Trade: Last Week Tonight with John Oliver (HBO)

trait the basic system of barter an exchange that you have to do really carefully or you'll end up with Dwight Howard Syria seriously parents talk to your children about trade you don't want to go to school with Peter Lunchables and coming home with Dwight Howard the baby's gonna add a three-point shot to his game now kids grow up no trade trade is a subject on which our current president considers himself particularly expert trade that's what I'm gonna do so good I'll take those traders and make them so good that's what I do I love taking bad deals and making them good I love trade you know trades always been my thing I could name ten different forms of trade I know every one of them hey the Wharton School of Finance right here yeah I can name ten forms of trade there's a free trade fair trade Rough Trade Trader Joe's that's what eight then there's human trafficking that's like trading for people well rounded up and call it ten Wharton School of Finance Roy here Thomas talked a big game on trade for decades and he spent this year slapping tariffs on products from China Canada the EU and others prompting them to retaliate with tariffs of their own and this trade war has escalated fast from tariffs on just 18 products at the start of the year to now over 10,000 so things have gotten pretty serious and American workers are already being impacted particularly in agriculture we're feeling a lot of pain right now in in the farm sector it's affecting farmers a negative way I always hope that one morning president Trump's just going to wake up and and send out that 3:30 in the morning tweet that says tariffs are gone wow that is a depressing thought so that guy's livelihood depends on a tweet that says tariffs are gone and even if Trump does end up doing that at 3:30 in the morning you just know it'll say tariffs a goon and we'll all have to decide what he meant by that so tonight before things get much worse let's take a look at this trade war because it's tempting to think that Trump has a plan after all trade is his thing and he's tweeted trade wars are good and easy to win but for years his strategy on that seems to have been based around little more than tone of voice so easy I drop a 25% tax on China and and you know I said to somebody that is really the messenger the messenger is important I could have one man say we're gonna tax you 25% and I could say another listen your we're gonna tax you 25% oh I see okay so the tone is important so if I were to say to somebody that's not how trade negotiations work that would be one thing but if I were to say that's not how trade negotiations work you're dumb that would be much more effective there are some very basic things about economics that he seems genuinely confused by take tariffs Trump wants tweeted that if the trade war doesn't end other countries will pay us vast sums of money in the form of tariffs we win either way but that's not how tariffs work tariffs are taxes designed to make foreign goods more expensive therefore making domestic products more appealing other countries don't pay us tariffs importers here too when they receive the goods and they usually pass that cost along to the consumer so when Trump imposes a tariff on an item you are probably going to pay more for it as reporters have been trying to explain in the most literal way possible here in the kitchen made in China utensils and appliances like stoves and refrigerators are being targeted upstairs in the bathroom everyday items like shampoo nail clippers makeup and towels could mean higher prices for things like instant coffee and this harley-davidson motorcycle everyday items like the iPad could be hid the tablet has a chip from Intel which could be a target East Cooter's have taken off this year now they face a 25% tariff okay I hate to admit this but if one of the key casualties of this trade war is e scooters I actually think I'm fine with that well basically is Dane Cook somehow became transportation and it's not it's not just tariffs that Trump seems to misunderstand there's also our trades deficits basically the number that expresses how much more we buy from other countries than they buy from us Trump talks about it all the time usually like this our trade deficit ballooned to 817 billion dollars think of that we lost 817 billion dollars a year over the last number of years in trade in other words if we didn't trade we'd save a hell of a lot of money okay okay so there's a lot to unpack there first our trade deficit is actually 552 billion so he was off by a quarter trillion dollars water school of finance right there a second trade deficit aren't actually always bad and many economists believe for very complex reasons involving savings rates and the dollar special status as the world's reserve currency that America's trade balance might be more or less where it should be and finally and this is important when we have a trade deficit we don't lose money it's not a big pile of cash that we handed over we bought things that we received and I'm not saying that it was all valuable does anyone really need the pony up daddy saddle which allows your child to symbolize their newfound dominance over your life no I didn't need it but I wanted it and honestly it's brought my dad and me closer together even the world leaders that Trump has been fighting with seem alarmed by how little he understands trade EU Chief jean-claude juncker reportedly met Trump armed with a series of colorful simple flashcards to explain the trade war and the work that really gets me there is colorful because that means that means that they have some simple flashcards and thought no too wonky let's get some big fun baby colors on those things let's give him a chance and Angela Merkel struggled to explain something even more basic the independent newspaper setting an unnamed senior German official ten times Trump asked ms merkel if he could negotiate a trade deal with Germany every time she replied you can't do a trade deal with Germany only the on the 11th refusal Trump finally got the message Oh we'll do a deal with Europe then so he understood but only after the 11th refusal just listen to what that sounds like deal with Europe ha deal with your ha deal with your ha deal with York ha deal with your ha deal with your car deal with your car [Applause] deal with your honestly I'm just amazed that after the fifth time Angela Merkel didn't turn to our translator and say okay you're fired you can't possibly be translating this right I'm not I am not saying that it's easy to understand trade it's one of the most complicated issues there is technically politically and emotionally over the years free trade has been criticized from all sides and people argue that unfettered trade can reward the worst behavior of multinational companies and exploit countries with fewer protections for labor and that has unquestionably happened but Trump generally confines himself to arguing that trade is responsible for the death of US manufacturing jobs and while there is some truth in that automation is the far bigger culprit we actually still make a lot of things in America US factories now manufacture twice as much as they did in 1984 but they do it with 1/3 fewer workers and the overwhelming consensus among economists is that trade between countries generally speaking can create jobs lower costs and be a net benefit to both nations essentially think of trade like sex if you're doing it right it can be good for both partners though the odds of that happening plummet as soon as Donald Trump gets involved and the problem the real problem with Trump not understanding trade is that he therefore doesn't understand its consequences for instance one of the first major shots he fired in this trade war was putting tariffs on steel and aluminum that was great news for the people working in those specific industries like this worker in a Missouri aluminum plant you you think that his policies are kind of why you have a job today I know what is you know it is yeah I want to have a job offer if it didn't happen wish I could meet him and give him big old hug you know yeah I do know and I honestly get why he wants to hug him Trump got him his job back is one of two possible explanations for that man wanting to hug Donald Trump but the other of course being that if during the early stages of the campaign Trump and Melania were driving through Missouri on a stormy night and their car broke down Donald's not getting out some Melania ends up climbing out into the rain and opening the hood as that aluminum worker comes driving down the highway he rolls down his window and asks if he can help to which Melania gratefully asked maybe a flashlight and just if the aluminum worker is handing the flashlight over it gets struck by lightning and they switch bodies so now Donald is living in the White House with an aluminum worker who feels understandably weird about holding his hat while Melania is forced to point after her husband from the factory floor her heart's aching for him every second of every day knowing full well that revealing her true identity would just complicate things for everyone but that's Melania you go to him the world will accept your love that aluminum worker clearly isn't in love with him everyone can see it and its players so much but that individual guy in that individual job things have improved but when it comes to trade nothing happens in isolation and then there are downstream effects to those tariffs not too far from where that guy works there is an eighth nail factory which suffered because thanks to Trump steel tariffs the price of their raw material steel skyrocketed sales dropped in half and they've laid off over a hundred workers and those that remain are worried some of these people this is the only ink of their guide just like me this is the only thing inked up I got and I got to put another daughter through school you know it's very hard yeah it is that's the problem here protecting steel help steel but it hurts anything made from it and you have to balance those consequences by one estimate Trump's tariffs may create 26,000 jobs in steel and aluminum but could cost over 400,000 jobs across the rest of the economy so if trump's trying to create jobs almost anything would be a better idea than tariffs he'd be better off dressing a turtle up like david bowie and throwing him into a pool full of milk will that create jobs of course not but it won't actively lose hundreds of thousands of them plus it'll be the highlight of ziggy she'll dusts life and listen listen we're still only scratching the surface of how complicated this is because distinguishing between a foreign product and an american job can be a lot trickier than you'd think take some of trumps favorite villains when it comes to foreign companies they sell mercedes and BMW and the cars come in by the millions and we hardly tax them at all we can't do this stuff anymore we protect Germany Germany who doesn't have a BMW we're gonna tax Mercedes Benz we're gonna tax BMW we're gonna tax all of those beautiful Mercedes Benzes that are coming in at wicked attacks BMWs that are coming in Trump is furious with German cars and here is here's the thing about that in the clip where he said who doesn't have a BMW to the crowd in his classic man-of-the-people way so trunk is actually in North Augusta South Carolina and just two hours drive away is a place called Spartanburg County well known for this Spartanburg is home to the largest BMW plant in the world last year they made more than 370 thousand luxury SUVs employing 10,000 people pumping billions into the state's economy yeah it seems Trump didn't know that look everyone knows he doesn't know a lot of things but occasionally it's important to remember that he also doesn't know anything it's true it's true I'll show you everyone close your eyes right now and think of something that thing you're thinking of he doesn't know that and since the trade war began Spartanburg County is actually double because they'll be affected by higher costs for the steel that they use to build the cars and when they try to ship them to China they'll be hit by Chinese tariffs so they are in complicated trouble or as Trump might put it listen your you get in tax twice so so if a trade war could be this disruptive and the net benefits are likely to be this negative why is Trump doing this especially because members of his own economic team seem against it Gary Cohn reportedly left over the proposed tariffs and Steve minuchin Treasury secretary and white hot sex bomb has has tried to do some damage control by claiming we're not actually in a trade war at all this has been a trade dispute all along it never was a trade war it's a trade dispute oh I get it it's not a war it's a dispute you know what I always almost bought that because I'm so distracted by this lavaridge sex volcanoes looks the guy's hypnotic I must have a bad case of the Manucci 'he's right now because he's looking like an absolute snack so so who is who is telling the president that this is a good idea well by most accounts the driving force is Peter Navarro head of the Office of Trade and manufacturing policy he's Trump's trade guy isn't that right Peter I'm the trade guy thanks Peter so so just just for the record let's all get our Trump administration role straight we've got trade guy Lyle ad nothing boy Jesus please a word ghoul crime nymph drunk grandpa and daughter wife it's a it's a well-oiled machine he's running now Navarro is the author of a series of get rich investment books and like Trump he's obsessed with trade deficits in general and China in particular saying trade with China is a zero-sum game meaning one country can only win if the other country loses and it is hard to overstate just how rare his views are among economists when the New Yorker profiled him they asked a Varro to help them find even one colleague who agreed with him he gave them two names one was Peter Murray see a University of Maryland professor who said of Navarro he has a rather severe position that zero-sum statement I have a problem with that where's his proof and the other was a blogger named Allen Tolson who Navarro described as a fine economist to which Thomson replied I do not hold an economics degree and I'm guessing Thomson also doesn't hold a degree in web design because this is the photo on the about page of his blog so if you are understandably wondering at this point then how on earth did Navarro get a job at the White House well it is way dumber than you are thinking apparently Jared Kushner was tasked with finding Trump experts on Chinese trade and this is how he went about it so Jared went on Amazon he fired up his computer and he found some of Peter Navarro's books and he asked him to come to the White House that's how Peter Navarro ended up in the White House yeah Jared looked for experts on Amazon that was his rigorous process so when Jeff Sessions does get fired be prepared for him to be replaced by crystal kaswell author of the erotic fiction novel dangerous rock a dangerous noise novel because for whatever reason that is honestly the first thing that came up when we typed good law person parentheses smart into a bizarre now the Navarro book that Jarrett found was called death by China and it paints the u.s. Chinese trade relationship in apocalyptic terms because while there are some legitimate complaints about China's unfair practices they've deliberately depressed their currency they violate intellectual property rights and arguably skirts WTO rules this book goes way further with chapter titles featuring phrases like shanghaiing the gene pool and look mark there's a death star pointing at Chicago and Navarro actually turned the book into a movie that one critic called the documentary equivalent of a raving street corner derelict which seems harsh until you see how the movie begins the film you're about to she addresses one of the most urgent problems facing America it's increasingly destructive trade relationship with a rapidly rising China it starts like that it's warm up is a literal knife being stabbed into the heart of America and if you are worried that that leaves it with nowhere to go please don't be concerned because there are even less subtle animations to come which depict China's trade practices as guns and bombs that blow up American factories and stunningly deceptive moments like this China has stolen thousands of our factories and millions of our jobs multinational corporation profits are soaring and we now all over three trillion dollars to the world's largest communist nation I'm not saying that that large ball isn't very convincing but our trade deficit isn't the same as what we owe to China those are two different numbers and neither of them is anywhere close to three trillion dollars and when something that central to your movie has something that wrong with it you usually have to replace it with Christopher Plummer so so so Navarro is not someone who any legitimate economists take seriously and yet he seems to be the only person the president is listening to Trump has called death by China right on and lauded its facts figures and insight and Navarro returns the compliment saying of his own job that my function really as an economist is to try and provide the underlying analytics that confirmed Trump's intuition and his intuition is always right and that is simply terrifying because the economists shouldn't be finding ways to confirm the intuitions of someone who doesn't know what they're talking about it's like a builder working for a child saying my job is to build this house he designed which is shaped like an ice-cream cone with a window that's also a door and the size of the Sun and a dog his intuitions are always right no they aren't you need to stop that child before someone gets hurt in fact if you want to get a sense of just how little Navarro understands the game he's playing consider this since this trade war began China has imposed 37 billion dollars of tariffs on the u.s. now take a look at what Navarro said back in March are you expecting China to come back with retaliation I don't believe any country in the world is going to retaliate for the simple reason that we are the most lucrative and biggest market in the world they know they're cheating us and all we're doing is standing up for herself it's just breathtaking to see someone be that confident and that wrong he's basically Leonardo DiCaprio in Titanic yelling I'm king of the world except you're not are you leo you're just an amateur sketch artist who's about to be murdered by ice when you put all of this together what you're left with is this we're engaged in an escalating trade war that almost no legitimate economist supports led by a man who honestly doesn't seem to fully understand the mechanics of what he's doing getting advice from the human equivalent of an all-caps email from your uncle and the crazy thing is the effect of all this is the exact opposite of what Trump says he wants because if you want to create jobs you don't do that by cutting off American companies markets and suppliers and if you want to curb the abuses of countries like China you don't do that by pissing off the leaders of every other nation on earth and I know that none of what I'm saying right now will get through to trump so so maybe it's time to take a page from one of the only people he's actually listening to and give him some basic economic lessons in the only language he seems to understand the film you're about to see addresses one of the most urgent problems facing America the destruction of basic economic knowledge by stupidity and the consequences of it could be disastrous so let's review a few fundamental facts first a trade deficit isn't a giant pool of money that you've lost to another country that's idiotic second if you think you can use tariffs as a weapon you should understand a tariff isn't something other countries pay you it's a tax you're forcing your own people to pay which might end up hurting them a lot less than it hurts you and third our economy is massively interconnected and you can't just tamper with one thing without considering what the water consequences could be unfortunately misunderstandings just keep getting bigger while basic knowledge is shrinking and the result is stupidity is increasing at an unsustainable rate listen economics is incredibly complicated and at the very least you'll probably shouldn't find your key economic adviser on Amazon and the trade guy because his could end up seriously hurting us [Music] [Applause]

Channel: LastWeekTonight

Views: 12,440,540

Rating: 4.8349686 out of 5

Keywords: last week tonight trade, john oliver trade, trade war, last week tonight trade war, john oliver trade war

Id: etkd57lPfPU

Length: 21min 13sec (1273 seconds)

Published: Sun Aug 19 2018

Reddit Comments

[u/moffattron9000]

Why is Martin Sheen narrating a terrible documentary about the US/China trade relationship?

[u/JumperCables18]

Did Peter Navarro come with two-day shipping?

[u/Lemesplain]

Trump's inability to understand Trade Deficits is probably the most infuriating thing... as a basic concept, it's not hard to grasp.

If I travel from the USA to Mexico and spend $20 on tacos and beer, I've just created $20 worth of Trade Deficit. American money has left the country to purchase foreign goods. But this doesn't mean that Mexico somehow owes the USA $20 because of my purchase. And if someone from Mexico visits the USA and spends $10 at McDonalds, they've reduced the trade deficit ... but still neither country owes any money to the other.

That's it. That's all it is. (with much bigger numbers, obviously)

Now... you can try to make American Tacos more appealing, so that I'll keep my $20 up here north of the border, or charge me extra for any imported Tacos (tarrifs), and all of that gets very complicated and intricate very quickly. Actually running an economy is a delicate balancing act that requires a LOT of research and a deft touch. But the basic concepts aren't that hard to grasp.

[u/stinsonlegend]

The Melania switching story was amazing.

[u/toarin]

searching "good law person (smart)" on amazon does give erotic fiction "Dangerous Rock". So, I guess that author has to be the next AG. ¯\_(ツ)_/¯

[u/Fallafot]

The running joke about how sexy Steve Mnuchin is is one of my favourites

[u/CatheterC0wboy]

Lmao he went on fucking Amazon to find Peter?! Holy shit... I mean it’s already been known, but the Trump’s truly are some dumb motherfuckers

[u/NotTheAndesMountains]

Really appreciate the beginning Dwight Howard joke as an Orlando Magic fan

[u/pjtheman]

I remember people who didn't like Bush and Obama hyperbolically saying "I could be a better president!" I honestly don't think that's hyperbole anymore with Trump. He literally doesn't fucking listen to people.

Like am I saying I could be a good president? Not at all. Far from it. But at the very fucking least. I would put someone in charge of trade who fucking knew how trade works. I would put someone in charge of education who had fucking experience in the field. I would put someone in charge of the EPA that didn't want to destroy national parks. He's just so fucking dumb.