It's been a long 100 days

Summary

Marketplace Morning Report: "It's Been a Long 100 Days" – Detailed Summary

Release Date: April 28, 2025
Host: David Brancaccio

In the episode titled "It's Been a Long 100 Days" of the Marketplace Morning Report, host David Brancaccio delves into the economic and business implications of the first 100 days of President Trump's second term. The episode features insightful discussions with prominent economists, including Zanny Minton Beddoes, Editor-in-Chief of The Economist, and Nobel Laureate Paul Krugman. This summary captures the key points, discussions, and conclusions drawn during the episode.

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1. Overview of the First 100 Days

Sabri Bennesour opens the episode by framing the 100-day milestone of President Trump's second term. The focus is on assessing the administration's impact on both the U.S. and global economies. The discussions aim to shed light on the administration's policies, particularly regarding trade and tariffs, and their broader economic consequences.

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2. Trade Policies and Their Economic Impact

Insights from Zanny Minton Beddoes ([01:36] - [04:14])

David Brancaccio engages in a compelling conversation with Zanny Minton Beddoes about the administration's significant shift in trade policies. Beddoes emphasizes the unprecedented scale of tariff increases under President Trump, labeling it "a revolution" not just in trade but across economic policies.

Zanny Minton Beddoes ([01:50]): "It is a revolution actually beyond trade. On the economic side, this administration has imposed the biggest tariff hike probably in history."

Beddoes discusses the International Monetary Fund's (IMF) recent downgrade of growth projections for the United States, highlighting a consensus among banks anticipating a sharp slowdown or even a recession. She attributes this downturn to self-induced factors stemming from the administration's policies.

Zanny Minton Beddoes ([02:17]): "Everyone is expecting the US to slow sharply, perhaps even hit a recession. And this is entirely self induced."

Addressing the administration's unpredictability, Beddoes points out the uncertainty surrounding policy directions due to frequent policy shifts by President Trump. This unpredictability, combined with strong market reactions, contributes to an "incredibly uncertain period" for the economy.

Zanny Minton Beddoes ([02:30]): "We're going to be in for an incredibly uncertain period."

Brancaccio further explores the role of financial markets as a check on executive power, noting unusual market behaviors such as falling equity prices alongside rising bond yields and a declining dollar—signals typically associated with weaker emerging economies.

Zanny Minton Beddoes ([03:15]): "If foreigners basically think Brand USA is damaged and they move out en masse, that means we could have a very serious financial crisis on top of slower growth and recession."

These insights underscore the critical view of the administration's trade strategies and their potential long-term ramifications on the U.S. economic landscape.

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3. Historical Perspectives on Tariff-Driven Industrialization

Discussion with Paul Krugman ([04:34] - [07:50])

Sabri Bennesour introduces Nobel Laureate Paul Krugman to provide a historical context to the current administration's tariff policies. Krugman reflects on past instances where countries have employed tariffs to stimulate domestic industries, drawing parallels and contrasts with the present situation.

Paul Krugman ([04:59]): "We are not the first country to try and use tariffs to promote development of, you know, homegrown industry."

Krugman references 19th-century America and Germany, as well as post-World War II Latin America and Africa, where nations attempted to industrialize through protective tariffs. However, he notes that these efforts often fell short of expectations, leading many countries to abandon such strategies by the 1980s.

Paul Krugman ([05:12]): "Nobody has ever imposed tariffs this big this fast as we're now seeing from Trump."

He critiques the efficiency of tariff-driven industrialization, arguing that protecting domestic industries often leads to inefficient production and resource allocation. The lack of competitiveness and the diversion of resources away from more productive uses result in suboptimal economic outcomes.

Paul Krugman ([05:32]): "It produced some manufacturing. Yeah, but it was inefficient, it was uncompetitive, it wasn't the route."

Addressing the success stories of countries like Korea and China, Krugman clarifies that their economic advancements were not solely due to tariffs but were supported by comprehensive industrial policies and subsidies targeting industries with positive spillovers.

Paul Krugman ([07:26]): "There are tariffs, but the really important tools have been industrial policy has been subsidizing, promoting industries which can work if you can figure out the industries that have positive spillovers to the rest of the economy."

Krugman's analysis provides a cautionary perspective on the efficacy of tariffs as a tool for economic development, suggesting that without accompanying policies, such strategies may lead to unintended negative consequences.

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4. Concluding Insights

The episode wraps up by reiterating the complexities and uncertainties surrounding the administration's economic policies. The discussions with Beddoes and Krugman highlight the potential risks of heavy tariff implementation without coherent industrial strategies, emphasizing the importance of market confidence and efficient resource allocation for sustained economic growth.

David Brancaccio ([04:08]): "Zanny Minton Beddoes, editor in chief of the Economist, Always good to catch up."

Sabri Bennesour ([07:50]): "Paul Krugman, professor of Economics at the City University of New York, York. Thank you so much."

These expert insights collectively paint a nuanced picture of the challenges and ramifications of the current administration's economic maneuvers, offering listeners a comprehensive understanding of the intricate interplay between policy decisions and market dynamics.

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5. Additional Segments

The episode also features brief mentions of certified financial planners and energy initiatives, though these segments fall outside the core economic discussions.

Certified Financial Planner Representative ([00:00]): "Certified financial planners are ethical, educated and experienced professionals committed to acting in your best interest."

Energy Trust Representative ([00:40]): "Trust of Oregon...we partner with local utility companies to help you save energy and lower costs."

These advertisements provide listeners with resources related to financial planning and energy conservation but are not central to the episode's primary focus on economic policies.

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Conclusion

"It's Been a Long 100 Days" offers a thorough examination of the economic strategies employed during the initial phase of President Trump's second term. Through expert interviews and analytical discussions, Marketplace Morning Report provides listeners with a deep understanding of the potential impacts of tariff policies, historical contexts of similar economic approaches, and the broader implications for both the U.S. and global economies. This episode serves as a valuable resource for those seeking to comprehend the intricate dynamics of policy-making and its real-world consequences.

Transcript

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[Sabri Bennesour]

Has been a long 100 days from Marketplace I'm Sabri Bennesour in for David BRANCACCIO. Tomorrow marks 100 days of President Trump's second term in office and we're taking a look this week at what this new administration has meant for the US and world economies in that time. We start today with Zanny Minton Beddoes. She's the editor in chief of the Economist magazine and she spoke with my colleague David Brancaccio.

[David Brancaccio]

A central beat of Your magazine over 180 years has been freer trade. So I guess, Zanny, you've lived to see it, the trade revolution before our eyes. I mean, I think you use the word it is a revolution.

[Zanny Minton Beddoes]

It is a revolution. It's a revolution actually beyond trade. But on the economic side, this administration has imposed the biggest tariff hike probably in history. The IMF came out with its latest projections for growth just a few days ago and they dramatically downgraded growth expectations for the United States. And the same is true of pretty much every bank. Everyone is expecting the US to slow sharply, perhaps even hit a recession. And this is entirely self induced.

[David Brancaccio]

The administration tends to suddenly pivot on some of these crucial points of policy. Do you think this revolution is so ingrained now that it's gonna stick?

[Zanny Minton Beddoes]

So I think there is going to be a huge amount of uncertainty about that because you are seeing that when the markets react very, very badly, President Trump appears to pull back. But I think this is a president who really believes in tariffs and because we don't really know what the end goal is. And you have a president who changes his mind, it seems very frequently. I think the main thing that we can predict with some certainty is that we're going to be in for an incredibly uncertain period.

[David Brancaccio]

I have been advancing a thesis here for quite a few weeks. Tell me if I'm wrong. Beyond America's legal system, the courts, it seems like the bond market and maybe the stock market, they're the last remaining check on executive power in America.

[Zanny Minton Beddoes]

Well, it's interesting. They are certainly particularly the bond markets playing a role as a check. And to have simultaneously equity prices fall, bond yields rise, bond prices fall and the dollar fall is a combination that you don't usually see in the United States. And that combination is something you usually see in a kind of weak emerging economy where investors suddenly lose confidence in the credibility of that economy completely and just want to get out of every asset that that economy has. And the really worrying thing right now in the last few weeks is that we've seen some hints that investors are having that attitude shift to the US and about a third of US Treasuries are held by foreigners. And if foreigners basically think Brand USA is damaged and they move out en masse, that means we could have a very serious financial crisis on top of slower growth and recession.

[David Brancaccio]

Zanny Minton Beddoes, editor in chief of the Economist, Always good to catch up.

[Zanny Minton Beddoes]

Thank you.

[Sabri Bennesour]

Beddoes was Speaking there with Marketplace's David Brancaccio. President Trump has promised that once the.

[Paul Krugman]

U.S. gets through a period of possible.

[Sabri Bennesour]

Short term pain from tariffs, once we're on the other side of that, they'll usher in a golden age of US Manufacturing. But the thing is, this is not a new idea. The world has been here before, many times, it turns out. So how did that work out in the past? Paul Krugman is here to talk about it. He's a professor of economics at the City University of New York and Nobel laureate in economics. Good morning.

[Paul Krugman]

Good morning.

So we are not the first country to try and use tariffs to promote development of, you know, homegrown industry. President Trump's not the first leader to promise prosperity through tariffs. Where else have we seen this in history?

You can go back to 19th century America and 19th century Germany. Many developing countries tried to industrialize with tariffs in the sort of 35 years that followed World War II. There's a lot of evidence on this, though. Nobody has ever imposed tariffs this big this fast as we're now seeing from Trump.

Well, in the cases where it has been tried before, I guess on a smaller scale in Latin America after World War II and Africa after World War II. How did it work out for them?

Well, yeah, Trump likes to talk about 19th century America, but if we look at the experience of tariff driven industrialization in the post war world, it's pretty bad. By and large, countries abandoned that approach the 1980s because it hadn't panned out. It produced some manufacturing. Yeah, but it was inefficient, it was uncompetitive, it wasn't the route. And it turned out that that more open economies, economies that were oriented towards world markets, performed better than countries that tried to build manufacturing by looking inwards.

Because I think to a lot of people it probably sounds intuitively correct that oh yeah, sure, let's protect our domestic industry. Let's just make more stuff here. Why did it not work out in the cases where it was tried?

First of all, manufacturing, it's not as if most countries most of the time have lots of spare labor, lots of spare resources. If you are going to build up manufacturing behind tariff walls, it's going to divert resources away from other uses. And then the question is, is that going to be a good use of workers, good use of capital or not? And if you try to only produce stuff for yourself, if you forego the benefits of international trade, then that industry is inefficient. You're producing things you really shouldn't be producing and you end up producing stuff also at inefficiently small scale. So you end up with low efficiency because you fragmented the industry.

Is there a way to make it work? And the reason why I ask that is because, you know, Korea, China, they seem to have used a certain amount of trade barriers along with other tools and they took their economies from 10 to 100 in just a few decades. Is there a way to do it.

To the extent that they have done stuff? It has tended to be, yeah, there are tariffs. But the really important tools have been industrial policy has been subsidizing, promoting industries which can work if you can figure out the industries that have positive spillovers to the rest of the economy.

Paul Krugman, professor of Economics at the City University of New York, York. Thank you so much.

Thank you for having me on.

[Sabri Bennesour]

In New York, I'm Sabri Benishore with the Marketplace Morning Report from APM American Public Media.

[Jannelli 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, Jannelli 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.