Global Trade This Week – Episode 186
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Keenan Brugh 0:00
You're watching global trade this week with Pete Mento and Doug Draper.
Doug Draper 0:08
Hello everybody. This is global trade this week. My name is Doug Draper and Pete my co host, Mr. Pete mento, we're both in California. It's 6am and global trade does not stop. That's why we're here today. This is going to be a super quick show. We both have responsibilities with trade shows that we're at, and we'll kind of go from there I am at Food Shippers of America in Palm Springs. Bob Costello, who some of you may know, is the keynote speaker this morning, so I'm excited. Pete, I think your day is a little bit more JAM PACKED than mine. Yeah. So I've been up since about 415 on the phone trying to get stuff about the tariffs, which we'll talk about in a minute. But our CEO, Jens Lund, our global CEO, so you know, we're made up of three companies. He's head of all three of them, is here today. He's going to be giving a speech at TPM. Pretty
Pete Mento 1:00
excited to hear about it, because I think he's going to talk about his vision for the combination of our companies. So that's that's exciting. And then I'm speaking at two o'clock. So I'm speaking at two o'clock to the assembled audience on
Pete Mento 1:15
tariff policy, and it's a question and answer. And boy, did I pick a bad day to do a question and answer for you know, a few 1000 people, probably not my smartest decision. Doug, wow,
Doug Draper 1:25
you're ripping. Can you hear me? Okay, I actually only hit my uh, mute button for a second. Yeah, yeah. Okay. Cool. Nice. All right. Global
Pete Mento 1:33
trade this week comes to you from two different hotel rooms, but in the same state this time. Yeah,
Doug Draper 1:38
yeah. So anyway, I don't really global trade. I want to talk to you about the Marriott Resort club membership. That's really the purpose of
Speaker 1 1:48
this. No, did you? Did you get pulled into something? Oh, no, no, no, no, no.
Doug Draper 1:57
I'm staying at when the hotel was full. And so this is just around the corner, but it's a resort property, and that's absolutely not did I get did I get wrapped up into that? So I was
Pete Mento 2:08
in Hawaii once, and this lady said, We'll give you three free nights at the same property if you sit through a short introduction, I feel my hand up like this, like six inches from her face, and I said, Not today, not TA, and I'm locked away from her, yeah.
Doug Draper 2:24
Well, I want to apologize to our viewers. I got a little bit of a frog in my throat. So anyway, let's get this party started. I know we got a super tight window. Pete, so this will be your prelude to your Q A this afternoon. You, you saw some things going down at 1201. Today.
Pete Mento 2:39
Yeah. There's no other way to put it. Boys, world went to hell last night. So the biggest domino to fall in the trade war has really started. Everything else after this will just be momentum. So starting at midnight last night, the United States has put a 25% tariff on practically all products coming to America from Canada and from Mexico. The exception being on energy products from Canada into the US, that is at 10% we've also increased. We've escalated our tariff on China from 10% to 20% so now all goods coming in from China without exception, without exemption, are subject to an additional 20% tariff, and that tariff is not eligible for duty, drawback, no exemptions and exceptions. It's it's pretty ugly. And then, you know, as if that's not enough, from what I'm hearing, that 10% increase will happen again next month. So they'll go to 30% with China, and then 40% with China. So the idea here Doug is to slowly ramp it up in order to let China have some conference, you know, some conversation with us. But at the same time, I think it also has something to do with limiting inflation. The the meeting that happens in May, happens in May. The report that comes out in April comes out in April. But damn it, it's March. What the fourth happy Fat Tuesday, everybody. And we have got another month before this. This report comes out that tells us about the the the reciprocal tariffs. It's going to talk about what countries are going to be hit, and the amount of anxiety is just through the roof. So expect there to be even more tariffs. Expect them to be even more bloody and nasty than they are right now. And let's, let's just make sure that our clients, for those of us in this business, understand what's going on, and tell them all to stay calm. You know, this, this could all be cleaned up by the end of April, we don't know, or by the beginning of May, we don't know. It depends on how President Trump's trip to China really goes.
Doug Draper 4:50
Yeah, well, as we said before, patience costs less money than panic, or panic is more expensive than patients, and I personally have seen it with some of our. Alliance. They're positioning themselves and being in the warehouse business, repositioning inventory. But it's not a panic. It's just, let's protect and not go overboard, but position ourselves. The one thing on the terrace, Pete, I know you talked about China, the one thing I'd like to talk about being from Kansas, and some Midwest boys that we are, I'm worried about the farmers. They're kind of getting zapped from lots of different different ways now, Fresno, California, where our company's headquartered, bread basket of the world. So I'm more tuned in than I have been before in my career. But you got inputs, you got daily operations, and then you got outputs, right? You got a your finished product, and you're selling it. There is a lot of fertilizer ingredients, for lack of a better term, that comes from Canada, significant amount of the potash, which makes it so farmers are going to get zinged on the inbound and then the operations. I didn't realize this, but with the federal funding freeze F cubed, there's a lot of grants and things that are out there for conservation, land use, soil, water, energy, and a lot of those funding just is on a whole now, I don't know if they're going to come back around, but there's farmers out there that said, Hey, I'm on board. I want to do the right thing. I'm going to put in solar panners panels. I'm going to put in drip lines with the intent that I'll get refunded a percentage based on the grants, right? So that would be the operational piece, and then the outputs is really the retaliatory tariffs, right? What? What happens when we get zinged with primary Canada? From, from from what I've seen just in the last eight hours or six hours, right? So I think the farmers, you know, are going to have a really tough time, and that's major important. It's one of those industries that just kind of goes under the radar, and people just assume the food's going to be on their table. But they're getting hit, in my opinion, in three different ways, the inputs, operations of their of their farms, and then the global market setting price on a lot of the grains and commodities. It'll be interesting to see what happens with that group,
Pete Mento 7:11
Doug. You know, China's already put more tariffs in place. Canada has retaliatory tariffs. Mexico is going to have retaliatory tariffs. And those are absolutely going to affect the heartland, and they're going to affect farmers. They're going to affect livestock producers. It's going to hit them, not to mention all the equipment manufacturers that are associated in the same industry, they're going to get hit as well. And I think you know over time, if this really does lag a long, long time, it's going to be hard. And like you said, there's a freeze right now. No one really understands what the funding is going to be like with regards to farm subsidies. It's just a scary time for these guys to be operating.
Doug Draper 7:45
Yeah, yeah. Well, they always say consumer, you know, you're the analyst and you come with data. I'm more the touchy feely guy, but we'll see what the consumer confidence happens with all this. Right? Are we just going to stay the course? And everybody's like, this is all part of the process, you know, step number one, or are, is the confidence level going to go down? And, you know, I wouldn't say, create a panic, right? America is kind of really bad at saving money, but we're really good at spending money. And if that spending of the money, you know, you've said crap that you don't need, if that spending is impacted or slowed down, that that's going to be something to keep an eye on. And to be honest with you, I'm not even sure all the nuances that that could have implications on. I mean, you know, unintended consequences of consumer confidence dropping will be interesting to see what happens in the next
Unknown Speaker 8:35
two to three months. Yep.
Pete Mento 8:37
And again, the you know, the American people may lose their patience with this, but there's only one person that could really make changes, and he's not listening at this point. He's he's got a plan in place. He intends to win. And as we've said over and over again, and as he said, there's going to be some short term pain for the long term plan. And I don't know. We'll see what the news is like the next couple of days. Yeah,
Doug Draper 9:00
yeah. Well, we'll see if the American people have patience, right? Because then, you know, a long term plan requires patience. We'll see. We shall see great
Pete Mento 9:09
comes in roses, song, Doug, it's gonna be in my my head all day now. Ah, yes, yeah.
Doug Draper 9:17
See if you can mix that in in your speech. In some point. I always tell people, number one, see if you can drop in a homer simpson reference, and number two, if you can drop in a Guns and Roses, Guns and Roses reference, that would be epic.
Pete Mento 9:32
I have five friends from high school. Whenever anyone gets married, whoever the best man was that gives a speech, we give them five words, they have to use the speech. And my favorite one so far was Paul mcgrannet, but my buddy bill actually did use it very, I mean, brilliantly in his best man, nice,
Doug Draper 9:48
nice, yeah, well, the cuss the cuss words in that example will come naturally, so it's nice that you're using different words, right?
Pete Mento 9:56
Yeah, no, there'll be no cussing today. No Cussing. It. But it's going to be a pretty ugly, ugly day for me to have to stand up in front of everyone and answer questions about
Doug Draper 10:06
tariffs. Yeah, yeah, I would say DSV has got it. Got some, some heavy lift today with two speakers on this day with tariffs retaliation is a whole nine yards. So I wish you that. I wish you, God speed there, my friend at two o'clock Pacific time.
Pete Mento 10:21
Yeah, two heavy hitters, one of which is significantly more interesting and more important than me. All right, let's just get that out of the way. So, yeah, like I said, I think it's going to be an hour of Stump the chomp of Uncle Pete here in Long Beach, but I'll let everybody know how it went.
Doug Draper 10:36
Yeah, yeah, good. All right, well, I know we spoke about a really quick show. You have a call to make. I got to get over to the show and help out with some volunteer work. So I think that's it.
Pete Mento 10:45
All right. Love your work. Doug, I'll see you next week. All right,
Doug Draper 10:49
thanks everybody. Appreciate you listening. And wow, what a crazy ride that we just started today. So, all right,
Pete Mento 10:55
more next week. Take care, everybody. You
Unknown Speaker 10:58
got it? You
Transcribed by https://otter.ai