Global Trade This Week – Episode 210
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Unknown Speaker 0:00
Doug, you're watching global trade this week with Pete mento and Doug Draper,
Pete Mento 0:07
Hello everyone, and welcome to a international version, I suppose, of global trade this week. Not that they're not always focused on international I'm Pete mento coming to you recorded for beautiful Dublin, Ireland, and with me, as always, is the best co host a guy could ever ask for. Doug Draper, Doug, how are you, buddy? Are you in Colorado?
Doug Draper 0:29
I am in Colorado, heading off. It's, you know, Ireland and California, especially Fresno. Not exactly the same, but that's where I'm heading this afternoon,
Pete Mento 0:40
I would swap with you in a heartbeat, buddy.
Doug Draper 0:47
Yeah. Hey, quick, sorry, quick story. This is one of those hashtags, mountain living. So got the windows open at night because it's nice and cool up here in Steamboat about four o'clock, here's some rummaging around. Our neighbor is moving. So they got a big roll off dumpster and couldn't quite see what was going on. Lot of rummaging, let's just say, so got up this morning. It was a freaking battlefield of trash between my neighbor's house in my house, and a whole lot of bear scat. So we had a bear invasion. I guess the neighbor kids had thrown a bunch of trash in there that had food and stuff in it. So they're, they're starting to forage to get ready for for the winter. So I woke up trash everywhere we were probably out there for 20 minutes cleaning up bear scat and and just crap everywhere in our Lawrence. So there you go. That's the problem, one of the many problems of living up here in the mountains,
Pete Mento 1:54
Doug, your wildlife adventures have been pretty awesome this year, between the moose and the bear. I'm waiting for, like an angry eagle to descend on you as you're walking out to your car.
Doug Draper 2:04
Yeah, yeah. Well, we'll see. I mean, as crazy I have probably seen, I'm not even kidding around now, I'm sure it's the same moose in some instances. Probably 20 moose sightings this summer, just and it's not even like Jesus. Get out of the way. I gotta. I got my day to take care of. Oh, but anyway,
Pete Mento 2:26
you're not like in awe of those creatures when you see him.
Doug Draper 2:30
No, I pull over every time and take a picture or a video and send it to my kids. They're not interested anymore.
Unknown Speaker 2:38
You can send them to Keenan and I because we are
Doug Draper 2:40
interested, yes, yes, yes. So good. Kick us off. Yeah. I know you got, you know, long travels, and you got your your meetings coming up there. So I wanted my first, my first take is, we're always glass half empty right where those guys were, those Muppets on the balcony, just chirping and every little thing that goes on. So I wanted to bring some fun statistics in and talk on a glass half full type of thing with how fun statistics about how the economy is rolling, right? And a lot of these are from the Bureau of Labor Statistics The Brewers Association and guns.com didn't even know there was a website called guns.com
Unknown Speaker 3:25
but there is one. So
Doug Draper 3:29
there's all these fun trends, you know, like, what's the trucking industry doing? That's a precursor to what does the economy look like? So I saw an article about that today, and I was like, I'm going to kind of dive into this a little bit differently. So here's some negative signals of downturns, right? Fast casual dining is decreasing a little bit, but hardcore fast food, like McDonald's Burger King is ticking up. So fast casual, Chipotle, sweet greens, Mediterranean. You know, you get the fast casual. So that's slightly down, but the hardcore is slightly up, right. Corrugated and boxing companies like International Paper, PCA, Georgia, Pacific, that is down. You may have seen some articles about how some box plants are being either shut down or tapered back, and there's cost savings going on in that, in that industry. And this one, I double checked, this one, Pete gun sales, when they go down, is a negative reflection of the economy, which I would have thought, that if the economy is going going down, you're kind of pulling back in. You got to get your gun because you want to be safe. And who knows what's going on out there, right? So anyway, the statistics so those are negative, which means downward trend of means, are we going to have economic problems? The upward trend is that even though we're still eating out right, 5.6% year over year, of folks eating out. Know, maybe the the hardcore fast food, but we're still going out right. We're paying more to go out right so that it's to go out to have a meal is more expensive, but we're still going out to have the meals. Craft beer sales are back up to some degree. I'm sure there's every statistic that you could come up with. It says they're down, they're up, they're down. That one came from Brewers Association. Craft beers are up. Usually it's PBR and in Miller, high life when tough, when things get tough, egg prices and overall spending in grocery stores are egg prices are up, general goods and grocery stores are up, but we're still buying food. We're still going out, we're still buying eggs. So if you Pete, I was trying to think, if you put a plus one or a negative one on all of those different metrics, it's a plus two, right? So if you look at those, you know, Doug Draper's stupid analogy of comparisons out there, I think we're going to be okay in this fourth quarter. And the world is not employing there's no Humpty Dumpty going on. So those are the fun metrics I have, as far as what's what's happening out there, as far as trends with the
Pete Mento 6:20
US economy. Doug, you sound like an economist right now? No, that
Doug Draper 6:25
was pathetic. As I finished up that take, I'm not communicating what I'm trying to say very closely. So I don't know about an economist, but awesome stats.
Pete Mento 6:36
You might be familiar with a term called the CPI, which is the consumer product index, and it's how we determine things like inflation. And some of them are kind of outdated, honestly. And you know, you should do the Doug Draper CPI, and it should be based on things like gun sales and craft beers and fast food, because you know what? It might be, just as good an indication. I saw a interview this week with the CEO of McDonald's, and he said that one of the things that that they watch really closely is breakfast sales, the number of people that come in and have McDonald's breakfast. And he said there's a couple of reasons for that. A lot of folks don't have the time or the money to make breakfast every morning, so they hit McDonald's on the way to work, grab something quick and eat. He said they're way, way, way down, and they think that that's an indication of, you know, people that are in that income bracket are skipping breakfast. It's not like they're going someplace else. They're skipping breakfast because they don't have the money to have that three meals a day, even if one of them was fast food. And he said they're, actually really concerned with it. So Doug, you know, you might want to poo poo, what you just said, but if you put together an index and we followed it for 10 years, I would love to see how, maybe I'll do that. Maybe you can send me all those and I'll do an index for you over 10 years, and we'll see how those types of different prices are actually reflection on the overall economy, you know what? Who says the Department of Treasury, Department of Commerce, have the have the magic. I think Doug Draper's CPI might be a little
Doug Draper 8:08
better. Thank you. Yeah, I'll chat GPT. That'll come up with some wicked graph that we can share to our audience.
Pete Mento 8:16
Chat GPT, because thinking is overrated. I gotta tell you,
Doug Draper 8:21
that's right, all right. Brother, what you got for your first one?
Pete Mento 8:24
So everyone's a buzz like this. Last weekend, the Powerball was up to $1.8 billion or something. I guess two people won it. I can't imagine having that much money. I would do some really dumb things. I would absolutely ruin my life. But there was this feeling of hope. So did you buy any tickets? Doug, of course
Doug Draper 8:44
I did. I bought two. Yeah,
Pete Mento 8:48
one's as good as two, right? So I, you know, I remember talking to my daughter this weekend and saying to her, you know, if I won that much money, here's all the things that I would do, and it's this very hopeful sense of the things that you would do with this money. Well, American importers are having their similar Powerball moment right now, because we're going to find out if the Supreme Court is going to take a look at the IEEPA tariffs and decide whether or not they were legal. Now they may not hear the case, which would be wonderful. They may hear the case and agree with the lower courts, which would be wonderful from the perspective of people that pay tariffs, but they may say, No, we disagree with the lower courts. They're staying in place in either case. We're going to find out soon. Ish, if we're all winners or losers, and a lot of my questions right now are, you can only imagine, right what are our importers going to say? We've got to give a refund to customers? Are they going to take that money and put it back in the bank? They're doing a lot of what ifs in their head right now. But the other question is, is, how will the refunds happen? Are there going to have to be individual court cases, which would be wonderful if you're a trade attorney. They would. They would be really. Busy getting that money back. Will it be something that Customs House brokers do through protests? I don't know, but we're waiting to hear that, and my phone is just buzzing off the hook with people saying, How do I prepare? How do I take best advantage of this? Do I push out my liquidation so I have more money to go after? We really don't know. We don't know, and we won't know until this is settled. But man, people are having Powerball dreams about that money right now.
Doug Draper 10:23
Doug, yeah, yeah, I had not even thought about that. This topic that you came up with, it's, it's interesting. The quick hit that I did is, and this may change, because this is an unusual situation, right? But I think there's six months, right? There's a timeline that you can go back and say, I want my refund. It's not, you know, I think it's five years you could be penalized, but it's only six months to get your money back, right? And then the other piece I was thinking is, if this truly happens, and it's a lottery moment, some of that money has already been spent, right? So are they gonna have to borrow money to refund companies on on all these tariffs, because it's not one or 2% as we've seen, especially out of the gate, it's big time money. So it'll be interesting to see if this does happen. You know, which is one of the opposite things that we wanted that part of the tariff situation and and have terrorists cover the economy, but are we gonna have to borrow money to pay back companies for the tariff? Those were the two things that popped in my mind,
Pete Mento 11:28
like, Don't imagine they'll borrow money. They might, but you're talking about damn near $30 billion John, and that's a lot of money that the government's going to have to cough up. I may have to take a few days off for dancing, reverie and excitement at the thought of the American government having to give people back that much money. I mean, that I would be, I would be overwhelmed with joy Doug because of my distaste and hatred for taxation that. I mean, I've said it before. My my disdain for the state is infinite, and to see them, have to eat crow like this. I don't know what I would do with myself. I don't know how I would deal with that level of joy. You know how dogs get to zoomies? Doug, yeah, shave my beard. Dog just like, run around the house because they're so happy for no reason. I might get the zoomies. I might just start running around my apartment. I'll be so excited if that happens. Yeah? Not because I get in tariffs. I'd just be so happy we got to stick it to the government.
Doug Draper 12:23
Yeah, yeah. And then what happens to this? Oh, it's gone.
Pete Mento 12:27
Yeah. I, I cannot stand this much longer. I It's driving me never make, never make an agreement like that without truly thinking
Doug Draper 12:36
it through. Doug, yeah, well, the Supreme Court could dictate whether you have a beard or not, I kind of like that. It's true. That's true.
Pete Mento 12:43
That's That's an excellent point. Doug, yeah, yeah, it's an excellent point, yeah. Well, go ahead and bring us to your favorite part, buddy. All right, halftime.
Doug Draper 12:51
Thank you very much. Brought to us by CAP logistics. Go check them out. Cap logistics.com, we wouldn't be here without them. We really appreciate their support week in and week out. So I don't you wanna go first? You want me to go? Me to go first? I can go first. Yeah, ours are actually pretty similar. So this will be good. This will be good.
Pete Mento 13:09
So we did, you know, enter out this or that a few weeks ago, and that seemed to be a fun one for everybody. So we're gonna do again, five questions that have nothing to do with trade. Okay, so it is currently September, and that means that everyone in America has gone gaga for pumpkin spice everything. Pumpkin spice lattes, donuts, Doug, are you in or out on pumpkin spice? You're out. You're out. I agree. I think pumpkin spice is a war crime. I don't understand it. I'm completely out on pumpkin spice next. What is your go to ice cream? Order Doug. Like if you're going to go to the ice cream, stand with your family. What is your go to ice cream?
Doug Draper 13:49
Order, that would be mint chocolate chip.
Unknown Speaker 13:54
Do you do cold sprinkles? No.
Doug Draper 13:58
Mint chocolate chip on a sugar cone. Okay, we don't do sprinkles. No sprinkles, no, no. Okay, that's it.
Pete Mento 14:08
That is one of my favorites as well. Lately, though, if I go, I'm a coffee with chocolate chip guy. Also want to show your coat. I'm a big fan. Okay, yeah, sporting matches. Doug, the NFL season started this weekend. Are you a in? You know, you can tell me which one you prefer. Go to the match live. Okay, watch it from home or go to a sports bar and watch it with other people. Which one would you prefer?
Doug Draper 14:39
I would it would vary by sport, right? The only one that I would say go to a bar with, and that's because of my upbringing from Kansas, would go see the Jayhawks play some basketball. So I could, I kind of in basketball. It's a little shorter, right? A football game. I just want to be at home on a couch and see all the re all the replays.
Pete Mento 14:56
So Okay, and last question, in that same vein, I. Buffalo wings. All right, so when you order buffalo wings, what's the level of spice or sauce that you order? Do you get ranch or blue cheese? And are you a veggie guy?
Doug Draper 15:14
Hot, not like crazy hot, where all these shows and people are crying, but if you have you know, mild, medium hot. I'll go hot. Blue cheese and yeah, I'll snap some celery sticks now and again.
Pete Mento 15:29
Yeah, I'm if I'm going to do buffalo, I like them hot, but not crazy hot, like you. I don't do dips, and I love carrots. But if I'm at Buffalo, wild wings or wing stop, I like the dry spices, so I like them a little crispy, and I like them with salt and vinegar or lemon pepper. But I'm not a dips guy, so there you go. Five questions have to do with trade,
Doug Draper 15:49
all right? And again, I said, mine's very similar, and it was just on Great minds think alike, because whenever you sent yours over, I'm like mine's very similar, so we're doing a then versus now preference right as far as, like, old school, new school, which one's better? So I'm just going to crank through a couple of them here. And because I heard a song this morning, Pete, and I swear to gosh, I was I turned it up. So are you Celine Dion, which is a song I turned up and was rocking to Celine Dion, or Adele. Celine Dion, I like it
Pete Mento 16:29
in a big way. Celine Dion, yeah,
Speaker 1 16:31
next up Madonna or Lady Gaga. Oh, Madonna or Lady Gaga.
Pete Mento 16:37
I'm gonna say Madonna. I saw her live. I was shocked that I knew every song. Yeah, I'm gonna go. Because I'm nostalgic like that. I'm gonna go Madonna.
Doug Draper 16:48
Yeah, I think Madonna to the original. All right, so Jack versus Leo. So I'm talking about Jack Nicholson and Leo DiCaprio.
Pete Mento 16:58
This isn't even a question, respectfully, Doug, this isn't even a question. You're talking about one of the greatest actors in some of my favorite movies, Jack Nicholson, are you? Are you on the devil's cabbage? Right now? It's not even a question. Leo DiCaprio is a pretty boy who had one good movie. No, no, no, no, it's Jack. It's all Jack all day. Okay?
Doug Draper 17:23
Well, I was, I'm Leo, because I love his performance in Wolf of Wall Street. Love it. No one flew with
Pete Mento 17:33
a cuckoo's nest the shining, uh, Witches of Eastwick. I mean, I can't keep going in, Batman is the Joker. He was fantastic. That's true. No, no. Can pound sand. Leo can go kick rocks at skinny nerd. Nope, it's Jack.
Doug Draper 17:48
Jack, all right, this, this is the one you hear all the time, Jordan versus or LeBron.
Pete Mento 17:52
Oh, Jordan. No question. No question, Michael Jordan. Michael Jordan is the greatest ever. Yeah, yeah. They need to replace the NBA logo with him.
Doug Draper 18:01
Yeah, that's true. That's true. Two more quick ones. Eddie Murphy or Kevin Hart. Oh.
Pete Mento 18:07
Eddie Murphy, Eddie Murphy made me want to be a comedian. Eddie Murphy, yeah, Kevin Hart's great, but Eddie Murphy was just a much better comedian, both artistically and I'm gonna go also with what he's been able to do with his movie career. Eddie Murphy,
Doug Draper 18:23
yeah, yeah, Delirious when he was in that. Was it a blue suit or a yellow or a red suit? I can't remember
Unknown Speaker 18:29
Red was that red was delirious and
Doug Draper 18:32
the purple one was raw? Okay, yeah. Loved it. All right. Here's the last one, the James Bond franchise, or the Mission Impossible franchise, James Bond.
Pete Mento 18:44
James Bond, are you more a Mission Impossible guy? Yeah,
Doug Draper 18:47
I think I was thinking about that one. Yeah, I'm more Mission Impossible. You know, bond rolls out with a pen that squirts ink, and, you know, Tom Cruise rolls out and does some crazy, crazy shit. So I think I'm an MI fan.
Pete Mento 19:02
You have much respect to Tom Cruise for doing all those stunts himself and wrecking his body Absolutely. But, you know, I wanted to walk out of the Last Mission Impossible movie, and I don't walk out of any movies, so didn't do it for me, but, but the early mi movies were fantastic. Fantastic. Yeah, my favorite bond without question is Sean Connery,
Doug Draper 19:28
yeah, yeah, I think so. Rod, yeah, Roger Moore. I don't see pros and cons with all of them. I was about to say Roger Moore than I was about to say Daniel Craig, but yeah, all right. Well, that's halftime brought to us by CAP logistics. We appreciate them. Check them out@caplogistics.com
Speaker 1 19:47
So, all right, Doug, what's your next one? Buddy or no? My next one?
Doug Draper 19:51
No, I'll go because I'll wrap it up. Mine's pretty short and sweet. I've just seen all of these companies talking about i. Foreign investment into the United States, right? That's one thing that the tariffs were trying to encourage, is foreign investment. Bring some money to the United States and help Help us. Help you avoid some of these tariffs. And we're starting to see it, right? Volkswagen, I think, most recently, talked about making significant investments into the US. Roche with pharmaceuticals, said they'd have a $50 billion investment. TSMC, obviously, semiconductors, they've made a commitment. But here's the thing, Pete, I'm hearing terms like commitment, pledge, nothing that's been written down, or an agreement that you can hold up and say this is a done deal. So I started thinking like maybe this is just a workaround or appeasement to the US government to say, Hey, give us a little break on these, on these tariffs. In exchange for that, we will make a commitment, or we will pledge, which isn't really tangible or binding by any stretch of the mean, any stretch of the mean. So it's coming around a lot. I'm sure there'll be regulatory discussions and and market conditions could change. So I'm just want to get your take on it right. Lots of verbal commitments, lots of promises. But what's out there that's tangible, that is going to have teeth behind it? I'm not seeing it. I'm seeing great headlines. I'm just like, Great Pete, I'm going to pledge to you that I'm going to give you $10 million over the course of my career, but I'm not going to really put it in writing quite yet, so I don't know what's your take on all that.
Pete Mento 21:49
Very similar to yours. Doug, I think that you know we're we're dealing right now in a world where our economy can really spank you if you don't play ball. And to get these commitments is wonderful, but we need to see some groundbreakings. We need to see some new industry starting here. You have companies like Apple, you know, that made a relatively small commitment in the long term, but a huge commitment in the short term to the United States and talking about changing their very core of manufacturing. And the Nippon steel deal, you know, HK and Hyundai with building ships. These are all massive. And the question really is, we have three years and what three years and five months left of this particular president, when this executive is gone, will the next one be as forceful as the one we have now? Or will these businesses in these countries simply renegotiate based on a new relationship, I don't know. Doug, so until there's, until there's diggers and backhoes ripping stuff up, and until I see something with signatures on it and some kind of a financial commitment where, if they don't do it, they're writing checks, I'm not so sure this is gonna happen. Doug, yeah, yeah. Okay, agreed. Well, all right, I'll bring us home, and then you can close out the show. So lots of alarming statistics to go along with your first topic, Doug, about the global economy. 80% of mail volume internationally is down to the United States. That has a lot to do with e com. A number of countries have announced that their exports, overall, just not to the United States, have taken a real hit. One of the ones was Germany, which came as a bit of a surprise. Great Britain was on that list, France, India. So we're, you know, we're seeing all these, all these great headlines, energy prices as an example, energy exploration, and people are pointing to this as being some harbinger of doom. You know that everything's gone to hell, and that the American importer is not going to import as much and buy as much, and global consumption is down. I think that it's a knee jerk reaction. I think that we're probably looking at it far too myopic. Yes, America's economy is massive, but we're part of a much larger ecosystem. I don't know. Doug, I'm not buying that everything has gone to hell yet. I think that we'll find out more through the course of the following year, in 2026 But Doug, do you think that the world's economy is slowing down or and then a follow up to that? Do you think that Americans are going to start buying
Doug Draper 24:20
less stuff? I think that both of those may be bumps in the road, but and they would probably merit some monitoring, for lack of a better term, right? But I think it's still too early. Even though we've been talking about this for months and months and months, I still think it's kind of too early to say, is this just a bump, or are we looking at like a detour here, and it's gonna dramatically change. I'm trying to think of a good analogy for cars, but bumping the road or a big detour. I think it's too early to tell. I don't think the panic is caught. You know, kicked in on any level across the globe. Now, obviously you're more well versed. I am, and I can't tell you the specifics of what's going on in every single country across the world, but I don't see a panic quite yet, right? I truly believe fourth quarter and the holiday season will tell us a lot, and it will shake out a lot. Do people still want to buy a bunch of plastic crap that they don't need? And I think retailers and companies do not want to have anything to do with product that they push out on the shelves in any level to bring that back in. They want to sell it and want to get the money out of their inventory and on their books. And so I think a bellwether is going to be what happens in q4 with the American purchasing power, or purchasing spirit, but for to answer your question, I'm not seeing it. It's a bump in the road, but it's, it's worth monitoring.
Pete Mento 25:50
Doug, I love it when you agree with me, because that gets to mean that both of us are right, and not just me. So yeah, I agree with you. I think you know time will tell. It's far too early to to pull the sheet over the eyes of the corpse of the global economy. We have time, and we need to give it time for us to see exactly how this turns out. Yeah, yeah. All right, buddy, bring us
Doug Draper 26:09
home. Yeah, that's it. That is another edition of global trade this week. You guys were for our listeners. We are committed, right? Pete is in another country. He's seven hours ahead of where I am. We make it happen when I'm in California sometime, I'm jumping on at 6am so if it's happening in global trade, we're talking about it. It doesn't matter where we are, it doesn't matter what time it is, and we can't thank you enough for listening and engaging with the show. With that being said, Pete, I know you got to take a shower and go hit some drinks with your compadres, so we will let you
Speaker 2 26:39
go. Pete, travel safe, thanks, buddy. Talk to you next week. Thanks. All right, catch you later. You.
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