The Trade Guys – "Tariff Talk Live at BAFT" (May 9, 2025)

Podcast: The Trade Guys
Host: H. Andrew Schwartz (CSIS)
Guests: Scott Miller & Bill Reinsch
Event: Live at BAFT

Episode Overview

This live episode at BAFT sees the Trade Guys—Scott Miller and Bill Reinsch—break down the current state of US and global trade policy under President Trump’s second term, the resurgence of tariffs, and shifting power dynamics in international trade relationships. The conversation touches on the administration’s “mission but not a plan” approach, how U.S. leverage is perceived and handled, the impact on allies such as Canada and Mexico, looming negotiations with China, and the possible global and domestic economic fallout. The tone is insightful, candid, and at times wryly humorous, with both guests offering historical perspective and policy analysis.

Key Discussion Points and Insights

I. The Shift in U.S. Trade Policy Mindset

• Trump’s Trade Stance Is Not New (02:49)

  • Trump’s views on tariffs and the U.S. being “ripped off” date back to the 1980s.
  • “These are views he's held for a very long time. And given that he's now in his second term, he's probably not going to change.” —Scott (04:04)

• Systemic Change and Chaos (03:49)

  • Reference to George Friedman's "The Storm before the Calm": We’re at the end of a sociopolitical and institutional cycle; post-WWII institutions are breaking down.
  • “They have a mission but not a plan.” —Scott (05:29)

II. Mission without a Plan

• The Administration’s Strategy (09:21)

  • While the President has direction—revive manufacturing, especially heavy industry—the actual plan remains murky.
  • Incentives (carrots) vs. penalties (sticks): Biden used incentives like the CHIPS and IRA acts; Trump uses tariffs as threats.
  • “Trump is a stick guy… I'm not going to pay them to do what I want. I'm going to threaten them with tariffs.” —Bill (08:57)
  • Some market incentives exist, namely low energy prices driving AI investment.

• Diplomatic Frustrations (10:24)

  • Foreign negotiators are unclear who to talk to or what the U.S. wants.
  • “They have two complaints actually. One, we don't know who to talk to and two, we don't know what the United States wants.” —Bill (10:32)

III. Trump’s Negotiating Style: Win-Lose, Not Win-Win

• “Only One Decision Maker” (11:08)

  • Trump frequently overrides advisors; decisions are highly centralized.
  • “Basically he's saying I'm going to run the economy and we're going to do it. They're going to do things the way that I say.” —Bill (11:17)

• Transactional Approach (12:51)

  • Trump expects others to concede; the U.S. often offers “not doing what was threatened,” rather than new access.
  • “There's only win-lose negotiations… the U.S. concession… is we're not going to do what we threatened to do.” —Bill

• Foreign Responses (14:09)

  • Many countries still hope for “win-win,” which creates diplomatic tension.
  • “Every other day there's a prediction we're going to have massive deals announced.” —Bill (14:09)

IV. U.S. Trade Leverage: Realities and Misconceptions

• Perception of American Leverage (16:24)

  • Trump and Lighthizer believe the U.S. market’s size gives the U.S. all the leverage.
  • “I think he overestimates our leverage and he underestimates the leverage that other countries have.” —Bill (16:41)
  • Prior China negotiations resulted in promises to buy American goods—which were not delivered.

• Specialization and Complexity (21:15)

  • Modern supply chains are specialized and cross-border; reshoring is not as simple as raising tariffs.
  • “There's a basic misunderstanding of how complex and specialized businesses are these days.” —Scott (21:15)

V. Spotlight on Key Trading Partners

• Canada and Mexico (23:44)

  • New Canadian PM Carney’s visit: aim was simply “no meltdown.”
  • Use of “Sheinbaum strategy”—assert sovereignty politely, make small concessions, let him (Trump) win.
  • “Let him win. Because… what he really wants to do is say I win. What it is that he wins is less important.” —Bill (24:53)

• Worries about China “Backdoor” (27:08)

  • Concern that Chinese goods will enter via Canada/Mexico if direct tariffs persist.

• Keeping USMCA? (27:05)

  • Trump suggests USMCA “may not be needed anymore,” causing uncertainty.

VI. Europe, Ukraine, and Geopolitical Risks

• Broader Geopolitical Concerns (32:26)
  • Europe’s priorities include preventing diversion of Chinese overcapacity and worrying about U.S. policy unpredictability.
  • The U.S. is now sending signals that “you can’t count on us,” which threatens America’s reputation as a reliable partner.

VII. The China Talks: Process and Prospects

• Upcoming High-Level Negotiations (36:28)
  • Secretary Bessant to meet China’s leadership; seen as a positive signal of possible de-escalation.
  • “This is like a sumo match… and this is the first step.” —Bill (36:28)
  • Major difference: The U.S. prefers top-down deals, China prefers details settled ahead of leader meetings.

VIII. Ripple Effects: Agriculture, Markets, and Policy Consistency

• Agriculture Under Threat (39:57)

  • American farmers, traditionally a well-rewarded lobby, could be “toast” due to tit-for-tat tariffs—e.g. loss of Chinese soybean markets.
  • “They are dependent upon exports for their long term survival… They got hosed the first time and he had to come up with $23 billion to bail them out.” —Bill (40:54)

• Markets as Tipping Point (43:04)

  • Empty shelf fears? The bond market may force a change—if debts get harder to finance, pressure mounts.
  • “The bond market. I'm a believer in what Carville said… They can intimidate anybody.” —Bill (43:04)
  • Retaliation from foreign markets is also a real threat, especially for agriculture.

IX. Dollar Value and Tariffs

• Tariffs as a Currency Tool (46:45)
  • While tariffs can devalue the dollar, there isn’t an explicit devaluation goal. Policy remains inconsistent and more about control.
  • “Tariffs have the effect of devaluing the dollar… it's a very flexible way to manage currencies.” —Scott (46:45)
  • Trump has cited being a “strong dollar” guy, but advisors may want a weaker dollar to shrink the trade deficit.

Notable Quotes & Memorable Moments

with timestamps (MM:SS)

• On Policy Chaos: “They have a mission but not a plan.” — Scott (05:29)
• On Tariff Tactics: “Trump is a stick guy. I'm not going to pay them to do what I want. I'm going to threaten them with tariffs.” — Bill (08:57)
• On Decision-Making: “There’s really only one person that you can talk to to get a reliable answer.” — Bill (11:08)
• On Negotiation Style: “There's only win-lose negotiations, the US concession...is we’re not going to do what we said we’re going to do.” — Bill (12:51)
• On U.S. Leverage: “I think he overestimates our leverage and he underestimates the leverage that other countries have.” — Bill (16:41)
• On USMCA: “Trump said yesterday we may not need it anymore…” — Bill (27:05)
• On Reliability: “The overall message he's sending is the United States is no longer a reliable partner, period.” — Bill (34:42)
• On Sumo Metaphors: “This is like a sumo match… and this is the first step.” — Bill (36:28)
• On the Fate of Farmers: “They're toast.” — Bill (39:57)
• On Markets as Enforcers: “The bond market…can intimidate anybody.” — Bill (43:04)

Timestamps for Important Segments

• [02:49] Trump's historical trade views
• [05:29] "Mission but not a plan"
• [08:57] Carrots vs. sticks in industrial policy
• [10:24] Diplomatic confusion, lack of negotiating clarity
• [11:08] Single decision-maker dynamic
• [12:51] Win-lose negotiation model explained
• [16:41] Overstating American leverage
• [21:15] Complexity of supply chains and reshoring
• [23:44] Canadian Prime Minister's visit, Sheinbaum strategy
• [27:05] USMCA uncertainty
• [32:26] Geopolitical linkages to Europe and Ukraine
• [36:28] China high-level talks preview
• [39:57] American farmers and trade retaliation
• [43:04] Market forces as tipping point
• [46:45] Connection between tariffs and dollar value

Episode Wrap-Up

The Trade Guys conclude with an open Q&A, addressing concerns about empty shelves, agricultural impacts, and links between tariffs and the value of the dollar. The overall message is one of deep uncertainty in U.S. trade policy—a purposeful but improvisational approach, with an emphasis on negotiation theatrics, geopolitical risk, and possible economic and reputational costs for the U.S.

For listeners wishing to continue the conversation:
The Trade Guys encourage audience members to submit questions via Instagram, Twitter, or LinkedIn (AskCSIS), and tease new ways to interact with CSIS and the podcast team.