Tariffs: what are they good for?

Summary

Planet Money Episode Summary: "Tariffs: What Are They Good For?"

Release Date: April 2, 2025

In this insightful episode of Planet Money, NPR delves into the complex world of tariffs—historical tools of economic policy—and examines their relevance and effectiveness in today's global economy. Host Mary Childs and co-host Greg Rosolski navigate through expert opinions, historical case studies, and contemporary policy debates to provide listeners with a comprehensive understanding of tariffs, their intended benefits, and the controversies surrounding them.

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1. Introduction to Tariffs and Their Controversy

The episode opens with the anticipation surrounding the Trump administration's decision to implement new tariffs on goods imported from various countries. Mary Childs sets the stage by highlighting the economic anxiety these tariffs have generated globally.

Mary Childs [00:22]: "The looming tariffs had sent chills down the spines of many economists around the world."

Greg Rosolski explains the traditional economic perspective on tariffs, emphasizing their role as import taxes that primarily burden consumers and disrupt free trade.

Greg Rosolski [00:37]: "Because tariffs, they're an old economic tool that many economists have disliked for a very long time. They're basically an import tax paid mostly by consumers."

2. Traditional Economic Views on Free Trade versus Tariffs

The discussion transitions to the foundational economic theory of comparative advantage, which advocates for free and unfettered trade to promote competition, lower prices, and overall economic growth.

Greg Rosolski [00:55]: "A bedrock theory in economics is the theory of comparative advantage, that basically countries can specialize in different things and through trade, we can all in the aggregate, get richer."

Mary Childs questions the utility of tariffs, leading into an exploration of scenarios where tariffs might actually serve a purpose.

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3. Ha Joon Chang's Defense of Protectionism

Enter Ha Joon Chang, a prominent economist and author of Kicking Away the Ladder, who challenges the prevailing economic disdain for tariffs by advocating for protectionist policies under certain conditions.

Ha Joon Chang [02:46]: "When the government has to be protected from outside competition."

Chang's work illustrates how historically successful nations like South Korea employed tariffs to nurture emerging industries, a strategy often discouraged by mainstream economists.

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4. Case Study: Hyundai and South Korea's Tariff Policies

Chang provides a compelling case study of Hyundai's evolution, highlighting how South Korea's protectionist stance enabled Hyundai to transition from assembling Ford cars to becoming a global automobile powerhouse.

Ha Joon Chang [02:51]: "Hyundai originally was a construction company. But sometime in the late 60s, this company decided that they want to build an automobile manufacturing business."

The South Korean government's stringent measures, including an outright ban on foreign car imports, provided Hyundai with the necessary shield to develop its own competitive edge.

Ha Joon Chang [06:03]: "Import of foreign cars were completely banned."

This strategy, known as infant industry protection, posits that young industries require temporary protection to mature and compete on the global stage.

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5. Infant Industry Protection: Theory and Application

The hosts delve deeper into the concept of infant industry protection, drawing parallels between nurturing a young child and supporting nascent industries.

Mary Childs [07:16]: "Like a country uses tariffs to support a sweet little baby industry, to protect it from the harsh world so it can safely grow bigger and stronger."

However, Chang cautions that without proper implementation, such protectionism can lead to prolonged inefficiency and wasted resources.

Ha Joon Chang [08:17]: "If the goal is to turn a little baby industry into a strong productive adult, then really tariffs aren't enough. You need not only to protect them from outside competition but you also need to nourish them and help them grow with things like subsidies and piano lessons."

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6. Situations Warranting Tariffs: National Security and Unfair Trade Practices

Beyond nurturing industries, tariffs can be justified on grounds of national security and combating unfair trade practices. The episode highlights scenarios where self-reliance in critical sectors and reacting to malpractice by trade partners necessitate protective measures.

Greg Rosolski [09:24]: "Tariffs are a pretty common tool for competitors to level the playing field."

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7. Evolution of Economic Thought: Increased Acceptance of Tariffs

Over the past decade, the economic community has seen a gradual shift towards acknowledging scenarios where tariffs and protectionist policies might be beneficial, aligning more closely with Chang's arguments.

Mary Childs [10:11]: "Over the last 10 years, more economists have come around to Ha Joon's way of seeing tariffs and protectionist policies."

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8. Trump's Approach to Tariffs: Divergence from Traditional Theory

The episode transitions to analyzing President Trump's application of tariffs, which extends beyond traditional economic justifications. Trump's strategy appears to intertwine economic policy with geopolitical maneuvering, viewing tariffs as instruments of power.

Greg Rosolski [11:03]: "President Trump is now imposing sweeping tariffs in all sorts of areas and on all sorts of countries."

Contrary to the targeted use of tariffs for specific economic goals, Trump's approach encompasses broader objectives like safeguarding national industries and addressing trade imbalances.

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9. Consequences and Effectiveness of Trump's Tariff Policies

Examining specific instances, such as the imposition of a 25% tariff on imported cars, the episode critiques the practicality and economic rationale behind such measures. Experts argue that while the intention is to revive American manufacturing jobs, the actual outcomes may include higher consumer prices and reduced market competition.

Greg Rosolski [17:04]: "It doesn't mean that the auto industry in general, it's not an infant industry. It doesn't need piano lessons. It has been competing on the global stage for years, and now it's getting protections."

Empirical data from previous tariff implementations, like the washing machine tariffs, reveal that job creation comes at a significant economic cost, questioning the efficiency of such policies.

Greg Rosolski [18:30]: "The washing machine tariffs actually did create jobs, 1,800 new jobs in the USA, making washing machines at an average cost to US consumers of more than $800,000 per job."

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10. Tariffs as a Geopolitical Tool: The Colombia Example

The episode further explores the use of tariffs as leverage in international relations, illustrated by the Trump administration's attempt to use tariffs to compel Colombia to allow deportation flights.

Mark Summerlin [19:24]: "For President Trump, a tariff is just a form of power."

This tactic underscores a shift from economic policy to assertive geopolitical strategy, raising ethical and practical concerns about the use of economic power to achieve diplomatic ends.

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11. Conclusion: The Dual-Edged Nature of Tariffs

As the episode wraps up, it reflects on the multifaceted role of tariffs in modern economic policy. While tariffs can serve as tools for fostering domestic industries, protecting national security, and exerting geopolitical influence, their implementation requires careful consideration to avoid unintended economic repercussions.

Mark Summerlin [20:35]: "If they want to retaliate, I think ultimately they're going to lose that game because they need us more than we need them."

The discussion highlights the ongoing debate within the economic community about the appropriate use of tariffs, suggesting that their role is evolving in response to contemporary global challenges.

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Key Takeaways:

• Tariffs are traditional economic tools used to impose import taxes, often criticized for burdening consumers and disrupting free trade.

• Ha Joon Chang advocates for targeted protectionism, arguing that infant industry protection can nurture emerging domestic industries until they become competitive globally.

• Historical examples, such as Hyundai's growth in South Korea, demonstrate how protective measures can transform nascent industries into global leaders.

• National security concerns and unfair trade practices provide additional justifications for implementing tariffs, beyond economic self-interest.

• The Trump administration's tariff policies extend beyond traditional economic theories, utilizing tariffs as instruments of geopolitical strategy and power.

• The effectiveness of tariffs remains contested, with evidence suggesting significant economic costs and mixed outcomes regarding job creation and industry growth.

This episode underscores the complexity of tariff policies, balancing their potential benefits against economic costs and ethical considerations in the realm of international trade.

Transcript

[Ha Joon Chang]

This is Planet Money from npr.

[Mary Childs]

Today is a big day. For weeks, we have been hearing about April 2. The Trump administration had promised that today would be the day that they put new tariffs on goods coming in from, I don't know, maybe every country in the world.

[Judy Shelton]

This is one of the most important days, in my opinion, in American history. It's our declaration of economic independence.

[Mary Childs]

The looming tariffs had sent chills down the spines of many economists around the world.

[Greg Rosolski]

Because tariffs, they're an old economic tool that many economists have disliked for a very long time. They're basically an import tax paid mostly by consumers.

[Mary Childs]

And for centuries, they've been used to make a country's population buy its own stuff instead of another country's stuff.

[Greg Rosolski]

But economists generally prefer more and freer trade because it means, means more competition, lower prices, economic growth. A bedrock theory in economics is the theory of comparative advantage, that basically countries can specialize in different things and through trade, we can all in the aggregate, get richer.

[Mary Childs]

But surely tariffs have been useful ever, or they wouldn't exist, right? Right. Hello and welcome to Planet Money. I'm Mary Childs.

[Greg Rosolski]

And I'm Greg Rosofsky. Today in the show, the case for tariffs. What can they be good for?

[Mary Childs]

We talk to an economist who has been making the lonely argument for protectionism for the past 30 years.

[Greg Rosolski]

And we hear how tariffs fit into President Trump's economic worldview from two economists in the orbit of the Trump administration.

[Mary Childs]

So tariffs, we have long heard from economists about how and why they are bad. Today we investigate what they can actually do, what they can be good for.

[Greg Rosolski]

And yeah, economists have always acknowledged that free trade has trade offs, that, you know, there will be losers in the face of foreign competition. But for a long time, the dominant voices in the profession made the case that those trade offs were really worth it. Top lawmakers in both parties in the US really bought into this idea that, you know, free trade would be great for America, and they really pushed it for the rest of the world.

[Mary Childs]

And through the decades of that argument, there's been an economist who argued that the dominant voices in economics were wrong, that free trade actually sometimes held countries back and protectionism could help make them richer.

[Ha Joon Chang]

Hi, I'm Ha Joon Chang. I'm professor of Bioeconomics at the University of London.

[Mary Childs]

Ha Joon Chang wrote a book called Kicking Away the ladder in 2002 about how rich countries used protectionist policies like tariffs back when they were developing and then told everyone else they couldn't do that. They had to do free trade.

[Greg Rosolski]

And Being a pro tariff economist back in the early 2000s, it was kind of lonely.

[Ha Joon Chang]

Are you a fan of the Lord of the Rings?

[Mary Childs]

I love Lord of the Rings.

[Ha Joon Chang]

Yeah. The second movie, there's this scene of battle at the Helm's Deep. You're a band of, I don't know, 120 super capable guys. Yeah. But then there are like a half a million orcs that are in front of you. What are you going to do?

[Greg Rosolski]

A battle against half a million free trade economists. That's how unpopular he felt. But he's got kind of the perfect example of why tariffs can work.

[Ha Joon Chang]

My favorite example is Hyundai, the automobile company.

[Mary Childs]

When Ha Joon was a little kid growing up in South Korea, Hyundai was not yet an automobile company.

[Ha Joon Chang]

Hyundai originally was a construction company. But sometime in the late 60s, this company decided that they want to build an automobile manufacturing business.

[Mary Childs]

So first Hyundai had to figure out how to make a car. Ha Joon says it started by placing an order with Ford for something called a knockdown kit, which is just a big wooden box full of all the parts you could ever need to build one car. The box arrives, you open it up and it's just full of carpet parts, large and small. A door, a bolt, two headlights.

[Ha Joon Chang]

They assembled around 3,000 of those cars in the late 60s. And then in the mid 70s, South Korean government said we are going to cancel the license for auto manufacturers unless they come up with their own design.

[Mary Childs]

Yeah, the government was like, actually we want our car industry to be real companies, global players. Assembling a Ford car is not our end goal here. Can you level up a little bit?

[Greg Rosolski]

So Hyundai had to come out with their own design. In 1976, it made the Hyundai Pony. It was the first Korean passenger car. They made around 10,000 of them in a year.

[Ha Joon Chang]

In the same year, Ford produced 1.9 million cars. General Motors produced 4.8 million cars.

[Mary Childs]

So they had a ways to go and they got a lot of help.

[Ha Joon Chang]

Initially, this company had to be hugely subsidized both by the government and by its own existing business, especially construction. Yeah, because there was no way this company was going to be able to make money without that.

[Greg Rosolski]

So yeah, Hyundai was losing money on this new venture. And he's saying the government decided to pitch in, give it some subsidies, and the other parts of Hyundai that were profitable sent over their money. But even that wasn't enough.

[Ha Joon Chang]

Even then it had to be protected from foreign competition. Because who's going to buy this 2 bit car when you could import a Cadillac or you know, Mustang?

[Mary Childs]

Yeah.

[Ha Joon Chang]

No way. So import of foreign cars were completely banned.

[Mary Childs]

A total import ban. Like a tariff to infinity. The tariff of all tariffs. Because the South Korean government's really serious. They want this to happen.

[Greg Rosolski]

Yeah. They're making rules that mean South Koreans couldn't buy foreign cars, cars that were maybe better or cheap, cheaper or both. Instead, they had to buy these homegrown cars, which was great for Hyundai, but for a Korean person trying to buy a car and paying taxes that are used to, you know, subsidize this company less. Great. But as you can maybe guess, this gambit worked. Hyundai is now one of the biggest car manufacturers on the planet.

[Mary Childs]

And this is a canonical example of what's called infant industry protection.

[Ha Joon Chang]

So this is an idea that the government of developing nation should protect and nurture the country's young industries until they grow up and can compete with more advanced industries from more advanced nations. In the same way that we protect the nurture of children until they grow up and then can compete in the other labor market.

[Mary Childs]

Right. Like a country uses tariffs to support a sweet little baby industry, to protect it from the harsh world so it can safely grow bigger and stronger.

[Greg Rosolski]

And then as we do with children when they grow up, we remove that protection.

[Ha Joon Chang]

In the same way that you don't want to make your kid work when he's six years old, you don't want to subsidize your kid until he's 45. So at some point you have to push the guy into the real world.

[Mary Childs]

And that's what South Korea did. It eventually took off the tariffs and the import ban and the subsidies.

[Greg Rosolski]

Right. The idea behind infant industry tariffs is they have to be temporary or you're just propping up a company that's inefficient and can't be successful on its own, and along the way wasting a lot of taxpayer money and societal resources that could be put to better use.

[Ha Joon Chang]

This idea was actually invented by an American, and not just any American. It was invented by Alexander Hamilton, the guy on the ten dollar bill, your.

[Greg Rosolski]

First treasury secretary, Alexander Hamilton. RIP Ha Joon Chang and other economists say if the goal is to turn a little baby industry into a strong productive adult, then really tariffs aren't enough. You need not only to protect them from outside competition, but you also need to nourish them and help them grow with things like subsidies and piano lessons.

[Mary Childs]

And the US Has a history of doing this, of trying to nurture little baby industries that policymakers have believed are the industries of the future, like solar energy and electric Vehicles.

[Greg Rosolski]

Now, there's a big debate in economics about the infant industry argument. There are lots of examples of infant industry interventions going bad, like Malaysia trying to build a car or Brazil trying to build a computer industry. These efforts have mostly failed, and they wasted a lot of resources in the process.

[Mary Childs]

Right. Because for this to work, the government has to pick the right industry to nurture and then nurture it correctly.

[Greg Rosolski]

And tariffs are not just for babies. This kind of protectionism also can make sense for national security interests.

[Mary Childs]

Like, what if your citizens need medicines or microchips or drone batteries, and the only people who make those things live thousands of miles away in a place with different, maybe opposing national security goals. Even the most free trade of economists seem to agree that, yeah, maybe paying a little bit of a premium to support a slightly uneconomic domestic industry in these cases is a good idea.

[Greg Rosolski]

Another situation where economists think there's a case for tariffs is when trading partners don't play by the rules. Like, if a country is manipulating its currency or stealing intellectual property or egregiously exploiting workers, that gives that country an unfair advantage in the global marketplace. And so tariffs are a pretty common tool for competitors to level the playing field.

[Mary Childs]

Over the last 10 years, more economists have come around to Ha Joon's way of seeing tariffs and protectionist policies.

[Ha Joon Chang]

Now things are, yeah, I wouldn't say it's going in the opposite direction, but more complicated.

[Mary Childs]

So Ha Joon Chang's lonely argument, it's less lonely. A lot of economists agree. Now, infant industry, national security, sure, tariffs can maybe help, but the Trump administration has more ideas. We get into that after the break. Okay, so tariffs could be useful for infant industry protection, for national security interests, and to combat unfair trade practices.

[Greg Rosolski]

President Trump is now imposing sweeping tariffs in all sorts of areas and on all sorts of countries. He does talk about things like national security and unfair trade practices, but his approach to tariffs feels like it's about something bigger than that. And it's all part of this particular worldview that seems to be shared within Trump world and also outside of it, that the costs of free trade, they were too high. That free trade devastated communities around America.

[Mary Childs]

And the economics world has really woken up to this over the last decade or so. There's this series of blockbuster studies on something known as the China Shock. The shock happened when China joined the World trade organization in 2001.

[Mark Summerlin]

There's been a distinct drift in the academic literature that every year new stuff comes out that the China Shock was worse and worse than we thought.

[Mary Childs]

That's Mark Summerlin. He's an economist, consultant, and longtime friend of Trump's Treasury Secretary.

[Mark Summerlin]

We just basically added suddenly like a billion people to the global workforce. And it really gutted a lot of things, and we were too slow to realize it.

[Greg Rosolski]

He says that China got a bunch of manufacturing jobs and the US Got cheaper imports. But the people who lost jobs in the United States didn't bounce back. They didn't get new jobs. The China shock created, like these mini depressions in towns around the country.

[Mary Childs]

Now we have massive trade deficits with China and other countries where we're importing way more than we export. Trump World sees this as a huge economic problem and tariffs as a solution, one that will help correct the trade imbalances and bring back manufacturing jobs.

[Mark Summerlin]

The way that the Trump administration looks at it, especially with something like China, is, no, it's a bad deal and China gets jobs and we get like, bad Chinese goods that last for a year and then we throw them out. And so you can see why people would say, you know, maybe we would prefer to have jobs and be building assets rather than getting all this excess consumption.

[Greg Rosolski]

One of the big goals of free trade policies has been to lower prices. But the trade off was a huge loss of manufacturing jobs. And manufacturing jobs maybe have something kind of magical about them. For example, a lot of economic research has shown that manufacturing jobs provided ladders to the middle class for people without a college education.

[Mary Childs]

So the administration's idea seems to be to choose a different trade off, to accept higher prices with the hope of eventually bringing back some of those good jobs.

[Judy Shelton]

If Christmas decorations coming in from China suddenly cost 25% more, I feel that you're going to see people suddenly rev up and start producing them here.

[Greg Rosolski]

Judy Shelton is an economist and senior fellow at the Independent Institute, a think tank.

[Judy Shelton]

Because we have Etsy, we have people can sign up for Amazon. I think Americans are quick to recognize an opportunity.

[Mary Childs]

Judy has been making the case for correcting the US Trade imbalance for years. In his first term, Trump nominated her for the Federal Reserve Board of Governors. She did not get confirmed. A bunch of economists and Fed employees wrote letters saying her views were extreme and too partisan on monetary policy.

[Greg Rosolski]

Judy says tariffs can really work when it comes to achieving the administration's economic goals, which is not only to deter people from buying imports, but also to incentivize them to buy stuff made in America.

[Judy Shelton]

The whole agenda of the Trump administration is oriented toward correcting the past general shift toward a more government managed economy, a more financialized economy, and Going back to the real economy where people make.

[Mary Childs]

Things to Judy, redirecting that spending is the best part of tariffs. But even if Americans refuse to buy.

[Judy Shelton]

American, if they go ahead and continue to purchase the good produced by another country and they pay the tariff, I guess the consolation prize is that you get the beautiful revenue, right? You get the increased taxation, the revenues to the US Government from the tariff that's being applied.

[Mary Childs]

And this is one more benefit the administration points to, to solving our problems using tariffs. They say it will help rebalance the government's budget. Right now, more money goes out of the government than comes in. If tariffs raise beautiful revenue, that's money in our pocket.

[Greg Rosolski]

But of course, if we are taking money out of our pocket for new spending or, you know, collecting less money through taxes, then tariffs won't necessarily improve the budget problem. Like much of the revenue from tariffs in Trump's first term was offset by bailing out farmers who were harmed by trade retaliation. And now the administration is talking about compensating farmers again.

[Mary Childs]

Now, all that, that has been basically their argument for why they want to use tariffs. And the way Trump is applying these tariffs is pretty different from the prescription that many economists are now on board with.

[Greg Rosolski]

There are a bunch of different tariffs flying around right now. So we're just going to focus on one, one that President Trump has been talking a lot about in recent weeks. Cars.

[Mary Childs]

Last week, Trump announced 25% tariffs on all imported cars and certain car parts, cars made in the US Even by foreign companies, no tariff. And the stated goal is to get Americans to buy cars made in the US because they would be comparatively cheaper and the US Gets those good manufacturing jobs.

[Greg Rosolski]

Now, you could make the case that electric cars are maybe an infant industry, but the auto industry in general, it's not an infant industry. It doesn't need piano lessons. It has been competing on the global stage for years, and now it's getting protections.

[Mary Childs]

And that means that car prices are going to be artificially higher. Foreign cars will be subject to this, you know, import tax, but also US Carmakers use foreign parts, which also face the same import tax. And there will be less pressure on US Carmakers to keep their prices low because their foreign competitors have a big price disadvantage in the US Market. So, yeah, likely higher prices all around, and that means consumers will likely buy fewer cars.

[Greg Rosolski]

So if this stuff works in the way the administration seems to want, the best case scenario seems to be that it will still be an expensive, slow process, like multiple years to build up all of this manufacturing in the United States. In fact, after Trump announced his car tariffs, the stock prices of U.S. automakers fell. The market is signaling that this policy will have costs even for American manufacturers.

[Mary Childs]

And the rollout of many of these tariffs has been a little chaotic. This year alone, we have seen Trump go back and forth on tariffs on different. And that uncertainty has a cost. It makes it hard for businesses to make decisions about which plant to build or where to hire. And waiting is expensive.

[Greg Rosolski]

And we actually have a little bit of data from last Trump term so we could see empirically what the effect was of similar policies. The Trump administration back then, they put tariffs on a bunch of Chinese goods, including washing machines.

[Mary Childs]

And one study found that the washing machine tariffs actually did create jobs, 1,800 new jobs in the USA, making washing machines at an average cost to US consumers of more than $800,000 per job, even after accounting for the revenue raised from the tariffs.

[Greg Rosolski]

The view from the Trump world, though, is like, yeah, the transition from our current setup may be painful, but it's going to be worth it.

[Mary Childs]

But there is this whole other side to the way Trump is using tariffs. Like earlier this year, Trump wanted to deport Colombian citizens who were in the US to send them back to Colombia. The normal course is apparently to send people on commercial flights. But in January, the Trump administration sent two military planes.

[Greg Rosolski]

The Colombian president wouldn't let the military planes land. So Mark Summerlin says Trump turned to tariffs.

[Mark Summerlin]

For President Trump, a tariff is just a form of power. So with, you know, with Colombia, he wanted them to take back certain people and he wasn't getting the answer that he wanted. And so he just threatened 25% tariffs.

[Greg Rosolski]

25% tariffs on Colombian goods. And Trump said they'd go up to 50% a week later.

[Mary Childs]

That was Sunday morning, and by that evening, Colombia and Trump had reached an understanding. Colombia would allow deportation flights without restrictions, no tariffs, though the White House said that the threat of tariffs would be, quote, held in reserve in case Colombia reneges.

[Mark Summerlin]

So that was a case where for some of us, it might be uncomfortable seeing it. Different people have different philosophies on whether big countries should be bullying little countries or not. But, you know, in that case, he got what he wanted. It was short lived. There wasn't, from a US Perspective, there wasn't really any damage done.

[Mary Childs]

And the reason the US can act like this, the thinking goes, is because we're rich, there are so many of us and we spend so much money. We don't rely on trade as much as our trade partners do.

[Judy Shelton]

In the end, we kind of do have the leverage. So, I mean, if they want to retaliate, I think ultimately they're going to lose that game because they need us more than we need them.

[Mary Childs]

I mean, to put a sort of another, like, blunt frame on it, it's like using a richness as a country.

[Mark Summerlin]

As leverage. Yeah.

[Mary Childs]

A bullying tactic. Yeah.

[Mark Summerlin]

As leverage. Yeah, yeah, yeah.

[Mary Childs]

That's it.

[Mark Summerlin]

That's it. As we're using our power and because.

[Mary Childs]

We have this power, thinking goes, if we're gonna trade with someone, we should get something we want for it. The Trump administration did this with Mexico, too, threatening tariffs and then delaying them because Mexico did something he wanted, agreed to send troops to the border because trade is power.

[Greg Rosolski]

And we have used trade policy kind of like this in the past as a geopolitical tool. For example, we thought, you know, that capitalism would cure communism. Judy remembers being in China when it was opening its markets in the 1980s.

[Judy Shelton]

We thought that it was two sides of a coin, that if you liberalize the trading rules so they could benefit economically, then you would have people demanding more freedoms. They would insist on sort of empowering their own private sector, and that would be all to the good.

[Greg Rosolski]

We had this idea that we could use free trade to make other people see the world in the same way that we do now.

[Mary Childs]

The US Is operating with a slightly different idea. Instead of free trade as an incentive to be our friend and join our democracy club, the US Is threatening to close trade to incentivize, strongly incentivize people to do what it wants. Like, nice economy you got there.

[Greg Rosolski]

And that's kind of the view from Trump world. We have all of this power and we should use it. We could go through some pain to get some gain.

[Mary Childs]

We have a new perk for Planet Money plus supporters. You can now listen to some of our classic series from the Planet Money art archive. Like when we wanted to understand the global financial crisis and bought a toxic asset we named Toxi. You can now find all eight Toxi episodes in one playlist. And there are more playlists to come this year. If you're already a Planet Money plus supporter, you can check them out. If you're not, you can sign [e-mail] you also get bonus episodes, sponsor free listening and know that you're supporting our work.

[Greg Rosolski]

This episode was produced by Willa Rubin and edited by Meg Kramer. It was fact checked by Sarah McCarthy Klutter and engineered by James Willits. Alex Goldmark is our executive producer. I'm Greg Rosolski.

[Mary Childs]

And I'm Mary Childs. This is npr. Thanks for listening.