Global Trade This Week – Episode 188
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Doug Draper 0:09
Doug, hello, everyone. Hello. Welcome to another edition of global trade this week. My name is Doug Draper. I am one of your hosts for this show, but my other host is on another part of the country. Mr. Pete. Mento Pete, where does this podcast find you? I am
Pete Mento 0:26
currently outside of beautiful Charlotte airport. I'm going to be putting on a suit pretty soon and heading to give a speech tomorrow. I'll be in LA Tuesday and Wednesday, Thursday, I'll be at JFK and Friday, back to Charlotte for another speech. So it's one of those weeks, buddy,
Doug Draper 0:45
yeah, well, I'll tell you what. I travel a little. You travel a hell of a lot, and so the fact that we get this thing done every single week is a kudos to you, and the commitment to the show
Pete Mento 0:57
Doug, this time is sacred, buddy, it's my time I get to spend with you, so I do whatever I can to make it work, though, right?
Doug Draper 1:03
Why? Speaking of making it work, let's just get this party started. You just roll. Sounds good to me. First topic, yep.
Pete Mento 1:10
So my first topic is ultra nerdy. We have the USTR report on on trade that just came out. Now it's not the big report we're waiting for in April 2. I need to make that clear. We're waiting on a much bigger report here in a couple days, but it does explain American trade policy. It does a very good job of explaining what it is we're trying to do, which is where possible bring back manufacturing to America. Do a better job of picking more politically aligned partners. Make sure that very strategic industry is here, like steel, aluminum, you know, and also where we plan on focusing for the next couple of years about our import process, which we'll be talking about in a little bit, right where we're looking for other places. And another thing it does is it, it gets into sort of the why of all these tariffs. I've mentioned it on LinkedIn. We all know what the tariffs are right now. We're pretty sure what types would be put in place. But why are we doing it? What's the collective hope that we have here? And I think that we're going to find that this April 2 report reflects much of what's in this one. So I'm telling all of our listeners and all of our watchers to go and check that out. I think you're going to find there's a lot of insight there for you.
Doug Draper 2:21
Great. Yeah. And it's posted now. How would they find it? So my
Pete Mento 2:24
LinkedIn page, so it's my last post. Or you can go to the USTR website and you can read it there. It really shows this dramatic shift away from China to other places of of lower cost manufacturing, except for certain industries that they want to see here in the US. And I think regardless of who our president is, we're probably going to see sort of a new focus on making sure that we can provide for ourselves certain industries so we don't find ourselves in a COVID situation like we had last time.
Doug Draper 2:53
Yeah, well, I'm sure that's a good nerd. I mean, interesting read. So thanks for sharing. Oh no,
Pete Mento 2:58
you were right. You were right. It is super nerdy, man, like it's, you got to be a real tight in the world weirdo to want to read this thing.
Doug Draper 3:06
Yeah. Well, my first topic, I got hit with some click bait over the weekend, right? And it was talking about mega cities and the whole nine yards. So I went in there, and the one, the one city they spoke about, and this isn't kind of global trade. Ish, global trade adjacent, right? But I didn't really know what was going on with Lagos, Nigeria, right? So they are saying, by 2080 there's going to be 10 billion people in the world, and Lagos could have 100 million people living in the in the city. So today, I didn't even know this, 20 million people. And tell me what other country this sounds like? 6% annual growth, high birth rate, rural Migration, right? India, China. Yeah, India, China, that just disrupted. And the financial and tech industry is kind of the epicenter in Lagos and entertainment. Apparently, it's called nollie wood, N, O, L, L, Y, and there's this place you got to check it out. It's called banana island, which is kind of the Beverly Beverly Hills equivalent here. But the thing that, if there's anything you know, history will teach us a lot. And one of the things that they mentioned in this article, which I think are going to be more impactful than we may realize, is infrastructure and urban planning. If you go and look at, you know, some of the pictures they show of the craziness in this town, about how congested it is, and if you have more and more and more people coming to this this area, which I think is great, right? They just need to make sure they got their act together. And there's a pretty robust port there, right? It's called the there's a couple different names, but the Lagos port complex fourth largest in in Africa, and you ask who owns it? So. 75% of it is owned by two entities. One's called China harbor Engineering Corporation, and another group out of Singapore tolarom, and then Africa only owns 25% of it. So you got this, my point, when this one Pete, you got this bustling city that's next to a port that is just going to have mass migration into it. And one of the gateways, the fourth largest port in the continent, is controlled by China. So it'll be interesting to see this. And as you said before, India emerging markets, and it'll be interesting to see what transpires over there.
Pete Mento 5:40
Yeah, you brought some great points on this. So I've been to Nigeria many times. And first of all, man, like, it's a social thing there, if your phone rings in the middle of a business conversation, you just answer it. So imagine you're out. You're out, like, having lunch with a customer. They don't even say, excuse me, they just pick up the phone and answer it like it's a it's a social thing there, like it's just part of their that's not seen as rude at all. That person on the phone is important, not any more or less important you. It's just something you have to get used to. As far as the port goes, part of the Belt and Road Initiative, the Chinese made a massive investment for all the reasons you just mentioned. They see that area growing dramatically. They want to get on the ground floor and be engaged and, yeah, birth rates, right? So you've got mostly Central and South America. India and Africa are the places where we're continuing to see those growth rates. And energy dude, Nigeria is a massive exporter of crude, and a lot of that's going to China, a lot of the Indian subcontinent. That place is really poised for growth, one of the few places I've ever been in my life, where I was very nervous just about every minute of it, very concerned for my own safety, the lovely people, the ones that I've worked with, and you've got to, if you're in oil and gas, you're going to end up in Nigeria at some point.
Doug Draper 6:54
Interesting. Yeah, that in India. Wants to see how that transpires, because they are primed and ready. Brings us to halftime. Pete, we're ramping through this show KB with CAP logistics. Keenan has a kind of a tight cut, so we're just running through this one. But anyway, halftime is brought to us by CAP logistics. We appreciate all their help and support and the platform. So Pete, with that, what you got going on for halftime? Well,
Pete Mento 7:23
it is St Patrick's Day week in in Boston, where I spent most of my formative years and a lot of my life in New England. It's a pretty big deal. So it's, it's a pretty big deal for a couple of reasons. One, I think many folks forget about, you know, immigration in the past, it wasn't easy being Irish in Boston when they first came to America, just as it wasn't being easy being Italian or polish for that matter, or Greek or French Canadian. And these days are remembrance days of how far they've come and celebrating their heritage. But in Boston, it's also an absolutely sloppy drunken mess. And first of all, I've never had a drink on St Patrick's Day. I don't drink during Lent and I haven't for all my adult life. So I've never actually been able to go out in Boston and enjoy it like everyone else, or maybe not enjoy it. But two things, first of all, the the number of videos and pictures of people being arrested with these things called Borg. Have you? Have you heard of this? A Borg before Doug? No, it's a big college thing. Apparently, it's bring your own gallon. So they take a gallon of water, and rather than drinking the first liter, which would be smart, they pour out just enough space to fill the rest of it up with an entire bottle of vodka. And then they use these, these water drink drops, you know, that flavor, flavor water, to color it in whatever color they want, and give it this, this flavor on top of the water in the vodka. And they drink that throughout the day. So there's all these pictures in Boston of 1000s, not hundreds, 1000s, of these things that the police took away. They're pretty cool about it. Like, listen, you can't have an open container. We know it's full, like, or just give it to us. And so you just see these colorful rainbows of all these boards on the side of the street they took from these college kids. Boston's a really good college town. And really, my second thing, Doug, is, are you a celebrator at all of St Patrick's Day. And maybe in your youth, were you a big celebrator of St Patrick's Day? Yeah,
Doug Draper 9:26
I would say the answer to that is, in my youth, I did a pretty good job of ripping it up and generally being from Kansas and going to University of Kansas, and basketball is king. It always fell right around the tournament on some days, like, oh, well, yeah, on the opening round. So it was pretty hardcore. Yeah, not anymore. It's hard to wake up the next day and function like a professional, so back in the day, yes, today, not so much. You know, maybe you'll get
Pete Mento 9:58
the corn beef and cabbage at. The early bird dinner at Denny's with me. You know something like that? Yeah, for sure. All right, Doug, what's your halftime, buddy? My
Doug Draper 10:06
halftime is all about Disney, right? I saw that this this season, right? I know the seasons right. Now you got spring breaks happening, and then all of a sudden, vacations, and it's going to be summer, and all of us remember standing in lines, families fighting with their kids just gooey, syrupy drinks while they're waiting in line, everybody's screaming at each other, which is just makes it the happiest place on earth. But I heard that over 13 rides, which is like 25% all the rides at Disney World are closed and they're being refurbished. So the big thing is, like you're going to Disney and your kids want to do what's it called? Thunder Mountain? Nope, closed till 2026 Tom Sawyer. Tom Sawyer Island. I remember that you could take a boat over Serato, Liberty Square. River boat closed, and so the weird thing is, they're renovating and fixing all of these. They're not releasing new rides. And to juxtapose that, Universal Studios is continually coming out with new new new so the rumor on the street peaked is, are they going to reduce the prices to get into that part, because 25% of all the rides are closed, right? It just seems Disney, I don't know anything about Disney, right, but they are a very successful organization. It seems to me that the leadership over there would realize that's probably not a good thing to do, but I don't know the nuances behind it. So have you ever been a big Disney guy? Well,
Pete Mento 11:43
this is timely Doug, because I was in Orlando last week, and I was there for icpa, which you just merciless, mercilessly mocked. Then I will have you know that i i probably spoke to no less than a couple 100 people who say that they watch the show every week. So I'm waiting for you to get the smoke for that, but the, you know, the theme parks there, that's why we have it every other year at Disney World. And my my daughter, came down for a spring break, so she stayed with me while I was at the conference. I did not go, I do not go anymore to Disney World, because just for me, it's not my idea of fun Doug. It's, you know, manufactured fun. It doesn't really work for me, but she went to the park every day, not just not right. She didn't go two days out of the week, but she went every single day. And I can tell you, they haven't dropped the price of those damn tickets. My God, were they expensive. And then on top of that, she caught me into getting her these lightning passes that allowed her for three rides at a time to kind of pick where she wanted to be when, and then she had a much more expedited line. But for she went to Epcot. She went to Hollywood Studios. She did animal kingdom, magic, magic kingdom, on average, she did about six rides, which apparently is really good, but she did say that a number of them were closed, but they weren't necessarily right. She was looking forward to going on, but that place was packed to the elbows every single day that I dropped her off and picked her up. It there was, there was no shortage of folks. You know, we raise our kids in a world now that's full of the Disney characters. And it's not just Disney. It's Marvel, it's Star Wars, right? So you have all these young people that want to go. I took my daughter for her fifth birthday, fourth birthday, a long time ago, and I will never subject myself to that ever again. But there are people where their entire year is based on their week at Disney, saving money up for it, making sure they can go hog wild. Those guys are printing money in those parks. Men. Topic number two for me is, I suppose, a little less nerdy, I guess. You know, I started off by boring everyone regarding the international trade report that came out that no one but me apparently cares about. But you know, we've been talking a lot. You brought this up twice now, Doug, will the increased tariffs find some way to reduce trade volume into the US? And if you begin to look at the statistics, there does appear to be a bit of a dip. And you know whether that dip is long term or short term, I guess we're going to find out. But will all these tariffs make Americans think about buying more locally, using more NAFTA supply products for their manufacturing. Will this have a major impact on Chinese imports, Vietnamese and Cambodian? I lead on saying no, I think that we're still going to see these increased volumes year after year, because I believe we're going to come to some sort of an agreement or accord with China. I'm a little less concerned, but I don't know. Doug, how are you? How are you seeing the statistics out there about volumes these days, for me, I guess there's been a dip, but from our business, I sure as hell haven't seen it.
Doug Draper 14:48
Yeah, from a well, from the warehousing perspective, you know, everybody was just get the product in here as soon as we possibly can, because of the uncertainty, right? And you multiple times, and we've talked about this on the show, right? How? I think it's more costly to patients, but if you get stuff on the on the water, and you got to get it in here, let's go. So the warehousing business has seen a spike. But even though it's been so chaotic, you got to remember it's been like two months, that's it, since the new administration popped in. And so it's been quite a roller coaster. So the long term effects kind of would be a little little premature to see anything. So to answer your question, Pete saw a blip in the warehousing piece because of what I just spoke about, but it's too hard to say. Is that going to be ongoing like it was during the pandemic, or is it a blip? Last comment on this one, Pete, and I've used it as an analogy before, when gas prices go above four bucks or whatever, people put gas in their car and like, God, bleep, this gas is freaking expensive. And then they fill their tank, and they pay the money, and they fill about their day, yeah, yeah. And then, so, you know, if a pair of shoes caught, you know, a pair of Nikes or some, you know, you're kind of a shoe guy, I'm not so much, but, you know, so would shoes cost 10 more dollars? Are people not going to buy them? No, they're going to buy them, right? So I think the short term, we'll see what happens, and I agree with you, and I think there'll be some resolution and some agreement on some of this. So it's not sustainable. Yeah,
Pete Mento 16:15
I don't see ocean traffic being cut in half or anything crazy like that. I think it's unrealistic for us to depend on that. Alright, Doug, bring us home, bud,
Doug Draper 16:24
alright, man. So this one is related to nuclear power, right? And we've talked about that a little bit for it's kind of a resurgence going on there, right? But I don't know if you read Amazon, Google, meta, they've all pledged and supported to tripling nuclear power by 2050 and it's all basically about power demands and artificial intelligence. And, you know, we've talked about just how much power and energy this technology drives, and so, yeah, it's interesting that the big three have have made that commitment. The unique thing, as I said in the article that I was perusing, it said electro electric companies didn't really engage because they were so high they were focused on large scope projects. And let's get this reactor back online. And that definitely is still happening. But I think what we're going to see on this one is that you're going to have all these little, smaller medium, whatever that is, and related to nuclear power facilities. But I think these three are gonna partner up. I think they're gonna develop, they're gonna lobby for regulatory compliance to be reduced, and you're gonna see like these mini nuclear power plants right adjacent to a data center that's going to be kind of a self contained, vertical type of situation where they're going to generate, create their own power, to run their own data centers and allow AI to continue to do what it's supposed to do. But it is a pledge. It's not there's nothing there tangible. It's a pledge. But all three of them have come together to pledge this, this change in power generation. So do you hear about it at all?
Pete Mento 18:08
Oh, yeah, yeah, it's a major topic of conversation with all this infrastructure. And I, I'm a big fan of nuclear power. I've made no art, you know, I haven't hidden that from anyone. You go on a Navy ship, and you see a bunch of kids straight out of high school working on operating nuclear power. I mean that there it's, it's, it's made me believe in its safety. It's made me believe in its efficacy. I agree with you the amount of energy that we need for the next leap of our economy. It's gonna have to come from somewhere. And right now we're just not ready to walk away from from nuclear, I think more importantly, want to double down on it, because as we use more and more renewable energy, hopefully petroleum will go down. I think it's ever going to go completely down, but this is a scientifically based, brilliant way to manage it, and it can be done safely. We just have to take that opinion and take that attitude and realize it's for the better good of our economy going forward. So Doug, I'm I'm a big fan of nuclear power. I'm a big believer that it's where the next expansion of our economy comes from. I just think the cost of doing it is the part that's so prohibitive. It's cost a lot of money to set up these types of facilities. But when you have companies like that behind it and their their political power, I think you're going to see a movement here. Yeah,
Doug Draper 19:21
that's it. You nailed it. That last sentence, you nailed it. Yeah. So
Pete Mento 19:25
that's going to do it for us this week on global trade this week, we have been keeping it under 30 minutes the last couple of weeks. I did see someone comment on the video they want longer shows, you know, oh, really, yeah. Call me and Doug up. We'll talk to you for hours about this crap. But it's, it's it's always a pleasure having having this opportunity to speak with you. Thanks to Keenan back in the booth and our good friends of CAP logistics that have continued to support us and we, we always say, if it's happening in global trade, you'll hear about it a global trade this week. We'll see you all next week, and thanks for tuning in. Take care. All right, my friend. Thanks. Bucha.
Transcribed by https://otter.ai