Bad shipping news

Robert Armstrong (0:00)

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Katie Martin (0:21)

Pushkin. Nerds and highly informed, discerning, very, very good looking listeners to podcasts like this one have been well aware of the storm around US trade policy for weeks, months even. In markets, bankers and investors are so aware, in fact, that they're getting to the point of burnout. Guys and girls, we hear you on that. It is pretty wild out there. Meanwhile, over on Main Street in the US, a huge number of people are bobbing along in blissful ignorance. I envy this greatly, but guess what? This bubble is about to pop. Data from ports shows that the usual flow of goods into the US has slowed to a tiny trickle. Americans, you are about to see that most chilling of things. Empty shelves. Today, on the show, we're asking, do we all have to pretend we are supply chain experts now? And is Christmas cancelled already? Or is Donald Trump a huge wimp who will back down? This is Unhedged, the markets and finance podcast from the Financial Times and Pushkin. I'm Katie Martin, a markets columnist at the FT in sunny London. And I'm joined down the line from New York City by the big man, Robert Armstrong. Rob, how's it going, man?

Robert Armstrong (1:36)

I'm a bit bruised, Katie. I fell off my bicycle over the weekend.

Katie Martin (1:40)

Was it a heroic summer salt you were doing on your bike? Or did someone do you wrong? Or what happened?

Robert Armstrong (1:45)

I was just was going slowly and like fiddling with something on the bike and hit something. And I went over the handlebars and I'm fine. I have a scraped knee and a bruised rib. But really what was terrible about my accident was that other people saw it.

Katie Martin (2:00)

Did anyone film it? Are they able to send it over?

Robert Armstrong (2:06)

I heard echoes of barely suppressed laughter. It was tough, man. The ego, the ego is the hardest part, Katie, in life. The body, the body heals, the ego, man, it's tough.

Katie Martin (2:19)

This is a sad story. Let's talk about something else that's careering over the handlebars and crashing into the ground. So there's a new story saying that Amazon is going to start breaking out the tariff costs when Americans buy stuff using their platform. To say on the little receipt, okay, so the widget that you bought is X number of dollars. And here's the amount on top of that, that is attributable to the new tariffs of, in China's case, something in the order of 145%.

The White House has said, get this, that this act of telling people how much they're paying for things that they are buying is a hostile and political act. The chief press officer, Caroline Levitt, said she'd spoken to the president on this, and it was all no surprise, given Amazon's links to Chinese propaganda or something or other. Rob, why do we think the White House thinks it's bad to tell people how much they're paying for things?

Robert Armstrong (3:15)

Well, first of all, Amazon has denied they're doing this. But still, the White House's strong response is very, very telling here. They're showing a, I mean, they've always shown a strong inclination in favor of invisible tariffs. Think to the first time the White House backed off on tariffs. That was almost immediately after Liberation Day, 48 hours later or something. They said, about those Chinese electronics. They said, we're going to wait on those a little bit. The point there, of course, is people notice the price of cell phones.

Katie Martin (3:53)

So Trump has managed to convince a large portion of the US population that it's China that pays the tariffs. This is what he said all along ever since he was on the campaign. So people are about to realize now that that's not true, right?

Robert Armstrong (4:07)

There's going to be a tariff or a tax on that widget that comes from China to Amazon. There still is an open question whether the Chinese manufacturer or the importer eats some of that tariff in the form of charging lower prices, and not all of it is passed on to the buyer at Amazon. So there is some, you know, it's not always going to be perfectly transparent what the tariff cost is, but the fact remains we have a long and august tradition in America of splitting out taxes on our receipts. Sales tax is not just mixed into the price, right? It's added to the price, and having taxes be invisible is always a government's preference because voters don't like taxes, but in all areas of business, finance, economics, whatever, transparency is better. This comes back to the general overpromising of Trump on tariffs. You know, we're FTers, right? So we are kind of pro-trade and pro-globalism, and we don't like tariffs. We think it's a bad form of tax. But you might make a case for different kinds of tariffs in different situations for different reasons.