Podcast Summary: The Opinions – "Steve Ratner on Just How Bad Things Will Get Under Trump’s Tariffs"
Podcast Information:
- Title: The Opinions
- Host/Author: The New York Times Opinion
- Description: You've heard the news, here's what to make of it.
- Episode: Steve Ratner on Just How Bad Things Will Get Under Trump’s Tariffs
- Release Date: April 4, 2025
Introduction
In this episode of The Opinions, hosted by Patrick Healy, deputy editor of New York Times Opinion, the focus is on the economic ramifications of President Donald Trump’s recent implementation of extensive tariffs. Joining Healy is Steve Ratner, a contributing writer for Times Opinion, former head of President Obama's auto industry task force (nicknamed the "Car Czar"), and a seasoned Wall Street financier. Together, they delve into the potential consequences of Trump's tariff policies on both the American and global economies.
Trump’s Tariff Implementation and Market Reaction
Patrick Healy opens the discussion by highlighting Trump's unilateral decision to impose a sweeping tariff increase, citing a "trillion dollar hike on imports" that has rattled global markets. Healy notes significant drops in major stock indices such as the Dow, S&P 500, and NASDAQ—each falling over 3%—and observes similar downturns worldwide.
Steve Ratner compares this move to historical trade wars, deeming it "the most extraordinary trade war" since the 1920s and 1930s’ Smoot-Hawley tariffs. He emphasizes that post-World War II, nations recognized the benefits of reducing trade barriers, fostering an era of unparalleled prosperity driven by global trade.
Notable Quote:
“This is the most extraordinary trade war, if you want to call it that we have conducted since the 1920s and into the 1930s” — Steve Ratner [02:41]
Economic Philosophy and Trump's Mercantilist Approach
Ratner critiques Trump's economic understanding, suggesting that the president operates under a 19th-century mercantilist ideology aimed at trade surpluses and gold accumulation. He argues that Trump's approach disrupts the modern economic principle that trade allows countries to specialize in producing goods where they have a comparative advantage.
Patrick Healy probes whether Trump’s strategy reflects a broader vision of "Fortress America," questioning the feasibility of isolating the U.S. economy from global markets without detrimental effects.
Steve Ratner responds skeptically, stating, “I don't think you'll find many economists who think this can work,” [06:36] and elaborates on the impracticality of swiftly replacing imported goods due to insufficient domestic infrastructure.
Notable Quote:
“I don't think you'll find many economists who think this can work.” — Steve Ratner [06:36]
Trump’s Negotiation Tactics and Business Community’s Response
The conversation shifts to Trump's negotiation style, likening it to gamesmanship where tariffs serve as "cards" in a high-stakes negotiation. Ratner underscores that Trump views tariffs as leverage to extract concessions from trading partners rather than genuine economic reforms.
Patrick Healy draws parallels between Trump’s strategy and his earlier business ventures, suggesting a disconnect between executive orders and the complex mechanisms of the global economy.
Steve Ratner explains that despite America's significant economic leverage, other nations like the EU and China are unified and resilient. He doubts that Trump's bullying tactics will yield sustainable results, noting, “I don't think that's gonna work, but that's the road we're going down.” [10:31]
Notable Quote:
“I don't think that's gonna work, but that's the road we're downing.” — Steve Ratner [10:31]
Impact on Business Confidence and Economic Forecasts
Healy inquires about the business community's sentiment towards the new tariffs. Ratner reveals widespread dissatisfaction among businesses, including auto companies, who view the tariffs as detrimental. He highlights the reluctance of businesses to publicly criticize Trump due to potential repercussions, leading them to express concerns privately.
Additionally, Ratner discusses the forecast for the U.S. economy, citing Goldman Sachs' downgrade of economic growth to 1% and an increased inflation forecast to 4%. He predicts a heightened probability of recession, estimating a 50% chance, and suggests America is heading towards stagflation—a combination of stagnant growth and rising inflation.
Notable Quote:
“We're in uncharted waters... I think at very minimum, we're in what we called back in the 70s, stagflation.” — Steve Ratner [14:26]
Comparison with Previous Administrations and Public Perception
Ratner contrasts Trump's approach with that of former President Bill Clinton, who successfully navigated economic challenges through policies of shared sacrifice and strategic negotiation. He criticizes Trump's lack of a coherent economic narrative, arguing that without a clear long-term vision, public confidence wanes.
The discussion also touches on consumer confidence, with Ratner noting that Americans are increasingly disillusioned due to persistent issues like slow growth, stagnant productivity, and rising income inequality, all exacerbated by Trump's tariff policies.
Notable Quote:
“It's craziness. And there's not going to be another side here that's going to make people say, oh yeah, the guy's actually a secret genius.” — Steve Ratner [17:36]
Future Projections and Potential Outcomes
In concluding the episode, Ratner speculates on the possible trajectories of Trump’s tariff strategy. He presents two scenarios:
- Mild Concessions: Trump might achieve minor concessions, similar to the USMCA (a revised NAFTA agreement), allowing him to declare a superficial victory and reduce tariffs.
- Sustained Tariffs: Alternatively, Trump may intend for the tariffs to remain in place indefinitely, signaling a permanent shift toward protectionism.
Ratner leans towards the latter, suggesting that Trump may ultimately retract significantly, maintaining a protectionist stance that continues to destabilize the economy.
Notable Quote:
“I think we're closer to the second than the first this time around.” — Steve Ratner [19:12]
Conclusion
The episode concludes with a clear consensus that Trump's tariff policies are likely to have long-term negative impacts on the U.S. economy without delivering the intended benefits of economic independence or favorable trade deals. The lack of a coherent economic strategy and the potential for escalating trade conflicts pose significant risks of recession and decreased global economic standing for the United States.
Final Thought:
“This is craziness. And there's not going to be another side here that's going to make people say, oh yeah, the guy's actually a secret genius.” — Steve Ratner [17:36]
Notable Quotes with Timestamps:
- “This is the most extraordinary trade war, if you want to call it that we have conducted since the 1920s and into the 1930s” — Steve Ratner [02:41]
- “I don't think you'll find many economists who think this can work.” — Steve Ratner [06:36]
- “I don't think that's gonna work, but that's the road we're going down.” — Steve Ratner [10:31]
- “We're in uncharted waters... I think at very minimum, we're in what we called back in the 70s, stagflation.” — Steve Ratner [14:26]
- “It's craziness. And there's not going to be another side here that's going to make people say, oh yeah, the guy's actually a secret genius.” — Steve Ratner [17:36]
- “I think we're closer to the second than the first this time around.” — Steve Ratner [19:12]
Attribution: All quotes are attributed to Steve Ratner, the episode's guest, with respective timestamps indicating their position in the transcript.