U.S. tariffs and the U.S. economy

Summary

Marketplace Morning Report: U.S. Tariffs and the U.S. Economy

Release Date: March 31, 2025
Host: Marketplace (David Brancaccio)
Guest: Yaneli Espinal, Host of Financially Inclined Podcast

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Introduction

In the March 31, 2025 episode of Marketplace Morning Report, the discussion centers on the escalating U.S. tariffs and their profound impact on the American economy. Hosted by David Brancaccio and featuring insights from Yaneli Espinal, the episode delves into the intricacies of trade policies, investor sentiments, and the burgeoning landscape of entrepreneurship in the United States.

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U.S. Tariffs and Market Reactions

Sabri Benishour opens the episode by highlighting President Trump's announcement regarding new tariffs. These tariffs, described as "reciprocal tariffs," are set to encompass nearly all countries, exacerbating existing import taxes on vehicles, steel, aluminum, Chinese goods, and certain trade items from Mexico and Canada.

Notable Quote:

"President Trump over the weekend said new tariffs set to be announced this week will cover basically all countries." — Sabri Benishour [00:17]

Zenova Safo provides a detailed analysis of the market's reaction to these tariffs. She explains that the introduction of these tariffs has already led to global markets dipping and futures indicating a bearish start to the U.S. trading day.

Key Points:

• Existing tariff structures on various goods have created a climate of uncertainty among investors.
• Goldman Sachs analysts have raised the probability of a recession in the next 12 months from 20% to 35%, citing increasing consumer caution and unexpected inflation rates.
• Inflation remains a pressing concern as recent data suggests that prices may continue to climb despite economic slowdowns.
• Investor Behavior: There's a noticeable shift towards "safer havens" like gold and bonds. Gold prices have surged to their fastest pace in nearly four decades, while bonds' rising prices have driven yields lower.

Notable Quote:

"All of this has investors fleeing for perceived safer havens such as gold, where prices have risen at their quickest pace in nearly 40 years, and bonds, where higher prices are sending yields lower." — Zenova Safo [00:40]

Despite the negative outlook, lower treasury yields offer a silver lining for consumers, making home loans and car purchases more affordable due to reduced interest rates.

Further Developments: President Trump has also signaled the possibility of additional tariffs targeting goods from countries that continue to purchase Russian oil, especially if Vladimir Putin obstructs a ceasefire in Ukraine. These tariffs are projected to range between 25% and 50%.

Notable Quote:

"These tariffs wouldn't be on Russia itself. They would be on goods coming into the US from other countries that buy Russian oil." — Sabri Benishour [01:47]

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Shift to Entrepreneurship: Navigating Business Start-ups

Transitioning from macroeconomic policies to microeconomic actions, the episode explores the surge in entrepreneurship over the past five years, a trend amplified by the pandemic's economic disruptions. With over 5.2 million new business applications last year alone, the entrepreneurial spirit is thriving.

Interview with Yaneli Espinal: David Brancaccio engages with Yaneli Espinal, the host of Financially Inclined, a podcast dedicated to financial literacy. Yaneli shares her personal journey transitioning from a hobbyist creating financial literacy content on YouTube to formalizing her business.

Notable Quote:

"I wasn't really looking to make money or anything. I just wanted to make videos on YouTube about financial literacy because I was learning a lot about it on my own." — Yaneli Espinal [03:28]

Business Structuring Advice: Yaneli provides valuable insights into choosing the appropriate business structure, emphasizing the balance between ease of setup and personal liability protection.

• Sole Proprietorship:
  Pros: Easiest and most cost-effective way to start, no formal legal steps required.
  Cons: Offers no personal liability protection.

  Quote:

  "It's definitely the easiest and cheapest option because you don't have to do anything like in terms of formal legal steps, but at the same time, there's zero personal protection." — Yaneli Espinal [03:59]

• Limited Liability Company (LLC):
  Provides personal liability protection, separating personal assets from business liabilities.

Recommendation:
For those testing business ideas, starting as a sole proprietorship is advisable. Once the business model is validated, transitioning to an LLC can offer enhanced protection.

Notable Quote:

"If you're just starting out and you're just trying to test an idea, it's okay to just start as a sole proprietorship and start learning." — Yaneli Espinal [03:59]

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Essential Business Practices for Longevity

Yaneli recounts advice from her conversation with Sam Vanderweeland, an entrepreneur and lawyer, focusing on treating a business with professionalism to ensure its success and legal protection.

Key Practices:

1. Separate Finances:

   • Open a dedicated business bank account.
   • Keep business expenses distinct from personal ones.

2. Insurance and Licensing:

   • Secure appropriate business insurance.
   • Obtain necessary licenses to operate legally.

3. Contracts and Policies:

   • Implement clear contracts and business policies to safeguard operations.
   • Example: Clear return policies to protect against disputes.

Notable Quote:

"Treating your business as a legit business involves like contracts and policies. You know, when I go shopping at any major retailer, they make their return policy so clear to me. And that's a way of protecting your business." — Yaneli Espinal [04:50]

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Resources for Aspiring Entrepreneurs

Yaneli emphasizes the abundance of resources available to entrepreneurs at various governmental levels and through specialized associations. She highlights the importance of professional assistance, particularly in areas like bookkeeping and taxation, to ensure the business's sustainability.

Suggested Resources:

• College Entrepreneurship Initiatives: Programs and support systems within educational institutions.
• Small Business Associations: State and city-level organizations offering guidance and support.
• Local Bar Associations: Providing legal assistance and advice.
• Women and Minority Business Associations: Focused support for underrepresented groups.
• Certified Public Accountants (CPAs): Essential for managing complex financial aspects like asset depreciation and tax compliance.

Notable Quote:

"If you've got a little bit of money set aside that you want to invest in your business, because hiring a CPA 100% is super, super important." — Yaneli Espinal [05:48]

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Conclusion

The episode of Marketplace Morning Report effectively bridges the macroeconomic challenges posed by new U.S. tariffs with the microeconomic opportunities in entrepreneurship. While the tariffs induce market volatility and economic uncertainty, they also set the stage for resilient business ventures, provided entrepreneurs leverage available resources and adopt sound business practices.

Final Thoughts from Yaneli Espinal: Yaneli promotes her Financially Inclined podcast as a trustworthy resource amidst the misinformation prevalent on social media, offering expert-backed financial advice to help individuals manage their finances and achieve their life goals.

Notable Quote:

"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." — Yaneli Espinal [07:13]

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This comprehensive discussion not only sheds light on the immediate economic implications of U.S. tariffs but also empowers listeners with practical advice and resources to navigate the entrepreneurial landscape amidst such challenges.

Transcript

[Capella University]

At Capella University. Learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu.

[Sabri Benishour]

More tariffs, more Fear in Markets From Marketplace I'm Sabri Benishour in for David Brunkaccio. President Trump over the weekend said new tariffs set to be announced this week will cover basically all countries. These are we what the administration has been calling reciprocal tariffs. Global markets are down this morning, and investors here in the US Are worried, too. Futures are pointing to a lower open marketplace. Zenova Safo has more.

[Zenova Safo]

Whatever tariffs are announced this week, they'll come on top of other import taxes already announced on vehicles, steel and aluminum, Chinese goods, and on a portion of the trade coming from Mexico and Canada. All of this has investors worried not just about policy uncertainty, but about how many blows the US Economy can take. And analysts at Goldman Sachs just increased the probability of a recession over the next 12 months from 20% to 35%. That's because data is piling up showing consumers are increasingly worried and becoming more cautious with their spending. Meanwhile, a key inflation gauge on Friday came in hotter than expected, which means prices could keep rising faster than experts want even as the economy slows. All of this has investors fleeing for perceived safer havens such as gold, where prices have risen at their quickest pace in nearly 40 years, and bonds, where higher prices are sending yields lower. Ironically, that could be good news in the short term for those looking to take out a home loan or buy a car as falling treasury yields push down consumer interest rates. I'm Nova Safa for Marketplace.

[Sabri Benishour]

President Trump is also threatening more tariffs if Russian President Vladimir Putin prevents a ceasefire deal with Ukraine from going through. These tariffs wouldn't be on Russia itself. They would be on goods coming into the US from other countries that buy Russian oil, Trump told NBC's Meet the Press. These tariffs would be between 25 and 50%.

[Yaneli Espinal]

Foreign.

[Marketplace Newsletter Host]

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.

[Sabri Benishour]

Up next are you thinking of starting your own business? In the last five years, since the beginning of the pandemic, there's been a burst of entrepreneurship. Last year, there were 5.2 million new business applications in the U.S. my colleague David Brancaccio spoke with Yanelli Espinal, host of Marketplaces financial literacy video podcast. Financially inclined. That is where Yanneli offers money lessons, mainly for younger people. But a lot of what she covers is useful for everyone. One recent episod was on starting your own business, something Yanneli has done herself.

[Yaneli Espinal]

I think I would consider myself what's technically called like a hobby based entrepreneur. I wasn't really looking to make money or anything. I just wanted to make videos on YouTube about financial literacy because I was learning a lot about it on my own. And then the audience kind of grew and so I was like, oh, maybe I should formalize this business.

[David Brancaccio]

You get a choice. You could be like a schedule C person who does their business on their regular tax form, or you could become a corporation. You could be a sole proprietor, and then there's the llc. Give us a sense of the difference.

[Yaneli Espinal]

Yeah, you know what? I think for most people, they're going to look for the easiest way to get started, and that's going to be sole proprietorship. It is definitely the easiest and cheapest option because you don't have to do anything like in terms of formal legal steps, but at the same time, there's zero personal protection. But if you're just starting out and you're just trying to test an idea, it's okay to just start as a sole proprietorship and start learning. And then if you decide later you want to make this more official, you can go ahead then and get like all the protections from an llc. And that allows you to basically say, hey, if somebody sues the business, they're suing the business, which is a separate entity than me as a person.

[David Brancaccio]

You were having a conversation in a recent episode of Financially inclined with a lawyer and entrepreneur who had some important advice connected to, you know, your time is worth something. Tell me about what you learned.

[Yaneli Espinal]

I was speaking to Sam Vanderweeland. She's an entrepreneur. She's also a lawyer. When Sam was talking to me, one of the key things I learned from her was, hey, take your business seriously. You know, if you have a business and you want it to actually be treated as a real business, then you have to run it like a real business. You have to open up a business bank account separate from your personal bank accounts. You have to separate those business expenses. And then she talks about business insurance and protecting your business, setting up a license if you need a license to run your business and things like that. And her piece of advice that I really loved was that again, treating your business as a legit business and operating as a legit business involves like contracts and policies. You know, when I go shopping at any major retailer, they make their return policy so clear to me. And that's a way of protecting your business.

[David Brancaccio]

You know, you can get help by watching your financial literacy video podcast, Financially Inclined. But also, you know, the United States supposedly encourages entrepreneurship and there's quite a few resources that people really should consider and consult.

[Yaneli Espinal]

Definitely there are, there's, you know, college entrepreneurship initiatives. There are small business associations at the state level. Absolutely. Even at the city level, check initiatives through your mayor's office. I mean, there's just so many in terms of local government because they want to encourage small business in their cities, in their states. Local bar associations will help because of all the legalities that you want to make sure you're doing properly with business. Women owned business or minority owned business, Check for women or minority business associations as well. Or, you know, obviously, if you have a little bit of money set aside that you want to invest in your business, because hiring a CPA 100% is super, super important. Because getting your bookkeeping, getting your accounting, getting your tax stuff set up properly is critical for the longevity of your business.

[David Brancaccio]

I know once you start getting into like depreciation of assets, I start to need serious help.

[Yaneli Espinal]

I don't want to do that by myself. No, thank you.

[David Brancaccio]

All right. Yanelli Espinal hosts Marketplace's financial literacy video podcast, Financially Inclined. Latest episode, entering your entrepreneur era is out now and you can find it on our website. Yanneli. It's always good to catch up.

[Yaneli Espinal]

Thank you so much for having me.

[Sabri Benishour]

And Yanneli there was speaking with Marketplace's David Brancaccio in New York. I'm Sabri Benishore with the Marketplace morning.

[Capella University]

Report.

[Sabri Benishour]

From APM American Public Media.

[Yaneli 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.