97. Trump’s Trade War 2.0: This Time It’s Different

0:28This episode is brought to you by Progressive Insurance.

0:35Welcome to The Rest is Politics US with me, Katty Kay. And I'm Anthony Scaramucci. How are you, Katty? What's going on? Tell us where you are. What are you doing? I'm in London. I have had the best week when I went to Wimbledon to the Royal Box. How many photos did I send you? How many times did I FaceTime you? You were missed so much. Lots of FOMO. I got there and the organizers of Wimbledon said, well, we kind of invited you because we really wanted Anthony, but they didn't exactly throw me out. But anyway, it was pretty clear. You were the star and you were very missed. I wish you had been there.

1:12It's too overt, Caddy. It's not working. Okay. I know it works for you and like the BBC and these other places, but I love the fact that you were there. This is for you. This is a gift to you. For those of you listening, this is a Wimbledon shopping bag. This is a Wimbledon shop with a hat for you. They chose it for you. Now, they said it is an extra large because they weren't sure about your head size. I said an extra large is probably about right. Yeah, no, of course. I have a big head. We know this. Do you like this? I'm modeling the Wimbledon hat for those of you who are not watching on YouTube.

1:46Hats were very famous prior to Jack Kennedy. Once Jack Kennedy got an office, he's like, hey, man, I got a full head here. I'm not wearing that. And then the hats went out of style. But look at that. I'm going to wear that hat, Katty. Yeah, it's a gift from the organizers of Wimbledon. Okay. And I'm not a bashful person, so I need a rain check on next year. If you Wimbledon people are listening, please invite me next year. I will be good to go. What are we talking about? We are going to talk about the return of Liberation Day and Trump's tariff threats. He has just announced sweeping new tariffs up to 50 % on a bunch of countries.

2:23He sent them letters, which he then posted on Truth Social on Tuesday. We're recording this on Wednesday, and he is sending more letters out today to other countries. and he says they have a new deadline for making trade deals, which is August the 1st. So we're going to talk about that. But first of all, we are going to talk about Elon Musk. He is back and he has announced that he is starting his own America party. So I guess the question for you, Anthony, is are you signing up? Well, I mean, listen, I would love to meet with Elon. I mean, it probably won't meet with me though, because I'm sure the MAGA people, you know, disfigured me to people like Elon, which is totally fine.

3:04But I would love to meet with them because I think the country needs some change and the country needs some level of reform. Again, we talked about the spending bill last week. It's just to me, I think the spending bill is outrageous and 38 % of the country wanted it. And of course, they voted it in anyway. So to me, I think we do need reform. I think Musk is a very smart person. I don't think he should be underestimated. And I like the zero Fs. I don't give a zero F version of Elon Musk because he's telling people that Steve Bannon's on the Epstein list, Donald Trump's on the Epstein list. He's putting countdown clocks and memes, just showing the farce of the whole Epstein list.

3:51But I think, listen, And there's two ways to go with the third party here. One is to go for a few purple districts and see if you could knock those purple districts into centrism. Then you will freeze the whole demo publican movement that does these stupid, big, beautiful spending bills. Second way is to put up$30 to$50 billion, have a nationally recognized third party. Trump is putting out on Truth Social that these things don't work. He's right. but they've never had Elon Musk working on them and they never had 20, 30, 40, possibly$50 billion to go into a third party. But remember, a third party did work.

4:33And of course, it started in 1854 and by 1860, we had our first Republican president. So when Trump says third parties don't work, he's right today, but they did work 160 years ago. And so you never know, Caddy. But I would like to learn more about it. And if I get invited to have a meeting with Elon, I would go see him and just discuss it. Yeah. I mean, my initial reaction was a bit like Donald Trump's, which I guess I don't say on this podcast very often that there isn't a history of these third parties working and the American system of two parties is set up with these huge big machines of the committees behind them and the money behind them.

5:13And so it's very hard for people to break in, which is why Mike Bloomberg, when he was thinking of running the billionaire from New York, who was mayor of New York and he was thinking of running and he decided it would be a kind of form of bankruptcy to run because however much money you put in, you couldn't overcome all the hurdles that everything from how to get on the ballot, the amount of money, the organization makes it very difficult to break through. Certainly, a third party could be a strategic spoiler. And we've seen that quite often in recent history. We saw it with Jill Stein back in 2016 when she got votes in Wisconsin, Michigan, and Pennsylvania that otherwise probably would have gone to Hillary Clinton.

5:55I mean, I think Hillary Clinton and the Democrats would say that Clinton would have won in 2016 if it hadn't been for Jill Stein being on the ballot. And then in 2000, you had Ralph Nader running as a third party candidate, and he got enough votes in Florida and took them away from Al Gore, which meant that George W. Bush won Florida. We all know how that election turned out. So George W. Bush won the election. So you've had in recent history, you've had key elections where a third party candidate has disrupted the status quo between the two candidates, the two parties, but hasn't actually managed to get anywhere near running, winning as president themselves.

6:34And maybe that what you're implying is, I mean, maybe it's possible for it wouldn't be Elon Musk because he's South African born. And so unless there was a constitutional change, he can't run for president. Maybe it's possible that America, the America Party would mount a successful presidential candidate. But maybe actually it's the chaos and disruption, which, of course, we know because we did the series on Elon Musk. He loves chaos and disruption. And maybe that's enough. That's what you seem to be suggesting, which is why I think you've got people like Mark Cuban saying this is interesting, and even Sam Altman, very smart, influential people saying, look, like you're saying, Anthony, there's room now for disruption to kind of unblock the system of American government, and that Elon Musk could successfully do that, or this party could successfully do that.

7:23What do you think are the hurdles to it, though? Well, again, yeah, lots of hurdles, which is why you'd need billions of dollars. Again, as we've said on this podcast, they closed down on each other. They created a very airtight duopoly after the Ross Perot election, and they made it almost impossible for third parties. Trump did look at this in 2000 as a potential reform party candidate, and then he decided there's no way I can get there. And so he bailed, and then he did a very smart thing. He took over one of the two traditional parties. He hijacked that party. He did a hostile M &A, decapitated the traditional Republicans and replaced it with MAGA.

8:03And so Trump has actually created a third party. He just cleared out one of the older traditional parties. So what Musk is talking about is very hard to do. I'm not saying it's going to happen, but I think if somebody could do it, he's the type of guy that could do it. But also, you know, the people want it, Katya. When you ask people, they say, you know, we don't like it. Congress has a 14 % approval rating, which is just slightly above Kim Il-jung, the North Korean dictator in terms of their approval rating. Slightly above journalists, but not much. Yeah, slightly above journalists, the North Korean dictator, Vladimir Putin, et cetera, but 95 % incumbent re-election rate.

8:46So they have a horrific rating. It'd be like you and I opening up a restaurant. I'm the chef. I suck as a chef. I get terrible Yelp ratings, but you never fire me and I just sit there and keep cooking, even though the meals that I'm producing suck. And this is what's going on in America with the Congress. And so the people don't like it. And the question is, if you could create a change, seismic change. And remember, Caddy, there's about 100 million. There's a voting block, a very important voting block, something like 100 million people. They vote the exact same way in every election. Very powerful voting block.

9:24It's the non-voting block. These people don't vote. And just imagine an entrepreneur like Elon Musk convincing those people to come into the voting swimming pool, come swim with us here. We've got better policies, different policies. You've been indifferent and cynical about politics, but come in, you could see a radical change to the whole system. Can I ask you, though, one question, which is about personality? I mean, I think Elon is, as we found when we were doing our series on him, and I think anyone that's watched American politics has found, he's got a very healthy ego. He's kind of narcissistic.

10:01So I think you have to wonder why he's doing it. There are some policies that he might want to run on. He's actually in the past been very in favor of trying to get the planet off fossil fuels, obviously. He doesn't like deficits. It's something that he's spoken about for a long time, which is probably why he's announcing this now. But Trump pointed out something in his long screed, which I would recommend people reading because it's quite funny, his long screed against Elon and the third party idea, which is that Elon was actually kind of happy with some of the things that Trump was suggesting, like shutting down the EV mandate when he was close to power.

10:43But now he's not happy with them. And he's coming out against a lot of Trump's policies. But he was okay with what Trump was doing when he had influence and he could kind of, you know, help dictate who was going to get which cabinet position. And he could sit in on the cabinet meetings and he could bring his toddler along to the Oval Office. He sort of went along with Trump's policies and Trump's ideas, the ones he doesn't agree with now. And so it makes you wonder, in this media environment where authenticity is so important, does he get hurt by having seemed disingenuous? I mean, the comeback is easy, right?

11:18Hold on a second, Elon. You were fine with this when you were schmoozing in the Oval Office and down at Mar-a-Lago and now suddenly you're not? I mean, I could see MAGA using that pretty easily against him. Okay. Well, again, it would depend on how he handles it. So So where Andrew Cuomo misfired in his Mayor Oriel campaign was he had some transgressions against him and he didn't want to face the music for it. And I think in America, if you're able to face the music, you get second acts in America. This is one thing F. Scott Fitzgerald, the author of The Great Gatsby, had one line that he got really wrong.

11:56He said, there are no second acts in America. Of course, this was in the 1920s. Maybe that was true then, but we're now in the 2020s and there are second acts in America. And I think that I find it ironic that there were Democrats railing on Elon Musk as, you know, three months ago, railing on Elon Musk. And now they're praising him because he's going after Donald Trump. And so what ends up happening in our society is you can get a second act, but you got to be real. And I think if Elon Musk was real and he said, listen, I got close to Trump because I was getting annihilated by the Democrats. They didn't invite me to the EV summit.

12:35They were knocking me around with my rockets. So I got close to Trump. I showed Trump what I could do. I helped him win. He turned his back on me, which happens in Washington. You know that. It's called rat effing, which you leave it there. And I learned my lesson in Washington. and now I'm going to be fortified with this story. Why are you laughing? Because that's sort of my story, right? That's basically what happened to me. Because you've done it. I'm laughing. And excuse me, I've just given interviews to an interviewer at Forbes all about your second act and how amazing it is that you've reinvented yourself.

13:11But you know what the difference between you, Anthony, and Elon Musk is? No, it's okay. A sense of hubris. I mean, where in Elon Musk do you see the ability to say, okay, I've really thought about this. I've done the work on myself that it took. I understand that my ego is out of control. And now I've come back a more humble person. And I apologize for having kind of gone along with the whole load of bullshit in Washington. Maybe he can't do it. Yeah. Maybe he won't be able to do it. Listen, remember this about Elon Musk. He's the richest, most powerful civilian in the world. I don't know if that makes you humble.

13:51That's the point. So he may not be able to look. We know that money and power corrupt people. And he did say, and I'm quoting him, it's not me. He did say, I love Donald Trump. And I love Donald Trump as much as a straight man can love another straight man. I think he said that was the exact quote. And I've been there. I've been there. I've done that. So I'm not sitting here throwing rocks at him, but I'm saying he could have a reclamation if he was self-aware and if he was humbled by the experience. But he's not the first person to have it happen to. But here's the reason why I don't think he'll meet with me, because you and I predicted that this would happen.

14:37By the way, it happened to me. It took me one Scaramucci to get blown out. It took him 12. And so what happens sometimes when you predict something about somebody and it actually happens, it's like you shoot the messenger. So you probably won't meet with me, which is fine. But I would like to meet with him because there's something wrong in the body politic right now. The Nancy Pelosi's of the world, the Chuck Schumer's are not listening. They've unplugged themselves and they're doing what they want to do for themselves. They're not serving their good. And by the way, not just them. It's John Thune.

15:16It's Teddy Cruz from Texas. These guys, they don't care about anybody. All they care about is themselves. They've looked at the math. They can get reelected no matter what. And so they don't care. And that's what's going on in Washington. and maybe Elon will pull a trigger somewhere and cause a cascade of people starting to care. You know, it has happened before in the United States. Remember, if people are interested in this, go to the origins of the Republican Party. They went after abolitionist Whigs and abolitionist Democrats and said, you don't want the slavery to cross after the Missouri compromise breached.

15:57You don't want it to cross into the Northern territories. It's immoral. There's a great biography out this month on Charles Sumner, who was a legislator from the great state of Massachusetts. He was a big time abolitionist. He had a major influence on Abraham Lincoln. And people said, oh, there'll never be a third party. There was. Republicans came into power changed America. So America is set for another renewal. I wouldn't discount Elon Musk. And by the way, Cady, I'll say this to you and get you to react. It doesn't have to be Musk. It could be a groundswell of people that have said enough is enough.

16:37And so it doesn't have to be Musk. It could be a more Cuban combo with other people. You said something that I think is really interesting about the moment that we're living in, which is how Democrats are now kind of delighting in what Elon Musk is doing because Elon Musk has turned against Trump. And I think that gets to the real root of some of the problems we have in American politics at the moment. I mean, you know, some people call that Trump derangement syndrome. So they're prepared to go along with Elon in order to, you know, the enemy of my enemy is my friend. But I think actually what it points to, that happens on both sides.

17:12And you have this knee-jerk tribalism on the left and the right. And you have people who are not happy with that. It was very interesting. Joe Rogan interviewed Bono the other day. And Bono kind of got Joe Rogan to say that actually the dismantling of USAID, which you and I have spoken about a lot and the damage that that has done around the world, but also to America. Rogan said, look, actually, you know what, that's a problem for America's soft power and America's standing in the world. And what I like about what you're hearing from somebody when they say something like that is that they're breaking ranks.

17:46I know what it's like to break ranks. Occasionally, you get a ton of bricks. I hear from friends of mine who are on the left or on the right that when they say something that is against the Democrats or the Republicans, that is when they get the most ferocious kickback, right? From liberals, if people perceive you as being liberal and then you say something like, well, actually, Elon Musk has a point or Joe Rogan has a point, you get like a ton of hate coming your way. So it takes courage to break ranks. But I think there are voices now who are so dissatisfied with what Washington is doing or not doing because the country is kind of borderline ungovernable unless you have a president who's prepared to take an enormous amount of power as Donald Trump is doing and get things done that way, but who are dissatisfied and who are dissatisfied with the orthodoxy of thinking of their own party.

18:34And it's those kind of independent voices. I mean, you could imagine some kind of alliance potentially of people like Cuban and Joe Rogan. And maybe this is non-representative because the voices we've spoken about happen to be incredibly wealthy, actually in this case, all guys. But people who are prepared to speak out against some sense of narrow tribalism and actually say, does this policy work? What's good about this policy? what's good about this president, what's bad about this president, without the sort of knee-jerk default to tribalism. And I don't know that Elon Musk is that person because I have, in some ways, Elon Musk, yes, has spoken about issues, but in some ways he does seem quite, as his foray in the White House suggests, very interested in power itself for power's sake.

19:19But I do think there are people in the country who are saying actually that tribalism can't work anymore. It's not healthy for the country anymore. I would love to see that broken. I would love to see America become more governable, get back to the idea of a country that was built on and for cooperation and break up these kind of monoliths of the party structures. And not just party structures, but tribal structures of liberal versus conservative. Listen, it would be a big help to the country at this moment. But of course, you would want radical centrism. What you don't want is a harder than hard right new party, and you don't want a harder than hard left new party.

20:04So you would definitely want something that's centrist. So you have to always be careful what you wish for. You don't want to open some kraken that comes out of the closet, and you now got another nightmare on your hands. Grok 4, Elon's new version of AI, is spewing out praise of Hitler and anti-Semitic tropes. So hopefully they can fix the algorithm. But I'm just telling you, we're in a weird phase of our civilization where even the structure of how we're going to fight with each other, what's going on in the military, structure of how we're going to get along with each other politically, structure in business.

20:43We're now making decisions in America where we're going to make people pay for the privilege of entering America's market. We didn't do that for 80 years. We're now going to do that. And so a lot of things are going to change at the same time. And again, not to bore people with my bibliography, Dominic Sandbrook once yelled at me, caddy. He said, you bring up too many books, Anthony. I don't know. He was like, I probably shouldn't bring up too many books. But there is a book called The Fourth Turning, which talks about how every 80 years, when you get a generational change of memory, the memory of the reasons why we put these institutions together, the European Economic Union, the UN, the World Bank, the IMF, the institutional real-time memory has gone away.

21:35So now there's a 45-year-old bureaucrat somewhere saying, what the hell are we doing that for? Let's try something new. That's happening right now. And so I like it, and I think people are uncomfortable with it at the same time. But I'm just saying, I would like it more if it led to a colossal reform and some level of collegiality. One last point, I think this is an important one. If Elon were going to start this, that he asked me for advice, not saying he ever would, I would say, put up the money and then decentralize it. Have a convention, get people together, put some first principles together of what the party's going to be, and then take a step back.

22:15Because what you find, and this frankly happened with Bitcoin, the starters of Bitcoin, they decentralized it, and then they dropped into anonymity. And it made the thing more powerful because nobody could point to one person. Nobody can say, oh, this is Elon's party and it's only Elon's party and it's his words and it's too absolute, it's too king-like. Start the party, step back and decentralize the party, but also have it be fabriced around principles. In the case of the Republicans, change party today, but in the 1850s, it was about anti-slavery. I think you probably in an American system of electing a president and the way a president is elected with so much around a personality, you would quite quickly need that decentralized party to have some kind of figurehead.

23:04What's interesting is that both of us are saying we are living in a moment of ultimate disruption. Things are not working as they are. And Elon has come up with this idea that I think neither of us are totally dismissing, which we may have done a few years ago. So it's kind of interesting that we both think this is worth taking seriously or at least looking at. Before we go, because I always like saying that to you before we take a break, Two bumper stickers I saw this week. I have to just share them. One is, I bought this car after Elon went nuts on Trump. I thought that was great. And then the other bumper sticker is, we're eating the checks, Gaddy.

23:39We're eating the balances. We're eating the checks and balances. That one was outside my house, too. It was my favorite. I loved that. Okay, we'll be back.

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24:59Welcome back to The Rest is Politics. Okay, it's Liberation Day all over again. This is interesting. So Donald Trump sending out all of these letters, Anthony, to countries telling them that the pause on the tariffs has been extended to August the 1st. And what I loved was this way he said, because how many times has this been, you know, this deadline been pushed backwards? And he was asked, is this it now? Is August the 1st the deadline that we all have to get excited about for the tariffs? And if you haven't done a trade deal, by the way, trade partner by August the 1st, you're going to get hit with these tariffs.

25:34And his response was, it's firm, but not 100 % firm, which I thought was just fantastically Trumpian. And of course, what was interesting is that I think America's trading partners and financial markets are hearing this and are saying, we know that he is going to chicken out again, and that the chances of America actually imposing up to 40%, up to 50 % in some cases, tariffs on its trading partners by August the 1st look increasingly slim. And so when he says firm, but not 100 % firm, the message to those other countries is we can probably offer the very minimum that we can get away with in order to get some kind of a framework of a deal that gives Donald Trump the ability to save face, which is why markets have barely blinked as far as I can see.