Fareed Zakaria GPS — “Big, Beautiful Tariffs”
Air date: December 28, 2025
Host: Fareed Zakaria, CNN Podcasts
Main Theme
This special episode of Fareed Zakaria GPS explores the sweeping “reciprocal tariffs” policy enacted during Donald Trump’s second term as President, tracing its historical roots, testing its promises against economic reality, and sounding the alarm on the potential dangers of crony capitalism and economic nationalism. Fareed Zakaria examines how and why Trump doubled down on tariffs, the legacy of tariffs in American history—especially the catastrophic Smoot-Hawley Act—and places the recent protectionist turn in the broader context of America’s postwar vision of open markets, cooperation, and prosperity.
Key Discussion Points & Insights
1. Trump’s Tariff Nostalgia and Historical Revisionism
- Trump’s admiration for President William McKinley (00:58): Trump invokes McKinley as “the tariff man,” romanticizing the economic boom he allegedly unleashed through steep tariffs.
- Myth vs. Reality: Fareed debunks Trump's narrative by pointing to historical data—America today is far richer than in McKinley’s era; McKinley’s tariffs were actually followed by recession and deep inequality (02:30).
“There are a few gaping holes in Trump’s version of history. America is much richer today by every measure than it was then. And McKinley’s big tariff was actually a big disaster...” (02:30, Fareed Zakaria)
2. The Economic Costs of Modern Tariffs
- Trump’s “Liberation Day” and sweeping new tariffs (04:40): Tariffs instituted on over 100 countries, including close allies, making them the most comprehensive since the early 1930s.
“Tariffs are now in place against more than 100 countries, including impoverished African states like Lesotho and on two uninhabited territories near Antarctica.” (05:16, Fareed Zakaria)
- Estimated Impact: Tariffs are predicted by economists to drive up prices for consumers, cost the average household thousands of dollars per year, and suppress economic growth.
3. The False Promise of Manufacturing Revival
- Trump’s vision: He claims tariffs will induce a “great American comeback” in manufacturing.
“Jobs and factories will come roaring back into our country...” (06:58, Donald Trump)
- Reality Check:
- Manufacturing’s decline is a long-term, global trend (~25% of US workforce in 1973 down to ~8% today).
- Advanced economies are overwhelmingly service-based (~80% of US jobs).
- Attempts to revive manufacturing (even abroad, e.g., Japan, France) have generally failed (10:18).
- America’s surpluses and prosperity come from dominating tech, finance, and entertainment.
4. Dangers to the Future: Undermining Innovation
- Redirection of Resources: Tariffs may jeopardize jobs of the future (in tech, science, and innovation) by favoring old industries and slashing funding for R&D (12:35).
- Brain Drain: New policies make life harder for high-skill immigrants, key drivers of innovation.
- Losing the Tech Race: China overtaking the U.S. in frontier technologies, a "stunning reversal" from earlier decades (14:03).
“From 2019 to 2023, China beat the US in 57 out of 64 pivotal technologies.” (14:23, Fareed Zakaria)
5. Lessons from the Smoot-Hawley Tariff and 1930s Economic History
- Historical Case Study: In the wake of the 1929 crash, the U.S. enacted the Smoot-Hawley Tariff in 1930, intended to help farmers but ballooned into protection for thousands of products through backroom deals (18:25).
"You got this dynamic where tariffs were just being ratcheted up without any consideration about who’s going to pay this." (21:18)
- Expert Warnings Ignored: President Hoover disregarded the caution of over 1,000 economists.
- Disastrous Consequences:
- Triggered retaliatory tariffs abroad.
- U.S. exports were halved within three years.
- Did not revive the farm economy; farming jobs plummeted anyway.
- Tariffs became political, with “winners” and “losers” picked through patronage rather than market success.
- Ultimate Outcome: Hoover, Smoot, and Hawley swept from office by voters in 1932.
6. Roots of Trump’s Protectionism: The 1980s and Japan
- Personal Grievances: Trump’s animosity toward Japan began in the 1980s, as Japanese cars, electronics, and investors became economic symbols of U.S. decline and targets for American resentment (30:20).
“They are systematically ripping off this country.” (32:19, Donald Trump, 1980s)
- Publicity and Politics: Trump used anti-Japan rhetoric and a major NYT ad to boost his brand and lay the groundwork for future political aspirations.
- Longstanding Philosophy: Tariffs as a lever for “winning deals”—a throughline from Japan-bashing to targeting China decades later.
7. Tariffs and Crony Capitalism: Corruption of the Political System
- Ken Griffin’s Warning (46:55): Billionaire and erstwhile Trump supporter decries “an era of crony capitalism,” where government determines winners and losers, likening it to Third World autocracies.
“It’s terrifying to watch this play out over the course of weeks.” (48:00, Ken Griffin)
- Modern Spoils System:
- Trump-era tariffs triggered a surge in lobbying as companies sought lucrative exemptions.
- The exemption process was opaque, seemingly favoring donors and political allies (49:56).
- Major corporate players and donors often succeeded disproportionately in getting favorable treatment.
“The tariff exemption process allowed the government to reward its political friends and punish its enemies, the study said.” (51:28)
- Historical Parallels: Fareed compares this to authoritarian regimes (e.g., Ferdinand Marcos in the Philippines) who used economic levers to enrich themselves and allies.
- The dangers: “Trump 2.0 appears to be an even bigger gold rush for favoritism than Trump’s first term.” (53:54)
8. Fareed’s Closing Thoughts: The Larger Vision at Stake
- Tariffs are about more than economics:
- They signify a vision of a closed, zero-sum world, versus the open, “positive-sum game” system America built after WWII (55:15).
- FDR and Truman’s Vision:
- The U.S. championed post-1945 openness, seeing cooperation as the foundation of peace and prosperity.
- The success of this “generous but long-term greedy” approach made America richer, kept the dollar supreme, and stabilized the world.
“America created a win-win world in which others prospered and America stayed strong.” (57:00, Fareed Zakaria)
- Current Path:
- The new wave of populist nationalism threatens to abandon this legacy, risking “a return to narrow self-interest, nationalist competition, and economic protectionism” (58:20).
- Other countries are forming new trade deals and not following the U.S. down the protectionist path.
- Fareed’s hope: America will one day “believe once again in its own ideas and ideals.” (59:08)
Notable Quotes & Memorable Moments
-
On the myth of tariff-driven prosperity:
“America is much richer today by every measure than it was then. And McKinley’s big tariff was actually a big disaster, hiking up prices and leading Republicans to a massive defeat in the midterm election.”
— Fareed Zakaria, (02:30) -
On the scale of new tariffs:
“Tariffs are now in place against more than 100 countries, including impoverished African states like Lesotho and on two uninhabited territories near Antarctica. The United States now has its largest tariffs since the early 1930s, likely raising prices on cars and groceries, costing the average household thousands of dollars per year.”
— Fareed Zakaria, (05:16) -
On jobs and economic realities:
“For every job in the steel industry that the tariff helped, there were 75 jobs in other industries that were lost because American businesses were paying more for foreign steel.”
— Fareed Zakaria, (07:30) -
On crony capitalism:
“Trump’s tariffs have unleashed an era of crony capitalism... It’s terrifying to watch this play out over the course of weeks.”
— Ken Griffin, (48:00) -
On the nature of the modern tariff system:
“The tariff exemption process allowed the government to reward its political friends and punish its enemies... in what it called a very effective spoil system.”
— Fareed Zakaria, (51:28) -
On America’s vision for the world:
“It built a system that helped others, but also helped itself stay rich and powerful for decades. The proof is in the numbers. As parts of Asia, like China, have risen from dirt poverty to great wealth, that has changed the balance of power among nations. Except for one country. The United States 45 years ago was about 25% of global GDP and today it is roughly the same number, in fact, slightly higher.”
— Fareed Zakaria, (57:00)
Important Segment Timestamps
- 00:58: Trump's admiration for McKinley and the "tariff man" legacy
- 02:30: Zakaria debunks the myth of Gilded Age prosperity from tariffs
- 04:40: The announcement of “Liberation Day” and the new tariff regime
- 07:30: Economic impact of past steel tariffs
- 10:18: Decline of manufacturing and rise of the service sector
- 12:35: Risks to R&D, innovation, and the tech workforce under new policies
- 14:23: China surpasses the US in key technologies
- 18:25: Detailed background on the Smoot-Hawley Tariff Act
- 21:18: Congressional deal-making and unchecked escalation of tariffs
- 30:20: Trump’s history of trade rhetoric—beginning in the 1980s with Japan
- 32:19: Trump’s early use of “ripping off” rhetoric
- 46:55: Ken Griffin’s alarm over crony capitalism
- 49:56: Surge in trade lobbying and opacity of the tariff exemption process
- 57:00: The “win-win world” America built post-WWII
- 59:08: Fareed’s closing hope for a return to American ideals of openness
Conclusion
Fareed Zakaria’s “Big, Beautiful Tariffs” traces the political and historical genealogy of Trump’s tariff-heavy policies, illustrating their dangers through economic history and recent experience. The episode warns not only of higher consumer prices and job losses, but of the deeper threat: a system where economic influence is determined more by political favoritism than by merit or market dynamics. It ends with a call to remember and protect the open, cooperative system that made postwar America—and the world—more peaceful and prosperous—a system now imperiled by the rhetoric and reality of protectionism.