The day after "Liberation Day"

Summary

Today, Explained
Episode: The Day After "Liberation Day"
Release Date: April 3, 2025
Hosts: Sean Rameswaram and Noel King
Producer: Vox Media Podcast Network

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Introduction: A New Chapter for American Industry

In the April 3, 2025 episode of Today, Explained, hosts Noel King and Abdullah Fayed delve into the seismic shifts in the American economy following "Liberation Day." This day marks what President Donald Trump describes as the rebirth of American industry, the reclamation of America's destiny, and the commencement of making America wealthy again.

Notable Quote:
Noel King (00:02): “April 2, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed and the day that we began to make America wealthy again.”

Immediate Economic Reactions: Market Turbulence and Consumer Panic

Abdullah Fayed recounts the immediate aftermath of Liberation Day, highlighting a sharp and precipitous decline in the stock market. This downturn spurred widespread panic among consumers, leading to impulsive purchases ranging from cars to wine.

Notable Quote:
Abdullah Fayed (00:18): “The stock market fell freely and precipitously. People panic, bought everything from cars to wine to and those were just the texts that I got. CEOs lost their minds.”

An economist characterizes the situation as a result of ill-conceived policy actions, emphasizing the chaos unleashed by the administration's decisions.

Notable Quote:
Economist (00:35): “But honestly, this is just a disaster of idiocy that I can't even tell.”

Tariff Policies Under President Trump: Objectives and Implementation

The core of the episode examines President Trump's aggressive tariff policies. Initially utilized during his first term, these tariffs have intensified under his renewed leadership, affecting a broad range of imports from both adversaries and allies.

Notable Quote:
Noel King (03:15): “They've treated our farmers badly. Look, our country's been ripped off by everybody and that stops now. They manipulated their currencies, subsidized their exports, stole our intellectual property.”

The administration justifies these tariffs as multifaceted tools aimed not only at correcting trade deficits but also at addressing issues like immigration and narcotics control. The use of tariffs extends to strategic negotiations, such as leveraging them in discussions over deals like TikTok with China.

Notable Quote:
Economist (03:26): “He's also talked about tariffs for curbing immigration and fentanyl. He's talked about tariffs as a means, as a negotiating chip to close in on a TikTok deal with China.”

Economists' Perspectives: The Swiss Army Knife Misuse

Economists interviewed in the episode provide a critical analysis of the administration's tariff strategy. While acknowledging that tariffs can be useful when applied narrowly, they argue that the broad and indiscriminate use of tariffs by President Trump resembles a "Swiss army knife" approach—attempting to solve multiple issues with a single, blunt tool.

Notable Quote:
Economist (04:33): “Tariffs are a tool in the industrial policy toolkit and there are times where they can be useful. But the problem is when you over rely on them, the costs are much greater than the benefits.”

The consensus among economists is that the current approach leads to higher costs for consumers, increased prices, and potential shortages due to disrupted supply chains.

Notable Quote:
Economist (05:30): “This will be the largest tax increase on American consumers in modern times. End of story.”

Impact on Consumers and Specific Industries: Inflation and Production Costs

The administration's tariff policies are anticipated to translate into significant price hikes across various sectors. Consumers are likely to face increased costs for goods as companies pass on the burden of tariffs. Additionally, domestic manufacturers may see rising production costs due to imported raw materials being subject to these tariffs.

Notable Quote:
Economist (10:40): “Chances are they will affect the American economy pretty negatively, and chances are they will affect people's wallets really negatively.”

Specific industries, such as agriculture and manufacturing, are poised to bear the brunt of these policies. The auto industry, in particular, faces heightened pressures as tariffs on imported cars and auto parts threaten to increase both foreign and domestic vehicle prices.

Notable Quote:
Economist (08:07): “He’s going to slap a 25% tariff on foreign cars, and he’s also going to slap a tariff on auto parts... domestic cars are going to get more expensive because producing them is going to cost more.”

International Reactions: Strained Alliances and Diplomatic Tensions

The imposition of steep tariffs has elicited a spectrum of responses from America's Asian allies. Countries such as China, Taiwan, Japan, South Korea, India, and Thailand have voiced their disapproval, ranging from outright condemnation to cautious observation.

Notable Quotes:
Chinese Government (16:08): “These tariffs are sort of deeply unreasonable, that it’s a sort of attack on the rest of the world.”
Japanese Trade Minister (17:27): “Following this announcement, we have once again conveyed to the US Government that the recent measures are extremely regrettable.”

The administration's approach has complicated diplomatic relations, particularly with allies who are now reconsidering their trade partnerships with the United States in light of these protectionist measures.

Reciprocity and Calculation: Assessing the Justification

President Trump's argument centers on reciprocity—levying tariffs in response to other countries' trade restrictions on American goods. He presents a chart showcasing reciprocal tariff rates, claiming to rectify imbalances caused by countries like Vietnam and South Korea.

Notable Quotes:
President Trump (18:07): “Reciprocal. That means they do it to us and we do it to them. Very simple.”
Economist (18:34): “What seems to have happened is there’s been a sort of reverse engineering of a figure via the trade deficits and surpluses that individual countries have with the U.S.”

However, economists challenge the validity of these calculations, suggesting that the tariff rates announced do not accurately reflect the actual trade barriers imposed by these countries. This misalignment undermines the justification for such broad-based tariffs.

Case Study: The Auto Industry Under Duress

A specific focus is given to the auto industry, where President Trump's tariffs aim to boost domestic car sales by making imported vehicles more expensive. However, the unintended consequence is an increase in production costs for American manufacturers, potentially leading to higher prices for domestic consumers as well.

Notable Quote:
Economist (09:01): “The reality of this policy is that he’s going to slap a 25% tariff on foreign cars, and he’s also going to slap a tariff on auto parts... domestic cars are going to get more expensive because producing them is going to cost more.”

This scenario exemplifies the broader economic principle that while tariffs can protect certain industries, they often result in increased costs and reduced competitiveness across the board.

Long-Term Implications: Shifting Alliances and China's Strategic Position

The episode explores the potential long-term consequences of the current tariff strategy. As traditional US allies face economic pressure, China stands to gain by fostering closer ties with these nations, positioning itself as a reliable trade partner in contrast to the unpredictability exhibited by the United States.

Notable Quotes:
Devin Schwartz (25:02): “If you listen to the Chinese Ministry of Foreign affairs, they will tell you... [the US] is a country that bullies smaller countries.”
Abdullah Fayed (26:24): “This is the absolute perfect storm from that perspective.”

The erosion of trust and cooperation between the US and its allies could lead to a realignment of trade patterns, weakening the United States' influence in the region and bolstering China's economic and diplomatic standing.

Conclusion: The Uncertain Path Forward

As Today, Explained wraps up the episode, the hosts emphasize the precarious balance the United States must maintain in its economic policies. The broad application of tariffs under President Trump's administration presents significant risks, including economic instability for consumers, strained international relations, and diminished global standing.

Notable Quote:
Economist (12:12): “Don't judge the tool by the craftsman that's mishandling it. So that's kind of what we can expect.”

The episode serves as a cautionary tale about the complexities of trade policy and the far-reaching impacts of protectionist measures when employed without nuanced strategy.

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Produced by: Devin Schwartz and Gabrielle Burbay
Edited by: Jolie Myers
Engineered by: Andrea Christensdotter and Patrick Boyd
Fact-Checked by: Laura Bullard and Amanda Llewellyn
Host: Noel King
Podcast: TODAY Explained by Vox

Transcript

[Noel King]

April 2, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed and the day that we began to make America wealthy again.

[Abdullah Fayed]

It was Liberation Day. April 3. The day after won't be remembered if we're being honest. Although there was some notable news. The stock market fell freely and precipitously. People panic, bought everything from cars to wine to and those were just the texts that I got. CEOs lost their minds.

[Economist]

But honestly, this is just a disaster of idiocy that I can't even tell.

[Abdullah Fayed]

You beyond proportions in Technicolor lower prices.

[Economist]

That's the whole reason this is set up the way it is.

[Abdullah Fayed]

And America's allies Mos Def got on a call with China. Today on Today Explained. We celebrate our day after Liberation Day.

[Sean]

Hey everyone. Sean here. I'm really excited to share with you our special series AI and Us, sponsored by canva. We'll take an in depth look at how AI will impact our lives in the future and explore the observations, ambitions and reasoning behind it all. In our first episode, I'll interview futurist and tech pioneer Jaron Lanier about the current state of AI, the potential it can unlock if we manage this technology well, and and the implications for humanity if we don't. And then in the second episode, I'll talk to Julia Longoria, host of vox's Good Robot, about the beliefs and ideologies of the people building, funding and influencing artificial intelligence and how looking at this AI origin story can provide clues into how this technology will change the way we live and work. You can find our special series AI and Us right here on the gray area.

[Abdullah Fayed]

Hey there, a little bit of news before we start today's news show. News you can use. You can now listen to TODAY Explained without listening to any ads. In order to do this, you just need to become a VOX member. When you become a member, you're going to be supporting the work that we do on today explained. And you'll also get unlimited access to Vox.com just go to Vox.com members to sign up.

[Noel King]

The golden age of America begins right now on Explained.

[Abdullah Fayed]

I'm Noel King with Abdullah Fayed. He covers policy at Vox, including trade. And this week, Abdullah wrote a piece about how tariffs are not all bad. Abdullah, in his first term, President Trump utilized tariffs. Then he was elected again and he's utilized them even more as of Liberation Day. And this big announcement, do you understand what his philosophy on tariffs is?

[Economist]

It's really hard to understand what Trump really sees in tariffs altogether, and that's because he really seems to view them as a solution to everything. He's been railing about tariffs for a long time, and since he came in this time around, he went out swinging for tariffs for all these different reasons.

[Noel King]

They've treated our farmers badly. Look, our country's been ripped off by everybody and that stops now. They manipulated their currencies, subsidized their exports, stole our intellectual property.

[Economist]

Not just a matter of addressing trade deficits or protectionism for our domestic manufacturers, of helping industries grow in the United States. He's also talked about tariffs for curbing immigration and fentanyl. He's talked about tariffs as a means, as a negotiating chip to close in on a TikTok deal with China, you.

[Noel King]

Know, because every point in tariff is worth more money than TikTok.

[Economist]

So, you know, they're kind of all over the place. He wants them to raise a lot of revenue for the United States. And he also seems to want to use them, you know, for the more traditional protectionist policy of helping prop up domestic industries, you know, like certain manufacturing industries, be it, you know, steel industry, automakers, the auto industry industry and things of that nature.

[Abdullah Fayed]

So economists will often tell you that tariffs are a tool. And Donald Trump seems to be saying, yes, they are. And they're not a hammer or a wrench, they're a Swiss army knife. You can do anything with them. Why is that a problem, if indeed it is?

[Economist]

Tariffs are a tool in the industrial policy toolkit and there are times where they can be useful. But the problem is when you over rely on them, the costs are much greater than the benefits. You know, when Trump is implementing tariffs in the way that he is, broad based tariffs on all imports, 10% and higher, you know, from countries, be they adversaries or allies. When you're implementing tariffs that way, the costs are going to be higher than the benefits because essentially, you know, tariffs are a consumption tax. They are indirectly a tax on consumers because companies will eventually raise their prices in order to offset the tax. So consumers do bear the brunt of tariffs. Prices will go up. There will be an inflationary aspect of this policy which will probably get people upset.

[Mike Bird]

This will be the largest tax increase on American consumers in modern times. End of story. A lot of our grain and mulch are sourced from overseas, from Germany and the UK and that will impact a lot of breweries across the board.

[Abdullah Fayed]

Yes, it should be pinpointed in specific areas typical of this administration. They use a blunderbuss instead of a scalpel.

[Economist]

It could also actually end up limiting trade and causing a shortage of supply, which might also drive prices up.

[Abdullah Fayed]

All right, so you wrote about when tariffs can be used beneficially, narrowly. What are some examples of when tariffs are a good idea? What did economists tell you?

[Economist]

They are a tool that ought to be used sometimes. And I think one example of this is part of the reason countries might be interested in levying a tariff on imports is to protect certain industries that serve the national interest. It could also be because out of national security reasons, you want to have some level of control over the supply chain so that in the event of a war or a pandemic, a disruption in the supply chains won't make you have a shortage of a crucial good. So there are reasons why you want to prop up certain domestic industries, and they can serve you well. One example of this is that if we import a lot of goods from, say, China, which has bad labor laws and labor protections and very low wages, those goods are going to be cheaper than goods produced in the United States. Part of the reason why goods that are made in the United States are very expensive is because we have higher labor costs. Now, that puts American companies in a difficult spot because then they have to choose between either having competitive prices or paying their workers well. So you have to balance that out as a government and think about what exactly is the problem that we're trying to solve here, and how can tariffs be a tool? Should they be a tool that we use here to solve that problem? In some cases, the answer is yes.

[Abdullah Fayed]

Right. So when President Trump made his announcement in the Rose Garden and he said he's going to put tariffs on imported cars, and the goal of that is to make sure that Americans buy American cars, that seems like that really narrow focus that economists are telling you is useful if you're going to implement a tariff. So would they approve of the tariffs that Trump has placed on foreign autos?

[Economist]

Well, that's. That's, again, why Trump, you know, in theory, a lot of what he says might make sense if you don't pay too close attention to what he's doing. You know, if you implement tariffs on foreign cars, domestically manufactured cars will be more appealing for consumers because they might be cheaper. But the reality of this policy is that he's going to slap a 25% tariff on foreign cars, and he's also going to slap a tariff on auto parts. So the expectation here is not just that foreign cars are going to get more expensive for American consumers, but domestic cars are going to get more expensive because producing them Manufacturing them is going to cost more. So the cost of production for American car companies is going to spike, even if they are producing their cars here in the United States.

[Abdullah Fayed]

One thing that President Trump and members of his administration say again and again that sounds very compelling on its face, is that tariffs are going to make America money. In fact, there's a number they've been throwing around $6 trillion, 6 trillion dol.

[Noel King]

And that's gonna be much higher by the end of the year.

[Abdullah Fayed]

When the administration says these are gonna make us much richer and we can actually put a dollar figure on it, what are they talking about?

[Economist]

To be honest, I don't really know. I have no idea, because I don't think it's possible for them to raise that much money. Tariffs used to generate a lot of federal revenue before we had things like an income tax. The reality, though, is that tariffs can't replace the income tax, especially in the way that Trump himself is talking about tariffs, because he's talking about tariffs as something that he will lift if countries agree to his terms on certain things. You can't really talk about this as a permanent revenue stream while also talking about it as a negotiating chip for other things. You have to pick a lane and understand why you're implementing them in the first place.

[Abdullah Fayed]

All right, so the American economy is made up of many different things. We've got Main Street, Wall street, we've got the markets, we've got who is employed, we've got what things cost. Americans deeply worried about inflation for a while now. When you talk to economists, what do they tell you about how all of these new tariffs that Donald Trump announced on Liberation Day, what do they tell you about how they'll affect the American economy?

[Economist]

I mean, chances are they will affect the American economy pretty negatively, and chances are they will affect people's wallets really negatively. Essentially, you're not necessarily guaranteeing that American prices are going to stay stable. Manufacturing in the United States will become more expensive because you're going to still be importing raw materials that have tariffs on them. So the cost of production is going to go up also for American companies. So we are going to see prices rise. The question that we don't really know right now is to what degree, you know, we're going to see price hikes, you know, across the board or, you know, in certain industries. But this is likely. If this is a policy that Trump stick sticks with, which I think is a big if, because he has been so back and forth on this for a long time that could you know, anger a lot of people. It could cause people to fear for, you know, their economic stability, their financial stability rather, you know, and whether or not they're going to be okay in a year from now. And, you know, that's why, you know, one of the economists I was talking with who was talking about how tariffs can sometimes be beneficial and how you can tailor them to be beneficial is he was just saying don't judge the tool by the craftsman that's mishandling it. So that's kind of what we can expect.

[Abdullah Fayed]

Abdullah Fayyad his article, what a Better Tariff Policy Could look like [e-mail] Coming up, we Pivot to Asia.

[Gabrielle Burbay]

Support for Today Explained comes from upwork. They say that running a small business means wearing too many hats. But that's even harder than it sounds, though it sounds pretty hard if you were wearing a baseball cap on top of a fedora on top of a cowboy hat. Wow, you're having an identity crisis. Upwork says they can help you hire the right people so you don't have to be all those people. Upwork says that posting a job on their platform is easy. According to upwork, there's no cost to join. You can register, browse freelancer profiles, get help drafting a job post, or even book a consultation. You can visit Upwork.com right now and post your job free. That is Upwork.com to post your job for free and connect with top talent ready to help your business grow. That's up w r k.com upwork.com.

[Devin Schwartz]

Support.

[Abdullah Fayed]

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[Mike Bird]

If you've been online this week, you've probably seen an unending flood of those beautiful animated studio Ghibli style images of everything from happy families being together to beloved cartoon characters committing unspeakable acts of violence against each other. That, my friends, is the AI world we live in. And it's not going to get less complicated. That is what we are talking about this week on the Vergecast, along with the future of robot vacuums, what's happening with car tariffs and everything else going on in the AI world. All that on the Vergecast. Wherever you get podcasts, you're listening to TODAY Explained.

[Devin Schwartz]

I'm Mike Bird. I'm the Wall street editor at leading magazine the Economist. We call it a newspaper internally. Just to be clear, I'll get in trouble if I don't say that.

[Abdullah Fayed]

We reached Mike Bird in New York. He was based in Asia, where many of the Liberation Day tariffs are aimed for many years. And Mike's first response when he heard the list of tariffs yesterday they really.

[Devin Schwartz]

Are very, very steep. So I was looking across a group of them where the tariffs run to between 24 and 46% depending on the country. So yeah, very, very steep. Consider than I think I was expecting considerably more than most investors were expecting. It's really extensive and broad.

[Abdullah Fayed]

It's really extensive. It's broad and it's throughout Asia. We've got China, Taiwan, Japan, India, South Korea, Thailand. What are we hearing today from leaders of those countries? Anything notable?

[Devin Schwartz]

There's a big range of reactions and I think that reflects the difference in both relationships with the US and sort of some different strategies going on. So the Chinese government reaction to note that the tariffs are sort of deeply unreasonable, that it's a sort of attack on the rest of the world basically is probably the least surprising of these. I think it's more interesting to break down the countries that are really much closer diplomatically to the US So the Cabinet of Taiwan called the Trump tariffs deeply unreasonable and highly regrettable. Korea said that they were studying what was happening at this moment.

[Mike Bird]

Our mission is to protect the safety of the people, secured national interests during the trade war, and swiftly devised solutions to pressing national issues through cooperation with the National Assembly.

[Devin Schwartz]

The Japanese trade minister did call the move extremely regrettable.

[Mike Bird]

Following this announcement, we have once again conveyed to the US Government that the recent measures are extremely regrettable.

[Devin Schwartz]

But a lot of these countries are a little bit more circumspect and a little bit more, a little bit quieter precisely because they have these very tight security relationships with and they're very, very keen not to upset D.C. basically. So, yeah, there will be a little bit of a reserved reaction from some of them.

[Abdullah Fayed]

Let me ask you about the President's argument on reciprocity.

[Noel King]

Reciprocal. That means they do it to us and we do it to them. Very simple. Can't get any simpler than that.

[Abdullah Fayed]

So when Trump held up his chart, it showed that Vietnam, for example, levies a 90% tariff on goods coming from the US South Kore 50% tariff. Donald Trump is saying these countries put tariffs on American goods and I'm gonna fix it. Is he right? And if so, why was this going on?

[Devin Schwartz]

So to be clear, we should start by saying there are trade restrictions that other countries put on the US in some cases they're steeper than the ones going in the other direction. That from first principles is a reasonable thing for US Policymakers to be upset about. But what became very clear in the immediate afterma of the announcement yesterday is that the figures being used weren't drawn from any meaningful measure of what, for example, the rates that Vietnam tariffs U.S. goods at. There was no relationship with that data. What seems to have happened is there's been a sort of reverse engineering of a figure via the trade deficits and surpluses that individual countries have with the U.S. basically, they've taken the trade surplus that Vietnam has with the US it by the figure for Vietnamese exports to the US It's a sort of Excel spreadsheet job. And it bears almost no relationship to what these countries actually limit U.S. trade with. You know, whether that's tariffs or other various non tariff barriers, these do exist. The tariffs as they're going to be implemented as they've been announced, bear no relationship to that. And it's a very strange measure to have used to decide which countries have been hit hardest. And it's why you have a country like Vietnam which does export a huge amount to the US and does have a very large trade surplus with the US Why you've seen such high tariffs be levied on them, for example.

[Abdullah Fayed]

All right, that's a good clarification. We should be skeptical of what we saw on the chart. Let's talk about China. Trump put tariffs on China in his first administration. Joe Biden then kept some of those tariffs on China. And then Trump comes back into office and he puts more on was China ready for what happened yesterday.

[Devin Schwartz]

This is basically the most predictable element of these tariffs, right? It's if you could have possibly thought of anything that Donald Trump was going to do when he came into office that he would almost definitely do, it was raise tariffs on China. So while painful, essentially, I think a lot of Chinese companies have had eight years to be strategizing about this. While you can never be fully prepared, I'd say that a lot of companies and the Chinese government perhaps were as prepared as they could reasonably be. Certainly a lot more prepared than companies operating in the other countries that were tariffs yesterday have been. You've seen Chinese companies over the years execute a lot of the strategy that has protected them so far. For example, moving lots of production, especially lower value added production of things like apparel, the final finished touches of making electronic goods into Southeast Asia. Now, obviously that's not a strategy that works as well if Southeast Asia is being tariffs, but that was the idea up until yesterday.

[Abdullah Fayed]

China is not a US Ally, but Donald Trump, as we said, did put big tariffs on countries that are our allies. Japan, South Korea. Do you think that this move forces them to rethink how they deal with the United States?

[Devin Schwartz]

I think it will change the attitude quite a bit. One thing that the US Government has tried to do a lot in the past few years is get cooperation from the Japanese and Korean governments in particular to cooperate on things like export controls of semiconductors to China. That's going to be a lot more difficult to execute if you're putting really, really steep tariffs on them. I don't think there's as many politicians in Japan or Korea that will wake up today and say, I would really like to cooperate with the US on these restrictions on Chinese trade. It's much more difficult to do that if you're also sort of slapping them in the face with these tariffs.

[Abdullah Fayed]

I was reading over the weekend that Japan, South Korea and China met for the first time in about five years to talk about trade. Among the three of them, the three.

[Devin Schwartz]

Asian manufacturing fragrant giants agreed to, quote, closely cooperate for a comprehensive and high level talks to improve free trade in the region.

[Abdullah Fayed]

The discussions came just days before the.

[Economist]

US Government's scheduled announcement of new reciprocal.

[Abdullah Fayed]

Tariffs as the three nations navigate rising protectionist pressures. Do we know what goes on in a meeting like that? I mean, it seems deliberately timed to Trump's announcement. Does a meeting like that make America nervous?

[Devin Schwartz]

I think it probably should if you're taking a really long term view, not wildly nervous. So there was a Chinese state media announcement after this meeting which said that China, Japan and Korea had agreed to sort of react jointly to react in concert against any U.S. tariffs because obviously they knew they were coming out. The Japanese and South Korean Governments were fairly quick to say that wasn't quite their understanding of the meeting.

[Abdullah Fayed]

Interesting.

[Devin Schwartz]

It's the understanding that policymakers in Beijing would like to have. But I would say that that this question of closer trilateral cooperation between China, Korea and Japan has been going on for a long time. And it's always been frustrated to some degree by the fact that these are three countries where usually at any given time someone's upset with someone else. Whether that's Japan and South Korea, they have a very fractious relationship. Whether it's South Korea and China, whether it's Japan and China, there's usually someone that's upset about something and it's limited the sort of trilateral cooperation. There's always been discussion of a potential Japan, South Korea, China free trade area and it's never really come to fruition. Now, if you wanted to make it come to fruition, what you would want is an external threat that was common to all of those countries. I'm not sure that this will actually come out in the wash. I'm not sure there'll be a trade agreement of that nature. But if I wanted to force one through, these are exactly the circumstances which I'd create to try and do that.

[Abdullah Fayed]

If China becomes a more trusted trade partner to American allies than America is right now, what are the long term implications of this for China?

[Devin Schwartz]

One thing the Chinese government has really struggled with in the past and for good reason, is that they don't really have a lot of natural allies or friends. Even in Asia, where sort of bellicose decisions around the South China Sea, around China's land borders, difficult negotiating positions have left it the country without obvious close friends. I think the US seriously damaging its own relationships in the region does make things easier on that front. If you listen to the Chinese Ministry of Foreign affairs, they will tell you, and they have done for decades, that the US Is a country that bullies smaller countries. It talks a sort of high and mighty game about all these lofty ideals of freedom and democracy and human rights, but in reality it's just looking out for itself. Basically. I think these tariffs make that argument a lot easier to make in large parts of Asia. And I think to countries that are US allies, this will be very difficult. And these countries feel like they're being really set upon by decisions made in D.C. that is a really natural opening for the Chinese government. It's a huge opportunity for them. You couldn't have drafted these conditions better if you were a Chinese diplomat. This is the absolute perfect storm from that perspective.

[Abdullah Fayed]

Mike, thank you so much for your time today.

[Devin Schwartz]

Thank you very much.

[Abdullah Fayed]

Mike Bird, he's the Wall street editor at leading newspaper the Economist. Devin Schwartz and Gabrielle Burbay produced today's show. Jolie Myers edited. Andrea Christensdotter and Patrick Boyd are our engineers. And Laura Bullard and Amanda Llewellyn kept us honest. I'm Noel King. It's TODAY Explained.