00:00:00
on a day known as Liberation day
00:00:02
president Donald Trump Just Dropped a
00:00:05
Bomb Carnage on Wall Street Markets
00:00:08
falling tumbling stocks plunging down
00:00:11
down down the nasdaq's getting crushed
00:00:13
small caps are getting crushed this is a
00:00:15
shock to the system it is ugly out there
00:00:18
worse than worst case scenario stocks
00:00:20
are getting slashed and burned 2 and5
00:00:23
trillion dollar
00:00:26
vaporized it is estimated that the
00:00:29
average American family will pay more
00:00:30
than
00:00:32
$5,000 out of their
00:00:34
pocket to pay for these tariffs economic
00:00:38
tariffs on the entire world the US
00:00:41
officially launched one of the most
00:00:43
aggressive trade policies in modern
00:00:45
history putting a 10% tariff on All
00:00:48
Imports across the board China got hit
00:00:51
with 34% Vietnam 46% even the European
00:00:55
Union is facing a 20% tariff now the
00:00:59
message is clear America wants to bring
00:01:01
production home secure its Supply chains
00:01:04
and assert its dominance now the people
00:01:06
who support this say this is needed to
00:01:09
protect National Security and rebuild
00:01:11
American Industries but critics argue
00:01:14
that we should get ready to pay higher
00:01:15
prices trade Wars and global economic
00:01:18
Fallout but there might also be a twist
00:01:21
ending to the story now these tariffs
00:01:24
could be deflationary and it could cause
00:01:26
the US economy to slow down enough to
00:01:29
force the Fed to lower interest rates
00:01:31
and rescue the economy which would allow
00:01:34
the US to refinance its debt and send
00:01:37
the markets to the moon now all of this
00:01:40
sounds kind of crazy there's a lot of
00:01:41
fear and confusion out there and I want
00:01:43
to help explain how this will reshape
00:01:45
everything from your portfolio to the
00:01:48
future of the global monetary system so
00:01:50
here's what's going on and how this will
00:01:52
affect you let's get into it hi my name
00:01:55
is Andre J hope you're doing well come
00:01:56
for the finance and stay for the global
00:01:58
reset so we're back to tariffs again so
00:02:02
let me start by explaining what just
00:02:04
happened why it happened the criticism
00:02:07
for all of it because there's a lot of
00:02:09
good reasons to criticize it and then I
00:02:11
want to look at some of the theories of
00:02:13
what could happen in the future so first
00:02:16
here's what just happened as of the day
00:02:18
after the announcement of Liberation day
00:02:19
and all the tariffs were announced the
00:02:22
stock market was down about 10% from its
00:02:24
peak which is known as a correction now
00:02:27
this is interesting because just a
00:02:28
couple weeks ago the story was the
00:02:30
complete opposite markets were really
00:02:33
excited and they were hoping for an
00:02:35
economic soft Landing meaning people
00:02:38
were hoping the economy would not go
00:02:40
into a recession but now it looks like
00:02:42
we just might and it's not just stocks
00:02:44
there's all kinds of stress in the
00:02:46
system right now including the credit
00:02:48
markets corporate bond spreads widening
00:02:51
currency fluctuations for trade
00:02:54
sensitive economies for example
00:02:56
currencies of export driven countries
00:02:58
like the Mexican p so the Canadian
00:03:01
dollar and the Chinese Yuan weakened
00:03:03
because they're expecting things to get
00:03:05
a lot worse that's because whatever the
00:03:08
US does it's going to be felt by the
00:03:11
entire world so right now wall Street's
00:03:13
response is fear there's layoff
00:03:16
announcements that have started
00:03:17
trickling in from companies head by
00:03:18
higher import costs business groups are
00:03:21
spending a ton of money to get some kind
00:03:23
of an exemption or to make Mr Trump roll
00:03:26
back the policy completely but no one
00:03:29
knows where all of this is going and
00:03:31
when the stock market doesn't know and
00:03:33
there's uncertainty it can't predict the
00:03:35
future so it becomes a roller coaster so
00:03:38
that's what's happening but the next
00:03:40
question is why is it happening and this
00:03:43
all happened because of how extreme
00:03:45
these tariffs are and to be fair the
00:03:48
critics have a really strong argument
00:03:51
against how these tariffs were created
00:03:54
so let me explain the administration
00:03:56
told us that these tariffs were
00:03:59
reciprocal meaning they mirrored what
00:04:02
other countries charged the US for
00:04:04
imports whatever they charge us we
00:04:07
charge them the same reciprocal tariffs
00:04:10
on countries throughout the world
00:04:12
reciprocal that means they do it to us
00:04:15
and we do it to them they also claimed
00:04:17
the tariffs were then cut by half
00:04:19
because we're nice but that's not true
00:04:23
these tariffs are actually a lot higher
00:04:25
than what other countries charge the US
00:04:28
for example China's average tariff on us
00:04:31
Goods isn't
00:04:33
67% it's closer to between 6 to 10%
00:04:37
Vietnam faces
00:04:39
46% but its tariffs on us goods are much
00:04:42
lower tariffs on Australia are now 10%
00:04:46
but Australian tariffs on us Goods is
00:04:49
zero they are not reciprocal in fact if
00:04:53
you look at the world average before
00:04:55
these tariffs the US charged the world
00:04:58
about2 and5 % and the world charged the
00:05:02
us about 5 to 10% so yes it was unfair
00:05:07
to the US but these new tariffs are
00:05:10
between 10 to 50% which dwarf those
00:05:14
rates so the question is why is the US
00:05:18
going to charge the world so much more
00:05:20
and how did they pick these numbers and
00:05:23
it turns out someone figured out a
00:05:25
formula that comes really close to how
00:05:26
this was decided the formula was was
00:05:29
based on a trade deficit with each
00:05:33
country rather than directly matching
00:05:35
the tariffs so here's how it works they
00:05:37
took the trade deficit the US has with a
00:05:39
country and divided it by the country's
00:05:43
exports to the US and then have the
00:05:45
result for niceness for example the US
00:05:48
trade deficit with China in 2024 was
00:05:51
$294.8 billion and imports from China
00:05:55
were
00:05:56
4399 billion so step one trade deficit
00:06:00
equals 295.000 billion step two 295.000
00:06:05
billion divided 4399 billion equals
00:06:10
67% step three 67% / 2 equal 332 so
00:06:15
round up which is how we got to
00:06:17
34% a 34% Tariff was applied to Chinese
00:06:22
Goods now this formula was actually used
00:06:24
for a lot of the countries listed so
00:06:26
let's look at another one the US has a
00:06:28
17 .9 billion trade deficit with
00:06:32
Indonesia its exports to the US are $28
00:06:36
billion so 17.9 divided 28 equals 64%
00:06:41
which we are told is what Indonesia
00:06:44
charges us and because we're nice we'll
00:06:46
charge them half 32% half of 64 in
00:06:51
reality the number Indonesia charges the
00:06:54
US is not 64% and never was what it
00:06:58
actually is is about 88.1% on average
00:07:01
but it's certainly not 32% and it's
00:07:04
nowhere near 64% here's the rest of the
00:07:06
countries if you want to pause and do
00:07:08
the math yourself but wait it gets even
00:07:11
worse because these numbers were purely
00:07:14
based on goods and the math completely
00:07:17
ignored what are called the services
00:07:20
section of an economy which are things
00:07:22
like tourism education financial
00:07:25
services and that's where the US
00:07:27
actually has a trade Surplus in other
00:07:30
words we export more of that stuff than
00:07:34
we import and that should have been
00:07:36
considered in the Tariff calculation but
00:07:39
they were not so what this means is that
00:07:41
the US will now charge the world
00:07:43
anywhere from 10 to 50% more for its
00:07:47
products and some countries even more on
00:07:50
top of that for certain industries so
00:07:53
ultimately then what does this all mean
00:07:56
and what's going to happen next so most
00:07:58
people will fall in one of two camps the
00:08:01
louder Camp being Trump is so dumb he
00:08:03
doesn't understand
00:08:05
economics so that's one of them but the
00:08:08
second Camp says maybe there's more to
00:08:11
this than meets the eye so let's take a
00:08:13
look at some history and what other
00:08:15
people have said about this concept of
00:08:17
charging other countries more money for
00:08:20
our products and you might be surprised
00:08:23
to see who the critics are look I think
00:08:25
the president's doing the right thing
00:08:27
China has been taking advantage of us
00:08:29
for two two decades they're stealing our
00:08:33
intellectual property which means
00:08:34
stealing our good paying jobs how far
00:08:37
does China have to go how much more
00:08:40
repression how big a trade deficit and
00:08:43
lack loss of jobs for the American
00:08:45
worker and how much more dangerous
00:08:48
proliferation has to exist before
00:08:50
members of This House of Representatives
00:08:52
will say I will not endorse the status
00:08:56
quo the lack of Market access the Ripoff
00:08:59
of our intellectual property the
00:09:00
transfer of Technology a country that is
00:09:04
not willing to play by the rules in any
00:09:06
respect in this trade relationship you
00:09:09
have a serious threat not only to our
00:09:11
relationship but to the industrialized
00:09:13
World further what they have said is
00:09:17
that we need to not worry about
00:09:22
Manufacturing in America because what we
00:09:26
should establish is a policy of unfed
00:09:29
free trade we don't need tariffs what we
00:09:32
need is to allow Corporate America the
00:09:34
freedom the freedom to throw American
00:09:37
work is out on the street people are
00:09:40
making 15 20 25 bucks an hour Health
00:09:43
Care pensions throw them out on the
00:09:44
street because somehow Madame President
00:09:47
we are going to create wealth in America
00:09:49
and good paying jobs in America as we
00:09:51
shut down plants we move to China
00:09:54
corporations there pay workers 203 cents
00:09:57
an hour and we bring the product back
00:09:59
back into this country it's also proper
00:10:01
for advanced economies like the United
00:10:03
States to insist on reciprocity from
00:10:06
Nations like China that are no longer
00:10:09
solely poor countries to make sure that
00:10:12
they're providing access to their
00:10:13
markets and that they
00:10:15
stop taking intellectual property and
00:10:18
hacking
00:10:19
our servers so imagine that tariffs can
00:10:24
be beneficial as long as they are done
00:10:27
strategically again Mr Trump has has
00:10:29
been saying this for almost 40 years I
00:10:33
mean you can respect somebody that's
00:10:34
beating the hell out of you but they are
00:10:35
beating the hell out of this country I
00:10:37
don't know how your audience feels but I
00:10:38
think people are tired of seeing the
00:10:40
United States ripped off and I can't
00:10:41
promise you everything but I can tell
00:10:43
you one thing this country would make
00:10:44
one hell of a lot of money from those
00:10:46
people that for 25 years have taken
00:10:48
advantage it wouldn't be the way it's
00:10:49
been believe me but now here's where
00:10:52
things get really interesting there's
00:10:55
another theory which I think could be at
00:10:57
play now on the surface tariffs are
00:11:00
about fair trade by punishing importers
00:11:03
bringing back jobs and protecting your
00:11:06
own Industries but this theory has less
00:11:09
to do with all of that and more to do
00:11:12
with the Federal Reserve interest rates
00:11:14
and the US national debt think about the
00:11:17
timing for example the US economy has
00:11:19
been facing High interest rates because
00:11:21
of the fed's fight against the
00:11:23
pandemic's inflation the government debt
00:11:25
payments went way up because interest
00:11:28
rates are now higher than they were a
00:11:30
couple years ago in fact us interest
00:11:33
payments on debt are approaching a
00:11:36
trillion dollar a year money that just
00:11:39
goes out the door to bond holders now if
00:11:43
you're a President Who campaigned on
00:11:46
debt reduction and economic growth High
00:11:49
interest rates stand in your way just
00:11:52
think about how Donald Trump has built
00:11:53
his wealth his entire life he invested
00:11:56
into real estate then borrowed against
00:11:58
his real estate estate to buy more real
00:12:00
estate some people call it the
00:12:04
brrrr strategy buy remodel rent
00:12:08
refinance repeat buy remodel rent
00:12:10
refinance repeat and that can only be
00:12:13
possible in a time when interest rates
00:12:15
are low he even said no one gets Rich
00:12:19
while interest rates are high so enter
00:12:22
tariffs tariffs hurt everybody they
00:12:26
raise costs they scare markets and they
00:12:29
can stop spending and investment that's
00:12:31
a bad thing even Howard lutnick said the
00:12:34
world putting tariffs against itself of
00:12:38
course it's bad when we're all equal and
00:12:42
everything is free and fair if you raise
00:12:45
tariffs and they raise tariffs isn't it
00:12:47
bad for society the answer is of course
00:12:50
it is but a slower economy can
00:12:53
accomplish something it might send the
00:12:56
us into a temporary short recession
00:12:59
so that it forces the Federal Reserve to
00:13:02
cut interest rates to stimulate that
00:13:04
growth to revive the economy and to
00:13:06
allow people to get rich again and what
00:13:09
else do lower interest rates do they
00:13:12
make it cheaper for the government to
00:13:14
borrow and refinance its debt of which
00:13:18
this year there will be about $9
00:13:20
trillion of now all of this sounds
00:13:23
almost mchy of Alan right but it's a
00:13:26
theory with a lot of data points
00:13:28
suggesting that at least it could be
00:13:30
possibly intentional it's supported at
00:13:32
least in part by one of the most
00:13:34
legendary macro investors and economic
00:13:36
historians of all time Ray Doo you might
00:13:39
know him as the founder of Bridgewater
00:13:41
which is one of the biggest hedge funds
00:13:43
in the world and the guy who literally
00:13:44
wrote the book on global economic Cycles
00:13:47
principles for dealing with the changing
00:13:49
World Order and recently he tweeted
00:13:52
something that might help decode exactly
00:13:55
what's going on so Ray Doo broke down
00:13:57
tariffs like this there a special kind
00:13:59
of tax and when you understand their
00:14:02
first and second order effects it starts
00:14:05
to make sense why all of this might be
00:14:07
happening right now and here's a really
00:14:09
simple version of what he said tariffs
00:14:11
raise revenue for the government and
00:14:13
protect domestic Industries they're
00:14:15
actually deflationary for the countes
00:14:18
being tariffed and inflationary for the
00:14:21
country that's imposing them but if the
00:14:24
economy slows down enough the Central
00:14:27
Bank like the Fed
00:14:29
steps in with rate cuts and that changes
00:14:32
everything in other words tariffs can
00:14:35
force the fed's hand ray Doo points out
00:14:39
that these policies can actually reduce
00:14:42
global economic efficiency lower Capital
00:14:45
flows and eventually lead to something
00:14:46
called stagflation which is bad for most
00:14:49
of the world but useful for the US If
00:14:53
the Fed responds with easier monetary
00:14:55
policy he also said that tariffs can
00:14:57
decrease our Reliance on on foreign
00:14:59
production boost domestic resilience and
00:15:02
help fix unsustainable trade and debt
00:15:05
imbalances so you take that idea and you
00:15:08
combine it with $1 trillion in yearly us
00:15:12
interest payments and the fact that Mr
00:15:15
Trump's real estate background taught
00:15:17
him the importance of refinancing during
00:15:21
low interest rate environments and
00:15:23
suddenly all this starts to make a lot
00:15:26
more sense slow the economy down trigger
00:15:29
a recession scare Force the FED to cut
00:15:33
refinance the US debt potentially
00:15:36
reindustrialize the US fix the trade
00:15:39
imbalance and make the trade more fair
00:15:42
Mr Doo even ended his post saying that
00:15:45
the world's monetary and geopolitical
00:15:47
systems are overdue for a reset and that
00:15:50
these kinds of abrupt unconventional
00:15:53
moves are exactly how it happens he
00:15:56
literally titled his new book how
00:15:58
countries go broke and while that might
00:16:00
sound scary it means that these kind of
00:16:04
resets might actually be a survival
00:16:07
tactic to reduce foreign dependency
00:16:10
rebuild domestic production and make
00:16:13
sure that the dollar stays strong as the
00:16:16
world's Reserve currency but the real
00:16:18
point I want to leave you with is that
00:16:20
we might disagree on how to fix
00:16:22
something but as long as our goal is
00:16:24
mutual which is to fix something then we
00:16:27
should give each other the benefit of
00:16:28
the doubt and it's okay to be critical
00:16:30
which is why I explained that the Tariff
00:16:31
numbers made very little sense it seems
00:16:34
like they're confusing trade deficits
00:16:37
with tariffs but I also explain how this
00:16:41
might also be part of a bigger strategy
00:16:44
maybe one that's more longterm and maybe
00:16:46
that's why Mr Trump calls this
00:16:47
Liberation day not just because it
00:16:50
punishes other countries but because it
00:16:52
resets the system it's like medicine or
00:16:56
surgery painful in the short term but
00:16:58
potentially healing in the long term
00:17:00
ultimately though no one knows besides
00:17:03
Mr Trump how long this pain might last
00:17:05
but if you want to go deeper with how
00:17:07
these tariffs might affect your stock
00:17:09
portfolios or crypto and how I'm
00:17:10
investing check out the last video
00:17:12
somewhere up here which explains all of
00:17:14
that but ultimately the lesson is stay
00:17:17
invested and you'll probably do just
00:17:19
fine in the meantime I'd love to hear
00:17:21
your thoughts I hope you have a
00:17:23
wonderful rest of your day smash the
00:17:24
like button subscribe if you haven't
00:17:26
already I'd love to see you back here
00:17:27
next week I'll see you soon bye-bye
