Scott Lincecum

speaker

168 appearances 5 recordings 5 series first heard Feb 2025 last heard 1 Apr

Scott Lincecum’s voice in public audio — every appearance, attributed to the second.

Trend

recordings per month · last 12 months

Recordings per month over the last 12 months — 3 in all, peaking in Apr 2026 with 2.

Appearances

newest first · ▶ plays the moment

The Bulwark Daily · Will Saletan and Scott Lincicome: A Crime Boss Has Taken Over · 3 Feb 2025 podcast

So in the olden days, so pre these executive orders, that widget, it was a capacitor, could actually cross the US-Mexico border the five times that it did, end up in a car seat, and have zero tariff supply. This time, it's going to get tariffed every single time it crosses the border. Why was it going across five times? Comparative advantage.

So you have certain factories in the United States are good at certain things, like creating circuit boards.

So it gets put into another thing that gets put into another thing. So engines are another example of this. They start out as an engine block. They keep getting more stuff added to them. There is a little buried provision in both of the Canada and Mexico executive orders, not to get too wonky on you, that is barring what we call duty drawback.

This is a system that effectively allows importers to not pay duties if they're exporting the same thing they just imported. So let's say you import an avocado, you make guacamole, you put that in a container and you export the guacamole. You can actually get a refund on the tariff you paid on the avocado. We call that duty drawback.

Makes perfect sense because it's not actually entering the United States for consumption. You're actually just processing it. And we want to get that processing value, right? So that's normal.

They removed duty drawbacks. So I've heard from several people. who are in these supply chains who are like, what, what the heck, what are we even going to do?

Yeah. And you know, I'm all sanitized. So we have this question of compounding tariffs. So if you go back to the automotive example, You could have a good that gets a tariff as its starting point, gets incorporated into something, crosses again, gets another tariff, crosses again, gets another tariff.

By the end of it, you actually – because your tariffs apply – this is, sorry, really wonky – to the gross value of the product. That means – They don't apply to just the value you've added to a product in a certain place. So let's go back to our guacamole example. Even though the guacamole part of it is only half of the – avocado is half of the cost. The guacamole is the half of the cost.

Tariffs don't do that. They don't say, oh, we're only going to tariff the additional stuff you did. They just give you the full 100% of the new value of the product, right? So – You're effectively, because of this system, which makes sense, it's hard to determine value-add at the border. Nobody's going to do that.

Because of the system, though, you can end up with tariffs that are just exponentially increasing because these things cross the border so many times.

This is another one of those kind of hugely underreported things. So the de minimis exception does have raised some concerns, right?

Because effectively, after the China tariffs were applied, a bunch of manufacturers realized they could set up warehouses in Mexico and Canada and bring in small shipments from China, store them in the warehouse, and then send them to the United States duty-free, right? Because they're small dollar values. Got it.

There are needs for reforms, but by simply banning all de minimis shipments, you're actually hitting a lot of perfectly legal trade and a lot of stuff, like you said, like grandma's cookies from Canada. But the other big point is – I don't know how customs is actually going to enforce this.

So some people look – because de minimis reform has been a thing that has been discussed for years now because of the kind of Sheehan and Timu taking advantage of this system, which by the way, again, just to be clear, was never a problem until we had all these tariffs in place, right?

Well, this is what we're getting at. 30,000 new customs agents or more. Customs officials have said to Congress and whatever, the amount of resources it would need to actually inspect individual de minimis shipments is outrageous. It's crazy. They do inspect. They do a sampling system. They scan them. They do everything they can. Sure.

But there's been this, I mean, we're talking about, I seem to remember 4 million parcels a day crossing via the de minimis exception now. Now, again, I'll just put on my libertarian free trader hat and say, maybe it was actually better to have bulk shipments coming directly from China than having 4 million packages sent across from Mexico. But sorry, your tariffs have caused this big mess.

So this is tariffs 101, right? Tariffs, when you apply them to an input, fertilizer is an input. It's going to harm your downstream producers. Farmers are downstream producers. And tariffs always lead to cronyism and lobbying because everybody wants an exception or exemption or they want their own tariffs.

Well, for sure. Well, the last time Trump implemented a bunch of tariffs, there was an exemption process through both Commerce Department and USTR.

And then a bunch of enterprising economists went back and looked and they found that you actually had a much better likelihood of getting your exemption if you donated to Republican candidates and hired a lobbyist who had connections to the Trump administration. So, you know, this is DC 101, right, man?

That's also trade 101. Retaliation is almost inevitable because politicians in these other places can't look weak to their own domestic constituents. You can't just look like a patsy to Donald Trump. You understand that import tariffs are going to be costly because you're not a mercantilist like Donald Trump. You actually understand this is going to be painful.

Showing 81–100 of 168 · page 5 of 9