Trump's Tariff Tumult

Summary

Summary of NPR Politics Podcast Episode: "Trump's Tariff Tumult"

Release Date: March 6, 2025

In the episode titled "Trump's Tariff Tumult," NPR Politics delves into the recent surge of tariffs implemented by President Donald Trump and their multifaceted impact on the U.S. economy, international relations, and global trade dynamics. Hosts Sarah McCammon and Asma Khalid, alongside NPR's chief economics correspondent Scott Horsley, provide a comprehensive analysis of the situation, exploring the motives behind the tariffs, the reactions from businesses and markets, and the international community's response.

---

1. Overview of Recent Tariff Actions

The episode opens with Sarah McCammon introducing the topic of President Trump's latest tariff measures. Scott Horsley outlines the rapid changes in tariff policies over the past week:

"On Monday, we had no tariffs on imports from Canada and Mexico. On Tuesday, we had suddenly a 25% tax on nearly all imports from Mexico and Canada... today, it was relaxed further as far as most imports from Mexico go."
(01:08)

These swift adjustments indicate a volatile approach to trade policy, placing the U.S. economy in "questionable territory."

2. White House’s Rationales for Implementing Tariffs

Asma Khalid compares the current wave of tariffs to those from Trump's first term, highlighting their expanded scope:

"These tariffs feel a lot more widespread and expansive than the tariffs in Trump term one... they've increased tariffs on China to about a 45% cumulative rate."
(02:44)

The administration's justifications for these tariffs are multifaceted. Scott Horsley identifies several stated reasons:

"The tariffs against Mexico and Canada and to some extent China are ostensibly a reaction to fentanyl coming into the US illegally... it's also about illegal immigration... encourage people to manufacture in the United States... raise revenue to offset the expected loss in revenue from extending the 2017 tax cuts."
(03:27)

However, he notes the inherent contradictions in these objectives, as tariffs cannot simultaneously address all these issues effectively.

Asma further critiques the administration's use of tariffs as a "multipurpose Swiss army knife," lacking a clear, concise end goal:

"At some point you wonder, what is this? Isn't this a negotiation tactic? Is it a political tool? Is it an economic tool? Is it about raising revenue? Is it about immigration?"
(04:06)

3. Impact on Jobs and Domestic Manufacturing

The conversation shifts to the implications of tariffs on domestic employment. Referencing Commerce Secretary Howard Lutnick's remarks:

"Why are our Michigan jobs in Canada? That's what the president's going to address. He's going to say, come on back. We're going to build Michigan, we're going to build Ohio."
(05:15)

Scott Horsley explains the administration's perspective:

"The administration sees it as that simple. They do think tariffs are a way to encourage domestic manufacturing."
(05:35)

However, he counters this viewpoint by emphasizing the traditional Republican stance against government intervention in business decisions:

"Republicans traditionally have said we don't want the government picking winners and losers... this is exactly the government picking winners and losers."
(06:28)

4. Business and Market Reactions

The episode examines how businesses and financial markets are responding to the tariffs. Scott Horsley provides a stark portrayal of market sentiment:

"The Dow Jones industrial average tumbled more than 1300 points on Monday and Tuesday... as the business community does not like this uncertainty."
(07:57)

Asma Khalid adds that while some individual companies may benefit, the broader economic consensus remains negative:

"Most economists would say the tariffs were not a net positive for the United States economy."
(10:51)

Scott Horsley draws a historical parallel, likening the current tariffs to the Smoot-Hawley tariffs of the 1930s, which exacerbated the Great Depression:

"This is akin to what we saw in the 1930s with the Smoot Hawley tariffs, which economists are almost unanimous in saying that global trade war worsened the Great Depression."
(10:51)

5. International Reactions and Relations

The international fallout, particularly with Canada and Mexico, is explored next. Asma Khalid notes:

"Canada and Mexico have long been close allies... the Trump administration’s tariffs are straining these relationships."
(12:02)

Scott Horsley contrasts the responses of Canadian and Mexican leaders, highlighting differing diplomatic approaches:

"Mexican President Claudia Schoenbaum took a more conciliatory approach... Justin Trudeau, the prime minister of Canada, whom the president has a notably frosty relationship with."
(12:42)

Asma reflects on the enduring tariffs on China, maintained by both Republican and Democratic administrations, questioning the administration's clear objectives:

"I don't have clarity over what the end goal is with these tariffs."
(13:21)

6. Long-Term Implications and Conclusions

The hosts summarize the broader implications of Trump's tariff strategies. Asma Khalid emphasizes the lack of a clear, unified purpose behind the tariffs, making their long-term benefits dubious. Scott Horsley reiterates the potential for significant economic disruption and reduced competitiveness in global markets.

"These tariffs are going to be a turnoff for international markets... most economists would say the tariffs were not a net positive for the United States economy."
(10:51)

The episode concludes with a cautionary note about the unpredictable nature of the current tariff policies and their potential to destabilize both the U.S. economy and international trade relations.

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Notable Quotes with Timestamps:

• Scott Horsley (01:08): "On Monday, we had no tariffs on imports from Canada and Mexico. On Tuesday, we had suddenly a 25% tax on nearly all imports from Mexico and Canada... today, it was relaxed further as far as most imports from Mexico go."

• Asma Khalid (02:44): "I've spoken to some manufacturers who say that they are now looking at about a 45% cumulative tariff on imports coming in from China."

• Scott Horsley (03:27): "The tariffs can't do all of those things. They're mutually incompatible."

• Asma Khalid (04:06): "At some point you wonder, what is this? Isn't this a negotiation tactic? Is it a political tool? Is it an economic tool? Is it about raising revenue? Is it about immigration?"

• Scott Horsley (07:57): "The Dow Jones industrial average tumbled more than 1300 points on Monday and Tuesday."

• Asma Khalid (10:51): "Most economists would say the tariffs were not a net positive for the United States economy."

• Scott Horsley (10:51): "This is akin to what we saw in the 1930s with the Smoot Hawley tariffs."

---

Conclusion

"Trump's Tariff Tumult" provides an insightful examination of the administration's aggressive trade policies, highlighting the complexities and contradictions inherent in using tariffs as a broad-spectrum economic tool. Through expert analysis and informed discussion, the episode underscores the precarious balance between protecting domestic industries and maintaining healthy international trade relationships, ultimately questioning the efficacy and long-term viability of Trump's tariff strategies.

Transcript

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[Madison Brainard]

Hey, I'm Madison Brainard, a student and reporter at the University of Alabama, and I'm about to go live in the news wall for the first time.

[Sarah McCammon]

This podcast was recorded at 1:18pm Eastern Time on Thursday, March 6.

[Madison Brainard]

Things may have changed by the time you hear this, but hopefully I'll have nailed my first live shot.

[Unnamed Speaker]

Woo.

[Asma Khalid]

Congratulations.

[Sarah McCammon]

I have no doubt. Hey there. It's the NPR Politics podcast. I'm Sarah McCammon. I cover politics.

[Asma Khalid]

And I'm Asma Khalid. I cover the White House.

[Sarah McCammon]

And on today's show, we are looking at the tariffs President Trump has put in place this week and how they're affecting the economy. So we've got NPR's chief economics correspondent, Scott Horsley with us. Hi, Scott.

[Scott Horsley]

Hi. Great to be with you all.

[Sarah McCammon]

Always good to have you. You know, just remind us, there's been so much tariff talk from Trump, but what has actually been put in place so far?

[Scott Horsley]

Well, you know, I think that caveat that we always put at the top of the podcast, things may have changed by the time you hear this is particularly apt in this circumstance because it's been a wild week. On Monday, we had no tariffs on imports from Canada and Mexico. On Tuesday, we had suddenly a 25% tax on nearly all imports from Mexico and Canada. On Wednesday, that tax was relaxed as far as cars go. Today, it was relaxed further as far as most imports from Mexico go, that is imports covered by the US Mexico, Canada, Free Trade Agreement. So it's changing hour by hour, day by day, but it's certainly put the economy into a lot of questionable territory.

[Sarah McCammon]

So, Asma, like Scott just said, there's been a lot of back and forth here. I mean, what is the White House trying to do just sort of bring us up to speed on where they're focusing these tariffs and why.

[Asma Khalid]

So to me, these tariffs feel a lot more widespread and expansive than the tariffs In Trump term one, when you're talking about 25% tariffs across the board on Canada, which at this moment in time, as of taping are still in place. There were also 10% tariffs, additional 10% tariffs on China that the Trump administration announced last month. Then just this week, they increased that to an additional 10% tariff. So, you know, I've spoken to some manufacturers who say that they are now looking at about a 45% cumulative tariff on imports coming in from China, because I don't know if folks remember, but they were actually tariffs put in place on China during Trump's first term. The Biden administration kept those in place.

[Sarah McCammon]

So those are still there.

[Asma Khalid]

Those are still there. And they're tacking more on. Right. And then on top of that, they have announced plans for, across the board, 25% tariffs on steel and aluminum imports coming into the United States from any country. And then the big headline is on April 2, Trump is calling for something called reciprocal tariffs. And his basic philosophy here is that this is about fairness. He says that other countries put high tariffs on the United States, and so we as a country ought to tariff those countries back at an equal rate.

[Sarah McCammon]

You know, Asma, you just mentioned the Trump administration saying that this is about fairness. But I just want to step back a little further. Both of you. What is Trump's sensible rationale for doing this?

[Scott Horsley]

Well, you know, they've offered multiple rationales. The tariffs against Mexico and Canada and to some extent China are ostensibly a reaction to fentanyl coming into the US Illegally, even though in the case of Canada, virtually no fentanyl comes from Canada. It's also about illegal immigration. But the president has also talked about using tariffs to encourage people to manufacture in the United States as opposed to in other countries. And then he's also talked about using tariffs to raise revenue to offset the expected loss in revenue from extending the 2017 tax cuts. The thing is, tariffs can't do all of those things. They're mutually incompatible.

[Asma Khalid]

I don't think that the deluge of tariffs should be a particular surprise to a lot of folks, because Trump campaigned on tariffs. He famously said that this was the most beautiful word in the dictionary. I think we anticipated this. They have come, though, I will say, with such a degree of speed. I mean, we didn't even mention this. But there's also investigations to possibly add tariffs to other specific things like lumber and copper. He's also floated the idea of putting tariffs on semiconductors. So this is an across the board tool. And as Scott was saying, it feels like the White House thinks that this is like a multipurpose Swiss army knife, right? Like you can pull it out for all sorts of things. And at some point you wonder, well, what is this? Isn't this a negotiation tactic? Is it a political tool? Is it an economic tool? Is it about raising revenue? Is it about immigration? I don't know that we have a clear vision of that. Trump officials have been asked multiple times on different, you know, television interviews what this is about. And I don't think that they have delivered a clear, concise answer about what these tariffs are actually meant to achieve.

[Sarah McCammon]

And, you know, it's not just about goods. It's also about jobs. I want to ask you both about something that U.S. commerce Secretary Howard Lutnick said on Fox News recently.

[Unnamed Speaker]

Why are our Michigan jobs in Canada? Why are our Michigan jobs in Canada? And that's what the president's going to address. He's going to say, come on back. Come on back. We're going to build Michigan, we're going to build Ohio.

[Sarah McCammon]

I mean, Scott, help us put this in context. Is it really that simple?

[Scott Horsley]

Well, the administration certainly sees it as that simple. And as we've said, they do think tariffs are a way to encourage domestic manufacturing. And this is one reason that the United Auto Workers union has been supportive of these tariffs, even though, as we mentioned now, autos have gotten a one month reprieve from from the import taxes. But the answer to Secretary Lutnick's question is why are those jobs in Canada? Because in this country, we've generally left it up to business people to make decisions about where factories should be located. We don't leave that up to central planners in Washington at the Commerce Department or the White House. Republicans traditionally have said we don't want the government picking winners and losers. Well, this is exactly the government picking winners and losers when the president can, with the stroke of a pen, impose a 25% tax on imports and then grant select collective exemptions to industries or executives or foreign governments that cozy up to him.

[Sarah McCammon]

Okay, it's time for a quick break. We'll have more in just a moment.

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On Throughline from npr.

[Scott Horsley]

The consequences for the country would have been enormous. It would have been a crisis.

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[Sarah McCammon]

And we're back. Scott, you were talking a minute ago about picking winners and losers, which brings me to the question, how are businesses and also how are the markets reacting to all of this?

[Scott Horsley]

You know, the stock market has been flashing a signal to this administration that could not be more clear. Investors do not like this trade war. The Dow Jones industrial average tumbled more than 1300 points on Monday and Tuesday. Once it became clear that the tariffs on Mexico and Canada were going to take effect, the market rebounded, rebounded somewhat on Wednesday when the White House granted a carve out to automakers in North America so long as they meet the terms of the usmca, the US Mexico, Canada Trade Agreement. And it was only a one month carve out. We've seen a further carve out on Thursday with tariff relief granted to all products coming from Mexico, again for just one month. But the market is once again down. As we tape this, it's down about 500 points because the business community does not like this uncertainty.

[Sarah McCammon]

Yeah. Asma, how much does the White House, how much does President Trump respond to those signals from the business community?

[Asma Khalid]

I mean, as Scott said, he certainly takes a lot of cues from the stock market, but I will say sort of broader in terms of their vision on tariffs. I don't see President Trump completely dialing down tariffs entirely. And I would say that for two reasons. One is because, as I mentioned, he campaigned heavily on them and he did keep in place some tariffs. I mean, I know there was a lot of trade war, tit for tat during his first term, but he did keep in place some tariffs on China. And the second reason I will say is I think there are like multiple reasons why he is doing this. And one reason you'll hear from the administration is that this is about bringing more jobs back to the United States. And I know, Scott, you were talking about that just a minute ago. But you know, they'll say that this is across the board. You know, President Trump was joined earlier this week at the White House with the CEO of the largest semiconductor chip maker in the world. This is a Taiwanese company, TSMC, and together they announced this $100 billion in US factories down in Arizona. And you know, the Trump administration's argument is, hey, look, we were able to achieve this through a threat of tariffs on Semiconductors, we didn't use subsidies like the CHIPS act that former President Biden was touting. They see opportunities for economic investment to occur on the soil of the United States through tariffs. And you know, there are individual companies that they can point to. There certainly are. And Scott, I'm sure you've talked to them too, that that will say we have benefited from the implementation of these tariffs. I mean, there's a wire company not far from here out in Maryland who, you know, is really optimistic about these tariffs. They make their products in the United States. They rely on American made steel. And yes, there are individual companies that perhaps have benefited from these tariffs. But I think on the totality, when you look at what happened from 2018, 2019, if we're gonna look to the past, most economists would say the tariffs were not a net positive for the United States economy.

[Scott Horsley]

And look, manufacturers in this country want to sell their products not only in the United States, they want to sell their products around the world. Farmers in this country desperately depend on global markets to sell their products. And these tariffs that the Trump administration is imposing to protect the domestic market are going to be a turnoff for those international markets. And we saw this in 2018, 2019, when US businesses lost foreign customers, lost foreign market share because the retaliatory tariffs that were imposed during the first Trump trade war. And as Asma says, this round of tariffs, what's already happened and what's in the pipeline is far more sweeping than what we saw in 2018, 2019. This is akin to what we saw in the 1930s with the Smoot Hawley tariffs, which economists are almost unanimous in saying that global trade war worsened the Great Depression.

[Sarah McCammon]

Okay, we've talked a bunch about businesses and how they're responding, but what about the countries that are being targeted with these tariffs? I mean, I'm thinking about Canada, which has of course been for such a long time, such a close US Ally, and others.

[Asma Khalid]

I mean, we've seen the political and economic reaction in Canada where we've seen them impose reciprocal tariffs of their own in response to what the Trump administration has put forth. You're also just seeing, I would say, the political culture sort of shift in real time where the United States and Canada have long been close allies and friends. And, you know, to the degree that other countries retaliate, once these April 2 big tariffs are announced, we'll have to see. I mean, the Trump administration's argument, and this is true, is that certain countries do have much higher tariff rates on US Exports than the other way around. And so that is their argument. They want to level the playing field.

[Scott Horsley]

But again, Canada and Mexico, we had a free trade agreement with Canada and Mexico, which the Trump administration signed.

[Asma Khalid]

That is correct.

[Scott Horsley]

In 2020 and which they have now ripped apart. Now, it is interesting, Mexican President Claudia Schoenbaum took a more conciliatory approach, a softer approach. She didn't impose retaliatory tariffs right away, although she threatened that she would do so on Sunday. And maybe that's why she's gotten a reprieve, a little bit more so than Justin Trudeau, the prime minister of Canada, whom the president has a notably frosty relationship. And some people have said this all comes down to personalities, kind of like what we've seen with Ukraine. You know, it's just who does President Trump personally get along with?

[Asma Khalid]

I do think it's worth pointing out, though, that a batch of tariffs from the Trump administration, the ones that were put on China, were kept in place during the Biden years, because I think if people just hear this at the outset, I think there's an assumption that tariffs are inherently good or bad. And one of the questions I've had is, well, then why did a Republican administration put them in place on China and a Democratic one kept them in place? And I think that this is partly about, like, what is your end goal with the tariffs? And that's what I keep coming back to with the Trump administration. I don't have clarity over what is the end goal. You know, if the end goal is to diversify your supply chains away from China, then fine, you, you've actually achieved that. I would say to some degree you have more things maybe being produced in a place like Vietnam. But I think the challenge right now is when you have such sweeping tariffs on a whole bunch of countries, including your neighbors, who you had a trade deal with, it's really not clear what the end goal is for putting all those tariffs in place.

[Sarah McCammon]

All right. I think we're going to leave it there for today. Scott Horsley, so good to have you with us. Thank you for being here.

[Scott Horsley]

Great to be with you.

[Sarah McCammon]

We'll be back tomorrow with the weekly roundup. I'm Sarah McCammon. I cover politics.

[Asma Khalid]

And I'm Asma Khalid. I cover the White House.

[Sarah McCammon]

And thank you for listening to the NPR Politics podcast.