Lutnick JUST Revealed MAJOR Tariff Game Changer | Trump

game changer on tariffs today that we

need to talk about what Lutnik just

said. Besson echoed as well. We're going

to break it all down, but some of you

have been asking for a sneak peek at

what this actually looks like. Here's an

example of what the alpha reports look

like when I send them out. Remember, you

can get them at me.com and you can now

use coupon code release the files. But

quick example, this morning before the

market opened, a lot of people were

looking for a deal like Openoor to

invest in. And so I wrote the following.

Rocket Mortgage has less but some

potential for a push when compared to

open. However, it needs to bounce at

1598. Unfortunately, the risk to the

downside here is that the 10-year is

moving up and that reduces momentum from

the Japan deal. Therefore, it's less

likely to be a big mover compared to

open. And in our live stream where we

covered this, we said not only open is

done. And what you really want to pay

attention to is that rocket is probably

going to dunk to the 1598 line. And look

at that triple bounce right here,

dropping off a cliff at the open. And so

in case you're wondering what it's like

when you get the alpha report, that's a

sneak preview of what it looks like. I

can't obviously guarantee it's perfect

every single day, but the goal is to go

into your trading day with a strategy

like here's why this could be an up.

Here's where it might bounce. Here's

where it might top out. Like with Open

Door, I said your highest high, five

bucks, went to $4.97.

And I told everyone in the alpha report

about that before it went anywhere close

to that. So that way you had a really

clear heads up. And some course members

were typing in the chat, "Hey, thanks.

took profits at 490 or whatever. That's

the goal because these momentum names

don't last. And so if you want my

insights on that, check it out at

me.com. Donald Trump's trade deal

announcement with Japan is extremely

unique and changes everything we know

about taco for the first time ever. We

just heard Howard Lutnik explain that

there's much more to the tariff rate

than just the tariff rate. And some of

what you're about to hear sounds very

central planningesque.

We'll get into what that means and what

that could mean for American companies

and of course the economy. But here's

what's going on. Before the Trump

administration, the tariffs that we had

placed on Japan as a percentage of

imports weighted by the dollars, right?

Like for example, you could have a 100%

tariff on a certain, I don't know, comb,

let's say, for your hair. and a 5%

tariff on a calculator and a 0% tariff

on something else, right? When we weigh

all of this by how much we trade it, we

come up with what's called a trade

weighted average tariff rate. Uh, and

that was 1.6% before Donald Trump took

office. Now, there were threats that

this was going to go as high as 25% in

the event that a deal was not struck

with Japan. Now that a deal has been

struck with Japan, which is bullish. I'm

actually surprised that the NASDAQ isn't

higher, but there's a reason for this.

We'll talk about that as well. Now, we

have a deal that we're going to have a

roughly trade weighted average tariff

with Japan of about 16%. It's because

the broad line we're talking about is

15%, but there are other things that

lead this to be higher, especially since

a lot of these reciprocal tariffs are on

top of pre-existing tariffs. So trade

weighted average tariff will go from

1.6% to 16%. Which is basically a 10x

increase. Somebody has to pay that

tariff. We know that. But that's not

what is so unique about what Lutnik just

said about the Trump's taco trade. What

he actually said is, "We allowed Japan

to lower their tariff rate from 25% to

15%, much like a mortgage buy down, so

to speak, by promising to have banks in

the government in Japan finance deals in

the United States, such as

infrastructure buildouts, pharmaceutical

deals, or whatever, through a

combination of loans or equity

investments. All right, let's try to

break that down with an example. Let's

say that

Donald Trump says he wants to produce uh

I don't know uh the example they gave

was an antibiotic uh making factory.

That's the example they gave. Uh but

let's add some color to it. So, let's

say this is a vial of antibiotics and

Donald Trump says, "You know, I really

want to make Michigan great again. We're

going to build an antibiotic factory in

Michigan." The way that would work is

you'd basically pick up the phone to all

your Trump donors or go on your Signal

group chat and say, "Which one of y'all

want some free money to go build a

factory in Michigan?" And then you know

somebody will go we'll do it. Let's say

it's Fizer. Okay. So Fiser's like we'll

go build the antibiotic factory. They're

like great Japan

$50 million or whatever it is. $200

million whatever it is. $50 million to

Fizer please.$100 $200 million to Fiser

please. So they could build the project.

What you're really doing is you're

taxing

uh the economy the global economy

somewhere. We don't know where that's

going to show up yet. It's probably

going to show up in existing companies

earnings through higher component costs

or electronic costs or potentially more

expensive Toyotas as an example, right?

Somebody has to pay that. The United

States gets some form of an increase in

tariff revenue which they could use as

subsidies for these projects as well.

And Japan, I guess, gets a lower tariff

rate, which incentivizes them to now

take an investment stake in this Fiser

company, which is probably sold to the

Japanese as, hey, when we announce this,

the stock is going to go up. So, you

could probably pay for your Michigan

plant that you're lending against or

whatever by buying the stock just like

we bought, you know, MP material

directly and look, we're up 40% on it or

whatever, right? So you could pay for it

by us just kind of like insider trading

this announcement, you getting an equity

stake, then we make the announcement,

then the stock moves. Like I wouldn't be

surprised that this is kind of how this

ends up playing out and how they sell

it. And so this really sounds brilliant

from one point of view. Like I kind of

look at it like, huh, this is really

interesting. You know, even the

reporters who were interviewing Lutnik

this morning, they're like, you know,

has this ever been done before? And he's

like, nope, nope. This is my idea. Never

been done before. Trump is the

negotiator and chief, but but I'm the

idea man. And I'm thinking to myself,

no, this has been done before. It's been

done in China because this is exactly

what the Communist Party of China does.

In fact, Tesla was a rare exception

because they wanted Tesla to build out

the supply chain for EVs in China, which

they did. And now look at how much EV

competition there is in China. So, it

was a brilliant 4D chess move by China.

But usually what China does is they say,

"Hey, we want you to be able to start

your business over here. We'll work with

the local city to expedite your permits,

but we're going to take an ownership

interest in your business. We'll take,

you know, a 10% stake or whatever, and

we'll give you sweet loan financing or

whatever, but we want you to focus on

this industry, and we want to be able to

sort of like guide you with what we

want. What this is is central planning.

That's all this is. Rather than the free

market deciding, which let's be real,

that always triggers the MAGATypes

because the MAGA types like

Looks we didn't have a free market

before.

Well, we had a free market by a factor

of 10, right? We had trade weighted

tariffs of 1.6% which isn't free market

which would be zero, but it was onetenth

as bad as 16%. Right? And so now we're

moving further away from the free market

spectrum. Like if if there's a line and

1.6% 6% is here and this is like totally

centrally planned economy with 16%

tariffs we're moving this way and then

with basically directing investments to

Trump's homies who get you know

discounted loans from Japan we're going

even more in the centrally planned

direction. So now all of a sudden what

we're doing is we're over the next few

years trying to create jobs where we

potentially don't need them. This is

where the antibiotic,

you know, question is really interesting

because like why would they use I don't

know why they used antibiotics as an

example. They should have really used

like drone manufacturing as an example

or robotic manufacturing because that is

something we could get behind. Like we

want domestic drone manufacturing. Do we

really have a shortage of antibiotics in

the world? And there's so many there are

so many antibiotics that get flushed

down the drain on a daily basis that

people are worried about superbugs in

our sewer systems because we have such

an oversaturation of antibiotics and

anybody anytime somebody has a sneeze

doctors prescribe antibiotics like first

thing oh 10day round 10day round 10day

round like it's it's been a problem for

decades and and now you know doctors are

sort of being coaxed into like please

prescribe fewer antibiotics let's do a

5-day course instead of a 10-day course

now never heard of that when I was a

child now they're doing 5day courses

because people don't need the whole 10

freaking days anymore. We're so

oversaturated with antibiotics.

Point is, that's more of me pointing out

that I think Lutnik's choice of an

example here was kind of bad because we

don't really need more. Uh that said, it

shows you the potential downfall of

government directing infrastructure. If

the government centrally plans and says,

"Oh yeah, we need more of this industry

and we really don't," then what you're

really doing is you're saying by closing

the market off more with higher tariffs,

companies earnings per share go down.

Companies have to cut costs. Companies

then have to degrade the quality of

their product as well. Because as soon

as you're done cutting costs to a

certain point where you can't cut costs

anymore, quality degrades

and you end up where like you start

cutting from the product, that's when

the quality, right? Uh and and so then

like the economy suffers because we have

worse quality products because of the

higher tax rates. This is where dead

weight loss comes from. And the idea is

whoever is paying the tariffs, let's say

we lose a thousand jobs because of that,

will you know a centrally planned

factory for antibiotics or whatever

replace those 1,000 jobs? Well, even if

they did, it would probably happen with

a delay, right? So you'd lose the jobs

in say 2026

and maybe you'd gain them back in 28 or

29. Okay. Well, that's not great because

you've got a dead weight loss here of

when people are working and when they

have jobs. But then what if your new

antibiotic plant only employs 200 people

and now you've net lost 800 jobs by

centrally planning the economy? We don't

know. Like there's nothing in these

policies that really enable us to say we

know that this crap is going to hit the

fan on this date. What we're really

getting is somebody going central

planning is great.

More government is great.

more taxes are great. Somebody else is

going to pay for it. And it like it's

basically a pile of crap that's wrapped

up in a beautiful bow and and like with

some nice birthday wrapping paper and

Lutnik and Trump were just throwing it

up into the air and it's a this box of

crap that looks beautiful and

everybody's like, "Oh, Trump's doing so

great." And at some point it's going to

hit the fan and it's going to come

raining down and we have no idea where

it's going to rain down. I don't think

the poop is going to slap Trump in the

face. It'll slap you in the face, right?

And the question is how? Like where? We

don't know. So I I don't know how I feel

about this. Like my gut reaction when I

first heard it, my reaction is oh this

is interesting. Okay, Japanese banks

basically offering, you know, loan

guarantees or cheaper financing or

equity investments into American

companies. But it it took me a moment to

really think about what this meant. What

this meant was not into any American

company. It was into centrally directed

portions of our economy. So in other

words, what the Trump administration

wants money to be spent on is what gets

the benefit. That's that's my takeaway

from this. The downside again of that is

we could be distorting markets in a way

we we just don't know what the impacts

are going to be and it'll probably take

years to really feel and it's it's

bottom line somehow not going to be

good. I don't think it will end well but

I can't tell you where that poop is

going to land. Now Donald Trump uh and

Lutnik also talk about this Japan deal

potentially being a model for the

European Union. Uh, the more we do this

model, the more I'm concerned that

you're just throwing more poop up into

the air. But whatever. Lutnik calls

himself the table setter with his, you

know, fancy ideas that I think he gets

straight out of China. And he calls

himself the table setter, whereas Trump

is the negotiator chief. But what is

interesting is you did actually see a

softening from Lutnik. And I want to

talk about that softening. I do quickly

just want to shout out that in the alpha

report this morning a lot of people were

asking me in the course member liveream,

hey like is rocket mortgage going to

momentum today? Is this going to be

where all the attention from open door

goes? Because you know open door is

starting to sell off and in the last two

days in the meet Kevin Alpha report I

suggested that Openoor uh was was

probably done with its momentum. We've

been pitching it for weeks by the way.

So, we've been riding this momentum wave

and we're like, "Hey, it's topping out."

Like, last two days it's topping out.

It's time to get out. And then people

are like, "All right, cool. What's the

next play?" It's not always very

obvious. This morning, even though in

pre-market, Rocket was up a lot. I

warned that the 1598 line was a place

that we're probably going to go for

Rocket. And look at this triple bounce

right now on 1598 with a big sell-off at

the open. And if you had the alpha

report that you could get at meetke.com,

you use coupon code AIBO. Uh then you

could join these as well. Uh by the way,

if you want, you could also use uh

coupon code release the files. It's just

another version. It's live now. Release

the files if you want. Uh but anyway, so

the next the softening that we got from

Lutnik was this idea that hey, we're not

going to produce everything. We're going

to want cheap clothing from China, uh,

but China's going to want some of our

fruits or whatever or vegetables. So,

we're negotiating below the tariff line

about opening up. Now, this is

interesting because this is what you

want is you want a government that

realizes we can't produce everything in

the United States. We're not going to

make, you know, toys in the United

States. Does it make sense for all of us

to go into a factory and produce these

brushes? I mean, these are This is the

best brush I've ever had because it

actually stands on my desk, you know?

Like, this is a cool brush. Uh, it cuz

it's got a stand. Oh, what a surprise. I

didn't even know this before I said it,

but what does the label say, right? I

mean, you should be able to see that

pretty clearly. It's still a little

blurry, but I mean, you get the idea.

The label says made in China.

Yeah, it's a little better. Uh, and like

we're not going to produce these. There

you go. We're not going to manufacture

these in America and be crazy, too. So,

I'm happy to hear that Lutnik Slutnik

Nutlick is finally waking up a little

bit, saying, you know, we don't want to

make certain things here. And what we

really want is,

you know, to to get these, you know,

unique kind of centrally planned deals

where we get like, fine, if we're not

going to make toys, then we'll take

cheap loans from you. All right. Now, I

do think there's a potential that by

throwing around the sort of like clout

of America, uh, American companies or or

employees could benefit. I just don't

know where. Like the distortions are

what are the concerning parts, right?

Are you for example going to lose your

job at UPS because people are buying

less stuff on Amazon or whatever? Uh and

then are you all of a sudden going to

get the job at that you know Michigan

antibiotics viofilling factory? Do you

even want that? You know that that is

the hard part. So we know we are

creating distortions which is bad. We

know we are moving away from free trade

which is bad. The whole like premise of

these tariffs originally was oh we're

going to use tariffs to negotiate freer

trade because again we weren't 100% free

trade but if the the idea was we'll use

them as negotiating leverage to get to

free trade that's not what we got. We're

actually getting tariffs that are just

commanding more of a centrally planned

economy. So, I really think there are

going to be a lot of bills to pay over

the next, you know, 10 years that this

will play out. I don't think all of this

plays out in the span of a few months

because the impact of these tariffs will

take a very long time to be felt. Uh,

and I'm not optimistic about it, but

I'm also happy to see some softening

from Lutnik on we're not going to make

everything in America. So, I'm very

grateful of that. So that's my take.

Somebody says people already losing jobs

at uh at uh UPS. Well, exactly. Uh

that's that's exactly right. So uh

so let's see here. South Korea picked

specialized industries to protect not

just any old product.

Well, yeah. I mean that's what

everybody's ultimately going to do. It's

like to some extent you're going to have

more protectionism from other countries.

And this makes sense. I mean, we also

have protectionist policies like not

selling China our H100s, right? This is

very very normal. Uh so

somebody says we're in the middle of a

recession. We should be done by October.

Well, I don't think you finish a

recession until you have a giant uh

layoff spike, unfortunately. But anyway,

uh yeah. Anyway, if you want more of

that alpha report, go check it out at

me.com and that gives you an update on

what's going on with Terrence. Why not

advertise these things that you told us

here? I feel like nobody else knows

about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.