Why a Worrisome Economy Doesn’t Seem to Worry Trump

Summary

Summary of The Daily Podcast Episode: "Why a Worrisome Economy Doesn’t Seem to Worry Trump"

Release Date: March 21, 2025
Hosts: Michael Barbaro, Sabrina Tavernise
Guests: Economics Reporter Ben Castleman, White House Reporter Maggie Haberman

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Introduction

In this episode of The Daily, host Michael Barbaro delves into the paradoxical state of the U.S. economy under President Donald Trump's administration. Despite implementing aggressive economic policies that have begun to unsettle consumers and financial markets, President Trump remains steadfast in his approach. Economics reporter Ben Castleman and White House reporter Maggie Haberman join Barbaro to explore why Trump's economic agenda may be backfiring and why the President appears undeterred by the ensuing economic turbulence.

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Trump's Economic Agenda and Initial Optimism

00:34 Michael Barbaro introduces the topic by highlighting President Trump's initial promise of economic prosperity through lower costs, reduced regulation, and tax cuts. Upon his election, there was a surge of optimism among businesses, consumers, and investors, leading to a booming stock market.

01:44 Ben Castleman elaborates on the situation two months into Trump's administration. He notes that while the economy initially showed signs of strength—such as low unemployment and solid job growth—the recent implementation of Trump's policies has led to a significant downturn in market confidence and consumer sentiment.

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Impact of Government Cuts on Economic Confidence

04:08 Ben Castleman identifies two primary actions by Trump impacting the economy: aggressive government downsizing and the imposition of tariffs on imported goods.

05:06 Maggie Haberman discusses the dual effects of government cuts:

1. Direct Economic Impact: Layoffs of government workers, cancellation of programs, and rescinding of grants reduce actual economic activity.
2. Confidence Hit: Job losses extend beyond direct government roles to contractors and businesses dependent on federal funding, fostering widespread uncertainty.

06:14 Haberman illustrates the ripple effects of these cuts, such as universities pausing hiring, which affects numerous high-paying jobs and can lead to broader economic contractions.

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Tariffs and Their Detrimental Effects

07:09 Haberman shifts focus to Trump's tariff policies, explaining that sweeping tariffs on many trading partners have led to higher prices for consumers and businesses. The Federal Reserve acknowledges evidence linking recent goods inflation to these tariffs.

09:03 Castleman highlights Trump's evolving stance on tariffs, noting that while he campaigned on curbing inflation and lowering prices, the tariffs have instead contributed to increased consumer anxiety over rising costs.

10:00 Haberman points out that Trump's messaging has shifted from immediate economic turnaround to acknowledging a "period of transition" due to the significant nature of his policies. This includes references to potential economic pain and even a possible recession.

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Economists’ Perspectives on Trump's Policies

12:07 Castleman introduces the critical views of economists regarding Trump's tariff strategies. Haberman conveys that most experts believe Trump's tariffs are more harmful than beneficial, labeling them as "bloodletting" rather than effective economic medicine.

14:56 Castleman notes that Trump remains undeterred by economists' warnings, continuing to implement and adjust tariffs without addressing the mounting concerns from financial markets and consumers.

15:04 Economist (guest speaker) explains that Trump views tariffs not only as economic tools but also as means to influence other countries' behaviors. Despite economists' consensus on the damaging effects of broad-based tariffs, Trump perceives these measures as essential to his economic agenda.

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Internal Administration Dynamics and Messaging Challenges

18:48 Economist discusses internal conflicts within the Trump administration regarding tariff policies. While top aides and economic advisors understand the negative impact, they are constrained from publicly criticizing the President's approach.

21:30 Castleman observes that despite internal awareness of the economic repercussions, advisors struggle to communicate these concerns externally without directly attributing fault to the President.

22:58 Ben Castleman highlights the administration's ongoing efforts to manage public perception, including meetings with key officials to refine messaging around tariffs and their economic implications.

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Political Implications and Future Outlook

25:18 Economist and Castleman debate Trump's long-term commitment to his tariff policies, considering his focus on upcoming midterm elections. The administration fears that poor economic performance could jeopardize the Republican majority in the House, leading to increased investigations and political instability.

26:35 Economist suggests that while Trump is willing to gamble with the country's economic future, he is less inclined to risk his political standing. This balancing act creates tension between maintaining his economic strategy and addressing voter concerns over rising prices and economic discomfort.

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Conclusion

The episode concludes with an analysis of President Trump's unwavering commitment to his economic policies despite significant pushback from financial markets, economists, and declining consumer confidence. The combination of aggressive government cuts and broad-based tariffs has introduced substantial uncertainty into the economy, challenging the initial optimism that greeted Trump's administration. As the midterms approach, the administration faces heightened political risks, potentially influencing future economic decisions. The interplay between economic strategy and political survival remains a central theme, highlighting the complexities of managing national economic policy in a polarized environment.

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Notable Quotes with Timestamps

• Ben Castleman [01:44]: "As you know, we're two months into the Trump administration and therefore two months into the Trump economy."

• Maggie Haberman [05:06]: "The layoffs of these workers, cancellation of programs, you know, rescinding of grants. Right. All of that is real economic activity that has been pulled back."

• Maggie Haberman [07:09]: "The President has imposed sweeping tariffs on many of our trading partners on a huge range of goods."

• Donald Trump [10:00]: "Next, I will direct all members of my Cabinet to marshal the vast powers at their disposal to defeat what was record inflation and rapidly bring down costs and prices."

• Economist [19:17]: "But he's also mindful, and we had a lot of conversations with people about this, of not looking like a paper tiger."

• Economist [24:04]: "Right. And to be fair to them and to the President, the President's agenda is the agenda in any administration."

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This comprehensive summary encapsulates the key discussions and insights from the podcast episode, providing a clear understanding of the complex economic dynamics at play during the early months of President Trump's administration.

Transcript

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[Michael Balbaro]

From the New York Times, I'm Michael Balbaro. This is the Daily. As President Trump has rolled out his economic agenda, the assumption was that he would quickly scale back his most aggressive policies once they began to scare consumers and the financial markets. That assumption turned out to be wrong. Today, my colleagues, economics reporter Ben Castleman and White House reporter Maggie Haberman on why the Trump economic plan may be backfiring and why Trump doesn't seem to mind.

[Ben Castleman]

It's Friday, March 21st. Hey, Ben.

[Maggie Haberman]

Hi, Michael.

[Ben Castleman]

Good to have you back in the studio. It's been a while.

[Maggie Haberman]

It has been a while. Happy to be here.

[Ben Castleman]

As you know, we're two months into the Trump administration and therefore two months into the Trump economy. And he comes to office with a set of sweeping economics promises that the business community and the stock market and polling shows Americans generally are very excited about more prosperity, lower costs, lower regulation, lower taxes, the market booms when he gets elected, stock market is surging. And then Trump starts to actually put his fingerprints on the economy. And the stock market has, over the past few weeks been plunging into. And now the Federal Reserve is telling us that the country's financial outlook is pretty unsteady. And Trump himself is now acknowledging that his plans may wreak a certain amount of havoc on the economy. So a lot has changed very quickly.

[Maggie Haberman]

Yeah, I think that's right. I mean, it's worth winding back a little bit to what Trump inherited in the economy, because by many measures, it was pretty solid, right? Unemployment was low, job growth was solid. Corporate profits were good. Right. There were a lot of things that were pretty good. We know there was one really big thing that was not good, right. Which was inflation. It had gotten a lot better. But we know cost of living had gone up, and that was in inflation and it was in housing prices and it was in all sorts of things. And we know that Americans did not feel good about the economy. Right. That was a big part of the reason that Trump was brought back to office in the first place.

[Ben Castleman]

Exactly.

[Maggie Haberman]

So as you said, when he is elected, there's a surge in optimism among businesses. There's a surge of optimism among many consumers. There was this sense, right, of the economy was actually in pretty good shape according to the economists, and now it was maybe also in good shape according to everybody else. And yet in the last few weeks, all of that has turned around, all of that. Markets are way down. Consumer confidence is way down. Business confidence, crucially, is way down. And so all of these measures of how consumers, how businesses, how investors feel about the economy have all taken a really sharp turn to the south. Now, that's how people feel. So far, most of the measures of actual activity, of what consumers are doing, of what businesses are doing, have not shown that same sharp deterioration.

[Ben Castleman]

But the risk, Ben, and I've learned this from you over the years, is that those eroding confidence and sentiment numbers become a self fulfilling prophecy and they end up dragging down the hard economic numbers that you just referred to. Yeah.

[Maggie Haberman]

And I think that's particularly a risk in a situation like this, where the drop is so sharp and with a very clear set of reasons.

[Ben Castleman]

Well, let's talk about those reasons. Let's talk about the mechanics of these confidence numbers falling so precipitously. In my mind, there are two major things that the President has done that have affected the economy. To what degree I don't quite understand. The first being his very aggressive and abrupt efforts to shrink the government, laying off thousands of workers, closing agencies. And the second, of course, is the tariffs he's imposed on goods imported into the U.S. let's start with the cost cutting to the government and how that has affected all the things you just talked about.

[Maggie Haberman]

So it has, I think, potential effects in two different ways. One is just the direct effect, right? The layoffs of these workers, cancellation of programs, you know, rescinding of grants. Right. All of that is real economic activity that has been pulled back. But the second piece of this is the confidence hit, right. Musk and Trump have cut however many thousands of jobs it is at this point. But there are many more, thousands of people who work for government contractors, who work for companies that sell to the federal government. And you can imagine all of them and all of their employers are feeling pretty uncertain right now. You look at what's happening in higher education, major universities saying that they're pausing all hiring, right? These are in many cases good, pretty high paying, you know, important jobs that then maybe have ripple effects of lots of other jobs.

[Ben Castleman]

So this is how cutting government spending or threatening to withhold it starts to really affect consumer and business sentiment and in this case, academic sentiment. But they're hirers as well.

[Maggie Haberman]

It has that potential, certainly within the sectors that are most directly affected is clearly having a big impact. You can think about it also on these programs. Right. If you rely on veterans benefits Right now, even if you have not had any difficulty getting your benefits, the fact.

[Ben Castleman]

That thousands of people who work at the Veterans Affairs Department have just lost their jobs might influence how you feel about those benefits.

[Maggie Haberman]

And there are rumors about what the impact might be on benefits. Absolutely. So these are all things that can have a sort of disruptive effect and that can lead people to pull back, can lead businesses to pull back on hiring.

[Ben Castleman]

Okay. So that's how the President's approach to cutting the government significantly is impacting the feelings around the economy and in some cases, behavior in the economy. Let's turn to his approach to tariffs and how that helps us understand these problematic numbers that you've been seeing over.

[Michael Balbaro]

The past few weeks.

[Maggie Haberman]

Yeah. And in many ways, I think this is the big one. The President has imposed sweeping tariffs on many of our trading partners on a huge range of goods. Now, some of those tariffs have been paused, they've been delayed, they've been canceled. Right. But at least in theory, it can cover a huge amount of goods. And we know from economic research that what happens when you impose tariff rates, this is a tax on imports. What does that do? It raises prices. And, you know, we often sit here, Michael, and we talk about the research says this, but Americans think this. This is one case where Americans seem to have gotten the message from economists, because in all of these surveys, it shows people think prices are going to be higher, and they specifically say because of tariffs.

[Ben Castleman]

Mm.

[Maggie Haberman]

And we're seeing that hit in terms of consumers expecting to pay higher prices. We're seeing that in businesses saying they expect to pay higher prices for the materials that go into their goods and then pass on those prices to consumers. And we're seeing at least some evidence of it in actual prices. The Federal Reserve just this week came out and said there's some evidence at least, that some of the recent pickup in goods inflation is the result of.

[Ben Castleman]

These tariffs, which means the tariffs are very quickly having a financial impact, which.

[Maggie Haberman]

Is what we would expect from the economic research. And I think that it's important to remember here, Trump ran on a platform of curtailing inflation. He even said he would bring down prices. And crucially, Americans who seemed to believe him during the campaign that he would bring down prices or control inflation are now saying, we're getting nervous that this is gonna mean higher prices, higher inflation.

[Ben Castleman]

Well, one reason why this nervousness seems understandable is that the president himself has started to change the way he talks about tariffs. Now. He seems to be acknowledging that tariffs can actually really be disruptive to the economy.

[Maggie Haberman]

That's right. We've seen a real shift in messaging from the president himself and from members of his administration over the past couple of weeks. Trump occasionally would acknowledge on the campaign trail, maybe prices would come up temporarily under tariffs, but for the most part. Right. What he was talking about was, my policies are going to turn around the economy on day one.

[Donald Trump]

Next, I will direct all members of my Cabinet to marshal the vast powers at their disposal to defeat what was record inflation and rapidly bring down costs and prices.

[Maggie Haberman]

And he said that even as recently as his inaugural address, the American dream.

[Donald Trump]

Will soon be back and thriving like never before.

[Maggie Haberman]

But over the last couple of weeks, there's an adjustment. We'll see whether there's pain. UN members of his administration have started talking about a period of adjustment.

[Donald Trump]

There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing.

[Maggie Haberman]

A period of detox, a period of.

[Ben Castleman]

Pain, a period potentially of even recession.

[Economist]

But are you expecting a recession this year?

[Donald Trump]

I hate to predict things like that.

[Maggie Haberman]

There is, yeah. He has notably refused to rule out the possibility of a recession, as have members of his administration. And look, economists would say you should never rule out the possibility of a recession. So that's not inherently unreasonable. But the tone has really shifted here from one of things will turn around on day one to there may be this period of pain, but it will pay off in the long run. And it's worth highlighting here, if this recession happened, it would be specifically because of. Of his policies. Right. Be his tariffs, his uncertainty that's generating the pullback in activity that leads to the recession. That's something presidents often try to avoid, even saying the word recession. And here he's talking about potentially causing one.

[Ben Castleman]

Right. Is that a moment where we should give him points for candor or be startled by the fact that he's willing to pursue a set of policies that might bring us into a recession, which is never really any president's idea of a good set of policies.

[Maggie Haberman]

So, you know, I asked this question to a lot of economists over the past couple of weeks, and People will say, in theory, the idea of short term pain for long term gain can be reasonable. Right? This is harsh medicine, but we need it.

[Ben Castleman]

But you better be darn certain of the long term gain.

[Maggie Haberman]

And what you hear almost universally from basically every economist, every expert is, that is not what this is. First of all, there's really no need for this harsh medicine right now. The economy is in basically pretty decent shape. But secondly, this specific medicine, this isn't a harsh medicine, chemotherapy that will generate a cure. This is bloodletting. Right. This is a medicine that will actually make the problem worse.

[Ben Castleman]

What makes these economists confident that there won't be a golden era on the other end of this? Bloodletting, Tough medicine, pain.

[Economist]

Yeah.

[Maggie Haberman]

I mean, I would go further, right? It's not just that they're not certain there would be long term gain. They're confident that these policies will not yield a long term gain.

[Ben Castleman]

Why?

[Maggie Haberman]

Look, anytime we say economists say, right, somebody should shock me. Because economists think many, many different things. This is sort of like shock. This is sort of the one thing that economists almost universally agree upon is that tariffs are ultimately a damaging policy, or at least that these kinds of broad based tariffs are a damaging policy. Now, there are different reasons for this, and this is a complex subject. There are a lot of economists who reject the very idea that we need to re industrialize the country in some way. Right. They argue that over the decades free trade has left Americans better off on the whole, that even if it has hurt some people, that on average it has been beneficial. I think most economists would make that point. But there's certainly been a lot of rethinking among at least some economists over the past couple of decades about the way that free trade has played out. Again, complicated subject, but I think the thing that there's pretty broad based agreement about is we can't just turn the clock back. We're not gonna make T shirts in this country again, we're not gonna make, you know, commodity furniture in this country. And there are plenty of economists who would say we should be doing things now to preserve the manufacturing jobs that we do have, and especially in some important sectors, right? In robotics, in AI, in green energy, in chips. These are areas where there may be real advantages to preserving the American manufacturing industry, but broad based tariffs of the kind that Trump is talking about are just not going to accomplish that.

[Ben Castleman]

But the President does not seem remotely deterred by what the economists say.

[Maggie Haberman]

He's undeterred. But in a way it's even worse than that, which is that so far, he's been all over the map. We've seen tariffs announced and then they've been delayed, they've been imposed, and then they've been paused. In some cases within days, in some cases on the same day. Right. Within hours. And if you talk to businesses, right, they don't like tariffs, but what they really don't like is having no idea.

[Ben Castleman]

They don't like uncertainty.

[Maggie Haberman]

They don't like uncertainty. If you're a business right now trying to decide where to buy your goods from, where to locate your factory, you have no idea what the policy is going to be a week, a month, a year from now. And you could easily imagine businesses just sort of pressing pause and saying, you know what, let's hold off. Let's see where things are when the dust settles. And that has real economic consequences. If they're not hiring, if they're not investing, and the downstream of that. Right. So they're not hiring construction workers and they're not buying materials. All of that is the kind of thing that ripples through an economy and can cause a recession.

[Ben Castleman]

You're saying the only certainty that has emerged from the first two months of this Trump economic agenda is uncertainty and to some real degree, pain.

[Maggie Haberman]

And so far, Trump seems okay with that. I think there was an expectation on some level that he would change direction if the market started to fall, if the economy started to sour, and maybe he will. But so far that has not been the reaction from him or from his administration. Seem to be saying, we'll take the pain and Americans are going to have to deal with it.

[Michael Balbaro]

Well, thank you, Ben.

[Ben Castleman]

We really appreciate it.

[Maggie Haberman]

Thanks so much for having me.

[Michael Balbaro]

After the break, Maggie Haberman on what the growing blowback over the economy has looked like from inside the White House. We'll be right back.

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[Ben Castleman]

So Maggie, typically when economic data starts to show that a president's agenda is backfiring, the president tries to correct for it. That does not seem to be the case here with President Trump. And you have been trying to understand what that looks like and why it is. So tell us what you found.

[Economist]

So I think there are a few reasons for that. He believes in tariffs not just as an economic tool, but as a good in and of themselves, as a revenue raiser, as a market corrector. He has been talking about tariffs since the 1980s. He has had this mantra about applying tariffs on countries, quote, unquote, ripping us off forever. So that's one. The other is he does see them as a tool. He also thinks that they are a way to impact other countries behavior and not just economically, but across a bunch of sectors.

[Ben Castleman]

Fentanyl in Mexico.

[Economist]

Correct. But he's also mindful, and we had a lot of conversations with people about this, of not looking like a paper tiger. He does not want to be perceived as an empty suit on this. He knows leaders in Europe and elsewhere are watching what he does on this and so he does not want to look weak.

[Ben Castleman]

All that makes sense. But what Trump is doing now is much, much bigger when it comes to tariffs than what he did in his first term. And as a result, the risk of potential economic costs is much higher than in the first term. So far it's not just been a wobbly stock market, but rapidly falling consumer confidence, for example. And yet none of those problematic data points are acting as any kind of.

[Economist]

A break on it, at least not so far. Michael, you are absolutely correct that this is a much broader scale of tariffs than what he tried doing in the first term. And I think part of this is because he learned some lessons that may have been the wrong ones from the first term.

[Ben Castleman]

Explain that.

[Economist]

So in term one he had a group of advisers who were often at odds with each other about economic policy, but he had some really strong anti tariff voices. Trump would suggest some version of an expansive tariff and his anti tariff economic advisors would strenuously object and push back very aggressively And Trump would then reverse course and back off of that. Trump's lesson appears to have been things didn't go that badly. The market didn't crash completely. Joe Biden kept some tariffs on. In terms of China, my advisors were wrong. Tariffs are good, and I can go bigger this time. But it was a very different economy then. It was a much more thriving economy. It was a pre coronavirus pandemic economy, among other things.

[Ben Castleman]

All of which is to say that Trump thinks the real lesson of term one when it comes to tariffs is that he went too small on tariffs and the costs were low. And if he can finally go much bigger on tariffs now in term two, because he's got the right advisors in place, the payoffs will be much bigger, the costs will remain low. But that feels like a real apples to oranges kind of comparison.

[Economist]

It is. Kind of apples and oranges in a very different economy.

[Ben Castleman]

Are there people inside the administration saying to The President, Look, Mr. President, of course we understand why you want to push for tariffs. We know how central it is to your message and your belief system. But you should know you're not really communicating it quite right. And the markets are very anxious about it. Perhaps there's something you can do differently.

[Economist]

There is a clear understanding in the administration that there is some whipsawing going on. So there was this meeting a week ago about how to handle the messaging at the Naval Observatory, which is the Vice President's residence. And there was Howard Lutnick, the Commerce Secretary, Susie Wiles, the White House Chief of Staff, Jamison Greer, the U.S. trade Representative representative, among others. It was a some big shots, big shots, very important voices in this discussion. And as we understand it, it was about dealing with the messaging and explaining to the public what is happening, trying to better explain what the tariffs are, when they might be coming. I haven't seen much evidence that that yielded a change in approach, but its.

[Ben Castleman]

Existence suggests that there's an understanding among the President's top aides and economic advisors that there's a problem here.

[Economist]

Correct. And they are never really able to say the problem is partly stemming from the top. So it has to be. How does the lower tier of people just below him deal with this when they're talking to television cameras and to reporters, as opposed to saying, the President is saying things that are complicated and convoluted.

[Ben Castleman]

And I've watched some of those interviews, and it seems worth saying how complicated it has become. I've seen the president's economic advisers go on TV and get asked a question like can you please help us understand why the President is now saying that this new approach to tariffs might ultimately bring us into a recession? And the question is basically like, isn't that bad? Don't you not want that? And then the advisor then has to turn around and say, well, it would be a small recession, but it's a very tough position to put your economic aides in.

[Economist]

It's an untenable position. And the two people who are out there the most talking about this tariff program are two financiers, Howard Lutnick, the Commerce Secretary, and Scott Besant, the Treasury Secretary. And so they are describing an economic program that clearly has not been their lifelong economic exposure and project. Right. And so there are inherent contradictions, as you said, in what they are trying to tell the public they should take from this, and I don't really see that resolving anytime soon.

[Ben Castleman]

Hmm. You seem to be suggesting that on some level they might not really believe in this set of policies, but they do have to defend it.

[Economist]

Right. And to be fair to them and to the President, the President's agenda is the agenda in any administration. This is a President who, he is not consistent on a number of things, but he has been very consistent about tariffs for a very long time, long before he became a candidate. And if you're going to serve a President, you should be expected that you're going to be asked to defend their policies.

[Ben Castleman]

Right.

[Economist]

But often and particularly with Lutnick, the conversation in interviews swings to the President's a genius. He knows exactly what he's doing, which doesn't do much to assuage the markets. The markets or concerned voters.

[Ben Castleman]

What does President Trump say or think about the fact that the majority of economists fundamentally disagree with him about the long term prospects for tariffs? We just talked about this with Ben Castleman. He said that. But there's pretty clearly a consensus that the short term pain won't necessarily lead to the long term gain of re industrialization across the United States as a result of these tariffs. So what you may end up getting is not just short term pain, but long term pain without much gain.

[Economist]

The President thinks the experts are wrong, which is what the President has thought on a number of fronts. And again, to be fair to him, he has been shown in very specific circumstances that that has been true.

[Ben Castleman]

That can be tr.

[Economist]

It can be true. And maybe his own poll numbers will be impacted to such an extent, his approval numbers will be impacted to such an extent that he changes course that he takes a dramatic action of some kind. This is definitely a Concern for his advisors, who are worried about the impact on his political standing, which at the moment they don't blame on voter response to tariffs, and they don't even really blame it on the stock market reaction. They think that the ongoing nature of elevated consumer prices, eggs, so forth, is what is hurting Trump. That may not be the case forever, but Trump so far has not seen anything that has convinced him that he is wrong. And Trump is making, Michael, this enormous gamble. He really is, yes, on his economic policy and on the idea that everybody else is wrong. And Trump makes these massive gambles. Sometimes they really don't work out for him, sometimes they do. And he takes those moments as affirmation that he was correct all along.

[Ben Castleman]

Is it right to think Donald Trump is kind of gambling his second term on tariffs?

[Economist]

To some extent, I don't think the entirety of it, but certainly the short term economic picture and possibly the long term, he is waging an enormous bet that his view of the economy is going to be correct in the face. To your point of almost everyone's expert opinion as to why this approach is risky. So this has been very confusing for people to figure out what exactly the end game is.

[Ben Castleman]

Well, the end game, one might presume, and you've hinted at this, is that the polls are pretty important to Donald Trump. He's never seemed to have a long term stomach for unpopularity. And everything you've said here suggests that he might be able to disregard the markets for a while and the views of Wall Street. He doesn't need reelection. And he fundamentally believes in tariffs and has for a very long time and thinks he didn't get a shot to do it as big as he wished in the first term. So he's gonna do it in this term. But if in a year, year and a half, two years, we're looking at polling that shows that the majority of Americans think he's mishandling the economy and prices are up and the long term gain isn't arrived, but the short term pain is very present. Don't we expect that he would change his approach to these tariffs? Or is the answer no? Not at all. Because he really thinks that the only way to prove the experts wrong is to remain committed to it.

[Economist]

So, Michael, I think that there will be competing impulses at play in Donald Trump's head as he is grappling with this. On the one hand, he is going to want to stick to his guns. This is something I think he does believe in. And I think he's going to want to show the experts that he's right. On the other, there is an external reality which is that he is not on the ballot again, but his party.

[Ben Castleman]

Is in the next midterms.

[Economist]

In the next midterms, and the Republicans have a very, very narrow majority in the House. Trump and his advisors are extremely aware that if they lose the midterms, the number of investigations and subpoenas that they will face from a Democratic House will be vast. And that's not something they want to spend the final two years of his term dealing with.

[Ben Castleman]

Right. And nothing can cost an incumbent president control of Congress more than a problematic economy, high prices, and appearing to seem.

[Economist]

As if you don't hear voters concerns about them.

[Ben Castleman]

Right.

[Economist]

So Trump might be willing to gamble on the country's future economically, but I think he's far less willing to gamble with his own political fortunes.

[Ben Castleman]

Well, Maggie, thank you very much.

[Economist]

Michael, thank you.

[Michael Balbaro]

We'll be right back.

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This podcast is supported by Noom weight loss.

It needs to be fast and sustainable. Noom GLP1 starts at just $149 and ships to your door in seven days. Take it from Lauren, who lost 22 pounds on Noom.

[Lauren]

If I come off of the GLP1, it's not going to automatically make my weight.

[Sponsor Voice]

Yo yo back $149 GLP1s. Now that's Noom smart. Get [e-mail] Real Noom user compensated to provide their story. Individual results may vary. Not all customers will medically qualify for prescription medications. Compounded medications are not reviewed by the FDA for safety, efficacy or quality.

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[Michael Balbaro]

Here'S what else you need to know today.

[Donald Trump]

Today we take a very historic action that was 45 years in the making. In a few moments, I will sign an executive order to begin eliminating the federal Department of Education once and for all.

[Michael Balbaro]

On Thursday, President Trump signed an executive order instructing his Education Education secretary to begin dismantling the Department of Education.

[Donald Trump]

And it sounds strange, doesn't it? Department of Education. We're going to eliminate it, and everybody knows it's right.

[Michael Balbaro]

Because the department was created by an act of Congress, it cannot be shut down without congressional action, something Trump called for on Thursday night. For now, the department will continue to carry out functions required by law, such as administering federal student aid and funding for special education. And the Times reports that Elon Musk's already enormous access and influence within the federal government are set to expand later today when he is briefed on the US Military's plans for any future war with China. That briefing will likely highlight Musk's many conflicts of interest since he runs multiple businesses that hold government contracts, including with the Department of Defense. Today's episode was produced by Mary Wilson, Will Reed and Rochelle Banja. It was edited by Mark George and Chris Haxel, contains original music by Marian Lozano and Dan Powell, and was engineered by Chris Wood. Our theme music is by Jim Runberg and Ben Landsberg of Wonderly. That's it for the Daily I'm Michael Balboro. See you on Monday.

[Sponsor Voice]

This podcast is supported by Noom Weight Loss.

It needs to be fast and sustainable. Noom GLP1 starts at just $149 and ships to your door in seven days. Take it from Lauren who lost 22 pounds on Noom.

[Lauren]

If I cut come off of the GLP1, it's not going to automatically make my weight.

[Sponsor Voice]

YoYo back $149 GLP ones. Now that's Noom smart. Get started at Noom. Com real Noom user compensated to provide their story. Individual results may vary. Not all customers will medically qualify for prescription medications. Compounded medications are not reviewed by the FDA for safety, efficacy or quality.