Liam Halligan is a British economist, journalist, author, and broadcaster. Subscribe to Liam's Substack - https://substack.com/@liamhalligan SPONSOR. Venice AI. Go to our sponsor https://venice.ai/triggernometry and use code TRIGGERNOMETRY to enjoy private, uncensored AI. Using code will get you 20% off a pro plan SPONSOR. Athletic Greens. Subscribe to *AG1* and get a FREE bottle of Vitamin D AND 5 Free AG1 Travel Packs with your first subscription. Go to https://drinkAG1.com/triggernometry SPONSOR. Pure Gold. Protect your wealth with The Pure Gold Company. Get your free investor guide at https://pure-gold.co/trigger Join our exclusive TRIGGERnometry community on Substack! https://triggernometry.substack.com/ OR Support TRIGGERnometry Here: Bitcoin: bc1qm6vvhduc6s3rvy8u76sllmrfpynfv94qw8p8d5 Shop Merch here - https://www.triggerpod.co.uk/shop/ Advertise on TRIGGERnometry: [email protected] Find TRIGGERnometry on Social Media: https://twitter.com/triggerpod https://www.facebook.com/triggerpod/ https://www.instagram.com/triggerpod/ About TRIGGERnometry: Stand-up comedians Konstantin Kisin (@konstantinkisin) and Francis Foster (@francisjfoster) make sense of politics, economics, free speech, AI, drug policy and WW3 with the help of presidential advisors, renowned economists, award-winning journalists, controversial writers, leading scientists and notorious comedians. 00:00 Introduction 03:11 What Are Tariffs? 16:13 China and Russia Relationship 23:00 The Risk Of Increased Nuclear Proliferation 29:29 The Fiscal Reality For Europe 37:57 How Close Are We To Going Broke? 44:22 Is Net Zero Simply De-industrialisation? 54:41 The Reform Party Civil War Between Nigel Farage And Rupert Lowe 01:08:32 What's The Thing We're Not Talking About That We Should Be? Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are Trump's tariffs, and how do they affect the economy?
Liam Halligan, our go-to guy for all things economics. We want to talk to you about the tariffs. We want to talk to you about the British economy. And you have a very particular insight into the civil war that's happening inside of reform as well. We'll touch on that at the end. But first of all, let's talk about the Trump tariffs.
One of the things I think quite a lot of us assumed is this is just talk, right? He's going to claim he's going to put some tariffs on in order to get people to do what he wants, but we're not actually going to have tariffs. Is that what's happening, or are we actually going to have a trade war of the kind that people fear?
Well, it's the old sage's response to anything that Trump does, isn't it? Take him seriously, but not literally. This is just a bargaining ploy. And I still think there is an element of that. But in order to be taken seriously, if not literally, he has to at least put some tariffs on for a while.
And yet what we're seeing is even though he says, you know, tariffs are the most beautiful work in the dictionary... I love tariffs. His actions suggest that he's actually blowing hot and cold, except, it seems, when it comes to China. And that's my proviso. We'll come on to that. So obviously, he talked about 25% tariffs on both Canada and Mexico in his inauguration speech.
introduced them beginning of february for a few days took them off again now there's a reprieve now it seems if they come back there's the the goods that are involved in the nafta free trade agreement which was renegotiated during the first trump presidency they're going to be excluded maybe car components are going to be excluded
because U.S.-based automakers, you know, they use Canadian-made car components a lot. So it seems to be kind of scattergun. But of course, just because Trump has threatened this and is talking tough on Canada, he's propelled, you know, he's convulsed America's relations with Canada and absolutely revolutionized Canadian politics with a complete...
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Chapter 2: How might Trump's tariffs influence US-China relations?
um outsider coming in as as prime ministers i'm sure we discussed and his party uh rocketing ahead in the opinion polls making up a big deficit china he has introduced tariffs i'm not sure they're going to be removed anytime soon there was already a 10 tariff under joe biden of course And Trump doubled that to 20 percent and made it more wide ranging.
And he's been threatening in his rhetoric a 60 percent tariff on China. And of course, he's also threatening tariffs on steel imports from the European Union and indeed from the UK.
Just pause one second. One second. One thing that occurs to me is that for our audience and for us as well, who are not economists like you, can you just explain that? what the point of tariffs is, what the impact of tariffs is, how does it work, and what is the thinking behind imposing tariffs on China and not taking them off?
A tariff is a tax on imports into your country. And the historic justification for tariffs is that you're protecting your domestic industries, particularly industries that used to be called the infant industry argument when industries were in their early stages. But of course, the US steel industry isn't in its early stages. It's been around for many, many decades.
So what you're trying to do, you're trying to appeal to domestic voters and domestic interest groups by protecting their market share, by shielding them from more competitive imports that are made elsewhere. If the imports elsewhere weren't better value, they wouldn't be coming in because the transport costs wouldn't be worth it, right?
But of course, what tariffs do, and the reason why I'm largely against tariffs in most cases, is that tariffs mean that your domestic consumers, your domestic manufacturers, when they buy imports, inputs from abroad, not least things, basic goods like steel, they pay more for them. So then consumers end up paying more. You generate inflation.
That's why we're seeing stock market convulsions in America, because, you know, outside of the political hurly burly, you know, the cool, calm market analysts, they're thinking, well, this is going to cause inflation. This is going to mean that the Federal Reserve can't lower interest rates as quickly as we previously assumed. This is going to stall the American economy.
You've now actually got some really respectable people on Wall Street and beyond predicting a U.S. recession.
Well, I saw a tweet this morning, somebody saying, my portfolio's pronouns are, was, were.
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Chapter 3: What is the significance of the Russia-China relationship?
He feels he's got the Democrats and their kind of lawfare, if you like, trying to remove him. Well, we'll see about that under control. And he knows this is his last chance, his last crack of the whip. So I think his kind of... business wheeling and dealing and gunslinging.
I think politics needs a bit of that to some extent, a bit less nonsense in politics, a bit more economic literacy in politics, a bit more certainly on the fiscal side being realistic with what Doge is doing and so on. But I think his tariff policies are incredibly dangerous unless they really are false.
And even if they are false, even if it is a ploy, a wheeze, then the Chinese aren't going to take it like that because they're not going to want to be pushed around.
And how much of you do you think this is because of his experiences dealing with the Chinese during COVID with the fact that they were, to put it mildly, opaque when it came to the creation of the virus, how it was spread, et cetera, et cetera. And him thinking to himself, right, well, this is payback.
I think everyone was opaque when it came to where the virus actually came from, with some honourable exceptions, including myself and one or two other British journalists. We talked to Sir Richard Dearlove, the former head of British intelligence in mid-2020, who said COVID was an engineered virus. escapee, i.e. non-zoonotic, i.e. made in a lab and it escaped by accident.
The Chinese didn't deliberately release it, of course, because their economy was hammered by COVID too. And that wasn't taken seriously at the time. And it wasn't taken seriously because Trump had also suggested it because He was also talking to people in security services. And now it's the conventional wisdom.
You know, the Western establishment has all but accepted it in that they don't knock people down who now say it. But when it comes to is that why Trump's doing this against the Chinese? No, he's doing this against the Chinese because the Chinese are, you know. a major economic power that on some definitions is now more powerful than the U.S.
And of course, there's a massive trade deficit with China. There are more Chinese exporters that need America than American exporters that need China, by the way. And he feels he can get leverage and he feels he can improve the deal more. You know, the sort of MAGA t-shirts now say, you know, you must pay for the privilege of access to the American market. And there's some logic in that.
You know, it's still the biggest, most valuable market in the world under most headings. Though, of course, many other markets have many more people. Having said that, I think if he pushes China too hard, then he'll find that, you know, the normal rules don't apply. The normal rules that he's used to in the US, in Europe, you have a spat, but then you sort of kiss and make up.
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Chapter 4: Can Europe handle increased defense spending?
That's sort of how it works. The big picture, Francis, just to finish off this section, is... Trump wants many things out of the relationship, his relationship with the Russia-Ukraine war. Above all, he wants to be seen as the good guy who does the deal and the Chinese not doing the deal.
Because for many months, it looked as if the Chinese were going to come in and sue for peace in Russia-Ukraine. And the fact that it's the Americans leading the global news bulletins on this is exactly what Trump wants.
And Liam, we weren't going to talk about Russia-Ukraine, but since you brought it up, something I want to ask you is one of the concerns of mine is there seems to be, for the reasons I think partly that you've just articulated, a very short-termist approach to attempting to get a settlement there, which I understand after three years of brutal fighting. Million dead.
We want the fighting to stop, of course. Well, some people do. A lot of people wanted to carry on, apparently. Yeah. I think, well, I think that's probably slightly a straw man in the sense that I think a lot of people want the right deal. Yeah. And they're prepared to continue fighting to the extent that that might contribute.
I think a lot of people are naive and idealistic and far, far less educated than you about this issue. And so they think, well, rah, rah, rah, Ukraine flag in bio, that's going to solve the problem. But if we're talking about serious people, I think everybody recognizes that Ukrainians did their best very courageously. We gave them not enough support, in my opinion, but whatever we were prepared.
Ultimately, that has ended up with us in a stalemate, more or less, where we are, right? So now it's time to have peace. The issue that I think is of great concern is that, number one, if we don't get a deal that has permanent security for Ukraine, this will happen again, number one. So we're going to be back in square one.
Number two, and this I think is even more concerning, particularly with a lot of people who say they're anti-war and they say the reason for that is they're trying to avoid nuclear disaster. Well, what happens when all the small countries that have powerful enemies look around and go, well, look, America has been very clear. They're no longer the world's policeman. They're stepping back.
They're not going to protect you. They're not going to step in and say this is wrong. They're not going to defend you. Well, how do you defend yourself when there's no police? You have to get the best weapons you can. So there's a risk of nuclear proliferation in that situation, isn't there?
I don't think there's a lot in there, Francis. There's a whole hour of discussion.
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Chapter 5: Is the British economy living in cloud cuckoo land?
You know, we had quantitative easing, lots of money printing to stimulate the economy over the last decade, and now we're going to use some kind of Keynesian war machine building, big borrowing and spending to generate economic growth. I really worry about that. And I'm sorry to sound like some kind of, you know, financial nerd here, but this is just how it is.
When Germany said it was going to take off the debt break, it was going to massively boost its borrowing in order to ramp up defence spending. The yield on German bonds absolutely spiked up. That's what markets charge Germany to borrow. And Germany is easily the most creditworthy nation across the European Union.
And indeed, it bankrolls much of the rest of the European Union through various dark accounts, something called Target 2, which some of your viewers and listeners will be familiar with, sort of underground plumbing of the European Union. central bank and the way countries within the eurozone help to support one another.
Can Europe really afford this without causing another sort of financial collapse like we saw in 2010-11, the euro itself coming under threat? And that may sound hyperbole, but I really don't think it is if you look at where financial markets are, because they know
If the big European powers borrow and spend and they spend most of that on defence, well, you know, they're basically creating bits of metal that sit in a warehouse, you know, hopefully never to be deployed. That is not a productive use of borrowing.
It's literally like borrowing money off capital markets when you can't afford to borrow it, when you're already massively indebted and spending it on employing people to dig holes and fill them up again.
Well, this brings us on to the British economy, which is something... It's not going to lead to the growth that the markets want to see to justify the borrowing. I think that's certainly true.
I suppose the question that I was going to ask you about the British economy, but I think it applies across Europe, is, is there a possibility that because of the hard reality... We've been living in cloud cuckoo land for quite some time. Fiscally, yeah. In every way, actually, culturally as well. We've believed all sorts of things that aren't true about men being able to be women and all sorts.
I agree. We've been living in cloud cuckoo land. Is there some hope that what happens is, I mean, net zero is a good example of this, right? It's another cloud cuckoo land policy, right?
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Chapter 6: How do geopolitical tensions impact global markets?
right schools universities higher education further education vocational education think of the morality of that so spending more on servicing our inability of our generation to not be able to spend within our means than we are on equipping the next generation to deal with the debt that we are leaving them and this is radicalizing politics and i was sitting next to
You know, in my life, I often end up talking lots to people in the Treasury, people in the Bank of England, real kind of establishment, straight dealing types, people I was at university with, used to be in academia with and so on. And I was sitting with a guy very, very senior in the Treasury. He says, oh, the thing is, Liam, no one wants, you know, the country doesn't want this austerity.
It's never going to work. Because we were arguing about austerity because I was saying, you know, under George Osborne from 2010 to 2019, under Osborne and Cameron, it was the years of austerity. And during those years of austerity, the national debt... went from, you know, 50% of GDP to 80% of GDP. So where was the austerity?
I'm not saying that certain budgets weren't squeezed and certain people didn't suffer, but the state got a lot bigger and we employed, you know, hundreds of thousands of more civil servants.
Well, let me interject one thing on that because it's very important for people listening and watching this that we get this. So austerity or the attempt to reduce our spending is never going to be about simply reducing things that are unnecessary. Some of those things that we're going to have to get rid of are things that we like, things that are good.
But in the same way that if you have someone, for some reason, your income halves, you're going to have to let go of things. You have to prioritize.
It's about being a grown up. Economics is a study of scarce resources and how you allocate them, which is why just if you're a sort of card carrying, you know, economist who can add up, you're called right wing because you're just saying, no, you can't actually do that. Oh, you must be evil then because we can't. No, because we can't actually afford it.
Yes.
But if we do this and we do this, we invest this, then we can afford it. So what did this guy say? Yeah, this Treasury guy said, oh, no one wants austerity and it's never going to get through. And I said, well, you say that, my friend. I won't embarrass him by naming him. But, you know, I remember 1976. I remember when the UK went cap in hand to the IMF. It was our economic Suez.
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