Sharon saved her supply chain from cyber risk and ended the office goat debate. White House here now is supply chain expert Brandon Daniels who's the CEO of the risk management firm Exiger. Welcome, Brandon. Also, Greg IP joins us. Greg's the chief economics commentator at the Wall Street Journal, which of course is President Trump's favorite newspaper. Particularly, he likes the editorial board there. He was saying something like that earlier. Thank you, Greg. Okay, actually, Greg, let me start with you. Not about the Journal's editorials or anything like that, but you've written yourself about how the ultimate goal you think for Trump is unclear. Now, we do see at least with Mexico this pause today that was announced. Does that clear things up at all? How do you feel now?
Well, I think the reason it's unclear is that all along Trump has offered two different motivations for tariffs. One is as a negotiating ploy to get movement from partners on things like drugs, fentanyl, trade deficit, etc. But he also talks about wanting like a return to an era when tariffs were permanently higher and a great source of revenue. Right? So I think it's still a little bit unclear. So even as he was talking, his own people were saying that Canada and Mexico were making progress on his demands that they do act on the border, he went ahead and imposed the tariffs. And the negotiators themselves from those countries were unclear on exactly what Trump was looking for. And I think that even if we do end up seeing a pause, delay, or a dialing back of the tariffs he announced on the weekend, everybody knows that he could reimpose them at any minute. And he is still talking about permanently higher tariffs later on. So I think that that's why I say it's a little unclear what is the end game here. Is it temporary tariffs now to achieve this short-term goal, or is it a world of permanently higher tariffs? No, I think it's an open question.
Right. I want Brandon, get your perspective on that. I point out by the way the Dow there which we have on the screen, it was just in the green, now down a little. Was down like 600 points early today, but with the Mexico news comes off those lows. Not a huge reaction, one or two percent even earlier. But Brandon, you're the CEO of a company that deals in supply chains, so I would have thought, boy, this is going to be like a lot of CEOs I've interviewed over the years about tariffs, they're going to be anti-tariff, blah, blah, blah. And then I read that you actually think that Trump, in the way he's dealing with this with a quote-unquote hardball strategy, is on point. That, you know, and that surprised me. So to pick up on what Greg is saying about the goals, from your perspective and where you think he's right about this?
Yeah. So first, Connell, thank you for having me on. It's good to see you again. So first, in terms of this negotiating strategy, I think there are four points, right? And I'm actually going to reverse this versus when we've talked about this in the past. The first is there's an opening salvo for bigger negotiations, right? I don't think this is a bluff. I think Trump is setting terms, and China and Mexico, they're already scrambling to respond. They know they're in a weak economic position, and Xi Jinping and the president of Mexico are looking for ways to come to the table without losing face. And so what we're really looking at from an overall position perspective is that this is a big opening salvo in a big and longer negotiation that is two parts. Then I think there are three core pieces to this, Connell. One, I think Trump wants to deliver on his immigration and crime promises. Trump is turning tariffs into the battering ram against illegal immigration, narcotics, crime, which we get by the way with Mexico. Canada, I think people are less sure, but continue.
Yeah, yeah. Well, I mean, he already accomplished this with Colombia, and there are concerns with, especially through Canada, anti-terrorist or anti-terrorism sort of law enforcement not being sufficient, right? And so the incentive to be complacent or exploit our border goes down.
Then I think we step into the longer-term strategy, which has two core points. Bring back manufacturing back home where we can be competitive, but with realism. So automation, AI, and robotics have changed the game. Cheap labor is no longer China's trump card. Sorry for the play on words, right? But the US can now compete in key manufacturing sectors because now you're at a place where the only thing that differentiates us is the cost of real estate, and there are places in Texas where it's cheap to manufacture. And then the last point I'll just make is that he was looking to bring back areas of manufacturing where we have to protect our IP, and that's in AI, robotics, in those key areas. So all strategic goals accomplished by wielding kind of the tariff as a threat, sometimes implementing it, hopefully for a short amount of time.
