The Trump Tariffs Poised to Remake Global Trade

Summary

The Daily: "The Trump Tariffs Poised to Remake Global Trade"

Episode Details:

• Title: The Trump Tariffs Poised to Remake Global Trade
• Release Date: April 3, 2025
• Host: Rachel Abrams
• Guest: Ana Swanson, New York Times Correspondent
• Co-host: Tracy Mumford

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Introduction

On a historic day for global trade, President Donald Trump announced a sweeping new tariff plan aimed at restructuring the United States' position in the global trading system. Hosted by Rachel Abrams, this episode of The Daily delves into the implications of these tariffs, featuring insights from Ana Swanson and Tracy Mumford.

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President Trump's Tariff Announcement

Timestamp [00:34] – [03:13]

Rachel Abrams opens the episode by highlighting the significance of President Trump's recent tariff announcement against multiple countries, marking a pivotal shift in U.S. trade policy. Tracy Mumford provides context, explaining that Trump’s administration has already imposed tariffs on major trading partners such as Canada, Mexico, and China, targeting industries like automobiles, steel, and aluminum.

At the Rose Garden, President Trump declared, “[04:03] 'It's going to be Liberation Day in America... one of the most important days in the history of our country.'” His speech emphasized a departure from the existing global trading framework, promising to prioritize American workers and rectify what he perceives as decades of unfair trade practices.

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Details of the New Tariff Measures

Timestamp [04:10] – [08:30]

Tracy Mumford outlines the specifics of Trump's new tariff strategy, which includes:

1. Universal Baseline Tariff:

   • 10% tariff applied broadly to nearly all trading partners, excluding Canada and Mexico.
   • Aimed at raising government revenue and addressing the trade deficit.

2. Reciprocal Tariffs:

   • Additional tariffs targeting countries deemed "bad actors."
   • Examples include an additional 34% tariff on Chinese goods (totaling 54% when combined with existing tariffs), 20% on the European Union, and 24% on Japan.

Mumford explains, “[05:18] 'He's sort of like, well, you have been unfair to us, so this is how we are going to get back at you.'” These measures are designed both as revenue generators and as negotiation tools to push other nations towards more favorable trade practices with the U.S.

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Rationale and Economic Impact

Timestamp [06:43] – [16:34]

Rachel Abrams and Tracy Mumford discuss the administration's objectives behind the tariffs:

• Reverse the Trade Deficit: By making imports more expensive, the U.S. aims to reduce its trade imbalance.
• Reinvigorate Manufacturing: Encouraging factories to bring production back to the United States.
• Generate Government Revenue: Utilizing tariffs as a source of income which could fund other initiatives like tax cuts.

However, the episode highlights a stark contrast between the administration's optimistic projections and the concerns raised by economists. Mumford notes, “[13:30] 'Economists just see a lot of price increases from this, and then from that flows slower economic growth, potential unemployment.'” The anticipated outcome includes higher consumer prices, increased production costs for manufacturers, and the potential for job losses in sectors dependent on international trade.

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Global Reactions and Retaliation

Timestamp [18:52] – [19:41]

The episode explores the immediate and anticipated responses from the international community. While the U.S. has excluded Canada and Mexico from the universal tariff, other countries have signaled strong opposition. Mumford states, “[19:00] 'A lot of them have threatened to retaliate.'”

Potential retaliation includes:

• Targeted Tariffs on U.S. Goods: Especially agricultural products from American states supportive of Trump.
• Impact on American Exporters: Increased barriers could significantly harm U.S. businesses reliant on foreign markets.

This reciprocal action underscores the fragile state of international trade relations, suggesting that the era of free trade may be drawing to a close.

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Conclusion: A New Global Trade Order

Timestamp [17:13] – [19:56]

Rachel Abrams and Tracy Mumford conclude by framing Trump’s tariff strategy as the foundation of a "new world order" in trade. This approach dismantles the post-World War II trading system built on negotiation and cooperation, replacing it with a more unilateral and protectionist model.

Mumford reflects, “[17:40] 'He has scrapped that old system that was built more on negotiation and cooperation with other countries. He's replacing it with basically a system of his own devising...'” This paradigm shift aims to place American interests at the forefront, potentially at the expense of long-standing alliances and global economic stability.

The episode underscores the profound and lasting impact of Trump’s tariff policies, positioning them as a significant turning point in global trade dynamics.

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Notable Quotes

• President Trump [02:34]: "For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike."
• Tracy Mumford [05:19]: "Exactly." (In response to defining "unfair" trade practices)
• President Trump [03:43]: "It's going to be Liberation Day in America... one of the most important days in the history of our country."
• Tracy Mumford [13:30]: "Economists just see a lot of price increases from this, and then from that flows slower economic growth, potential unemployment."

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Implications for the Future

The implementation of these tariffs marks a significant shift in U.S. economic policy with far-reaching consequences. While the administration touts benefits such as job creation and economic revitalization, the potential for increased consumer costs and strained international relationships presents substantial challenges.

As other nations prepare to retaliate, the global trade landscape is poised for transformative changes, potentially heralding the end of an era characterized by free trade and collaborative economic policies.

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This comprehensive analysis provides listeners with an in-depth understanding of the Trump administration's tariff strategy, its motivations, and the potential repercussions on both the U.S. and the global economy.

Transcript

[Tracy Mumford]

This podcast is supported by Betterment.

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[Rachel Abrams]

From the New York Times, I'm Rachel Abrams. This is the Daily. In a history making day of tariffs against dozens of countries, President Trump ended one era of global trade and began a new one. Today, my colleague Ana Swanson on how the world's economy is being upended and who will be affected Most. It's Thursday, April 3rd. Hi Ana.

[Tracy Mumford]

Hey, how are you?

[Rachel Abrams]

I'm good. I'm really curious what your day has been like.

[Tracy Mumford]

Well, it's been exciting. Liberation Day.

[Rachel Abrams]

That's right.

[Tracy Mumford]

We're here at 7:52 at night. Been pretty full day.

[Rachel Abrams]

So Ana, obviously today has been incredibly busy, but really the news on the tariffs over the last few months has been totally head spinning and frankly kind of hard to follow. And we're speaking to you shortly after President Trump has come out to the Rose Garden and announced this expansive new plan. We all watched it here at the Daily and there's a lot to get into. But I just wanna start off with, can you walk us up to this moment?

[Tracy Mumford]

Yeah. So President Trump came into office promising to reorder the global trading system for the United States. And in the last few weeks and months, we've really seen him do that. He has announced sweeping tariffs on some of the country's biggest trading partners. On Canada, on Mexico, on China. He's targeted different industries like automobiles and steel and aluminum. And then today he was going to come out with what he has described as his biggest measure yet. Yet.

[Donald Trump]

Thank you very much. Thank you.

[Tracy Mumford]

So at 4pm, Trump came out to the Rose Garden and he gave a speech.

[Donald Trump]

For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike.

[Tracy Mumford]

He talked about how America had been cheated for decades.

[Donald Trump]

Our country and its taxpayers have been ripped off for more than 50 years. But it is not going to happen anymore. It's not going to happen how now.

[Tracy Mumford]

We'Re finally going to put the American worker first and said that the global trading system hadn't worked for the United States and needed to be changed in.

[Donald Trump]

A few moments, I will sign a historic executive order.

[Tracy Mumford]

He announced two big types of tariffs. First, a universal tariff that will apply across the board to almost all trading partners, and then bigger reciprocal tariffs that go on top of that for countries that are bad actors.

[Donald Trump]

In his eyes, reciprocal, that means they do it to us and we do it to them. Very simple. Can't get any simpler than that.

[Tracy Mumford]

And the measures that he's announced were much bigger than many people were expecting.

[Donald Trump]

It's going to be Liberation Day in America, and it's going to be a day that hopefully you're going to look back in years to come and you're going to say, you know, he was right. This has turned out to be one of the most important days in the history of our country. God bless you and God bless America. Thank you, everybody. Thank you very much.

[Rachel Abrams]

So let's dig into those measures for a second that he announced. Can you just explain them a bit more?

[Tracy Mumford]

Yeah. So first, the President is imposing what he's calling a universal baseline tariff. And so this goes into effect on basically all trading partners, except for Canada and Mexico. It's a 10% tariff that applies across the board.

[Rachel Abrams]

And to be clear, that universal 10% tariff that you mentioned, that's going to be applied to some countries where there is currently no tariff at all, including some of our allies, is that right?

[Tracy Mumford]

Yeah, that's right. And then on top of that, there are additional tariffs on dozens of other countries in return for what the President is calling their unfair trade and economic practices against the United States.

[Rachel Abrams]

And by unfair, he means.

[Tracy Mumford]

So by that, he means the tariffs that other countries are charging on American products, but also other barriers that they have to US Imports, other regulations that might make it harder for US Businesses or farmers to sell their products in those countries.

[Rachel Abrams]

So in other words, he's sort of like, well, you have been unfair to us, so this is how we are going to get back at you.

[Tracy Mumford]

Exactly.

[Rachel Abrams]

So during the speech, he held up this poster with kind of a big chart on it that tried to break down some of these numbers, because there were a lot of countries a lot of numbers. And the chart was supposed to help explain the calculations his administration made and how they came to it. Can you walk us through that a little bit?

[Tracy Mumford]

So when he held up that chart, we immediately started taking pictures of it and, you know, sharing it around, because the numbers were a mystery to everybody up until he walked into the rose Garden. And some of the numbers are pretty big. Big. So the chart said, for example, that the US would impose an additional 34% tariff on Chinese goods that comes on top of a 20% tariff that the president has imposed on China in recent months.

[Rachel Abrams]

Just to be clear, we're Talking about a 54% tariff on Chinese goods. It sounds astronomical. That is a very large number.

[Tracy Mumford]

Right. And these big tariffs don't just apply to countries like China. They apply to. To some of our allies, too. So there's also an additional 20% tariff that'll be charged on imports from the European union and a 24% tariff that applies to goods from Japan.

[Rachel Abrams]

Ana, earlier you said that these were much bigger tariffs than anybody had been expecting. Can you just explain the rationale behind some of them and like what Trump was hoping to achieve with some of these more extensive measures?

[Tracy Mumford]

So the president has talked about having a lot of goals that he wants to accomplish with tariffs. He wants to reverse the trade deficit. He wants to bring manufacturing back to the United States. He wants to raise revenue. So before today, there was a question about what exactly he would do with these tariffs, what he would try to accomplish with them. In the lead up to this announcement, we had reported that there were two camps in the White House. And so one was interested in this baseline tariff, this broad tariff that would apply to a lot of imports, and essentially, as imports came into the country, would raise a lot of revenue for the government. And that revenue could be used for other purposes, like funding tax cuts. And then there was another camp that favored reciprocal tariffs. So these are tariffs that would be higher or lower based on other countries trading practices, and which would really be used as a negotiating tactic to try to get those countries to, you know, lower the trade barriers that they have on the United States, lower their tariffs with the goal of having more trade and having more U.S. exports. And so what Trump ended up announcing today was essentially a version of both. So he decided to do this baseline tariff that, you know, will apply broadly to all imports, will raise revenue for the government, he believes will also help to reverse the trade deficit and then higher reciprocal tariffs that are really more directed at what he calls unfair behavior by other countries against the United States.

[Rachel Abrams]

So it sounds like from your description that the 10% is kind of here to stay, whereas the other one is more of a negotiating tool. And we might see that one kind of fluctuate.

[Tracy Mumford]

Yeah, the White House said in a call today that they weren't in a hurry to negotiate with other countries and that though some countries had dropped their tariff rates in the last 24 hours, they should have done that decades ago. But in the executive order laying out these tariffs that Trump signed today. It does say that if countries either reduce those trade barriers or the US Trade deficit with them drops, then those tariffs could come down.

[Rachel Abrams]

Can we just zoom out for a second? Because I kind of want to understand how the administration went about targeting these specific countries this way to begin with. Some countries are obviously being hit harder than others.

[Tracy Mumford]

So the president said today in the Rose Garden that these numbers were calculated based on tariffs and other trade practices that these countries use against the United States. But actually, when you look at the number, it seems like it's a simple calculation that's based on the size of the trade deficit that the United States runs with each of these countries. So essentially, countries that have bigger trade deficits get hit with bigger tariff numbers. But it's also notable who is left out of the tariffs today. The tariffs don't apply to Canada and Mexico.

[Rachel Abrams]

Can you just explain that? Like, why were Canada and Mexico left out? Especially given the fact that I feel like we've heard so much from the administration just kind of railing against them and threatening tariffs over the past few weeks.

[Tracy Mumford]

So we don't know why yet, really, but it was a big surprise. And, I mean, I think the reason has to be that Canada and Mexico are such major trading partners for the United States. They've already been hit by fairly big tariffs by Trump in the last month that had put pressure on a lot of businesses that are making products in North America. And they also have a trade agreement with the United States that President Trump himself negotiated in his first administration. And so goods that have been moving under that trade agreement have been exempted so far from the other tariffs that President Trump already hit Canada and Mexico with. Now, that doesn't mean that Canada and Mexico are getting off easy. President Trump has also announced auto tariffs that will go into effect on Thursday, and those will hit Canada and Mexico quite hard because much of the supply chain for the auto industry is based in those countries and is imported into the United States. And the president has tried to kind of wave away those concerns about those tariffs, saying they're going to benefit workers, they're going to bring auto manufacturing and auto jobs back into the United States and benefit unions like the uaw, the auto workers.

[Rachel Abrams]

Right. He even brought one of those UAW guys up on stage today during his speech. Like, he's really trying to emphasize that these policies are helping everyday Americans.

[Tracy Mumford]

And the UAW has been one of the groups that actually has been very vocally in support of the tariffs, saying that they could reverse this disastrous trade policy and benefit workers. But a lot of other companies and unions and trade groups have expressed a lot more skepticism about how these tariffs are going to pan out.

[Rachel Abrams]

We'll be right back.

[Brian Rosenthal]

Over 70 million workers in the United States are stars. That's workers skilled through alternative routes rather than a bachelor's degree. Stars have gained valuable skills through alternative routes like military service, on the job experience and more, but are held back by the paper ceiling because they don't have a bachelor's degree. It's time for a skills first hiring approach. Help tear the paper ceiling and create opportunity for millions of skilled workers. Learn more@tearthepaper ceiling.org brought to you by opportunityatwork and the Ad Council.

[Tracy Mumford]

Hey, I'm Tracy Mumford. You can join me every weekday morning for the headlines from the New York Times.

[Rachel Abrams]

Now we're about to see a spectacle.

[Donald Trump]

That we've never seen before.

[Tracy Mumford]

It's a show that catches catches you up on the biggest news stories of the day. I'm here in Red Square. We'll put you on the ground where news is unfolding.

[Donald Trump]

I just got back from a trip out to the front line and every.

[Tracy Mumford]

Soldier and bring you the analysis and expertise you can only get from the Times newsroom.

[Betterment Ad]

I just can't emphasize enough how extraordinary this moment is.

[Tracy Mumford]

Look for the headlines wherever you get your podcasts.

[Rachel Abrams]

On. Every single time that Trump has announced or threatened tariffs since he took office, there has been a chorus of prominent, probably the most prominent economists who say this will be bad for the economy, this will raise prices, this will be bad for consumers. And here again today, President Trump was saying, no, no, these tariffs will boost jobs and they'll make America wealthy again.

[Tracy Mumford]

Yeah. So the president has a very different theory of how tariffs work than I think most economists do. The president thinks that tariffs bring factories back to the United States. That increases jobs for American workers, it pushes up wages and that's good for the economy. I think economists also think that those things happen, but they see a lot of other side effects happening from tariffs, too, that in a lot of cases can offset those positive impacts from tariffs. So you did have today economists just racing to downgrade their forecasts for the US Economy, lifting their expectations for inflation, saying that unemployment would rise as a result of this. S and P Global saying that manufacturers were going to have to pay more for their inputs, so inflationary pressure would build as a result. So economists just see a lot of price increases from this, and then from that flows slower economic growth, potential unemployment. So it's a Very different picture of how tariffs impact the economy.

[Rachel Abrams]

So if the economists are right, who is paying for all of this? Because just to emphasize here, these tariffs are enormous.

[Tracy Mumford]

So the President likes to say that foreign countries, foreign companies will pay the tariffs, but a lot of times it's the company that is bringing the product into the United States that pays. And then, then a lot of times they will pass that cost on to the consumer. So we can think about an example. Let's say Walmart is bringing a toaster in from China. When Walmart brings that toaster in, they're now going to have to pay 34% of its price in the form of an additional fee to the US Government. So does Walmart ask the toaster maker in China to eat that cost and accept less money for the toaster? Or does, does Walmart reduce its own profits or do they just jack up the price of the toaster and have the US Consumer pay more for it? A lot of times it is the American consumer, because companies tend to pass on the cost of those tariffs so that they can preserve their own profit margins and they don't have to see their own profits decline.

[Rachel Abrams]

I mean, it really feels like this is unbelievably broad. Like, is this as historic as it feels?

[Tracy Mumford]

Yeah, I think it's definitely historic. It brings tariffs to rates that we haven't seen in nearly a century. And it changes the structure of US Trade and to a certain extent, the US Economy. And it's going to be a big shock because the United States does rely on imports. Consumers rely on imports, manufacturers rely on imports. The President and his supporters argue that we might go through kind of a transition period, but in the long run, it's going to be worth it because we'll have more manufacturing in the United States and we'll restore that manufacturing.

[Rachel Abrams]

You know, we've talked a lot on the show Ana, about the reordering of the global world order, how Trump is blowing up long standing relationships with allies. And obviously we know that Trump shatters norms. That's what he did in his first term. And so I just sort of wonder, given the fact that these tariffs are unprecedented and historic in the ways that you've outlined, do these policies fit into that new reordering in some bigger way?

[Tracy Mumford]

Yeah, I definitely think that is the case. So, you know, it really seems like this is the first day of, in trade, this new world order that President Trump has been promising. And he's really throwing out the old system that the United States worked out with other countries after World War II. He seems unafraid to demolish that system because he says it's been unfair to the United States. It hasn't worked for our country. What's the harm in blowing that up, essentially? So he has scrapped that old system that was built more on negotiation and cooperation with other countries. He's replacing it with basically a system of his own devising in terms of the tariffs that we're charging on other countries. And this is really a vision of America. First we put up trade barriers. You know, maybe that will hurt our trading partners, but the United States has the biggest, most valuable market. The United States will be, you know, maybe hurt, but will be less hurt than other countries, and we will end up being on top.

[Rachel Abrams]

I mean, to that point, how are these countries responding? I mean, I know these tariffs just got announced, but do we know anything about their reaction yet?

[Tracy Mumford]

So we're still waiting to see how many other countries will respond, but a lot of them have threatened to retaliate. So we had been expecting Wednesday to be liberation day, but Thursday to be retaliation day. Other countries have been drawing up lists of American products that they could target, including farm goods, particularly products from red states where a lot of Trump supporters are located. And that could definitely hurt American exporters quite a lot.

[Rachel Abrams]

So is it fair to say that the era of free trade is over?

[Tracy Mumford]

Yeah, I mean, it's certainly sustained quite a death blow this week. And I think if you were to ask President Trump, that would be his hope.

[Rachel Abrams]

Anna, thank you so much.

[Tracy Mumford]

Thank you.

[Rachel Abrams]

We'll be right back.

[Brian Rosenthal]

Over 70 million workers in the United States are stars. That's workers skilled through alternative routes rather than a bachelor's degree. Stars have gained valuable skills through alternative routes, like military service, on the job experience, and more, but are held back by the paper ceiling because they don't have a bachelor's degree. It's time for a skills first hiring approach. Help tear the paper ceiling and create opportunity for millions of skilled workers. Learn more at tear the paper ceiling.org brought to you by OpportunityAtWork and the Ad Council.

[Ana Swanson]

I'm Brian Rosenthal. I'm an investigative reporter at the New York Times. My dad is a scientist.

[Tracy Mumford]

My career has been devoted to scientific teaching and research.

[Ana Swanson]

I remember growing up, I didn't fully understand what he was doing every day. But now that I work as an investigative journalist, I do understand.

[Rachel Abrams]

So you have to start with facts.

[Donald Trump]

From those facts, a hypothesis appears, and then you work on trying to test that hypothesis.

[Ana Swanson]

I do the same thing, obtaining documents, crunching the data, and I talk to as many people as possible to get to the bottom of the story. The New York Times does not publish until we can prove that something is true. The best scientists are able to do that deep work because they receive funding from their university or from the government. We as journalists depend on funding from subscribers. You can support that type of of work by subscribing to the New York Times.

[Rachel Abrams]

Here's what else you need to know today. On Wednesday, a federal judge dismissed sweeping corruption charges against New York City Mayor Eric Adams, a victory for the Trump administration, which had asked that the case be dropped. But the judge refused the government's request to potentially reinstate the case later, a possibility that many Democrats feared would give the White House enormous power over Adams and how he governs the city. And Election Day data from Wisconsin, where Democrats scored a major victory on Tuesday, showed that Democrats far exceeded their own expectations for turning out voters in the race for a seat on the state's Supreme Court. The outcome has fueled Democratic Party hopes that Trump's agenda is energizing their voters. Today's episode was produced by Nina Feldman, Stella Tan and Alex Stern, with help from Asta Chaturvedi. It was edited by Mark George and Chris Haxel. Contains original music by Dan Powell, Pat McCusker and Marion Lozano and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsberg of Wonder. That's it for the Daily I'm Rachel Abrams. See you tomorrow.

[Brian Rosenthal]

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