Peter Baker

This is precisely because in the first Trump administration, when Trump unleashed these tariffs, a lot of big companies like Walmart, to pick an obvious example, but really every company that sells into North American markets, well, we don't want to pay all these tariffs to China. Seems like this U.S.-China divorce thing is real. We better go find another lower-wage country.

This is precisely because in the first Trump administration, when Trump unleashed these tariffs, a lot of big companies like Walmart, to pick an obvious example, but really every company that sells into North American markets, well, we don't want to pay all these tariffs to China. Seems like this U.S.-China divorce thing is real. We better go find another lower-wage country.

And moreover, Chinese companies moved a lot of investment into places like Vietnam and Cambodia, and they just exported their model to these other countries.

And moreover, Chinese companies moved a lot of investment into places like Vietnam and Cambodia, and they just exported their model to these other countries.

This is meant to catch that and divert production to friendlier places from the Trump administration standpoint.

This is meant to catch that and divert production to friendlier places from the Trump administration standpoint.

Mm hmm. Can I throw a wonky point at you? Sure. So I think it's worth remembering that there's so much integration between the U.S., Mexican, Canadian economies that when we buy a finished good from Mexico... something like 30 cents on the dollar, the value of that good, actually made in the United States, you know, with American labor.

Mm hmm. Can I throw a wonky point at you? Sure. So I think it's worth remembering that there's so much integration between the U.S., Mexican, Canadian economies that when we buy a finished good from Mexico... something like 30 cents on the dollar, the value of that good, actually made in the United States, you know, with American labor.

The counterpart number for China is three cents on the dollar. And Chinese state policy is directed at driving that number as close to zero as possible. So it's been true you know, going back to the first Trump administration, that if we assume, and there are a lot of reasons to debate, you know, what's the real objective? What does Trump really want to do? Does he just want to centralize power?

The counterpart number for China is three cents on the dollar. And Chinese state policy is directed at driving that number as close to zero as possible. So it's been true you know, going back to the first Trump administration, that if we assume, and there are a lot of reasons to debate, you know, what's the real objective? What does Trump really want to do? Does he just want to centralize power?

Does he want chaos? Whatever. But if we take as a given, just for the sake of this conversation, it's about bringing production back to the United States, generating jobs in the United States. Well, it's always been true that Mexico and Canada are the potential solution, I'm putting in air quotes, to our also air quoted China problem.

Does he want chaos? Whatever. But if we take as a given, just for the sake of this conversation, it's about bringing production back to the United States, generating jobs in the United States. Well, it's always been true that Mexico and Canada are the potential solution, I'm putting in air quotes, to our also air quoted China problem.

And we've gone through a very bewildering couple of months where it seemed like, oh, no, maybe Mexico is the enemy to the Trump administration.

And we've gone through a very bewildering couple of months where it seemed like, oh, no, maybe Mexico is the enemy to the Trump administration.

It's creating opportunities for Americans. This is starting to make a lot more sense to me.

It's creating opportunities for Americans. This is starting to make a lot more sense to me.

30,000 parts in modern cars.

30,000 parts in modern cars.

I think that cars are the most obvious place to drive the reshoring strategy. You know what I'm saying? We will stick you with tariffs if you don't make your stuff in the United States with a whole bunch of caveats. You know, let's take a look at a company like Hyundai. This is the group that owns not only Hyundai, the brand, but Kia as well. This is a South Korean company. Right.

I think that cars are the most obvious place to drive the reshoring strategy. You know what I'm saying? We will stick you with tariffs if you don't make your stuff in the United States with a whole bunch of caveats. You know, let's take a look at a company like Hyundai. This is the group that owns not only Hyundai, the brand, but Kia as well. This is a South Korean company. Right.