?
00:41So I think a lot of it's going to depend when these Section 301 tariffs land.
00:46They're a very different kind of tariff instrument than what we've seen before.
00:49They're largely insulated from court challenge. So, and we've also kept Section 301 tariffs in
00:54place against China for almost eight years. So I don't think they face a lot of pressure in terms
00:59of the actual instruments in terms of, you know, limiting their use, but it's going to be those
01:04broader indicators. And look, at some point, we've seen the president pull back, I think there's
01:07certainly a chance of it.
01:10So how much influence does President Trump have on these new tariffs, these Section 301 tariffs?
01:17Can he ratchet them up, down? How does that work?
01:20Yeah. So the way it operates, excuse me, they, there's a process that has to be followed. They
01:25have to solicit notice and comment, have a hearing. But once the duties are in place, you know, they
01:30really have the ability to ratchet the tariffs up and down with a lot of flexibility. And the courts
01:36have faced challenges and have heard challenges in terms of whether the president has the authority
01:40to do that. And they haven't stepped in to stop it. So the bottom line is we could be back
01:44to a
01:44situation like we had in early 2025 once the 301 tariffs are in place.
01:50So what do we know about these tariffs to date, Ryan? I mean, we've been at this now for,
01:55you know, more than a year here. What's your takeaway? Are they effective? Are they having
02:03an impact? What are you seeing?
02:06So, you know, I think the one big success the administration can point to is that when the
02:11original tariffs were put in place last year, that did lead our trading partners to the table.
02:15And they made a series of investment commitments into the US. And that's kind of at the core of
02:19what they're trying to do. They're trying to reshore manufacturing. Now, the question is,
02:23can they actually implement that? Are we actually going to see the investments get made on the ground?
02:28If that happens, I think they're going to find success. But the story hasn't, you know,
02:32hasn't concluded at this point. We just don't know.
02:34So, I mean, again, we've had, you're right, you refer us back to a lot of those big investment
02:40announcements from a lot of companies, a lot of countries. I guess that suggests that if you're
02:46the administration, that in fact, these tariffs, to some extent, are in fact working.
02:52I mean, they're certainly getting our trading partners to the table. I think we can have a
02:55bigger debate about, you know, kind of where we're going to be in the next decade or two with
03:00our trading partners after this kind of policy has been in place. But in terms of getting immediate
03:04gains on investment commitments, we're seeing that.
03:06Okay, what's our blended tariff rate right now? When you got Canada, Mexico,
03:10with all sorts of waivers, carve outs, whatever, what's the Ryan Majerus blended rate right now we're
03:16doing?
03:17Yeah, I think that's a key point. Because to give one example, we had a Section 301 release
03:22last week on Brazil. And they applied 25% tariffs across the board on Brazil, which is kind of splitting
03:29the baby between the 10% baseline AIPA tariff and 122 tariff, and a 40% tariff they put on
03:35Brazil.
03:35So they put in place 25%, which is still a significant tariff. But they carved out about half the goods
03:41exactly from applicability. So the bottom line is they're quietly pulling stuff out of the tariff.
03:45Okay, but so like Budget Lab at Yale, or Ryan Majerus at King and Spalding. I mean,
03:50what are we rocking a 10% blended tariff right now?
03:54I think that's right anywhere from 10 to 15%. So it's still significant. It's quite a bit higher than what
03:59here's the number one question given our debt and deficit. Are we addicted to this cash flow?
04:06I actually don't think the revenue is as significant of a piece. I mean, I think it was
04:10definitely one of the three or four key parts of what they were leaning on. But for example,
04:14with the refunds for AIPA, there are some core challenges on certain aspects of the entries,
04:19but most of them are getting refunded. So I actually think that's becoming less prominent in
04:22the focus of the administration. But more directly to your question, we're not dependent on this
04:26revenue at all. Okay. I mean, it is so dwarf. Okay, I got to get down. I got to get
04:30down brass
04:30tacks. You can bill me King and Spalding by the hour. Okay, Ryan, as simple as I can. Does Michael
04:37Barr get a tariff rebate on his Detroit Tigers merch that he bought that was a total gouge because
04:45of a Chinese tariff? How are these rebates going to work? That's a difficult question to answer. I hope
04:51you can. The way the system operates is you need to make sure you provide all the
04:56relevant information to customs. It's basically on a spreadsheet. As long as you give them the
05:00information they need and it's eligible in the program, you'll get a refund. But that's still
05:05a lot of qualifiers before you get there. For what? Like by the time Scooball leaves the Tigers?
05:11I hope not. This is a mess. Okay, we did these tariffs and I don't know the details, right? We're
05:18in
05:18awe of your abilities. But the bottom line is now Paul Sweeney is going to get a rebate. Colgate
05:24Palmolive is going to get a rebate. Amazon and Walmart are going to get a rebate. Does the only
05:30one who makes money here is King and Spalding? I think the story is unwritten in terms of like
05:36who is going to formally get the refunds. I can tell you that the big companies like Amazon,
05:41Walmart, even the freight carriers like UPS and FedEx, they're under a lot of pressure to pass on
05:47those refunds to consumers. And there have been lawsuits filed, including class actions.
05:51So
05:51a ballot.
05:51I'll try next to that.
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