Trump 2.0: Tariff Turnaround

Summary

Detailed Summary of "The Journal" Podcast Episode: "Trump 2.0: Tariff Turnaround"

Release Date: April 11, 2025

Podcast Information:

• Title: The Journal
• Host/Author: The Wall Street Journal & Gimlet
• Description: The most important stories about money, business, and power. Hosted by Kate Linebaugh and Ryan Knutson, with Jessica Mendoza. "The Journal" is a co-production of Spotify and The Wall Street Journal.

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Introduction

In the episode titled "Trump 2.0: Tariff Turnaround," hosts Kate Linebaugh and Molly Ball delve into the recent tumultuous events surrounding former President Donald Trump's aggressive tariff policies. Released on April 11, 2025, the discussion centers on the economic and political ramifications of Trump's decisions, the internal dynamics of the White House, and the uncertain future of international trade relations.

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Trump's Tariff Announcement and Market Reaction

The episode opens with Kate Linebaugh expressing fatigue over the recent tariff maneuvers:

Kate Linebaugh [00:29]: "I'm a little bit exhausted from the tariff rollercoaster of the last week."

Trump's announcement of sweeping tariffs, referred to as "Liberation Day," initially caused significant market instability:

Kate Linebaugh [00:29]: "When Trump announced sweeping tariffs, the markets tanked."

However, the narrative shifted midweek when Trump announced a 90-day pause on these tariffs, leading to a market rebound:

Molly Ball [00:58]: "We've now had several polls come out since Liberation Day. All of these polls are showing that his approval rating on the economy specifically has tanked."

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Political Implications and Approval Ratings

Molly Ball highlights the adverse political fallout from the tariff policies:

Molly Ball [00:58]: "The tariffs are not popular by big double digit margins, 20, 30 points with all kinds of voters."

Despite Trump's initial stance, polls indicate a significant decline in his economic approval ratings, revealing widespread voter dissatisfaction across various demographics.

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White House Dynamics and Internal Pressures

To provide deeper insights, White House reporter Josh Dawsey joins the conversation, shedding light on the internal atmosphere within the administration post-Liberation Day:

Josh Dawsey [04:24]: "There were certainly folks who were deeply concerned about the markets and watching them plummet every day and getting lots of calls from corporate America, from lobbyists, from all sorts of folks asking for a pause."

Dawsey explains the bifurcated sentiment among White House officials, with some advocating for resilience and others urging decisive action due to unsustainable economic pressures.

Key Players Influencing the Decision:

• Chief of Staff Susie Wiles: Facing pressure from corporate America and political figures.
• Treasury Secretary Scott Besant: Engaged in numerous discussions with Wall Street stakeholders.
• Peter Navarro: Remains a staunch advocate for tariffs, though his influence is waning.

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The 90-Day Tariff Pause: Strategy and Implications

The pivotal moment in the episode is Trump's decision to implement a 90-day pause on reciprocal tariffs:

Josh Dawsey [08:19]: "The Treasury Secretary Scott Pustin has been the key player here in getting him to this outcome."

This pause serves as a strategic maneuver, allowing the administration time to negotiate deals without appearing to capitulate entirely. It aims to:

• Provide Negotiation Space: Allowing countries to approach the U.S. for favorable deals.
• Maintain Aggressiveness Towards China: By keeping tariffs on China, Trump sends a clear message of continued pressure on the nation.

Quote Highlight:

Josh Dawsey [08:26]: "This 90 days grants him time to negotiate."

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Listener Questions and Discussions

1. President's Potential Personal Profits and Insider Trading Concerns

A listener from Houston, Tim Madison, raises pertinent questions about the ethical implications of Trump's tariff announcements:

Tim Madison [12:48]: "Can he profit personally from these rapid shifts by using his foreknowledge of his actions... If so, is this a case of insider trading?"

Molly Ball responds by acknowledging the skepticism and the ongoing investigations:

Molly Ball [13:23]: "Democrats are saying that this is something that they're going to investigate."

Currently, there is no concrete evidence linking Trump to personal profits from these actions, but the topic remains under scrutiny.

2. Trump Administration's Tariff Strategy vs. Negotiations

Listener Richard Zernick from Spokane questions the administration's blanket approach to tariffs:

Richard Zernick [14:20]: "Why didn't the Trump administration just go out and negotiate or renegotiate with all of those countries for more favorable domestic manufacturing...?"

Josh Dawsey explains Trump's preference for leveraging tariffs to gain negotiation power:

Josh Dawsey [14:51]: "If you go out and say we're going to make deals and people aren't feeling any pain or any punishment, they might be less likely to come to the table."

The administration believes that showing firmness through tariffs compels other nations to engage in meaningful negotiations.

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Current Status and Future Outlook

Despite the 90-day pause, uncertainty looms over the future of tariffs and their long-term economic impact:

Molly Ball [16:07]: "This is now a major trade war, much bigger than anything Trump did against China in his first term."

Economists predict rising prices on imported goods and potential recessionary trends as outcomes of these ongoing tariff policies. The fluctuating nature of Trump's decisions adds to the unpredictability, keeping markets on edge.

Quote Highlight:

Josh Dawsey [20:57]: "Sort of this elaborate gamesmanship is what I'm expecting."

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Conclusion and Looking Ahead

As the episode wraps up, hosts reflect on the high stakes involved and the critical 90-day window the administration faces:

Josh Dawsey [17:46]: "What Trump wants to get done is a lot of deals with various countries and then he will go out and tout his deal-making process."

Molly Ball emphasizes the prolonged uncertainty:

Molly Ball [18:48]: "We still don't know where the economic picture is going to end up."

The hosts anticipate continued discussions on tariffs in future episodes, underscoring their significance in the broader economic and political landscape.

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Production Credits:

• Produced by: Enrique Perez de la Rosa
• Edited by: Katherine Whelan
• Engineered by: Nathan Singapak
• Theme Music: So Wiley, remixed by Peter Leonard
• Fact Checking: Kate Gallagher
• Artwork: James Walton

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This comprehensive summary encapsulates the key discussions, insights, and conclusions from the "Trump 2.0: Tariff Turnaround" episode of "The Journal." It provides a clear understanding of the complex interplay between economic policies, political repercussions, and internal administration dynamics, offering valuable context for listeners and non-listeners alike.

Transcript

[Kate Linebaugh]

Hi, Molly.

[Molly Ball]

Hey, Kate.

[Kate Linebaugh]

I know you're not surprised to see me here, but I'm here for Ryan.

[Molly Ball]

Yeah, I was hoping you'd do like a Ryan impression, you know, like maybe you can like talk about basketball and I could be confused.

[Kate Linebaugh]

And the Ducks.

[Molly Ball]

Yes, definitely some Oregon references. Got to get that in here.

[Kate Linebaugh]

But we're not going to do that.

[Molly Ball]

Anyway, great to have you. How are you doing?

[Kate Linebaugh]

I'm doing just fine. I'm a little bit exhausted from the tariff rollercoaster of the last week. It's been a lot indeed since so called Liberation Day. When Trump announced sweeping tariffs, the markets tanked. And then on Wednesday, Trump put in place a 90 day pause and the stock market shot up.

[Molly Ball]

That's right.

[Kate Linebaugh]

So, Molly, what does this mean for Trump politically? How is it playing out?

[Molly Ball]

Not great. We've now had several polls come out since Liberation Day. All of these polls are showing that his approval rating on the economy specifically has tanked. It's underwater. The tariffs are not popular by big double digit margins, 20, 30 points with all kinds of voters. So, yeah, it's not going great.

[Kate Linebaugh]

And is that why the pause button was hit?

[Molly Ball]

Well, we're going to talk about that. It seems to have had less to do with the politics than with the markets. That seems to have been what finally scared him straight.

[Kate Linebaugh]

From the Journal, this is Trump 2.0. I'm Kate Linebaugh.

[Molly Ball]

And I'm Molly Ball.

[Kate Linebaugh]

It's Friday, April 11th. Coming up, we'll break down the week in tariffs and go behind the scenes at the White House.

[Tim Higgins]

I'm Tim Higgins with the Wall Street Journal. We've got this spot to hear directly from the leaders behind the bold name companies we cover every day. Check out bold names from the Wall Street Journal wherever you get your podcasts.

[Kate Linebaugh]

So, Molly, last week Trump announced these sweeping tariffs and seemed to be sticking to his guns until Wednesday when in a post on Truth Social, he announces this pause. Were you surprised?

[Molly Ball]

I mean, you know me, I try never to be surprised by anything Trump does. He had repeatedly said that he, like you said, was gonna ride this out, was gonna stick to his guns, didn't mind the pain, didn't care what was happening in the economy and the markets. But we were hearing this rising tide of angst from people around him and people in the Republican Party. So it wasn't too surprising that he did decide to change course. But if there's anything that's predictable about Trump, it's unpredictability.

[Kate Linebaugh]

And to help us understand what happened in the Trump orbit, We're joined by our colleague, White House reporter Josh Dawsey. Hey, Josh.

[Molly Ball]

Hey, Josh.

[Josh Dawsey]

Hi. How are you guys doing?

[Molly Ball]

Well, thanks for being with us.

[Josh Dawsey]

Of course.

[Kate Linebaugh]

Josh, what has the mood been like at the White House since Liberation Day?

[Josh Dawsey]

Well, at the White House, I think it depends who you talk to. There were certainly folks who were deeply concerned about the markets and watching them plummet every day and getting lots of calls from corporate America, from lobbyists, from all sorts of folks asking for a pause, and then others who said, we're going to be resilient. We're going to take this pain for a little bit. It's a global reordering of the economy. Frankly, it's going to suck for a while and we're just going to hang tight. Of course, then the President decided to change course. So I think over the past week, you saw really faction some people who thought, it's time. We've got to do something. This isn't sustainable, and other folks who said, you know, this is gonna hurt for a little bit.

[Kate Linebaugh]

Who were the players in the administration who were getting pressure?

[Josh Dawsey]

Well, I think Chief of Staff Susie Wiles was getting pressure from lots of corporate America, from politicians. I think Treasury Secretary Scott Besant, I was told, was getting lots of calls from people on Wall Street. Peter Navarro gets less of that. He's one of the president's trade advisors. He's probably the biggest tariff hawk in the White House. And I think most folks who to see the president relent, believe talking to Peter was a waste of time. But I was talking to some lobbyists during this who said, you know, anyone who had any sort of connection to the White House, they were trying to use in this moment just to get messages to Trump about how bad it is.

[Kate Linebaugh]

When would you say that Trump really saw how bad it was and started to think about changing course?

[Josh Dawsey]

Well, I would start this weekend where Scott Besant went down to Florida and met with him. And our understanding is, you know, made a case that you could make deals with these countries, and there were lots of things the administration could do that would not look like a capitulation. I also think Trump heard from a lot of different friends in New York about the tariffs while he was down in Florida this weekend. As you know, everyone from New York sort of goes to Palm beach in those circles in the winter, and his club was packed. He was at various fundraisers, various events at the club. Also, multiple people told us that he was watching not just the stock market, but the credit market and the bonds. And we're seeing some bad signs there and that those things mattered. But it's really hard to know. I mean, I talked to someone who had done a call with Trump on Monday, and this person said on Monday, Trump was saying, I like the position I'm in, was gonna be a little bit of pain, but we're gonna get through it. And then by Wednesday had changed his mind. So it's hard to know, but there were lots and lots and lots of factors I think at play here.

[Kate Linebaugh]

Molly, I was curious, like, as he was holding his guns, sticking to this policy earlier in the week, what were you hearing?

[Molly Ball]

Well, you know, there's always been this divide in the Republican Party between the sort of new right protectionists who have actually been cheering what Trump has been doing. And I talked to some of them as well as the more traditional Republicans, most of whom have been pretty horrified by Trump's moves in this direction. So, you know, there were some in like this sort of new right think tank world who were saying, yes, he's finally doing it. This is the promise that we believe he was elected on. And this is a very influential faction in today's White House. Not only the sort of Peter Navarros of the world, but JD Vance is really one of the intellectual architects of this movement that wants to move the Republican Party in what they see as a pro worker direction. And they're true believers in this philosophy Trump has been espousing about sort of gutting it out in the name of long term reindustrialization. So some people were absolutely thrilled to see that Trump was not cowed by the markets and they were relatively dismayed to see him then cave.

[Kate Linebaugh]

What role did his team play in changing his mind?

[Josh Dawsey]

Well, I mean, a lot of the particulars we're still trying to figure out, but on Wednesday, he had a meeting with Scott Bessant, his Treasury secretary, and Howard Lutnick. And in that meeting is when he dashed off at True social post at 1:18pm that sort of sent the market surging up. I think he had talked to lots of his trade advisors on Monday and Tuesday, you know, throughout the day about what he should do. I think the way it was described to me by multiple people is that Treasury Secretary Scott Pustin has been the key player here in getting him to this outcome.

[Kate Linebaugh]

And the face saving solution is that this 90 day pause grants him time to negotiate.

[Josh Dawsey]

Yeah. And I think what the argument was is that in this 90 days you'll have lots of countries that come to the table and want to make deals with us and it won't just be viewed as a capitulation of the end of 90 days. You'll have a lot to show for it. Now. We'll see if the White House is able to actually pull that off or not. But we're hearing pretty reliably that, you know, lots of different countries really are coming to the table and have been in the most recent days because, you know, they don't want extraordinary tariffs from the United States on their products.

[Molly Ball]

Josh, one thing I've been interested about in this whole episode is that I felt like sort of infighting between different White House officials was a big theme of the first Trump term. But there hasn't necessarily been as much of it this time around. But now with these conflicts over economic policy, we're really seeing a return to that. I mean, how much are they sort of at each other's throats in the White House these days?

[Josh Dawsey]

Well, I think it is less in the first term, but it's rare that you see one top advisor to the president, Elon Musk, call another when Peter Navarro, his other trade advisor, a complete and total moron publicly. And this administration, it just Caroline Levitt goes out to the podium, she says we're the most transparent administration ever. Boys will be boys and move it right along. Right? It's a certainly like those are pretty remarkable. That word has been used a lot for Trump and sometimes it's hyperbolic and whatever. But to see people actively working for president, going publicly and calling others idiots and morons and even using the R word that I'm not gonna use here, cuz it's a family friendly podcast, it's pretty remarkable. I mean, it's pretty remarkable.

[Kate Linebaugh]

So where are we left in this conversation about tariffs right now?

[Molly Ball]

I think that's really the big question is sort of where do we go from here? Because we saw the market spike up on Wednesday with the announcement of the pause, but then it sort of fell back to earth on Thursday in part because I think Wall street collectively realized like, oh, this isn't over. We still don't know where this is all going to land, number one. Number two, with the extremely high tariff on China, which of course used to be a major American trading partner, and that across the board 10% tariff that remains in place, this is still a very large hike in tariffs, even if it's less than what was originally proposed. And we've talked about this on the show before, it's the uncertainty. Stupid, right? I'm not calling you stupid. I'm just referring back to the cliche about the economy, because what I think a lot of people on Wall street have taken from this whole episode is just that so much is riding on the president's whims, and he has such vast unilateral authority, unless the courts or Congress rein him in, that we're likely to be on this rollercoaster for a while longer. I don't know. What do you think, Josh?

[Josh Dawsey]

Yeah, I mean, Trump obviously believes in tariffs. That's one of his only things that he's, I think, kept a set position on for many, many decades. I mean, you go back to the 1980s and watch interviews with him, and he was saying the United States was getting ripped off on many tariffs. So I don't think this is going to be the last you hear of them. I mean, I think countries that do not give him what he want in the next 90 days or give him something that looks like a win in the next 90 days probably are going to get more tariffs.

[Kate Linebaugh]

We're going to take a quick break, and when we're back, we're going to hear some listener questions and look ahead to what the next 90 days hold for Trump's tariffs. Stick with us.

[Tim Higgins]

Christopher. I'm Christopher Mims of the Wall Street Journal. Every day we talk to the leaders behind bold name companies, and you can hear from them in bold names from the Wall Street Journal, wherever you get your podcasts.

[Kate Linebaugh]

So we would like now to hear from a listener. And we have a question from Tim Madison in Houston.

[Tim Madison]

My question has to do with the president's ability to significantly shift market returns. Can he profit personally from these rapid shifts by using his foreknowledge of his actions, which caused them to adjust his personal investments prior to his public announcement? If so, is this a case of insider trading? If so, is he protected from legal consequences of this action by the recent Supreme Court immunity decision? Thank you for your important work.

[Molly Ball]

I am not familiar with all the legalities involved, but certainly this is something that Democrats are on fire about. You know, on Wednesday morning, before he announced the rollback of the tariffs, Trump posted that it was a great time to buy. And there's some ev that at least some people did take that advice. And so the question is, did they have foreknowledge? And the president himself had people in the White House, and he's pointing at them saying, look how much money they made off of taking my advice. And Democrats are saying that this is something that they're going to investigate.

[Kate Linebaugh]

And to be clear, right now there's no evidence that Trump himself profited personally?

[Josh Dawsey]

No, again, we have no evidence of that, but it's certainly like an open question of something that I think is.

[Kate Linebaugh]

Worth exploring, and I'm sure it's something a lot of reporters are exploring right now. But now we'd like to hear from another listener, Richard Zernick in Spokane, Washington.

[Richard Zernick]

Hello, my name is Richard, and my question is this. Instead of imposing tariffs on every country in the world and affecting the American economy in a detrimental manner, why didn't the Trump administration just go out and negotiate or renegotiate with all of those countries for more favorable domestic manufacturing and importing and exporting of goods whereby they look like they're getting a win win situation instead of expecting every country on earth to come to us?

[Josh Dawsey]

Well, they could have done that. And I think that's a fair question. I think what Trump would say is you are better having negotiations when you have leverage. Right. If you go out and say we're going to make deals and people aren't feeling any pain or any punishment, they might be less likely to come to the. I think you could have had a lot less of an impact on the economy. Certainly the way they did it had a deleterious impact on markets, really sort of threw the world into chaos. And I think there are a lot of questions on whether that is worth it. But I think in Trump's mind, he says, I showed you I was playing hardball here, at least for a week, and I might do this again if you don't give me a deal and you need to come to the table. Right. So, you know, I think it's certainly a fair question to say you could have just gone out and made deals with these countries one on one. Would the countries have been as eager to come to the table without this? I don't know the answer to that.

[Kate Linebaugh]

In his 90 day pause, he paused these so called reciprocal tariffs on all countries but one. He still kept the tariffs on China and turned up the heat. What does that say?

[Josh Dawsey]

Well, I think he wants to put China in an uncomfortable spot. He wants to build a wall kind of around them, so to speak. Right. I also think in that move, it gave him a way to not just say that he was pausing the tariffs and saying that he was taking a more aggressive stance towards one of these countries. Right. And I think he was to send a message to the rest of the world that, you know, if you come and give me a deal, you're not gonna have to be like China. Right. He wants to alienate them to Put them on an. And I think that's part of his strategy.

[Molly Ball]

Yeah, I mean, look, the trade war with China is well underway and with the caveat that Trump is nothing if not unpredictable and could reverse himself in any way at any moment. The reality is this is now a major trade war, much bigger than anything Trump did against China in his first term. And we are still at the very beginning of these tariffs actually being implemented. So the market gyrations may calm down a bit, but the real impact on the economy, which most economists believe we're going to see in the form of rising prices on a lot of imported products, that is, we are only at the beginning of that potentially starting to happen. And most forecasters are still saying we're likely going to be in for a recession. And I think we just don't know where the economic picture is going to end up.

[Kate Linebaugh]

The stakes are really high for the administration here and they have this 90 day window. What does the administration need to get done in that period?

[Josh Dawsey]

It depends who you ask. I mean, I think what Trump wants to get done is a lot of deals with various countries and then he will go out and tout his deal making process and say, you guys, we had to make these drastic steps and that brought everyone to the table and no other president would have done that. And you know, look at me. I mean, as someone was pointing out to me, you know, just as Trump has his politics here, every other country's leader has their politics as well. Do they want to be seen as kowtowing to Trump internally? Do they have to take him on more aggressively? I mean, I think it will be individual choices and we'll watch this play out over 90 days. But you know, I was talking in the past couple of days to a couple of the biggest lobbyists in Washington who raised money for Trump and are always at the White House with various clients and they're all signing these countries right now. Cuz these countries are trying to find someone with close ties to Trump to hopefully get a better deal.

[Molly Ball]

Something we still don't know is sort of what is the end game here because the administration keeps kicking the can down the road. We still don't know. They still haven't told us where they want to end up. What would constitute a satisfactory deal that would, would allow them to remove some of the tariffs on a permanent basis. What the 90 day pause means. Right. It obviously means they've created space for this kind of deal making. But at the end of 90 days, does the door come slamming back down or is There another pause? Is there some kind of, is it country by country? They really have not made clear just sort of where it's all going.

[Kate Linebaugh]

But last week on this podcast, we heard Howard Lutnick saying that but in six months, you'd start to see a revival of American manufacturing because of these tariffs. So what does this mean for the policy objectives that were used as the justification for these tariffs?

[Josh Dawsey]

That's a good question. I mean, I think if you ask some of Trump's advisors, like Peter Navarro, and I think Trump has even said this, that in one day he'll say the whole goal is to bring back American jobs, to impose these tariffs, to stop offshoring, to fundamentally reshape the economy. And then other days he says, I'm up for negotiation. Right? Give me the best deal, you'll give me what I suspect will happen. And again, I don't want to get in the prediction business, particularly with Donald Trump, but I suspect you will see a lot of deals because countries will want to give him things. He will want to have showy Rose Garden press conferences where he announces X, Y or Z and probably put some spin on it, so to speak. I bet you watch a lot of that play out in the next three months. And I think what you'll also see him do is play some of these countries against each other. Right. If you give me this, I'm gonna do this. This country's doing this. You've gotta do better than that. Sort of. This elaborate gamesmanship is what I'm expecting.

[Kate Linebaugh]

Well, Josh, thanks so much for joining us.

[Josh Dawsey]

This was fun.

[Molly Ball]

Thank you so much.

[Kate Linebaugh]

Molly, do you think this is going to be the last time we talk about tariffs?

[Molly Ball]

Well, we only have a couple more episodes, so maybe, you know, it's possible that there'll be so much else going on that we just won't even be able to get to them. But the tariffs have been a pretty big storyline of Trump 2.0 so far, so I'd be surprised if they don't come up again.

[Kate Linebaugh]

They're not going to come up next week because we're taking a week off.

[Molly Ball]

That's right. I'm going to spend my kids spring break, hopefully not thinking about tariffs at all.

[Kate Linebaugh]

Have fun. As you just heard, Trump 2.0 is taking a break next week, but we'll be back in two weeks on Friday, April 25th. Trump 2.0 is part of the Journal, which is a co production of Spotify and the Wall Street Journal. This episode, the episode was produced by Enrique Perez de la Rosa and edited by Katherine Whelan. Molly Ball is the Wall Street Journal's senior political correspondent. I'm Kate Linebaugh. This episode was engineered by Nathan Singapak. Our theme music is by so Wiley and remixed by Peter Leonard. Fact checking by Kate Gallagher. Artwork by James Walton. See you in two weeks.

[Tim Higgins]

Every day, Wall Street Journal reporters talk with the most powerful, influential and interesting people. And now we're bringing some of those conversations directly to you. I'm Tim Higgins. And I'm Christopher Mims. We're teaming up to ask tough questions of the leaders behind the bold name companies found in the pages of the Journal every day. Are you going to build that $20,000 vehicle?

[Josh Dawsey]

No, because that market sucks.

[Tim Higgins]

Check out bold names from the Wall Street Journal wherever you get your podcasts.