Who's advising Trump on trade?

Summary

Summary of "Who's Advising Trump on Trade?"
The Indicator from Planet Money
Release Date: April 24, 2025
Host/Author: NPR

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Introduction: The Trade Turmoil and White House Goals

In the April 24, 2025 episode of The Indicator from Planet Money, NPR delves into the intricate dynamics shaping the Trump administration's trade policies. Amidst volatile market swings driven by fluctuating hopes for trade deals and fears over persistent tariffs, the episode seeks to unravel the key influences steering the White House's economic strategies. Hosts Adrienne Ma and Darian Woods explore the pivotal question: What is the White House's end goal for trade?

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Schools of Thought: Divergent Advisors Shaping Trade Policy

The episode identifies two primary factions among Trump's trade advisors, each advocating distinct strategies to navigate the global economic landscape:

1. Make America School
2. Weak Dollar School

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Make America School: Prioritizing Domestic Manufacturing

Key Figures and Perspectives

• Peter Navarro: Senior Councillor for Trade and Manufacturing, representing the most fervent advocates for bringing manufacturing back to the U.S.

• Scott Besant: Treasury Secretary, positioning himself as the principal voice of this school. A former economic history educator, Besant brings a historical and security-focused lens to trade policy.

Core Arguments

• National Security and Manufacturing Resurgence: Advocates emphasize the necessity of rebuilding domestic manufacturing to ensure national security. In the wake of the COVID-19 pandemic, the U.S. faced critical shortages in essential goods, highlighting vulnerabilities in relying heavily on foreign production.

  "We couldn't even produce enough medical masks, let alone the semiconductor chips and steel that would help the country ride out an international emergency."
  — Scott Besant [03:34]

• Tariffs as Negotiation Tools: Beyond protecting domestic industries, tariffs are viewed as strategic measures to compel other nations to engage in fair trade practices. Besant has articulated that the elevated tariffs are not permanent but part of a negotiation tactic aimed at encouraging other countries to present favorable trade offers.

  "The tariffs are at a peak and it's now up to countries to come up with offers to begin to bring them down."
  — Simon Rabinovitch, US Economics Editor for The Economist [04:40]

Notable Insights

• Flexibility in Tariff Strategy: Besant acknowledges that the current high tariffs on China (145%) cannot remain indefinitely. He anticipates a prolonged negotiation process, estimating a potential trade deal within the next two to three years.

  "Negotiations with China haven't started yet and will be a slog. Still, he thinks a trade deal may be possible in the next two to three years."
  — Darian Woods [04:53]

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Weak Dollar School: Addressing Currency Imbalances

Key Figures and Perspectives

• Stephen Myron: Chair of the Council of Economic Advisors, leading the faction that argues the U.S. dollar's strength undermines American exporters by making their goods more expensive internationally.

Core Arguments

• Devaluing the Dollar to Boost Exports: The proponents contend that the dollar's overvaluation hampers U.S. exports, as a strong currency makes American products less competitive abroad. By weakening the dollar, exporters can gain a pricing advantage in global markets.

  "The cost for America in doing this is that you have a dollar that has been distorted... and that has held back American exporters."
  — Simon Rabinovitch [07:02]

• Global Economic Structure Disadvantage: Myron argues that the current global economic framework disproportionately favors the U.S., primarily due to the dollar's reserve currency status. This dominance results in economic imbalances that disadvantage U.S. interests.

  "The structure of the global economy has disadvantaged America."
  — Simon Rabinovitch [06:04]

• The Mar A Lago Accord: Myron proposes an ambitious plan where global leaders convene in South Florida to negotiate a collective agreement aimed at weakening the dollar. This accord aligns with Trump's intuitive sentiment that America has been economically wronged on the global stage.

  "The big idea in Stephen Myron's paper is that leaders of countries from around the world would descend on South Florida, make a grand deal with President Trump to help weaken the dollar. And this would be called the Mar A Lago Accord."
  — Adrienne Ma [07:51]

Notable Insights

• Economic and Political Risks: While a weaker dollar could benefit exporters, it poses significant risks, including increased inflation as imports become more expensive and higher borrowing costs. These trade-offs create a complex policy environment for the administration.

  "A weakening dollar might be good for exporters but it fuels inflation for consumers as imports get more expensive."
  — Adrienne Ma [08:05]

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Internal Conflicts and Trump's Decision-Making

Divergent Views Within the Administration

The episode highlights a palpable tension between the two schools of thought, manifesting in conflicting approaches to trade policy. While Scott Besant adheres to a traditional stance favoring a strong dollar, Stephen Myron's proposals challenge this status quo by advocating for a weakened currency.

Discrepancies in Public Statements

This internal discord is exemplified by conflicting narratives presented to the public. When the administration decided to pause global tariffs in early April, Besant maintained that it was a deliberate strategic move, aligning with the negotiation tactic narrative.

"The change was Trump's strategy all along, nothing to do with the crumbling markets."
— Scott Besant [09:41]

Contrarily, President Trump contradicted Besant shortly after, attributing the pause to market conditions rather than a strategic decision.

"The pause was because of the falling bond market."
— President Trump [09:41]

This inconsistency underscores the challenges advisors face in influencing the president, who ultimately relies on instinctual judgments over expert recommendations.

Advisor Limitations

The episode illustrates the difficulties advisors encounter in shaping policy, as Trump's decisions may not always align with economic experts' recommendations. The reliance on gut feelings over structured economic strategies limits the effectiveness of even well-informed advisors.

"What ultimately matters to Trump is his gut."
— Adrienne Ma [09:58]

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Current Status and Future Implications

As of the episode's release in April 2025, Scott Besant and his traditional economic perspectives appear to hold more sway within the White House. However, the presence of alternative viewpoints, like those of Stephen Myron, ensures ongoing debates and potential shifts in trade policy direction.

The administration's struggle to reconcile the benefits of a strong dollar against the push for a weaker currency reflects broader global economic tensions. The outcome of these internal debates will significantly influence the U.S.'s position in the global trading system, impacting everything from national security to consumer prices.

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Conclusion: Navigating a Complex Trade Landscape

"Who's Advising Trump on Trade?" provides a nuanced exploration of the competing economic philosophies within the Trump administration. By dissecting the arguments of the Make America and Weak Dollar schools, the episode underscores the complexities of formulating effective trade policies in a rapidly evolving global economy. As advisors continue to "whisper" into the president's ear, the ultimate direction of U.S. trade policy remains a critical watchpoint for economists, businesses, and consumers alike.

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Notable Quotes:

• "We couldn't even produce enough medical masks, let alone the semiconductor chips and steel that would help the country ride out an international emergency."
  — Scott Besant [03:34]

• "The tariffs are at a peak and it's now up to countries to come up with offers to begin to bring them down."
  — Simon Rabinovitch [04:40]

• "The cost for America in doing this is that you have a dollar that has been distorted... and that has held back American exporters."
  — Simon Rabinovitch [07:02]

• "What ultimately matters to Trump is his gut."
  — Adrienne Ma [09:58]

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Produced by Lily Kiros, engineered by Kwesi Lee, fact-checked by Tyler Jones, and edited by Cake and Cannon. The Indicator is a production of NPR.

Transcript

[NPR]

NPR.

[Darian Woods]

Markets continued their deep swings this week. Stock and bond prices have had some up days on hope there might be some trade deals in sight. And then we've seen other days of dropping fears that the big tariffs might be here to stay. And so perhaps the most important question for the global economy is what's the White House's end goal for trade here?

[Adrienne Ma]

Yesterday we analyzed the conflict within Trump himself. His desire to cut deals with other countries on the one hand, but also his taste for long term tariffs on the other. Today we look at how Trump's appointees are whispering in the President's ear. This is the indicator for Planet Money. I'm Adrienne Ma.

[Darian Woods]

And I'm Darian Woods. Today on the show, the advisers pitching the intellectual case for tariffs, including a proposal to weaken the dollar with what's been called the Mar Lago Accord.

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[Darian Woods]

To understand what Trump's advisors are whispering to him about the trade war, we can look at two broad schools of thought. One we might call Makin America. The school of thought wants more manufacturing in the US for national security reasons.

[Adrienne Ma]

The other we might call the weak dollar school. These advisors believe the playing field is stacked against the US because of its strong dollar.

[Darian Woods]

The make in America crowd has several members. Most extreme is senior councillor for trade and Manufacturing Peter Navarro. But the advisor closest to the President's ear right now is Treasury Secretary Scott Besant. He's kind of like this school principal. You know, he used to teach economic history and he is super pessimistic about China. Here he is on a Tucker Carlson interview broadcast forth and Tucker, by the.

[Adrienne Ma]

Way The Chinese business model and the economy are the most unbalanced, imbalanced in the history of the modern world. We've never seen anything like this. In terms of their export level relative to their gdp, relative to population.

[Darian Woods]

China's exports as a share of its economy is actually around the middle of the pack globally. What really makes China dominate exporting is that it has a huge population.

[Adrienne Ma]

Simon Rabinovitch is US Economics editor for the Economist newspaper. And he says that Scott Besant's views are fairly well aligned with Donald Trump's.

[Simon Rabinovitch]

He effectively expresses a slightly more thought out view similar to Donald Trump's, which is the idea that the tariffs are ultimately about bringing manufacturing back to America. Not all manufacturing, but manufacturing that's consistent with America's national security.

[Darian Woods]

Simon says that Scott Besant points to the early days of COVID when the US Couldn't even produce enough medical masks, let alone the semiconductor chips and steel that would help the country ride out an international emergency.

[Simon Rabinovitch]

And so his view is that kind of tariffs play into this national security need to be able to produce critical products that it needs today and that it would most certainly need were it to ever find itself in a war.

[Adrienne Ma]

That would imply these tariffs are here to stay, certainly on whatever those critical goods are deemed to be. It could be a narrow set like jet engines and rare earth minerals, but it could also be a broad set of things like steel or cars. And yet, Simon says this school of thought isn't just about tariffs.

[Simon Rabinovitch]

Now, Secretary Besant has also been clear that he views the tariffs partly as a negotiating tactic. He's talked about the idea that tariffs are at a peak and it's now up to countries to come up with offers to begin to bring them down.

[Darian Woods]

Scott Besant was asked about this recently and he acknowledged that the 145% tariffs on China couldn't stay that high forever. And he hinted that this was part of the President's negotiation strategy. In a closed door meeting on Tuesday with JPMorgan Chase, he reportedly said that negotiations with China haven't started yet and will be a slog. Still, he thinks a trade deal may be possible in the next two to three years.

[Adrienne Ma]

So that's the make in America crowd. Then there's what we've dubbed the weak dollar school. Essentially because people around the world use the dollar so much, that pushes up the dollar's value and actually hurts American exporters. So the weak dollar school wants to see the American dollar devalued. This school of thought is led by the chair of the Council of Economic Advisors, a guy named Stephen Myron. His vision is spelled out in a paper he wrote in November called A User's Guide to Restructuring the Global Trading System. And let's just say it has a lot of Greek letters in it.

[Darian Woods]

It's almost like an audition essay to get into the Trump administration totally.

[Adrienne Ma]

And Simon Rabinovitch says he was successful at that.

[Simon Rabinovitch]

His argument is that it's not just about manufacturing that is part of it, but that ultimately the structure of the global economy has disadvantaged America.

[Adrienne Ma]

Speaking with Bloomberg in early April, Stephen Myron called on other countries to give more to the U.S. they could say.

[NPR]

Hey, America is creating a global trading system backed by defense umbrella, which again.

[Simon Rabinovitch]

Allows us to trade, which creates our.

[NPR]

Prosperity, and we're going to help share the cost of those things.

[Darian Woods]

Stephen was saying that the US has spent a lot on military around the world, bringing benefits that other countries are freeloading off.

[Adrienne Ma]

Also, he's saying the US has provided a safe haven for money, as in, no matter whether you're in Italy or Thailand, you can invest in the US dollar or US Government debt and be reasonably assured that your investment will maintain value. More than half the world's trade is done in dollars, even when neither country trading is the US Simon boils the weak dollar school down to this.

[Simon Rabinovitch]

The cost for America in doing this is that you have a dollar that has been distorted in his view. Basically this means overvalued, and that has held back American exporters.

[Darian Woods]

A strong dollar means that American consumers can afford to buy more stuff from overseas. And so American factories find it harder to compete with these cheap imports.

[Simon Rabinovitch]

And so there's different ways that other countries can begin to address this problem. They could basically agree to buy more American products. They could invest more in America. You know, one solution that he expressed, which I think is a little bit tongue in cheek, is that they could just send checks directly to the US treasury to basically pay them a fee for services. Or alternatively, America could impose tariffs.

[Adrienne Ma]

The big idea in Stephen Myron's paper is that leaders of countries from around the world would descend on South Florida, make a grand deal with President Trump to help weaken the dollar. And this would be called the Mar A Lago Accord.

[Simon Rabinovitch]

You can see how it's something that appeals to President Trump. It kind of intellectualizes his instinctual view that America has been wronged.

[Darian Woods]

One problem, though, is that Trump can't seem to make up his mind whether he wants a strong or a weak dollar. There are trade offs. A weakening dollar might be good for exporters but it fuels inflation for consumers as imports get more expensive. Also, as we've seen in recent weeks, borrowing costs rise.

[Adrienne Ma]

This debate over whether a strong or a weak dollar is more beneficial to the US Is one of the biggest differences between Trump's advisors.

[Simon Rabinovitch]

Scott Besant has kind of taken the much more traditional treasury line, which is that a strong dollar is America's policy, that it's in America's interest, that it's not about to give up its reserve currency status.

[Darian Woods]

In fact, Scott Besant has said that he speaks for the administration's view on the dollar, not Stephen Myron, the chair of the Council of Economic Advisors. Simon recently had a conversation with Myron.

[Simon Rabinovitch]

And he tried to say that, well actually, you know, I think people have misinterpreted my viewpoint. I was never saying that I want the dollar to be weak, but that really seems like kind of a post hoc change of few when he actually begins to see that in pract idea of reducing the dollar's reserve currency status is something that will really work against America's long term interests.

[Adrienne Ma]

Right now Scott Besant and his worldview seem to be winning out at the White House, but that hasn't stopped him and other advisors from being put in some pretty awkward positions trying to justify the on again off again tariffs.

[Darian Woods]

When Trump pushed pause on a lot of those global tariffs in early April, Scott Besant said the change was Trump's strategy all along, nothing to do with the crumbling markets. Just an hour later, President Trump contradicted Besant, saying that the pause was because of the falling bond market.

[Adrienne Ma]

And this goes to show the limitations of whispering in this president's ear. No matter how much global economic history you can sweetly cite. What ultimately matters to Trump is his gut.

[Darian Woods]

This episode was produced by Lily Kiros and engineered by Kwesi Lee, was fact checked by Tyler Jones, Cake and Cannon edits the show and the indicator is a production of npr.

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