Jeff (00:02)
Welcome to episode 19 of Rittner Reflections. I'm Jeff Rittner. This podcast is where I explore the dynamic complex world of cross border trade and reflect on life's most important issues in times of uncertainty. It's really good to be back with you recording again. With Thanksgiving just days away, I want to share a story that's both personal and universal.

It begins with a lopsided ceramic mug I made as a child. My mother kept it for over 50 years. To most, it's ugly. To her, it was priceless. That mug has become my metaphor for this year. A year of jagged edges, uneven surfaces, and unexpected colors. An ugly year.

Yes, but one that still holds warmth, meaning and lessons that are worth keeping. Now I am releasing this episode a couple days prior to the US holiday that's known as Thanksgiving. ⁓ This is one of my most favorite holidays. I really enjoy time with my family and friends and normally I eat too much food and I reflect.

on the year and the things that I am grateful for. For those of you out there listening who celebrate, I do wish you the very best time with your loved ones.

Now today, I would like to tell you the story of the ugly mug. Now you can see a picture of it on my website for this episode. Yes, it is a bit unusual and

likely not like any mug you've ever seen. Yeah, I made this mug when I was in grade school, perhaps when I was seven, eight, nine years old. ⁓ We had one of those school projects and this one was to work with clay and we were to make something to give to our mothers on Mother's Day. Now I can't quite remember ⁓ if everyone made mugs or if this was just my choice.

But to understand the reason the mug looks like it does, you have to know a little bit about me as a child. You see, I was one of those children that could never sit still. I always playing around, goofing off, distracted and not really paying attention, all in the sense of having a good time. I was...

Also not very detail-oriented and I certainly not artistic. Now I cannot remember all the details of making this mug, but I am certain that I was so busy messing around that I ran out of time. Now given this was one of those classroom situations and you there was most likely a deadline to get all the items into the kiln. I recall running up against it.

and was still scrambling to form the mug right up to the deadline.

The mug you see is

got sent to the kiln. Now the next day was painting time. And again, with all of my distraction and with my lack of artistic capabilities, you can see that it resulted in the marbled colored scheme and including the pink drippings from the lip.

Now, when the project was completed, this version that you see, this mug was what I gave to my mother on Mother's Day. You know, like a good son, I had a gift, I gave her the mug, although I was a little bit nervous knowing what it looked like. And she did what moms do. She said that she loved it and she so appreciated all the work that I'd put into it. Well, from my perspective, mission accomplished.

She was happy on Mother's Day.

Well, for more than 50 years, I never really thought about that mug, nor the whole story of what it took to make it and giving it to my mother, until just a few weeks ago after her passing when I discovered it among her belongings. I couldn't believe that she still had this thing. It was an ugly mug, but to her, it was special and meant a lot.

you know, for her to keep it all those years. The mug is a symbol really of enduring love. It's imperfect beauty and emotional continuity that spans generations. At the end of this podcast, I will offer you some lessons that I take from the ugly mug. Now, as I hold this mug in my hands and I look at it, I can't help but think,

about the ugly year we've all lived through. Much like its twisted handle and uneven glaze, 2025 has been jagged, unpredictable, and at times downright ugly. I am now calling it the ugly year. However, just as the mug still holds warmth,

This year has taught us lessons. It's made us more resilient and I think it's given many of us unexpected opportunities. So let's talk about trade. know, the world of cross border trade has been front and center in almost every daily news cycle. There's some sort of news about trade, some new development that ⁓ is being addressed around the world. And as a result,

trading has become messy. It's unpredictable and more expensive and quite frankly, ugly. We have observed policies that feel like they've been rushed into the kiln. We've seen negotiations that have left rough edges. Markets have tested our patience and we...

we see political actions that leave us confused, concerned, and in some cases, downright angry. Let me describe some of these for you. Starting with just the world of geopolitics. As we look around the world this year, we've seen rising tensions. We've seen ⁓ shifting alliances between countries, escalations, retaliation.

reactions to threats, ongoing negotiations, wars, peace agreements, sanctions, and policies that really seem to isolate rather than unite. If we were to talk about tariffs, for example, ⁓ you know, there's been, I don't know how many, just multitudes of announcements about tariffs.

And we've seen rescissions. And then we have studies that are announced that really feel abrupt, like glaze dripped without care. One day a tariff is announced, the next day it's under study. And by the end of the week, it might be suspended. This is the kind of churn that we've experienced. And for business, this is unsustainable.

Businesses need predictability to be able to plan and execute. And when you have this sort of volatility in the supply chain and in the cost of crossing borders, it becomes intolerable. You know, I'll give you an example of a coming attraction. So hopefully by the end of the year, we are going to receive a ruling from the Supreme Court. And this ruling is going to address the fact that

President Trump has levied tariffs against countries all around the world under the IEPA.

This is the International Emergency Powers Act. And he is using this act to say there's an emergency and we need to levy these tariffs. And the Supreme Court is now ruling to see if that really is constitutional. know, whatever the ruling might be, it's going to add another layer of unpredictability and it's gonna reshape regulatory boundaries. If the court rules that these tariffs are not constitutional under the AIPA,

then will the US government have to refund importers duties they've already paid and what will that do and how will that happen? So just more unpredictability.

How about all of the executive orders and regulations that have been put forward over this year? We see them announced. Sometimes they're rescinded. Sometimes they're suspended, kind of like clay that's reshaped mid-firing. We've even seen regulations being used as a bargaining chip in a negotiation.

Now this is definitely a departure from normal regulatory practices. I can share with you two examples that I've talked a lot about in my prior podcast. The first is what is known as the affiliates rule. I talked about this during my three-part series on export controls. I actually dedicated an entire podcast to this. It's also been known as the BIS 50 % rule.

So this rule was suddenly ⁓ implemented. ⁓ We all kind of knew about it all summer long, but all of a sudden without warning, boom, it's now effective and companies had like 30 days to make sure they looked at their supply chain, looked at their screening practices to make sure they could comply with these regulations. Basically the regulation says that you cannot do business with someone who's identified on the entity list.

And now you have to look at all the affiliates that are associated with that entity. And if any of them have in combination more than 50 % ownership, you cannot do business with those affiliates. So companies began scrambling, began looking at how do we buy the right software tools? How do we put the right processes together? And then as a result of the US-China trade negotiations, all of a sudden the US decides we're gonna pause that rule for 12 months.

And now companies are left with, ⁓ we still follow these rules? Do we not? ⁓ I would advise those of you out there that this rule applies to, I would say do not stop what you were doing. I would continue to put your processes in place, continue to work with the tools you've purchased, because at any moment,

⁓ this rule could be reestablished and then you will have to comply. Second example, ⁓ this one comes from China. shortly before President Xi and President Trump were to gather to discuss a trade agreement, China decided to announce a number of new controls on rare earths. Knowing that these, that they really have

the market on these and they have the advantage and they put together rules identifying additional rare earths that are subject to export controls and more importantly they established rules that look and mirror exactly what the U.S. has done. And one of these was really problematic and it basically said that if you have items

that you're exporting or re-exporting from other countries that contain China rare earth, either technology or the actual item itself, you now have to have a Chinese export license to re-export. This would be incredibly problematic for companies, especially those that are in the automotive industry and those that are in semiconductors and high tech that use these rare earths for the products that they develop. And trying to figure out how

a company was going to identify what required the license and then get China to approve the license in a timely manner was going to be extremely problematic. again, as a result of the US-China trade agreement, China decides, we're going to put a pause on this for one year. And so now companies are left like, oh, wait a minute, we spent all this time trying to figure it out and now we don't have to do this. And again, my advice to those of you that these rules apply to is please don't stop.

Please continue to look at what you need to do to make sure that you comply if and when these rules are reestablished because at any given moment, China could decide they're back on again and then you will have to comply. So once again, these are examples of how the trade world has become so complex and so volatile. And I think the reason why I...

I use these examples to just demonstrate this truly has been an ugly year.

So then what is the result of all this? What are we seeing in the world of trade? Well, first of all, most companies have trade compliance programs and most of them are well established, but now they're having to be changed. They're having to be adjusted. And this is all having to be done in a hurry because rules are put forward so quickly and changed so quickly. And this creates this uncertainty and

It does not allow time, I think, for thoughtful design about a program. You there are huge implications for the use of trade systems and standard processes. know, companies are spending large sums of money purchasing systems to be able to comply and then find out the rules aren't applicable. Second, I think we could look at just the human cost.

We have seen over and over weekly by week, you know lost jobs layoffs those have been In private industry and they've also been with the government. I mean, I've dedicated a couple of my podcasts talking about layoffs You know, and then we've seen, you know, there was a long extended government shutdown which had huge implications for individuals and for companies and for and and for government agencies

And then third, I'll just say, if we just look broadly at society and just the turbulence that society is experiencing, and it's really due to kind of an atmosphere around us of distrust and disarray. And we see this in various scandals and legal decisions, and then there's appeals and we see assassinations and various politics going on, which just makes society anxious and

uncertain and just brings about a sense of turbulence. so this is just what we are experiencing, I think, in this ugly year. And so as I think about the mug and the ugly year, ⁓ it really does become exhausting.

Even in

ugliness though, there are glimpses of resilience. You know, we do see, you know, companies adapting. And sometimes those adaptations, in those adaptations, there might be new solutions discovered. Supply chains are being reimagined. Companies are focusing on cost. ⁓ New partnerships are being forged. You know, for those who choose to be comfortable in this chaos,

There are many opportunities to recalibrate, to rediscover ways that you can actually thrive and to refocus your efforts on what matters most.

You know, interesting, ⁓ when I made this mug, I made it back in the late 1960s. And when I think about it now, I realize those were turbulent times too. There were civil rights struggles, war protests, political upheaval, and there were cultural shifts that reshaped the world.

This mug was born in an era as jagged and unpredictable as its own edges. You know, discovering it today in another season of turbulence reminds me that imperfection and uncertainty are not new. They've always been with us, and yet through it all, what we cherish can endure.

And that's where the lessons of the ugly mug come into focus. Because it's not just about clay and glaze. It's about what survives through decades of upheaval and what truths we carry forward. So as I've sat and kind of looked at this mug, five lessons come to mind. First, imperfection can be cherished. My mother kept this mug for over 50 years.

Not because it was beautiful, but because it was mine.

Second, persistence matters more than finish. I scrambled to complete this in time, and despite its flaws, it has endured.

Third, symbols hold stories. This mug is more than clay and glaze. It's a vessel of continuity across generations. Fourth, ugliness reveals resilience. The mug survived decades just as we, people, and our systems survived turbulent years. And finally,

Gratitude lives in the keeping. My mother's act of holding onto this mug was an act of quiet gratitude. So these are the lessons I'll carry forward from the ugly mug and from this ugly year.

As Thanksgiving arrives, I hope we all find gratitude not in perfection, but in persistence. In the people who kept showing up, in moments that didn't go as planned, but still mattered, in the mugs, ugly or otherwise, that remind us love doesn't need symmetry. I'll leave you with a gentle invitation. What ugly mugs

have you kept and what stories do they hold? Well, as I head to Spain next week to run the Valencia Marathon and to take some time for some vacation and reflection, I look forward to sharing my next episode, episode 20 with you, perhaps recorded from there or soon after my return with fresh stories and new lessons from the road.

Until then, may your mugs, ugly or otherwise, be full of warmth. Thank you very much. Talk to you again real soon.