More tariffs, more economic anxiety

Summary

Marketplace Morning Report: "More Tariffs, More Economic Anxiety"

Release Date: March 31, 2025

In this episode of Marketplace Morning Report, hosted by Sabri Ben, listeners are navigated through a series of pressing economic issues impacting both the domestic and global landscapes. The episode delves into the implications of impending tariffs announced by President Trump, explores the legal challenges faced by Norfolk Southern Railway following a significant train derailment, and examines an innovative approach to cryptocurrency mining in Africa by the company Gridless. Here's a comprehensive breakdown of the key discussions and insights presented.

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1. Tariffs and Economic Uncertainty

Guest: Julia Coronado, Founder of Macro Policy Perspectives and Professor at UT Austin

President Trump's recent announcement signaling a "tsunami of new tariffs" has stirred significant market volatility. Over the weekend, the President clarified that these tariffs would be "applied to all countries," a move that has led to sharp declines in both domestic and international markets.

Key Points Discussed:

• Expectations vs. Reality: Markets were anticipating whether these tariffs were a mere bargaining tactic or a precursor to genuine trade negotiations. Coronado highlights that the escalation of threats rather than negotiations has heightened economic anxiety.

• Impact on GDP and Recession Risks: While GDP growth has been naturally slowing down over recent quarters, there's growing concern about whether the introduction of widespread tariffs could push the economy into a recession. Coronado emphasizes that the U.S. economy's resilience makes it unlikely to tip into a recession solely due to a trade war. However, she warns that a combination of factors, including other disruptive policies and spending cuts, could collectively pose a recession risk.

Notable Quotes:

• Julia Coronado [01:12]: "The US Economy is a giant diversified ocean liner that is very difficult to tip over."
• Julia Coronado [01:46]: "There is growing concern that a combination of factors, a trade war and maybe other disruptive policies, cuts to spending that disrupt certain industries, could be enough to tip the US Economy over."

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2. Norfolk Southern Railway Faces Legal Scrutiny

Reporter: Nancy Marshall Genser

Today's legal landscape includes a pivotal trial concerning Norfolk Southern Railway's accountability in the 2023 train derailment in East Palestine, Ohio. The central question revolves around whether Norfolk Southern can compel other companies to share the financial burden of the $600 million class-action settlement reached last year with affected businesses and residents.

Key Points Discussed:

• Responsibility Allocation: Norfolk Southern contends that chemical company Oxy Vinyls and rail car company Gatx bear partial responsibility. Gatx owned the specific rail car involved, while Oxy Vinyls allegedly provided inaccurate information regarding the transportation of vinyl chloride.

• Company Responses:

  • Oxy Vinyls: Denies fault, citing lack of decision-making authority in the release and burning of vinyl chloride.
  • Gatx: Claims responsibility for rail car maintenance and asserts that Norfolk Southern should handle inspections.

This trial not only underscores the complexities of corporate responsibility in industrial accidents but also highlights the broader implications for accountability within the transportation and chemical sectors.

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3. Gridless: Innovating Cryptocurrency Mining in Africa

Reporter: Joe Tidey, BBC World Service

Amidst the global discourse on cryptocurrency's environmental impacts, Gridless emerges as a groundbreaking company redefining the narrative by establishing mini electric grids in several African nations. These grids serve the dual purpose of mining cryptocurrencies and providing renewable energy to remote areas.

Key Points Discussed:

• Operational Excellence: Located on the Zambezi River in Zambia, Gridless operates a bitcoin mining facility powered by the site’s hydroelectric energy. Philip Walton, co-founder of Gridless, explains how the use of excess electricity from Zengamine Hydro has optimized energy utilization and boosted local economies.

• Community Impact: Daniel Ray, CEO of the site, emphasizes the critical role of mining revenues in keeping electricity prices affordable for the local population. By monetizing excess energy, the project ensures sustainable energy availability while generating income.

• Future Aspirations: Gridless plans to expand its operations by seeking new sites with surplus energy and constructing additional mini-grid energy plants. Their vision includes positioning bitcoin mining as a significant tenant within these energy projects, thereby fostering energy production and economic growth in isolated communities.

Notable Quotes:

• Daniel Ray [05:04]: "We really struggled to make ends meet and every day we were wasting over 50% of the energy that we could generate, which also meant we're not earning from that."
• Philip Walton [05:28]: "I'm sure you'll have critics who will worry that the community want the energy, but you'll favor the mining."
• Daniel Ray [06:03]: "The truth is that bitcoin mining doesn't pay very high prices for electricity. If we think of ourselves less as a bitcoin miner and more as an energy producer, then bitcoin becomes one buyer that has a price they're willing to pay."

Environmental Considerations: While cryptocurrency mining globally consumes as much energy as a small country like Poland, Gridless's model leverages renewable energy sources, showcasing a path toward more sustainable mining practices. Analysts note a positive trend with major mining operations adopting greener energy mixes, potentially mitigating long-term environmental concerns.

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Conclusion

This episode of Marketplace Morning Report encapsulates the intricate interplay between governmental policies, corporate accountability, and technological innovation shaping today's economic climate. From the looming threat of widespread tariffs and their potential repercussions on GDP growth to the legal battles that define corporate responsibility, and pioneering solutions that merge cryptocurrency with renewable energy—Marketplace provides listeners with a nuanced understanding of the forces at play in the global economy.

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For more insights and updates on the economy and business news, subscribe to the Marketplace newsletter at Marketplace.org.

Transcript

[Sabri Ben]

More tariffs, more economic anxiety for marketplace. I'm Sabri Ben, ashore in for David Brancaccio. On Wednesday, President Trump is expected to announce a tsunami of new tariffs. There's been a lot of mixed messaging on how the on how broad these would be. But over the weekend, the president said these tariffs would apply to all countries. Markets today are down sharply here and abroad. Julia Coronado is here to talk about it. She's founder of Macro Policy Perspectives and a professor at UT Austin. Hi, Julia.

[Julia Coronado]

Good morning.

[Sabri Ben]

So you know, we've known that these so called reciprocal tariffs were coming for a while. So why do you think there's been this sharp reaction now?

[Julia Coronado]

Well, I think there was still some lingering hope that this would be a bargaining tactic and that as we got closer to the date there would be negotiations. And instead what we're seeing is escalation of threats.

[Sabri Ben]

GDP growth has been slowing down the past few quarters. Do we think, and that's natural, that's sort of expected, but do we think tariffs are going to be enough to actually hoist the economy into an actual recession? Any more clarity on that?

[Julia Coronado]

You know, the rule is that the US Economy is a giant diversified ocean liner that is very difficult to tip over. So will a trade war be enough by itself to tip the US Economy into a recession? That's still not the base case of most investors in the market, but there is growing concern that a combination of factors, a trade war and maybe other disruptive policies, cuts to spending that disrupt certain industries, could be enough to tip the US Economy over.

[Sabri Ben]

Giulio Coronado, founder and president of Macro Policy Perspectives, thank you so much.

[Julia Coronado]

My pleasure.

[Sabri Ben]

A trial is set for today to settle whether Norfolk Southern Railway can force other companies to help shoulder the cost of the 2023 train derailment in East Palestin, Ohio. The company says it's not the only one responsible for safety. Marketplace's Nancy Marshall Genser reports Norfolk Southern.

[Nancy Marshall Genser]

Reached a $600 million class action settlement last year with businesses and residents of East Palestine. The question is who will pay for it? The railroad says the chemical company Oxy Vinyls and the rail car company Gatx are partly responsible. Gatx owned the car that caused the derailment. Norfolk Southern says Oxy Vinyls didn't give accurate information to officials who were deciding whether to the vinyl chloride it was transporting. They did eventually release and burn it. In an email, Oxy Vinyls told me it's not at fault because it didn't make that decision. Rail car owner Gatx told the Associated Press it takes care of its cars and Norfolk Southern was responsible for inspecting them. I'm Nancy Marshall Genser for Marketplace.

[Sabri Ben]

If you want to be savvy about the economy, the Marketplace newsletter is just what you need. Every Friday you'll get explainers and analysis that makes sense of everything from the moving markets to grocery prices. No jargon, no hype, just smart takes delivered to your inbox. Sign up [e-mail] subscribe Mining Cryptocurrency is usually associated with added strain on power grids, but a cryptocurrency company called Gridless is setting up mini electric grids in several African countries to both mine crypto and help bring electricity to remote areas using renewable energy. The BBC's Joe Tidey visited a bitcoin mining operation on the Zambezi river in Zambia to see this in action.

[Philip Walton]

24 hours a day, this container full of powerful computers crunches through complex mathematical problems to earn bitcoins as part of the global volunteer mining network.

[Daniel Ray]

This noise means we're making money.

[Philip Walton]

That's Philip Walton, the American Kenyan co founder of Gridless, the company that runs the mine containing 120 machines. It's an odd place for a high tech crypto operation, but it makes sense as the electricity is so cheap here as it comes directly from the site's hydroelectric power plant. Zengamine Hydro has been supplying energy for the local community for 17 years. CEO of the site, Daniel Ray and his missionary family were involved in the construction. £3 million was raised mostly from British churches, but the bitcoin mine has been a major boost since it was installed in 2023 as it makes use of excess electricity.

[Daniel Ray]

We really struggled to make ends meet and every day we were wasting over 50% of the energy that we could generate, which also meant we're not earning from that. What we lacked was an institutional a major user of power in the area and the extra revenue important to say has also helped us keep the prices down for what we charge the local people, which is also very important.

[Philip Walton]

The plant has received a huge amount of investment and will soon be expanding. They hope to sell any excess energy eventually back to the grid. So Philip and team have got to hit the road and find a new place as perfect as this. As well as searching for sites with excess energy, Gridless is now hoping to start building its own mini grid energy plants with its bitcoin mine as the first major tenant. I'm sure you'll have critics who will worry that the community want the energy, but you'll favor the mining.

[Daniel Ray]

The truth is that bitcoin mining doesn't pay very high prices for electricity. If we think of ourselves less as a bitcoin miner and more as an energy producer, then bitcoin becomes one buyer that has a price they're willing to pay. The community is another buyer that will pay a higher price.

[Philip Walton]

The mission to get electricity to isolated communities is a monumental task in Africa. A 2022 estimate from the International Energy Agency suggests 600 million people on the continent are without power. But because of bitcoin's reputation, some companies and authorities remain uncomfortable with including it in electrification projects. Globally, the industry is estimated to use as much energy as a small country like Poland. The environmental impact has long been a concern, too, but according to analysts, there are signs that could be improving with more of the mining giants moving to sustainable energy mixes.

[Sabri Ben]

That was the BBC's Joe Tidey in Zambia. 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.