Today is not gonna have a huge impact on the American consumer, but what about what's to come?

And that's correct.

You know, it's, this is, we're about $50 billion of, of reciprocal tariffs on, between the US and Canada, and that's out of $900 billion in total trade.

So, you know, in terms of the overall relationship with the US and Canada, it's not that big of a, of an impact.

But for individual producers, it, it absolutely is a, a very serious, um, you know, potentially, uh, existential threat to them.

And, you know, we've seen a ratcheting up over and over again with China and other countries.

So as you say, we don't know where this is gonna go.

Ron, I would argue it was Jared Kushner's greatest achievement in Trump 1.0. Jeff, what kind of pressure is this putting on Kevin Warsh, who when we just heard from him in Jackson Hole, made it clear he's focused on inflation, and inflation could be a problem, which it is.

How did, how did you know that? How did, how does, how does some-- 'cause nobody else picked it up.

If you are, uh, as, uh, internet br- uh, brain poison pilled as I am, and you spend as much time on Twitter as I do, which is not something I'd recommend to any of your, uh, viewers, um, you get a sense of what is written by AI, and you can sort of see the recursive, um, patterns of speech that AI likes to use, and there's a few telltale signs.

I wasn't the only one, I'll say, to, um, notice that the Druckenmiller op-ed had laced through it, really from the beginning to the end of the op-ed, the sort of language that AI likes to write in.

And it's this...

And it's not just the use of em dashes, it's the sort of sentence construction that is replicated across different AI models and become sort of easy to spot once you see people using it enough.

Um, but I was the only reporter to say, "Hey, I have this guy's number.

I'm gonna call him and say, 'Did you write this with AI?'" And I don't know if The Wall Street Journal asked, but if it was obvious to me, I'd be shocked if it wasn't obvious to them.

Did he really take aim at the right person with his, with the, the central heart of what he was talking about?

How did, how did you know that? How did, how does, how does some- 'cause nobody else picked it up.

If you are, uh, as, uh, internet br- uh, brain poison pilled as I am and you spend as much time on Twitter as I do, which is not something I'd recommend to any of your, uh, viewers, um, you get a sense of what is written by AI, and you can sort of see the recursive, um, patterns of speech that AI likes to use, and there's a few telltale signs.

I wasn't the only one, I'll say, to, um, notice that the Druckenmiller op-ed had laced through it, really from the beginning to the end of the op-ed, the sort of language that AI likes to write in, and it's this...

And it's not just the use of em dashes, it's the sort of sentence construction that is replicated across different AI models and becomes sort of easy to spot once you see people using it enough.

Um, but I was the only reporter to say, "Hey, I have this guy's number.

I'm gonna call him and say, 'Did you write this with AI?'" And I don't know if The Wall Street Journal asked, but if it was obvious to me, I'd be shocked if it wasn't obvious to them.

And, and I think even more surprising in some ways than the fact that Druckenmiller used AI to write this was that The Wall Street Journal then came out and said yesterday, "We're actually okay with this.

Did he really take aim at the right person with his, with the, the central heart of what he was talking about?

Just can you walk us through your reporting on this and what you found?

Yeah.

One, you know, uh, upside to not being at The Washington Post is there aren't, you know, 30 other tech reporters that, uh, are also competing on this story, and so it was relatively easy for me to, um, perk up here and say, "I, I wanna look into this." And I think what I found pretty quickly, and we discussed this a little bit, but There's sort of a gap between what people who are seeing this every day have gotten accustomed to and what someone, you know, who has the benefit of fresh eyes like I do in this, in this, uh, field sort of are being told, and it's, it's-- the gap is, is enormous.

And, you know, I started doing one conversation with one guy.

He seemed, like, a little hysterical.

[chuckles] And I thought, "Okay, well maybe that's just one guy," you know? And then I talked to another guy and another guy, and sort of across the labs, and also, you know, people who are in academia and close to the labs and, and follow this stuff well, you really get a sense of the, the sort of sense of, um, shock and, and really hysteria that I think is not being sort of well communicated, um, from the media, um, to the public.

The degree to which the people in the labs, and really in just the last month or two, have said the capacities of these things, the capabilities, and people have been understandably skeptical for a long time.

But when you're talking to people and interviewing them, one's hysterical and you go, "Well, hey, maybe that's just one person." I go, "No, no, no, they're the same level of hysteria." What are they-- what are these professionals, kind of hardened professionals in this industry, what are they specifically hysterical about?

Just can you walk us through your reporting on this and what you found?

Yeah, one upside to not being at the Washington Post is there aren't 30 other tech reporters that are also competing on this story.

And so it was relatively easy for me to perk up here and say, I want to look into this.

And I think what I found pretty quickly, and we discussed this a little bit, but there's sort of a gap between what people who are seeing this every day have gotten accustomed to and what someone who has the benefit of fresh eyes like I do in this field sort of are being told.

And the gap is enormous.

And You know, I started doing one conversation with one guy.

He seemed like a little hysterical.

What are these professionals, kind of hardened professionals in this industry, what are they specifically hysterical about?

Can you explain to people, like, what that actually means?

Yeah.

So you'll remember, Phil, and thank you for the kind words, that about a year ago the President imposed really high tariffs on what was called Liberation Day, and this triggered a major panic in the market, and particularly in the bond market.

And it was an enormous political story because what happened at the very last minute was that the President backed down from these tariffs because of the tremors in the bond market.

Now, in the last week or so, we've had a slower, um, sort of boil, but a similar run-up in bond yields, and we can get into what is going on there exactly.

But basically, investors are having less confidence in the long-term value of the dollar.

They're selling it, and that's driving up the yield on, um, the 30- and the 10-year, which are the benchmark rates for which people use, um, to calculate auto loans and, uh, mortgages and all kinds of really critical parts of the US economy.

Like, what's causing it? It feels like there's a convergence of factors, but what's your sense from talking to people about what's driving it right now?

Right.

There are a lot, there are...

A huge portion of the base is really riled up about data centers.

It's not seeing the benefit to them of this AI explosion and is pushing back.

I mean, I think we saw the head of the Michigan Republican Party express a new openness to data centers because at the ground level, the base of the Republican Party is extremely skeptical of this.

But then at the elite establishment level, the Trump administration, I'm not breaking any news here, is deeply intermeshed with the biggest tech companies Trump relied on, um, you know, the, the biggest players in this game, David Sacks and others, to set administration policy, and that administration policy has been very supportive.

And we're at a point now where because in part of that supportive policy, there's trillions and trillions of dollars.

W- what impact does this have on society? You know, how do you think people are going to, to take in this, this brave new world in terms of wealth that is already being created before our eyes?

Give us a l- give us the lowdown of the, the big headlines out of Iowa last night.

Well, you've got an incumbent congresswoman, Congresswoman Hinson, who represents northeast Iowa.

She was born and raised in central Iowa, and she won the Republican nomination to succeed Republican Joni Ernst, who is retiring.

And she is taking on a Democrat.

His name is Josh Tuрок.

He's currently a state lawmaker, and he is Chuck Schumer's choice.

And all the money came in, and all of the news releases have come, uh, ever since last night when we've crystallized who it would be.

Mm.

The result was the United States provided a source of massive demand, acted as arbitrator of global peace, but did not receive adequate compensation. This system is not sustainable.

What he's, uh, getting at is that the American dollar has been very, very strong for quite a long time. And because the dollar has become the backstop of the global financial system, we buy imports at a very cheap rate. And while that sounds great, and, and many economists say that it is great, our ability to buy Chinese and Vietnamese and Mexican and German exports on the cheap has hurt American manufacturing jobs and sort of hollowed out the Midwest and many parts of this country that were dependent on the ability to export to other markets. And Trump is engaging in this really radical attempt to wrench the global financial system out of really the s- the place it's held in the global financial system since the Bretton Woods agreement that followed World War II, and create a system in which our manufacturing prowess returns, because we're shaking up our currency and monetary agreements with the rest of the world. That, however, is not (laughs) gonna be accomplished by tariffs, and it is really, really hard to imagine how Trump can undo sort of what's happened in the last 60, 70 years in three to four years. And, but, but I think it gives a clue and sort of helps explain why he keeps saying, you know, maybe we'll have to stomach some short-term pain to achieve that sort of new order.

All right, so he's saying a weaker dollar might be better for American manufacturers. Like, in theory, that makes sense. If the dollar were to get weaker, if it w- were no longer the backstop of the world economy, what else would happen?

Right now, America really (laughs) benefits from something I think, you know, we kind of take for granted, which is that we are able to print huge amounts of money. I mean, our- our debt and deficits are sort of unparalleled in the developed world. (instrumental music plays) We have, you know, 35, $36 trillion in debt, and the reason that we can do that is in part because America's dollar is viewed as such a safe asset, and that creates demand for our debt, which allows us to, you know, afford pretty low taxes with a- with the amount of government spending that we have, and that fiscal imbalance is enabled in part by America's status as sort of the global financial, um, back or backstop. If that were to change in the world that Trump is talking about, you would see, you know, not only it get more expensive to buy foreign goods, it- you know, costs for American consumers would rise, but it would also lead to this really difficult rebalancing of our fiscal situation, which- which could be quite painful, because, uh, it would allow- you know, need- require either major tax hikes or cuts to spending programs that people really depend on. Whether that loss could be offset by the increase in American exports is a... (laughs) it's a tricky bet. Um...

Hmm.

While, while we have to take those issues seriously, I think it's worth saying that, you know, Trump has been very clear for over a year now that he sees tariffs as, um, able to do several different things.

These things or intention, he's-- The, sort of the most generous possible interpretation we can give him, I think, is that he views these, these goals, these separate goals for tariff policy as sort of, um, all, all worthwhile, but maybe not all worthwhile simultaneously, or maybe some can be accomplished and others can't, and that's okay.

So just to, to back up and, and try to explain this a little more clearly, Trump has said, I think, really, really importantly to understanding Trump's motives, that from his perspective, the US is getting screwed by the existing state of trade barriers, where they believe, with some reason we can get into why there's-- This is more complicated than they say, but that other countries have far higher import duties on our exports than we do on theirs.

So that's a-- that's clearly a goal, I think.

But there's also the goal of can we raise revenue? Because we know that Republicans are trying to pass $4 trillion in tax cuts, and Trump is not wrong that if you impose massive taxes on every import coming to the US, even though it would be devastating for a lot of poor Americans who depend on imports for cheap food and, and other necessities, it could raise a lot of money.

Now, these two [laughs] things don't mesh together.

It's like, "No, we're actually going to take your land, and mine your minerals, and let our oligarchs like buy up the pieces of your country that are gonna be valuable to them."

Give us your latest.

We understand that, you know, the president has so far imposed tariffs on about a trillion dollars worth of stuff, give or take.

He has said and put in motion plans to impose tariffs on an additional two trillion or so.

So I think people really need to, and I think part of what we saw in the markets today, was a realization that, that this is not necessarily bluster or a threat, that this is something that they are quite serious about following through on.

My sense from people in and near the White House is that there's a bit of a division between advisors who think that these tariffs can be used to negotiate a trade, a sort- some sort of trade or currency agreement that would a- allow the US to i- you know, increase exports, domestic exports.

But the Trump administration is sort of hopelessly double-booked on what the tariffs are for, right? They say it's for reaching deals, but they say it's also for revenue.

They say it's to close the deficit.

We're gonna be making T-shirts and phones and all of this stuff here." So- so the president has this right argument to make for people that come from the manufacturing world, but there's no one who stood up and said, "And now we're gonna make that stuff here, and for the same prices where you're- that same $200 TV at Walmart that you're getting that's made overseas, we're gonna make it here." Not one person.

Where do things actually stand with this right now?

So I guess the core thing that I think people need to take away from all this is that, you know, I've been writing not just this week, but for a couple of years now about how senior Trump people and Trump himself.

have been very clear that they think that they should have way more unilateral authority over canceling spending.

And this debate gets bogged down really easily in very boring terms like apportionment and impoundment and sequestration.

It's all these DC insider terms that make people's eyes glaze over.

But the fundamental core thing here is like, When Congress and the White House do a negotiation to pass a bill to spend money, is that just a starting point for what the White House wants to do? Does the White House actually have the authority to just be like, no, we don't want to spend the money that we legally agreed to do with Congress? And the Trump people are like...

Actually, this whole system, like this 1974 law that dictates when the president can and can't stop spending money that he agreed to spend with Congress, they just kind of want to throw that out.

He's not a cabinet official who's being confirmed by the Senate or anything.