Lots More on a Massive, Historical, Stagflationary Shock
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What is the main topic discussed in this episode?
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What a day, huh, Tracy?
What a day. Another day. Another crazy day. I don't know. I'm I'm I'm getting a little tired. Is tired the word? I'm not. I'm
exhilarated. I'm comp I am not getting tired. I think this is why we get up in the morning, but as we are talking right now, which is April third, NASDAQ's on four point eight percent.
Yeah, obviously this is all because of Liberation Day and Donald Trump announcing his new reciprocal tariffs, which turned out to be a lot worse than a lot of professional analysts and economists had been expecting.
Yeah, I'm sorry, the market's just totally taken aback. Tom Orlock, how surprised were you by yesterday? We took him seriously. But not seriously enough. I did a deadlift. I'm
both the most popular trader and most successful trader at Citadel.
Fed is going viral.
Uh barges.
This is an after school special, except
I've decided I'm gonna base my entire personality going forward on campaigning for a strategic pork reserve in the US. Black gold! These are the the important questions. Is it robots taking over the world? No, I think No, I
think that like in a couple years the AI will do a really good job of making the Outlaws podcast. One day that person will have the mandate of heaven.
How do I get more popular and successful?
We do have the perfect guest.
You're listening to Lots More, where we catch up with friends about what's going on right now.
Because even when the odd lots is over, there's always lots more.
And we really do have the perfect guest.
So on the campaign trail, Trump was talking about sixty percent tariffs on China, twenty percent tariffs on everybody else. And I think the reaction from Wall Street and the reaction from most in the economics profession was This is red meat for the campaign trail. This is not a serious proposal. The US economy, the global economy, the global trade system wouldn't be able to survive tariffs at this level. And now here we are on April the third, one day after Liberation Day, and we've got tariffs at that level. For China, if you add it up. Tariffs may even be a bit higher than sixty percent. So it's a huge shock. And I think the question people are going to be asking is What's being liberated from what?
Is the US being liberated from unfair trade practices from China and Europe, or are US workers about to be liberated from their jobs and US investors liberated from their returns?
Yeah, kind of two different outcomes there. Tom, you were at our Washington, DC event. You think you by the way. Thank you. You gave this great presentation showing some of your favorite charts at the moment. And you kind of made the point that when it comes to trade, the US has some legitimate grievances. Can you kind of walk us through that, especially in relation to China? And then also if you think these tariffs are actually going to start alleviating some of those grievances.
So I think it's interesting, Tracy, if we go back to the nineteen nineties, it was a kind of unipolar moment for the United States, right? The Soviet Union had collapsed, China was still an early stage of its development, its GDP was a kind of tiny fraction of that of the United States. And so the argument for free markets really made a lot of sense. Let's have low tariff barriers. US firms are the most competitive firms in the world. They're gonna be the biggest winners from low trade barriers. And guess what?
What triggered the massive tariff shock announced by President Trump?
Additional bonus if we trade with China, that's gonna be a force for market reform in China, and maybe even, whisper it quietly, uh a force for democratic reform in China.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–4:23
2
What triggered the massive tariff shock announced by President Trump?
4:23–10:26
3
How did Tom Orlik assess the historical significance of these tariffs?
10:26–16:05
4
Why does the guest argue that the tariffs could cause a stagflationary shock?
16:05–20:11
Speakers
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