The Hidden Reality We See Beyond Tariffs

Transcript

Ken Fisher:

I don't much like talking about President Trump because everybody else does. I don't have terribly unique views there. I don't know that I have any unique views there at all.  My view of President Trump, neither being a Trumpian or Never Trumpish, is that he says a lot of stuff that I think everybody knows you got to take with a grain of salt. A lot of it appears to be posturing on his part for something that he wants. That may not be what he's talking about. And I think that includes everything that you've seen this year about tariffs or maybe not everything that you've seen about tariffs, but a bunch.

Let me say that differently. He has a hot button to push with tariffs because the intelligentsia has people, and has long had people, scared to death of tariffs. Now I am not a fan of tariffs, and tariffs are bad policy, but they're not bad policy for all the reasons that people talk about. Tariffs are rarely fully enforced. Tariffs, I mean most tariffs, are sidestepped pretty easily. If they normally are going to put on a tariff of about 10% to 15% on categories of goods, the reality of what really happens to those categories of goods is you see an impact to their cost that's more like about 1.5%. But they scare the Dickens out of people. And President Trump, I believe, has learned, but I believe most people seem to know this today, so I don't think it's as important that I say this, that he can use this as a negotiating chip.

He threatens tariffs, then he goes to make a deal about something else. And you can see that with what he did this year with Colombia and Mexico and Canada. And while he then sometimes implements tariffs, truly, as he did against China, I want to point to two fears. People think it might cause inflation. People think it might cause economic weakness. And you know that, you know that's what they point to. The fact of the matter is, if you look at his tariffs in his first term, you can't see any real sign of that.

Now this time he talks about bigger. But he's got four years to get whatever he wants to get done. And I think he wants to negotiate a lot.  I take most, not all, but most of what he says with a grain of salt, presuming that he's got some other motive. And that isn't necessarily a bad thing, it's just different, and we're not used to it. But for example, I'm going to speak to this, it's not tariffs, but it creates the same fearful impact on a lot of people—some of this talk about Greenland.

We're not going to, America is not going to take over Greenland militarily. But, and I want to be real clear about this, there's considerable things that could be done in cooperation between the United States and Denmark that would be good for Denmark, good for Greenland, and good for the United States of America. And there's a lot of stuff about that that I could talk about at some great length. And I don't really need to do that in this video, because that's not what you asked about. That's not what the topic matter is. But oh, by the way, it's his talk. "We're going to take over Greenland."

That sucks the oxygen out of the room, gets everybody talking, kind of takes the Danish and says, "Hey, wake up, we're going to talk about this stuff here." And then he probably moves to try to negotiate something that increases the existing small military presence that we have on the northern portions of Greenland that are aimed at detecting incoming from ulterior Russian and Chinese sources. And the more we put, I'm just going to babble a little more since I'm babbling. I'm just going to use Greenland as an example of what I was talking about with tariffs, because I think the fear of it and the negotiation is similar.

If you increase America's military presence at about 200 military personnel in Greenland right now, if you increase our military presence there, Greenland, which has an economy smaller than my firm's and 58,000 total residents, and half of that GDP being subsidy from Denmark. If we increase the military presence there, it's actually good for Greenland. And can decrease the subsidies from Denmark, which total about 1% of Denmark's GDP.

All of that could be a good thing. It would help America in terms of monitoring for defense and maybe even offense if we started putting a bombers in Greenland, etc.. There's lots that could be done, but the way Trump goes about these things is often baffling. And that isn't necessarily bad. It's just different. We're not used to it. I have a saying that I've used before, and it's not a statement about good or bad, You know, I've been to McDonalds. I've eaten there many times. I've been to Burger King. I've eaten there many times. And the only thing that I really know about what goes on in President Trump's head is that Big Macs go into it and Whoppers come out of it. And yet, that doesn't mean that what he's really doing is inherently good or bad.

One has nothing to do with the other. It's just stylistic. And I think that's what his tariffs are about. Negotiating deals mostly, but not solely. He'll apply tariffs where actually looking at enemies, and he'll negotiate tariffs harshly with our friends, I think. Thank you for listening. I hope you found this useful and educational and not too rambly.

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