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- [00:01]
A
I'm Scott.
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B
I'm Bill and we're the Trade Guys.
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C
You're listening to the Trade Guys, a podcast produced by CSIS where we talk about trade in terms that everyone can understand. I'm Alex Kisling and I'm here with Scott Miller and Bill Reinsch, the CSIS Trade Guys. Thanks for listening to the Trade Guys. On today's episode, we look at the White House's new executive order on Customs Enforcement. Then we dig into the latest on the Trump administration's use of sections 232 and 301 as tools in its broader tariff strategy. All that and more on today's episode of the Trade Guys. Trade Guys, it's great to be with you again. And as we have done in recent weeks, we're going to start today's episode with an update from Bill on the latest on the tariff refunds process. Bill, what's happening this week?
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B
Well, this is becoming mind numbingly complicated, I think. And told Alex and Scott before we began that be prepared for some rants this episode. And this is going to be one of them.
- [01:06]
C
Rant away.
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B
There was a hearing on Tuesday before Judge Eaton, who has been put in charge of all this. There had been this scuffle that we alluded to about who needed to show up from the government for this. And the judge was insisting that the customs commissioner show up and the administration pushed back and the judge backed down and they had somebody else there to explain what was going on. It turns out now that customs has so far sorted most of the tariffs into three categories. The category that they're already paying out and some 23 billion they've said has gone to treasury to be refunded. So somebody somewhere ought to be getting their money back fairly soon. That's sort of phase one. And what CBP did on Tuesday, this is June 9th at the hearing was to announce that they're going to begin phase two on June 29th. And these are items that have been in, I guess the word they used is the reconciliation process, which I think means duties that were being reviewed by customs before being finalized. And we're still in sort of this interim process of reviewing what the correct amount was and what the correct designation of the product was. So they're going to move on to phase two on June 29th. And everybody seems happy with that. The legal dispute is over phase three, which is those duties where liquidation has been finalized. And we talked about this before finalizing liquidation usually takes place, I think a max of 310 days after entry and what it denotes is that it's basically, it's the final action. Customs has finally decided what the duty is. They've made any adjustments from their preliminary judgment about that, and then they've finalized and put all the record keeping somewhere. The judge's position has been from the beginning, and he ordered that all the tariffs, including those, needed to be refunded right away. And he's backed off a little on the right of way because they do seem to be making progress. The administration, making it harder rather than easier, has recently taken the position that this last group, this phase three group, cannot be refunded except by court order. What that means in the practical term is if your tariffs were in that category, you've got to sue, which means you've got to hire a lawyer, go to court, get a court order in order to get your money back. There are, according to customs estimates, 27 million entries in this category. That's a lot of lawsuits. Okay, I think it's like $20 billion, something like that. No, it's less than that. It's 11, I think $0.6 billion. But 27 million entries having to sue is a lot of lawsuits. And here's where the rant comes in. This is a case where the Supreme Court, which generally tries to operate on the principle of judicial economy, which is don't decide things that we don't need to decide, missed a step here by not deciding something that they did need to decide, which is going to end up in their lap. They declared the tariffs illegal and then declined to say anything about the refund process. So the judge at the Court of International Trade has sort of been on his own. He issued a universal order on this subject, which then the administration is now appealing. As I just said, utilizing a case the court decided last year which limited the ability of judges to issue universal injunctions and left open the possibility of class action suits, which is probably going to end up if the administration wins this one. And lawyers are saying that actually the administration has a good argument from a legal standpoint, but from a practical standpoint, this is really, really stupid because you have 27 million entries and a whole bunch of people who want their money back and are now being told by the administration at least, that they're going to have to find a lawyer and go to court in a suit in order to do that. And whether they have to do it one by one, or whether somebody can cobble together a class action suit and assemble as many of those people that want to play, I mean, the 27 million entries are not for 27 million different people. I mean, a lot of them are from the same companies, but there's still a lot of entries. And if you have to sue one by one, you know, that adds up. The court could have avoided all that, and they chose not to. This is going to end up back in their lap. The judge's decision has been appealed now already to the Court of Appeals for the Federal Circuit. They'll decide one way or the other fairly soon. No matter what happens, it'll go to the Supreme Court. And so it gets back, dumped in their lap to do what they should have done the first time. Meanwhile, CBP said an interesting thing, trying to make everybody happy. CBP has said that they are getting ready to refund all that money if they have to do that. At the same time, they are claiming via the Department of Justice that they don't have to do that. So they're trying to make everybody happy and have it both ways, which allows them to tell the judge, you know, we're the good guys here. If we have to give it back, we're prepared to give it back. The administration, of course, is banking on the fact that the. Those 27 million entries, a lot of the people that own them won't bother and they won't have to refund the money. And that's probably what will happen. The losers here, as always, are small companies, people who can't afford lawyers, people who don't know the rules, people who have a handful of entries and are just not going to bother. And it's a shame because the money they paid was paid illegally and they're not going to get it back. So that's today's status.
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C
Yeah. I mean, in practice, does this mean that everything is really on hold until the Supreme Court does weigh in? And, I mean, who knows when that would be?
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B
Well, phase one and phase two are rolling merrily along.
- [06:33]
C
Right, Right, right.
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B
So it's not like nothing's happening. A lot of people are, in theory, going to get their money back. Phase three is on hold until the courts make a final ruling.
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C
Right, right.
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B
And Trump being Trump, you know, every time he loses, he appeals. If he loses this round, it'll go to the Supreme Court. And I suspect, given the plaintiffs, they lose, it'll go to the Supreme Court. So you. That will probably be in the fall, the rate they're going. The court is about to take its annual summer vacation.
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C
Right? Yeah. All right. Well, we're going to stick with Customs Enforcement for our first big topic today. And Scott, I'm going to turn to you because on June 3, President Trump signed an executive order directing a major overhaul of Import rules at U.S. customs and Border Protection. Scott, this seems like a big deal to me. So what does this order actually do and what problem is it trying to solve?
- [07:21]
A
Yeah, and it's a major shift in enforcement practices by U.S. customs. So as a bit of background, there's anytime there is an importation, the responsible party is a specific name. They're called an importer of record. It means they're the entity that is managing the importation of the goods and they're the ones who are accountable to the Customs and Border Protection organization to provide accurate information, to have everything that is requested by CBP and required in importation forms, that it's that importer of record who's responsible for making sure they do a thorough job of this. What this executive order does, among other things, is it does increase the burden of enforcement, requiring more information and having higher costs if you happen to make mistakes or if something's wrong about the form. So call it increased higher degree of scrutiny of these importations for entities or importers of record that are not US Based or have relatively few US Persons involved in the transaction, limited US Presence. So if you are an importer of record, that is a sort of a shell entity that was created to handle the transaction, which happens all the time in in US Corporate law, these entities will be subject to the higher level of scrutiny. The executive order puts in place a fairly comprehensive program. There'll be a revision to who's eligible for what kind of treatment that in terms of inspections, those kinds. There's also requirement in the EO for customs to come up with a set of legislative recommendations where places where they need changes in the law to implement and documentation requirement. Those are all happening as a requirement of the eo. So I think in this case the burden is going to be felt much like the burden when de minimis went away, which was rolling incident in 2025, starting with De minimis from China in April. And by the time we got to August, the Trump administration had basically eliminated de minimis treatment of any goods coming through customs. Once again, that's something that small businesses would face the most of the burden. I think the same thing is going to happen here, the occasional importer, the small importer who has this particular structure without many US Presence or employment. Now, the positive news is that they're using as good compliance models some things that have existed for a long time. There's a voluntary program called ctpat, Customs Trade Partnership Against Terrorism that was implemented on a voluntary basis, I think about two months after 9, 11. So end of 2001 goes way back. And almost everybody who does importing regularly tries to comply with the rules of ctpat just because it simplifies matters on a going basis. So that's one of the compliance hallmarks that they're going to stick with. But overall, this is going to be disruptive for smaller entities and non US Entities. Don't know how it's going to work out. Maybe some national treatment or most favored nation problems with it. There's lots of controversy in the trading system over the years of import licensing and those kinds of things that tend to burden foreign entities to a greater extent than than homemark entities. That's not just the United States. It happens all over the world. But that's one where they're going to have to be careful. But otherwise they're turning up the enforcement meter on foreign entities here. I don't know what exactly they're looking for, who they think is violating everything, but that's what they're doing. And it's a big shift. It's going to require a lot of work and a change in operations at the border.
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C
Yeah. Bill, what's your view on what the big problem they're trying to solve here is?
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B
Well, second rant coming on here, people have been trying to cheat customs authorities for centuries. This is not a new problem. When you have a policy of relatively low tariffs that are the same for everybody as we used to have, it's a more contained problem because there's no tariff arbitrage. There's no benefit in claiming that your product came from country A rather than country B because the tariff is the same either way, with a few exceptions. If it came from North Korea or Cuba or an embargoed country, a lot of the customs inspection is if you're trying to sneak something in that's illegal, like drugs or coming from an embargoed source like Cuba or North Korea. But when you've changed the policy to higher tariffs and differential tariffs where different countries are paying in different amounts, you create an incentive for tariff arbitrage and trying to sneak products through countries with lower tariffs. So for example, if where all these tariffs end up, when all is said and done, as for example, the UK is at 10% and the EU is at 15%, that creates an incentive, and not a small one, for European exporters to channel their goods through the UK and try to claim that their Products are the UK in the process, that would be customs fraud. But that's exactly what this kind of regulation is about. The rant is basically that this is another example to me anyway, of Trump creating a problem, well, not in this case, amplifying a problem and then having to come up with a patch to solve a problem that he's made worse. The classic example of this was what he did to the farmers in his first term where his trade policy basically screwed all the farmers. And so his patch was a $23 billion taxpayer funded bailout to farmers to compensate them for the retaliation they suffered because of his tariffs. He's going to do that again, I think, not to the same extent, dollar wise this time around because the farmers are suffering from Chinese retaliation. This is kind of the same thing. He's made a problem worse and now he's trying to fix it by changing the regulations in way that will make it more difficult to import. Now it's hard to object to any of the particular provisions because they're all sort of good government transparency provisions. But the effect of them will be, and I think Scott noted this will be to make importing more expensive, to add costs to it and to make it more difficult for foreign importers of record. The two biggest changes I think that we're going to see are first that, well, to go back a step, I mean, the biggest thing it does is to sharpen the distinction between foreign importers of record and domestic importers of record. And it does that by requiring the submission of a lot more details and information about who you are, where you do business and exactly what business you're doing. And the aim, as Scott said, is to weed out shell companies that pretend to be American companies, but in fact are not. And this has led to a legitimate customs problem, particularly with Chinese imports. If you have a shell company that is the importer of record and owes customs duties and for one reason or another they decide not to pay, they simply walk away. And they don't really have any assets in the United States that the authorities can attach. And so, you know, the government is left holding the bag. So it going after them is legitimate. And in this case though, it's going to put a burden on the legitimate importers of record because for one thing, they will be prohibited from filing informal entries, which is sort of the standard thing you do if you have a one by one basis. You have relatively small entries, you just file when the item comes in, you pay your duty, it's an informal entry. Customs takes a quick look and that's sort of the end of it. Foreign IORs will no longer be able to do that. They will have to final formal entries, no matter how small or singular their entries might be. The second difference that is noteworthy is the process that relates to bonds. Importers of record have to have on file a bond basically at surety, so in case they can't pay or decide not to pay, somebody else can step up and pay. It's like insurance, so the government gets its money. Regardless, importers can currently obtain single bonds, that is a bond that covers an individual entry, or they can have what's called a continuous bond. So if you're an importer of record and you import a lot of stuff over long period of time, a continuous bond is one that allows you to cover multiple entries for a specified period of time, I think usually a year. So that's a big convenience. And if you're a major importer, that helps a lot. The change here is that foreign importers of record will not be able to file continuous bonds unless they've been approved by CBP or unless they're compliant with CTPAT that Scott just referenced. So an extra step here that will result in more foreign importers of record having to get in single bonds, more paperwork, more fees which get passed on to consumers, and ultimately higher prices. So it's hard to object to something that is designed to weed out crime, fraud and corruption, and it's designed to do all that. But there's going to be collateral damage here in the form of more paperwork, more delays, and higher prices for consumers.
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C
How likely is this to be tied up in court at some point?
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B
That's a good question. I went to a briefing on this yesterday, and just a short plug here for my former law firm. Kelly Dry and Warren has put together a good fact sheet on this. And if anybody wants to be brave and deal with the law firm, talk to Kerry owens or Jennifer McCadney at Kelly Dryan Warren and ask them to send you their fact sheet on this. It goes out in considerable detail of what the rules are, and tell them I sent you and they'll probably answer, at least I hope they will. I asked Kerry, who was doing the briefing, what the reaction to this has been. You know, are people up in arms or not? The answer so far seems to be not that people are taking this in stride. People are getting ready to do it. Most of the changes are phased in over 180 days, so this is not entirely immediate. The bonding change, I think, is supposed to be prompt as well, as the informal entry thing is supposed to be right away, but people are taking it in stride. One of my questions to her was whether this is going to force more importers to use customs brokers who are basically professionals and know how to do all this stuff. It's not clear if that's what's going to happen. I think the answer is probably. And of course, that means that the customs brokers are not disappointed about this.
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C
Yeah, Scott.
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A
Right. Yeah, they're good people and they provide a useful service. But their service was less in demand when you had the major package delivery firms and de minimis rulings. So that was actually quite simple. And basically FedEx or UPS, whoever was the international shipper, could essentially handle issues that a freight forwarder or a customs broker would handle on behalf of the individual customer. So for very small customers, infrequent customers, they may wind up having a customer on their payroll.
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B
So I don't see a major revolt on this.
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C
Okay.
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B
This is America. As I've said many times, anybody can sue anybody for anything. So.
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C
And they do.
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B
It wouldn't surprise me if there's a lawsuit along the way, but I don't see a big pushback right now.
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C
Well, I'm not sure if any lawyers are going to be available after all those 27 million lawsuits are filed from the refunds.
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B
They'll be busy. Yes. Yes.
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C
All right, let's move on. And I want to come back to a topic we covered last week, but worth revisiting, and that's section 301 investigations. Earlier this month we had action from the USTR on Brazil, specifically a proposed 25% tariff on a range of goods. And of course, we have the recent proposal from USTR to impose new tariffs on 59 countries in the EU under 301, which was the topic we discussed last week. But let's focus, if we can, on Brazil for a minute. Bill, I'll start with you. What is going on there? And is there anything about the proposed tariffs on Brazil under 301 that make this move unique? And actually, before you start that, Bill, I don't want to lose sight of the fact that we probably could give our audience a refresher on section 301. We're going to talk about 232 next, so we'll do the same here. But if you'd be kind enough to give us a minute refresher on 301 before we dive into Brazil, I think that'd be helpful for our audience.
- [19:33]
B
Yes, goes back to 1974 Trade act of 74 was significantly amended and somewhat expanded in the Trade Act 87, which is one of the ones that I worked on. And the intent of 301 is initially, I think I said this, we had an earlier episode on this. It was. I talked to the person who actually drafted this provision, said the intent was to allow the government authority to identify trade problems. And those are defined in the law as actions by other countries that are unreasonable, unjustifiable, or discriminatory which burden or restrict United States commerce. So that's sort of a two part test. They have to be doing something that's unreasonable. And I'm focusing on that word because most of the cases that are coming out now, particularly the forced labor ones, unreasonable is the criterion that the administration has been using. And the second part is they have to determine that the unreasonable action is burdening or restricting U.S. commerce. Theory being that if it's unreasonable, not hurting anybody, you know, why bother? The idea of the statute was that the government could identify those things and then go to the offending government and say, we believe you're doing something that is bad for the following reasons, and we would like to work out an arrangement where you stop doing that and we have authority to take action against you if you don't do that. So the purpose of the statute was originally designed to force a negotiation and to try to work things out. And the retaliation was the instrument of last resort. Trump has sort of reversed that. It's sort of a. Instead of ready, aim, fire. It's ready, fire, aim. It's identify the problem, retaliate, and then enter into a period of negotiation. But the foundation of the statute remains the same. You have to find things that are unreasonable, unjustifiable, or discriminatory in which burden and restrict United States commerce. In the Brazilian case, it's a little anomalous because oddly, we have a rather substantial trade surplus with Brazil.
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C
Surplus? Yeah, yeah.
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B
$14 billion or so. It's unusual for the United States to go after countries that were winning, if you will, from a trade perspective, but here we are. They found a boatload of violations of failure to deal with IP issues and forced labor issues. Two that are interesting. The one that baffled me is failure to do enough to stop deforestation in Brazil. How that burdens or restricts U.S. commerce is a little bit elusive to me, but that's what they're arguing. The other thing that's interesting and I think novel and potentially usable in other cases, although I'm skeptical about it, the United States is claiming that Brazil's entry into trade agreements with other countries like the America Soviet Agreement burdens or restricts U.S. commerce. And it's an interesting argument. I suppose from a US Perspective, you could say that if the Brazilians are giving an advantage in lower tariffs to somebody else, that hurts us. But if you think about it from a global standpoint, if the US position is anybody that enters into trade agreements with anybody else besides us is hurting us and that justifies retaliation against them, that's going to lead to an awful lot of 301 cases.
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A
It seems to me that's consistent with the administration. Both Trump 45 and Trump 47 is creative use of this particular statute. And Bill pointed out correctly that it's a very flexible statute, can cover a lot of different types of trade. Most other administrations since the 1988 Trade act, starting with Reagan, have either not used it out of respect for some trying to make the WTO dispute settlement work, I think is probably the reason that 301 fell into disuse. But even the early uses starting in the 70s were mostly market access issues. I think the first case was either poultry to Canada or eggs to Canada. One of the two. They're both kind of poultry, if you think about it. It was definitely Canada was the first target of a Section 01 case, but I just can't recall which one. They're all mostly used to deal with market access, which is Bill's point about negotiate first before you apply it. It's why that made sense. What the Trump administration did both with in the first term and in the current term is be much more creative about where the distortions come from. So if you go back to the original China deal, that was a Section 301 investigation, and one of the areas of greatest interest was intellectual property. And IP theft was a big deal. Well, that's domestic regulation in China. And yet full credit to Bob Lighthizer and the team at USDR that did the investigation that that was a distortion of trade. There was no question that the statute applied there. And so he. I think we're continuing to see that level of creativity in the Section 301 filings. And it's one of the harder statutes to stop an action by the administration just because most of the tools that they have are in the hands of the ustr.
- [24:27]
B
There will be lawsuits. That's one certainty here. And I've been having a dialogue with Alan Wolf in particular about who is a distinguished lawyer, in addition to being former Deputy Director General of the wto, about how those might play out. Alan seems to think, and he's written a piece about this that you can get on Peterson Institute website, I believe Alan seems to believe that the courts may well, looking at the forced labor ones in particular, because those are the ones that are on the table right now, the court may invalidate them. Allen believes as basically presidential overreach and that his view is that revenue authority belongs to Congress and the imposition of tariffs like this is unconstitutional. I've told him I don't agree with that, but I do see an avenue here for prospective plaintiffs in at least some of these cases. The administration position in the pending 301s60 so far. I was kind of expecting the remaining 16 on overcapacity to come out this week, but they haven't. So maybe next week we'll cover it next week. But in the 60 forced labor ones, everybody was guilty. Now, if you think about it, you know, from the standpoint of actual facts, it's hard to believe that everybody is guilty. I can easily believe that not everybody is innocent. But there are some countries out there that are probably matching us in their enthusiasm for dealing with forced labor. And I thought from the beginning that if you select your plaintiffs wisely, somebody who actually is going to be hurt by this action in the form of having to pay higher tariffs for their imports, and you select your targeted country wisely by picking the country where this case, the forced labor case, isn't credible, I think some of these lawsuits are winners. If you look at the report the administration provided on its findings in the forced labor cases, it was 98 pages, but the individual descriptions for each country are only two or three paragraphs. There's really no evidence provided they're assertions. You know, they're not doing enough. They don't have a law or they're not doing enough to enforce the law that they've got, period, without much supporting evidence or explanation for that, I can see a judge saying in individual cases that that's not good enough, that if the administration is going to decide that an action burdens or restricts US Commerce, they have to prove it. And the evidence that's been submitted so far for most of these countries really doesn't do that. So I can see winning on the merits of I don't think the constitutional argument is going to get as far as Alan thinks it's going to get. But the one thing we can be confident about is they'll both be tested and we'll find out and probably fairly quickly. I mean, you can't file until you're hurt, really. So we have to wait till after July 24, when I think they'll put these things into effect.
- [27:18]
A
And you have to wait quite a while before this gets heard by a federal judge. So there will be 301 tariffs collected in the meantime.
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B
Oh, yes. Yeah. But the Court of International Trade, you know, has been moving pretty fast on these things.
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A
They have.
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B
They move quite fast on the Yipa ones. It doesn't make a lot of difference because it all ends up with the Supremes in the end. And this is going at the pace where whatever the CIT decides, it'll be appealed to the Court of Appeals. Whatever they decide will be appealed. The Supreme Court will get this next year. So, yes, Scott's exactly right. We're going to be paying 301 tariffs for a while, starting probably late July.
- [27:54]
C
Okay, well, let's go from 301 to section 232. Similarly, I would love to get an overview of 232, but we're talking about it today because there are a number of investigations for which deadlines are upcoming or have already passed, including on copper and aircraft. So, Bill, if you could start us off again with an overview of 232 and then talk about what you're tracking.
- [28:14]
B
Yeah, this one's a shorter explanation this time. This is a provision from the Trade Expansion act of 1962 that basically is a national security provision. If the President determines that imports are a threat to national security, he has authority to take action to limit them or block them. There is, like, in 301, there is a process, and in this case, it goes to commerce, not USTR. They have 270 days to investigate and issue their report to the President, and then, I believe, has 90 days to decide what, if anything, he wants to do about it. There are, I think, probably have been or are 15 or more than 15 of these investigations out there. And Alex has made the important point, which is a lot of them are either overdue or coming due. There's no penalty in the statute for missing the deadline. You know, if Commerce doesn't finish by 270 days, nobody goes to jail. And if the President doesn't make a decision, nothing happens.
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C
So what's the point?
- [29:11]
B
So sort of academic, but what we've got, we got already now overdue or shortly to be due. Aircraft, pharmaceuticals, drones, robotics, medical supplies, semiconductor chips, where there was a partial decision, but no action taken yet. And some copper derivatives. There was an action taken on copper last year, but the Secretary of Commerce was instructed to look at some specific copper derivatives where there was no action taken and to report back in a year, which is about now. So these things, some of these have kind of disappeared. The aircraft deadline was last fall for commerce to finish and it's not clear whether they did or not. But there's been no action, no decision in some of these. That one and I think the chip one and probably the pharma one as well. I think what's happened is the government has realized that the standard Trump remedy, which is tariffs, would be counterproductive. If you're going to look at aircraft and determine basically that imports from Airbus are a national security threat, then you're going to place tariffs on finished aircraft, but you're also going to do it on aircraft parts and components. The biggest loser if you do that is going to be Boeing. And they've made that very clear. I've talked to them. They made very clear to the administration exactly what the consequences would be if he imposes tariffs on, on the aircraft sector. And you'll note, I think one of the things that was worth noting, when they rolled out the forced labor, 10% or 12.5% tariffs, they had 75 pages of exclusions. And if you look at the exclusions, aside from the ones that have politically sensitive, like beef and tomatoes where prices have gone way up, and the ones like coffee and bananas where we don't grow them for the most part in the United States, the industrial exclusions are mostly limited to the aircraft sector.
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C
Interesting.
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B
So clearly Boeing lobbyists have done a terrific job on this of pointing out to the President, I think we have a surplus in aircraft. And why do you want to mess with success is basically the point.
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C
Yeah, I want to get Scott in here. Bill. Scott, I want to get your take here.
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A
Well, I agree with Bill that these are late and they're probably late for the reason that the administration has to figure out something to do that would not be harmful to the economy. And fortunately, the section 232 is a statute that does have more possible remedies than tariffs. In fact, one of the last cases in the Cold War era was a 232 case on machine tools, the very high precision multidimensional machining where there was one or two US Firms who were good enough to do this and all the high end work in this kind of machining was done by firms in Japan. I think Japan, Korea for the most part may have been a European firm.
- [32:01]
B
Japan, Germany and Israel.
- [32:02]
A
Germany, Israel. There was just a very handful of countries who had the sophistication to do this. And so tariffs made no sense, but there was some negotiated settlement to protect and keep this US Entity in the business as the remedy. So the statute's got some subtlety to it, and I think that's what is going to be necessary in some of these areas. Certainly aviation and copper. I mean, goodness, there's a lot of copper mining that goes on in the US we have a lot of it because we have a big share of the earth's crust. And the U.S. geological Survey knows where it all is and it's in production today. So what exactly you do doesn't sound a lot like tariffs, but it does have a lot to do with where the ores are located and what it takes to process them. So the subtlety is what's required here. And it's clear to me, just from looking at the sort of the reports that have it issued, like the dogs that haven't barked, is that this is actually hard to do in a way that gets you to what you're trying to accomplish, which is to improve the productive capacity of the US Economy in areas of national security concern.
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C
Yep. Bill, go ahead.
- [33:11]
B
Yeah, well, there's. And some of it is timing, too. Pharma tariffs, you know, you want to raise drug prices, which is the opposite of the administration's policy.
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A
Right, right.
- [33:19]
B
Put tariffs on pharmaceuticals. I mean, I think the policy is let's try to move that production to the United States, which is fine. I think what the administration is running into is it takes time to do that.
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A
Sure.
- [33:32]
B
Companies have to decide to do it. They have to make the investment and they have to build the factories, basically. And putting tariffs on this month is going to produce higher drug prices, basically less. And until the industry reshores. So I think they're faced, as Scott said, they're faced with the reality that the Trump's preferred remedy, which is always tariffs, is not always in these cases, the most suitable one. And so they're struggling a little bit to figure out what, if anything, they should do.
- [34:02]
C
Okay, Bill and Scott, we're going to leave it there for today. Thanks as always and thanks for the overview of 301 and 232. I get confused myself from time to time, so it was very useful. Thanks to everybody for joining us. We look forward to you joining us again next week. Take care. Until then.
- [34:15]
A
Thank you.
- [34:15]
B
Thank you.
- [34:19]
C
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