Trump's latest tariffs go into effect

Summary

Marketplace Morning Report: Trump's Latest Tariffs Go Into Effect Release Date: April 9, 2025

In this episode of Marketplace Morning Report, hosted by Will Bain on behalf of Liana Byrne, the focus is on the implementation of President Trump's latest tariffs. These tariffs have significant ramifications for global trade, impacting numerous countries, companies, and markets. The episode delves into the specific effects on Vietnam and Taiwan, examines the broader implications for the global stock market, and highlights concerns from businesses caught in the crossfire of these economic measures.

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1. Overview of Trump's Tariffs

Timestamp: 00:01 – 00:57

Will Bain opens the report by detailing the activation of President Trump's new tariffs, which have been imposed on approximately 60 countries identified by the White House as major trade offenders. Notably, China faces the steepest tariff increase, now at 104%. However, the report emphasizes a broader geographical impact, extending beyond China to other significant players in the global market.

Key Points:

• Scope of Tariffs: 60 countries targeted with higher import taxes on exports to the U.S.
• China's Tariff Rate: Highest at 104%, making it the most adversely affected country.
• Focus Beyond China: Importance of examining impacts on other nations like Vietnam and Taiwan.

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2. Impact on Vietnam

Timestamp: 00:59 – 02:57

The report transitions to Vietnam, which now faces 46% duties on exports. Adam Sitkoff, Head of the U.S. Chamber of Commerce in Hanoi, provides insights into how these tariffs affect both American consumers and the companies operating within Vietnam.

Subsections:

a. Range of Affected Products

Timestamp: 00:59 – 01:31

Will Bain prompts Sitkoff to highlight the variety of Vietnamese-made products available to American consumers. Sitkoff emphasizes that numerous everyday items—from electronics like laptops and smartphones to apparel—are manufactured in Vietnam by American multinational companies.

Notable Quote:

“Everything from laptops and smartphones and TVs to a lot of the clothes they wear.”
— Adam Sitkoff (01:14)

b. Economic Implications for American Companies and Consumers

Timestamp: 01:34 – 02:02

Sitkoff explains that the tariffs are unlikely to harm Vietnamese companies directly. Instead, the increased import taxes will impact American businesses and consumers by driving up prices.

Notable Quote:

“It's hurting the American companies and it's going to hurt the American consumers because prices are going to rise. There's really no way around that.”
— Adam Sitkoff (01:34)

c. Projected Price Increases

Timestamp: 02:02 – 02:50

Discussing the tangible effects, Sitkoff provides specific estimates on how much prices for various goods will rise due to the tariffs.

Key Estimates:

• Clothing: 35-40% increase
• Toys: 30% increase
• Laptops and Smartphones: 25-30% increase

Notable Quote:

“These are major increases on 340 million American people that just a couple months ago were upset that eggs were expensive, and now everything is going to become expensive.”
— Adam Sitkoff (02:16)

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3. Impact on Taiwan

Timestamp: 03:11 – 04:51

Shifting focus to Taiwan, the report features Wen Tai Hsu, a professor at the Institute of Economics, Academia Sinica in Taipei. Taiwan, a key player in the global microchip industry and a long-term U.S. ally, is navigating the challenges posed by the new tariffs.

Subsections:

a. Tariff Concerns and Government Response

Timestamp: 03:11 – 03:28

Hsu expresses alarm over the 32% tariff imposed on Taiwanese exports and mentions ongoing governmental discussions with the U.S. to potentially reduce these tariffs.

Notable Quote:

“The tariff itself is scary, the 32% tariff. The government is talking with the US and hoping to lower down...”
— Wen Tai Hsu (03:11)

b. Impact on Employment and Technological Advancement

Timestamp: 03:39 – 04:16

While there is concern about potential job losses if companies relocate manufacturing to the U.S., Hsu remains cautiously optimistic. He highlights Taiwan's robust economy driven by its microchip sector and underscores the importance of maintaining technological progress despite the tariffs.

Notable Quote:

“The Taiwanese economy has been booming in the last few years because of the microchips. The real problem here is that when you have so many firms going out, then you start to worry about whether this technological age is rolling away.”
— Wen Tai Hsu (03:59)

c. Taiwan’s Negotiation Strategy

Timestamp: 04:16 – 04:44

Hsu outlines Taiwan’s approach in negotiations, advocating for the reduction or elimination of tariffs on specific products that already have low tariffs, thereby minimizing overall economic damage.

Notable Quote:

“Of course they offer to say we can have zero tariff. And so that's fine because we actually don't have a very high tariff to the US to begin with.”
— Wen Tai Hsu (04:16)

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4. Effects on Global Markets and British Firms

Timestamp: 04:51 – 06:21

Will Bain shifts attention to the broader financial markets, noting a sharp decline in European company shares amidst the turmoil caused by the tariffs. The report spotlights the challenges faced by small businesses, exemplified by Claire Lucas, co-founder of the British toy company Little Bird.

Subsections:

a. Market Reactions in Europe

Timestamp: 04:51 – 05:21

European stock markets have opened lower, with drops ranging between 2% to 3%, negating gains made in previous sessions. This downturn reflects investor concerns over the escalating trade tensions and their potential ripple effects across various industries.

b. Case Study: Little Bird’s Uncertainty

Timestamp: 05:21 – 06:21

Claire Lucas discusses the precarious situation for small businesses like Little Bird, which relies heavily on exports from China to the UK and the U.S. She articulates the uncertainty surrounding how tariffs will be applied to direct-to-consumer shipments, expressing fears about potential drastic tariff hikes that could jeopardize her business.

Notable Quote:

“There's little clarity on what's going to happen for businesses like us. We don't know the consumers will be asked to pay the import tariffs or we don't know if it's going to be the baseline tariff of 10% because we're a UK business or will it be what we're now hearing might even be 104%. I mean, if it is, you know, we may as well switch off the lights and go home.”
— Claire Lucas (05:21)

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5. Conclusion

Timestamp: 06:31

As the episode wraps up, Janelli Espinal introduces an advertisement for the podcast Financially Inclined by Marketplace, which focuses on providing trustworthy financial advice amidst the pervasive misinformation in social media.

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Summary Insights:

• Economic Ripple Effects: The new tariffs imposed by the U.S. are not only affecting the largest economies like China but also have significant consequences for countries like Vietnam and Taiwan, as well as small businesses globally.

• Consumer Impact: American consumers are set to face considerable price increases across various product categories, exacerbating inflationary pressures.

• Business Uncertainty: Companies operating in the global supply chain are grappling with uncertainty regarding tariff applications, potentially leading to operational disruptions or relocations.

• Market Volatility: Global stock markets are responding negatively to the escalating trade tensions, reflecting heightened investor anxiety.

This episode underscores the intricate interconnectedness of global trade and the far-reaching implications of unilateral tariff policies. Businesses and consumers alike are navigating a landscape of increased costs and strategic uncertainties as the economic policies unfold.

Transcript

[Will Bain]

President Trump's latest tariffs have taken effect and sparked another wild day for companies, countries and the global stock market. Live from the BBC World Service, this is the Marketplace Morning Report. I'm Will Bain in for Liana Byrne today. Great as always to have your company. Yeah. About 60 countries dubbed by the White House as the worst offenders when it comes to trade, are now being charged higher import taxes on exports of their goods into the U.S. china is now the hardest hit in the world as they face 104% tariffs. We focused a lot on China this week though, so we wanted to take you elsewhere. Amongst those hardest hit, in a moment we're going to hear about the impact on long term US Ally and key microchip maker Taiwan. But first to Vietnam, which now faces 46% duties on exports. And as Adam Sitkoff, head of the U.S. chamber of Commerce in the capital Hanoi told us, it's not just US consumers that could feel that, but companies too. Morning, Adam. Thanks for your time.

[Adam Sitkoff]

Good morning. Nice to be here.

[Will Bain]

First of all, worth perhaps reiterating for people the scale and range of products that they might see every day on their shelves at home or perhaps online that are actually manufactured and come and shipped from Vietnam.

[Adam Sitkoff]

Well, sure. I think as American people, if they look in their kitchen, in their bedroom, in their kids room, they'll see that all kinds of stuff is made here in Vietnam. Everything from laptops and smartphones and TVs to a lot of the clothes they wear.

[Will Bain]

And a lot of that by design from American companies.

[Adam Sitkoff]

Absolutely. It's mostly not Vietnamese companies that are just deciding to make things and ship them off to America. This is American multinational companies that are taking advantage of the world's globalized economy that we have. So when we look at these new tariffs, we're saying, who does it hurt? It's not so much that it's hurting Vietnamese companies, it's hurting the American companies and it's going to hurt the American consumers because prices are going to rise. There's really no way around that.

[Will Bain]

Yeah. On that impact, the scale of it, the 46% additional tariffs as of the last few hours, how quickly do you think you might see people reassessing the price of those goods that they're, that they're selling?

[Adam Sitkoff]

Well, it's really going to depend on the, on the product and the brand. You might not see it right away, but in the near term you're going to see it. We expect the price of a lot of clothing that American people buy is expected to rise 35 to 40%. You're going to see the price of toys probably rise 30%. You're going to see the price of laptops and smartphones rise by 25%. 5 to 30%. These are major increases on 340 million American people that just a couple months ago were upset that eggs were expensive, and now everything is going to become expensive.

[Will Bain]

Adam Sitkoff, the head of the U.S. chamber of Commerce in Hanoi, Vietnam, thanks so much for your time this morning.

[Adam Sitkoff]

I appreciate it. Thanks for having me on.

[Will Bain]

Well, from Vietnam to Taiwan, Wen Thai Hsu is a professor at the Institute of Economics, Academia Sinica in Taipei, Taiwan. Professor Hai, what are the areas of the Taiwanese that could be impacted?

[Wen Tai Hsu]

Hi. The tariff itself is scary, the 32% tariff. The government is talking with the US and hoping to lower down, but we don't really know how much can be lowered. But I really think it is the pressure to go to the US that the companies are forced to go to the US and to invest there.

[Will Bain]

Right. So you would think that that would see a loss of jobs at home in Taiwan because companies would say, right, to stay on the right side of these tariffs, we need to move all our manufacturing to somewhere in the United States or some of it.

[Wen Tai Hsu]

Some of it. I don't worry too much about the effect on the job market here because, you know, the Taiwanese economy has been booming in the last few years because of the microchips. The real problem here is that when you have so many firms going out, then you start to worry about whether this technological age is rolling away.

[Will Bain]

And so in the interim, professor, what kind of things do you think the government in Taiwan is thinking about when it talks about joining this list of countries that wants to talk to President Trump? What will they be putting forward, do you think, as their perspective for why that tariff number should be lowered?

[Wen Tai Hsu]

Of course they offer to say we can have zero tariff. And so that's fine because we actually don't have a very high tariff to the US to begin with. And so even just a few items like cars and, you know, some sort of high tariff items, if we just lower the tariff of those stuff to zero, that's actually fine. To us, it's just a small damage. Some of the companies have to go there, but in what scale and how many of them? So that's really the talking point, I guess.

[Will Bain]

Professor Wen Tai Su from the Institute of Economics, Academia Sinica in Taipei, Taiwan, thanks so much for your time.

[Wen Tai Hsu]

Thank you.

[Will Bain]

Well, let's take a look at what all this is doing to the numbers this morning. Company share markets down sharply right across Europe. They've opened down running the 2 to 3, 2.5% range, almost wiping out all of those gains from Tuesday already. Well, we've heard about the big picture there. A perhaps unlikely firm caught in the crossfire of those tariffs on China is a British firm making toy rocking horses. Claire Lucas is the co founder of Little Bird told me and she explained.

[Claire Lucas]

Why we sell to the trade, but we also sell direct to consumers via our e commerce site. A third of our sales are to US consumers. So everything we make is in China. We ship it to the uk sometimes into the Netherlands. We've got a, a warehouse there as well. But most of the goods come to the UK and we sell our goods on from here. So while we're shipping to consumers direct, obviously the goods are made in China. So we need more clarity really, what these tariffs means for businesses like us. Because, you know, obviously we're not shipping containers into the U.S. we're shipping individual products direct to a consumer. And as it stands, there's little clarity on what's going to happen for businesses like us. We don't know the consumers will be asked to pay the import tariffs or we don't know if it's going to be the baseline tariff of 10% because we're a UK business or will it be what we're now hearing might even be 104%? I mean, if it is, you know, we may as well switch off the lights and go home.

[Will Bain]

Claire Lucas bringing us to the end of this edition of the Marketplace Morning Report from the BBC World.

[Janelli 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, Janelli 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.