As the U.S. grapples with the economic implications of rising tariffs, we discuss what it means for domestic production and global trade warfare. Expert guests weigh in on how these developments might accelerate a recession and what families can do to prepare. Additionally, this episode touches upon the significant challenges in military strategy as the U.S. and Israel align their forces around joint operations against Iranian nuclear sites. This week’s discussion is a compelling blend of economic policies, military preparations, and strategic international relations.
SPEAKER 08 :
from the heart of our nation’s capital in Washington, D.C., bringing compelling interviews, insightful analysis, taking you beyond the headlines and soundbites into conversations with our nation’s leaders and newsmakers, all from a biblical worldview. Washington Watch with Tony Perkins starts now.
SPEAKER 12 :
Welcome to this April 7th edition of Washington Watch. I’m Tony Perkins. Thanks for tuning in. President Trump met with Israeli Prime Minister Benjamin Netanyahu today in the Oval Office. The talks covered a wide range of topics, tariffs, hostages, Iran and Gaza. But what brought the prime minister back to the U.S. so soon after his February visit? We’ll be joined by CBN’s Chris Mitchell from Jerusalem with a readout on the Oval Office meeting. Also over the weekend, the Senate passed its budget resolution. House Budget Committee Chairman Jody Arrington blasted the measure as unserious and disappointing. Speaker Johnson says the resolution doesn’t define the final outcome, but it does allow reconciliation to begin in earnest. The House is expected to vote on this Wednesday. We’ll talk with Chairman of the House Freedom Caucus, Maryland Congressman Andy Harris, a little later. And on the tariff front, China responded to President Trump’s tariffs with a 34% increase on U.S. goods. Now, President Trump is pledging another 50% tariff hike if China doesn’t roll back on their retaliation.
SPEAKER 10 :
They’re very confident in many ways, except in their economy. When you look at the inside working of their economy, they’re very, very dependent on exports. If they don’t have large quantities of exports, their economy doesn’t work at all. So this is a direct challenge to them to say, we’re going to try to push more manufacturing in the United States to bring jobs here. So I think that’s why China has reacted so fast.
SPEAKER 12 :
That was Senate Republican Conference Vice Chair James Langford on Meet the Press yesterday. We’ll unpack this with Asian expert Gordon Chang. Also joining me, economist David Bonson. Will the tariffs, will it create a trade war? And could it accelerate a recession? And what should families be doing to prepare? We’re going to talk about all of that and more on this Monday edition of Washington Watch. And speaking of Monday, today brings a new episode of FRC’s God and Government. In episode eight, I explore what the Bible says about economics, wealth, inflation, and the proper role of civil government in the economy. I can tell you it’s a very timely and important discussion. God and Government is available exclusively on the StandFirm app. You can go to the app store and download the StandFirm app or simply text the word course, that’s course, to 67742. Course to 67742 and I will send you a link. Israeli Prime Minister Benjamin Netanyahu met with President Trump at the White House earlier today after arriving in Washington on Sunday. The meeting comes on the heels of President Trump’s new tariff policy in Israel’s dramatic expansion of its footprint in Gaza Strip since it resumed its war against Hamas. The meeting is attracting a lot of attention as Prime Minister Netanyahu was just in Washington in February for President Trump’s first meeting with the foreign head of state as he began his second term. Joining me now to unpack all of this is Chris Mitchell, the Middle East Bureau chief at CBN News, who joins us from Jerusalem. Chris, welcome back to Washington Watch. And as always, thanks for staying up late for us.
SPEAKER 11 :
Sure. Glad to do it, Tony. Important things happening here in Jerusalem and certainly where you are in Washington.
SPEAKER 12 :
Now, according to reports, this visit was scheduled with only a few days notice. My sense and what I’m hearing from others that I’m having conversations with is that since the prime minister was just here in February, for him returning so soon would suggest that this is a very significant conversation taking place.
SPEAKER 11 :
I would agree, Tony, and I think it’s very sensitive and significant and likely revolving around what the U.S. and Israel will do with Iran and its nuclear sites. Will they attack or will they delay it or will they actually be direct or indirect talks with Iran over its nuclear program? The U.S. is making it clear that Iran has to eliminate its nuclear program, whether that does it voluntarily or through a military strike remains to be seen. It’s unlikely, it seems, after the long history of Iran and its nuclear program, that they would do so voluntarily. So perhaps this meeting has to do with plans to have a joint U.S.-Israeli strike, and or maybe it’s the Israelis who really want to make sure that President Trump doesn’t get bogged down in endless negotiations, and there’s a date certain to when these talks may end. We know, Tony, that President Trump sent a letter to the Ayatollah Khomeini, you know, talking about the negotiations, but he put a two-month limit on it, which is going to expire not too far away.
SPEAKER 12 :
The conversations that I’ve been having on both sides, Israel, the United States, by those that are kind of in the mix, is this is the time. I don’t think anyone disagrees over the timing that this is the moment in which this threat has to be removed, whether that’s voluntarily, as you pointed to. And I think the analogy there or the way forward with the voluntary is like what we saw with Libya, where there is a voluntary dismantlement of their nuclear plan that is overseen by other countries, including the United States. the there’s only one other option. And it looks like both countries could be prepared to take that other option if necessary.
SPEAKER 11 :
Yeah. And if you look at all the military assets that are being brought here to the region, Tony, it looks like the military option is the way that it’s going to go. If you look at Diego Garcia there in the Indian Ocean, they are B-2 bombers, B-52 bombers. You have two carrier strike groups in the region, a third on its way. So the military assets are just, you know, getting more and more assets here into the region. And you would think that this is going to be a joint strike. For the Israeli perspective, Tony, to have the B-2s and where they can have a 30,000-pound bomb called the MOP, the Massive Ordnance Penetrator, that really is what probably can really make a difference in some of these sites in Iran right now that are buried deep underground areas. CONCRETE HARDENED, AND IRAN HAS DONE THAT BECAUSE THEY KNOW THAT, SO WE TRY TO MAKE IT INVULNERABLE TO ANY AIR ATTACK, BUT WITH THE B-2s, THE B-52s ADDED TO WHAT ISRAEL CAN BRING WITH ITS F-35s, IT LOOKS LIKE A PRETTY FORMIDABLE ATTACK AGAINST THESE NUCLEAR SITES WHICH ARE SPREAD THROUGHOUT IRAN PURPOSELY TO AVOID, YOU KNOW, LIKE A SINGLE STRIKE THAT HAPPENED IN 1981 IN THE IRAQI reactor, and then 2007 against a Syrian reactor. So Iran knows what it’s doing, but they’re facing right now the possibility that their nuclear program might get hit very hard.
SPEAKER 12 :
So Chris, talking about the military, let’s talk about Gaza, because it does appear that Israel is accelerating their activity there in Gaza. I would interpret that as wanting to bring this to a conclusion pretty quickly, allowing them to turn their attention elsewhere.
SPEAKER 11 :
Yeah, what they’re doing is setting up security zones. So they’re actually eliminating all Gazans out of certain areas within Gaza, like in Rafah, areas between Rafah and Qanunis. They’re shrinking the territory that Hamas is able to control. They’re also cutting it into different security zones throughout the Gaza Strip. So, yes, it seems like they want to bring it to a conclusion, put more pressure on Hamas. hopefully be able to put the pressure on so that more hostages would be released. But I think this idea of a security zones is really a bit of a game changer here right now. And in the battle, the year and a half now against Hamas. And I think Israel is taking a much more determined stance against Hamas with this new military operations in the last few weeks.
SPEAKER 12 :
And Chris Mitchell, more evidence coming out as documentation found among the rubble there of Hamas controlled areas in the tunnels of this collaboration between Iran and Hamas and how October 7th may have in fact been funded by Iran.
SPEAKER 11 :
Yeah, it was released by Israeli Defense Minister Israel Katz, where some of the documents were from Yahya Sinwar and his number two man, Mohammad Deif, where they were getting $20 million a month, up to half a billion dollars, to prepare for annihilating, as they say, the, quote, Zionist entity. And part of that translation, Tony, they said that, you know, Allah willing, we will actually meet in a liberated Jerusalem. So the idea was that they could actually defeat Israel and not only that, but also come here to Jerusalem, which is the goal not only of Hamas, but also Iran as well, to liberate Jerusalem, to destroy the Jewish state. and all part of the documentation that they’re finding right now to show the financial connection between the Islamic Republic and the Hamas leadership all before October 7th.
SPEAKER 12 :
Now, wasn’t that at the same time that the Biden administration was releasing funds to making funds accessible to Iran?
SPEAKER 11 :
I mean, it’s such a tragedy, Tony, that actually the U.S. was easing sanctions on Iran. For four years, the Trump administration had the maximum pressure policy that was nearly bankrupting the Islamic Republic. And when lifting the sanctions, it literally gave billions of dollars back into Iran’s coffers, and they were able to use that to actually fund not only October 7th, but the Houthis down in Yemen, Hezbollah in Lebanon, and all designed at the time to have this ring of fire around Israel and really eventually destroy the state of Israel. But here we are over a year and a half after October 7th. Hezbollah is nearly gone, so is Hamas and the Houthis as well.
SPEAKER 12 :
I mean, you cannot deny the impact of America’s foreign policy and how we engage. I mean, here we are, here we were, we’re not doing it now, but making it easier for Iran to have the excess revenue to fund terrorist activity and attacks on Israel that we in turn helped fund them to defend against. Tell me that makes sense.
SPEAKER 11 :
It makes no sense, Tony. And I remember being with you and a group of other Christian leaders that repented at the site of the Nova Music Festival for funding UNRWA, which was part of, you know, allied with Hamas there in the Gaza Strip and helped facilitate that massacre that we were there and saw the many victims. signs of many of the people that were murdered on that day. And so I think that was a moving time to actually repent for what the U.S. was culpable for, not only with UNRWA, but also helping to fund the Islamic Republic.
SPEAKER 12 :
Well, it is certainly something that Americans, Christians here in America, need to be praying because we were complicit, not directly but indirectly, by allowing Iran to have the capacity and the capability to inspire and fund these attacks on Israel. We just have about a minute and a half left, Chris, but more information coming out of Hamas. The Jerusalem Post reporting. that what most of us realize Hamas was lying about the numbers when it came to facilities. It was not children and women. The vast majority was in fact those that fell in the age category of terrorists and warriors.
SPEAKER 11 :
Yeah, thousands. Hamas itself has taken off these roles of those who have died. You know, at the very beginning of the war, it was the Hamas health ministry that started promoting these numbers, all in a way to exaggerate what Israel was doing and all the way to demonize Israel. It’s all part of their propaganda war for those. that had been covering this for 20 years or so. It was a movie that we’ve seen before. Hamas typically exaggerates the death count. They talk about more women and children than actually men. So this is something that finally is coming out to the light. And the major media, including even the Biden administration and other nations, just took these numbers by Hamas at face value and just ran with them.
SPEAKER 12 :
And I haven’t seen them correct it either. Chris Mitchell, always great to see you. Thanks so much for joining us tonight.
SPEAKER 11 :
Thanks, Tony.
SPEAKER 12 :
Chris Mitchell with CBN from Jerusalem. All right, when we come back, we’re going to talk budget with the chairman of the House Freedom Caucus, Dr. Andy Harris of Maryland joins us next. Don’t go away. A lot more Washington Watch straight ahead.
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At Family Research Council, we believe religious freedom is a fundamental human right that all governments must protect. That’s why FRC President Tony Perkins went to Capitol Hill to testify on behalf of persecuted Christians in Nigeria. Islamist terror groups target Christians and other religious minorities in Nigeria with brutal violence. Representative Chris Smith, who chaired the hearing, said 55,000 people have been killed and 21,000 abducted in the last five years alone. The congressman also stressed that 89% of Christians in the world who are martyred are from Nigeria.
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Yet the government of Nigeria has failed to make progress against religiously motivated persecution of Christians despite religious freedom being enshrined as an essential human right in their constitution.
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Tony Perkins called for the United States to send an unmistakable message.
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This is systematic religious violence. Nigeria must be redesignated a country of particular concern. The Biden administration’s removal of this designation was a reckless mistake that emboldened the very terrorists who are slaughtering Christians.
SPEAKER 02 :
Redesignating Nigeria will enable the U.S. government to pressure Nigerian leaders to protect vulnerable Christians.
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These are not just numbers. These are fathers, their mothers, their children, their families.
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Bishop Wilfred Anagabe risked his life to speak out, sharing firsthand accounts of the danger faced in his church district in central Nigeria.
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We live in fear because at any point it can be our turn to be killed. But to remain silent is to die twice. So I have chosen to speak.
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FRC is calling on President Trump to act now to promote religious freedom around the globe and speak up on behalf of Christians in Nigeria.
SPEAKER 04 :
Looking for a trusted source of news that shares your Christian values? Turn to The Washington Stand, your ultimate destination for informed, faith-centered reporting. Our dedicated team goes beyond the headlines, delivering stories that matter most to believers. From breaking events to cultural insights, we provide clear, compassionate coverage through a biblical lens. Discover news you can trust at The Washington Stand, where faith and facts meet every day.
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Download the new Stand Firm app for Apple and Android phones today and join a wonderful community of fellow believers. We’ve created a special place for you to access news from a biblical perspective, read and listen to daily devotionals, pray for current events and more. Share the Stand Firm app with your friends, family and church members and stand firm everywhere you go.
SPEAKER 12 :
This is Washington Watch. I’m your host, Tony Perkins. Thanks for joining us. All right, Republicans in Congress are working to pass President Trump’s America First budget as quickly as possible. Over the weekend, the Senate passed another budget resolution, this one in line with the One Big Beautiful Bill approach. But some House members, GOP members, believe it pales in comparison to the House-passed version from over a month ago. So what are the differences? What’s causing concern? And will it have the necessary votes for the scheduled vote to take place on Wednesday? We’re here to discuss this. Congressman Andy Harris, he serves as a member of the House Appropriations Committee. He’s also the chairman of the House Freedom Caucus. He represents the 1st Congressional District of Maryland. Dr. Harris, welcome back to Washington Watch. It’s always good to see you.
SPEAKER 14 :
Good to be with you, Tony.
SPEAKER 12 :
All right. So not surprisingly, the Senate Republicans fell a little bit short of expectations for House members. Break that down for us.
SPEAKER 14 :
So the Senate bill is a little more complicated than the House bill. So what it does, it sets an aspirational budget goal for next year of six point five trillion total spending. But that’s completely unenforceable. The only thing that’s enforceable are the instructions to the four committees for deficit reduction, and those sit at only $4 billion with a B, whereas the House version was $1.5 to $2.5 trillion with a T. So we think that in order to get meaningful deficit reduction, we’d have to go with something much closer to the House version or see what the Senate intends to do with their language.
SPEAKER 12 :
Now, the speaker says that this sets up the serious phase of this budget reconciliation, that this provides the framework and doesn’t necessarily dictate the outcome. Is that accurate?
SPEAKER 14 :
Well, we don’t need to set up the next phase. We could go right to the committees and ask them to begin writing the reconciliation bill. That’s actually what we did in 2017. We didn’t pass the unified budget resolution, which is what we’re talking about now, until actually we had put some meat on the bones in terms of what was going to be the final product. That’s what we should do now because there are some of us in the House who just feel this is not an adequate amount of debt reduction when we’re looking at a $2 trillion federal deficit. And again, if the Senate stays true to their word and they do deliver a reconciliation bill that begins to look like that, that’s fine. We can pass that budget resolution at that time. But, you know, I’m a believer in trust but verify. We need some verification from the Senate that they’re actually going to have meaningful deficit reduction.
SPEAKER 12 :
Now, the Republican conference in the House had a conference call yesterday. And I understand that there were there were a lot of concerns expressed in that call. A vote has tentatively been scheduled for Wednesday. It doesn’t sound like there’s going to be the Republican votes to pass what’s currently on the table here.
SPEAKER 14 :
I don’t think there will be, and I think the Speaker should put it off because it’s not necessary to pass this at this time. We should get to work. Again, put pen to paper. Let’s see what the Senate means when they’re talking about deficit reduction. And if it’s in line with what the House has suggested, then we’ll be good to go at that time. But I would advise the Speaker not to do it, not to put it to a vote this week. because he doesn’t want to come up short on this, because we can continue with drafting those reconciliation bills without this budget resolution at this point.
SPEAKER 12 :
So what do you envision would be the time frame for that consolidated approach between the House and the Senate? Because it obviously has to go through both chambers. And the economy is getting kind of antsy with the tariffs. The tax cuts are contained in this reconciliation, I think, which I would think are going to be essential in stabilizing the economy.
SPEAKER 14 :
Again, Tony, I think the most important thing is let’s start talking the brass tacks. Where is the deficit going to be reduced? And we can do that right now. We don’t need this budget resolution. We will need it at some point in the future. And if the Senate, again, is in line, if their idea of deficit reduction is in line with the House’s idea, then we can pass it at any time and then move the reconciliation bills forward. The only thing we can’t do is bring a reconciliation bill to the floor without these budget resolutions being passed by both houses. But we’re still far away from that. And again, I trust would verify. I mean, let’s go ahead and see what the Senate means by deficit.
SPEAKER 12 :
So what you’re proposing, if I understand it correctly, Dr. Harris, is that the House should go ahead and put pen to paper and not just use the top line numbers, but actually put forward these deficit reduction measures, put that into a package and then tell the Senate, hey, this is what we’ve got.
SPEAKER 14 :
Yeah. And most importantly, we need to see what the Senate’s got, because we know that we have to have at least a trillion and a half and up to two and a half trillion dollars in cuts over the next 10 years. Their instructions are only for four billion over the next 10 years. We need. But they say, oh, trust us, we’re going to have a larger deficit reduction. Good. Let’s see what that deficit reduction is like. And at that point, we’ll pass the budget resolution. And this this will go proceed very rapidly after that.
SPEAKER 12 :
I mean, I kind of see the committee, Budget Committee Chairman Jody Arrington saying this is not even serious. $4 billion in enforceable cuts. I mean, what do you think the Senate’s thinking here?
SPEAKER 14 :
Well, look, they claim they’re going to be serious about deficit reduction. I just say, let’s see where it is. You know, show us the money. Show us where your deficit reduction plans are. And if they come again, if they come near the House’s deficit reduction plans, then let’s go to town. Let’s give the president his tax cuts. Let’s put that deficit reduction in place. And we can do that in fairly rapid order. But again, it’s not on the promise of the Senate because it’s not enforceable. The only thing enforceable in the Senate is $4 billion. And I think Jody Arrington is right. It’s not serious until we see exactly what their idea of deficit reduction is.
SPEAKER 12 :
We just have about a minute and a half left, Dr. Harris, but I do think it’s important when we talk about deficit, we talk about debt, you know, a lot of folks get lost in all these D.C. terms, but we’ve been talking about the imbalance between trade and why it’s important to do the tough decisions about tariffs and trying to balance out our trade. Getting a handle on the deficit and our debt is just as critical, if not more so.
SPEAKER 14 :
That’s absolutely right, and the two are intertwined. You know, as we bring American industry back through tariff policy, if we bring industries back into the United States, we grow our GDP, we help our debt and our deficit. So they are intertwined, but right now we have to deal with the federal debt and the federal deficit because these, in the end, could be crippling to the American economy if it goes too far.
SPEAKER 12 :
Yeah, and I tend to agree that the Senate’s not really grasping the urgency of the moment when it comes to the deficit and the debt. Dr. Harris, always great to see you. Thank you so much for joining us and appreciate you and the Freedom Caucus. Thank you. Dr. Andy Harris of Maryland, also, as I mentioned, chairman of the House Freedom Caucus. I think I’d be surprised if there is a vote this Wednesday. I think it’s going to be very difficult. Remember, you only have like a couple of votes now to spare on the Republican side in order to pass something. And I do think the Senate needs to get aggressive on cutting spending. All right. Don’t go away. We’re back with more after this.
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Everything we do begins as an idea. Before there can be acts of courage, there must be the belief that some things are worth sacrificing for. Before there can be marriage, there is the idea that man should not be alone. Before there was freedom, there was the idea that individuals are created equal. It’s true that all ideas have consequences, but we’re less aware that all consequences are the fruit of ideas. Before there was murder, there was hate. Before there was a Holocaust, there was the belief by some people that other people are undesirable. Our beliefs determine our behavior, and our beliefs about life’s biggest questions determine our worldview. Where did I come from? Who decides what is right and wrong? What happens when I die? Our answers to these questions explain why people see the world so differently. Debates about abortion are really disagreements about where life gets its value. Debates over sexuality and gender and marriage are really disagreements about whether the rules are made by us or for us. What we think of as political debates are often much more than that. They are disagreements about the purpose of our lives and the source of truth. As Christians, our goal must be to think biblically about everything. Our goal is to help you see beyond red and blue, left and right, to see the battle of ideas at the root of it all. Our goal is to equip Christians with a biblical worldview and help them advance and defend the faith in their families, communities, and the public square. Cultural renewal doesn’t begin with campaigns and elections. It begins with individuals turning from lies to truth. But that won’t happen if people can’t recognize a lie and don’t believe truth exists. We want to help you see the spiritual war behind the political war, the truth claims behind the press release, and the forest and the trees.
SPEAKER 12 :
Welcome back to this Monday edition of Washington Watch. Thanks for tuning in. Well, shortly following President Trump’s Liberation Day, which culminated in a host of new tariffs, China responded by raising a matching percentage of tariffs against the United States. The move was criticized by many, including President Trump, as hasty and unnecessary. President Trump is pledging to raise tariffs even higher on China if they don’t remove the 34 percent increase they placed on U.S. goods. We’re here to discuss this. Gordon Chang, distinguished senior fellow at the Gatestone Institute. He is a author of several books, including Plan Red, China’s Project to Destroy America. You can follow him on X under the handle at Gordon G. Chang. Gordon, welcome back to Washington Watch. Thanks for joining us. Thank you Tony. So China has responded to President Trump’s 34 percent tariffs with their own 34 percent additional tariffs against the United States. Are we on the verge of a trade war. What’s going to happen here.
SPEAKER 13 :
Well, it certainly looks like one, and it’s escalating. As you point out, President Trump today said that he would impose an additional 50% tariff. That would take tariff rates on China to over 100% if China did not take back its 34% tariff. And this is important because China right now is really out of ammunition. They’re the smaller economy. Their economy, even with their inflated reporting, is less than two-thirds the size of ours. And China is the trade surplus trader. It last year had a $295.4 billion merchandise trade surplus with the U.S. Trade surplus countries can’t really do much in a trade war. And the only thing they can try and do is intimidate President Trump to back down. But President Trump is not backing down. And so I think Xi Jinping is in a very difficult position right now.
SPEAKER 12 :
I mean their economy needs America to buy their products, right?
SPEAKER 13 :
Especially now, because Xi Jinping has turned his back on consumption as the fundamental basis of the Chinese economy, which means his only way out of an increasingly serious situation is to export more. And he can’t replace the U.S. market, the largest in the world. And President Trump is just closing it off. So right now, Xi Jinping just does not have any options.
SPEAKER 12 :
This is double edged sword, though, for and we’re going to talk more about this a little bit later for President Trump, because America has in many ways become a consumption nation. We consume. We’ve become really almost addicted to these cheaper products coming out of China. So how long can the American economy, you think, hold out without the cheaper products coming from China until there’s some type of resolution?
SPEAKER 13 :
We can hold out for a long time now. Politically it would be difficult for President Trump but he doesn’t face something until let’s say the midterms. So he’s got a lot of time in which to have his moves bear fruit. And by the way this has got to be done because we’re in an unsustainable situation. America accounts for almost half of the world’s merchandise trade deficits. China accounts for almost half of the world’s merchandise trade surpluses. This just is not acceptable from any number of different viewpoints. And so I think President Trump gets high marks, whatever happens, he gets high marks for trying to deal with this, something that his predecessors let slide for decades.
SPEAKER 12 :
So it’s something that at some point in time, if we want to have a sustainable economy of our own, we have to address this trade deficit.
SPEAKER 13 :
Yes. I mean, and, you know, I understand Wall Street’s reaction. But, you know, we got to as Americans, we’ve got to ask ourselves, you know, do we really think that we could get out of decades of misguided really horrible trade policy and not bear some cost of course we’re going to have to do that and president trump has decided i think on the best way which is to make sure that china doesn’t take over the american economy and take over the economies around the rest of the world so yes this is the right move it may look really ugly right now but it’s absolutely necessary
SPEAKER 12 :
Yeah. When you’ve been apathetic to situations like this and I would I would throw in. Obviously it’s not a part of this tariffs but the deficit and the debt that America has right now at some point we’re going to have to take on that issue as well. And it’s not going to be pleasant all the way around. But long term it’s absolutely essential. I want to go beyond the economic impact here for just a moment Gordon. And I want to get your thoughts on how the tariffs might impact China’s plans toward Taiwan.
SPEAKER 13 :
This we ought to be concerned about because Xi Jinping right now has an economy that’s not growing at the 5.0% pace that they reported for last year. It’s probably about zero. And with the actions that we have seen over the last couple weeks, it’s probably heading to deep contraction territory. That means Xi Jinping may decide whether it’s Taiwan, Philippines, Japan, South Korea, India, he very well may decide to use it rather than lose it. But also we know that there are signs of instability at the top of the Communist Party. The infighting is getting intense. Xi Jinping may decide that war is in his interest, not to rally the Chinese people, because Xi Jinping knows the Chinese people do not want war. But he might decide a war is in his personal interest to prevent other Communist Party figures from challenging or maybe even deposing him. So right now, I think the situation is extremely tense across China’s periphery.
SPEAKER 12 :
So given the political instability, economic instability growing, this may prompt him to take military action to, in some ways, distract, right?
SPEAKER 13 :
Yes. I’m actually more concerned about something. Not that Xi Jinping wakes up some morning and says, I’m invading the Philippines. But we’ve seen some very dangerous provocations in the last couple of weeks against South Korea, Japan, Taiwan, Philippines and Australia. And if one of those escalations goes wrong, I don’t think Xi Jinping will be able to control escalation because right now he has configured China’s political system so that only the most hostile answers are considered to be acceptable, which means if something starts, it’s going to continue.
SPEAKER 12 :
Well, Gordon, we’ll have to leave it there and we’ll continue it on another time at another date. Thanks so much for joining us. Always great to see you, my friend. Alright folks, stick with us. We’re coming back with more discussion about the tariffs after the break.
SPEAKER 06 :
What is God’s role in government? What does the separation of church and state really mean? And how does morality shape a nation? President John Adams said our Constitution was made only for moral and religious people. It is wholly inadequate to the government of any other Join Family Research Council for God and Government, a powerful 13-part series that equips you with biblical truth to engage in today’s most pressing debates. From the Ten Commandments in classrooms to the immigration crisis of America, we’ll uncover the foundations of our nation’s history and why it’s relevant for today. Defend God’s plan for government because faith and freedom were never meant to be separate. New episodes available each Monday. To view the series on the Stand Firm app, text COURSE to 67742.
SPEAKER 05 :
The world is hurting. Streets are filled with crime. Families are broken. Sin is celebrated. And God is mocked. Everywhere we look, the wages of our sin are on full display. As Christians, we know that surrender to God’s will is the solution to our biggest problems, but not everyone agrees. Even in church, we hear people say the most important thing is to be tolerant, that we shouldn’t impose a morality on other people, and that loving our neighbor means celebrating what they do. But you can’t do that. It’s not that you don’t love your neighbor. You do. But you care about God’s opinion more than your neighbor’s opinion, and this makes you different. In fact, sometimes it makes you feel alone, like you’re the only one. But there is good news. You are not alone, not even close. Research has found that there are 59 million American adults who are a lot like you. There are millions of people around the country who are born again, deeply committed to practicing their faith, and believe the Bible is the reliable Word of God. But that’s not all. They’re also engaged in our government. They’re voters. They’re more likely to be involved in their community, and they’re making a difference in elections. The problem is that a lot of them feel alone, too. We want to change that. FRC wants to connect these 59 million Americans to speak the truth together, no matter the cost. If you want to learn more about this group and what it means to be a spiritually active, governance-engaged conservative, or if you want to find out if you are one of these SageCons yourself, go to frc.org slash SageCon and take the quiz to find out. The world is hurting, and we have the solution. We can’t do it alone, but we can do it if we work together. That’s what we’re working toward every day. Join us. Go to FRC.org slash S-A-G-E-C-O-N, SageCon, to learn more. That’s S-A-G-E-C-O-N, SageCon, to learn more.
SPEAKER 12 :
All right, before we continue our conversation about the tariffs, let me remind you of a new episode of God and Government. It’s out today, episode eight. And in this episode, I explore what the Bible has to say about economics, wealth, inflation, and the proper role of civil government in the economy. Tell you what, it’s a timely and important discussion. God and Government is available exclusively on the Stand Firm app. So you’re going to have to have the app in order to watch the God and Government series. And guess what? I’ll provide it to you. Just text the word COURSE to 67742. That’s COURSE to 67742. And I’ll send you a link. Our word today comes from Ezekiel 24. Utter a parable to the rebellious house, the Lord says. Say to them, thus says the Lord God, set on the pot, set it on, pour in water also, put in the pieces of meat, all the good pieces, the thigh and the shoulder, fill it with choice bones, take the choices of the flock, pile the logs under it, boil it well, seethe also its bones in it. i am the lord i have spoken it shall come to pass i will do it i will not go back i will not spare i will not relent according to your ways and your deeds you will be judged declares the lord god for decades god had called his people to repentance through his prophets warning came not with cruelty but with patience offering a chance to turn He even allowed seasons of chastisement, refining fires meant to purify and restore, but the people refused, choosing the soothing lies of false prophets over the truth. Now the pot boils, not to cleanse, but to consume. Judgment, once delayed by mercy, is now inevitable. God’s word always comes to pass. The question is whether we will respond in time. To join our journey through the Bible, text the word Bible to 67742. The stock market fallout since the White House tariffs announcement last week continues. This morning, Wall Street’s so-called fear gauge, the CBOE Volatility Index, surged to the 50 level. On Friday, it closed above 40, its highest closing level in five years. Is this temporary pain for long-term gain, or is there more to brace for? Here now to unpack this is financial advisor David Bonson. He is a founder of the Private Wealth Group from the Bonson Group. He is also the senior fellow of economics for the Center for Cultural Leadership. David, welcome to Washington Watch. Thanks so much for joining us today.
SPEAKER 03 :
Thanks for having me, Tony.
SPEAKER 12 :
All right, so been a pretty rough week since the president announced these tariffs, and it doesn’t appear that it’s over yet.
SPEAKER 03 :
No. When you get this kind of economic scare, there can be some volatility that’s quite prolonged. It’s really more than just markets. You definitely have risk assets that have sold off substantially. And yet there’s also the bigger fear as to what ends up happening in the economy and where the fundamentals will be throughout the second quarter and going into the third quarter of this year.
SPEAKER 12 :
Is this possibly Wall Street big business kind of bowing up to the to the president saying we’re not going to go along with this. We’re going to we’re going to show you and we’re going to rattle the stock market.
SPEAKER 03 :
No, I’ve heard some theories like that. And I would tell you and our listeners out of hand that that isn’t what’s happening here. Wall Street is really a euphemism for capital markets. It’s people who have investments in all different aspects of risk assets from debt to equity, stocks, bonds. Real estate, private companies, big companies, small companies. When we’re talking about the stock market, you have a substantial amount of the market owned by individual retirees, by pension funds, by a lot of small investors. But then there’s also big hedge funds as well. The idea that investors are willing to go sell things at a loss and sell into a loss to try to teach the administration a lesson, I don’t think it speaks to a good understanding of what these guys’ incentives really are. This is capital in pursuit of a return, not a particular agenda. It’s capital being driven by fear right now, Tony, that perhaps we’re going to see a decline in profits, a decline in wages, a decline in economic growth. And so from my vantage point running over $7 billion wealth management firm, I get to see the optics to both the stock market but also regular business because so many of our clients are business owners. And I got 100 calls on Thursday, Friday, and over the weekend, 83% of whom voted for President Trump. absolutely petrified about what these tariffs represent to their business and concern for their outlook in the months ahead. So I think it’s both a stock market and a real economy and small business impact that right now there’s just a lot of uncertainty.
SPEAKER 12 :
So, David, let’s talk a little bit about fear for a moment. And I want to put this in a broader context than just economic fear, although that’s obviously what we’re focused on right now. But fear is something we’ve been warned against, and there’s a reason for that. And I step back to use an analogy with the economy where we have the consumer price and the consumer confidence index. We look to see what the confidence level is of consumers. Is not our economy built a lot just on confidence and trust? And when there’s fear, can that not fuel kind of a stampede?
SPEAKER 03 :
Well, on one hand, my answer is yes, it can. But on the other hand, it’s not to me about the consumer. It’s about the producer. And this is something that’s very important to me theologically, but also economically. I think the self-fulfilling prophecy you get where when there’s a lot of fear, you end up not having a certain activity is not that people get afraid and say, I’m not going to go to the mall. Candidly, if people are really afraid of their job right now, they shouldn’t be going to the mall. Where you get a self-fulfilling prophecy is when there’s a decline in production, a decline in capital goods, a decline in capital investment that make and build and do the things that lead to real economic output. Consumption takes away wealth. With this idea that our economy is built on people spending money is just not true. Our economy is built on us producing things. Now, of course, we produce things so people will enjoy them, but it becomes wealth additive. And it’s the most important Christian tenet in all of economics. Our belief in economics is one of addition and multiplication. Be fruitful, multiply, fill the earth. That’s what Christians believe in about the economy. The Keynesian notion, the statist notion, the central planning idea from the 20th century was an economics of subtraction. And this idea that mankind is just built to go spend money and gratify themselves, and that’s where you get economic growth, it’s just not true. So I really believe that the fear issue is true, but it’s more on the production side than consumption.
SPEAKER 12 :
Yeah, and we look at that consumption side. That’s also what is driving our idea that the world’s overpopulated and this idea that we don’t need children is because they’re consumers rather than producers. So when you have this uncertainty, what it does cause are those who would invest money in capital projects are going to sit on that money out of fear of the unknown. Is that an accurate assessment?
SPEAKER 03 :
They’re going to sit on it. They’re going to delay. They’re going to cancel. They might diminish like they were going to do something that was a 10 and now they’re going to do a 5. There’s all those types of things. And so then that leads to a sort of self-fulfilling prophecy of a downturn in economic activity and growth.
SPEAKER 12 :
But you would agree I think that America needs to once again become more of a producer when we’ve seen a lot of our manufacturing has moved offshore moved south. Is this the way to get it back through the tariffs mechanism.
SPEAKER 03 :
Well, let’s start with what we can’t manufacture onshore, coffee, bananas, certain spices and consumer goods. Adam Smith, the great Christian economist of the 18th century who wrote The Wealth of Nations, taught us that there is a comparative advantage sometimes that makes nations wealthier by trading with one another. Now, you start bringing up communist China. We start looking at some of the more complexity of globalization and offshoring. And I’m not suggesting that all of that fits into the category I use with coffee and bananas. But that’s one of my criticisms of the current policy is it equally paints with a broad brush. I think we have to distinguish between what we’re doing to really bring certain productive activities onshore that America can competitively do and not punishing in those areas where we simply can’t. You know, we’re going to get better chocolate from Switzerland, right? I mean, so there’s certain advantages that we can’t get rid of. But the other factor, Tony, is even where there are issues like certain auto parts manufacturing that over a long period of time went down to Mexico, it can’t come back to America in one month. These are going to take years to rebuild and reprep factories. Most of our manufacturing, our job market is tailored to more high-tech manufacturing. So I don’t think that we’ve gone about it the right way to really carefully analyze what America’s strengths are, where we need to invest to the future. And I really believe we have to understand that our labor force, we need more able-bodied men that want to work. And they talk all the time like our only problem is a decline of jobs. But we had a decline of workers. And those are two different things.
SPEAKER 12 :
Well, not only a decline of workers, but a decline of skilled workers. When you look at what we’re training, I mean, we just have been in the process of building a house. You know, when you look for bricklayers, you know, we’re not training people to do that anymore. That’s why there’s so many people coming into this country to provide that manual labor, which is a technical skill. I mean, you want your house to stand up when it’s built. So there is multiple factors, I agree with you, that comes into this. That said, David, what would be your advice in how this should have been approached as a policy decision?
SPEAKER 03 :
Well, I would have separated China from the rest of the world. I think not only just politically, was there already a little more acceptance that we’re dealing with something adversarial with China? And I think the president did go about treating our friends and our foes the same. And I think that was personally a mistake, both economically and politically. But again, this economic idea that we are being ripped off or being stolen from merely because other countries sell us more things than we sell them, I think that’s problematic. I think we need to approach it by looking at China for their particular issues and how we want to solve A lot of it, by the way, could be getting it out of China now to South Korea, Mexico, Vietnam, and then over time looking for things that can come back to America. But ultimately, I think they painted with too broad a brush. And then they said they wanted to do it on fairness and reciprocity, and they didn’t. They ended up doing it more on just who simply sells us more than we sell them. And that’s why countries like Vietnam, Switzerland, and South Korea are being punished the most when they don’t have barely any tariffs on us at all.
SPEAKER 12 :
Yeah, well, I definitely agree on on China. And it’s hard to compete with someone using using slave labor, which they do in many cases. But I think moving it to to other countries as an interim before it comes back to our shores is a good idea. So let’s talk. We have about three and a half minutes left. David, I want to talk practically here other than having to pay more for bananas. How should people be prepared for what’s ahead?
SPEAKER 03 :
Well, I still, even though I am critical of this particular administration policy, I still hold out confidence that President Trump has been a very good negotiator throughout his career. He has a style that’s very different than mine. And I think right now the risk reward of this negotiation is very frightening. But I do hope. that we get to a place where we get some better deals, but we back off from some of the more problematic elements. I think people should be prepared for some higher prices. And I think people have to understand that even if we get better trade deals in the next month or so, you’re going to see a decline in the economy here over the next quarter or two for the reasons you and I talked about earlier, companies that have already pulled back on certain activities. So I would expect a bit of a slowdown, and I’m continuing to pray for wisdom in the administration. He happens to have a lot of advisors around him that I like, and he happens to have a few advisors I don’t care for. So I would be praying for the advisors that I like to win the argument.
SPEAKER 12 :
I do think the president and I’ve known him since his first term and watched him and he’s made some decisions and taken actions that I just thought, oh, this is the end. He just pulled the pin. When in fact, it turns out this is a way of his negotiations where it’s kind of shock getting people’s attention. And in most cases, he’s able to work out a good deal. So I still remain optimistic, although when you look at the, as you pointed out at the beginning of this discussion, how much capital has been lost in the stock market, there’s a lot of ground to retake.
SPEAKER 03 :
A lot of ground to retake. And just remember, in 2018, he did it in the second year after in the first year. They had built the political capital and economic capital of passing tax reform. And I think the sequence this time was probably backwards from what they did before and had success with. They may have been better off getting the tax reform done first, letting Doge do some effective things with deregulation and cost saving first. then approaching this more complicated tariff issue. And I would have done the tariff issue by putting the warning out to countries first and having all those meetings, then coming back. But again, to your point, he prefers shock and awe negotiations, so it’s just a stylistic difference, I guess.
SPEAKER 12 :
David, 30 seconds left, but you mentioned the tax cuts. That’s essential now, I would think, in extending these tax cuts, or else we’re going to get a double whammy on our economy.
SPEAKER 03 :
No question. It’s absolutely essential. And the only thing I would say is you probably have to do even more than that. The markets did not price in just an extension of tax cuts. They priced in that plus some additional tax cuts. That’s what the voters are expecting as well. So that’s a big question mark over us as well, Tony.
SPEAKER 12 :
David Bonson, always great to talk with you. Thanks so much for joining us and providing some insight to this very, very important issue.
SPEAKER 03 :
Thank you so much for having me.
SPEAKER 12 :
All right. And folks, something else to pray about. As David said, praying for the president, for this administration, his advisors, that they’re making the right decision. Scripture tells us to pray for them, that we might live peacefully. And obviously having a strong economy, a safe country is a part of that. All right. Out of time for today. Thanks so much for joining us. Until next time, you know what to do. Keep praying and keep standing.
SPEAKER 08 :
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