Kenneth Raposa
Appearances
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
tariffs is harder than rocket science, because rocket science, we know where we're going, and we could communicate with the Voyager 1 and Voyager 2 satellite right here from the United States, but yet we can't seem to figure out how to manage trade or how to tariff a certain country, so you have an industry in the United States. So it is a lot harder than rocket science.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Now, as far as the tariff story goes, there's three front strategy to Trump's tariffs, right? You have what I call the help a brother out tariff or the tariff threat, which you saw over the past two weekends, where Trump would say, we have a national emergency at the border with fentanyl and drugs.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
We are asking you, you're our friends, you're Mexico, you're Colombia, we have a free trade agreement with you guys, we're asking you to help us out. You don't want to help us out? Okay, we're going to hit you with 25% tariffs and maybe you'll change your mind. They did change their mind.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
So now there is no tariff and we have supposedly more policing at the border, we added the Colombians taking in their migrants, and we'll see how that goes over a month. That was the deadline that Trump gave to reassess the situation. That's one way that we're going to use tariffs. The other way is as a revenue, and that would be maybe a lower tariff of 10% to 15% across the board.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
That would basically wipe out all the free trade agreements we have, because even Korea, which had a free trade agreement with the United States, would now be faced with tariffs for imports, whatever we import from Korea. And the idea there would be that the government is raising revenue, and that revenue would be used to...
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
enable the government to extend something like the Tax Cut and Jobs Act, or, of course, lower our fiscal budget deficit, which is about $2 trillion today. And then the third is what we heard out today, which is more of a balanced trade situation, right? And this would go after certain countries. We've already had this with China, for example, when Trump was elected the first time.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
We have to ask on those guys. The balanced trade issue, which is what we've heard today from the White House, is where you're telling a country, look, We know that we're the big guys. We know that we're the consumers. We know that we love to shop till we drop in the United States. And there's never going to be equal trade among us, right? Because we're a bigger consumer than you are.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
But we don't want to have a growing deficit. We don't want to go from a 2017, $16 billion deficit with Canada to a record-breaking $70 billion one. We don't want to go from a $900 billion deficit in goods with the world to a 2024 record-breaking $1.2 trillion goods deficit. We want to see some stabilization, or maybe it's some countries going the other way.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Because that's not the case, those countries are going to face tariffs. So one thing Trump said today was, as an example, Hey, if the Europeans want to import a Jeep Wrangler from the US, it's a 10% tariff at least, not to mention the VAT tax, value added tax on top of that. But if we want to import a BMW convertible made in Germany, it's a 2.4% tariff.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
So in the idea of the reciprocity, we will say, OK, we're going to hit that convertible beamer with a 10% tariff and VAT or something equivalent, just like you're doing to our guys. So that's the free-prompt strategy. And that's what we saw coming out of Washington today with the tariffs that would come down the pipe in April to balance trade with our biggest trading partner. Okay.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Okay. So, I work for the Coalition for a Prosperous America. They are in favor of tariffs because their members are companies who are impacted by trade from countries who have low-cost labor, lower taxes, weaker environmental regulations than we have here. And if they want to exist as a company, if they want to exist as a going concern, They need some sort of protection.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
They're very in favor of tariffs. The same thing with a lot of our members who work in agriculture, who are beef ranchers, for example. We have free trade agreements with numerous countries like Mexico. We're importing more beef than we ever did before.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
The beef that you have on the shelves in the grocery store probably came from Mexico or Brazil, probably didn't come from Oklahoma or your local farmer, unless it's labeled as such, right? So these guys want to have a... I don't want to use the word... It's a level playing field because there's never really going to be a level playing field when you have the strongest currency in the world.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Obviously, our dollar goes much farther in Mexico. If you want to build a beach house and we only have a million dollars, we're not going to be able to build it in Malibu, but we are going to be able to build it in Colombia or Margarita Island in Venezuela. That's for sure. Because the dollar is much stronger for us, it's much easier for us to import.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
If you want to have a strong dollar, you want to have the dollar be the world currency and the world reserve currency, then you have to have some sort of protection if you also want to have industry and people who produce things in the United States. Otherwise, as time goes on, as we have seen, it's going to be a market just increasingly penetrated by imports.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
And that's going to lead to layoffs and more treatment centers in upstate New York and other areas instead of people working.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Well, the top downside to tariffs, of course, would be, let's say, for example, I'm an auto industry, right? And I have to import an engine from my contractor in Canada. Right now, it's duty-free. So now there's a tariff. I'm importing the engine. The guy I'm importing it from, the customs broker, is going to say, well, that $5,000 engine is now trapped at 25%.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
You have to fork up that money ahead of time. Now, imagine if I'm importing 1,000 of those engines. Now, I've got to fork over hundreds of thousands, if not millions of dollars to pay for the tariff to my customs broker. Now, I might be able to reach an agreement with my customer on the other end, where I can say, what if I buy more volume, or can I take on a loan?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
So the tab is a little less impacted than the 25%, meaning that $100 tab to 25% doesn't always mean that the good is going to be all of a sudden $125, is what I'm trying to say.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
But for a company like that, like the auto industry in particular, that tab that sends things back and forth across the Mexican and Canadian border all the time, multiple times for the same item, it would be a big headache for those guys, for sure.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Okay, well, let's look at it like this. Do you remember the China tariffs when Trump was first in office? You remember those, obviously. And you don't remember that... Yeah, that really meets a higher cost for you. We all heard about inflation in 2021 and 2022, which was because of COVID and the lockdowns and money printing, right?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
So your insurance went up, your health insurance went up, your table bill went up, your food costs went up. None of these eggs, for example, went up. We all heard about that. So many things that went up that drove inflation, gasoline, these were not things that we import.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
it's certainly not things that we import from china and china was the main main source of our uh uh tariffs in 2018 and of course they were ascended during the biden presidency as well so tariffs against china our number one trade partner did not lead to inflation okay not not measurable and either janet and even janet yellen our president secretary before our new one scott the zen said the same thing it's not measurable now
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Recently, the Boston Federal Reserve came up with a report, and the report was, let's pretend there's going to be a 25% tariff on Mexico and Canada. Let's pretend there's going to be a 60% tariff on China. I think if I remember off the top of my head, it was a one-time increase of the inflation rate of 0.8%. percentage point. So what does that mean?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
That would be a one-time thing. Now, we can argue, oh, no inflation is good. Okay, I get it. Life is very complicated. But what if I told you that your inflation is higher, but your income is higher, right? You're making more money. You're now working. They're now hiring more people at General Motors. People now have the economy better.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
There's more people producing and making things, and I think rather than working part-time jobs in retail and in travel and tourism. There's always a payoff, right? We can't sit back and not be active. We can't be inactive because we're afraid of something happening. That's not what leadership is.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
You can't be afraid if you take an action that you're going to break something and something's not going to go right. If something does not go right or goes terribly wrong, you know, tariffs are not permanent. You could remove them, right?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
So all of a sudden, like I was telling you, if $100 time and 25% really was a 25% charge in addition to your $100 widget, which it is not, but if it was even close to that, you could always say, ah, that's too much for our consumers. That's too much for our economy. They're now gone. So it's not permanent.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
But all the studies show, from the Boston Fed to the US Industry Commission show that tariffs are not a major factor for a play pit. It's money printing, right? Big problem there, government spending. Those are the main reasons for inflation, not power.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Sure. So when you think of the pharmaceutical market, there's two things. There's branded drugs, which would be like Some new drug, right? Some new branded drug that just came out a year or two ago. This is where the pharmacy companies like Pfizer make all of their money. And then there's the generic drugs, which is what most people take.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Somebody's on blood pressure medication or even something like Viagra. This is all generic medication now. So it's commoditized. It's lower cost. And the big pharmaceutical companies have decided that it's much easier for them to either, A, contract manufacture overseas, which India being one of the lead spots, followed by China. or just get out of the business altogether.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
And so then those players in India and China, namely India, become the brand, like Dr. Ready or Cipla or Sun Pharmaceutical. These are all brands that they sound American, right? But they're not. They're Indian brands. And on the pharmaceutical side, I believe India is a culture of more than half, at least 60%, maybe more, of our pharmaceuticals, generic pharmaceuticals.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
In order for them to even make these pharmaceutical goods, they rely on China for organic compounds and synthetic chemicals that go into your drugs, right? So China is a major component of the generic supply chain in the United States.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
And not only that, because of China's Made in China 2025 policy, they're also moving way up the value chain, and China is investing heavily in branded drugs and new treatment, so they can become the Pfizer's and the AbbVie's of the world. And they're getting there. They're on par with a lot of our big biotech guys. For the US.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Well, for generic pharmaceuticals, it's about 80%, right? So, about 80% of your generic farmer is overseas. And the majority of that comes from India. Other markets would be Israel is huge with Teva Pharmaceuticals. That's an Israeli brand. And a lot of companies also from Ireland, believe it or not. A lot of those would be American companies that contract manufacturing in Ireland.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
And these guys are a big source of Americans' trade deficit in Ireland because of pharmaceutical drugs, actually. One of the biggest sources of Americans' trade deficit is pharmaceutical drugs because, as we know, Americans are on a boatload of drugs. Right? No one's on drugs like Americans. So we have a huge deficit. It would be great if we... Hey, we're number one.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
We're number one.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Well, some people say it is a national security issue, actually, because if you can't get things like antibiotics or when you had COVID, for example, when you couldn't imagine if you're in a situation with COVID and this could happen easily in the future, why not? But you go, we don't have the labs to make vaccines.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Let's pretend you thought the mRNA vaccine was God's gift to mankind to save you from COVID. We don't have the labs to do those things. We don't have the innovators. Well, where are we going to get it? Well, we got to get it from China. We got to get from somewhere else. And as you increase your...
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
purchase of, as you would actually increasingly depend on imports, then you lose the local lab talent to even want to get in the pharmaceutical business because it's just so small, right? It's just a branded guy. So we're doing R&D and wonder drugs, you know? So it's very important to have a little mix of all of it. You can't just have the branded, the big one, the drugs that are here.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
You got to have the generic drugs as well, because these are the drugs that we take all the time. And these are the things that are going to keep you alive during surgery, for example, like anesthesia, for example. We don't even make that in the United States. Those kind of medications are very important.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
And again, what happens if, let's pretend, again, let's pretend, and these are not ridiculous assumptions. Let's pretend that you said, okay, ivermectin and hydroxychloroquine, that is the cure. We don't need the vaccine. Or doctors can use that. They can use that as a prophylactic to COVID vaccine. Guess where all of that is made? It is almost entirely made in India.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Now, if India also says, we want to use these things, they have a billion people. They have three times more of our population. Do you think they're going to let... A bunch of these life-saving pills disappear from their market to serve the United States.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Even if the United States was charged with paying $5 more a pill, they probably wouldn't do that because they have an old national security issue to deal with, a national health emergency, for example. So it's important to make these things here, and we do not.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Yes, that is still the domain of the US, high-end biotech. But I will tell you that the large research guys, so Pfizer or Eli Lilly, if they're trying to come up with new things like synthetic biology, for example, this would be like a robotic arm, for example, and making it work with your skin. If you're doing research in that, those guys partner with the Chinese.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Because the Chinese are just set up to do those things, okay? So China is also learning to do that, and they are going to be leaders in that, and the Chinese government wants to be leaders in that, as I said earlier, with the Made in China 2025 policy, where they made biotech a very important part of China's growth strategy. India doesn't have anything like that.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
India is more involved in the generic space, right? But China is involved in boom. China's a beast, man. If China sets out to do something, they get it done. You guys are no joke. And if they say they want to be leaders in something, they tend to be leaders in it. They get there. They have not failed yet.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Well, I will say it's getting better insofar as now it's a conversation whereas before it never was. Okay. So, and it's only been a conversation in my view, maybe the last four years, right? Because COVID really hit in 2020, 2021, right? That's where it really became a conversation. So today you had Trump saying, I want to bring the pharmaceutical supply chain home.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
I want to make more generic drugs. He didn't say generic drugs. He said, I want to make more pharmaceuticals at home. What? We can obviously assume that that means generic, considering most of the drugs that Americans consume, including some basic things like a saline drip in the hospital, it's imported.
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
We assume that he's not just talking about the branded drugs, because a lot of those drugs are already made in the United States, or again, contract manufactured in Europe and Ireland in particular. So yes, it is a topic of discussion. It is something that you hear more about on Capitol Hill. You have the President of the United States talking about doing it, right?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Making it so that you could do those things there. But again, like manufacturing anything else, you have to be incentivized. And when you're making something that is low cost, like a generic drug that people take every day, How can you make it cost effective for a lab to produce that in the United States and not go broke?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
Or not need the US government to give them a check of $100,000 a month in order to do it. So there's policies in place to make sure that can happen. None of those have become law yet, but wheels are in motion. It is a topic of discussion, right?
The President's Daily Brief
PDB Situation Report | February 15th, 2025: Trump's Crackdown Triggers Cartel Retaliation & Global Tariff Fight
But again, you have to make it so that those key drugs, those generic drugs, including those drugs that you mentioned earlier, like ADHD medication and others that are in constant short supply in this country, like penicillin that are not made here, for the most part, you can do it here and you can make some money or at least not lose money.