The potential trade war with Canada and Mexico was averted, sparking a lively discussion about diplomatic maneuvers and their economic implications. The absurdity of a proposed U.S. sovereign wealth fund is examined, along with contrasting global models. The conversation then shifts to innovative event betting during Super Bowl season, highlighting the cultural phenomenon and regulatory nuances. To wrap things up, ticket prices and celebrity culture surrounding the Super Bowl are humorously explored, showcasing the extravagance of major sporting events.
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Quick takeaways
The avoidance of a trade war with Canada and Mexico reveals the fragile state of North American trade relations under the current administration.
Concerns about Trump's proposed US sovereign wealth fund highlight its disconnect from fiscal realities and possible cronyism amidst a significant national deficit.
Innovative strategies like offering Super Bowl event contracts demonstrate how companies navigate the evolving landscape of sports betting regulations in the U.S.
Deep dives
Trade War Avoided
The recent avoidance of a trade war between the U.S., Mexico, and Canada highlighted the delicate nature of North American trade relations. Initially, the U.S. threatened to impose significant tariffs on these countries, causing widespread concern and media speculation about the potential economic fallout. However, negotiations led to last-minute agreements, with both Mexico and Canada offering troops to assist the U.S. border situation, indirectly diffusing the tariff threats. This situation underscored the unpredictable behavior of trade negotiations under the current administration, raising concerns about future volatility.
Understanding Tariffs
The discussion on tariffs revealed the substantial implications of imposing a 25% tariff on goods, especially within the integrated North American manufacturing landscape. It was explained that U.S. automotive supply chains often involve components crossing borders multiple times before final assembly, making such tariffs potentially catastrophic. The complexity of how these tariffs would affect prices was emphasized, with the effective rate far exceeding the nominal tariff due to the extensive border-crossing nature of manufacturing. The conversation also critiqued the reasoning behind such tariffs, pointing out their disconnect from the stated goals, particularly regarding unrelated issues like drug trafficking.
Sovereign Wealth Fund Proposal
The proposal for the U.S. to establish a sovereign wealth fund sparked skepticism about its feasibility and implications. Comparing it to funds in countries like Saudi Arabia and Norway, it was noted that such funds typically stem from surplus revenues, while the U.S. currently operates under a significant deficit. The conversation challenged the logic behind proposing a sovereign wealth fund without Congressional approval and amid a backdrop of rising national debt, emphasizing that it might serve more as a tool for personal patronage rather than a legitimate economic strategy. This point highlighted concerns over cronyism and misallocation of funds under such a model.
Impact of Unpredictability
The unpredictability exhibited in trade discussions and negotiations has broader implications for the U.S.’s reputation as a reliable trading partner. Stakeholders in various industries require stability and certainty to make long-term investments; however, the chaos created by impulsive tariff threats undermines that stability. This unpredictability could lead to lasting damage to the trust foreign and domestic entities place in U.S. economic policies. Concern was voiced regarding how such instability might influence future investment decisions and the overall business climate, noting that consistent policy signals are vital for economic health.
Super Bowl Betting Innovations
The upcoming Super Bowl has initiated discussions about the evolution of sports betting in the U.S., notably how companies are navigating legal restrictions. One innovative solution involved an online firm providing contracts based on the Super Bowl outcome, cleverly circumventing state laws against traditional sports betting. This tactic raises questions about the legality and regulatory status of such offerings in states where sports gambling remains illegal, especially given prior interventions by regulators. The conversation highlighted the evolving landscape of legal betting and how companies like CalSHI are positioning themselves to capitalize on this shifting environment, reflecting broader trends in both regulatory approaches and consumer interests.
This week: Trump almost started a trade war with our nearest neighbors. Felix Salmon, Emily Peck, and Elizabeth Spiers explain why Trump’s trade war with Canada and Mexico not happening is still newsworthy. Then, Felix breaks down why Trump’s plan for a US sovereign wealth fund makes no sense. And finally, Kalshi seems to have found a loophole by offering event contracts on the Super Bowl even in states where sports betting is illegal. The hosts discuss the distinctions between betting and trading futures, and how each are affected by their respective regulating entities.
In the Slate Plus episode: Egg Watch 2025 gets its own episode.
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Podcast production by Jessamine Molli and Cheyna Roth.
