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- [00:01]
A
I'm Scott.
- [00:02]
B
I'm Bill and we're the Trade Guys. 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.
- [00:22]
A
This is Trade Guy Scott. Thanks for listening to the Trade Guys this week. We welcome in the year 2026 with a special collaboration, Bill and I join Andy Shiles and Lalo Solrazzano who are the trade compliance experts who have a similar podcast called Simply Trade. Simply Trade is co hosted by Lalo and Andy and they have a large audience in the compliance business. They are themselves experts in that side of the trade world with over 60 years experience. We hope you enjoyed this joint episode of SimplyTrade and the trade Guys.
- [01:01]
C
We're kicking off 2026 with a special collaboration between the Trade Guys and the Simply Trade podcast. We're bringing the policy side of the Trade Guys and we're bringing the compliance and actions that day to day practitioners need to do to meet those trade policies. But for listeners of the Trade Guys, my name is Lalos Alorseno and I'm one of the hosts of the Simply Trade podcast and and alongside with Andy Shiles, he's the co host. And for those on the Simply Trade audience, in case you don't know, the Trade Guys are made up by Mr. Bill Reich.
- [01:32]
B
Got that right. Good one, Lalo.
- [01:35]
C
Okay, good. And Mr. Scott Miller. So we don't script. Neither do the Trade Guys. You know, we just kind of created a little bit of a framework. Scott suggested a really good egg drop, which is what may be happening for 2026. And we're not going to really call this a forecasting show or anything. Kind of like what is going to happen that we know that there are events that are already scheduled to occur during the year and it's not a prediction like what is SCOTUS going to say about the case or anything. We've already argued that in other episodes and I'm sure we'll argue that on throughout the year as the decision comes through. So we're going to talk about four battle on forefronts for 2026 and Scott suggested this, which is pretty good. POTUS versus Cotis and of course Congress. And I think we'll see a little bit more about that after the midterm elections if it goes the way of Democrats. But we can talk a little bit about that. USMCA is US against Mexico and Canada. We have the tariffs, of course, which is revenue versus inflation, and of course, China against the rest of the world. So we'll explore that along three storylines, like I said, and Bill suggested the three storylines, and we'll talk a little bit about that as we go throughout the show. But for now, having a new year, guys, at the at the risk and at the expense of getting canceled by Larry David, because my statute of limitations has expired. I don't know if you all have seen a Curb youb Enthusiasm, but he says it cannot you cannot say Happy New Year after three days. So anyway, so here I am saying Happy New Year. I kind of was thinking about how I can kick this off, and I thought of this. There's a line out there that says there are decades where nothing happens, and then there are weeks where decades happen. So I think you can define 2025 that way. And I'm wondering, so 2026, how many decades do y' all feel may be coming up? So I don't know if you want to kick that off, Scott, since you're the one that came up with those four battlefronts, maybe.
- [03:32]
A
Well, thank you, though. And I like the idea of these these sort of these fronts or thematics, because I hate forecasting for Fierce because I'm always wrong.
- [03:41]
B
You just don't want to be proved wrong, Scott.
- [03:43]
A
Well, I'm fearful that somebody's going to remember this wrong. Usually you don't have to that risk just, they usually just the mistakes just go by. You have to remind them when you're right. But that's, that's enough. But, but yes, I think the right place to start off is where where my list started, which is first, there's no there are no fights in Washington that are better than separation of powers fights. Okay. That's what we all live for. And there has been a large one brewing that may be released tomorrow there. The Supreme Court is handing down decisions tomorrow. There's rumors, yes, there's speculation that the IIPA case will be handed down tomorrow. So we may be close to news. But the the president has taken a great deal of liberties with the statutes that he has to operate within and finding ways to manage his trade agenda that are at least novel. I think, when it comes to IA or the International Economic Emergency Economic Powers act, that statute was really written with an eye toward adversaries and the president has used as leverage toward friends and neighbors more than anything else. And the case will be will turn on whether the Congress delegated tariffs as part of the remedies for IEEPA problem solving by the executive. And so we'll see what we see that comes out. I don't want to say too much about it, but what I'm hoping is when this, when the dust settles and court decisions are over, that Congress will remember its inherent authority to regulate foreign commerce and step up, pull up its pants and decide to do what it was elected to do, which is to make the trade legislation and to say what our trade policy is. So it hasn't happened yet. It may happen soon. It may just be a dream for me. But that's, we're looking forward to that with some anticipation.
- [05:29]
B
It didn't happen today, incidentally. The House voted not to override the President's vetoes on two bills that passed by voice vote last fall. They were non controversial. One concerns Colorado water project and another one concerns property involving an Indian tribe in Florida. They passed by voice vote. They were sponsored by both parties and the president vetoed them probably for reasons that have to do with revenge, basically because one of them was Lauren Boebert's bill and she's not in favor right now. And the other one was affected a Florida India tribe, the Indian tribe that Trump is also mad at. And there was a lot of expectation that Congress would stand up and they would vote to override the veto and they didn't. It failed on both.
- [06:14]
A
I guess they're busy with other things.
- [06:17]
C
And I guess just to timestamp this where we are recording on January 8, so just so everybody knows when we release this show just in case. So anyway, so go ahead.
- [06:25]
B
Everything we're saying may be irrelevant by the time this is released, but the rumor in Washington, which is where I'm these days, is rampant, that tomorrow we're going to see a decision. Yes, and I think we talked about this the last time. I'm not going to predict the decision. My, my, I am. I guess my, my guess is it's going to be more complicated than people think. It won't be clear cut the President is right or clear cut the president is wrong. I think it will be somewhere in the middle. It'll probably tilt net against the President. The thing that worries me the most and Lalo, I think should and Andy should worry your listeners is we're going to get a decision that says the law permits some tariffs, but maybe not these or not all of these. And we're sending this case back to the lower courts to determine which tariffs are legitimate and which tariffs are not legitimate, which we will review at a later date. All that does is prolong the uncertainty. And all it does, particularly for your listeners, is prolong the question of do they get their money back? Because the answer will be not yet, you know, if at all. And the debate here is focused increasingly more on that. The assumption of a lot of lawyers has been, well, the administration is going to lose. And if they do lose, then the next question will be what about refunds? And so Scott and I haven't really dipped into that. I assume maybe you guys.
- [07:50]
A
No, it's, it's, but it's unexplored territory. Nobody really knows how this plays out.
- [07:55]
D
Yeah, I mean, the issue there, and I've, I've had some discussions with a few different customs brokers and, and it's, I mean, it's a big question mark. Do you file a protest? Do you file a petition? Do you file, you know, just a general refund request? I mean there's, there's so many different options administratively. And in the midst of that is, are there anything that in your entry that customs could come back and look at it and go, yes, you're asking for a refund on this, but we're finding some other enforcement issues. So it's just, it's very complex. I mean, Bill, you're right on the money. I think you're, it's going to be a complex answer. I will say that everybody keeps saying, well, you don't have, the president doesn't have the authority under IEEPA to do the tariffs, but yet Congress has delegated for trade negotiations to the president and I'm looking, well, okay under that umbrella. Why would he not have the ability to do the tariffs as well? Because tariffs are used to motivate somebody to get to the table. And yet it's the same. It's so convoluted. I'm like, well, he's, the president's used IEPA initially. Is there something else that he's now going to exercise and say, well, this still qualifies the same action under something else? I don't know?
- [09:14]
B
Well, yeah, he's got a pile of choices. The gossip seems to be that if he employs them, he can probably replace about half the tariffs in revenue terms, but not all of them. Depends on the statute.
- [09:29]
A
Yeah, the big one for revenue is in The Trade act of 74, where there is Congress allows for up to a 15% tariff for balance of payments matters. It is time bound, but Congress can renew it.
- [09:44]
C
But I guess it kind of brings us to Bill, you suggested that we should also discuss something about with regards to The WTO ministerial only because it may come up, you know, like on rules for tariffs and you know, how that globally, I guess is said. I mean, do you think this decision will also be part of the conversation there?
- [10:04]
B
Well, in the back rooms, yes. I think not publicly. I mean, the good news on that is that Trump withdrew from 66 international organizations yesterday. The good news is the WTO was not one of them. And so we're still in and now we have an ambassador and so we're starting to participate. I think it's going to be very interesting to see how this plays out. The next ministerial meeting, which is the conference, the highest level they have is at the end of March, I think the 26th through the 29th. And what's going on right now is what always goes on, the process of trimming and shortening the agenda. The theory being that ministers can only handle so much and we don't want to overburden them. It's going to be an interesting test of how Trump deal with the organization. He doesn't like multilateral organizations. We learned that yesterday when he pulled out of a pile of them. He doesn't like them because he thinks they can gang up on us and he prefers the unilateral use of US Power. He's in a situation, however, in this case, and you guys all know about this, where he's going to have to rely on the WTO because one of his campaigns is to make sure that the WTO authorized moratorium on E commerce taxes stays in effect. And this moratorium has been in effect since the Uruguay Round. But it's not permanent. Every ministerial, it has to be renewed. And there has consistently been objection to that, which in the end on all previous ministerials has been overcome by a combination of, I think, bribery and arm twisting.
- [11:33]
A
But that's one of the reasons the WTO is still effective is it's a table, okay? And when countries or members bring issues that they want to have resolved, the organization functions pretty well. And yes, you're right, Bill. President Trump does not like international organizations, but he has good reason to not like some of them. And there are many of them set up in the post World War II order, as it was called, became worse than useless like a lot of the UN agencies. As a taxpayer, I'm glad to see my dollars wasted someplace else.
- [12:04]
B
This is a case where he needs them. And that's what's interesting. The moratorium in which all 166 members of the WTO are bound not to impose these taxes that is a big gift to our tech companies.
- [12:17]
A
Yes, sir.
- [12:18]
B
And we have been leaders for years in the fight to keep the moratorium in place. India has been the primary opponent, and it'll be interesting to see how this plays out. He's just put 50% tariffs on India. They don't really owe us a lot of favors right now, I don't think. But it's going to depend on whether or not we can persuade them not to object to continuing the tax moratorium. So Trump is, if he wants to achieve the objective, which is an important one for him, he really has to work within the organization and he has to work with all these countries that he's, that he's beating up. And I'm just going to be watching with real interest to see how he chooses to do this.
- [12:59]
D
It's not going to be an easy thing. It's almost like herding cats in, trying to get everybody, everybody together on that. But that's the, the, the impact is not only the digital side of things with the tech companies and all, but also jumps over into the E commerce because people that are going online and making an order and all that kind of stuff would be potentially on the tax. So the, the E commerce side of this is huge and, you know, doing away with the de minimis. So E commerce into the states is also affected. That kind of gets into also the, the deal with, you know, are these tariffs and, you know, is there an inflationary act on it or is there an offset there with more, you know, domestic sourcing?
- [13:42]
B
I don't know. That'll be in the background of the WTO discussions. I think what we're seeing just on the tariff question and I. We're going to predict, I think you're going to see this sort of play out the way it's been playing out. The impact has been less than people thought. So far it's been less than people thought because the tariffs are lower than threatened. They were implosed later than threatened. You know, they didn't really come into play until August and there's a growing number of exemptions. You know, he started in, in November and December, exempting things that we don't make. So coffee gets a free ride, bananas get a free ride. I mean, you'd think that he would have thought of this last March when they were doing all this, since it's pretty obvious we don't, except for Hawaii, we don't grow coffee. But, you know, they got around to it. So there's a study that came out recently that suggested that the, the average overall tariff impact of what he's done is 14.1%. And that this has caused a lot of analysts to say, well, you know, it's going to level off at 15, which is what the EU's got. It's what the UK is at 10, but the Asian countries are at 20. It's going to level off in the 15 range. And I think that's about right. What you're going to see over the next probably year is the administration coming in, trying to clean up all the leftover details in the agreements they negotiated. You know, none of them are finished, none of them are binding, none of them are enforceable. And between the stuff where the leaders came out of the room and described what they'd agreed to totally differently, and the stuff they explicitly punted to further negotiations, and the stuff where countries are coming back for a second bite, there's a lot still on the table. And I think we're going to spend the spring and probably the summer in repeated negotiations with these countries trying to clean up the mess. I mean, the Indonesians have come back and said, well, you know, yeah, we agree to that, but we really can't do that. We need to talk about it some more. The UK is under fire for not moving fast enough on some things, same with the eu. So on the tariff front, I don't see, I see a threat to more tariffs, but what I really see is an effort to clean up all these agreements and try to put them into some form that's final and manageable.
- [16:08]
A
Meanwhile, maybe the economists will get it right this time, because the one place where they were in most fundamental error is, and I made the same mistake, is we expected retaliation and the absence of retaliation. The management strategy which led to no retaliation was probably the reason that many of the more dire forecasts were, did not come true. But I think you've got this tremendous set of tailwinds to the US economy that we saw the breakout numbers in growth for the third quarter. And what you have is low energy costs. We have energy abundance at relatively low costs. We have lower regulation. There is, there's a great deal of investment from outside the United States that's coming into the United States. We have certainty on tax policy, relative speaking, certainly on tax policy for the next five years. Those kinds of things are, I think, helping to get the economy going in ways. There's no question the tariffs are a drag to some extent, but I think it's smaller than anticipated. But Bill's right, there's a lot of I think the President and his team actually like this very active agenda. They like the fact that there's stuff to talk about with allies because he's got more demands, they've got, they've got theirs. So I think people, countries are kind of adjusting.
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B
Yeah, coming back for a second bite means us too, not just the other guys.
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D
Yeah, well, and here's the thing though, it's like, you know, with the, you're talking about the BTO meetings or whatever, whenever Trump is going somewhere, there's no question there are people lining up to try and get a side meeting with him, a one on one meeting. And there's been a lot of discussion. I don't know if anything has come out in black and white and say, hey, we've, you know, we'll negotiate a trade deal. Here it is and go through and there's a lot of detail is still so general. But one of the things that you guys had brought up on your last show that I thought was very insightful and you were talking about the sale of the Nvidia chips to China. And I haven't seen any more from this right now. But it's controversial to say is that an advancement or not. You know, Trump has been dealing or playing hardball with China, but now he seems to have kind of backed off a little bit in the hopes of trying to negotiate something. I guess, to be honest, as much as I support some of the things that they're doing, China's played hardball with the entire world. But, you know, I don't know what, where the latest is.
- [18:28]
C
Well, that brings us to that second area or segment that we wanted to talk about was China against the whole world. And Bill, in your shows, you, you very famously put it, they kick the, for somewhere down the road and that's. We're going to catch up to that, Ken, here in April, I believe that's when that meeting that Xi had invited Trump to China, I guess, and continue the conversations. I'm assuming they're going to talk about a bunch of that information that was like you said, kicked it down the road. Right. I mean, everybody's just waiting in anticipation to see how they're going to negotiate that.
- [19:01]
B
I'm betting they'll kick the can again. I think what we've gotten into here is a, is a cycle of provocation by one side or the other. Retaliation, counter retaliation, escalating counter, counter retaliation. And then there's a meeting where everybody agrees, calm down, let's pull back our retaliation. Let's basically negotiate a Ceasefire, which is what Trump did in, at the end of October. And then, so they've not solved any fundamental problems, you know, and they can't solve any fundamental problems because we don't agree on them. So we talk about small things, we.
- [19:35]
A
Pull back the politics, but it's a managed separation.
- [19:38]
B
And then there will be a new, then there will be a.
- [19:40]
A
Look, the way I explain this to people is, look, China and the US are getting a divorce, okay? And they're trying to be decent for the sake of the children. So when daddy and his new girlfriend come over to take some furniture, Mom's away, and they try to manage the tensions. But there's no question that both China and the United States see it in their interest to decouple.
- [20:03]
B
You're not suggesting that Trump, you're not suggesting that Trump has a new girlfriend, are you?
- [20:08]
A
I didn't characterize the parties involved. But you know, at the same time, China is still an export led growth market. They still have a 40% of GDP in domestic consumption versus the 70 that every other big developed country has. And so those exports are not coming to the United States to the, at the volume they were, but they are coming to other markets and those local manufacturers are noticing. If you look at Mexico, Mexico is adopting a Trump tariff strategy for a number of reasons, but among them Chinese imports. And this is going to disturb a lot of world trade that's been focused on America up to this point.
- [20:44]
B
That's a really good point. And that's happening a lot. Mexico, the EU on electric vehicles, Brazil, actually India, South Africa has talked about, I believe, are either talking about or thinking about taking adverse actions against China for exactly the reasons Scott said. So it's not just us. But you're right, there's a lot of redirection going on. I mean, maybe Andy Lalo, you've noticed this and where you are. Trade data came out for October this morning and we have the lowest trade deficit in 17 years. 29.8 billion, I believe it was. And I haven't seen the details, but I think if you look at the details, I will bet you that a lot of that is decline in Chinese imports. But those are going somewhere else and they're going to these other countries. So it's not just us who has this problem anymore, it's everybody who has this problem. And the Chinese are not consumers everywhere.
- [21:38]
A
Gonna find out what a great value many Chinese manufactured goods are. I mean, just if you're, if your, your listeners travel at all, I know ours do take a look at, at Chinese cars, like once a year, twice a year, just their normal vehicles. It is like the sort of the original Toyopets versus a Toyota Corolla from last month. The progress they're making is astonishing in terms of quality and value and they're a force to be reckoned with everywhere. So that's kind of south.
- [22:07]
D
Yeah. Well, I know that South Korea has really been, you know, I guess, raising some concerns over the, the quality improvements that China's been making in the automotive industry and, and whatnot. I will say when it's gearing up for the meeting in April with China, this situation with Venezuela may have changed a whole lot that China definitely wants to have that meeting now, but who knows? I mean, again, there's Bill, what I call what you were talking about, the actions taken. Retaliation, more retaliation. That's saber rattling and it's just like they're constantly going back and then they'll calm down and, you know, it's, you know, the.
- [22:48]
B
We just did something provocative. We have a big arm of sale to Taiwan.
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D
Yeah.
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B
We're kind of waiting to see what the Chinese do about that. So I think the April Xi Trump meeting, which I think will happen, it's not firm yet, but I think it will happen, basically. I think it'll end up with another ceasefire. They're going to undo the things they do to each other between now and then. The Chinese will retaliate against the arms sale. We will then retaliate against whatever the Chinese do. It goes up and, you know, it escalates up. Then we have a big meeting, it escalates back down and then we repeat. It's like, you know, wash, rinse, repeat. And we're just going to see this for a while because we can't solve any of the big problems.
- [23:30]
D
I guess the scenario there is, I think at least in the US market, there's been a concerted effort to find other sources other than China and it's been pretty successful. I think rather than just talking about what the 301 tariffs and all that. I think the big, one of the biggest motivators was the, you know, the anti slavery. What is it? The Forced Labor Prevention Act. Yeah, the Uyghur bill and other countries around the world started ramping up their enforcement of the anti. Or the forced labor prevention and it has made an effect. And now, of course, you know, China's played hardball, like I said. So, yeah, they're, they're exporting to other countries, but I don't think the volumes have been as High as you know, replacing the volumes with the US well.
- [24:22]
A
We'Ve got some of our own difficulties coming up in North America so we'll, we'll the renegotiation of USMCA or whatever they're calling it.
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B
Nice segue, Scott.
- [24:30]
C
Y' all are talking about fights and so there nobody likes more. Nothing more than a family fight. And this is literally a family fight.
- [24:37]
A
Definitely a family feud. Yeah, not quite like US Cuba, but it's close. But what's odd this time is that is usually when these things happen. Canada has managed to be a good partner in all this and seen positively by the US I will tell you, U. S Canada relations are the worst that I've seen them. There's almost hostility between the two and there's concern among Canadian leaders about whether it's going to be turned around and, or if it can be. So it's and would point out that in Sunday's Globe and Mail, which is Canada's Wall Street Journal, basically it's a national newspaper that has a business orientation. It's behind a payroll. But their editorial board wrote about Canada's Venezuelan problem that particularly money laundering and related to drugs by Canadian banks is a genuine concern by the government of Canada and the leadership of Canada. So there's a lot going on beyond just trade flows that we'd all like to see him leave alone.
- [25:38]
C
Unbelievable for our trade compliance people. I guess just to put it in like in perspective, I guess I see it as there's three things that can happen and maybe you guys may think differently but A, nothing's negotiated. Everybody just walks away from the table and they cancel the whole agreement. B, instead of canceling the agreement they just say well we can't come to an agreement and they keep it because it's actually supposed to go on for another 10 years. Right. I mean that's what the agreement was originally drafted for, 16 years. And if nothing has changed changed in the six year negotiation, then it goes for the next 10 years or C I see it which I think is the most viable option is there's going to be two agreements, maybe three actually, which are bilateral agreements. U.S. with Mexico, U.S. with Canada and I'm assuming Mexico and Canada will have their own.
- [26:24]
B
So one of my colleagues here at CSIS in Washington has actually doubled your options, although he's come up with six different alternatives.
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C
Okay.
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B
But there are variations on the theme. I guess the one that would produce immediate disaster would be if one or more parties simply withdraw from the agreement and let it fall apart. The betting in Washington is that's unlikely. I would say partly it's unlikely for political reasons. That would be an enormous economic disruption four months before the election. And I think Trump's advisors will say, even if you want to do that, you know, the summer of an election year is not a good time to do that. Hmm. So I think it's more likely that you're going to see either what you suggested, Lalo, which I, I think is also likely, which is Trump's preference for two bilateral agreements and then presumably a third one between Canada and Mexico. My colleague thinks the more likely option is that they will either renew it with substantial changes to meet the demands of all the parties, or they will go into the 10 year mode. And, and those of you that listeners out there who studied this know that if they can't agree to renew it, what happens is it's still in effect for 10 more years, but the parties have to meet every year to talk about whether they want to change their minds and renew it. So basically you're dooming the thing to 10 more years of negotiation, which would be painful for everybody, I think. But I'm inclined to think that US will press initially anyway for the first option. Here are our demands. And you know Trump, there will be many threats, much drama, lots of threats. I think the main demand is to prevent Mexico from being a backdoor to Chinese imports. And that's an area, I mean, you guys should comment on that. I think that's an area where they might find some common ground with the Mexican government. So I think they have an equivalent interest. And then there's a whole bunch of other issues where we feel mistreated by the Mexicans and the Canadians and they feel the same thing about us. There's a lot to be put on.
- [28:27]
A
The table, mostly for US Business. The last time our rooting interest was for the 90% of the agreement that didn't change versus NAFTA. There are a lot of changes in automotive, a lot of changes in some dispute settlement and labor provisions and those kinds of things. So it was declared, of course, NAFTA was the worst agreement ever since the earth cooled and USMCA was the best ever. We were told so by President Trump. Having said that, the parts of the preference schedules that did not change, that's the most helpful thing you can do is just leave it alone. Companies have adapted. We make things together with Canada and Mexico. We sell them to the world because we make things together among the three countries. They're globally competitive, and that doesn't change and you don't want to let that get away.
- [29:13]
D
To your point though, here's the thing that I think is going to come into play is that there has not really been a strong incentive in the past, even with under nafta. NAFTA started some things and a lot of manufacturing obviously went down to Mexico especially and then Canada and then USMCA came along. You had the 60% North American content, it was up to 75%. But since both countries had zero duty basically or very low duty on any other goods, a lot of companies were like, why should I go through all the extra administrative headache to comply with umca? I see this as there's going to be the USMCA probably staying in place a lot along with a bilateral with each country for the non USMCA goods. So then there's still going to be the incentive if you're going to do USMCA in your manufacturing, make sure you have your content and all but administratively from a compliance, you know, the policy is one thing and the intent is to generate, if you will, our North American family to generate an economic surge here of being able to manufacture things together. But you're going to have to know your content, you're going to have to keep up with that. And it's going to get down to the point, China parts, if you will, of something, it's got to be identified along with any other, you know, where are you getting these things and all that. So it's, it's something that is, you got to be almost like an accountant when it comes to your purchasing and relating that down to the inventory and then your finished products and all that good stuff.
- [30:49]
A
Yeah, the compliance system. I also often wonder why we haven't crashed it completely about three times a month, you know, because I, I do remember the days back when de minimis was a good thing because it saved a crash from the automated Customs Enforcement. The ACE program, which is about to run off the rails. De Minimis kind of gave them the, took the pressure off and allowed them to fix ace. But every time we make these detailed changes and completely complicated rules, we run the risk of running the whole thing off the rails. So you guys are clogs, the system. Yeah, we policy people just say, ooh, that looks like it hurt.
- [31:25]
D
Yeah, when De Minimis came in it, it was able to pull out hundreds of thousands of entries for these low dollar items. Well now all that stuff is right back in. And I still, I think there's a need for de minimis. I think the pendulum effect that went in there. You know, the driver on the de minimis were companies like Sheen and Temu and whatever else. And you know, look, instead of a shotgun approach for everything, because de minimis is actually a good thing for the US Economy, in my opinion, is having that is then draft regulations specific to so people don't abuse that de minimis issue there.
- [32:04]
B
Do you think the pendulum is going to swing back and that might happen?
- [32:06]
D
I hope it does. I, you know, the problem is, and bill you, it's a great question if Congress and I'm talking both the House and the Senate, if they will have and adopt this thing of not just anti Trump or what's the best thing for the country and actually work together, I think we could do some things. The problem is is that you've got such a radical leadership on one side and maybe on the other and then some in the middle. And it's just we're back to potentially not getting anything done again.
- [32:39]
B
The center is kind of disappearing, which is worrisome. There's going to be kind of a test vote next week on something related to this which will be interesting to watch. They're scheduling a vote on renewing the African Growth and Opportunity act and I think the Haitian program as well. It's, you know, they've expired. This is one of those ironic things and, you know, everybody's for renewal, but they can't seem to get their act together and actually do it. There's going to be a vote in the House next week on basically a straight extension without changes short term. I think it's three years, which is longer than the president has asked has asked for. But it's still not what everybody wants. I mean, if you talk to investors, they say we need 15 years minimum to provide some certainty. But the important point for this conversation, I think, is that it does show that there's some stirring of interest in Congress to take some action on trade to reassert its primacy in the trade area and its authority. And it's a small step, you know, redoing it go up. So we begin with baby steps, but maybe it's a sign that they're then going to delve into other areas as well. And I'm sure there will be people coming to the Ways and Means Committee saying while you're at it, you know, you want to take a look at de minimis because you've thrown the baby out with a bathwater and to use an old cliche and you know, there's a lot of good that that did that was harmless. And how, why can't you figure out a way to deal with the bad guys and let the good guys continue to function? I mean, that's difficult, but maybe somebody from Congress will be willing in Congress would be willing to take, take up that challenge.
- [34:14]
D
I would ask because we're going to need to, you know, come to a close here and wrap this up. As you guys are seeing this situation, that policies have been so common one after the other all over the place and negotiations here and there for those of us in the private sector, in these companies and all that. Do you have any suggestions on what people should do to try and influence maybe these House and Senate members to, you know, or even the White House for that matter to say here's some policies that we need or something? I mean, it's, everybody's looking at reacting and I'm like, well, how do you get ahead of this thing?
- [34:51]
A
Well, the first thing for your companies is to develop relations with their constituent members and talk to them regularly about what life is really like when they make a policy change. I personally remember doing this. There's a big debate over immigration regulation and how, whether it should be included in the trade agreement. And all the major associations were up there. And we had members of Congress who didn't understand a word they were saying. And I went into a congressman from Cincinnati and said, look, I had a three year assignment in Canada when I was working for P and G in Cincinnati and I was Mode 4. And he goes, what do you mean? And that was how I explained to him mode 4 was movement of persons and it was one of the categories in services negotiations. And he said, is that all they're talking about? And it was like a breakthrough. And all they had to do was put it in a context where he understood it, which a lot of the associations really don't have the time to do. But the companies know, okay. And if you're, if you're, if you're an operating manager or a government relations manager for a company, know your members and make sure they know what you make, where and what their decisions do to your business. It's the most honest service we can provide.
- [36:05]
B
Put it on everybody's screen. You know, there is an election coming up later this year.
- [36:09]
A
Yep.
- [36:10]
B
A big one in Texas for the Senate. And people need to go to, go to meetings, go to town meetings, if your members are holding them, go to, you know, campaign events and ask questions. Where do you stand on this? Where do you stand on that? And you don't have to mimic a speech, you just ask a question. If you ask, if enough people ask questions about what are you doing about de minimis, you know, the candidate's going to go back to his staff and say, wait a minute, I think I need to know something about that. And they're going to think about it. And then you put it on their screen. It's, you know, it's grassroots can be very effective, but they've got to do the work.
- [36:44]
D
And you don't need to go to a meeting and just try and disrupt it. You need to be asking the question to let them talk and then you make your decision. Sorry, Lalo, I jumped in on.
- [36:52]
C
No, no, that's fine. I was going to say also another suggestion that I have. We had episode in December with the group over ncbfa and they're a big lobby group in Washington. They literally sit with members of Congress and the Senate and their staff, and they're getting ready to propose or push together. They already have a little. They have some bipartisan support and they're trying to find sponsors for something called adapt. I don't know. I'm sure probably y' all haven't heard of it because it's not out there in the public yet. So basically, what that is is helping give you 30 days, at the very least time to adapt, quote, unquote, to any policy that might be announced. So it's not just going off of that tweet or that social post, giving Everybody at least 30 days. If you're going to bypass the idea that Congress is not going to go through the usual measures of putting together a trade policy, then at the very least, give us 30 days. Not just make it from one day to the next or announce it on Friday and it's. And it's. And it's ready to go out on Monday. So something like that, if y' all can support like the NCBFA or groups like that that are putting together ideas or bills like this would be also, I feel very strong and helping the trade community.
- [38:08]
A
Well, hey, thanks for inviting us back on. This was a lot of fun.
- [38:11]
D
You guys are great. I love the discussion. You know, it's. And, man, you're going to forget more than I'm going to get to learn, so.
- [38:19]
B
Well, just remember what Scott said in the beginning. It. If you make a prediction, if you're wrong, nobody remembers, because by the time they discover you're wrong, they've moved on to something else. And if you're right, you can keep reminding them it's all up to you. The other thing that I should say to your listeners, your listeners, you should be very excited. You are listening to the number one and number two international trade podcasts in the country. Which one is number one and which one is number two? Depends on which rating set you look at. But we're both up there. And of course, you know, the dirty little secret is it's a very small pond, but it's more than 2. Anyway, we have a lot of fun with it. It's always good to talk to you guys because you bring us back down to earth and talk about what's happening in the real world and we, we really value that.
- [39:07]
D
Y' all think. Fantastic.
- [39:08]
C
Yes. Thank you so much. And hopefully we can do periodic check ins like this. And thank you and, and wishing you all a great 2026.
- [39:18]
B
You're allowed to say that now.
- [39:20]
C
Yeah, I'm not saying happy. I'm not saying happy New Year. I'm wishing you for the.
- [39:24]
B
Okay, same to you, though.
- [39:25]
C
Yeah, yeah.
- [39:26]
D
Hey, folks, listen, seriously, we really, we appreciate your listenership and if you haven't already done it, look up the trade, guys. Look up simply trade mark that follow or subscribe button, push the like buttons and all that. We greatly appreciate your listenership for both shows because this is one of those where hopefully your feedback will get to the point where we'll talk about whatever you want to talk about. So very good.
- [39:53]
A
Thanks again, guys.
- [39:54]
D
Guys, take care.
- [39:55]
C
Thank you.
- [40:00]
B
You've been listening to the Tray, guys, a CSIS podcast. For more audio content, visit csis.orgpodcasts thanks for tuning in.