00:00Absolutely. Tariffs are giving us inflation, and they're also slowing down economic activity. I did a really close look at
00:09trade between North American countries, Canada, Mexico, and the U.S., and year over year, from the spring of last
00:17year to the spring of this year, compared to the year previously, every single commodity is down, except for computer
00:25parts and aircraft.
00:27Everything else is down. Steel is down 20%, but computer parts are up 25%.
00:34So the new tariffs, which we put in, I think, in the last 24 hours, 10 and 12.5%, and
00:40there's a, you know, I get all the details, but it's a Friday in July. I can't focus on the
00:46details.
00:47Martha Gimbel says all in, we're at 9% tariffs. That's way above where we used to be still, right?
00:55Well, actually, so the 9% is before the last 24 hours. Now, the Yale folks are saying it'll be
01:02closer to 13. And so that does raise us up a few percentage points from, you know, sort of the
01:08tariff scheme of the last few months.
01:10So that really begs the question, what is the point here? Are we really thinking that tariffs are going to
01:18help with the federal debt and deficit? Because, you know, everybody says they're really not. It's a drop in the
01:24bucket.
01:24And does it slow economic activity? And for members of the conference board that maybe want to build factories, it's
01:32a lot more expensive. And what is our trade scheme? Are we going to be able to trade, for example,
01:38with Canada and Mexico in a confident way?
01:42Now, Erin, these new levies are designed to prevent forced labor in the supply chains of our partners. Now, you
01:48know, I really have to ask you about this. And you mentioned Mexico. We, you know, Canada, we are getting
01:53close to September when those renegotiations are going to take full effect.
01:55I know just this morning, Greer was meeting with Scheinbaum. You know, we have, you know, the EU and China
02:01retaliatory tariffs on one another, you know, talk to us, give us a little bit of an update from your
02:05vantage point as to where we are here heading into a very active September. Certainly, Xi and Trump are going
02:11to be meeting about this, no?
02:12Right, right. I think these tariffs are, you know, let's put aside the federal deficit. Let's put aside, you know,
02:19encouraging on-shoring and near-shoring.
02:22I mean, I really think that they're a strategy for negotiation. You know, we have had no formal negotiations with
02:30Canada around USMCA. We're the only of the three countries that is sort of opting out and going year to
02:37year instead of, you know, reaffirming for another decade.
02:41And, you know, threatening 50% on Canada for a lot of these commodities and materials and sort of just
02:49stringing our neighbors along is definitely not making the case for near-shoring and on-shoring.
02:55And I think it's a negotiation strategy.
02:59Sorry about that. Well, I mean, talk to us about that meeting between, you know, President Xi, about President Trump.
03:04I mean, like, can you, as some of these big dates are coming up, these negotiations are coming up, how
03:09do markets, how do you expect, you know, the markets to be, you know, kind of maneuvered, I guess is
03:14the way I would say it, right?
03:15Right.
03:16Like, what does the Fed want? Like, does the Fed want inflation to go up? Does it want it to
03:19go down? Do they want to cut rates, hike rates?
03:21How does all of the tariff talk, all of this trade uncertainty feed into what the central bank here in
03:26the U.S. is going to do?
03:28Right. So at the conference board, we do not think the Fed is going to do anything, basically, for the
03:33rest of the year, that they're going to sort of have a wait-and-see attitude.
03:37And, you know, folks may remember back with China, our one-year truce took effect starting back in November.
03:46So I am very interested to see, you know, when we have these discussions starting in September, are we able
03:52to sort of re-establish certainty?
03:56And, you know, regardless, I think for companies that are looking at their manufacturing footprint, it takes seven to ten
04:04years to build a factory.
04:05And if you don't know and understand, are these things going to be in place for another year, another two
04:12-and-a-half years, it really just creates so much unpredictability.
04:17What's the granular study at the conference board right now about a slowing American economy?
04:23Atlanta GDP is under 2%.
04:28Do you buy that?
04:30We do, yes.
04:32We definitely think things are slowing, and it's really sort of big structural issues.
04:37You know, you guys have been talking about housing today, and I think about housing all the time.
04:41So many of our members sell consumer goods that we wouldn't even think are related to housing.
04:47Things like pet food, flooring, you know, just sort of consumer materials.
04:53When people buy houses, they buy a lot of other things.
04:55If the first-time home buyer, you know, within the last year is now 40 years old instead of 33,
05:01that's a delay of a lot of purchases.
05:04It's the delay of a lot of life decisions that trigger spending.
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