4/10/25: MAGA 'Art Of The Deal' Cope, Mass Bankruptcies From China Tariffs, Immigrant Screening For Israel Criticism

Summary

Breaking Points with Krystal and Saagar – Episode Summary Release Date: April 10, 2025

In the April 10, 2025 episode of Breaking Points with Krystal and Saagar, hosts Krystal Ball and Saagar Enjeti delve into the tumultuous landscape of American politics and economics under the Trump administration. The episode primarily focuses on the repercussions of the "Art of the Deal" tariff strategy implemented by the MAGA movement, the ensuing mass bankruptcies due to China tariffs, and the controversial immigration policies targeting individuals critical of Israel. Through incisive analysis and expert insights, the hosts unpack the complexities and consequences of these developments.

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MAGA's "Art of the Deal" Tariff Strategy and Its Fallout

Saagar Enjeti initiates the discussion by condemning the inconsistent and manipulative nature of the MAGA-supported tariff policies. He criticizes the administration's fluctuating stance on tariffs, highlighting the illogical justifications provided for their imposition and subsequent removal. At [02:00], Saagar remarks:

"There's a sheer level of stupidity that began with a doge but has now morphed into a full-fledged insult of people's intelligence."

He underscores the arbitrary rationale behind tariff adjustments, questioning the credibility of claims that these measures were genius strategies aimed at economic revival. The hosts illustrate how supporters of the tariffs initially lauded the measures as job creators but swiftly pivoted to praise Trump as an economic genius once the tariffs were lifted, regardless of the underlying economic realities.

Krystal Ball reinforces this sentiment by pointing out the lack of sustained support for the tariffs, noting, at [03:00]:

"All three of my kids, including the 8-year-old, could do that."

This highlights the oversimplification and lack of substantive understanding among tariff proponents regarding the economic intricacies involved.

Economic Impacts and Business Challenges

The conversation pivots to the tangible impacts of the tariff policies on American businesses. Saagar articulates the challenges faced by small to medium enterprises (SMEs), emphasizing that only large corporations like Amazon or Walmart can afford to negotiate and secure exemptions from the tariffs. At [11:10], he states:

"If you are any number of small to medium businesses across the country, you don't have that opportunity. And Trump himself has said, I'm going to be open to giving some companies carve outs."

This creates an uneven playing field, disproportionately affecting smaller businesses that lack the resources to lobby effectively. The hosts lament the administration's disregard for the broader economic repercussions, stressing that arbitrary tariff impositions can lead to widespread financial distress and potential bankruptcies among SMEs.

Expert Insight: Interview with Ryan Peterson, CEO of Flexport

A pivotal segment features an interview with Ryan Peterson, CEO of Flexport, who provides an expert analysis of the potential consequences of the Trump administration's tariff policies. Peterson explains that the proposed fees on Chinese-made ships—ranging from $500,000 to $1.5 million per port call—are unprecedented and threaten to cripple the global shipping industry.

Peterson elaborates, at [20:11]:

"Chinese shipyards have been dominating recent years. I think they're producing between 60 and 70% of the world's container ships. And that number keeps growing."

He discusses how these tariffs could force shipping companies to reroute their vessels to fewer ports, leading to inefficiencies and increased costs. This would not only disrupt supply chains but also inflate prices for consumers and exporters alike. Peterson predicts that such policies could result in mass bankruptcies and urges that sustainable, export-oriented strategies are essential for genuine industrial revival.

Immigration Policy and Anti-Semitism Crackdown

The episode shifts focus to the Trump administration's stringent immigration policies, particularly the crackdown on individuals deemed to engage in anti-Semitic activities. Krystal and Saagar critique the vagueness and overreach of these policies, arguing that they are effectively tools to suppress legitimate criticism of Israel under the guise of combating anti-Semitism.

Krystal highlights, at [33:00]:

"If you have said the wrong thing with regard to Israel, Palestine, it is really outrageous and of course does not just stop with immigrants or permanent residents."

This policy extends to denying immigration benefits based on social media activity or personal associations, disproportionately targeting those who criticize Israeli policies. Saagar draws parallels to racial quotas, emphasizing the discriminatory nature of such measures. At [36:25], Saagar states:

"This is literally just as bad as a racial quota for people. Like we need racial quotas of X amount of black people to come in."

The hosts argue that this approach undermines fundamental freedoms, including freedom of speech and religion, and poses a significant threat to civil liberties. They also discuss recent legal setbacks faced by the administration, where federal judges have blocked deportations under the Alien Enemies Act, citing insufficient evidence and the potential for irreparable harm.

Public Opinion and Legislative Response

Krystal points out the shifting public sentiment towards Israel, noting a decline in support outside of older Republican demographics. This change poses a challenge to the long-standing bipartisan alliance supporting Israeli policies. At [41:35], Krystal remarks:

"Israel has lost effectively the entire American population outside of like Republican boomers."

This erosion of support is reflected in broader cultural and media narratives, with influential figures and podcasts expressing skepticism about the deep ties between the U.S. and Israeli policies. The hosts suggest that such shifts in public opinion could prompt legislative and policy reevaluations in the future.

Conclusion

The episode concludes with Krystal and Saagar reiterating the urgent need to critically assess and challenge the Trump administration's policies. They advocate for independent thinking and caution against the prevailing tendencies to accept contradictory and illogical policy justifications without scrutiny. The hosts emphasize the importance of safeguarding economic stability and civil liberties against erratic political maneuvers.

At [46:29], Krystal sums up:

"We're just lost in the hilarity. Cause it is funny at some level is people's lives, people's businesses."

Through a blend of sharp critique, expert testimony, and incisive commentary, Breaking Points offers a comprehensive examination of the current political climate, urging listeners to remain vigilant and informed amidst the chaos.

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Notable Quotes:

• Saagar Enjeti [02:00]: "There's a sheer level of stupidity that began with a doge but has now morphed into a full-fledged insult of people's intelligence."

• Krystal Ball [03:00]: "All three of my kids, including the 8-year-old, could do that."

• Ryan Peterson [20:11]: "Chinese shipyards have been dominating recent years. I think they're producing between 60 and 70% of the world's container ships. And that number keeps growing."

• Sagar Enjeti [11:10]: "If you are any number of small to medium businesses across the country, you don't have that opportunity."

• Krystal Ball [33:00]: "If you have said the wrong thing with regard to Israel, Palestine, it is really outrageous and of course does not just stop with immigrants or permanent residents."

• Saagar Enjeti [36:25]: "This is literally just as bad as a racial quota for people. Like we need racial quotas of X amount of black people to come in."

• Krystal Ball [41:35]: "Israel has lost effectively the entire American population outside of like Republican boomers."

These quotes encapsulate the core criticisms and themes discussed throughout the episode, highlighting the hosts' concerns over economic mismanagement, policy overreach, and the erosion of civil liberties.

Transcript

[Unknown Speaker 1]

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[Amy Brown]

Hey, it's Amy Brown from the Bobbi Bones Show. Join me in supporting St. Jude Children's Research Hospital for a chance to win a trip to meet Megan Maroney at the 2025 I Heart Country Festival in Austin, Texas on May 3rd. Hosted by Bobby Bones, we're going to hook you up with tickets, flights, hotel, food credits and a meet and greet with Megan Maroney. Take action now to support St. Jude and help cure childhood cancer. And and you're going to be entered for a chance to win. Visit iheartcountrytrip.com to learn more at Ameca.

[Unknown Speaker 2]

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[Sagar]

It out.

[Unknown Speaker 2]

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[Sagar]

Hey guys, Sagar and Krystal here.

[Krystal]

Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.

[Sagar]

This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.

[Krystal]

So if that is something that's important to you, Please go to BreakingPoints.com, become a member today and you'll get access to our full shows unedited ad free and all put together for you every morning in your inbox.

[Sagar]

We need your help to build the future of independent news media and we hope to see [e-mail] let's, let's move on because there is a sheer level of stupidity that began with a doge but has now morphed into full fledged insult of people's intelligence. I think Signalgate was a major demarcation point where they were like we're going to lie to you and we are going to force MAGA to debase themselves to cover up somebody who is clearly leaking, somebody who ideologically is an opponent. So already a good enough reason we shouldn't even be in the white house in the first place. And then also turn it into a thing where we're supposed to accept his explanation that this number got sucked into his phone and we're all just supposed to move past it and that Elon's technical experts were on top of it. Then we have the formula where we take four and we multiply it by one fourth. Okay, you know, I mean, there are teachers of grade school math saying, what the fuck is going on here? Then we have a week of tariffs.

[Krystal]

All three of my kids, including the 8 year old, could do that.

[Sagar]

No, literally, by the way. So then we have a week of tariffs. Tariffs that are not negotiating. We're manufactured, we're crashing the stock market. There's no exclusions, and now tariffs are off. It's art of the deal. Except he says he did it because he got spooked. It's same thing. And this is a transition to the COPE thing, where they demand that you debase yourself to the point where there's always logic, it's not stupidity, that you must accept their word, that you yourself can never put yourself in the mind space of Donald J. Trump. And I mean, look, I think they're losing a lot of people, first of all. And second, it's just for anyone out there, like, please, I'm pleading with you to think for yourself. I don't know why it's so difficult. You'd be amazed if you look at comments and all these other people or anybody who is willing to call this out for what it is, if they're just like, oh, this was part of the strategy all along. It's like he said it's cause he got afraid. And they're like, yeah, but it's not mutually exclusive. You know, Trump yesterday said that he makes decisions based on, he said flexibility and his gut. And it reminded me that we've moved so far as a country that it used to be a joke. Do you remember in 2002 when Bush. Yeah, I make decisions from my gut. He was ridiculed by the American people.

[Krystal]

That's right.

[Sagar]

I actually tweeted that yesterday. I tweeted the Bush quote. Nobody even got the reference. This was once, this was a scandal that this guy's like, I'll make decisions from my gut about who we're gonna bomb. So that's the level of where we're at now. Yeah, that's the level.

[Krystal]

Indeed. Indeed it is. Literally. So just think about this. How many people were out two days ago saying that the specific tariff regime that Trump had imposed, including the absurd 4 times 0.25 formula that has no basis in anything. That this was genius, that this was going to lead to a golden age of America, that we were going to have this manufacturing revival, that Trump was so strong because he was doing this in the face of market turmoil. He wasn't going to be a panican. They were arguing in favor of a very specific tariff regime and saying that it was brilliant and great and wonderful and going to do all sorts of great things for the country. And then on a dime, when he backs off of it, they go from, what is money anyway and who cares about the stock market to like, my God, the greatest stock market gains in history. Art of the deal. It literally is that meme come to life where he puts the tariffs on and they say, this will create jobs. And then he takes it off and they say, art of the deal. And then he puts them on and they say this will create jobs. Literally that. So our producers put together a little mashup of some of the things that Republicans have been saying, starting with Caroline Levitt, who actually does the meme herself, where they were all insisting this isn't a negotiating tool, this is what's happening, these are in place, it's bold, it's brilliant, et cetera, right up to the moment that Trump decides to change, and then he's a masterful economic genius. Art of the deal. Let's take a listen.

[Unknown Speaker 3]

The President was asked and answered this yesterday. He said he's not considering an extension or delay. I spoke to him before this briefing. That was not his mindset. He expects that these tariffs are going to go into effect. There will be a 90 day pause on the reciprocal tariffs as these negotiations are ongoing and the tariff level will be brought down to a universal 10% tariff. Many of you in the media clearly missed the art of the deal. You clearly fail to see what President Trump is doing here.

[Unknown Speaker 4]

Would you be open to a pause.

[Krystal]

In tariffs to allow for negotiations?

[Sagar]

Well, we're not looking at that.

[Ryan Peterson]

Will you do a 90 day pause? Would you consider that or. Bill? Yeah, you know, I think that the President is going to decide what the President's going to decide.

[Krystal]

Here's the thing.

[Sagar]

This is not a negotiation. There is no postponing. They are definitely going to stay in place for days and weeks. That is sort of obvious.

[Unknown Speaker 4]

What I find so frustrating about the conversation around tariffs is that we all agree on the problem. We all agree that the deindustrialization of America led to the downward mobility of the American working class. Deaths of despair, people Working multiple jobs and not being able to afford the American dream. We all agree that it is deeply unfair for the American middle class to be bearing the burden of unfair tariffs from other countries. We all agree that it is great for the President to have leverage in order to demand reasonable things like that countries stop allowing fentanyl to murder 100,000Americans every year and that Mexico do its part to police its own bor. And yet when somebody has the courage to show up and say to Wall street, screw you. I'm waging class warfare on behalf of the American working class. And you elites in Wall street, you do what you need to do, because I'm not gonna stop fighting for the American working class.

[Krystal]

So did the elites on Wall street win now that he's backed away? And Scott Bessant said something similar. You can put this up on the screen. D2 this quote from him had gone sort of viral. He said, for the last four decades, Wall street has grown wealthier than ever before. But for the next four years, it's Main Street's turn. I guess it is once again, Wall Street's turn saga.

[Sagar]

Yeah, that's right. One of my friends, Trung fan, on Twitter, he was like, it was Wall Street's turn April 2025 to April 2020. Listen, it just demands too much stupidity. If you have an ounce of self respect, you have to understand this for what it is. Put the Trump truth up there on the screen. D3 the United States has a chance to do something that should have been done decades ago. Don't be weak, don't be stupid, don't be a panicin a new party based on weak and stupid people. And then he can't come out two days later and he says, I'm doing this because people are afraid. And you know, there's other flashing signs that anybody with a fucking brain knows this is dumb. JD he hasn't tweeted in like five or six days. All right, he reemerged to tweet about. I mean, he's been like retweeting. Yeah, yeah. You know, usually when they go hard in the paint, it's on something that they know is politically palatable and. Or good for them. Silence. All right. Same with the many of the. I mean, even the best. What, like MAGA influencers and all these other folks, they look so stupid they spent an entire week justifying this. I mean, I can tell you this. You know, for me, as people know, I'm pro tariff. Even a 10% tariff, I'll give you argument for it. Later. If we wanna talk about it in terms of. If we wanna talk about how it actually prevents trans shipping, et cetera. But at a certain point it feels foolish to dignify it with the justification and response whenever it is so ad hoc and unrooted in any seriousness that we just have to sit here and be like, what are we all doing here?

[Krystal]

Right?

[Sagar]

You know, we're just. And you know, lost in the hilarity. Cause it is funny at some level is people's lives, people's businesses. You know, maybe we'll ask Ryan about this, but he elevated a post yesterday and this is an actual business. Who has a question here? Our customers pre ordered our product for as low as $59. We have a product that is ready to ship the tariffs. It will now cost us $189 per unit. Should we, number one, wait until it gets better? Number two, ship now and eat the tariff costs. Three, cancel the order and eat the manufacturing costs. What does he do?

[Krystal]

What do you do?

[Sagar]

What would you do? I don't know what I would do. Maybe I would wait. Hope I can. Hope I'm in a financial position where I can wait 90 days to make sure I don't have to book any revenue. Hope I'm in. Or maybe I'm in a financial position where I have to eat back of the napkin mat $120 cost on a product where maybe my margin was 10% to start off with. Or three, cancel the order and then eat the cost of having produced the damn thing in the first place.

[Krystal]

That's right. That's right.

[Sagar]

Take that and multiply it by, I don't know, 12% of all U.S. trade. The U.S. economy's worth roughly 15 trillion. So, okay, I mean, you can do math. That's over a trillion dollars that's been affected.

[Krystal]

And here's the thing. If you're Jeff Bezos, you can get an audience with the President. You can make your case.

[Ryan Peterson]

Yeah, actually I will.

[Sagar]

Let me return to that, cuz there's a story I want to.

[Krystal]

Okay, yeah. If you're, you know, if you're Jeff Bezos, if you're the Walmart CEO, whoever that is now, you know, if you're one of the big guys, you can get on the phone with him, you can make your little trek to Mar a Lago, you can plunk down, he's, you know, you can get a private audience for him for $5 million. The price is right there. Very easy to make that transaction. If you are any number of small to medium businesses across the country, you don't have that opportunity. And Trump himself has said, I'm going to be open to giving some companies carve outs. Which goes back to like part of maybe the whole part of what he really likes about this is he loves being in that position. He loves the CEOs calling him and flattering him and buttering him up and begging on bended knee for their little carve out for the thing that they need for their business to survive. He loves the heads of state coming to call and paying homage to him and having to grovel for some little exception or whatever. And so if you're one of the big guys, you may be able to successfully do that. But if you are the vast majority of businesses, that option is not gonna be available to you. So you're just gonna have to deal with whatever the hell his gut decides that day is gonna be. The global economic regime.

[Sagar]

Yeah. So, stories, this is the problem with all this news is that I'm not actually, we're not able to really dig into anything. So literally this just happened buried in all the tariff news. If you'll remember, all that talk about Nvidia H100 chips, those highly advanced chips. Well, it turns out, and this was published in a trade publication, that the Trump administration is likely to drop the export control on Nvidia's most highly advanced chips to China. Now, how exactly did that come up? That's a massive reversal in semiconductor and chip policy. It turns out that Jensen Huang, the CEO of Nvidia, bought one of those $5 million things where he wanted to go and have dinner with Trump. And in his dinner with Trump, he was like, listen, there's no reason to do this now. 5 million is nothing compared to the market cap of Nvidia, one of the most valuable companies in the entire world. And he probably just saved himself literally hundreds of billions, billions of dollars on their bottom line over the next decade. But look, agree or disagree on the chip thing, I happen to think there's no reason at all that we should be exporting them. Maybe you're in support. Do you think that's the process which we should go about?

[Krystal]

Of course not.

[Sagar]

Exactly. It's ridiculous. And that is the ultimate issue with all of this. And even his treasury and his commerce secretary, they had some lines which theoretically I would even be in agreement with. They're like, no exceptions and no exclusions. Why is that good? No lobbying. That means that no special cases, winners and losers, at least theoretically, will apply to everybody. But now, Trump actually just yesterday said that Maybe we will have exclusions.

[Unknown Speaker 1]

Because why?

[Sagar]

Because of stuff like this. And, I mean, just again, at a basic level, this Art of the Deal and all this other nonsense, it's like, I just don't know what he needs to do to push some of these folks into reality. There's the mindlessness and the team instinct on all of this. It's like, what does he need to do? Like, literally make you poor? Even at that point, I'm not so sure. I honestly am not sure. I don't think they would do anything.

[Krystal]

Favreau actually had a good tweet. He said, art of the Deal, number one, impose massive tariffs on nearly every country that crash the markets, create the conditions for global economic collapse. Number two, make zero deals with zero countries. Number three, pause tariffs. Number four, declare victory.

[Sagar]

Okay, also not to be mean, how many people who are posting Art of the Deal have negotiated, like, their W2 income by, like, 5%? It's like, what do you know about.

[Krystal]

Art of the Deal?

[Sagar]

Huh? Huh? What? Oh, you got your realtor to put in a counter offer. It's like, what the fuck do you know about negotiation? Again, listen. Or you want to take it from a business owner or somebody you actually respect. We've negotiated deals with some of the biggest companies in the world. Okay, Maybe you should listen to me by that logic.

[Krystal]

The bottom line, I could respect someone more. I actually. I don't know if you have. I haven't seen a single person who was previously like, these tariffs are amazing. This is brilliant. Delivering for the working class. He's telling Wall street to fuck themselves, defending the tariff regime as it was and saying, this is glorious for our future. I have not seen one of those people be disappointed that those tariffs are no longer in place.

[Sagar]

Yeah, that's a good point.

[Krystal]

Not one.

[Sagar]

Exactly. Yeah.

[Krystal]

So I could actually respect sort of someone who at least had a consistent position of like, ah, man, I really wish they would have kept those 50% tariffs on Lesotho. That was great when that was in place, and I'm sad to see that go. I don't see a single. Not one. I have not seen one person say that. Instead, what I see is art of the Deal. Like, I was two days ago. I was in favor of the crazy formula and the penguins getting tariffs, and I was justifying it all. And who even needs the iPad? You just want that. What is money like? We all need to pare back. And then the stock market jumps and he makes this announcement, and, oh, he's so brilliant. He's a genius. This is amazing, et cetera. Like you should just not. You just can't take these people seriously. Just don't take them seriously because they will debase themselves every single time. And if he does something different next week, they'll justify that and it doesn't matter what it is, does not matter the details of it. They will work backwards from whatever it is that Donald Trump is doing to their conclusions.

[Sagar]

Yeah, that's absolutely correct.

[Unknown Speaker 1]

You know how we're always talking about what's next? Well, I found it. It's called Formula E. Forget everything you think you know about racing. This isn't just cars going fast. It's like a supercomputer on wheels. The tech is insane and the drivers, they're like chess grandmasters at 200 miles per hour. You've got to see it. Trust me, you'll be hooked. Follow Formula E live on Roku next race. Miami, April 12 hey, it's Amy Brown.

[Amy Brown]

From the Bobby Bones Show. Join me in supporting St. Jude Children's Research Hospital for a chance to win a trip to meet Megan Maroney at the 2025 I Heart Country Festival in Austin, Tex. On May 3. Hosted by Bobby Bones. We're going to hook you up with tickets, flights, hotel, food credits and a meet and greet with Megan Maroney. Take action now to support St. Jude and help cure childhood cancer and you're going to be entered for a chance to win. Visit iheartcountrytrip.com to learn more at Ameca.

[Unknown Speaker 2]

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[Sagar]

Let's go ahead and get to Ryan Peterson. He is the CEO of Flexport. He's the one who really broke the news about that $1.5 million port call stuff that's about to go into play. He is also such an excellent guest for years now who is somebody who has broke down all of the supply chain problems with the ports. Remember when was the Suez Canal was all blocked up like he is a go to source.

[Krystal]

He's an odd lots guest too.

[Sagar]

He's an odd lots guest and the thing is about Ryan is he has such intricate data because he helps all of these global shipping customers that he actually can tell you about the real time impact that he is seeing. And we are going to get into the shipbuilding problems and stuff that we've seen and how somebody who actually has to grapple with this stuff, like for real moving trillions of dollars of goods all across the world, what this means for them. So let's go ahead and get to him. Joining us now is Ryan Peterson. He's the CEO of Flexport. As I said, an absolute go to resource of mine for anything concerning global shipping. He really set DC ablaze after he realized and noticed what some sort of tariff regime that is coming in for fine or for customs duties at ports. Let's go and put this up there on the screen. Cause I want him to break it down for all of us. He says on April 17, the U.S. trade Representative's office is expected to impose fees of up to 1.5 million per port call for ships made in China and for 500,000 to $1 million if the ocean carrier owns a single ship made in China or even has one on order from a Chinese shipyard. So Ryan, can you break down just how extraordinary of an imposition that would be and what some of the numbers behind these global shipping companies are with respect to Chinese made ships?

[Ryan Peterson]

Yes, and to be clear, it's a fee on the owner of the ship or the operator of the ship rather. And, but obviously they got to pass it through to the, to the people shipping cargo on that, on that boat and. Yeah, well, first off, there's not a single ocean carrier that comes to the United States that I can find that doesn't meet these qualifications, that doesn't have at least one ship made in China or one on order from a Chinese shipyard. Chinese shipyards have been dominating recent years. I think they're producing between 60 and 70% of the world's container ships. And that number keeps growing. And there's almost none made in America. There were none made in America last year. No container ships. It's Korea and Japan that they're taking market share. Originally it was Japan, Korea. Hyundai built big shipyards back in the 1970s and first took market share from them. And now it's China leapfrogging Korea. That's a big deal. First off, the obvious trick to avoid paying because it is per port call. The obvious trick here is for the ocean carriers to just make fewer port calls. Instead of stopping at Seattle, then Oakland, then LA, just skip the small ports and go straight to LA because you'll save 3 million bucks by doing so. And so that's a really bad deal. I mean, Oakland's a major export hub for all the agricultural products coming out of the Central Valley, Seattle. I mean, these are just major hubs, and there's a lot of exports going out. And so if the ships aren't stopping there, it means you got to run trucks or trains all the way to Southern California. Hugely inefficient, costly, and it's hurting American exporters, which is sort of like the exact opposite of the stated goals of the administration.

[Sagar]

That's right.

[Krystal]

How likely is this to go into effect? And then also, to the extent that you can say, and then also, even for these larger ports, like we all saw in Covid, there was a huge backup, and this was part of what crippled the supply chain, and that's part of what fueled inflation. That became the number one political issue and in many ways is responsible for Trump ultimately getting reelected. So help us understand some of these pieces of how this will actually all work in practice.

[Ryan Peterson]

Yeah, it's hard to say how likely it is. I think in the form that was proposed a month ago, they've already started. You know, I did that sweet storm, and then the next day, I heard I got a couple of texts like, hey, people are talking about this in Washington. And then the next day, the Wall Street Journal reported that they're considering revising it. I'm not taking credit for that, but it's possible that they are. They've been pretty reasonable about taking feedback from the. I mean, they took feedback from the market yesterday and kind of paused on the Southeast Asia and other tariffs. So it's possible they'll be talking about.

[Krystal]

Right. And that was just art of the deal. That was the plan the whole time. I don't know.

[Sagar]

There was no market. There was no market.

[Krystal]

Anyway, the heart of the deal is.

[Ryan Peterson]

Like, do something crazy and make everybody think there's no, you know, no hope. And then switcheroo at the end. So. And the April 17 date, I don't think is set in stone. It's very possible that there's flexibility and that, you know, I said, we can't really say what will happen. The biggest clause, in fact, in this you mentioned. Yeah, there is a. There is a. What will happen in L. A would be congestion, like we saw in Covid. I mean, if all the ships go there, Louisiana Port, Long Beach Port, just can't keep up. They barely kept up with a 20% increase, which is what you saw during COVID But if all the ships only went there, it would be a massive surge. But actually, there's another clause in here, and this one, I think, is almost certain to go away because it's just too bad for American exporters. The other clause is that within seven years, 15% of exports from the United States must travel on American made ship crewed by American citizens. And there's only 23 of those container ships in the world today. And none of them go where our exports are going. These are ships that are serving the domestic ocean freight market, meaning traveling to Alaska, Hawaii, Guam and Puerto Rico as well as this is called the Jones Act. So in order to travel domestically, you have to be made in America. So it's kind of a Jones act on steroids. And the Jones act is, I think you can very clearly say Jones acts a failure. It was designed to promote American shipbuilding and we didn't make any container ships last year. So we got to try something else.

[Sagar]

I really want to stick to that point because this is very important. Let's put this one up on the screen, guys. The next one, which really underscores Ryan's point about the number of ships that were actually built in the United States compared to China. What's the statistic is that China produced more ships in 2024 than all of the United States since post World War II era. Just to give people an idea, as you said, we did not build a single ship in 2024. The Jones act thing that you just brought up reminds me of the tariff discussion where we have in a regulatory regime which is designed to, quote, unquote, promote shipbuilding by creating a ring around the industry, but simultaneously we give no money to the shipbuilding industry incentives, supply chain, all of the industrial production that the Chinese offer. And so what happens, you both have a regulatory thing that increases costs while also not building any more ships. So you have the worst of both of those things. So I'm curious for your reflection based upon that policy that they're putting into place and also the lack of investment right now coming from the White House on any of this.

[Ryan Peterson]

Yeah, actually, well, we should note there was an executive order.

[Sagar]

There was one yesterday. You're right in the Oval Office last night.

[Ryan Peterson]

And it does, it does. It's not clear enough about like what benefits there will be, but it very clearly states, hey, we're going to, we're going to. The biggest probably barrier to shipbuilding United States, by the way, is things like the California Coastal Commission. I mean, good luck trying to make a shipyard on the west coast of the United States. These guys won't let you. You know, you can't have a beach hut like you're not building a shipyard. And so it's regulatory. Can you get Red tape out of the way. Can you actually allow these things to get built? The model here, the real thing, the real danger here, and actually I would look at it the same way we're looking, I look at these tariffs is if you're just putting up protective barriers and protecting US Industry and sort of coddling our industry. Yes. You might actually make some companies out of that. But will they be good companies? Like would they? Are you just. Because if you just make crappy products and the only reason those can survive is because there's no competition from abroad. All you've done is like hurt the American people on a net basis. What the lesson to learn here is from East Asia, where they went and industri industrialized. And the key requirement of the successful countries that industrialize was that you must export your products must be good enough that people in other countries want. So you don't just give them money, but you give them benefits when they export. You give them encouragement to go and export and you require it in order to hit subsidies. You must be able to win export markets and so you can actually see advantage. Like India tried to make their car companies in India that only served domestic and were protected from foreign automakers and their cars didn't improve from like the 1950s to the 1990s.

[Krystal]

Malaysia and Japan as well. Yeah.

[Ryan Peterson]

Whereas Japan and Korea actually focused on export markets and made great cars and great companies and kind of took over the world. So if we're going to re industrialize, it really has to be export oriented then that's what's so dumb about this policy is like you're going to cap American exporter exporters and kneecap them and say, hey, you got to, you have to travel on American made ships. Oops, there are none. Yeah, like good luck exporters. You know, it's like it's really bad policy.

[Krystal]

Give us some sense of what you're seeing, you know, from your vantage point economically and how you think there's sort of like a reaction like Trump's rolled back all the tariffs. Of course he hasn't. There's still massive tariffs on China. Well over 100%, 10% tariffs almost across the board around the world. So what are you seeing in terms of what the fallout from that could be? What early indications do you have?

[Ryan Peterson]

Yeah, so when it was the big reciprocal tariffs on everybody, I mean, that was sort of nuclear winter for the international trade community. People were really, it was a really scary couple of days for our customers. You know, Flexport is designed to ride out anything. We have a really strong balance sheet. And we believe deeply that like the technology we're building and over the long run here is just going to be like people will want it regardless of how much trade there is. But we're very worried for our customers. In fact we saw that 28% of all the ocean, of all of our customers that we surveyed said that they would cancel all ocean freight bookings entering the United States as soon as the tariff went into effect.

[Sagar]

Wow.

[Ryan Peterson]

That we didn't actually see that yet, but that's what they told us they were planning to do. Now obviously the ones that aren't China have now said, okay, the 10% is business as usual basically. And then China oriented ones just got hit with a much bigger tariff. And I think a lot of folks are going to be in a world of pain. This is really ugly and it's just a huge number of companies. I think you're going to have mass bankruptcies of companies in the United States if this goes through. And I don't, I personally predict there will be another deal to get done with China. I don't think Trump wants that to be his legacy is just like central planning of the economy that puts tons of companies out of, you know, overnight out of business and creates unemployment in our country.

[Sagar]

Ryan. So there's a 90 day pause, et cetera, 10% tariff. But as you just alluded to the 125% or maybe 150%, no one is actually clear on that of what the tariff rate there is. I believe it's about 12% of us. What is it? 12% of trade, their stands in terms of goods with China. Since you have some insight into this, what are the categories of goods that are coming over on these ships? Is it everything? Furniture, what type of inputs and others can we expect to see? Immediate price hikes, consumer hikes and bankruptcies? What industry should we be looking at?

[Ryan Peterson]

Certainly the stuff that's been the hardest to move out of China has been consumer electronics. There's just this whole ecosystem of subcomponent manufacturers that you just can't lift and shift it. So I mean apparel, things that are where the main input is just cheap labor that largely left China over the last 15 years already because China is no longer the low cost labor provider for the world. It's actually the high skilled manufacturing center. And so it's higher. It's things that are more intricate than that require lots of subcomponents. So yeah, consumer electronics is the big one. Your iPhone's made in China, so they got some production and they're shifting more. But most of those things are made in China. Computers, TVs, and a broad range of stuff. But there is some furniture from there. A lot of furniture has already moved to Indonesia and Vietnam, but we have some. The tariff on a sofa from China is going to be 159%, if I'm doing the math right in my head. Or 154%. Excuse me. Yeah, it's. It's ugly out there.

[Krystal]

Wow. All right, well, thank you so much, Ryan. It's really just so useful to get your perspective since you deal with, like, the nuts and bolts of how this all actually works. So thank you for taking the time. I know you're extremely busy guy.

[Sagar]

That's right. Thank you, Ryan. We appreciate you. Everybody. Go follow him on Twitter. The best insights out of anybody out there. Somebody actually does the work. Thanks, dude.

[Ryan Peterson]

Thank you.

[Krystal]

Our pleasure.

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[Krystal]

So we have a few major updates for you with regard to the Trump administration's immigration policy. And let's start some specifically with the big anti Semitism crackdown. The whole of government, whole of society. Anti Semitism crackdown. Can put this up on the screen so the U.S. citizenship and Immigration Services. They're announcing that they will begin considering aliens, quote, anti Semitic activity on social media and physical harassment of Jews as grounds to deny immigration benefit requests, including applications for lawful permanent resident status and foreign student visas, per uscis. Under this guidance, we will consider social media content that indicates an alien endorsing, espousing, promoting or supporting anti Semitic terrorism, anti Semitic organizations or other anti Semitic activity as a negative factor in any discretionary analysis when adjusting immigration benefit requests. This guidance is effective immediately. So, first of all, as you guys likely know, when they say anti Semitism, sure, they mean actual anti Semitism, but they also just really mean any criticism of Israel. And this, this is abundantly clear if you look at the students that they've gone after not for any sort of criminal activity, but literally for things like writing an op ed, sharing things on social media, or being part.

[Sagar]

Being married to the wrong person.

[Krystal]

Being married to the wrong person. Thank you. Or in some instances, there's no indication that they were even involved with the protest whatsoever. So it truly is now. And here's the thing again, Sagra kind of goes back to our coat block. Like all of the people who were concerned about social media censorship and cancel culture and weaponization of government against certain viewpoints, et cetera, there are a few who have been consistent. The vast majority have nothing to say about every part of the state being used to ban criticism of a specific foreign country, including denying foreign student visas, including denying, okay, you're here, you wanna marry an American citizen, you are applying for a green card, all of those sorts of things. If you have said the wrong thing with regard to Israel, Palestine, it is really outrageous and of course does not just stop with immigrants or permanent residents. Mass crackdown across the board on anything that would be critical of Israel.

[Sagar]

Well, with the anti Semitism activity, what does it mean? I mean, you know, these terms are supposed to have meaning. Well, if we're going off of what the Holocaust, IIR I H r a definition, then we are literally talking about criticism of a foreign government. And I mean, that's part of what's just so sickening. We're talking about subjecting this standard to any potential resident or immigrant to the United States of America based upon their views of a foreign government. And what's even crazier, and I don't see a lot of the right wingers doing this, is they're like, hey, so it's just, it's not any other religion. So you could be anti Christian or anti Muslim or anti Hindu or anti what else am I missing? Sikh, Sikhism or any of these. And that would be fine. But this is actually, that's the problem with these types of exclusions. It also is just genuinely like unskilled based and ideological which is just as bad as any sort of. This is literally just as bad as like a racial quota for people. Like we need racial quotas of X amount of black people to come in. Can you imagine what people would do? It wouldn't even matter who they are. It's like just based on the color of their skin.

[Krystal]

Yeah, well, we're talking about, okay, so freedom of speech, freedom of religion, famously in the same amendment, First Amendment. And so yeah, I mean this is the equivalent of being like, we're just not allowing any Christians in, we're just not allowing any Muslims in, we're just not allowing any Jews in. I mean if you are basing entry, basing solely on speech and in particular, I mean, listen, I would object on really on the grounds of a wide range of speech, but if you are focused in particular on, you are not allowed to have a particular view of our foreign policy of a particular foreign nation, like this is just complete insanity. You could not. The turnaround between basing an entire movement on being anti woke and embracing the most authoritarian woke elements and embodying it in the state and using all of the levers of the state, including things like the HHS to effectuate your goals. Like the fact that so few have anything to say about this again tells you how seriously you should take their commitment to literally anything. Because this was so central. The anti woke backlash was so central, really was for a time the thing that was holding the Republican party together. And now they just turn on a dime and are like, oh, they need safe spaces. And you know, this is a microaggression. And here's a college student who felt bad on campus because of a slogan. So we need to, you know, we need to crack down and have arrests and deport people and hold them in detention, et cetera. It is wild to see that this.

[Sagar]

Is the worst nightmare of any sort of woke style revolution about using the federal government and subjecting it to people. And even for those who are, you know, like, oh, it's only just immigration. Well, we've already had several US Citizens who have literally had their rights denied and been expelled from college as a result of demands from the United States federal government. These are US Citizens who have attended and paid for a full year, four year college degree who violated no university or no university rules and are Being forced out by the government for their attendance to this place. So that in and of itself, professors have also been fired. And again, this is not. They're not government employees. We're talking about leveraging the government power of funding or whatever demands and taking over the Middle Eastern studies department at Columbia University. That is literally out of the anti racist playbook. If you guys have ever had the.

[Krystal]

Misfortune of their wildest dreams, they could not have achieved this level.

[Sagar]

That's what I'm saying. I actually read the anti racism book. I've read them both by Ibrahim Kendi. He actually proposes similar things to what they are doing now for antisemitism. Going in, leveraging the government, implementing quotas. I mean, can you imagine if they took over the history department or whatever at what, the University of Alabama? That would be insane. That is what they are doing now.

[Krystal]

That's right.

[Sagar]

What are we doing here?

[Krystal]

And for all of you people like Sager who are here for the mass deportation, okay, is it really your priority to have huge numbers of ICE agents tracking down some student who posted an op ed, who was here legally, by the way, lawfully, you know, on either student visa or legal permanent resident? Like, is that your priority? Because there are finite resources here. So instead of getting the, you know, we're gonna round up the criminals and the terrorists, instead you're getting like, you know, Mahmoud Khalil who dared participate in some protests, or you're getting the girl who was vanished on the street, disappeared because she dared publish the student newspaper op ed calling for her university to divest from Israel. Like, it's just, it's just insanity and hypocrisy all the way around. And as Sager said, if you think this is just about immigrants, it's not. It's not even close to that because you already have students who are being punished, US Citizen students. You already have them calling these protests, investigating these protests as quote, unquote, terrorism. There is going to be a huge, There already is a huge crackdown against any of this speech. It comes at a time too where they've basically, I mean, Israel has lost effectively the entire American population outside of like Republican boomers. That's the only. There's new polling that came out asking about people's opinions on the state of Israel. And the only demographic group that hadn't really moved and still had a positive opinion of Israel was literally like older Republicans. Not even young republicans. Young Republicans. And I'm talking like under 50 Republicans under 50. Now Israel is underwater with their opinion. It's only older Republicans are the only ones who still hold onto this view. So, you know, Ryan said this, and I think it is, it offers a little bit of hope even as it's a very hopeless situation. The Washington politicians had no limit for the amount of slaughter that they would allow Israel and support Israel and ship the bombs for Israel to commit. But the American people did have a limit, of course. And it's, you know, they like have completely turned on what has been a multi, multi decade long project and really glowing, bipartisan, glowing sentiment around this country.

[Sagar]

I mean, at a basic level, they are bombarded with propaganda and told that all of these images which are uncensored and coming out of Gaza are necessary to accomplish an end. And actually, even if you look at polling or whatever, they would buy that in the interim. But now after, what is it, April 10, so 18 months or so, people are like, yeah, I'm just not buying this anymore. Right.

[Krystal]

How many lies are they being caught exactly?

[Sagar]

These people are paying attention, even if you're tangentially paying attention. And the entire podcast ecosystem is moving against them. We had Tim Dillon being like, is America just working for Israel? Theo Vaughn, just yesterday he was like, I feel like we're owned by Israel. We didn't even know about it. I mean, you can see this stuff pervading into the public sphere. Even Rogan has said a few things about Israel. So look, it's getting pumped into the bloodstream in a way that is not, it's not explicitly leftist or anything like that, but people are noticing. People are noticing.

[Krystal]

Yeah. And having our government seem to bend to the will of Israel is not doing anything in terms of some of the tropes. Like this is only furthering to fuel the very anti Semitism that you purport to be concerned about. I just wanted. Let me give a quick court update here because this is really significant. We covered earlier this week Supreme Court siding with the Trump administration on the Alien Enemies Act. That is of course the justification the law that was invoked that Trump used to ship hundreds of Venezuelan migrants to this dungeon, Bukele's dungeon down in El Salvador with zero due process. Supreme Court says, okay, you can, we're going to lift the temporary restraining order. You can go forward with these. But they say you have to provide reasonable notice to people who you are going to deport under this provision. Now, they didn't define what reasonable notice was. So, you know, that left a lot of questions. They also said it can't be done as sort of like a class, you have to file these individual habeas petitions in the district where those migrants are being held. So most of the migrants have been moved to Texas and Louisiana. These are districts that are seen to be more sympathetic to Trump. However, now, the Trump administration has just received two pretty significant court defeats in the wake of that Supreme Court decision. So let's put this up on the screen from Politico. You had two different judges, one in New York and one in Texas, who have now both limited Trump's bid to deport alien enemies back to back rulings. Let me go ahead and read you the details here. You had one federal judge in Texas on Wednesday who was a Trump appointee, blocked the Trump administration from deporting people designated as alien enemies, citing that Supreme Court ruling and warning of the potential for irreparable mistakes. You had another Manhattan district judge who came out with a very similar ruling. This was a Clinton appointed federal judge. Now, because of what the Supreme Court did, this doesn't mean a blanket restraining order on all deportations. They only apply for those districts. But the Texas one in particular is significant because so many of these migrants are being held in Texas in preparation for these type of flights. And also indicate that, you know, the federal judges, whether they're appointed by Democrats or Republicans, have a lot of deep concerns both about. There's two pieces here that still have to be determined whether these individuals even qualify as alien enemies under this act because they have to be proven to be trend Narago gang members. We know we can put this next piece up on the screen. We had previous reporting saying, Hey, 75% of these people that you shipped off had zero criminal record. Bloomberg did an analysis. They found 90% of migrants deported to El Salvador had no U.S. criminal record. So question number one is, okay, is it just they have a tattoo you don't like? Are they actually in trend nicua? And question number two is whether this was a lawful invocation of the Alien Enemies act to begin with because they're using this claim that Venezuela has invaded the country by their proxies in Trenda Aragua. Previously, Alien Enemies act has only been used in real wartime, like World War I, World War II, that sort of thing. And so this is, to say the least, an extraordinary act interpretation that the Trump administration has gone with. But it seems like even that little opening that the Supreme Court gave of you have to give reasonable notice and there has to be some ability for these migrants to be able to pursue their claims. That seems to have provided the window for these two federal judges to be able to push back.

[Sagar]

Yeah, two interesting TROs. We're waiting to see what that is. As you also. Peace. Go told us about. There's been no merit ruling yet based on that basis and could be rolled up over to the supreme court. Okay, I think that's it for today, guys. Do you have anything else you want to go into?

[Krystal]

No. Okay, we're good.

[Sagar]

All right, we got to get. We're filming this out of order. We have a guest standing by. That's why I'm doing this. All right, we will see you guys later.

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[Sagar]

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