Dimitri Sevastopoulos
speaker
28 appearances
1 recordings
1 series
first heard Apr 2025
last heard Apr 2025
Dimitri Sevastopoulos’s voice in public audio — every appearance, attributed to the second.
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On Friday night, the Customs and Border Protection Bureau put out a memo late at night that nobody seemed to see in Washington, but it was floating around in China on Saturday morning and Saturday afternoon, which said that cell phones, smartphones, laptops, computers, certain other kind of consumer electronic devices, and a whole range of goods, which are heavily imported from China,
would be exempt from the tariffs. So the whole world said, OK, fantastic, Donald Trump is backing off. He's seen sense on this. Americans are not going to see massive price rises in their iPhone or whatever other smartphone they use.
But then on Sunday, we had more confusion when Howard Ludnick, the Commerce Secretary, came out on television and said, no, no, no, no, no, we're not taking tariffs off these goods.
These different messages have created huge confusion as to what exactly the Trump administration is doing and why the rollout of the tariffs is so chaotic, given that they've had several months to plan how they were going to do this.
Yes, I mean, China has, as the US does, China has a range of tools that it can employ in a trade war with the US. The kind of the simplest retaliatory move it could take is to put countervailing tariffs on US exports, which it has done. But one of the areas where it essentially has a stranglehold on the global market is is in different kinds of critical minerals, rare earths.
These are metals and minerals which are used for everything from batteries for electric cars to components of weapons and a whole array of products in between. And China essentially is very, very dominant in the processing of these minerals, which means that if China decided to cut off supply to countries or to the world, it would have a massive impact because the U.S.
and its Western allies, Japan, South Korea, and a whole range of countries at the moment are still reliant on China for processing these critical rare earths and critical minerals.
Well, I think there's a couple of things that are going on. The first thing is when he basically launched an economic trade war against the whole world, initially, you know, the equity markets of stocks and shares that people have in their portfolios fell and people felt that one in their 401ks.
Scott Besant, the Treasury Secretary, went out on television and said, listen, it's not such a big deal because most Americans don't have everything in the market.
Americans generally hold 60% of their 401k in stocks and 40% in bonds. And overall, it's not such a big hit. Well, then all of a sudden, the bond market came under attack and bond prices started falling.
And I think there was panic in the Trump administration that this was really going to hit the average American. Their 401ks were going to be hit. And then in several weeks or months time, the prices of goods that are imported from overseas are going to go up. So you're going to have your pension go down and your month to month costs go up. So I think that was the first thing that happened.
The second thing that happened was there was a realization that even if 130 countries have come to Donald Trump and said we want to negotiate, which is the number the White House is putting out at the moment, the U.S. government doesn't have enough manpower across the different agencies that deal with trade to do trade negotiations with 130 countries. It's just not feasible.
I think for several reasons. One is China is a much more relatively powerful country compared to the US than it was in 2017 when Donald Trump first entered the White House. I think also the Chinese leadership feels that they have more ability to tolerate pain than in their economy. And that's not withstanding the fact that they are having economic headwinds right now. They have their own problems.
So it's not as if they have a lot of leeway, but I think they feel like they can tolerate the pain for now and that they can tolerate the pain for longer than the US can. And one of the reasons, which is looking at the way the Trump administration very quickly pivoted last week when the bond market started to fall.
I think that's a signal to the Chinese that the bond market is a vulnerability that the U.S. has, and that when bond prices fall, that the U.S. is going to backtrack on some of its policies. So I think that's given China more confidence as well. Now, whether all those things turn out to be accurate or not, we don't know. But I think that's the thinking in Beijing right now.
Well, for American consumers broadly, it's going to mean, you know, if you go to Target or Walmart or, you know, wherever you shop to buy a whole range of products, you know, a toaster, you know, let's say you pay 30 bucks, 40 bucks for a kind of a mid-range toaster right now, you're going to find all of a sudden that toaster is 50 bucks, 60 bucks.
And, you know, one of the biggest impacts in the long run, which you will also be felt by consumers in the way that it was felt during the pandemic, is that this is going to have a massive impact on global supply chains. One, because companies are going to struggle to know what they can afford to import from different parts of the supply chain.
And second of all, some companies are going to stop investing in certain parts of the world where they have supply chains because they don't want to pay the import costs, the tariffs. And so you're going to find that the supply chains around the world, which are massively complex, are going to become even more complex and brittle.
And you will see all of a sudden that something you've ordered on Amazon that you were told was going to arrive in two weeks time, you'll get one of those notifications saying been delayed. We'll let you know when it's ready to be shipped. So I think that's not going to happen immediately. But after a few weeks of all of these tariffs being in place, you're going to start to see signs of that.
And it will build over time. unless the Trump administration starts to dial back more of these tariffs, particularly on China.
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