How Trump Wiped Out $10 Trillion in Wealth in 3 Days

Summary

The Daily: How Trump Wiped Out $10 Trillion in Wealth in 3 Days

Hosted by Michael Barbaro | Released April 8, 2025

Introduction

In this gripping episode of The Daily by The New York Times, host Michael Barbaro delves into the catastrophic three-day span where former President Donald Trump's aggressive tariff policies led to a staggering $10 trillion loss in global wealth. Through insightful conversations with renowned journalists Andrew Ross Sorkin and Jonathan Swan, the episode unpacks the intricate dynamics between Trump's trade war strategies, the plunging stock markets, and the wavering confidence of the business community.

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1. The Stock Market Crash Triggered by Tariffs

Timestamp: [00:00 – 03:10]

The episode begins with Michael Barbaro highlighting a significant downturn in global stock markets, attributing the chaos to President Trump's implementation of universal tariffs. The immediate consequence was the declaration of a bear market in the US, coupled with escalating retaliations from China.

Notable Quote:

• Andrew Ross Sorkin: "President Trump is doubling down now, threatening even bigger tariffs on imports from China, 50% if the country does not revoke its retaliatory tariffs on American products sold there." [01:04]

Scale of Loss: Andrew Ross Sorkin emphasizes the unprecedented scale of the market crash, noting, “we're talking about trillions of dollars with a T” lost in corporate value. He elaborates that the markets have seen a decline of over 20% from their peaks near the election, translating to immense personal and national economic losses.

Notable Quote:

• Andrew Ross Sorkin: "We are down 10% peak to trough from the sort of heights of where we were near the election to now, you could argue we are over 20% off, maybe more depending on how you do the math." [02:44]

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2. Impact on Major Companies

Timestamp: [03:10 – 09:23]

Sorkin provides a detailed analysis of how Trump's tariffs have disproportionately affected major corporations. He uses Apple as a primary example, stating the company's stock plummeted by 18% in five days, resulting in a $700 billion loss in value.

Notable Quote:

• Andrew Ross Sorkin: "Apple's a company that manufactures a lot of its goods in a combination of places like China, increasingly in places like Vietnam and India... $700 billion wiped out." [04:38]

*Apple's predicament illustrates the broader issue: companies face the dilemma of either absorbing the increased costs or passing them onto consumers, both of which adversely affect profits and stock valuations. This domino effect extends to other giants like Meta, where increased costs in building data centers and reduced advertising revenues have led to a significant drop in stock prices.

Notable Quote:

• Andrew Ross Sorkin: "Meta is reliant on advertising. And there are going to be a lot of companies that are going to likely scale back how much they're going to spend on advertising at places like Meta." [08:19]

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3. Business Leaders' Response

Timestamp: [09:23 – 14:08]

The episode explores the wavering support Trump has among business leaders. As corporate values decline, even those who previously supported Trump, such as billionaire investor Bill Ackman, are reconsidering their stance.

Notable Quote:

• Andrew Ross Sorkin: "They have been rushing to try to get in his ear. But I don't think that CEOs are calling him saying, Mr. President, you have made a terrible, terrible error." [12:23]

Despite the majority of CEOs privately acknowledging the detrimental impact of the tariffs, public dissent remains rare. Exceptions include Bill Ackman and Elon Musk, who have made public remarks questioning the sustainability of Trump's tariff policies.

Notable Quote:

• Andrew Ross Sorkin: "Bill Ackman then kind of rolled it back and Elon Musk coming out and saying, I don't know about these tariffs." [14:08]

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4. President Trump's Stance and Advisors

Timestamp: [14:08 – 18:35]

Jonathan Swan provides an in-depth look into Trump's unwavering commitment to his tariff strategy. Despite mounting evidence of economic turmoil and eroding business confidence, Trump remains steadfast, viewing the tariffs as essential for reshoring manufacturing and eliminating trade deficits.

Notable Quote:

• Jonathan Swan: "What he's been saying when people call him... he's in that kind of a mode to do tariff deals. Yes, because I put out these tariffs, everyone's coming to beg, which is a position he loves to be in." [21:05]

Trump's advisors, recognizing the precarious situation, are reportedly seeking an "off ramp" to mitigate the damage. However, Swan indicates that Trump himself shows little inclination towards easing these measures, maintaining his long-term economic vision.

Notable Quote:

• Jonathan Swan: "So if there's ever a subject to take Donald Trump literally about, it's tariffs." [35:05]

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5. Political Fallout

Timestamp: [18:35 – 30:42]

The aggressive tariff stance has ignited tension within Republican circles. While privately many Republican members of Congress are anxious about the economic repercussions, Swan remains skeptical about a public revolt against Trump's policies.

Notable Quote:

• Jonathan Swan: "I don't have any sense that this is going to be a Congress that will step out and defy this present." [30:42]

Despite a few Republican members co-sponsoring legislation to restrain Trump's tariff powers, the likelihood of Congress taking significant action remains low unless the economic situation deteriorates further.

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6. Future Implications

Timestamp: [30:42 – 35:17]

Looking ahead, both Sorkin and Swan discuss the potential long-term effects of Trump's tariff policies. The uncertainty has stifled business investments, with many CEOs adopting a wait-and-see approach. The persistent economic instability threatens to overshadow Trump's previous image as a successful businessman and economic steward.

Notable Quote:

• Jonathan Swan: "One problem that some of his advisers have... is get criticized a lot for, well, your messaging is so all over the place." [23:12]

The episode underscores the precarious balance Trump faces: continuing his tariff strategy could either lead to a trade revolution or precipitate a deeper economic crisis, fundamentally altering perceptions of his leadership.

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7. Conclusion

Timestamp: [35:17 – End]

As the episode wraps up, Jonathan Swan reflects on the broader political and economic landscape, emphasizing the rarity of a single individual causing such widespread market upheaval. The potential for this crisis to redefine Trump's legacy and alter the American economic trajectory cannot be understated.

Notable Quote:

• Jonathan Swan: "So if you think about it, the whole idea that if you had a lot of money, you were somehow protected... emboldened to stand up so far has not been the case." [14:08]

Michael Barbaro closes by highlighting the growing disconnect between Trump's economic policies and the sentiments of the business community, setting the stage for what could be a pivotal moment in American economic history.

---

Final Thoughts

This episode of The Daily offers a comprehensive exploration of the immediate and far-reaching impacts of Trump's tariff policies on the global economy. Through expert analysis and firsthand accounts, listeners gain a nuanced understanding of how a single policy decision can reverberate across multiple sectors, influencing everything from stock markets to international trade relations. As the situation develops, the episode leaves audiences contemplating the delicate interplay between political will and economic stability.

Transcript

[Michael Barbaro]

This podcast is supported by Betterment. Don't just imagine a better future, start investing in one with betterment. Whether it's saving for today or building wealth for tomorrow. We help people and small businesses put their money to work. We automate to make savings simpler. We optimize to make investing smarter. We build innovative technology backed by financial experts. For anyone who's ever said, I think I can do better, so be invested in better with Betterment. Get [e-mail] investing involves risk performance not guaranteed. From the New York Times, I'm Michael Balborough. This is the daily checked your 401k today. You know you lost a lot, a lot of money. Monday was yet another dark day on Wall street as global stocks whipsawed over President Trump's universal tariffs. A bear market briefly became official in the US and tit for tat retaliation with China intensified.

[Andrew Ross Sorkin]

President Trump is doubling down now, threatening even bigger tariffs on imports from China, 50% if the country does not revoke its retaliatory tariffs on American products sold there.

[Michael Barbaro]

Now, as trillions of dollars in corporate value evaporates, Trump's support in the business world is cracking. And even Republican members of Congress are debating whether to take away Trump's power to wage a trade war. There's no escaping the fact that business leaders are really losing confidence. Bill Ackman, a billionaire who helped to fund the Trump campaign, has called for a pause in tariffs, warning of what he calls a self induced economic nuclear winter.

[Jonathan Swan]

This is Wall street screaming at the White House.

[Andrew Ross Sorkin]

If this is help, we don't want your help.

[Michael Barbaro]

Please stop now. Today, Andrew Ross Sorkin with the view from the stock market and Jonathan Swan with the view from the White house. It's Tuesday, April 8th. Andrew, thank you for coming in the studio.

[Andrew Ross Sorkin]

Thanks for having me. What a day.

[Michael Barbaro]

Another what a day day.

[Andrew Ross Sorkin]

Another what a day day.

[Michael Barbaro]

Yeah, well, when things go really haywire in the markets, we like to bring you in. We reserve you for the.

[Andrew Ross Sorkin]

For the crises.

[Michael Barbaro]

Yeah, for the crises. And I think we should start by talking about really the scale of the stock market sell offs that we have witnessed over the past few days. Just put that into some perspective.

[Andrew Ross Sorkin]

Well, look, if you just look at how much money has been lost, we're talking about trillions of dollars with a T. But in percentage terms, you can look over just even the last week, we're down 10% peak to trough from the sort of heights of where we were near the election to now, you could argue we are over 20% off, maybe more depending on how you do the math, right?

[Michael Barbaro]

And that's just worth pausing on one fifth the value of certain entire stock indexes. That's just a tremendous amount of wealth poof.

[Andrew Ross Sorkin]

It's a tremendous amount of wealth poof. In the sort of broader scheme of the universe. But to make it feel personal, let's just say you had a portfolio and you were a retiree and 20% of your wealth went poof overnight. And it went poof overnight because of a man made crisis. You know, most of the crises that I've come in to talk to you about, whether it's in 2008 or it's the pandemic or whatever, there's been something that has happened ostensibly beyond one human's control.

[Michael Barbaro]

Right.

[Andrew Ross Sorkin]

This is a panic that has been brought on by a particular person with a particular decision around, in this case, tariffs.

[Michael Barbaro]

Right. Donald Trump's decision to impose what are being described as universal tariffs have essentially crashed global stock markets.

[Andrew Ross Sorkin]

There's no other way to put it.

[Michael Barbaro]

So explain exactly why Trump tariffs equals the stock price of some of the most admired and financially seemingly well put together companies in the country.

[Andrew Ross Sorkin]

Well, let's go through a couple of specific stocks and then let's talk about why it's impacting virtually every company in America and frankly, the world. So the easiest example is to look at a company like Apple. Its stock has dropped, by the way, about 18% in the last five days alone. That is about $700 billion of value destruction. $700 billion wiped out. And you might say to yourself, why? Well, Apple's a company that manufactures a lot of its goods in a combination of places like China, increasingly in places like Vietnam and India. In fact, Apple moved a lot of its manufacturing out of China to places like Vietnam and India, in part because of pressures from the US Government over the last several years. Given the relationship between the US And China. And one of the reasons they did that was because there was always a concern that perhaps there would be tariffs in the future or national security issues.

[Michael Barbaro]

Mostly aimed at China.

[Andrew Ross Sorkin]

Mostly aimed at China. There was never an expectation that if you were manufacturing your iPhones in India or Vietnam, that all of a sudden you were going to have to pay every time you shipped those phones into the United States, something on the order of a 50% plus tariff, which is what we're talking about here.

[Michael Barbaro]

That was your Apple phone ringing.

[Andrew Ross Sorkin]

That was my Apple phone, probably built in China ringing, which would be tariffed if I bought a new one tomorrow. And so all of a sudden, if you're Apple, you are either going to have to do one of two things. Either you're going to have to charge the American consumer ostensibly 50% more for the phone than you did before, or you're going to have to eat some of that cost, which is going to ultimately cut into your profit and therefore cut into all sorts of other things you do. Which is to say, how are you going to think about hiring next year? What does your research and development budget look like? Are you going to advertise as much as you did last year? And by the way, if the price point for the phone is higher, are there as many people who are going to buy it? And therefore all of the economics of.

[Michael Barbaro]

Everything you do just went sideways.

[Andrew Ross Sorkin]

Just went sideways. And all of the interactions that you have with other businesses just went sideways. And so the downstream effects, not just at Apple, but everywhere, just cascade.

[Michael Barbaro]

I just want to restate this because I think it's worth putting a really fine point on how this gets back to the stock market. Apple products now hit with these tariffs. In a country where it makes this phone, if they raise the price to make up for that tariff, then consumer demand goes down. Therefore, shareholders might think this company's not worth as much. I'm going to start to sell the stock.

[Andrew Ross Sorkin]

Correct.

[Michael Barbaro]

If they eat the cost of it rather than passing it on to the consumer, then their corporate profits are hurt. Therefore, I might sell the stock because I don't think the company's worth as much as I did before these tariffs. And then you're adding to that, Andrew, the reality that the trauma that has just been inflicted on Apple stock is going to filter through the rest of corporate America to all the companies Apple touches or doesn't touch as much as it used to.

[Andrew Ross Sorkin]

And.

[Michael Barbaro]

And their profits and their shareholder sense of that company's worth. I'm making this up, but I was thinking about this as you were talking about Apple. Apple does a lot of advertising with social media companies like Instagram. I have to imagine with Meta, and therefore that stock might fall.

[Andrew Ross Sorkin]

And it is falling. And why is it falling? Not because it does business in China. In fact, Meta does no business in China. But Meta is reliant on advertising. And there are going to be a lot of companies that are going to likely scale back how much they're going to spend on advertising at places like Meta. Meta is also in the business of building data centers all over the country. They've already said they're going to invest billions of dollars to build these data centers for new AI features. Well, those data centers just Got a lot more expensive. So either they're going to have to build less, which means they're going to grow slower, or they're going to have to build the same amount, but it's going to cost them a lot more. And that's going to also eat into their profits and therefore their stock is down. Because technically you would say to yourself, well, they're worth less now.

[Michael Barbaro]

Got it. So all of this magnified by the scale of the stock market itself, helps you understand how Trump's tariffs equal trillions of dollars in lost corporate value over.

[Andrew Ross Sorkin]

The past few days across the board. And we're just talking about the most obvious examples. I'll give you less obvious examples, please. So if you're a McDonald's or you're a Starbucks doing business not just in China, but all over the world, there are now questions, demonstrable questions that they're asking themselves about whether consumers are going to buy their goods, they're gonna come into the store with the same velocity. Really.

[Michael Barbaro]

Even the kind of commodity style, low cost product of a McDonald's cheeseburger and a Starbucks medium cappuccino, even a McDonald's.

[Andrew Ross Sorkin]

Or Starbucks is starting to see the effects of it. Not just even the last week. It's actually been something that's been something they've been concerned about now for several months.

[Michael Barbaro]

They're worried about tariffs.

[Andrew Ross Sorkin]

These companies have been worried about what tariffs mean to the relationship that the United States has with the rest of the world. What does the American dream halo effect that was over all of these American brands in places like China, in places like Europe? Well, that polish is coming off because citizenry in these places are saying, we're upset with these people. We may not want to go to Starbucks, we may not want to go to a McDonald's. We want to support our own local company. In fact, I keep hearing actually that some of the big consumer brands are talking about future advertising plans that are much more local, meaning don't focus on it being an American brand. Whatever love people had for the sort of soft power of America and whatever they liked about and thought about our country and our businesses and our industry, there are more concerns about them than there used to be. Now it may right now be on the margins. But longer term, I think there are bigger questions about whether the toothpaste is now out of the tube, no matter what the tariffs ultimately turn out to be. And how do you get that toothpaste back in the tube if you can?

[Michael Barbaro]

How many business leaders that you talk to are calling up the President and saying, hey, this is not sustainable. This is really a problem for us. Look at our stock price. This is a really, really big deal. Or have they accepted that the president is deeply committed to, to a long term project of tariffs, no matter the economic suffering short term, especially to corporations, out of his long held belief that this is going to improve domestic manufacturing.

[Andrew Ross Sorkin]

I think I Talked to over two dozen CEOs over the weekend and I would tell you that virtually all of them had tried to call the President, Howard Lutnick, Peter Navarro, or somebody else in the administration across the board. They have been rushing to try to get in his ear. But I don't think that CEOs are calling him saying, Mr. President, you have made a terrible, terrible error.

[Michael Barbaro]

That's what they think.

[Andrew Ross Sorkin]

They think it's a terrible, terrible error. I don't know of a CEO who does not think it is a terrible, terrible error. Some of them like to use the phrase unforced error. However, I think that the phone call is a little different. The phone call is, Mr. President, let me tell you what's going on with my company right now. Let me tell you about all the problems that this is creating. Let me tell you about all of the employees. I was hoping to hire and be able to put out a press release and say that you were responsible for it. Help me help you, Help me help you. I think that is the way the CEO community is trying to position themselves with this president, because I think if you go straight at him publicly or privately, the phone call ends quickly.

[Michael Barbaro]

Well, there are two exceptions to what you just said over the past few days. One of them involves a billionaire investor named Bill Ackman, who throughout the presidential campaign vocally supported Donald Trump. And he, over the past 48 hours or so, comes out and says what many in his world do not. These tariffs are a big mistake.

[Andrew Ross Sorkin]

But I want to stop you for a moment because he then put out tweets this morning, effectively apologizing for some of his earlier comments about Howard Lutnick, the Commerce Secretary.

[Michael Barbaro]

I did notice that, and I think.

[Andrew Ross Sorkin]

That'S indicative of what so many senior executives are thinking about, which is, what can I say publicly, especially if I want to have access privately.

[Michael Barbaro]

Fascinating that billionaires get spooked, but they do by this president.

[Andrew Ross Sorkin]

The whole idea that if you had a lot of money, you were somehow protected, or that you would feel compelled and feel emboldened, emboldened to stand up so far has not been the case.

[Michael Barbaro]

Let's talk about the second exception, which was Elon Musk, he says over the past few days, and we should establish, not that it needs saying, that his Trump loyal bona fides are pretty much unquestioned at this point. He says, I think that we should be living in a world of zero tariffs between the United States and the European Union specifically. It's a pretty subtle but clear way of saying that this Trump universal tariff program, this is not good.

[Andrew Ross Sorkin]

There's no question that Elon Musk differs from the President on tariffs, but I think he, unlike so many of the other executives in America, feels like he has a special license to create some daylight on certain types of issues. And so I think in many ways, Elon Musk is just closer to the Scott Besants of the world who say this is a great way to negotiate with other countries to get their tariffs to go to zero.

[Michael Barbaro]

I'm glad you brought that up because I think this is an essential question. When you talk to business leaders, do they believe that what we are now in the middle of is a long term reorienting of the American economy around high tariffs, protectionism, and a project of reestablishing domestic manufacturing? Or are they of the belief that the pain that they're currently experiencing is gonna be a short term one as the President negotiates tariff deal, tariff deal, tariff deal with the eu, with China, with Thailand, et cetera? Today we saw that literally they're negotiating.

[Andrew Ross Sorkin]

With Japan in this very moment. I would tell you the majority of business leaders in is saying, you know what, I'm gonna wait this out. I'm gonna play chicken with the President. I'm gonna see what happens with the stock market. If the stock market continues to go lower, it will likely put more pressure on the President and Congress and the Senate to somehow undo these tariffs. Maybe the courts get involved and say that the President doesn't have the powers to enact these tariffs to begin with. And if that's the case, why should I be investing in manufacturing in America if they're not going to be these tariffs in six months or even two years or three years or five years from now?

[Jonathan Swan]

Right.

[Michael Barbaro]

And so what you're really saying is, as all these business leaders stew over their lost stock prices and privately negotiate with the President, they're not really interested in giving him what he wants and what he would need for, for these tariffs to do the very thing they're supposed to do, which is to bring more manufacturing back to the U.S. that's a pretty messy reality of this dynamic right now.

[Andrew Ross Sorkin]

You use the word mess in the business Community, they call this uncertainty. Uncertainty is the enemy of business. It's the enemy of investment. Nobody invests into an uncertain market, into an uncertain situation. And so you as a CEO, need to make a bet. If you think that there are tariffs here, and that's a politically popular position, even after a Trump administration, you might bring manufacturing back to the U.S. solely to avoid the tariffs. If you don't, and the pain of moving is high, you may try to play this out and see what happens.

[Michael Barbaro]

What you're describing would seem to be an incentive structure for the president to create certainty. And that certainty would seem to be, I'm determined to keep these tariffs in place. And I did notice today, we're talking on Monday that when there was a brief moment where someone posited that there might be a pause, these might be, they shut it down. They said, no, this is for real, this is for keeps.

[Andrew Ross Sorkin]

Because from a negotiating position, and the president talks about this in his book the Art of the Deal, this is what they describe as anchoring. It's called an anchoring technique, which is to say that you state your position and you hold your position, and the moment you break from that position, it becomes a lot harder. And so you're 100% right. The second that they start announcing that they are taking a pause or that they're willing to do a deal at a lesser number or whatever it is.

[Michael Barbaro]

They'Ve undermined their own case.

[Andrew Ross Sorkin]

They've undermined their own case. The business community has a phrase that they've been using all weekend, which is, what is the off ramp? Which suggests that there is one and there might not be an off ramp.

[Michael Barbaro]

After the break, White House correspondent Jonathan Swan on how President Trump himself is seeing this moment. We'll be right back.

[Susan Lee]

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[Michael Barbaro]

Jonathan our colleague Andrew Ross Sorkin, who has been on the phone day in, day out with the country's CEOs, just finished explaining how privately they all blame Trump for the crash of the stock market over the past few days. And in their minds, this whole program of universal tariffs doesn't really make any sense and is not incentivizing them to do the thing that Trump wants them to do, which is invest long term in domestic manufacturing, because they're not certain these tariffs are gonna last. And meanwhile, their stock prices are down so much that they don't wanna do much of anything. How is the President viewing this growing perception of him as basically the steward of what the business community sees as something of an economic catastrophe?

[Jonathan Swan]

Well, it's actually a hard question to answer because as a reporter, all you can go by is what he's saying privately to people. And Trump, in these moments of crisis, doesn't actually always articulate what he's really thinking. So what he's been saying when people call him, as happened over the weekend, I've spoken to a few people who spoke to him privately over the weekend, is in these conversations, he's boasting, he's saying, everyone's calling me, they're all kissing my ass, they all want to do deals, they're begging me. You know, he's in that kind of a mode to do tariff deals. Yes, because I put out these tariffs, everyone's coming to beg, which is a position he loves to be in. Now, that leads you to a second question which is, okay, so is the goal then to do a whole series of deals that will then actually maybe end up creating a freer trading market? Well, then, you know, you ask that question of people around him and they say, well, no, not really. He might do some deals. But actually, no, he's really quite set on this idea of eliminating trade deficits and reshoring manufacturing and building things here in America. So you have these two things running into each other. One problem that some of his advisers have, I would say most of his advisers have, if they're being honest, is get criticized a lot for, well, your messaging is so all over the place. It's like, yeah, no kidding. Because the man, yeah, from one minute to the other, it's like, you know, he's in deal making mode and then he's in, no, this is an economic revolution and you need to hang tough. You're getting these competing Messages. I will say it's not just reporters who've been surprise. It's not just pundits that have been surprised or his donors, but some of his advisors, I think were still of the mindset that this would be term one Trump and term one Trump talked a really big game on tariffs, but actually when the market started to wobble, he backed off. And he was much right.

[Michael Barbaro]

The stock market operated as a check on him in the first term you've.

[Jonathan Swan]

Talked about in the past and it really isn't right now. And I think that's freaked a lot of people out because they had a certain set of assumptions about Donald Trump and those assumptions are now being defied.

[Michael Barbaro]

Can you explain why the stock market does not operate any longer as a check against the President? Because it's very hard to imagine a businessman who prides himself in having achieved the confidence of so many business leaders just shrugging off trillions of dollars being lost in just a handful of days in the stock market because of something he did and only because of something he did.

[Jonathan Swan]

There's like a few different theories. One is he's been talking about tariffs for 40 years, right. And in his first term he had to run for reelection. I remember talking to some of his economic aides in the first term and people on the Hill and Trump would say to them, don't worry guys, year five will tackle the debt, but we can't do anything with the debt before year five because you know, he's got to run for reelection. Didn't want to do anything to upset things. He's not running for reelection anymore. So there is a theory that, well, he feels somewhat liberated by that and he can do what he thinks is the right thing to do and move forward and deal with the consequences. I think a secondary theory which is empirically true is he doesn't have as many advisors around him who are making strong arguments to the contrary. Right. In term one, he had Gary Cohn, Steven Mnuchin, really some very anti tariff figures around him on his economic team. And you don't have the same dynamic here. There's not people in the room arguing staunchly against tariffs full stop, as there were in the first term. I think the third one is even before he ran for president, other people always end up picking up the bill for whatever he does. Like he's never actually had to absorb and bear the consequences of his actions. And I think that's on steroids now. Like if you just think about it like not only did he get through January 6, he managed to rebrand January 6 for much of the conservative movement. He got indicted in four jurisdictions, he was criminally convicted, and then he became the president of the United States again. So if you think about the sort of dynamic we're all aware of, which is when famous people in business or politics feel like all the naysayers have told them this thing and they were all wrong and I was right, Trump might be the most extreme example we've ever seen of that, of situations where every smarty pants in the world says, you're insane, you're wrong, and Trump in his mind says, no, actually, this is reality and I'm going to bend you all to my will. And I think we're now seeing the most extreme experiment of that impulse with the economy and the stock market as the potential collateral.

[Michael Barbaro]

Well, let's talk about what it might look like in the coming weeks and months for him to keep telling what he sees as all the smarty pants, that they're wrong and become deeply entrenched in his commitment to these tariffs. Because we're starting to see some evidence. And admittedly it's small, but it's pretty meaningful given the track record so far in this presidency of elements of his coalition starting to crack a little bit over tariffs. And it began in the business community. We just talked to Andrew Ross Sorkin about this with Bill Ackman coming out and saying these tariffs are a big mistake. As Andrew said, Bill Ackman then kind of rolled it back and Elon Musk coming out and saying, I don't know about these tariffs. I think we should be living in a world of zero tariffs. That does seem meaningful, right? That those people are saying this is a problem out loud.

[Jonathan Swan]

Yeah. I think what's even more meaningful is in my memory until the last month or so, there's never been a time in the last decade where Donald Trump has been underwater in terms of public perception of his handling of the economy. So, like, one of the reasons why his approval rating is so stubbornly stable is because people have priced everything in with Trump pretty much. You know, like, oh, I found out there's a new woman who's accused him of something. It's not like that changes their perception of Donald Trump, but the ones one thing he's always had to his advantage is he is still seen, has been historically seen by a majority of Americans as a successful businessman and someone who can be trusted to handle the economy.

[Michael Barbaro]

Right.

[Jonathan Swan]

That is changing. That is changing in a small way, but it's meaningful. And I think that is the biggest risk that he faces. You know, I was talking to someone over the weekend about this and they made the point to me that if this becomes a full blown economic crisis, we will have had three major economic crises in the last 20 years. The global financial crisis, Covid, and potentially this. But of the three of them, you almost couldn't conceive of a crisis that is more directly attributable to one person. Right.

[Michael Barbaro]

As Andrew just told us. Yeah.

[Jonathan Swan]

The political risk here is, I think, quite profound because it is the one issue that actually he's been really, really strong on. And this could actually damage perceptions of him.

[Michael Barbaro]

And that's saying something. The possibility of a business community revolt against this so far remains pretty low. But there's growing evidence of something approaching a mini rebellion of Congressional Republicans against these tariffs. And I wonder if you can just talk briefly about that and where you think it might be headed. It feels connected to that polling you just described about how uneasy many Americans are about these tariffs.

[Jonathan Swan]

I think there's a couple things going on here. One is, privately, you'd be hard pressed to find a single Republican member of Congress who isn't extremely anxious about this. And I've talked to a number of them over the last 72 hours. That's a different question from how many are willing to actually step out and publicly defy the President? That's a separate issue from an even more extreme scenario, which is enough Republicans, which would be 2/3 of congressional Republicans, to override a presidential veto and push legislation that would restrain his tariff powers. That it seems to me at this point almost inconceivable. You'd have to.

[Michael Barbaro]

But seven or eight of them have agreed to co sponsor such legislation. Right.

[Jonathan Swan]

Okay.

[Michael Barbaro]

I guess you're about to say to me, sure, Michael, you need 60.

[Jonathan Swan]

You need 67. I don't see it right now. And then the House, it has to pass the House as well, and Mike Johnson has to decide to bring it up for a vote. A lot of things have to happen, and I just don't have any sense that this is going to be a Congress that will step out and defy this present. Things would have to get, I think, still substantially worse for that to happen. It's not impossible, but I think it's very unlikely.

[Michael Barbaro]

Well, help me understand the thinking of the Trump administration when it comes to this seemingly entrenched position they're in, that they can inflict a lot of pain on the stock market and on people's 401ks and not have it come full circle. In the form of voters calling members of Congress and saying, I don't like this, do something about it, and them responding. The only way I've been able to make sense of it so far is in what the Treasury Secretary, Scott Bessen, said a couple of days ago, look.

[Andrew Ross Sorkin]

I'm not happy with what's going on in the market today.

[Michael Barbaro]

He went on Tucker Carlson's show, but.

[Andrew Ross Sorkin]

The top 10% of Americans own 88% of the stock market. The next 40% owns 12% of the stock market. The bottom 50 has debt, they have credit card bills, they rent their homes, they have auto loans, and we've got to give them some relief.

[Michael Barbaro]

He talked about how, in his mind, the consequences of these tariffs so far are really only on the investor class. The argument that Bessen seems to be making is that Trump's working class supporters are insulated from the initial pain of these tariffs. Is that the thinking so far?

[Jonathan Swan]

That's the best he can say publicly. But privately, most people on Trump's team understand that this is a very precarious situation and it can spiral out of control. And, and it's not for nothing that different investment banks are now altering their forecasts about recession. So they understand that this can spill over into the real economy pretty quickly and pretty profoundly. They're doing their best to contain the damage and to reassure people. I mean, you saw Scott Besant today come out with a whole lot of tweets about potential deal with Japan saying, you know, the president has authorized me to create a new golden age of trade with Japan and 50 countries have come looking for deals. These are the sorts of messages that they're trying to reassure the markets that there is actually a method to this and a potential off ramp from an escalating trade war.

[Michael Barbaro]

But the problem, that's an important phrase you use, though. Off ramp. That's what Andrew Sorkin said everyone in corporate America was looking for. But if they get that off ramp, it means that Trump was never serious about the tariffs being a solution to reestablishing domestic manufacturing.

[Jonathan Swan]

Right. I still, for one, you know, having tried to cover this, don't have a sense at all that Trump is looking for an off ramp. So I think it's what a number of his advisors are hoping that he goes for. But again, this is not clear to me at all that that's where he's going to end up.

[Michael Barbaro]

So to add to what Andrew said, the business world wants an off ramp. Now, you say many of Trump's advisors, even his economic advisors, wish there were an off ramp. There just seems to be one problem, which is that Trump himself may not want an off ramp. He may be deeply committed to this as a long term economic vision for the country.

[Jonathan Swan]

Yeah. And if you take him at his word, which is that he thinks this is necessary and that the US Economy needs this kind of quote unquote medicine, the patient is very sick and it needs this medicine. And it's going to be rocky a little bit. But at the end of the tunnel is the rainbow. He's not saying any different privately than he's saying publicly. So you have to conclude that it's something that he's serious about. And that business community that you speak of that Andrew was talking about, like, I've had innumerable conversations over the last three years with people in the business community and their consultants who sort of glibly and knowingly use cliches like you've got to take Trump seriously, not literally. And also, it's all just garbage. It's like, at this point, what are you even talking about? I understand why on this issue people were talking like that because all the evidence you had was what he did in his first term and it was much narrower. But at this point, you know, I think people are waking up to the idea that maybe we also need to take him quite literally with much of what he says.

[Michael Barbaro]

And quite literally on tariffs.

[Jonathan Swan]

So if there's ever a subject to take Donald Trump literally about, it's tariffs.

[Michael Barbaro]

Well, Jonathan, thank you very much.

[Jonathan Swan]

Thank you.

[Michael Barbaro]

We'll be right back. If you find yourself bewildered by this moment where there's so much reason for despair and so much reason to hope all at the same time, let me say I hear you. I'm Ezra Klein from New York Times Opinion, host of the Ezra Klein Show. And for me, the best way to beat back that bewildered feeling is to talk it out with a piece. People who have ideas and frameworks for making sense of it, there is going to be plenty to talk about. You can find the Ezra Klein show wherever you get your podcasts. Here's what else you need to know. Day we're having direct talks with Iran and they've started. It'll go on Saturday. We have a very big meeting and we'll see what can happen. On Monday, President Trump said that the United States would hold negotiations with Iran beginning this weekend in a last ditch attempt to stop Iran's nuclear program. The talks are a turnaround for Trump, who pulled out of the last nuclear deal with Iran in 2018. But Iran is moving closer than ever to a workable nuclear weapon, a prospect that neither the United States nor Israel say they can tolerate and might take military action to avoid.

[Andrew Ross Sorkin]

And I think everybody agrees that doing.

[Michael Barbaro]

A deal would be preferable to doing the obvious. And the obvious is not something that I want to be involved with or frankly, that Israel wants to be involved with if they can avoid it. So we're going to see if we can avoid it. Today's Episode was produced by Shannon Lin and Jessica Chung. It was edited by Liz O. Balin and Lisa Chow, contains research help from Susan Lee, original Music from Pat McCusker and Alicia Waitoo, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsberg, of which journey. That's it for the Daily I'm Michael Barbaro. See you tomorrow. This podcast is supported by 20th Century Studios. The Amateur Critics rave. The Amateur stands right up there with Bourne as one of the most exciting spy thrillers in many years. It's a tense, unpredictable ride that constantly finds new and inventive ways to up the stakes. Starring Academy Award winner Rami Malek and Academy Award nominee Laurence Fishburne. The amateur rated PG13. Only in theaters and IMAX this Friday. Get tickets now.