Sent Items #184: Wednesday, April 9, 2025

By the time you’re reading this tariffs will be officially implemented (as of 12:01AM this morning).

WE. ARE. SCREWED!

Team! There is currently a 104% tariff on Chinese goods! The one country that is the villain of all villains - the perpetrators of fentanyl! - who are “eating our lunch” - are the only ones not coming back to the negotiation table!! Indeed, as of this morning, China has just imposed additional tariffs of 84% on U.S. goods!

Yes, the smaller countries dependent on exports to the U.S. will succumb. Barbados, the Maldives, Cambodia - yup, they’ll all eagerly negotiate. But China? The second biggest economy in the world. They ain’t backing down. Trump, you are a loser!

The guy who has bankrupted 6 companies (even after a small billion dollar loan from Daddy) is doing an impeccable job at sending our country into a deep recession. This is one of the largest tax increases on the American consumer ever. Over 77 Million of us voted for him (I did not, and 77.8 Million didn’t either). We knew Trump would betray us. He has in fewer than 100 days.

These tariffs are redefining how we think about business. Rules are changing. We can't rely on old models in a new world. Forecasting doesn’t work in environments like this. Discipline matters a lot, but it's hard not to be emotional.

Howard Marks summed it up well when he said that for decades, consumers and businesses benefited from one major tailwind: globalization. Trade was open. Supply chains were efficient. Goods were cheap. That tailwind is fading.

Domestic production is being prioritized, even if it’s more expensive. That has real consequences for economies, inflation, and asset prices. One of the most underappreciated effects of globalization was how much it kept inflation in check. As global trade expanded, the cost of many goods fell—dramatically, helping consumers. 

I am now reading stories of small businesses who will likely go out of business as a result of these tariffs. Theses are U.S businesses employing U.S. labor, paying U.S. taxes, and selling to U.S. consumers.

I was talking to an Amazon seller who sells toys. His best selling product is made of steel and sourced from China. You can not produce toys in the United States. American teens aren’t salivating at the thought of working in sweatshop. Even with 200% tariffs it would still be cheaper to source from China.

His product was loaded onto a boat March 1st when he expected to pay 25% + 10% China tariff, + 3% duty. The boat departed a day after Trump announced the additional 10% China tariffs. If he places a new order he will be paying 104% in tariffs. His business is on the brink of going out of business.

The silver lining, I suppose, is that those MAGA hats that are made in China will hopefully become a little more expensive. [naturally he’ll excuse those manufacturers].

Watch this Milton Friedman video from 1980. 45 years ago. Friedman was a long time Republican advisor (to Reagan and British Prime Minister Margaret Thatcher).

Heck, even the China CCP is tweeting President Reagan as evidence of how dumb Trump’s tariff policy is:

Because I know nothing but I have many friends who do, I’ll be on two upcoming webinars.

(1) Hosting a panel TOMORROW (Thurs Apr 10) with Justin Sherlock from Caspian, Brian Bourke from SEKO, Alex Yancher from Passport, and Izzy Rosenzweig from Portless. Heavy hitters in the e-comm logistics space. Register and tune in here (link)

(2) Next Tuesday I’ll be on another panel discussing Tariffs with Chad Brinton from True Classic, Alex Kent from Stord, and Kyle Bertin from Two Boxes. Register here (link)

I’ll leave you with this post from my friend Molson Hart, titled America Underestimates the Difficulty of Bringing Manufacturing Back (link). Read his post and read it twice.

The TLDR: Drawing from his 15 years of experience in both U.S. and Chinese manufacturing sectors, he presents several arguments why this is the stupidest economic policy ever:

1. Insufficient Tariff Levels: even with tariffs as high as 104%, manufacturing in countries like China remains more cost-effective than in the U.S., due to lower production costs abroad.​

2. Weak Domestic Supply Chains: the U.S. lacks robust industrial supply chains for many products, making it challenging for manufacturers to source necessary components domestically. (see Milton Friedman video above)

3. Labor Market Challenges: the U.S. faces issues such as a shortage of skilled labor and higher wage expectations, which further complicate efforts to reshore manufacturing.​

Without addressing these fundamental issues—such as enhancing supply chain infrastructure and investing in workforce development—tariffs alone are unlikely to achieve the desired resurgence in American manufacturing.

On a lighter note, new unboxing video this week, featuring Autonomy Foods. Follow Third Person on LinkedIn, Instagram, TikTok and YouTube to stay up to date.

Hang in there!

- Matt

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