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June 3, 2019 - Steve Pieczenik
04:40
OPUS 156 Mexican Tariff
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Time Text
Hi, this is Dr.
Chenick, and I'd like to talk about the 5% tariff that Trump has just put on Mexico.
Mr.
President, may I suggest the following?
You need a new team to understand what you need to do in terms of psychological and economic warfare.
You have created an economic warfare with China, which is not the most effective warfare you're going to have.
Increasing tariff does not really work.
Because what happens is you basically put a burden on our society, we pay the taxes, and then in turn our economy starts to become very volatile as you see the stock market.
And then what you do is when we have an alternative route, which is basically Mexico, for us to do ABC manufacturing with China, anything but China, then you put a 5% tariff on Mexico, Because they're not stopping the foreigners from coming into the United States.
That's unfortunately not how it works and unfortunately John Bolton, Pompeo and all the people you have in the White House have no idea how to do economic warfare.
There are those of us who've been trained in it and who have done it very successfully against the Soviet Union.
We didn't put an embargo.
We didn't put a tariff on them.
We basically played with the ruble.
We shorted that.
We shorted their bond ratings.
And at the same time, we created space warfare, which did not exist, forcing them into a bankruptcy right under Gorbachev.
And then we broke up the Soviet Union.
It was not something that Reagan had just...
I declared and the wall came down.
It was a major effort that started at the RAIN Corporation.
I initiated and then worked with an entire team in the CIA and National Intelligence.
So you better realign your team to understand that if you want to have economic warfare against China or Mexico or any other country, the tariff is not the way to go.
Because what will happen in the long run, and it's happened in the past, is you will create an economy which is not stable.
There will be a major number of unemployment here.
Now let me explain to you what Mexico does for us.
Mexico has an export of $380 billion to the United States.
We in turn have an export to Mexico Of $210 billion.
That means there's a $170 billion differential.
Where is that $170 billion differential?
Well, it has to do with the fact that we have systems that are in place which have to deal with fuel, where we refine the fuel for the Mexicans and we sell it back to them.
It has to do with Fiat, GM and Chrysler.
Where they make the body parts and they make the cars and then they send them to us, but they need our management systems so that we're totally integrated within that $170 billion.
That's a free float, let's call it.
The other issue is, believe it or not, Mexico is our primary exporter of beer.
That's correct.
They export $350 million worth of beer.
We, in turn, Pay about $12.5 million for the beer price now, but if it were to go up 25% on the tariff, you would be paying close to $1 billion.
And that is out of control for the consumer.
So TV, cars, computers...
Foxcom, which is a Taiwanese company, builds Apple iPhone in Mexico and ships it to us and we in turn help them to build all these facilities for Foxcom.
So when you increase the tariff base on Mexico, it's not going to affect the number of aliens that come through Mexico or the number of aliens that come to our country.
What you have to understand is you have to go back to the target situation, which will be El Salvador.
It'll be Peru.
It'll be Ecuador.
And by the way, you already have a problem in Venezuela.
For a year, Bolton has not, along with Elliott Abrams, who should have known better, has not been able to get rid of Maduro.
Are you kidding me?
We were able to do in the past a coup overnight in fast time.
So let me quote to you A famous line from President McKinley.
He said, I'm a man who believes in tariffs, and I will stand on the tariff platform.
Remember that, Mr.
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