A muffin recipe that includes chocolate, blueberries and tariffs

Summary

Marketplace Morning Report Episode: A Muffin Recipe That Includes Chocolate, Blueberries, and Tariffs
Release Date: May 8, 2025
Host: David Brancaccio

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Introduction

In this episode of Marketplace Morning Report, host David Brancaccio delves into the intricate web of economic factors impacting various industries, particularly focusing on real estate trends, Federal Reserve policies, shipping dynamics between the U.S. and China, and the profound effects of tariffs on the chocolate and blueberry sectors. The episode offers insightful analysis, expert opinions, and real-world examples to illustrate the current economic landscape.

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1. Real Estate Market Trends

Speakers: David Brancaccio, Stephanie Hughes, Joel Berner, Thomas Brett

David opens the discussion with a report from realtor.com, highlighting a significant trend: in about a quarter of the United States' 100 largest metropolitan areas, both the price and square footage of new homes are declining.

• Stephanie Hughes explains, “A lot of these cheaper, smaller new homes are being built in metro areas in the American South” (00:52).

• Economist Joel Berner adds, “It's cheaper to build farther from the city centers. In the Sun Belt, there's more available land and more permissive zoning than in, say, the Northeast” (01:03).

• Civil Engineer Thomas Brett notes, “The target right now is people that are just entering the homeownership market, which is a smaller home, a more affordable home” (01:31).

However, Berner warns of potential challenges ahead: “If tariffs on Canadian lumber go up this fall as planned, that'll make new homes in the US more expensive to build” (01:39). This indicates that while current trends favor affordability, future tariff policies could reverse these gains.

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2. Federal Reserve and Economic Indicators

David transitions to the Federal Reserve's recent decisions and their broader economic implications.

• The Fed has opted to hold interest rates steady, choosing to "continue waiting to see if tariffs and uncertainty surrounding policies cut into economic growth, jobs, and or boost inflation" (01:50).

• Fed Chair Jerome Powell made headlines by emphasizing the concept of "weight" or its synonyms 22 times during his briefing, underscoring the cautious approach (01:50).

Additional economic indicators discussed include:

• Bond Markets: Bonds are down, with the 10-year interest rate rising to 4.31% (01:50).

• Shipping Volumes: There’s a notable 30-40% drop in shipping container volumes between the U.S. and China, as reported by Maersk (01:50). Despite this decline, Maersk remains optimistic about its profit forecasts, attributing elevated shipping rates to a tax imposed by Houthi rebels in the Red Sea (02:49).

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3. Impact of Tariffs on Businesses

a. Beyond Good and Chocolate Tariffs

The conversation shifts to how tariffs are affecting businesses, with a spotlight on the chocolate industry.

• Beyond Good, a company specializing in Madagascar Vanilla chocolate, faces significant challenges due to tariffs. Tim McCollum, CEO and founder, discusses the dilemma: initially considering passing the tariff costs to customers but opting against it to maintain business integrity (03:24).

• Thomas Brett explains, “We have a $4 retail that's no longer going to be a choice if there's a 47% tariff, so our price goes up to $6.99 or $7.99” (04:01). Nevertheless, McCollum chose not to increase prices, keeping the business operational despite uncertainty (04:12).

Brett further emphasizes resilience: “You just get through those things and eventually you realize nothing's going to stop the business. It's just going to cause the business to pause momentarily and figure some challenges out” (04:23).

b. Blueberries and Tariffs Affect Washington State

The blueberry industry in Washington state provides another case study on the impacts of tariffs.

• Anna King reports on how tariffs are disrupting the supply chain for blueberries, which often loop through Canada for packing, processing, and cold storage (05:01).

• Ray Billn of a large blueberry farm states, “Our decisions do impact other people's decisions” (05:21), highlighting the interdependence between U.S. and Canadian operations.

• The potential for double tariffs—once entering Canada and again upon returning to the U.S.—poses a severe threat: “The tariffs could lead to cut off isolated berry islands without access to processing or cold storage” (06:06).

• Alyssa Houtby, Director with the North American Blueberry Council, remains hopeful for favorable trade resolutions: “If the Trump administration strikes the right deal, maybe at least some in the domestic blueberry industry will win out” (06:47).

The scenario painted is one of looming oversupply and operational paralysis, as exemplified by Paul Senga, who fears an August inundation of berries with no processing avenues (06:30-06:50).

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4. Federal Tariff Policy and Future Trade Arrangements

David discusses the Trump administration's broader tariff policies and their intended effects:

• The administration aims to encourage more jobs on U.S. soil and use tariffs as a form of revenue to potentially offset upcoming Republican tax cuts (07:24).

• There's anticipation surrounding a new trade arrangement with Britain, which could serve as a template for future deals between the U.S. and other nations (07:24-08:02).

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5. Climate-Conscious Investing

Before concluding, the episode briefly touches on another topic:

• Amy Scott introduces a segment on climate-conscious investing, exploring its rise, setbacks, and potential resurgence. This segment underscores the interconnectedness of economic policies and environmental initiatives, hinting at ongoing challenges in aligning financial strategies with climate goals (08:01-08:21).

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Notable Quotes

• Stephanie Hughes: “A lot of these cheaper, smaller new homes are being built in metro areas in the American South.” (00:52)

• Joel Berner: “It's cheaper to build farther from the city centers... In the Sun Belt, there's more available land and more permissive zoning than in, say, the Northeast.” (01:03)

• Thomas Brett: “The target right now is people that are just entering the homeownership market, which is a smaller home, a more affordable home.” (01:31)

• Ray Billn: “Our decisions do impact other people's decisions.” (05:21)

• Thomas Brett: “We have a $4 retail that's no longer going to be a choice if there's a 47% tariff, so our price goes up to $6.99 or $7.99.” (04:01)

• Alyssa Houtby: “If the Trump administration strikes the right deal, maybe at least some in the domestic blueberry industry will win out.” (06:47)

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Conclusion

This episode of Marketplace Morning Report offers a comprehensive overview of current economic challenges and trends, particularly emphasizing the ripple effects of tariffs on the real estate market, shipping industries, and specific sectors like chocolate and blueberries. Through expert analysis and firsthand accounts, listeners gain a nuanced understanding of how policy decisions shape business strategies and economic outcomes.

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Timestamps:

• 00:52: Real estate trends in the American South
• 01:03: Cost advantages of building away from city centers
• 01:31: Targeting first-time homebuyers with smaller homes
• 01:39: Potential impact of Canadian lumber tariffs
• 01:50: Federal Reserve's interest rate decision and economic indicators
• 02:49: Shipping volumes between US and China
• 03:24: Beyond Good's response to chocolate tariffs
• 04:01: Impact of 47% tariffs on product pricing
• 04:12: Business resilience despite rising costs
• 04:23: Overcoming tariff-induced challenges
• 05:21: Interdependence in the blueberry supply chain
• 06:01: Risks of double tariffs on blueberries
• 06:30: Potential oversupply in the blueberry market
• 06:47: Hope for favorable trade deals
• 07:24: Federal tariff policies and job creation
• 08:01: Introduction to climate-conscious investing

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This summary is intended to provide a comprehensive overview of the podcast episode for those who have not listened to it. All timestamps correspond to the original transcript provided.

Transcript

[David Brancaccio]

Attention, you early birds. When you make a donation to Marketplace during the first two days of our May fundraiser, it can make a huge impact. The Investors Challenge Fund has issued us a challenge. If we raise $25,000 in the first two days of this fundraiser, we'll unlock another 25,000 from the challenge Fund. We can't afford to fall short here. Please step up and show your support today. Give what you [e-mail] donate and thank you. Who could say no to tariff stories looking at either chocolate or blueberries, I'm David Brancaccio in Los Angeles. First real estate in about a quarter of the country's 100 largest metropolitan areas, the price and square footage of new homes are going down. That's a report this morning from realtor.com, marketplace's Stephanie Hughes takes a look.

[Stephanie Hughes]

A lot of these cheaper, smaller new homes are being built in metro areas in the American South.

[Joel Berner]

We're seeing a lot of new communities developing kind of on the outskirts of a lot of these Southern cities.

[Stephanie Hughes]

Economist Joel Berner wrote the realtor.com report. He says it's cheaper to build farther from the city centers. Also in the Sun Belt, he says there's more available land and more permissive zoning than in, say, the Northeast.

[Joel Berner]

In the south, you can kind of.

[Stephanie Hughes]

Do whatever you want and builders are reading the room in terms of what people want to buy, says civil engineer and developer Thomas Brett. He is based in Nashville, one of the areas where new home price and size dropped.

[Thomas Brett]

The target right now is people that are just entering the homeownership market, which is a smaller home, a more affordable home.

[Stephanie Hughes]

But economist Joel Berner is keeping an eye on tariffs on Canadian lumber. He says if they go up this fall as planned, that'll make new homes in the US More expensive to build. I'm Stephanie Hughes for Marketplace.

[David Brancaccio]

The Federal Reserve left interest rates alone to continue waiting to see if tariffs and uncertainty surrounding policies cut into economic growth, jobs and or boost inflation by one count. The Fed chair Jerome Powell used the word weight or its synonyms 22 times in his briefing yesterday. Bonds are down this morning with the 10 year interest rate up at 4.31%. And here's one more number, a range really minus 30 to 40%. That's the drop in shipping container volumes running between the US And China as calculated by the cargo company Maersk. Still, Maersk of Denmark is sticking to its profit forecast for this year with shipping rates elevated because of a tax by Houthi rebels in the Red Sea.

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[David Brancaccio]

Go to Wix.com when President Trump halted his big jump in tariffs just over four weeks ago now, it left in place a tariff hike of 10% that was essentially universal. The fourth largest island in the world, Madagascar, is still adjusting to the idea of 47% tariffs if and when Trump's pause runs out two months from now. Beyond Good is a company that would have a tough time sourcing somewhere cheaper because Madagascar is a key part of the artisanal appeal of its Madagascar Vanilla chocolate. The Tim McCollum is the CEO and founder. His first impulse was to pass the tariff cost to customers.

[Thomas Brett]

So we have a $4 retail that's no longer going to be a choice if there's a 47% tariff and so our price goes up to 699 or 799. But the business is still whole and intact.

[David Brancaccio]

But that's not what he opted for, and with an option B still not clear. Beyond Good is, like so many businesses dependent on imports, has been left waiting to to see where tariffs go next.

[Thomas Brett]

You get through something like Covid or last year in the case of the chocolate industry, we had a 300% increase in cocoa prices. You just get through those things and eventually you realize nothing's going to stop the business. It's just going to cause the business to pause momentarily and figure some challenges out that it wasn't thinking about a week ago or at the beginning of the year.

[David Brancaccio]

Then there is a Made in the USA crop that still finds itself on the wrong side of tariffs. Turns out a lot of blueberries from from Washington State do a loop through Canada for packing, processing and cold storage. Hit that tariff buzzer. Northwest Public Broadcasting's Anna King reports.

[Joel Berner]

At one of the largest blueberry farms in the US There are rows and rows of bushes to the horizon.

[Ray Billn]

This variety here is Draper.

[Joel Berner]

Ray Billn's family owns this farm in Franklin County, Washington state. There are around 800 workers to harvest just this farm.

[Ray Billn]

Our decisions do impact other people, decisions.

[Joel Berner]

Like how to navigate tariffs.

[Ray Billn]

That's why it's important to stay even Keel and try to make the best decisions in the landscape we're given.

[Joel Berner]

Billn's family has other large farms in the US but also in Canada. Billn says the blueberry industry is totally interdependent across the border. Most of his Washington fruit is processed and packaged in plastic clam shells up north in British Columbia. And then the berries come back stickered as US fru. That means his produce could be tariffed twice, once going into Canada and again on the return. Just the idea is putting his big plans in a blender.

[Ray Billn]

You know, we have projects on pause now on both sides of the border.

[Joel Berner]

About 40 million pounds of Washington's blueberries are shipped to Canada for packing or processing each year. When the berries are ripening at the hilt of summer, it's go time to get them sold fresh or frozen right away. The tariffs could lead to cut off isolated berry islands without access to processing or cold storage.

[Thomas Brett]

We're going to have a large oversupply.

[Joel Berner]

That's Paul Senga. He grows berries in the very north of Washington state. Plus he distributes mass amounts of fruit around the country. Senga's imagining August with loads and loads of berries in his 10 acre shipping yard with no place to go.

[Thomas Brett]

How do we in such a short window handle that?

[Joel Berner]

Alyssa Houtby is a director with the North American Blueberry Council. She's hoping for at least some sort of silver tariff lining for US Blueberry producers. We want to see the tariffs in Vietnam address, in Japan address Malaysia, Taiwan. Those are countries that import a lot of frozen, fresh and dried blueberries from the US So if the Trump administration strikes the right deal, maybe at least some in the domestic blueberry industry will win out. In Franklin County, Washington, I'm Anna King for Marketplace.

[David Brancaccio]

The Trump administration hopes its higher import taxes will encourage more jobs on US Soil. The tariffs are also taxes that raise money. Some administration officials have seen that as a way to help offset the Republican tax cuts that are in the works. We're also waiting for confirmation after the White House flag that it's come up with a new trade arrangement with Britain to a template that could shape deals between the US and other countries. In Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report.

[Thomas Brett]

From.

[David Brancaccio]

APM American Public Media.

[Amy Scott]

Can we invest our way out of the climate crisis? Five years ago, it seemed like Wall street was working on it until a backlash upended everything.

[Joel Berner]

So there's a lot of alignment between the dark money, right, and the oil.

[Ray Billn]

Industry on this effort.

[Amy Scott]

I'm Amy Scott host of How We Survive, a podcast from Marketplace. And this season we investigate the rise, fall and reincarnation of climate conscious investing. Listen to How We Survive. Wherever you get your podcasts.