Your hot takes on this week's tariff insanity

Summary

Make Me Smart: Your Hot Takes on This Week's Tariff Insanity

Podcast: Make Me Smart
Hosts: Kai Ryssdal and Kimberly Adams
Episode Release Date: April 10, 2025
Episode Title: Your Hot Takes on This Week's Tariff Insanity

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Introduction

In this episode of Make Me Smart, hosts Kai Ryssdal and Kimberly Adams delve into the tumultuous world of tariffs that have been shaking the U.S. economy. With rising concerns from listeners and significant market fluctuations, Ryssdal and Adams break down the complexities of current tariff policies, their historical context, and the broad-reaching impacts on businesses and consumers alike.

Listener Mailbag: Navigating Tariff Turbulence

Understanding the Surge in Tariffs

The episode kicks off with listener questions about the abrupt escalation in tariffs. John from Canton City shares his foresight regarding the recent tariff hikes:

"There are still 10% across the board tariffs on everything coming into this country from every country on the planet... We're still in literally what a lot of people thought was the worst case scenario for a while—the 10% across the board tariffs."
[03:01] John, Canton City

Ryssdal responds by clarifying the current state of tariffs:

"On the 20th of January, the average US tariff rate was about 2-3%. Right now, it's substantially higher than that."
[04:40] Kyle Ryssdal

This dramatic increase from approximately 3% to 10% across the board represents a significant shift in U.S. trade policy, affecting imports from virtually all countries.

The Unpredictable Nature of Tariffs

Kimberly Adams highlights the erratic implementation of tariffs under the current administration:

"It's the completely arbitrary and capricious nature of the way it is happening... Imagine tomorrow the entire global economy could wake up with Donald Trump having changed his mind again. We just don't know. It's insanity."
[06:38] Kimberly Adams

This unpredictability not only complicates international trade relations but also creates uncertainty for businesses planning their operations and budgets.

Impact on Businesses and Consumers

Michelle from Phoenix Valley shares firsthand experiences of how tariffs are disrupting business operations:

"We had one customer place a $1.5 million order on laptops, monitors, and all the peripherals. They started showing up today right after the announcement. You can bet that their Q3 and Q4 budgets have been wrecked because of the tariff issues."
[07:25] Michelle, Phoenix Valley

Adams extends this concern to consumers:

"How many people did we hear from who bought new iPhones or bought new computers or bought cars, trying to get ahead of this and people plan their spending kind of carefully... that's going to affect spending moving forward."
[08:08] Kimberly Adams

The ripple effect of increased tariffs leads to higher costs for consumers and disrupts business forecasts, potentially dampening economic growth.

Political Context and Historical Comparisons

Adams reflects on the pattern of tariff announcements and reversals reminiscent of previous administrations:

"Trump will announce something that seems extraordinarily extreme. People freak out, and then he'll dial it back to something less extreme but still a significant change from where we started."
[05:03] Kimberly Adams

She further compares current tariffs to historical data, referencing a chart from the Peterson Institute of Economics which illustrates the escalation of tariffs over time, particularly focusing on U.S.-China relations.

Educational Insights: Teaching Economic Concepts

An intriguing segment features Kevin from Anaheim, California, a fifth-grade teacher who has adapted his curriculum to include lessons on tariffs and trade deficits:

"I’ve had to teach tariffs and trade deficits to fifth graders. Never would I have imagined I’d have to do that. My students are understanding it. They’re rolling with it... better than anyone currently hanging out inside 1600 Pennsylvania Avenue."
[08:39] Kevin, Anaheim

Adams shares her approach to simplifying complex economic terms for young students:

"If you have a cookie and you want to sell it to your friends, and all the different ingredients for your cookie start to go up... we walked through examples using the ingredients for chocolate chip cookies. They got it."
[09:52] Kimberly Adams

This creative teaching method underscores the necessity of making economic discussions accessible to all age groups, especially in turbulent times.

Market Reactions: The "Sad Happy Music"

The hosts touch upon the emotional rollercoaster of market responses to tariff news. Dr. Worm, Ph.D. humorously asks about the appropriate background music during volatile market days:

"What was the sad music that played as you did the numbers yesterday?"
[10:59] Dr. Worm, Ph.D., Blue Sky

Ryssdal explains the concept of "sad happy music," a minor key melody that reflects the mixed emotions of market fluctuations:

"We went with what we call the sad happy music... it was during the financial crisis and we couldn’t play the happy music when things are falling apart."
[11:00] Kyle Ryssdal

This metaphor perfectly captures the bittersweet nature of economic news—simultaneously acknowledging the necessity of upward movement while recognizing underlying instability.

Conclusion and Looking Ahead

As the episode wraps up, Ryssdal and Adams invite listeners to engage further with the topics discussed:

"We want to keep hearing your thoughts on tariff news or questions that you got or how you are experiencing this economy..."
[12:07] Kyle Ryssdal & Kimberly Adams

Listeners are encouraged to contribute their experiences and questions through email or voicemail, ensuring that the conversation around tariffs and economic policies remains dynamic and inclusive.

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Key Takeaways

• Current Tariff Landscape: The U.S. has implemented a 10% across-the-board tariff on imports, a significant increase from the previous 2-3%, affecting nearly all countries except specific exclusions.

• Economic Uncertainty: The arbitrary nature of recent tariff changes underlines a period of economic unpredictability, complicating business planning and consumer spending.

• Business Impact: Both medium-sized and larger businesses are experiencing disrupted budgets and supply chains, while consumers are altering spending habits in response to rising prices.

• Educational Adaptations: Educators are finding innovative ways to incorporate complex economic topics like tariffs and trade deficits into their curricula, ensuring younger generations understand these critical issues.

• Market Sentiments: The concept of "sad happy music" encapsulates the mixed emotions of market responses amid tariff-induced volatility, highlighting the nuanced impacts of economic policies.

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Make Me Smart continues to decode the complexities of today's economic climate, providing listeners with insightful analyses and actionable information to navigate the ever-evolving landscape. Stay tuned for more episodes that make sense of the headlines and empower you with knowledge.

Transcript

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[Kyle Rysnal]

Hey everybody, I'm Kyle Rysnal. Welcome back to Make Me Smart, where we make today make sense.

[Kimberly Adams]

And I'm Kimberly Adams. Thank you for everyone for joining us. If you survived yesterday, Today is Thursday, April 9th. It is time for a listener mailbag episode. We know y'all have lots of questions and trying to make sense of what's going on. So we're gonna do our best playing. Playing voicemails, reading your comments, answering your questions after just. Sure. We'll describe it as a whiplash to.

[Kyle Rysnal]

We will indeed.

[Kimberly Adams]

Sure, sure. That.

[Kyle Rysnal]

All right, here we go. First thing. Hit it.

[Kimberly Adams]

Hi, this is Mike from Detroit, Michigan. Sorry to help with the E rating, but what the actual is going on. Sorry for that. Appreciate the show.

[Kyle Rysnal]

Look, that's fair. If we get to do it, they get to do it.

[Kimberly Adams]

Yeah.

[Kyle Rysnal]

I don't know. The short answer is, I don't know, legit. I can't figure out what's going on.

[Kimberly Adams]

You know, I think, I don't know if you remember, but during the pandemic we kept talking about how all these economic models that we use to sort of describe what happens in the economy just don't really seem to work so well anymore. And there were like all of these like rock solid economic theories that were just sort of falling out of use because they just weren't working anymore. And I feel like we're in one of these moments when it comes to like politics and politics and the economy, just the old stuff doesn't work anymore.

[Kyle Rysnal]

Yeah.

[Kimberly Adams]

So us trying to apply traditional logic or traditional strategies that we know politicians use when it comes to managing the economy. They just don't apply.

[Kyle Rysnal]

That's exactly. I think that's exactly right. Spot on. Totally.

[Kimberly Adams]

Yeah. All right, let's go to another listener question.

[John]

Hi, Connie, Kimberly, this is John from Canton City. Today, I feel a little bit vindicated. I was telling my wife last week, I think what's going to happen with all of these tariffs is that there's going to be big swings in big numbers, and then all of a sudden we're going to backtrack and it'll seem like everything is back to a low level, but in the end, it's actually going to be higher than it had been. So my question is, I wonder if you could talk a little bit about what seems to be the baseline 10% across the board tariffs and how that compares to historical tariffs that we have imposed on imports. And if we could try to forget the last week of retaliatory tariffs and the Chinese tariffs, what we would expect to happen to the US Economy with even what we're left with today.

[Kyle Rysnal]

Yes. So we should be clear, you know, this thing that's happening in a lot of the press about there being a pause on tariffs. Yes, but not really because forget the China thing for a minute. There are still 10% across the board tariffs on everything coming into this country from every country on the planet, with some minor exceptions and or excesses for cars and items covered under the usmca, the successor to NAFTA that President Trump negotiated that he now decides he doesn't like. Anyway. So the short answer is on the 20th of January, the average US tariff rate was about 2ish 3ish%. Right now it's substantially higher than that. And what you can I just dropped.

[Kimberly Adams]

In the chat a chart that's helpful.

[Kyle Rysnal]

All right. Well, look, I'll dig the chart out, but the answer is what you can expect with tariffs that have in effect, tripled overnight. Forgetting all his back and forth and oh, my God, am I gonna do this or not thing three times as high a level of import taxes on everything coming into this economy. Think about that for a minute. Right.

[Kimberly Adams]

Yeah. And I mean, I'm kind of annoyed with myself for not remembering well enough the first Trump administration where he this is a very clear pattern in how he chooses to govern. He'll announce something that seems just extraordinarily extreme. People fre out and then he'll dial it back to something that is less extreme but still a significant change from where we started. But people are like, oh, well, because it's not as bad as that thing. At least there's this. And I think that accounts for some of the market swings that we saw like yesterday and today where the markets like rebounded, like, yay, we're saved. It's like, oh, wait, we still have 10% tariffs on everything. Not to mention the 25% tariffs that we still have on cars, steel and aluminum. Not to mention the fact that we still have these big tariffs on Canada and Mexico, except for the stuff that's covered under the usmca, which is hard to figure out. We still have significantly higher tariffs. And there's a really good chart the Peterson Institute of Economics has put together when it looks at China, specifically looking at US versus China tariffs and how they've changed over time. And it's basically just like normal line, normal line, normal line, 90 degree angle. But I think that John is absolutely right. Like we are still in literally what a lot of people thought was the worst case scenario for A while, the 10% across the board tariffs.

[Kyle Rysnal]

So, yeah, I would also just suggest that as bad as this is because of the tariffs, it's made worse by the completely arbitrary and capricious nature of the way it is happening. And I talked a little bit yesterday on the POD about the conversation I had with Chad Bowne at Peterson and you know, I said, Chad.

[Kimberly Adams]

He's the one who made this chart, by the way.

[Kyle Rysnal]

Yeah, no, exactly. Chad's a super good economist. But you know, I made up this theoretical thing where Trump wakes up in the middle of the night and changes his mind and oh, look that, and I said that would never happen and oh look, it actually happened. And tomorrow the entire global economy could wake up with Donald Trump having changed his mind again. We just don't know. It's insanity. Anyway, Another voicemail. Shall we?

[Michelle]

Hi, this is Michelle calling from the Phoenix Valley in Arizona. I work at a medium sized business. We manage assets for several companies around the country. And with the tariff rush, we had one customer place $1.5 million order on laptops, monitors and all the peripherals. And they started showing up today right after the announcement. You can Bet that their Q3 and Q4 budgets have been wrecked because of the tariff issues.

[Kyle Rysnal]

Yeah, and I would say that goes for medium sized businesses and even sort of schmig big businesses. You know, all of this hits everybody.

[Kimberly Adams]

And consumers who did the same thing. Like how many people did we hear from who bought new iPhones or bought new computers or bought cars, you know, trying, well, the cars thing was still relevant, but, like, you know, trying to get ahead of this and people plan their spending kind of carefully, and if you kind of stretched yourself to get something to beat these price increases, like, that's going to affect spending moving forward. But yep, totally, yes. All right, let's hear from the next listener.

[Kevin]

Hey there, Kai and Kimberly. Longtime teacher, first time caller. My name is Kevin, and I've taught off and on since the early 2000s. Currently teaching 5th graders at Zion in Anaheim, California. I teach all subjects, including technology, and without question, the most boring software to teach. Well, they're the spreadsheets like Excel or Google sheets. But years ago, I made it more engaging for students by giving them each $10,000 in play money. Of course, I'm a teacher, after all, to invest in the stock market, which they then use spreadsheets to track, with the goal being to end the quarter with the most money. This year, I've had to teach tariffs and trade deficits to fifth graders. You heard me right. I've had to teach tariffs and trade deficits to fifth graders 11 year olds. And never would I have imagined I'd have to do that. Credit where credit is due. My students are understanding it. They're rolling with it. At least they understand it better than anyone currently hanging out inside 1600 Pennsylvania Avenue.

[Kyle Rysnal]

Amen, Kevin. Amen. I can't imagine trying to explain trade deficits and tariffs to a fifth grader. Holy cow.

[Kimberly Adams]

I once got asked to speak to a class of second graders and it was just as like, the inflation was really spiking. And one of them asked me, they're like, what is inflation? And I was like, oof.

[Kyle Rysnal]

Wow. Yeah.

[Kimberly Adams]

And so I used the analogy of, like, if you have a cookie and you want to, like, sell it to your friends, and what happens if, like, all the different ingredients for your cookie start to go up? Like, what does that mean for, like, how you're selling your cookies to your friend and whether you're even going to make cookies at all and how much. Like, we walked through example using, like, the ingredients for, like, chocolate chip cookies. And because chocolate comes from another one place and the eggs come from one place and, you know, we talked about supply chains and they, they got it. They got it.

[Kyle Rysnal]

Which is cool. That's very.

[Kimberly Adams]

Yeah. And if there is a kid in your life with big questions about money in the economy, do not turn to me. Turn to our colleagues Bridget and Ryan and our Marketplace podcast for Kids Million bazillion. They do a great job. Break these things down in ways that Kids can understand. We'll have a link to that in our show. Notes.

[Kyle Rysnal]

One more before we go. This One comes from Dr. Worm, Ph.D. on Blue sky, who writes, and this is the question, what was the sad music that played as you did the numbers yesterday? That would have been what was yesterday Tuesday, when the market was up like a zillion points because of that pause. Right? Was yesterday Tuesday? No, yesterday was Wednesday.

[Kimberly Adams]

No, yesterday was a Wednesday.

[Kyle Rysnal]

Sorry. Yesterday was Wednesday. Sorry, sorry, sorry. Anyway, so the market was up a zillion points because of the tariff air quotes. Pause. But really it was no reason to play the crazy happy music because that would have been bad. So we went with what we call the sad happy music, which is we're in the money in a minor key played in the style of the Wah Wah Trombones. We came up with that. It was a guy by the name of Nate Demeo who used to work here and it was during the financial crisis and he was like, we can't play the happy music when things are falling apart. So we came up with the sad happy music and that's what we got.

[Kimberly Adams]

Well, that is it for us on this Thursday. We are going to be back tomorrow for Economics on Tap, which is going to be our YouTube livestream. It's going to start at 3:30 Pacific, 6:30 Eastern. A lot of us are going to definitely be in need of a cocktail this week or at whatever you choose.

[Kyle Rysnal]

To drink, whatever your beverage of choice.

[Kimberly Adams]

Maybe it's actually better that we don't drink this week anyway. We're gonna have more news drinks and a game.

[Kyle Rysnal]

And we do of course want to keep hearing your thoughts on tariff news or questions that you got or how you are experiencing this economy, because it's a lot look, and we know that. Email us makemesmartmarketplace.org Leave us a voicemail. Five Zero Eight U B S M A R T.

[Kimberly Adams]

Make Me Smart is produced by Courtney Bo. Our intern is Zoha Mullick, and today's episode was engineered by Justin Duler.

[Kyle Rysnal]

Marissa Cabrera is our senior producer, Bridget Bodnar is the director of podcasts, and Francesca Levy is the executive director of Digital.

[Janelie Espinal]

If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance. Financially inclined From Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of. I'm the host, Janelie Espinal, and each week I ask experts important money questions like how to negotiate job offers, how to choose a college that you can afford, and how to talk about money with friends and family. Listen to Financially inclined Wherever you get your podcasts.