Richard Helppie's Common Bridge
The problems we have in the country are solvable, but not solvable the way we’re approaching them today, because of partisan politics. Richard Helppie, a successful entrepreneur and philanthropist seeks to find a place in the middle where common sense discussions can bridge the current great divide.
Richard Helppie's Common Bridge
Episode 270- A Tale of Two Tariffs. A Conversation with Bill Michels.
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The global economy stands at a crossroads as tariffs reshape international trade, and few understand these seismic shifts better than Bill Michels, returning to The Common Bridge with crucial insights on what's happening at our ports, in manufacturing, and throughout supply chains worldwide.
Shipping containers sit idle at major ports like Los Angeles and Houston as businesses hesitate to import goods, unsure what tariffs they'll face. "Tariffs are breaking the shipping model," Michels explains. "We're not just paying more, we're seeing fewer goods shipped." This uncertainty creates a troubling ripple effect - customs backlogs delay product releases, truck drivers lose loads, and consumers face higher prices or empty shelves.
Perhaps most provocative is Michels' assessment of reshoring manufacturing. While tariffs might indeed bring factories back to American soil, he forcefully challenges the notion this will create significant employment: "If I'm going to reinvest in a factory, it's going to be lights out, automated. I'm going to use robots that work 24-7, don't have union problems, and I'm not going to hire tons of people." He cites GE's billion-dollar automated factory and Taiwan Semiconductor's Arizona plant as examples of modern manufacturing that creates minimal jobs despite massive investment.
The conversation takes fascinating detours into how AI is transforming business negotiations (Michels' company has developed negotiation-training avatars) and the complex interplay between immigration policies and economic outcomes. As agricultural workers face deportation amidst existing labor shortages, Michels warns we could see both inflation and reduced GDP as labor-intensive industries struggle to find workers.
Join us for this thought-provoking discussion that cuts through political rhetoric to examine the real-world consequences of trade policies. Whether you're a business owner navigating supply chain disruptions or simply curious about how global trade impacts your daily life, this episode delivers crucial context for understanding our economic future.
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Introduction to The Common Bridge
Speaker 1Welcome to this episode of Season 6 of the Common Bridge, where policy and current events are discussed in a fiercely nonpartisan manner. The host, richard Helpe, is a philanthropist, entrepreneur and political analyst who has reached over 5 million listeners, viewers and readers around the world. With our surging growth in audience and subscriptions, the Common Bridge continues to expand its reach. The show is available on the Substack website and the Substack app Simply search for the Common Bridge continues to expand its reach. The show is available on the Substack website and the Substack app Simply search for the Common Bridge. You can also find us on YouTube and wherever you get your podcasts. The Common Bridge draws guests and audiences from around the political spectrum and we invite you to become a free or paid subscriber on your favorite medium.
AI in Negotiation and Procurement
Speaker 2Hello, welcome to the Common Bridge. We have a very popular returning guest today, the godfather of the supply chain, mr Bill Michaels, also now bringing AI into the world of procurement and sales, and hopefully we'll hear a little bit about that. But today, because the policy orientation of the Common Bridge is why our audience comes to us, we're going to hear a little bit today about how the tariffs, whatever they may turn out to be, are impacting and may impact international trade and what that's going to do for suppliers, consumers, manufacturers and everybody that participates in the economy. Bill, welcome back to the Common Bridge. It's always good to see you, my friend. How have you been?
Speaker 3I've been great Rich. Thank you for inviting me.
Speaker 2What's the headline on the AI? If you don't mind starting there, what's going on?
Speaker 3I don't mind. We've actually created a great product and we've really made it very, very desirable. It's for teaching people how to negotiate. So we built a negotiation strategy that people can either fill out some questions online or submit their strategy, and then we have an AI avatar that will sit there and critique the strategy and tell you where you're weak, where you're strong, what you should do, and then, once you get your negotiation strategy done, you actually can. We have a series of education modules. One of the unique things about our education modules is you have interactivity with the digital mentor at any time.
Speaker 3So I know I don't like it. I'm an old guy. I don't like e-learning modules. I think they're boring, but if this one, you can stop. You can ask any questions you can really interact with how do I apply this to this category? Or really anything about procurement. So that helps.
Speaker 3And then, when you're done, you sit down with a conversational AI avatar and negotiate. You have a case study, all of the conditions of the case study. Some are custom case studies and some are not and then you sit down and you negotiate with the avatar and he continues to negotiate with you. Nothing is ever the same. And then, when you're done, you get a score, a score that tells you all the things that you could have done better, all the things that you did well, and then you can continue to improve your skills, which is really important when we start talking about tariffs and price increases going up, because our business is up a little bit because of that- I would imagine, and I guess I could see, a world someday where your bot and their bot are negotiating with each other and, I don't know, you're having a cup of coffee someplace.
Speaker 3That's happening Rich. It's happening in the low-end spend. So in the tail end of companies like the office supplies, the toilet, there are two companies running bots out there doing negotiations, actually, and taking care of that Because you know if you can get it in place and then do a little bit better on the pricing, that's fine. You're not going to make or lose your company on a set of office supplies.
Impact of Tariffs on Shipping
Speaker 2Well, that's very, very interesting. Well, we don't have bots controlling our trade policies. Now I wish you know, frankly, somebody would be controlling them, because they seem to change as the wind blows. And one of the things, bill, I've been hearing is this that container ships are not arriving in the major ports Los Angeles, houston, new York, san Pedro. Specifically in Los Angeles area, that means that truck drivers aren't going to have loads, that the bulk container companies are going to have the containers sitting there. I can imagine this is going to affect the railroads, but ultimately, what products are not getting to our shelves? Or are they getting there but they're going to be priced dearly because of tariffs? What's going on out there right now?
Speaker 3Well, you know, tariffs are breaking the shipping model right, we're not just paying more, we're seeing fewer goods shipped because of the tariffs and we saw initially some inventory shipped ahead of the tariffs. But now people are waiting to see what is the tariff. Where should I move this stuff and can I get a lower tariff? And the interesting thing, rich is. So that's causing one problem. But the other problem is, as these goods arrive, you have to pay the tariff before you get your goods. That's the way it is and what we're seeing. One of my automotive customers said all their stuff is sitting down in customs trying to get freed up because there's a backup in customs to get things through the regulations and through the tariff. So you're going to not only see the shipping problems, you're actually going to see problems where you can't. You know, the increased documentation, regulatory changes all delay the release of the goods.
Manufacturing Return Without Jobs
Speaker 2One of the things that troubles me about this president is that he seems to do things from the seat of his pants, and with something as complicated as international trade you'd think you'd have your ducks in a line. And you know I get the overall strategy that, look, if somebody's bringing in cheaper goods because they're paying their labor a lot less, or indeed slave labor, or they're not following our safety procedures and such Say all right, look, if you want to make that baseball, that battery, that toy in another country, okay, you can do that, but to sell it in our market you're going to have to pay a tariff which might possibly stimulate some domestic production, because that price advantage from the international company would be going away. But it takes a long time to stand up a factory. It takes a long time to put the supply chains in place. This just doesn't seem to be a very well thought out policy. Or is it creating chaos for some other purpose?
Speaker 3Well, you know, we have the notion that the tariffs are going to bring manufacturing back into the United States. I agree with that. The thing I disagree with that it's going to bring in jobs. It is not going to bring in jobs because if you own a factory overseas, you're not going to reset your factory based on the 50s model of assembly and people on the line. You're going to go to an out. If I'm going to reinvest in a factory, it's going to be lights out, it's going to be automated. It's going to be productive. I'm going to use robots in a factory. It's going to be lights out, it's going to be automated. It's going to be productive. I'm going to use robots that work 24-7, don't have union problems and I'm not going to hire people. I'm not going to hire tons of people to run the business.
Speaker 3When GE brought its factories back from Asia, it built a billion-dollar factory that mostly is automated. So you're not going to see what we're thinking. You will see the companies come back, but you won't see the jobs. You know the Taiwan manufacturing company here in Arizona is making chips all automated, everything is automated about it. So you're going to see factories if they come back and if you can build them in two or three years, they're not going to bring the jobs back. So we're starting to see more of a social problem. You and I talked about this social problem in a previous issue.
Speaker 3Same thing with all these people that are out of the government. Let's take IRS, for instance. You don't need a million people to look at the tax returns. You've got AI that has the rules, understands the rules, can spot the differences. Look at the tax returns. You've got AI that has the rules, understands the rules, can spot the differences. You're going to see more AI in introduction to some of these clerical jobs and jobs that are out there. So if you think tariffs are going to bring back manufacturing, you're right. If you think they're going to bring jobs into the United States, I disagree with that.
Tariff Exemptions and Economic Disruption
Speaker 2Would there be any kind of job change? So take, for example, that container ship arrives in the United States, we have longshoremen that need to offload that and then that needs to go onto either train or it needs to go onto trucks. Those are jobs. Then they go to warehouses, distribution centers there's some jobs that are more and more automated and then out to store shelves and ultimately to the consumer. If I'm understanding, what you're saying is that yeah, okay, we bring the manufacturing back, but it's going to be lights out, so there won't be production workers. There also won't be a need to bring those container ships into the ports. So less need for dock workers, longshoremen, but we're still going to need trains and trucks to move product around. Dock workers, longshoremen, but we're still going to need trains and trucks to move product around. So it's really it's just that very front end of the supply chain, the manufacturing, that would change.
Speaker 3Right, but you're looking at a longer term program to even get it back and then some industries never come back. The example that I think of is in my early days in manufacturing. We used to make our own dyes, tools, molds. We had a New York State license factory. That was a place where people could co-intern and become professional trade people. Well, when the tooling business left and the older people that had the skill set retired, there's no one here to do it. And if you look at the things like textiles, it takes a lot of hand labor to do it. It's not going to happen here. With high paid wage union wages you couldn't afford the clothes. So I think those things will still stay outside of the US.
Speaker 2And perhaps they do stay outside the US.
Speaker 2But it's almost like a value-added tax right, a consumption tax that says, all right, you know, we're going to bring in that shirt from the Philippines, for example, and instead of it being $4 at the wholesale level, it's going to be $7, and that's going to pass on to the consumer.
Speaker 2But it would be a tax collection based, again theoretically, on consumption versus on income. But if that's the idea, it's not been laid out very logically, and I think this is what causes people such consternation around this president, is that they don't know what he's going to do next, and I think he surprises some of his advisors. A little less volatile this time, although I will say in his defense that the 70-30 issues he's doing very, very well on the security of the southern border, the stopping the abuse of the asylum system, the changes in the military in terms of transgender ideology and the like, and then going after some of the fat in the federal government those remain 75, 25, 70, 30 issues. But on the vital things about the economy, people don't know which way to turn. How could you plan if you don't know what the taxing is going to be?
Speaker 3That's absolutely true and I took some lessons from the last. I wrote a couple of LinkedIn blogs on this, lessons from the last time Trump was president and he had the tariffs. One of the things that I noticed is that there were a lot of exemptions right, so companies could apply for the exemptions. Apple applied for 18. I was working with a small manufacturer that had aluminum heat sinks. They were able to apply and get an exemption. So I think you know if you're not savvy and you don't think about these things, you're not going to be good, I know.
Speaker 3One of the questions you asked me is how has the market reacted to tariffs so far? And I know that the supply chains are shifting. Companies are moving whatever they can to a lower tariff. So if China's very high, even some of the Chinese are moving to a location where tariffs are a bit lower. So there's the mixing around of where should I get it? Where can I lower the tax? They're trying to increase reshoring, but there's a long way to get to that and I don't think that it's going to be the factories that left, the factories with the assembly lines of the 50s.
Speaker 3I think people are not investing. They're very selective about what they'll invest in. You know they're not going to invest in the sectors that are hit hardest by the tariffs. I think we're going to see margin pressures on everybody. Commodities are really mixed up. I mean particularly agriculture, and bulk shipping is going to be affected by our agriculture not going to China and, you know, I think we're going to start to see inflation. But one of the things that's interesting is one of the negotiation tactics we use is it's called conditioning. So you throw something up there and you condition someone and then you change that. But I think if you throw it all up at the same time and you make it as severe as we see, it's going to be very difficult to negotiate changes.
Speaker 2You know a couple of points just to react to that. Negotiate changes. You know a couple of points just to react to that. So, first of all, it's like, okay, well, we'll get an exemption, and hackles on my back get raised. Because it's like, okay, now here we go. Crony capitalism If you can make campaign contributions, say the right things, you're going to get the power of, supposedly, our government behind your specific company. And here we go. You know, meet the new boss same as the old boss.
Speaker 2That is a bit bothersome, not a bit bothersome, that's very bothersome. And ultimately, what I don't hear is anyone speaking up for average citizens like us. It's all about is this going to be a win for the Democrats? Is this going to be a win for the Republicans? How's this going to play out in the polls? You know, last night, canada held an election. I was watching CBC late into the night last night, me and lots of other nerds around here but they handled it in a very Canadian way, very unifying, and it wasn't like in your face, whatever. But they're going to look out for their interests interests as they should. And when I think about Trump's negotiation style, I negotiated a lot of contracts in New York, and that's how they start. You start off in crazy town with crazy demands just to see what they can get, and you just kind of have to let the noise go by over your head because ultimately, if you're at the table, they want whatever it is you've got. But trying to do that around the global economy is a little crazy, isn't it?
Labor Shortages and Immigration Impact
Speaker 3Yeah, I think it's really crazy, I think. And then the other thing that we you and I haven't even talked about is we already have a labor shortage. And then, when we start to look at certain industries like the construction industry and the agricultural industry, these deportations are causing more of a problem because, you know, we're going to hit our GDP significantly and push up inflation if there's no one there to do these jobs. So you know, we think deporting 500,000 immigrants is going to result in a bunch of workers probably about 40,000 or 50,000, lose their jobs because they don't have the people to get the stuff out of the field. There's a skill shortage everywhere. There's no plans to. I mean.
Speaker 2Look, in agriculture we've had a guest worker program for a long time, Right and so for getting the crops out of the field, I don't see that as a problem, at least what I can get out of there, because there has been a guest worker program. No-transcript.