Global Trade This Week – Episode 263
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Pete Mento 0:01
You're watching Global Trade this week with Pete Mento and Doug Draper. Hello, everyone, and welcome to Global Trade this week-the most exciting 20 to 40 minutes that you can watch for free on the internet about trade. Might be the only I don't know. I'm Pete Mento, and with me, as as usual, is my co-host and my friend Doug Draper. Doug, how are you, buddy?
Doug Draper 0:28
Good, man. I appreciate appreciate everything, and yeah, it's a 20 to 40 minute show, depending on what we want to talk about. Halftime is usually what draws the thing out, but you know what? It's one of my favorite parts of the show. I enjoy coming up with what the hell are we going to talk about at halftime. So, yeah, it's good. I am in Steamboat in a little cubicle. You can see the sun coming in nice and brightly over here, but we're supposed to get a little snow on Wednesday night, my friend.
Pete Mento 1:02
That feels early, Doug. Is mid October not early? Is that
Doug Draper 1:05
not up? About right. Not up here. It's about right. I mean, nobody's skiing. Nobody's skiing on Thursday. I'll tell you that. But you know, it'll get it'll get wet and cold enough that we'll probably see some flakes in the sky. So everybody's excited.
Pete Mento 1:21
I bet they are. Yeah, I'm in Norfolk, Virginia, for the VMA, and just got here this morning. I was in DC yesterday, so yeah. Every year, I think I'm here every year. I think I speak every year, and I'm seriously considering this, Doug. So I'm I'm honestly considering 2027 being a no-fly year.
Doug Draper 1:43
How is that possible for you?
Pete Mento 1:49
I wish I wish I could tell you how I'm going to pull it off, buddy. But I really think that I'm other than my road shows for Baker Tilly, I may not do any live speaking. If you want me, I'll do it on Zoom, but I I'm never home. I mean, I don't get home until this weekend, and then I immediately leave to go to Nashville and go to Boston, and then that I come back. I mean, it just it just it just never ends, man. I need a break.
Doug Draper 2:17
Yeah. Well, don't burn yourself out. You still got some runway left in your career, my friends. So don't blow those tires on your travel.
Pete Mento 2:29
I'll try not to. Well, I open the show, Doug. So that means you bring us topic number one. Topic number one. For those of you keeping score at home, we each have two topics in a halftime, which Doug likes way too much. But let's go ahead and get after.
Doug Draper 2:42
Awesome. All right. Well, I saw something the other day about two things that caught my attention on this topic. Number one, it's Chinese auto invasion in the EU space. Right. We we may not see it as often, but holy cow, is China cranking out EVs and some of the brands that you and I have never heard of, don't know anything about, are really starting to gain interest. However, the EU just put the brakes on that. They are restricting imports for the EV, so they're doing it to protect, Obviously, VW, BMW, all the other European brands, and so I think the amount that it's like 500,000 EVs they could import in 2027. That is a lot of cars that they will not be importing because I think they were exported. China exported 7 million EVs across the globe, and they're really starting to take a chunk at it. So, anyway, it was interesting. But you know, really, in my opinion, Pete, what's going to happen is, hey, let's just go ahead and set up some manufacturing in In Europe, and let's just build these EVs, quote unquote, domestically, and bring our technology, bring the roadshow to Europe, and I think it's going to happen, and I think it's going to continue to grow. The EV cars that China is kicking out is just unbelievable. BYD is probably the brand that you and I know the best, but it's it's pretty impressive. So EU's putting the brakes on a little bit, but I think that we'll still see a lot of electric vehicles and the technology that China is really really stepping up. So what does that mean for us? Hey, okay, BYD. We don't we don't have that brand here, but Ford, GM, even Tesla, they compete globally. All those cars are not just exclusively sold in the U.S. They're sold internationally, and I think this could really have a negative impact on that. The technology, the battery tech. Technology is is just dominant by the Chinese, and I think that's going to be an impact. And like I said, they're expanding manufacturing worldwide. So the tariffs, the barriers to get into certain markets, I think you're going to see a lot of global manufacturing of Chinese electric vehicles start to emerge in 27 and 28. I don't know. You're not an EV guy. I don't think you have an EV. Is that right?
Pete Mento 5:28
No, no. When I was in Europe with my daughter last December, every single Uber that we took, every single one, each and every one, was a Chinese EV. Every single one of them, and they looked shockingly like another car I had seen before, like this one looked a lot like a Camry. Hmm, this one looks a whole lot like a Trailblazer. Hmm, you know, like they they all sort of looked like another car, but they were easy. They were nice. They were comfortable. I talked to most of the drivers, which I don't normally do, about how they felt about them. They loved them. They felt that they were great value for the money, you know that whole agreement that you're you're you're referring to, that came out on the ninth. People need to read that, Doug. They need to read what else is in there about about high powered magnets, about rare earth materials. You know there was a lot that was in there, and also this idea of of lowering most favored nation status tariffs for China, which would actually give them a boost up against the United States. It's an interesting little announcement that came out. I remember, you remember too, when we were kids, little company called Datsun.
Doug Draper 6:34
Yep,
Pete Mento 6:35
came Nissan, Honda, which is now sort of gone from just being Honda to to also you know Acura, Toyota, which is now also Lexus. They've got their their feet in that market, and then I also remember in high school and then in the in the 90s, Korean cars. They were they were coming here. They didn't have necessarily the best reputation now, but they're everywhere and wonderful and with excellent track records for service, I think China is hoping to kind of speed up. Right, they want to make it go faster than it did for the Japanese and the Koreans, and they're doing that with these relatively energy efficient automobiles. That if you see the ones in China, there are some pretty amazing things that they can do. Pretty awesome cars, ones that have lay down beds in the back of the in the back of the minivan, you know, pop up campers like the old Volkswagens. They are they are taking risks and they're paying off for not just that market but markets around the world. It's a wake up call. It's a wake up call to Europe and the United States, Doug. We have to start getting better. We have to we have to raise up our game. And if EVs really are the future, a part of that is designing EVs that people want to buy.
Doug Draper 7:46
Yeah, it's interesting. I think you know the EV technology and the rare earths and and the battery technology. China has been very forth forthright on those are two industries they want to dominate, and they're well on the way.
Pete Mento 8:01
And they have, yeah, yeah. I mean, let's. I I look at these cars, Doug, and I have a hard time believing that we'll be able to keep up. And that's that's that's a very hard thing for a patriot to say. But I think it's going to be hard for the United States to continue to be dominant in the automotive market unless something really dramatically changes.
Doug Draper 8:18
Yeah, yeah. Well, more to come on that one for sure. All right, brother, what you got on your topic, numero uno?
Pete Mento 8:26
We've talked a little bit about this advanced information play that customs is doing, where they want more information. They want export declarations. They want the classification that was used by the exporter time of export. They want value. They want actual you know commission value that's being used for export purposes. They want all of this for a couple of reasons. One, child labor, forced labor. They want to make sure that stuff isn't being circumvented to get away from the tariffs. I get all that. They also want it because it's a non-tariff barrier to entry, a non-tariff barrier to entry. Last week, the United States told Canada, "Any potatoes that come into this country from now on must be completely free of all dirt. There can be no dirt on it. Your Canadian dirt is not welcome here. It's a danger to ecology. Come on, man. When's the last time you went to a grocery store and there wasn't some dirt on your potatoes? Right. So this is another way of trying to make people think twice about importing. I don't know how effective it's going to be, but the part I wanted to talk about today, Doug, is there's an open comment period, and I feel like mr. Hand in fast times. Like, are you all on dope? Why aren't you paying attention? Why aren't you doing something? Like, you you need to get with everyone and put all the comments in there because if we don't, the government's going to think that the trade's not going to be freaked out by this. Imagine calling your foreign supplier and saying, "Hey, yeah, I know you're just a distributor of these auto parts. I need your original invoice from the person you bought it from. Pound sand, no, ain't happening. So I think it it's so important to the American import community to. Speak out right now. Raise your voice. Let people hear how crazy this is before the government makes a decision that we're all just going to have to learn to deal with.
Doug Draper 10:07
Yeah. Well, three comments on that. One: Does CBP actually need more information and more data, or they just they already have it and they just need to use it better.
Pete Mento 10:23
The more data, the better, Doug. You'll never hear a law enforcement agency saying, "I don't want more data. They will be more effective in their mission if they have more data. Absolutely.
Doug Draper 10:31
Okay. Perfect. The next thing that comes to mind is this really adding more security or just more paperwork?
Pete Mento 10:41
That's a hard one to answer. I I think it will allow them to enforce better. My fear is that the paperwork will not materialize. That people are going to have entries come in, and they just can't get the documentation. And when that happens, they won't be able to make entry of the goods.
Doug Draper 10:58
Yeah, yeah, yeah. That was, and to your point, when you said pound sand, what is realistic? What is the information, the documentation, the data that's realistic to get from suppliers? Right, they don't play by the U.S. rules. Hey, man, I made this thing, and this is the best I got as far as documentation. You want to buy it or not? And I think that how realistic it is the information. To your point, when they have open comments, people really need to bring that up. But that's one thing. The main thing that caught is like, okay, are the vendors going to provide this? Is it going to be like, what are you talking about? This is like egregious. So I think that's going to be problematic if things go the direction that you're saying.
Pete Mento 11:40
Yeah, I don't disagree, Doug.
Doug Draper 11:42
Yeah. All right. Halftime. We're here. Brought to us by Cap Logistics. Every single week, we talk about how much we appreciate them. This show would not exist. Our conversations would not happen if it wasn't for Cap. So, thank you, Cap Logistics. All right, Pete. Rip it, buddy. I'll let you go first, so Doug.
Pete Mento 12:02
I have found myself on no less than five occasions in the past three or four months where I have seen something on social media and decided to buy it. I and that is that is not normal. Part of me was doing this as a thought experiment, right? Would I be happy with the goods that I got back? Would I feel like I was ripped off? Did I get what I actually ordered? And I gotta tell you, Doug, I haven't been let down. I um, I have a a nicotine pouch addiction, like many Americans my age, and I bought myself a nice little leather pouch to put those in. The one that I had been using-I don't know what happened to it-but I bought a new one. It's it's wonderful. Came exactly as I had hoped that it would. I bought myself a number of very nice t-shirts, sort of dressy t-shirts, if you will, that I've been very happy with. I bought things, right? They've suckered me into it, Doug. The ads have worked on me, and I was always very much a no. These ads will never work on me. Skip, skip, skip, whatever. But I found myself doing it, Doug. So my question to you is: Can you think of anything that you've bought through social media, and how happy were you with the transaction?
Doug Draper 13:17
No, I've not purchased anything from social media, but I literally had my finger on the mouse, proverbial mouse, to click. My scrolling vice is Reddit, right? I love just scrolling through Reddit, and there's this person on there, this Asian guy, that shows a picture of the his little his little thing is there's a an ad that he's looking at and then he cuts to it and he throws up his credit card and he's like I gotta have this and he slams the credit card down and then the package appears right obviously he ordered it and the two things that caught my attention one is this light that you can like clip on, and it it shows like the universe up on your ceiling. And the second one is some shower head that increases the water pressure. And so this guy gets in the shower and he's trying it on. He's fully dressed, turn you know, screwing the head on, and compares the video to what he's experiencing, and both of them are thumbs up. He basically says both of those purchases are are awesome. I'm just a little afraid if I hit if I hit the purchase button, where where where does my data go? Right, you can't pay cash for that. You can't you can't hide from the man. You're paying with a credit card, so part of me is still reluctant as an old guy. I don't know if I want to buy this on on a Reddit ad, so I have not. To answer your question specifically, I have not, but I've been pretty tempted. And whoever this guy is on Reddit is crushing it because I'm almost there to buy it.
Pete Mento 14:57
So imagine the people that. As strong-willed as you, there's probably a lot of folks that have bought it at this point.
Doug Draper 15:03
Yeah, yeah, yeah. All right, okay, man. This thing popped up the other day. It was not on Reddit, but I saw it in 10. So I'm going to list 10 things, right? I'll be quick. Maybe I'll just do seven or eight of them. But things that we've lost along the way, right? It's things that you and I experienced when we were growing up that really aren't aren't there anymore, right? So I'm going to go through these, and then I just got a question at the end here, right? So we've spoken about this one: driver's license at 16. You and I manned 12:01. When I turned 16, I was driving something, right? And in this day and age, it's not. It doesn't to me appear to be that big of a priority with kids like, hey, I can get around in other ways, and getting that driver's license and freedom at 16 doesn't seem to be as
Pete Mento 15:53
important.
Doug Draper 15:54
As important, the daily newspaper, right? Maybe people still get the New York Times or the Sunday edition of whatever, but there's no daily newspaper anymore. In Denver, there were two papers. It was the Denver Post, which was I think a morning paper, and the Rocky Mountain News was an afternoon paper. So can you imagine two news crews, two two full-on things that would have two papers a day? Broadcast TV, you you and I both know at 12 midnight they would just sign off and you would they play the I think the national anthem and then it would just go to to static right here's one Black Friday madness you remember how crazy it was Cabbage Patch Kids and all the big box retailers would open up at like 11 p.m. and it would just be an absolute shit show. That doesn't exist. Oh, you'll appreciate this one, Pete. Midnight movie premieres, right? Not the Rocky Horror Picture Show, but big blockbusters would roll out at at midnight, and there'd be people in costume and and everything. Neighborhood block parties, where you would basically rally the troops and your neighbors. You'd block the street off, and you would take over, and the kids would be running around, and dads would get drunk and and everything else. But nobody does block parties anymore. Even up here, I've not seen any block parties up in the small town of Steamboat. And Sunday night dinners, right, or some meal on Sunday, whether it's after church for fried chicken midday or having a nice family meal where you sit with tablecloth and placemat and have a nice nice meal. So those are a couple things that caught my attention. So Pete of the tradition. So here's the two questions, right? Of those traditions, or another one I didn't speak about. Which one would you bring back immediately? Hey, we got to get this this tradition that we've lost back front and center. Which one would it be? If I didn't talk about it, and you get a different one, let me know.
Pete Mento 18:07
Sunday dinners definitely. It's funny I was writing these down things that we just don't have around anymore, and a lot of it's because of phones. A lot of them are so tokens, bus tokens, subway tokens, tokens for the car wash, tokens for whatever. We just don't do that anymore. You know, you have your phone to pay for almost everything. The newspapers, I really do miss the newspaper, Doug. Reading the morning paper for me was-it was almost as much of a ritual as it was a way to get the news. It was a-it was a part of my day that slowed down. I would drink my coffee. I would drink my papers, and we had two in Boston, and now I just read digital editions. It's just not the same. Taxi cabs in New York. There's still plenty of them, you know. But it was part of everyday life when you were in the city hailing a cab and getting somewhere, making sure. Another part of that is cash, you know, cash. I always have cash on me, but it was one of those things where better get to the bank before five, or hopefully you know where an ATM is because you need to have your cash on you. Don't have cash, you got a problem. Movie trailers. Movie trailers used to be really cool to me. I would go to the movies and see the trailers. Now I just go on YouTube and they're out like two years before the movie comes out. It's preposterous. Frequent buying cards. Remember, like you'd go to the coffee place and they'd punch your card, and then like the 10th one was free. Yeah, yeah, we don't have any of that crap anymore. Fireworks, fireworks. You know, playing around with dangerous toys, I guess. And the last one, privacy. Oh, privacy, actual, legitimate feelings that you could have a life that other people were not engaged in. I, I have a friend in New Orleans who I know is on TikTok, Instagram, Facebook, Twitter, on everything, in every single event that happens in their life. Look at me! Look at me! Look at me! And it's got to be out there. You know, I'm not on most. To that crap anymore because I don't want to know about people's lives. I'm perfectly fine not being engaged in every little detail of their horseshit life, and I certainly don't want to know about their opinions. Life was a lot better when we held our opinions about most things privately, or at least most people did.
Doug Draper 20:15
Wow. Okay. Well, I like all of those. Yeah. Did you know that McDonald's is doing Monopoly right now.
Pete Mento 20:22
Yeah. Oh, hey man, we got to. I wish I could eat McDonald's. I I loved that when I was a kid. Have you watched that documentary, Doug?
Doug Draper 20:30
Yeah. Yeah. That that thing where it was a whole scam or somebody's cousin they rigged it. They could make some money.
Pete Mento 20:36
It was. It was so simple. I'm not going to ruin it for anybody, but when they finally figured out how they did it in the end. It was like, oh my god, it's so obvious. How did you not figure that out? It's so obvious.
Doug Draper 20:46
Yeah,
Pete Mento 20:47
yeah.
Doug Draper 20:48
But it's all digital. I give me a give me a game piece. I want to peel something off of a coke.
Pete Mento 20:54
Yeah,
Doug Draper 20:54
and stick it on my my thing. I don't. I was like, I don't care. You know, this is the grumpy old man commenting. Like, I don't care about it. I'm not going to log and get a password and all that crap. Just give me a give me a plain board so I can get it dialed in.
Pete Mento 21:10
Privacy, buddy, like you said.
Doug Draper 21:12
Yeah, good deal. All right. Well, that was halftime. Cap logistics. Namaste, my friends. Appreciate you doing this week in and week out. My second topic, Pete. This one's kind of close, but it's a little bit kind of like same. My whole thing's about same day deliveries, right? You got Walter Goggins on Walmart talking to a hamster about something it needs, and oh my gosh, they can get it in two hours. I'm not sure if anybody really asked for this. Are we really buying? Are we buying convenience, or are we being sold and told we have a problem that never really existed? Right? Maybe like bottled water back in the day. Right? Like what happened to just drinking out of a tap or a or a hose outside in the middle of summer, so is it manufactured demand? Did consumers ask for it? But I tell you what, Walmart, Amazon, Target-they're they're going gangbusters, and the big play is the whole, in my opinion, the whole the gig drivers, right? Where you can log in and grab a grab a delivery route here, grab a delivery route there. That's becoming more and more popular. My company is partnering with a company that does gig driving services for a sort that we're doing. But yeah, I think the emergence of gig drivers and the concept of the Ubers to go grab something is good. But the big boxes have monopoly on this because they basically have micro fulfillment centers all over the country, specifically Target and and and Walmart. So I don't know. It's not free, right? So you want to buy a stick of deodorant and have it delivered in two hours because you're going on a date in two and a half hours. I don't know. I guess that's your prerogative to do that, but you know it's not it's not free. So I don't know. I don't think people are asking for this. Maybe I'm naive and think that they are, but they're sure marketing the heck out of it. And Walter Goggins is doing one hell of a good job of you know hyping it up on Walmart, so I I don't know. Do we really need toilet paper delivered in two hour window? Maybe in some instances, but for the most part, just get prepared, and you won't have that problem. I don't know. What's your take on same day deliveries and two hour delivery windows?
Pete Mento 23:35
Well, you talked a little bit about it earlier, right? People are they're not driving, so maybe that's part of it, you know. Living in a city, it's not fun having to pull my car out of my parking space, open my gate, drive somewhere, deal with traffic, deal with tourists in the French Quarter, bring everything back. So I can understand the pure convenience of it, and it is nice to have a whole pile of groceries delivered all at once, I can dig that too, but it is significantly more expensive. So you know, I have a Sunday ritual. I get up, I try to go to church, I go to the grocery store, I buy everything I want for the week, and then it usually sits there and goes bad because I travel and I don't get to it. But whatever, I don't know if anyone needs. If you need something that badly, go and get it. But if it's difficult to get to, I can understand that, but we are creating a bit of a society right now where everything you want is brought to you, everything you could possibly dream, all your hopes and wishes, Doug, they're all brought to you. So why would you ever want to bother to put yourself in a car and go take care of something, right? Oh, oh, how silly! I think the kids love it, bud. I hate to call on the kids again, but I think the kids love it, and I think the kids are what are driving this. And their stupid parents that are paying for it aren't making it any easier.
Doug Draper 24:50
Yeah, yeah. Just get a credit card. I've known a couple of when my kids were in college, like they would order everything, like literally the. Over to my dorm room, and it's just a piece of plastic they pay with, and they have no idea that they just spent $35 on a Big Mac that they could have picked up for for six bucks, right? Anyway, yeah,
Pete Mento 25:13
get in your car, go for a ride, turn up the radio, listen to some punk music. You'll feel better.
Doug Draper 25:17
Yeah, yeah, that's not 100% global trade, and that's teetering on a on a halftime rant. But I just I don't see a lot of people asking for it. But we're sure being sold on the fact that we need it. So I don't know. All right, I don't think it very
Pete Mento 25:33
much has to do with global trade because it pushes demand.
Doug Draper 25:37
Yeah, I guess you're right there. So all right, bring us home with your final topic.
Pete Mento 25:42
The Court of International Trade has theoretically made it easier to go after liquidated entries that you paid your IEPA on through the use of a class action, and it's been suggested, hasn't been enacted yet, but it's it's a wonderful day to be a trade attorney if that's the case, and a good day to be an importer to finally get this money back. We've been watching this drag its feet for a very long time. But the idea of creating a class action suit, I believe, is going to make that money even more accessible, regardless of if you have to pay the fees to an attorney. I applaud the court. I think it's wonderful. But until it's written down, until we have actual processes, we're still using Cape Phase Three. Better hope you're in that early early bucket, but there are ways to still use it. I think it's imperative that people join the case if they have significant money outstanding and get that cash back. And if you need help with that, give me a call. I know where to go.
Doug Draper 26:32
Gosh, the government really makes it easy for them to collect taxes, but really difficult to
Pete Mento 26:39
give them back. Give any
Doug Draper 26:40
of that money back, right? To your point, you know. Hey, if you want your money back, you got to pay me because I'm a lawyer to help you navigate navigate the seas to get it done. I don't know. I mean, great, it's a class action, and and people can jump on board. But, gosh, the whole process. Big companies that have 10s of millions or billions of dollars of of duty coming back to them, 100% absolutely. But there is a significant amount of companies out there that are small to medium sized, where the CEO or the logistics guy of this or the director of finance for that has too much shit to worry about, right? You know, like let's just look at what's the cost. Is the juice worth the squeeze to drop 15, 20k to get my money back? And at this point, there's a lot, in my opinion, and and being in a smaller town and knowing a few people that do some importing here, they're just like, I'm done. I'm just that that that's in my rearview mirror. I need to focus on my business right here, right now. How do I grow my brand? How do I generate more revenue? And I don't have time or the money to go chase $6,000 that happened to me 18 months ago. So the big guys that can afford all of that, I think it's good. But the vast majority of the importers in this country are small, medium-sized guys that are just going to say, forget it. I don't have time to deal with it.
Speaker 1 28:04
Yeah.
Pete Mento 28:05
No, you're right. And I have that conversation twice a day. I mean, it's $100,000, Pete. We're just going to let it go. Oh, okay. Well, I wish I was in a position to make claims like that, but you know, it's up to you. It's your money.
Doug Draper 28:16
Yeah. So the question I have is truly that wasn't that wasn't an example. That stuff is happening to you on a regular basis,
Pete Mento 28:24
every day, every day. Yeah, crazy. Take care, buddy.
Doug Draper 28:30
Yeah. Well, that's it. That's it. We're you know you said 20 to 40 minutes. We're at 28 minutes and 30 seconds. So I think we hit it right in the middle. I'd call that a bullseye, my friend. And I'd like to thank everybody for listening to the show every single week. We'll be around next week. We'll figure out what we're going to talk about. But here's the thing: if it's happening in global trade, Pete, you and I are going to be talking about it on global trade this week. So thanks for making the time. I think your hotel room looks great. Looks nice and safe back there with the with whatever that is on the wall, so good on you, my friend.
Pete Mento 29:03
Thanks, buddy. We'll talk again soon.
Doug Draper 29:05
Okay. See you. See you.