Summary of NPR's "Consider This" Episode: When it comes to the economy, it's all about uncertainty

Episode Information

• Title: When it comes to the economy, it's all about uncertainty
• Host: Juana Summers
• Release Date: March 6, 2025
• Description: This episode delves into the economic uncertainty stemming from President Trump's tariff policies, exploring expert opinions and real-world impacts on businesses and consumers.

Introduction to Economic Uncertainty

The episode opens with Juana Summers addressing the widespread concern among economists regarding President Trump's implementation of broad-based tariffs. Highlighting the potential negative repercussions, Summers introduces Mark Zandi from Moody's Analytics.

Mark Zandi states at [00:07], "Broad based tariffs are a real problem for the economy." He warns that maintaining these tariffs could compel the typical American household to spend an additional $1,200 to $1,300 annually on the same goods ([00:14]).

Treasury Secretary Scott Besant counters these fears, describing them as "alarmist" on CBS News’s Face the Nation. However, Zandi argues that it's not merely the tariffs but the uncertainty surrounding their implementation that poses significant challenges.

The Ripple Effect of Tariff Uncertainty

Zandi emphasizes the broader implications of unpredictable tariff policies. Referencing the fluctuating statuses of tariffs on Canada, Mexico, and China, he explains that such volatility is detrimental to business confidence.

At [01:20], Zandi remarks, "You need, you know, some confidence in the rules of the road. And tariffs are a key rule. And if you don't have that, you're not. Yeah, I don't know that you cut. I don't know that means you fire people. But I think it does mean you sit on your hands." This uncertainty leads businesses to hesitate in making investments or hiring decisions, ultimately slowing economic growth.

Real-World Impact: Randy Carr's Business

To illustrate the tangible effects of tariff uncertainty, Summers introduces Randy Carr, the owner of a Florida-based business specializing in embroidered patches. Carr's operations, which include factories in the U.S. and Mexico, face increased costs due to the impending 25% tariffs.

Carr shares at [02:01], "Once I get a clearer picture of what's going to happen with the tariffs, then we'll reassess where we go with that. But everything's been shelved for now." This delay impacts his ability to invest in new equipment and manage day-to-day operations effectively, as he states at [02:14], "We're not taking care of our customers. I'm not taking care of my employees. I'm taking care of a what if scenario on tariffs."

Expert Analysis: Nick Bloom on Economic Uncertainty

After a brief interlude excluding advertisements, Summers converses with Nick Bloom, an economist at Stanford University and co-creator of the Economic Policy Uncertainty Index. Bloom provides a deeper analysis of the current economic climate shaped by tariff-induced uncertainty.

At [04:05], Bloom explains, "It is going to slow down growth because if you're a firm out there, you're thinking of opening a new store or investing in new equipment or maybe launching an R&D project...if tens of thousands of businesses put plans on hold, that means they're not hiring and they're not investing." This stagnation extends to consumer behavior, where high uncertainty leads to decreased spending on durable goods such as houses, cars, and electronics.

Bloom further elaborates at [05:31], "It's very high. On a, you know, one to ten scale, I'll give it a nine. We've been tracking this, we have data going back almost 100 years...what is completely unprecedented is seeing this as a deliberate policy move from a government." He underscores that the current level of uncertainty is unprecedented, largely driven by President Trump's deliberate policy decisions, which contrasts with the typical political approach of maintaining stability and reducing uncertainty.

Broader Implications Beyond Tariffs

Bloom points out that the uncertainty is not limited to tariffs alone. At [06:51], he notes, "It's not just tariffs, it's regulation, it's taxes, it's government expenditure...so, yes, tariffs are in some sense the most obvious right now, but it's kind of right across the range of regulations, taxes, spending that the government controls." This pervasive uncertainty affects various sectors, creating a hesitant business environment reluctant to make strategic decisions or investments.

Balancing Optimism with Risk

Despite the uncertainties, businesses initially showed optimism following Trump's election, buoyed by promises of tax cuts and deregulation. However, Bloom observes a conflict between this optimism and the growing fears of a potential recession. At [07:44], he states, "It's really interesting that Trump, too, is unlike anything we've ever seen before...business optimism picked up. The stock market, as you saw, jumped up. But they don't like uncertainty and neither does the stock market." This duality raises questions about whether the positive outlook can withstand the mounting risks associated with policy unpredictability.

Bloom concludes that while optimism remains, the increasing risks and uncertainties may overshadow the initial positive sentiments, making the economic future under Trump's policies highly unpredictable.

Conclusion

The episode from NPR's Consider This provides a comprehensive examination of how President Trump's tariff policies have introduced significant uncertainty into the economy. Through expert insights from Mark Zandi and Nick Bloom, alongside real-world examples like Randy Carr's business, listeners gain a nuanced understanding of the delicate balance between potential economic benefits and the pervasive uncertainty hindering growth and investment. The episode underscores the critical need for stable and predictable policy environments to foster business confidence and economic progress.