Slate Money: "The Nespresso Tariffs"

Date: August 2, 2025
Host: Felix Salmon (A)
Co-hosts: Elizabeth Spiers (E), Emily Peck (C)
Guest: Nathan Bomey (Axios) (B)

Episode Overview

This episode of Slate Money, hosted by Felix Salmon with regular co-hosts Elizabeth Spiers and Emily Peck, dives into the sweeping new tariffs imposed by the Trump administration, their legal uncertainties, and ripple effects on both consumer goods (most notably Nespresso pods) and the broader U.S. economy. The discussion branches into labor market woes, intricate policy debates about trade, and immigration, before pivoting in the second segment to the world of sports gambling scandals with Axios reporter Nathan Bomey. The show is punctuated with characteristic Slate Money banter, making serious economic policy relatable, sometimes personal, and frequently wry.

Segment 1: The August Tariffs — What Are They and What Do They Mean?

[02:49–26:31]

Key Discussion Points

1. Trump’s August 1 Tariff Blitz

• Announcement: On July 31, Trump enacted tariffs against 60 countries, with varying rates—e.g., Brazil at 50%, Switzerland at 39% (especially impacting Nespresso and Rolex imports), while countries with a U.S. trade surplus like the UK land at a "base" 10% rate.
• Rationale: The administration justifies tariffs based on trade deficits, aiming punitive rates at those where the U.S. imports more than it exports.
• Quote: “The arbitrariness of these numbers, like, how did they land on 39%?” – Elizabeth Spiers (03:36)
• Felix Explains: "We are going to determine the degree of protectionism in your country by looking at one number, which is the trade deficit." (03:42)

2. Economic and Political Ramifications

• Switzerland Case: Heavy tariffs impact Nespresso and pharmaceuticals, a blow to coffee lovers and the drug supply.
• Brazil Case: Suggestion that steep tariffs are political, as Trump targets the current government over former ally Bolsonaro.
  • “Brazil doesn’t need us that much... We need Brazil more than they need us. We need their coffee.” – Emily Peck (05:49-06:00)
• Knight-move on Copper: Copper tariff threat spiked domestic prices until Trump unexpectedly reversed course, underscoring policy volatility.
  • “It’s all unpredictable. It’s all chaos.” – Felix Salmon (07:15)

3. Labor Market Chill and Economic Jitters

• Timing: The economy is already wobbly—a weak jobs report, anemic growth outside of healthcare, and signs that new tariffs may worsen things.
  • “We’ve been on this, like, weird rollercoaster where we’re like, it’s going to be terrible. No, it’s fine. And now we’re back at maybe terrible again.” – Emily Peck (08:32)
• Lagged Tariff Effects: Acknowledgment that impacts of tariffs on prices and employment will play out over months.
• Upcoming Changes:
  • De minimis exception for small-value imports is closing; enhanced paperwork and taxes for packages under $800 arriving from abroad. Felix and Emily predict a logistics “shit show” for everyday imports. (09:10–10:04)
  • Crackdown on "trans ship" strategies (e.g., China → Vietnam → US). Enforcement doubts linger.

4. Job Market, Immigration, and Tariffs

• Immigration’s Role: Slowed net immigration (legal and illegal) is a larger culprit for weak job growth than tariffs; many industries suffer as legal status for various groups is revoked.
  • “The native born employment rate was low. People who wanted jobs and could work were working… native born Americans don’t want to work in the meatpacking plant. That was true. And now… we’re finding out.” – Emily Peck (12:21)
  • “There was a meatpacking company in Omaha where they lost 50% of their employees, and they had gone to great lengths to try to verify that all those employees were documented.” – Elizabeth Spiers (13:17)
• Verification Uncertainty: Employers face unsolvable uncertainty with verification systems; even those following rules find themselves penalized, which leaves industries in limbo.

5. The Looming Legal Fight

[17:24–26:31]

• Federal Appeals: The Federal Circuit Court of Appeals (majority Democratic appointees, no Trump judges) appeared highly skeptical of the legality of Trump’s tariffs, predicting a likely upholding of the International Trade Court’s ruling against them.
  • “These tariffs are obviously illegal.” – Felix Salmon (18:06)
• Potential Outcomes:
  • If ruled illegal, Congress would need to legislate tariffs—a process notoriously slow and politically fraught.
  • Realistically, Supreme Court intervention is expected, likely maintaining tariffs until final judgment (echoing a year-long pattern of the “shadow docket” siding with Trump).
    • “I’d be shocked if they didn’t let him have his way... This is what they do now.” – Emily Peck (21:00)
• Broader Take: The hosts reflect on the inefficiency and complexity of both neoliberal trade policy and tax law, musing that attempts to “simplify” often just create new loopholes and enforcement headaches.

6. Notable Moment – Irreconcilable Ironies

• Ford Example: Ford pays higher tariffs (due to high tariffs on aluminum inputs) than Korean automakers facing lower finished vehicle tariffs, despite being the quintessential U.S. carmaker.
  • “Ford winds up paying more tariffs than Kia does.” – Felix Salmon (25:54)
• Emily’s Take: “Trump is economically illiterate. I... just more proof every day.” – Elizabeth Spiers (26:27)

Segment 2: Sports Gambling, Cheating, and the Integrity of The Game

[29:04–52:43]
Guest: Nathan Bomey (Axios)

Key Discussion Points

1. The Cleveland Guardians Betting Scandal

• The Case: Pitcher Emmanuel Clase (Cleveland Guardians) is under investigation for allegedly intentionally pitching balls, letting gamblers profit from “micro bets” (e.g., outcome of an individual pitch). He’s currently on paid leave.
  • “He may have been... intentionally pitching balls... which could be because professional gamblers or amateur gamblers can bet on that and can make money off of it.” – Nathan Bomey (30:38)
• Rising Micro-Betting: The explosion of live, in-game betting has increased incentives and opportunity for manipulation, though individual bets are small and sportsbook-imposed caps make it unlikely that players are doing this for personal enrichment.
  • “I’d be personally surprised if anybody could bet more than $1,000 or $2,000 on any individual play like this... that’s obviously not going to move the needle for any athlete in professional sports. So why are they doing this?” – Nathan Bomey (34:20)
• Desperation Factor: Some players may be vulnerable due to gambling debts, leading them to manipulate outcomes in exchange for syndicate "debt forgiveness" (35:50).

2. The New Sports Wagering Ecosystem

• Growth of legal betting (DraftKings, FanDuel, and now Kalshi) increases both transparency (and opportunities for catching cheaters) and temptation due to easier access.
• Offshore sportsbooks remain popular for reasons like tax evasion or better odds, despite risks of enforcement and payment defaults. (37:17)
• Mass-market prediction markets (e.g., Kalshi, Polymarket) have less incentive than traditional bookies to police for manipulation because they operate peer-to-peer, not "house versus bettor."
  • “They have much less of a financial incentive... the more betting there is, the more money they make. And if this goes on, they just make money, they don’t lose money.” – Felix Salmon (46:11)

3. Penalties and Enforcement

• Standard for proof in pro sports is high; lifetime bans are typical for match-fixing or clear manipulation, but leagues wait until evidence is substantial. Circumstantial statistics and communication (texts, coordination) are key triggers. (40:39)
  • “If you are caught manipulating the outcome in some way, that’s 100% going to get you banned for life.” – Nathan Bomey (39:25)
• Example: NBA’s John Tay Porter banned for providing insider info to gamblers.

4. Do We Need Sports Integrity?

• Emily & Nathan: Fans see sports as a last bastion of meritocracy; cheating shatters the emotional bond fans have with athletes.
  • “I say absolutely yes. Look what happened with steroid scandal in baseball in the early aughts... I think people really need to root for athletes and feel like they're trying their best. And this is real, right?” – Emily Peck (41:27)
• Felix’s Counterpoint: Draws a parallel to professional wrestling (where everyone knows it's staged) and suggests that professional sports are already entertainment products; fans buy into the narrative (“neo kayfabe”).
  • “No one complains that the Marvel comic universe is fake.” – Felix Salmon (48:06)
• Pushback: Emily, Elizabeth, and Nathan insist that unpredictability and authenticity set sports apart.
  • “This is, I think, among your worst takes I've ever heard… Beneath all the pageantry is a real competition, and I think everyone's bought into that pretty hard.” – Emily Peck (48:06)
  • “But I think sports is the one place that Americans, at least, are not cynical about.” – Emily Peck (49:10)
• Elizabeth: Wrestling fans may accept artifice, but most sports fans want to believe.

5. Historical Echoes

• Revisits the 1919 Black Sox scandal, the ongoing Hall of Fame debates (e.g., Pete Rose), and the thin line between infamous and famous in sports culture.
  • “You can't have heroes without villains. Let's have some villains in this narrative.” – Felix Salmon (51:57)
  • “I think we're going to see more and more villains. I don't think this is going to stop because there's just so much incentive on all sides.” – Nathan Bomey (52:12)

Numbers Round

[53:33–57:58]

• Emily (C): 500 — New York cannabis dispensaries prohibited within 500ft of schools, but after NYC changed measurement methods, about 100 shops may be operating illegally (53:35).
• Elizabeth (E): 345 — $345 for a pair of “Chili’s” co-branded cowboy boots made (partly) of red booth vinyl. Team debates the value and practicality of $300+ vinyl boots (55:45).
• Felix (A): 127.29 — Figma’s share price after IPO surged from $33, making it a $60B company. Cites antitrust as the reason Figma remained independent after Adobe’s failed $20B acquisition (56:50).

Notable Quotes & Moments

• “Brazil doesn't need us that much. We need Brazil more than they need us. We need their coffee.” – Emily Peck (05:49)
• “It’s all unpredictable. It’s all chaos.” – Felix Salmon (07:15)
• “There was a meatpacking company in Omaha where they lost 50% of their employees…” – Elizabeth Spiers (13:17)
• “The tariffs are just one part of a very, very large and very complex economy.” – Felix Salmon (10:28)
• “These tariffs are obviously illegal.” – Felix Salmon (18:06)
• “Ford winds up paying more tariffs than Kia does.” – Felix Salmon (25:54)
• “Sports is the one place that Americans, at least, are not cynical about.” – Emily Peck (49:10)
• “No one complains that the Marvel comic universe is fake.” – Felix Salmon (48:06)
• “You can’t have heroes without villains. Let’s have some villains in this narrative… No harm, no foul, right?” – Felix Salmon (51:57)

Timestamps for Key Segments

• Tariffs & Trade Policy Deep Dive: 02:49–26:31
• Legal Challenge Segment (Court Cases): 17:24–26:31
• Sports Betting, Cheating & Integrity (Nathan Bomey): 29:04–52:43
• Numbers Round: 53:33–57:58

Final Thoughts

Slate Money’s “The Nespresso Tariffs” offers a lively, critical tour through the madness of contemporary economic policy and regulation—where tariffs swing on a dime, businesses flail in legal gray zones, and the sanctity of America’s favorite pastimes faces new threats from the gambling economy. With trademark humor and skepticism, the hosts question both the theory and reality of “simple” policy fixes, the role of legal institutions, and what we really value in American competition—whether buying Nespresso or rooting for the home team.