Episode Transcript
[00:00:01] Speaker A: The best insight, instant feedback, accountability the all new Talk Radio Freedom 106.5 Henry, good morning and welcome back. I did tell you not to be a stranger and you are proving me correct. I gratefully, I'm thankful that you're able to join us this morning as we chat with him on the 10% imposed by Donald Trump. Now he's a leadership advisor, an executive leadership advisor and a behavioral pollster. So emoale, good morning to you again sir.
[00:00:41] Speaker B: Good morning, good morning to you and good morning to your listeners. So good to be here with you.
[00:00:45] Speaker A: Yes, I want to tell you listeners, where are you exactly at this time?
[00:00:49] Speaker B: Emwale I'm in Trinidad.
Yes I am.
[00:00:54] Speaker A: I didn't realize you're enjoying that. Well, welcome home. Alright, alright. So given the fact of what is taking place here on the geopolitical landscape as it relates to tariffs, first of all, for the benefit of listeners who don't know what a tariff is, I would allow you to explain that to them and give them a little historical facts as to how long tariffs have been around.
[00:01:18] Speaker B: Okay, good. So as it relates to tariffs, in simple terms, a tariff is a tax and it's usually applied on the import of external goods. The basic use of tariffs is something that's been around for many, many years. It's a revenue generating tool but is used by countries, but is also used as a protection tool.
How when I say protection to protect domestic markets. To protect domestic markets. And also it's also used as a tool to attract foreign manufacturers to come into a domestic market to generate that production domestically. So for instance, most of the manufacturing that happens throughout the world, especially on consumable products, happens in China. And if, if the US wants to attract that manufacturing back into what is called the Rust Bells where most of the manufacturing happens, then then businesses and companies because of the imposition of attacks of bringing back that product back into the US Market will then decide to say, hey, it's too expensive to do production foreign and import that goods. Let's move our plants and facility and our supply chain within the US where it will be tax free. That allows my bottom line to be cheaper and more competitive. So tariffs have around three key uses and Donald Trump is applying or attempted to apply that use to level the trading field.
[00:02:58] Speaker A: Do you think that with the application of these higher tariff prices now that he is on the brink of economic trading wars?
[00:03:10] Speaker B: Oh good, good question. So I think it's clear in his positioning and semantics he is saying that his application of a baseline of 10% tariff across and applying it based on the regional country. He is saying this is a reciprocal tariff versus a retaliatory tariff. Now, this is, this is very much different and I'll tell you why.
If, for instance, in the Caribbean we have had tariffs in place, if you look at Trinidad, for example, there are products in the poultry industry.
We have tariffs applied so that we could protect local manufacturing production. That's how we, how we protect. There were times where that tax went down and then you saw the influx of foreign meat. Right. I don't know if anybody could remember. There was once upon a time we saw a lot of US Chicken right on the marketplace and it was cheap because local manufacturers cannot compete when it comes to the economies of scale to what larger manufacturers can do. So governments throughout the region apply tariffs to protect our local markets and to selectively bring in other goods. So to your question about trade wars, you would see that there has been a softening opposition. For instance, the governor in, I believe in Canada, where they know that other countries have had higher tariffs in place, upwards of 30, 37%. There's a chart that is going around where, for instance, Trinidad, we've been charging, I believe it's like a 12%, 12 or 13%. 12%. 12%. And now Donald Trump is saying, okay, we didn't have a tariff in place, now it's 10%.
So maybe we might see ourselves coming down to 10%. So there's an equilibrium.
So he's saying his move is reciprocal. If you charge me 10, I charge you 10.
And he's even using bargaining terms called I even given a discount, even though you charged me 36, I will still, I'll put it at 80. Yeah, he's trying to bring some kind of equilibrium in US Trade.
[00:05:32] Speaker A: And that's very important. And I'm happy that you, you know, you give some consensus on that because let's look, for example, Cambodia. Based on the snippet of countries hit by with tariffs. Let's look at Cambodia.
Cambodia is one of the countries that has the highest tariffs against the US in terms of taxation. They're coming in at a, at an astonishing 97% tax to the U.S. all right. Trump's reciprocated that tax at 4, 49%, almost balancing it off as half, bringing the equilibrium down to half. But the thing about it is he did not match them. He still in charge them, not even 80%. He went, he said 40, 49%.
[00:06:25] Speaker B: And the key reason for that is based on the balance of trade. Because Trump, his attempt where he talks about this is Liberation Day, right? His attempt is to try to bring back manufacturing back into the US So the truth is, and this is where we have to be objective in our analysis, many of the people who will be affected by this tariff are US Businesses because these are US Businesses, US Businesses that have us what we call US supply chains that they've got more incentive to produce outside of, of the US at cheaper prices and then import those same products. So where you get your Nikes, where do you get your Adidas, where do you get those products that are being produced? It's in some of those same countries.
[00:07:18] Speaker A: But, but just to add to you, Emily, just to add to you, you're saying the business is going to be hit with the tariffs, but let's bring it down to the, to the, to the chalk countries or the other situation. It's us. We, because the businessman is not going to incur that extra cost on his own, he's going to pass that on to you. So the bottom line is at the end of all the trading wars and the tariffs and the heads, remember these people like Donald Trump, who is imposing these type of tariffs on countries, saying that, you know, it's reciprocal. It may sound good to the business eyes, to the business community. Yeah, man, you know, it's all about business. But let's not forget who are the consumers we are.
[00:07:59] Speaker B: Well, good question. So if you are locating the impact of tariffs to the Caribbean, then we need to do a clear survey of where do we import most of our stuff. When we talk about retail items, I would hazard a guess that there are a lot of retail items that are coming from Panama and China and not necessarily from the US So that's something we need to examine. So then would we see inflationary prices that does not reflect the true impact of tariffs? Because if I'm importing items from Philippines and from China and from Panama, and then I say, well, you know, tariffs is here, you know, and the cost of production, we may see an artificial increase in prices in Trinidad.
[00:08:51] Speaker A: No?
[00:08:51] Speaker B: All right, so that's something.
[00:08:55] Speaker A: And while you, when I chat with you, I decided laugh, you know, because you just bring it down. You just, you just hit on the nerve there, boy. When I say the nerve in the sense that you touched squarely. I don't know if it was in my head this morning with where I was thinking, but you're spot on. Because let's take for example, VAT in Trinidad and Tobago, value added Tax. You know, from time to time we hear government say VAT offer basic domestic products such as cheese, salt, fish, this, that, that basic thing, you know, no VAT or reduce VAT and whatever, and you hit the grocery shelves. But to me, the price don't move.
So it begs to differ when you talk about the artificial charges that businesses may impose against consumers, saying that, you know, tariffs in place and, you know, production and all these things. How truthful and factual would that be is debatable because we're not importing from the US A lot of people in clothing stores, they go Panama data, are not Taiwanese, are Chinese. You're getting those things.
What should our government do to restrict these unscrupulous businesses? And I'm saying it loosely. I ain't calling no name, I ain't accusing no one business or entity of doing it, but to prevent it on a whole so that the citizenry of this country wouldn't face these artificial increases in prices that cannot be justifiably produced.
As to why we are paying it.
[00:10:25] Speaker B: You know, I'm thinking about, you know, your statement, right? So if we examine our economy, you know, we say that we are a liberal economy, I guess we lean on a more capitalist type of definition of our economy.
But, you know, I think of the quote, you know, Mark, that talks about. Sometimes we, we talk rugged capitalism for the poor and socialism for the rich. So when I. Capitalism for the poor, I'm looking, I'm examining our trade policy when it comes. Well, our trade policy when it comes to pricing, right? We don't believe in pricing controls. We say let the market set it. And for the most part, the Ministry of Trade and Industry will put out a bulletin on pricing so people will know where to purchase, where to buy. You know, so it's more based on education. So we, we stay away from price controls. But when it comes. So that's rugged capitalism, right? We have to shop around to find best prices. But if you look at pricing, as you said it, more, more or less remains the same.
So I think we probably have to go a step further, right? And that step further is looking at the original products that come into the country. We need to have a clear database on that. And once we, we are clear on the original products, then probably we need to move into legislation to protect consumers.
All right? And in protecting consumers, consumers now need, need that level of protection because we could end up experiencing artificial inflation. And, and that in itself can impact the quality of life. So I think any government needs to be willing to have some sort of, you know, consumer protection, but have legislation to limit people who are breaching that, that type of standard. So for instance, if you know, the original products and products on the shelves, then there's a price ban or a price limit. So when you go on the shelf and you see made in China, made in, you know, whatever, and you're outside of that price band, you know, businesses should be sanctioned in some form because you can, you can be price gouging people at the end of the day, right? There has to be some kind of equilibrium. So I hope that before we get to that stage that apart from moral persuasion, that the state is willing to govern and to ensure that there's fairness in the marketplace.
[00:13:08] Speaker A: I don't agree that moral persuasion is the way we should go. I think as a people in Trinidad and Tobago, we have proven to ourselves that morals in most instances does not exist. We are a capitalist society. We are not governed by communism or socialism. We are capitalists and it's always about the almighty dollar. So the price gouging I think is something that we should be concerned about. Now here's a question that I want to pose to you in your thoughts and humble opinion. With these tariffs, let us break down the science of it as to how it is going to truly affect Trinidad and Tobago.
[00:13:53] Speaker B: Well, let's, let's say for instance in the energy sector, right, we depend by and large on our energy input. So if you look at, I believe presently we do about, let's say our, our exports. So our exports to the U.S. i think we are probably the sixth largest exporter to the U.S.
so in the energy perspective, that's going to be, that's going to have a first impact because the question would be now would we be an attractive market if there's a 10% markup to importing energy exports? So on one end there could be a lag in revenue because people now would decide not to buy as much inputs from, from Trinidad market. And then number two for us, it's also an opportunity to pivot, right? So we can pivot more into increase exports to Chile because we presently do a lot of exports to Chile in the Caribbean region. I'm a strong advocate of doing exports to the African continent.
Africa has been identified out of the 20 top economies, fastest growing economies. We have about 11 or 10 of those countries that are the fastest growing economies in the world.
It's an emergent market. So I think there's opportunities across the Atlantic as well. So that in itself could be an opportunity for us.
My concern would be, you know, when you look at agricultural products, whatever is being imported. Do we have the capacity, if we no longer decide to import at the levels that we do? You and I know we import an inordinate amount in the retail sector and the consumable sector. So we will have to force ourselves to get into agroprocessing in a real way and not just talking about it or playing around because it's going to hit, you know, a lot of this stuff that we import when it comes to food comes from US markets. So how do we manage that relationship between what goes to the US and what comes is yet to be seen. But I think that in itself could.
[00:16:18] Speaker A: Have an impact because is it that we have to consume food from the US Is it that we. Is it a prerequisite for us In Trinidad and Tobago? I remember one time a former prime minister would have banned the importation of apples, grapes and certain things from the US For a particular period. And he said, for that particular Christmas, whatever had you Wheaton, Pomceti, Pomerac and whatever fruits in the country. So as much as we import foods, are the foods coming into the country, is it from an agricultural standpoint or is it just the luxury foods that are coming in that we think we can put a halt on?
[00:16:52] Speaker B: Yeah. Well, then we end up in a chicken and an egg approach. Right. It's either we bite the bullet, stop a lot of the luxury stuff that comes in, and push that effort from a nationalistic perspective of activating, you know, fallow lands, a lot of lands that were given for agricultural purposes and they aren't in use, or they're actually going into housing developments. How do we. And this is in the private sector, right? Because you have people who either got lands through as part of the separation package from County. Okay. What is being used with those lands presently? How can we enable persons to really monetize and add to the food basket? And another component which we didn't talk about is the impact of the petrochemical sector, because you would have known in the past two years we would have seen some form of diversification, of adding revenues from both the manufacturing sector, which is food and beverage, and then some intake from the petrochemical sector. Now, the truth is, where we have ammonia being exported to the U.S. i think we are the second largest that's going to take a hit. Right. And if you have products going into the US that's taking a hit, coupled with gas issues coming into the plants, you know, are we going to now face a question of viability of the petrochemical sector in point? Lisa's how are we going to pivot to deal with this additional tariff of importing ammonia inputs, which is fertilizer components, into the US So that could have an impact on jobs, that could have an impact on the business model.
How do we pivot into that space, especially when these are US Based, for want of a better term, companies that are operating in Trinidad now, they have this tariff. That's yet to be seen how that's handled and how we navigate that as a country.
[00:19:04] Speaker A: You know, I will take a call with you this morning with any concerns that any of one of our callers have. Hello, good morning.
[00:19:10] Speaker C: Good morning to you, sir.
[00:19:12] Speaker A: Good morning.
[00:19:13] Speaker C: Good morning to your guest, Mr. Henry and good morning to the entire host and audience of Freedom 106.5 question, sir, if we go as I think we normally would, let us suppose because of the tariffs, we decide our product not selling much outside, we start to concentrate on local production, production for the local market and we start to concentrate on agriculture like the main things, food, clothing and shelter. By cutting down the imports from oda, do you think it would interfere much with the trade balance and would that also bring more reciprocal tariffs against us? That is just my main question. Thank you very much. God bless.
[00:20:00] Speaker B: A good question. So if we become more, as I say, self reliant domestically, I don't see because we are importing less would cause an increase on tariffs or exports because there are two things you'll have to do, you know, to your caller's question is one, to expedite local consumption and local production. Sorry to meet with local consumption and then to whatever we export because we don't export much food items per se. You know, we, we export gas, we export petrochemicals, some of the manufactured foods might be beverages, confectionaries, that type of thing goes into the U.S. so what we just have to do is to pivot where we actually do that export increase regional exports in the Caribbean region. As I indicated across the Atlantic, we have markets in Chile.
When it comes to natural gas, I think uniquely we've already been pursuing increasing markets in Europe, etc. So from that perspective, and then Trinidad is a small marketer. So it's not to say, you know, if we stop doing exports from the U.S. we come upon the radar as being in some form of imbalance. It's a really small percentage in the larger scheme of what the current administration is trying to target. All right.
[00:21:39] Speaker A: Hello, good morning.
Hello, hello.
[00:21:43] Speaker D: Morning Devi and morning to your guests. Just tuned into your program.
People are people seem you Know, I watch videos on YouTube and people on the radio and whatnot on the news and they seem to don't understand the tariffs or they just want to scare the population.
Donald Trump is only putting these tariffs.
He's claiming the US has been taken advantage of for years by partners and non partners with high taxes, in some cases 3 to 400% on some goods in dairy and all these type of things. And all he's doing, if you have a tax on US Goods coming into your country, he's going to put a tax, half of that back into, back into, on, on goods that your country exports. Now, I don't know if Mr. Henry knows how much in dollar wood we export to the United States, but I'm sure it's very, very minuscule.
And I want to tell people on this radio station that before 1913, the U.S.
america had no income tax. They were a tariff economy.
[00:22:56] Speaker B: Right.
[00:22:57] Speaker D: The only time income tax was introduced in the US before 1913 was during the Civil War to pay for war efforts and whatnot. But before that, no taxes. They were terrorist economy. And it succeeded. Thank you.
[00:23:14] Speaker A: Good point.
All right, we take another call quick. Hello, Good morning. All right, 625-2257 and 6273223. Your final thoughts as to how citizens should view the tariff imposed by Donald Trump here in Trinidad and Tobago and Wadi.
[00:23:29] Speaker B: Yeah, so my first response would be we shouldn't panic, but we should pivot.
That would be my, my key admonition to the nation because it's reciprocal in nature, it's not retaliatory. We've, we haven't had any significant imbalance of trade between, between Trinidad and the U.S.
i believe, since 2023. Teacuala, who said, you know, we've exported about $3.3 billion worth of goods to the U.S.
and most of that has been around, you know, fuels, you know, petrochemicals in the petrochemical industry. And then thirdly, we need to remember, and I'll end where we began, we need to remember the purpose of tariffs. It's designed to do one, to generate revenue, two, and in the short term, it's, it's also designed to protect local industries. All right. And then thirdly, what it's also designed is to relocate manufacturers that are external to bring them into your domestic economy to produce. So likewise, we should see what we can do around those three key areas. How can we continue to protect our local industries? One, how can we stimulate local manufacturing? Because it can protect industries and not upscale and upscale and incentivize production and outputs. So how do we do that locally so that we can have local consumption and local job creation? And then thirdly, how do we also attract external manufacturers who require an enabling space to produce and to reach out to markets outside of the U.S. so again, let's not panic. It's an opportunity for us to pivot.
[00:25:27] Speaker A: Thank you very much, Emwale, for chatting with me this morning. Again, I continue to reinvite you on the program. We always have great discussions and do have yourself a safe day here with us. Okay.
[00:25:38] Speaker B: Thank you so much.
[00:25:38] Speaker A: All right.
[00:25:39] Speaker B: Have a great day.
[00:25:39] Speaker A: Take care. The best insight, instant feedback, accountability the.
[00:25:44] Speaker B: All new Talk rank Radio Freedom 106.5.
