What was the market mayhem all for?

Summary

Apple News Today: "What Was the Market Mayhem All For?"

Release Date: April 11, 2025
Host: Shemitha Basu
Guest: Sean Donnan, Senior Economics Writer at Bloomberg News

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Trump Administration's Tariff Policy and Market Turmoil

In this episode, Shemitha Basu delves deep into the tumultuous week surrounding President Trump's aggressive tariff policies, a central theme that has significantly impacted global markets and economic stability.

Escalation of Tariffs: President Trump’s administration intensified tariffs, notably imposing a staggering 145% tariff on Chinese goods. Despite some reversals, the overall tariff rate in the U.S. reached its highest since 1909, as highlighted by Sean Donnan (02:00). This dramatic increase has led to a noticeable slowdown in global trade, with companies canceling shipments and orders from Chinese suppliers.

Market Reaction: The financial markets experienced unprecedented volatility, with $19-$20 trillion in global financial market value wiped out within a week (02:35). Donnan emphasizes the severity by comparing it to the size of the U.S. economy, stating, “That’s wiping out two-thirds of the US Economy from global financial markets” (02:45). The sudden rise in U.S. Treasury yields further signaled alarm, contributing to the decision to scale back tariffs.

Administration’s Strategy or Concession? A pivotal question discussed is whether the administration’s actions were a calculated strategy or a reactive concession. Donnan suggests that President Trump might have orchestrated the tariff escalation to gain leverage, noting, “Donald Trump outsmarted the world” (03:48). However, the unpredictable bond market responses indicated potential overreach, leading to partial tariff rollbacks.

Potential Concessions and Long-Term Impact: Trump’s administration claims to have engaged dozens of countries in negotiations, aiming for significant concessions in trade deals. Donnan remains skeptical, citing Trump’s history of proclaiming victories that often fall short upon closer inspection (06:35). The long-term implications include a more closed U.S. economy, increased production costs due to higher tariffs on materials like steel, and demographic challenges such as a shrinking workforce exacerbated by restrictive immigration policies.

Vision for American Manufacturing: Basu probes the administration's ultimate goal of revitalizing American manufacturing. Donnan assesses the realism of this vision, acknowledging the legitimate concerns over job losses due to globalization but highlighting numerous barriers. Issues such as higher domestic production costs, a declining workforce, and regulatory hurdles present significant challenges. He concludes, “We’re not going to know for two, three years how successful Donald Trump’s strategy is” (07:45).

Dual Narratives: Victory vs. Capitulation: As the episode wraps up, Basu and Donnan reflect on the contrasting narratives surrounding the tariff policy. While the administration celebrates the week’s actions as strategic victories, critics view them as unsustainable concessions. Donnan advises listeners to consider the broader trajectory towards protectionism, stating, “The real story in the weeks and months, possibly even years to come is going to be how the United States manages that shock” (10:15).

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Supreme Court Ruling on Wrongful Deportation

The episode also covers a significant Supreme Court decision mandating the Trump administration to facilitate the return of Kilmar Abrego Garcia, a Maryland man mistakenly deported to El Salvador (11:13). The court paused the lower court’s order to allow further review, emphasizing the necessity to handle his case as if he had not been deported. The administration’s inability to provide evidence of Abrego Garcia’s alleged gang affiliation was highlighted, raising questions about immigration policies and executive power.

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Aviation Incidents and Public Safety Concerns

Two aviation accidents shook public confidence on the same day:

1. New York Helicopter Crash: A helicopter carrying six individuals, including children, tragically crashed into the Hudson River, resulting in no survivors (11:30).
2. Reagan National Airport Collision: An American Airlines plane carrying House members from New York and New Jersey was struck by another aircraft on the ground, rekindling fears following a deadly collision in January that killed 67 people.

These incidents underscore ongoing safety challenges within U.S. aviation, especially at Reagan National Airport, which has faced heightened scrutiny since the January accident.

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Impact of U.S. Immigration Policies on International Artists at Coachella

As the Coachella music festival commences, concerns arise among foreign artists regarding U.S. immigration policies. Increased visa costs, longer processing times, and incidents of denied entries have made some artists hesitant to perform in the U.S. The LA Times reports that these barriers, coupled with political tensions, are causing international acts to reconsider their participation, potentially affecting the festival’s diversity and international appeal.

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Additional Insights: Democratic Response to Immigration Agenda

In a conversation with New Yorker staff writer Jonathan Blitzer, Sean Donnan comments on the Democratic Party’s muted response to the Trump administration’s stringent immigration policies. He warns that the lack of robust opposition could embolden further anti-democratic actions, labeling the administration's agenda as the most radical it has ever been (14:00).

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Conclusion

This episode of Apple News Today provides a comprehensive analysis of the Trump administration’s controversial tariff policies and their far-reaching economic implications. Through insightful discussions with Sean Donnan, listeners gain a nuanced understanding of the strategies, challenges, and potential outcomes of these policies. Additionally, the episode touches on critical issues such as wrongful deportation, aviation safety, and the intersection of immigration policies with cultural events, offering a well-rounded perspective on current events shaping the global landscape.

For more detailed coverage and ongoing updates, listeners are encouraged to access the full episode via the Apple News app.

Transcript

[Shemitha Basu]

Hey there, it's Shemitha. I've got a quick request for you. If Apple News Today is an essential part of your morning routine, follow the show in Apple Podcasts. And if you have another 30 seconds, leave us a rating and a review, too. It helps other people find our show and it helps us know what you like about it. Thanks. Good morning. It's Friday, April 11th. I'm Shemitah Basu. This is Apple News Today. On today's show, a look back at this week in tariffs. The Supreme Court says the Trump administration must help bring back a man who was wrongly deported to El Salvador and why some foreign musicians are thinking twice before coming to play shows in the.

[Sean Donnan]

US.

[Shemitha Basu]

Let'S start with the biggest story all week. President Trump's tariff policy. It's been one of the most volatile weeks we've seen in decades for the markets. Even as he reversed himself on broader tariffs, the Trump administration imposed tariffs of 145% on China. To understand the impact of all of this and what comes next, I called up Sean Donnan, a senior writer for economics at Bloomberg News, And I started by asking him why the White House reversed itself in the way that it did and what, if anything, this chaotic week has actually accomplished.

[Sean Donnan]

So, look, I think the most important thing to remember is that at the end of this week, we have much higher tariffs in place here in the United States than we did before this week. The Yale Budget Lab was out this week with a new analysis that says the average tariff rate on goods coming into the United States is now at its highest level since 1909. And we're starting to see in the global economy the impact of that. We're starting to see global trade start to slow down. We're seeing companies cancel shipments, orders from suppliers in China. While President Trump scaled back his tariffs on 60 or so countries, he's only scaled them back to a 10% baseline that again, did not exist there a week ago. There's also a 25% tariff on imported cars that's still in place. There's more sectoral tariffs to come. And over the week leading up to the scaling back, we really had an incredible reaction in global financial markets. Something like 19 or $20 trillion in value was wiped out of global financial market. Just to give you an idea, the US economy is about a $30 trillion a year economy. I mean, that's wiping out two thirds of the US Economy from global financial markets. It's enormous. And then the night before scaled back just in the kind of last day, the Market reaction turned into the bond markets. And what we saw was the yields on US Treasuries go up very, very fast. And that immediately started ringing a different kind of alarm bells. And that seems to have been what caused president now come to the end of this week. And I say, look, the story in the financial markets is not over. It's going to drag on for some time. And the tariffs are still there.

[Shemitha Basu]

Yeah, well, that moment that you're describing on Wednesday, it sounds like that was a turning point for a lot of people watching closely this tariff policy. I mean, we heard Fox Business senior correspondent Charlie Gasparino, who's been a big supporter of President Trump's, basically say this is not sustainable.

[Sean Donnan]

I want to tell you right now that Donald Trump outsmarted the world. Trust me, I'm an American. I support my president. But that's not really what happened here. From what I understand, people focus on the stock market all the time. It's the bond market and the sort of lending markets. That's the plumbing of the economy. And those markets were imploding last night.

[Shemitha Basu]

So was this actually a strategy of Trump's? Are we seeing something that suggests this is a strategy that unfolded in the way he had planned, or or is this really Trump conceding and walking something back because it clearly was too unpopular and unsustainable?

[Sean Donnan]

Look, I mean, it depends who you listen to, right? I mean, the White House very quickly started to focus on the number of countries who have come to them, you know, wanting to negotiate new deals. And therefore, this was the art of the deal. And President Trump got the leverage he wanted. He's getting the result that he wants. This is all the plan. A lot of reporting at the same time indicated that even some senior economic aides did not know this was happening, that the scaling back was happening. In fact, Jameson Greer, the US Trade representative, was up on Capitol Hill and there's pictures of him kind of in the middle of testimony, kind of looking at his phone and going, oh, okay, things have changed. In theory, he should be the person driving U.S. trade policy or certainly one of the people in the meetings and at the forefront of that.

[Shemitha Basu]

I mean, he was even admitting, admonished in that hearing, it sounds like you're sitting here in front of us. Why is there a big movement on trade policy?

[Sean Donnan]

Absolutely. And it's almost like he learns from the rest of the world what someone has done on his portfolio. And that's been a feature of Donald Trump and how he manages the economy and trade policy going back to his first term. Now, the risk of this, of course, is that Donald Trump somehow gets emboldened by one day's gains. Right. What we saw on Wednesday after he made the announcement was the biggest increase in the Dow Jones and the s and P500,500 that we had seen since 2008. Right. You know, this is an enormous movement. Now, there's a lot of people who also tell you that that's not a sign of a healthy market. Right. Markets should not be swinging around like this. And you know, the United States is supposed to be and its financial markets are supposed to be a kind of beacon of stability, a safe haven in the storm. And over the last week, they've been anything but.

[Shemitha Basu]

Let's go back to this idea of concessions for a moment because we're hearing President Trump say this, some of is saying this, that they have managed to get dozens of countries to engage with them since the tariffs, new tariffs were introduced and that they're hopeful that this will now lead to serious concessions. What concessions is he hoping to get? How much of the concession talk to you appears to be substantial versus pr?

[Sean Donnan]

Basically, look, that's a very good question, but we're only going to be able to see the answer to that when we actually see these deals and how meaningful they are and so on. Donald Trump has a history in the past of kind of proclaiming victory and claiming that he has just secured a magnificent deal. When you scratch under the surface, it's less than that. So some of the issues that Donald Trump wants to solve in a matter of days with these tariffs are issues that have been there for decades, have been pretty intractable. Now, if he's able to solve those issues, I think a lot of people in the United States will say that's great.

[Shemitha Basu]

Well, so the administration's stated goal, end goal at least, is to bring American manufacturing back to the United States. Can I ask you to just evaluate that vision for a moment? I mean, how realistic is that? What would it look like? How long might it take?

[Sean Donnan]

I think a lot of people in the United States feel like one of the consequences of globalization has been the loss of good paying factory jobs. That's a completely legitimate complaint. There are communities around the United States that have been decimated by deindustrialization. There's a lot of those communities, in fact, and Donald Trump has built his political support in part on votes in those places. The question is how you do it. During the Biden administration, the idea was industrial policy. We're going to give subsidies to companies to kind of end tax breaks. And we're going to find other ways to encourage them to make stuff here in the United States, whether it's semiconductors, electric vehicles, other green energy kind of products. They kind of focused on target targeted industries. Donald Trump's idea is to instead throw up this kind of defensive wall. And there's a lot of people at companies, and I hear from manufacturing companies and also economists who say, well, that's okay, we get it. But a lot of the things that we need to build here in the United States are components that come from overseas. And if you put up tariffs on steel, well, then what ends up happening is domestic steel prices also go up because they no longer have that competition from overseas. And that makes building a factory here more expensive. We know that there are fewer young people coming into the workforce every year just as a result of demographics. We also know that there's a huge amount of baby boomers who are exiting the workforce just as a result of demographics. We know that Donald Trump is cracking down on immigration as well. So who's going to work in these factories is another issue. And then there's other issues like permitting and so on. So we're not going to know for two, three years how successful Donald Trump's strategy is. But we do know now that there are all these barriers that are there and that those aren't necessarily being addressed, and in some cases, they're being made worse by Donald Trump's policies just to.

[Shemitha Basu]

Bring us to an end here, to an end point of reflection. I mean, we've talked about there being these two competing narratives of what happened this week. I think we're going to be hearing about this for a long time. The Trump administration is touting this week as a victory, as a, this was our plan all along. Others are calling it a capitulation, a real walk back after so much backlash. How would you advise people who are listening to think about these dual narratives and decide which one is closest to true?

[Sean Donnan]

Look, I think the kind of victory capitulation narrative is, I would just kind of set that aside. They're just blips on a policy trajectory that is taking the United States towards high tariffs, towards a new era of protectionism that Donald Trump is deliberately pursuing. And the real story in the weeks and months, possibly even years to come is going to be how the United States manages that shock. Whether we go into a recession here in the United States, whether the world goes into a recession as a result of these things, or whether it finds a way through. Now, hopefully, some of these negotiations that are going to come, whether as a result of victory or capitulation, maybe take you away from some of the worst case scenarios, but the US Is still going to be a more closed economy than it was a week, 10 days, two months ago.

[Shemitha Basu]

Chandanan with Bloomberg. Thank you so much for your time.

[Sean Donnan]

Hey, thank you so much for having me.

[Shemitha Basu]

Before we let you go, a few other stories we're following. The Supreme Court ruled Thursday the Trump administration must facilitate the return of a Maryland man mistakenly deported to El Salvador back to the United States. A lower court judge ordered the administration to return Kilmar Abrego Garcia by Monday night, but Chief Justice John Roberts paused that order so the court could have time to review the case. The administration accused Abrego Garcia of being a gang member, but so far has not publicly provided any evidence of that. They admitted he was erroneously deported, but said there was nothing they could do to return him. And they argued the judge who ordered his return had no power to do so. In addition to saying the government should help him return, the justices also ordered his case to be handled as it would have if he had not been deported. There were two aviation incidents on Thursday. First in New York, a helicopter carrying six people went down into the Hudson River, ABC News reports all six people on board, including a pilot, two adults and three children were killed. Meanwhile, in Washington, a plane carrying a number of members of the House from New York and New Jersey was clipped by another plane while on the ground at Reagan National Airport. Both were American Airlines aircraft. Reagan Airport has been in the public eye ever since an American Airlines jet collided with an army helicopter in January, killing 67 people. And finally, the first of two weekends of the Coachella music festival kicks off today. The LA Times reports recent high profile incidents at the US Border where people were denied entry has some foreign artists worried about traveling to the United States, especially if they've been critical of President Trump. The US Is the biggest touring market and festivals like Coachella attract music acts from all over the world. According to the Times, this general feeling of unease, plus recently increased visa costs and longer wait times, are making some artists call their lawyers or even think twice before coming to perform in the US you can find all these stories and more in the Apple News app and check out our interview show. In conversation this week, I talked to New Yorker staff writer Jonathan Blitzer about the recent deportation of more than 200 Venezuelan migrants to a maximum security prison in El Salvador. Blitzer spoke about what he sees as the near silent Democratic response to the Trump administration's immigration agenda.

[Sean Donnan]

I think the agenda they have is more radical than it's ever been. I think the political resistance to that agenda is as muted as I've ever seen it, which is also a source of real alarm for me. And I think actually this is the real less laboratory where you see, to my mind, the most anti democratic behavior from the administration actually beginning to take shape.

[Shemitha Basu]

If you're listening in the Apple news app right now, that episode is queued up to play for you next. Enjoy the weekend and I'll be back with the news on Monday.