What to Expect From Trump’s New Trade Drama

Summary

The Daily: What to Expect From Trump’s New Trade Drama Release Date: July 10, 2025

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Introduction

In this episode of The Daily, hosted by Natalie Kitroeff from The New York Times, the focus is on President Donald Trump's resurgence of aggressive trade tariffs, rekindling fears of a global trade war. Joining Natalie are seasoned journalists Ana Swanson, Maggie Haberman, and Ben Castleman, who delve into the implications of Trump's latest trade maneuvers, the current economic landscape, and the potential long-term effects on both the U.S. and global economies.

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Current State of Trump's Trade Policies

Natalie Kitroeff sets the stage by recounting the timeline of Trump’s trade policies over the past 90 days. Initially, Trump unleashed a broad set of tariffs that led to significant market turmoil, including a stock market plunge and a temporary economic downturn. In response to the backlash, he paused the tariffs, allowing the market to recover and giving the illusion of a hiatus in the trade war.

However, as Ana Swanson explains at [02:41], the pause was superficial:

“It is on. Of course, they're overshadowed by what the President is threatening to put in place just in a matter of a few weeks.”

The effective average tariff rate has surged to 17.6%, the highest since 1934.

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Analysis of Recent Trade Deals

Despite the threats, only limited trade deals have been finalized. Ana Swanson highlights two significant agreements:

1. United Kingdom Framework Deal ([04:33]):

   • Focused on lowering tariffs on specific products.
   • Emphasized continued dialogue without substantial commitments.

2. Vietnam Agreement ([04:51]):

   • Lowered tariffs on certain Vietnamese products to 20%.
   • Imposed higher tariffs on products with Chinese content.
   • Lacks transparency, with no detailed public documentation available.

Maggie Haberman critiques the limited success of these deals:

“It's too early to say that this isn't working, you know, but it certainly is not the success that Trump believed it would be.” ([05:55])

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Impact on U.S. Economy and Tariff Revenue

The administration's dual objectives are to stimulate domestic manufacturing and generate revenue through tariffs.

Ben Castleman discusses the financial aspect:

“We're bringing in tariff revenue at record setting rates... it's about $50 billion of additional tariff revenue.” ([09:09])

However, this revenue is effectively paid by American importers, which translates to higher costs for businesses and consumers.

Natalie questions whether the anticipated price hikes have materialized. Ben Castleman responds:

“Overall inflation has continued to cool... Some of that is picking up, but not in a sort of a crazy way.” ([10:31])

Despite high tariffs, consumer prices haven't surged as expected, partly because companies absorbed the costs or delayed price adjustments.

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Challenges in Restoring Manufacturing

One of Trump's key goals is repatriating manufacturing jobs. Ana Swanson provides a sobering update:

“Company spending on new manufacturing facilities has kind of trended downward... we've seen a loss in manufacturing jobs.” ([13:57])

Ben Castleman adds that the unpredictable nature of tariffs hampers long-term investment decisions:

“These policies as they've actually been implemented is not likely to yield that result.” ([15:18])

Maggie Haberman echoes this sentiment, emphasizing the impracticality of reversing complex global supply chains on short notice.

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Recession Fears and Economic Sentiment

Initially, there were widespread fears that Trump's tariffs would trigger a recession. However, Ben Castleman observes that the economic impact has been less severe than anticipated:

“We have not seen this sort of big jump in consumer prices... Instead what we see is this sort of gradual impact.” ([10:27])

Despite high tariff rates, the economy remains relatively stable, with inflation cooling and consumer spending continuing. However, Maggie Haberman notes a decline in consumer confidence regarding the economy:

“...his numbers on the economy have changed. Like people have kind of soured on him in that respect.” ([20:53])

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Trump's Use of Power and Implications for Trade Negotiations

Trump's approach to trade negotiations is characterized by shifting deadlines and inconsistent policies. Maggie Haberman explains:

“...he tends to buy himself more time to jump from one lily pad to the next.” ([05:55])

This unpredictability undermines confidence among foreign leaders and businesses, making it difficult to achieve meaningful trade agreements. Additionally, Ben Castleman points out that while Trump can dictate tariff policies, he cannot control the economic outcomes:

“He can't rewrite the rules of economics... There's going to be a lot of hedging of bets.” ([27:36])

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China as a Central Focus

China remains at the heart of Trump's trade aggression. Ana Swanson confirms:

“...the subtext of a lot of these global trade negotiations has been about China.” ([23:33])

Efforts are being made to isolate China by involving other nations in trade agreements that target Chinese products, aiming to close loopholes and counteract China’s economic influence.

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Market Reactions and Future Outlook

So far, the markets have not reacted violently to the latest tariff threats, unlike the initial April reactions. Ben Castleman suggests that investors might be anticipating further delays or extensions of the tariffs:

“We're not seeing the kind of violent reaction that we saw back in April.” ([25:14])

However, concerns persist in bond markets regarding increased debt due to tariffs and related fiscal policies.

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Conclusion

The episode concludes with a consensus among the panelists that while Trump's tariff policies aim to reshape global trade and stimulate domestic manufacturing, the immediate economic impacts have been mitigated by various factors, including corporate absorption of costs and delayed price adjustments. However, the long-term effects remain uncertain, with significant challenges in achieving meaningful trade deals and rebuilding manufacturing sectors. The unpredictability of Trump's approach continues to pose risks, potentially leading to economic inefficiencies and strained international relations.

Key Takeaways:

• Tariffs are active and increasing, with the U.S. maintaining the highest average tariff rate since 1934.
• Limited trade deals have been achieved, with significant uncertainty surrounding their efficacy.
• Economic impacts so far have been muted in terms of inflation, but long-term effects on manufacturing and consumer costs remain unclear.
• Market reactions have been relatively calm, but future tariff implementations could trigger more significant economic responses.
• China remains a primary target in Trump's trade strategy, with efforts to involve other nations in counteracting Chinese economic practices.
• Trump's unpredictable policy shifts hinder confidence among foreign partners and domestic businesses, potentially leading to broader economic inefficiencies.

As the situation evolves, the next few months will be critical in determining the true impact of Trump's renewed trade policies on the U.S. and the global economy.

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This summary captures the essential discussions and insights from the episode "What to Expect From Trump’s New Trade Drama," providing a comprehensive overview for those who have not listened to the full podcast.

Transcript

[Ben Castleman]

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[Natalie Kitrowitz]

From the new York Times, I'm Natalie Kitroweff. This is the Daily after months of delaying his most extreme tariffs, President Trump is now threatening to revive the most aggressive version of his global trade war. Now, America's trading partners, investors and consumers are bracing for impact. Today I speak with three of my colleagues, Ana Swanson, Maggie Haberman, and Ben Castleman, about what we can expect and what Trump's endgame might be. It's Thursday, July 10th. Welcome to the Roundtable Economic Edition. Ana, nice to have you.

[Ana Swanson]

Thanks for having me.

[Natalie Kitrowitz]

Ben, thank you for being here in the studio.

[Ben Castleman]

Great to be here.

[Natalie Kitrowitz]

Maggie, it is always a pleasure.

[Maggie Haberman]

Natalie, it is so nice having you here, even if I'm not actually with you.

[Natalie Kitrowitz]

We wish you were here. I want to just set the table for us a little bit. 90 or so days ago, Trump instigates a global trade war on a scale that the world has never really seen before. Reciprocal tariffs on a bunch of countries. It's this seismic economic event. The US Stock market plunged. Trillions of dollars in value are wiped out in a matter of days. I honestly can't remember an economic event like this. And then because of all that fallout and the outcry, Trump presses pause on a lot of it. The stock market recovers. And then everyone gets kind of used to the idea that the trade war is on what seems like a hiatus now. It feels like to the degree that it was ever suspended, the trade war is back. He's lobbying these new threats against countries again on Wednesday. So, Ana, can you just lay out for me the current state of play?

[Ana Swanson]

Yeah. So actually this trade war was paused, but it never truly went away. The president had paused his tariffs for 90 days in April to try to encourage other countries to come to the United States and do trade deals instead of getting hit with tariffs. And in the last three months, we've seen this flurry of activity with other countries trying to get some time on the schedule of U.S. officials to negotiate these deals. But in the meantime, the president did actually go ahead with Other tariffs on cars and steel, copper, pharmaceuticals. So even though, you know, the biggest global tariffs have been paused, tariffs have been steadily rising. And right now, the overall average effective tariff rate for the United States has climbed up to 17.6%, which is actually the highest that the United States has had since 1934.

[Natalie Kitrowitz]

Wow. So it might have felt pause, but it's actually kind of on in a way that does not feel insignificant. It's real.

[Ana Swanson]

That's right. It is on. Of course, they're overshadowed by what the President is threatening to put in place just in a matter of a few weeks. He's now moved his deadline for countries to negotiate deals or face tariffs to August 1st. A lot of countries are working toward these trade deals, and we've seen two of them announced so far. Pretty limited deals, but for many, many more. The President is sending out these letters that are going out globally this week informing countries of the high tariffs that their products will be charged as of August 1st.

[Natalie Kitrowitz]

I just want to quickly ask about the deals that have come. Ana, can you just tell me, what are those? How should we be thinking about them?

[Ana Swanson]

So one that the President announced with the United Kingdom in May is really what I would call kind of a framework. So the two sides agreed to lower tariffs on some certain products, and then for a bunch of other things, they basically said, we're interested in cooperating. Let's keep talking.

[Natalie Kitrowitz]

Got it.

[Ana Swanson]

The other big announcement that we've seen was with Vietnam. Last week, the President said on his social media that he had reached an agreement with Vietnam to lower tariffs on some of their products to 20% with a higher tariff on some products that would come from China and that Vietnam would open their markets to US Products. However, nobody has since released any text of the deal or even any fact sheets spelling out what was agreed to with Vietnam. So we really don't know at this point if there is a deal, what it actually includes. The only thing we have is the President saying on his social media account.

[Natalie Kitrowitz]

So not a ton of clarity.

[Ana Swanson]

It's not a lot of clarity. It's not a lot of substance for 90 days. But again, I also don't think that's particularly surprising because doing trade deals is hard and it takes a long time. And I think, you know, the administration and the world is kind of starting to see that.

[Natalie Kitrowitz]

Maggie, it's interesting he keeps pushing this deadline back. What's going on here? What's he up to?

[Maggie Haberman]

Well, President Trump has a history of moving deadlines, as we know, both in terms of his life As a real estate developer and also from his first term in office, he tends to buy himself more time to jump from one lily pad to the next. And that's really what this is. If you look at everything with Donald Trump as an ongoing negotiation, then this makes sense and follows a logical pattern. The problem is that countries engaged in trade can't really function that way. And so what's going on here is he is buying himself more time to come up with something that he can call a win, whether that is a bunch of frameworks for trade deals, or he is trying to see whether there is some other kind of a mitigating factor he could get in terms of an announcement about a company moving production to the US and so forth. But it's a pretty broad range, Natalie, of what he would consider a win. It's too early to say that this isn't working, you know, but it certainly is not the success that Trump believed it would be.

[Natalie Kitrowitz]

I'm interested, Ben, in whether it surprises you that there have been so few deals up until this point. I mean, I understand that it sounds like the threat has not worked, but, you know, there were a lot of countries on this list that were gonna get hit by tariffs on Liberation Day, as he called it. Why didn't they come to the table? I mean, what's going on there?

[Ben Castleman]

Yeah, I mean, I think on one level, it's not surprising, Right. The idea of 90 deals in 90 days was never plausible. Right. Trade deals take years to negotiate. But I think that for a lot of these countries, you know, one, their leaders have their own domestic concerns. They don't want to be seen as caving to Trump. And look, you know, Maggie made the point a moment ago about, you know, Trump having a history of pushing out deadlines and backing down on some things. I think that has been noticed by foreign leaders. And there's a recognition that, hey, if we string this out for a while, maybe we can get out of some of this. Maybe some of this doesn't actually end up hitting us as hard, at least as being threatened.

[Maggie Haberman]

I think that is definitely true that countries have realized that they can kind of have some elastic approach here in terms of what Trump will tolerate. But there's a point that an economic expert made to me about how Trump seems to view these tariff impositions as he keeps describing them, which is, I set the level, you do. What I want is you give up the terms that I want, and otherwise you're gonna be punished. But some of these countries have seen that he doesn't necessarily abide by the deal frameworks. He says he's going to anyway. So they don't have a ton of incentives to come forward and make concessions because who knows what happens after that.

[Natalie Kitrowitz]

I just wanna step back and think for a moment here about what the point of all of this is for the Trump administration. There are two big kind of ideas behind all of this, as far as I understand it. Get manufacturing back to the United States and raise money through these additional tariffs. Where are we been on those fronts on the impacts of all of this so far? And I want to first start with the easier of these two, the raising money part. How much money has been raised? How big of a deal is it?

[Ben Castleman]

We're bringing in tariff revenue at record setting rates. You know, Scott Besant, the Treasury Secretary, referred to having collected about 100 billion in tariff revenue. That's a little misleading because we already collected tariff revenue. Right. So it's about $50 billion of additional tariff revenue, but that's real money. Okay, but it's important to remember who's paying that. Right? That's being paid by importers. Right. Which means American companies. And one way or another, that's going to end up passing through into the American economy, whether that's through the companies paying it and losing it in their profit margins or ultimately it getting passed on to consumers. So yes, it's reven the federal government, but it's revenue that you and I in some form or fashion are ultimately paying.

[Natalie Kitrowitz]

But is that true? Because I'm wondering if we've actually seen the price increases that we were warned about.

[Ben Castleman]

Yeah, I mean, so I think it's funny, right, because the President is saying, oh, tariffs are gonna bring back manufacturing jobs. So far we've been losing manufacturing jobs. Critics are saying, oh, tariffs are gonna raise prices and slow down the economy. So far prices have continued to moderate and the economy has remained relatively solid. Right. So on some level it's sort of defying all the narratives and the economy is kind of trucking along.

[Natalie Kitrowitz]

Wait, can you just pause on that for a second? Are you saying that prices haven't gone up?

[Ben Castleman]

Yeah, so it's complicated. Overall inflation has continued to cool. Right. So we have not seen this sort of big jump in consumer prices. If you zoom in and if you look at products that we're importing from China, for example, you do see some evidence that some of that is picking up, but not in a, not in a sort of a crazy way. And even though, as Ana said, we have seen higher tariffs than we've Seen historically, it's not at this sort of wild level that was being threatened back in April. And so instead what we see is this sort of gradual impact, gradual erosion that's going to take time to play out in the economy.

[Natalie Kitrowitz]

But for now, at least, even with this kind of historically high effective tariff rate, we're not seeing prices go up yet, is what you're saying. What does that mean? Like, what's going on there? Does that mean companies are largely eating the cost of the tariffs, the hundred billion dollars? Because that, that surprises me.

[Ben Castleman]

I think it has surprised a lot of people, but maybe it shouldn't have. Right. It's going to take time, even in the best of circumstances, for companies to sort of figure out how they're going to make their pricing decisions. Right. It's not like tariff hits and you immediately pass on that price. Right. That's something that takes time. And companies, because they saw this coming, rushed to buy products, to import. We saw a huge surge of imports in the first months of this year as companies rushed to bring things in before the tariffs hit. What that means is they've got a whole bunch of inventory that's sitting there that they didn't have to pay the high tariffs on. And that gives them a little bit of wiggle room to make some decisions about how they're going to. To pass on these prices or not. And then you have this uncertainty element. You've got all of these companies that are sitting here saying, I don't know what the. As Ana was saying, I don't know what the tariff is gonna be. I don't know what my material costs are gonna be. And so I think that there's a reluctance to make big decisions. There's a lot of sort of putting it on hold. And that's true on the price level, but it's also true on hiring, on investing. There's just kind of a pause in a lot of parts of the economy right now.

[Natalie Kitrowitz]

And then of course, there's the fact that when this first happened, you had some big companies start to say, we're gonna raise prices. I'm thinking of Walmart and Trump comes out and really hammers them. Maggie, I'm wondering if you think there's any chance that in addition to what Ben is saying, that there's a part of this where companies are seeing that and eating the cost because they just don't wanna piss Trump off.

[Maggie Haberman]

I think that's 100% a reality here, and I think that is where you see tariffs as a weapon that he uses Domestically, not just with countries overseas or companies that might be based elsewhere. He has shown that he is willing, Natalie, not just to publicly name and shame, which is part of what you're talking about. You know, we certainly saw him do it, say with Jeff Bezos, when some element of Amazon was listing what the impact of the tariffs would be on certain products. It wasn't across the website, but there was some aspect of it and that was undone in like an hour.

[Natalie Kitrowitz]

Ana, I want to turn now to bringing manufacturing back to the U.S. that was the stated goal of these tariffs. Right. And obviously manufacturing wasn't going to come back in three months, but do we see any signs that companies are moving in that direction, that they're at least trying to move some of their operations back to the US As a result of all the tariff pressure they're seeing?

[Ana Swanson]

So in the data so far, it seems like no, we're not seeing, you know, evidence that, for example, company spending on new factories is increasing. It looks like company spending on new manufacturing facilities has kind of trended downward in the last few months since Trump came into office. We've also seen a loss in manufacturing jobs in recent months. So the overall jobs numbers for the United States have been strong, but that's actually been buoyed a lot by health care and, you know, certain sectors actually factories are losing thousands of workers in the last few months.

[Natalie Kitrowitz]

Yeah.

[Ben Castleman]

And I think to piggyback on what Ana's saying, there's the way that these tariffs have been rolled out have really sort of undermined some of the President's stated goals on this. And I hear that when I talk to economists, but also when I talk to businesses. So if you're a business right now, if you're a manufacturer thinking like, hey, maybe I should step up my manufacturing in the US you really don't have the information you need to make that bet. You say, oh, I'm going to enjoy some protection here from these tariffs, and then they get removed a month later or they never take effect. And so I think that even to the extent that these policies might sort of theoretically work, this set of policies as they've actually been implemented is not likely to yield that result.

[Ana Swanson]

Yeah, that's a great point. And I mean, moving supply chains takes many months, can take years and billions of dollars. Right. So these are long term investments. And the President has been moving, in contrast, on kind of a daily or hourly timeline in terms of shifting the strategy.

[Maggie Haberman]

He's also been working from a framework as if it is still 1990, something you know, we are in a very different economy. A lot of what he is looking to restore is going to be it's not just that it takes time, it's that it's so impractical for some of these companies. You can take Apple as an example. To Ben's point, I'm not sure how much of this is going to materialize the way he believes it will. And I certainly know Tim Cook made that clear to him.

[Natalie Kitrowitz]

I feel like what all three of you are sort of saying is that we are just in really early days here. We don't quite have a verdict on this. And maybe it's sort of misguided to even be measuring this by short term gains. Yeah.

[Ben Castleman]

Why are we doing this episode at all, Natalie? I think what we can say with confidence right now is one, there are costs to these policies that are ultimately going to be borne by the American people in one form or another and that the benefits, whatever they might be, are not likely to be as clear as they might be if these policies were rolled out in a different way.

[Natalie Kitrowitz]

We're going to pause for a break because, Ben, not only are we doing this episode, but we're going to do a whole other half of this episode. And when we come back, we're going to talk about some of the bigger potential impacts of all of this tariff drama. We'll be right back.

[Abdi Latif Dahir]

My name is Abdi Latif Dahir. I'm the East Africa correspondent at the New York Times. Speaking to someone in their own local language opens up a level of honesty and transparency that would not be present when I speak to somebody in English, when I come into someone's home and greet them in Somali or Swahili, you know, like Habari or Habari Zenu. It brings you into the room. I understand the culture you're coming from, and I'm speaking to you in the language that you understand, that level of familiarity. I use that to really get deeper into what's going on. What I'm trying to do is help our readers understand what's happening here in East Africa and see how it plays a role in the bigger picture. New York Times subscribers keep our journalists reporting from across the map to help you understand the issues shaping our world. If you would like to subscribe, you could do [e-mail] subscribe.

[Natalie Kitrowitz]

Ben I have to ask about one of the big fears that has been baked into all of this from the beginning, which is a recession, the idea that companies could pull back on hiring and expanding, that people would lose jobs the economy would shrink. That does not seem to have happened. We've seen good job numbers month after month. How should we think about the economy right now? Ben?

[Ben Castleman]

Yeah, So I think that if you, again, go back to that April 2nd period, there were a lot of Wall street forecasters, economists, who were warning of a real risk of an imminent recession as a result of that. But then Trump pulled back. And so what we're seeing now instead are predictions that rather than that being this one acute thing that looks like a big recession, that it's more kind of a slow drip. Somebody compared it to a Brexit scenario. Britain leaves the European Union, and instead of there being sort of some immediate recession, their economy is just weaker for an extended period of time.

[Natalie Kitrowitz]

Yeah, yeah. The sky didn't fall in the case of Brexit either. You know, like we're not seeing some major meteor hit.

[Ben Castleman]

Yeah. But we know from other evidence, right, that Americans are not feeling good about the economy. And we saw a real decline in all measures of consumer confidence early in Trump's term. What's interesting, right, is we went through the same thing under Biden, right, when voters didn't feel good about the economy, but they kept spending money and the economy basically looked okay. And here we are sort of again in the same realm of voters don't feel good, but they're continuing to spend. And we don't see that much evidence of economic damage.

[Natalie Kitrowitz]

Maggie, do you get the sense that there's any hesitancy in the White House right now about restarting these tariffs? You know, like that pushing for these broader tariffs now might have a negative impact on the economy when you have all of these vulnerabilities, potentially with voters around this, you know, at a moment when they don't feel that good about it. Yeah.

[Maggie Haberman]

People keep saying to me, Trump's poll numbers are sliding and it's really choose your own adventure. His numbers are actually pretty stable. They've gone down a little bit, certainly on how the voters view him in terms of the economy. That has changed on that specific question, and that's a warning sign for him. Where his advisors get concerned is that he has turned talking about tariffs into his entire public facing economic discussion. And that does risk having voters start to get concerned about what it means for them and maybe make that association of. This is why Mike Paycheck is not going as far as it was. But Trump has proven remarkably durable at being able to keep saying something that isn't necessarily the case and having his voters believe it.

[Natalie Kitrowitz]

I just wanna make sure I'm getting this, Maggie. You're saying his numbers on the economy have changed. Like people have kind of soured on him in that respect.

[Maggie Haberman]

Yeah. If you look at the cross tabs, Natalie, on Trump, I'm paraphrasing on what the exact question is because every pollster asks it a little bit differently. But how people feel about his handling of the economy, it used to really be his calling card. It was his strength over Hillary Clinton. In 2016, it was certainly his strength over both Joe Biden and then Kamala Harri that is now underwater, that specific metric. There are warning signs that voters are not happy. It's just not that they are necessarily saying, and therefore I wish Trump wasn't president or and therefore I don't want Republicans to be in power. One thing to remember about this president, Natalie, is he has to be fair to him. Been saying that NAFTA was a terrible deal for 30 years, but he, he didn't discard NAFTA. He redid a version of it. Right. I mean, like, we're not looking at like an entirely wholesale change in trade.

[Natalie Kitrowitz]

What you just said, Maggie, is sort of that while Trump talks about kind of reimagining the global system of trade in these kind of big maximalist terms, at the end of the day, what we've seen in his record is that he does a deal, he is making changes, but he's not upending the whole system. No.

[Maggie Haberman]

Well, he's upending the whole system in the sense that there's a lot of chaos and unpredictability. Right, sure. And people don't feel like they can know what's happening day to day. But inconsistency is not an entirely changed dynamic. And this is not some whole new economy. He is a developer who, yes, he has built some properties like Trump Tower, but often what he does is he takes over somebody else's partly built property or a property that didn't work, and then changes them into a Trump property. And there's some aspect of that. Now, what he is doing, we've been.

[Natalie Kitrowitz]

Talking about a situation in which Trump is not building something from scratch. He's not remaking the system out of whole cloth. You know, companies are maybe betting on that. I'm wondering if China, if the relationship with China is the exception. You know, it's been the stated priority of this trade war for a long time now. Ana, is that still the case? Does Trump still have his eyes trained on China? Is he still wanting to go big, at least in his aggression trade wise, with that country?

[Ana Swanson]

You know, it's true that the subtext of a lot of these global trade negotiations has been about China. So with Vietnam, part of what the President said had been agreed to is that the. The Vietnamese will have lower tariffs on products that they send, but then higher tariffs on products that have a certain amount of Chinese content in them. But it's really not clear how the United States is going to enforce that. But we know that's something that they've been discussing with other nations in Asia. Malaysia, for example, it's something the Trump team has brought up with Europe and Mexico.

[Natalie Kitrowitz]

Right. That does seem directed at isolating China. Right?

[Ana Swanson]

Yeah, yeah. No, I mean, there's definitely kind of global effort to look at Chinese products that are getting into the United States through other countries and finding these loopholes into the United States. So that activity has been going on since the first Trump administration when we had really high tariffs on China. And there definitely is part of the negotiations right now that aims to counter that.

[Natalie Kitrowitz]

I want to turn to the markets here because we saw that after Liberation Day, the first kind of April tariff day, the market seemed to play a pretty outsized role in moving Trump to scale back, to put those tariffs on pause. Do you think that the market's going to react to this new chapter of the trade war the way that it did last time? Do we have any early signs of that? And if not, why?

[Ben Castleman]

I mean, so far they certainly have not. And it seems that, for the most part, investors are betting that this is a bluff again and that there will be further extensions. Now, that raises the risk that if these actually do take effect, and it looks like they're gonna stick, that then the markets will react in a much larger way. There are hints of concerns among bond buyers that are related to not just to tariffs now, but also to this big, beautiful bill and the trillions of dollars that it added to the debt. I think that's where the concerns are now in the bond market, which could end up having a real impact on Trump and what he's able to do. But we're not seeing the kind of violent reaction that we saw back in April.

[Natalie Kitrowitz]

Okay, just stepping back, I want to think about where we are here and the reality that Trump is still in this kind of half in, half out trade war. I want to talk about how we think about that in the larger context of how Trump uses his power. I think it's fair to say that the President has been remarkably successful at exercising his power over all kinds of realms in these first several months of his term and basically forcing many people to bend to his will. Congress, universities, law firms, Iran even. Why does it seem like these trade deals are exempt from that or like the one thing that seems to be beguiling him?

[Maggie Haberman]

Maggie, because you can't threats work to a point with global trade and with global markets, but they have their own sets of concerns and dynamics and behaviors. He has levers that he is able to push and pull with, say, universities or law firms that he was threatening with executive orders or even individuals. You can't force the markets to bend to your will the same way. You can't force other countries to bend to your will the same way. And what ends up happening is because the world is built on alliances, you risk pushing countries towards your adversaries, not closer to you, not just militarily, not just in terms of defense alliances, but in terms of trade and in terms of all kinds of other dynamics. And I do think the backing off hurts him.

[Ben Castleman]

Yeah. I think on some fundamental level, Trump has been able to rewrite the political rule book in the US he's been able to write the legal rulebook to some degree in the US thanks to both Congress and the Supreme Court. He can't rewrite the rules of economics. And there's this fundamental level that he could go and impose these steep tariffs on China, on the European Union, all of these countries. He apparently has the power to do that, but he can't control what happens as a result of that. And I think if you're a company right now, you do not have the confidence that whatever gets put in place is going to be the long run reality. And so there's going to be a lot of hedging of bets. There's going to be a lot of spreading around of supply chains and probably some inefficiencies that result from that.

[Natalie Kitrowitz]

Ana.

[Ana Swanson]

Yeah, no, I agree with Ben. I think the economy is a really big and complicated place. So we don't immediately see some of the effects of these tariffs, but they are there and they are real. It's hundreds of billions of dollars that the United States is collecting and that has real implications for trade and for companies.

[Natalie Kitrowitz]

Ben, I'm just struck by the fact that you said, you know, that he can't rewire the economy. Right. But at the same time, it appears like he is doing all of these really big things to put his stamp on it.

[Ben Castleman]

I do think this is Trump's economy now. Right. He spent the first several months of his term trying to blame things on Joe Biden. I won't take any view as to how voters will view this, but certainly he's been able to put in place the tariffs that he wanted to put in place. He's been able to get his tax bill through. He blames some things on Jerome Powell, the Fed chair, but he's gonn get his own fed chair starting in May when he gets to appoint somebody. So we are at a point where whatever happens in the economy, there's no one to blame or no one to take the credit if things work out other than him. This is his economy at this point.

[Natalie Kitrowitz]

Thank you guys so much for being here. We really appreciate your time.

[Maggie Haberman]

Thanks Natalie.

[Ana Swanson]

Thanks. Great to be here.

[Ben Castleman]

Thanks for having us.

[Natalie Kitrowitz]

On Wednesday, President Trump posted letters informing a host of additional countries that they should prepare for double digit tariff rates, bringing the number of countries facing new tariff threats to 22. The highest tariff rate that Trump threatened was 50% on Brazil. The Brazilian president responded by saying the country would retaliate. We'll be right back.

[Ana Swanson]

Hey, it's Lauren Dragan from Wirecutter, the product recommendation service from the New York Times. And I test headphones. We basically make our own fake sweat and spray it over and over on these headphones headphones to see what happens to them over time. We're gonna put on some noise canceling headphones and see how well they actually block out the sound. I have 3,136 entries in my database. Kids workout what version of Bluetooth? At Wirecutter, we do the work so you don't have to. For independent product reviews and recommendations for the real world, come Visit [e-mail] Wirecutter.

[Natalie Kitrowitz]

Here'S what else you need to know today in Texas, the authorities confirmed that at least 119 people had died in the recent recent flooding and more than 170 remain missing, raising the prospect that the death toll could climb much higher. Officials have struggled to answer questions about their response to the floods and whether a lack of warning sirens and insufficient disaster planning may have made the tragedy worse. When asked about investigating what went wrong, Texas Governor Greg Abbott said that those kinds of questions were the the words of losers. He compared disaster response to football and said only losing teams focused on their failures. And new data on Wednesday showed there have been more measles cases in the United States in 2025 than in any other year since the virus was declared eliminated in 2000. More than 1,288 people had a confirmed case of the measles this year, 92% of them were unvaccinated or had an unknown vaccination status. Most of this year's cases were tied to an outbreak that began in January in a Mennonite community in West Texas and then spread to New Mexico and Oklahoma. Today's episode was produced by by Diana Wynne, Sydney Harper and Olivia Natt. It was edited by Mark George with help from Paige Cowett. Contains original music by Dan Powell and Elisheba Itup and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for the Daily I'm Natalie Kitrowev. See you tomorrow.