There's a new tariff in town

Summary

Summary of "Today, Explained" Podcast Episode: "There's a New Tariff in Town"

Podcast Information:

• Title: Today, Explained
• Host/Author: Vox
• Description: Today, Explained is Vox's daily news explainer podcast. Hosts Sean Rameswaram and Noel King guide listeners through the most important stories of the day.
• Episode: There's a New Tariff in Town

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Introduction

In the episode titled "There's a New Tariff in Town," Noel King delves into the resurgence of tariffs as a central component of President Elect Donald Trump's economic strategy. The discussion primarily focuses on Trump's consistent advocacy for tariffs, their intended impact on the U.S. economy, and the broader implications for international trade relations.

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Trump's Tariff Policies: Consistency and Objectives

Noel King opens the discussion by highlighting that President Elect Trump was elected on a platform promising economic revitalization, with tariffs being a cornerstone of his strategy.

• Trump's Perspective on Tariffs:

  Donald Trump: "The word tariff, properly used, is a beautiful word." [00:08]

Trump views tariffs not merely as economic tools but as instruments of fairness, aiming to rectify what he perceives as imbalanced trade relationships, particularly with China.

Greg Ip, Chief Economics Commentator for the Wall Street Journal, elaborates on Trump's unwavering stance:

Greg Ip: "Well, he has been arguing more or less for his entire life... They sell us cheap products, but they don't buy anything from us. And as a result, the United States has a large trade deficit with most countries." [02:53]

Ip explains that Trump believes tariffs can reduce trade deficits, compel other nations to engage more equitably with the U.S., and revive manufacturing jobs lost over the past decades.

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Implementation and Effects in the First Term

Tariff Actions Undertaken

During Trump's first term, he implemented several rounds of tariff increases, especially targeting Chinese imports. These actions were part of broader efforts to address issues like technology theft and barriers to U.S. exports.

• Trump on Steel Tariffs:

  Donald Trump: "I put a 50% tax on China steel coming in... You saved our industry." [03:13]

The tariffs extended beyond China, affecting products from South Korea such as washing machines from LG and Samsung, and even solar panels with a 30% tariff in the first year.

Limited Success and Economic Impact

Despite aggressive tariff implementations, the overall impact on the U.S. trade deficit was minimal. Several factors contributed to this outcome:

1. Exemptions and Negotiated Deals:

   • Tariffs were often softened or removed through negotiations, especially with key trading partners like Canada and Mexico, resulting in a trade system resembling the pre-Trump era with minor modifications.

2. Shift in Trade Patterns:

   • Instead of significantly reducing imports, many companies opted to relocate production to countries not subject to high tariffs (e.g., Vietnam, Mexico), thereby maintaining their supply chains with minimal disruption.

• Greg Ip on Trade Deficit:

  Greg Ip: "If the test of Donald Trump's trade policy was a smaller trade deficit, then, no, he didn't really achieve what he wanted." [09:09]

Unintended Consequences

The tariffs led to mixed outcomes:

• Job Market: While there might have been minor gains in specific manufacturing sectors, other industries suffered. For instance, US Steel announced temporary layoffs, contradicting the anticipated job growth from increased tariffs.
• Consumer Costs: Increased costs of imported goods, such as shoes from China, led companies like Steve Madden to either absorb the costs or shift production elsewhere, often resulting in higher prices for consumers.

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Companies' Responses and Trade Patterns

Case Study: Steve Madden

Steve Madden, a major shoe manufacturer, serves as a prime example of how tariffs reshaped business strategies:

• Initial Impact: With two-thirds of its shoes imported, 70% from China, tariffs threatened to escalate costs.
• Strategic Shift: Instead of bringing production back to the U.S., which is cost-prohibitive, the company moved manufacturing to Southeast Asia and Latin America to circumvent high tariffs.

Greg Ip comments on this shift:

Greg Ip: "Instead of closing markets at home, we've opened markets to us abroad... [explains increased complexity and cost adjustments]." [16:47]

Broader Business Adjustments

Businesses across various sectors faced similar dilemmas:

• Increased Costs: Companies had to decide whether to absorb higher input costs, pass them on to consumers, or relocate production.
• Supply Chain Reconfigurations: Moving production to alternative countries introduced inefficiencies and increased operational complexities.

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Anticipated Plans for the Second Term

With Trump's re-election, there's speculation about an intensified approach to tariffs.

• Expanded Tariffs on China:

  Greg Ip: "Instead of just putting tariffs on about half of China's imports, he's talked about a tariff of a tariff on all of Chinese imports of as much as 60%." [10:54]

• Broader Tariffs on Other Nations:

  • Plans include imposing across-the-board tariffs (10-20%) on imports from traditional allies, compelling them to adjust to the new U.S. trade paradigm.

Potential Outcomes:

• Increased Domestic Jobs: The hope is that broader tariffs will create more manufacturing jobs within the U.S.
• Consumer Impact: Higher prices for imported goods could lead to reduced consumer spending or shifts in purchasing behavior.

Trump on Tariff Negotiations:

Donald Trump: "It gives you power in dealing with other countries because China would... they were absolutely fine for me to deal with because they were so petrified of me putting on additional tariffs." [11:59]

However, Greg Ip cautions that while Trump favors tariffs, his administration might continue using them as leverage rather than enforcing blanket increases.

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International Reactions and Retaliations

China’s Retaliatory Measures

In response to U.S. tariffs, China announced tariffs on $60 billion of U.S. goods, emphasizing mutual respect as essential for resolving trade disputes.

Amgen Representative: "China says it will now slap tariffs on $60 billion of U.S. goods." [09:56]

European and Mexican Concerns

Germany and the European Union expressed alarm over potential tariffs, fearing significant economic repercussions, especially during a period of domestic economic weakness.

• Impact on Germany:

  Greg Ip: "Germany is virtually in recession right now...they are, as we say in economics, freaking out." [20:07]

Mexico also threatened retaliatory tariffs, challenging the U.S. positioning and highlighting the interconnectedness of North American economies.

Greg Ip: "Mexico did and the European Union did. It will hurt American farmers...it could be devastating." [22:45]

Global Trade Tensions

The imposition of tariffs has led to a tense global trade environment, with multiple countries considering or implementing retaliatory measures, thereby threatening the established multi-decade trend towards globalization and free trade.

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Potential Future Outcomes

Greg Ip outlines two primary scenarios for the future of global trade under Trump's tariff-centric approach:

1. Escalation of Trade Wars:

   • Scenario: Trump implements extensive tariffs leading to widespread retaliations.
   • Consequence: Shrinking of global trade, economic downturns across multiple nations, and heightened geopolitical tensions.

2. Reconstruction of Trade Agreements:

   • Scenario: Recognition among global leaders that while the existing trade system had flaws, completely dismantling it would be detrimental.
   • Consequence: Formation of a modified trading system with selective tariffs and renewed emphasis on fair trade practices, possibly incorporating some of Trump's grievances.

Greg Ip: "Countries should trade with each other for the same reason that people should essentially buy and sell from each other. It expands the market... important to remake that thing." [24:15]

Ip emphasizes that trade is fundamental to economic prosperity, and any shift away from this could have profound negative effects globally.

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Conclusion

The episode "There's a New Tariff in Town" provides a comprehensive analysis of Donald Trump's tariff policies, their implementation, and the multifaceted repercussions on both the U.S. economy and international trade relations. While tariffs are intended to protect American industries and reduce trade deficits, their actual impact has been mixed, leading to altered trade patterns, increased consumer costs, and strained international relationships. As Trump prepares for a second term, the potential for more aggressive tariff strategies looms, with uncertain consequences for global economic stability.

Key Takeaways:

• Tariffs as a Double-Edged Sword: While aimed at protecting domestic industries, tariffs can lead to unintended economic challenges, including higher consumer prices and disrupted supply chains.
• Global Interconnectedness: The modern global economy's interdependence means that unilateral tariff actions can have widespread ripple effects.
• Future Uncertainties: Trump's continued focus on tariffs introduces significant unpredictability into international trade dynamics, necessitating careful observation of ensuing policies and their impacts.

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Attributions:

• Host: Noel King
• Guest: Greg Ip, Chief Economics Commentator, Wall Street Journal
• Quotes: Included with speaker attribution and timestamps as per transcript

Transcript

[Noel King]

President Elect Trump was president elected because he promised Americans he'd fix the economy. One plank of his platform, tariffs.

[Donald Trump]

The word tariff, properly used, is a beautiful word.

[Noel King]

A tariff is a tax on imported goods. So tariffs on China mean that things coming from China will cost more. Usually they'll cost you more. Is more expensive good? Donald Trump is making a genuinely interesting bet that you might decide it is.

[Greg Ip]

I'll give you a perfectly good example, the minimum wage. And when the minimum wage goes up, most of us will end up paying more for things like, you know, our hamburger or our dry cleaning. And yet most of us vote for a higher minimum wage because we think it's fair. And I think that you have to sort of look at tariffs the same way is that the people who are looking at Trump's plan and saying his plan means higher cost for me are also saying, but there's also a question for fairness here. Is it fair that I get cheaper prices on everything? But communities that depended on the production of the products that are now made in China are withering away and dying.

[Noel King]

Coming up on TODAY explained.

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[Ashley C. Ford]

I'm Ashley C. Ford and I'm the host of into the Mix, a Ben and Jerry's podcast about joy and justice produced with Vox Creative. And in our new miniseries, we're talking about voter fraud. For years now, former President Donald Trump has made it a key talking point despite there being no evidence of widespread fraud. But what impact do claims like these have on ordinary voters? People like Olivia Coley Pearson, a civil servant in Douglas, Georgia, who was arrested for voter fraud because she showed a first time voter how the voting machines worked. Hear how she fought back on the latest episode of into the Mix. Subscribe now wherever you listen.

[Noel King]

You'Re listening to TODAY Explained. I'm Noel King. Earlier this week, the president elect told his allies that he wants Robert Lighthizer to be his U.S. trade representative. That's the person who sets trade policy. Mr. Lighthizer was in this role from 2017 to 2021. And like Trump, he loves a tariff. So to ask what this might mean for America, we called Greg ip, the chief economics commentator for the Wall Street Journal, who says Donald Trump is, at the very least, consistent.

[Greg Ip]

Well, he has been arguing more or less for his entire life, but especially in his last term as president. And this other countries take advantage of the United States. They sell us cheap products, but they don't buy anything from us. And as a result, the United States has a large trade deficit with most countries. And he would argue it's why we've lost a lot of good manufacturing jobs.

[Donald Trump]

I put a 50% tax on China steel coming in, and every person in the steel industry, when they see me, they started crying. They would hug me, they would kiss me. Sir, you saved our industry.

[Greg Ip]

He says the solution is to raise tariffs on those imports, which would reduce trade deficits, force those countries to treat the United States more fairly, and bring back some of those good manufacturing jobs that have been lost over the last 10 to 20 years. Now, there's a wide debate among economists about just how effective this would be. But in terms of the messaging, there's no question that especially to blue collar or former blue collar workers in a lot of those battleground states, that kind of message resonated.

[Noel King]

So it sounds like what you're saying is that Donald Trump has a kind of unified theory on trade. Trade is a reality of economic life these days. What is Trump's theory on it and how does it differ from his predecessors.

[Greg Ip]

In the United states? Since the 1940s, at least, there's been a bipartisan consensus that more trade is good. We cannot protect our economy by stagnating behind tariff walls, but that the best protection possible is a mutual lowering of tariff barriers among friendly nations so that all may benefit from the free flow of goods.

[Historical Figure]

We must expand world trade. Having recognized in the act of 1962 that we must buy as well as sell, we now expect our trading partners to recognize that we must sell as well as buy. Instead of closing markets at home, we've opened markets to us abroad, thus helping to create more American jobs.

[Greg Ip]

So you've seen generally tariffs in the United States decline and tariffs in our trading partners decline. And you've seen the United States embrace more free trade agreements, such as with Mexico, such as with Korea, such as with Canada, such as the creation of the World Trade Organization. And this came from a bipartisan view that this made our workers more productive because they had bigger markets to sell into. It benefited our consumers because they got cheaper goods and a greater variety of goods. And it was also good for the US Geopolitically because it helped us increase our economic bonds to countries that thought the same. We did Politically, for example, it increased the strength of our alliances with Europe and with Japan and Korea.

[Historical Figure]

Our peaceful trading partners are not our enemies, they are our allies. We should beware of the demagogues who are ready to declare a trade war against our friends, weakening our economy on national security and the entire free world, all while cynically waving the American flag.

[Greg Ip]

Trump comes along and he argues this entire regime has been much more to the advantage of other countries than it has been to the United States. Countries like Japan and then Germany and now China have taken advantage of the United States fixation on free trade to increase their trade surplus with the US Sell us lots of manufacturing goods and not buy very much from the United States.

[Donald Trump]

And I want German car companies to become American car companies. I want them to build their plants here. I want to beat China in electronics production. And we'll be able to do that easily. We have the greatest.

[Greg Ip]

So his entire mission, you know, from his first term and now into this one, is to reverse that relationship and he hopes, force those countries to buy more from the US And Americans to buy more from each other instead from imports. That's a theory, anyway.

[Noel King]

Donald Trump had a chance to do all of this from 2016 to 2020 when he was in office. What did he do?

[Greg Ip]

So Donald Trump's first term in office, a lot of people thought, oh, this guy's coming in. He's a protectionist. He's going to destroy the world trading system. In the end, he did not. He did raise tariffs, for example, in a series of rounds of tariff increases, he imposed tariffs on a wide range of products from China. And this was pursuant to a long running case that complained that China was just systematically unfair to the United States, stealing our technology and putting up barriers to US Exports to China. Then he imposed a variety of more bespoke tariffs on particular products.

[Amgen Representative]

The new taxes will hit a wide range of Chinese imports, raising prices on items such as air conditioners, TVs, boats, furniture and toys.

[Noel King]

The tariffs on washing machines will affect popular South Korean brands, LG and Samsung. The tariff on solar panels will be 30% in the first year. The White House announced that they were.

[Greg Ip]

Going to expand the steel and aluminum tariffs and what struck. But when all was said and done, what was interesting was that the total increase in tariffs for the United States was actually rather minor. And one of the reasons for that was because, first of all, there were many exemptions, and second of all, because often Trump decided that rather than stick with the high tariffs, he would strike a new deal with some of these countries. So, for example, with Canada and Mexico, he said, I really don't like the North American Free Trade Agreement that my predecessors negotiated. We'll replace us with a better agreement. And they did, and they called it the U.S. mexico Canada Agreement. And because of that, the tariffs that Trump imposed on some imports from Canada and Mexico went away as a result. At the end of Trump's term, you ended up with a trading system that looked a lot like it did before Trump, except with a few more bespoke tariffs here and there and perhaps a little less deference to international rules, such as those that are enforced by the World Trade Organization.

[Noel King]

So at the end of that first term, had Donald Trump gotten what he wanted? Had his plan worked?

[Greg Ip]

If the test of Donald Trump's trade policy was a smaller trade deficit, then, no, he didn't really achieve what he wanted. The trade deficit when he left office was larger in dollar terms than when he entered office. Did some manufacturing jobs come back? Possibly in this industry, that industry. But there also appear to have been some costs. There were industries that had to pay more for their inputs because of tariffs, and they lost sales and possibly jobs.

[Noel King]

People we've spoken to here in the community are concerned and shocked by this news. They thought that these steel tariffs were going to bring back production and bring back jobs, but instead, US Steel announcing that they are going to temporarily be laying off about 200 workers here.

[Greg Ip]

And then, of course, some of our trading partners retaliated.

[Amgen Representative]

China says it will now slap tariffs on $60 billion of U.S. goods. A foreign Ministry spokesman said mutual respect is the only right way out of this trade dispute. But the US Shows no sincerity or goodwill.

[Greg Ip]

You did see some interesting changes in patterns of trade. So, for example, our trade deficit with China did begin to shrink. At the same time, though, you saw our trade deficit with Mexico and Vietnam grow. And what that told us is that some businesses responded to Trump's tariffs not necessarily by bringing production back to the United States, but by moving it to another country, out of China, into Vietnam, into Mexico, that were not quite as affected by the tariffs.

[Noel King]

So Donald Trump had a chance. He did what he was going to do, and now he gets a second term, and he said he's going to do things differently. What are Donald Trump's plans for his second term?

[Greg Ip]

The throughput of his campaign rhetoric was as follows. He wants to, number one, come down even harder on China. Instead of just putting tariffs on about half of China's imports, he's talked about a tariff of a tariff on all of Chinese imports of as much as 60%. And in addition, instead of sparing traditional US allies, he wants to impose an across the board tariff on Everybody of, say, 10 to 20%. So if you thought that you would escape Trump's tariffs by moving production out of China, maybe you won't, because the country you move it to will also face U.S. tariffs. And finally, maybe there weren't that many jobs created in the United States in his first term because the tariffs weren't broad enough. Maybe you'll see some jobs created that you didn't before because he's hitting a much broader range of products with tariffs. But there's a very big caveat to this, Noel, which is that we don't really know if Trump will end up doing exactly what he's talked about. We know that Trump likes tariffs, but we also know that Trump likes to make deals.

[Donald Trump]

It gives you power in dealing with other countries because China would come in and say, no, no more tax, no more tax. They were absolutely fine for me to deal with because they were so petrified of me putting on additional tariffs.

[Greg Ip]

And so, as in his first term, we might see that the threat of tariffs is primarily a leverage instrument, you know, a negotiating chip in which he goes to countries that he thinks treats the United States unfairly and says, here are some things we want you to do differently, and if you do as we ask, then we won't hit you with the tariffs that I've talked about.

[Noel King]

Greg IP is the Wall Street Journal's chief economics commentator. All right, so that's the view from the usa. Coming up, we're going to zip abroad where terrified businesses and nations are reacting in terror.

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[Noel King]

It's Today Explained. As Greg IP of the Wall Street Journal was telling us before, the point of a tariff might be to make a country or a company change their behavior. So stop making your shoes in China. Make them in the US instead. That'll be great for America. Donald Trump is betting, but what will it mean for the rest of the world? Last week, just a few days after the election, the shoe giant Steve Madden gave us a peek.

[Greg Ip]

Steve madden, Boots are made for walking and that's just what they're doing right out of China.

[Noel King]

Thanks to two thirds of the shoes it sells in the US are imported, 70% of those from China. The company's CEO now telling investors that will Change. It's as if Greg IB Donald Trump is already winning.

[Greg Ip]

Here's the catch, though. They're not bringing that shoe production back to the United States because the United States is a very expensive place to make shoes. Instead, they're moving it to other countries in Southeast Asia and Latin America. So tariffs don't simply reduce imports or increase exports. They change patterns of trade. So Steve Madden and every company like them is basically in their heads trying to juggle a whole bunch of competing possibilities. Number one, the shoes that we make in China will be much more expensive in the US Market because of these tariffs. So we either swallow that tariff ourselves. Oh, we can't do that. That's too bad for profits. We pass that on to customers. Oh, we're going to lose some sales because the shoes are more expensive, or we find another place to make our shoes. And it looks like that for now, they're going with option C. They're going to try and find another place to make those shoes. Now, obviously, the reason they chose China in the first place was because they thought China was a cheaper, more efficient place to make them than some other place. So in moving from China to, say, Cambodia or Mexico, they will be sacrificing something. They'll be sacrificing the efficiency of the Chinese internal supply chain, perhaps the productivity of Chinese labor, the ease of getting stuff into container ships in China and bring them to the United States. So once they make this production change, it is probably still the case that the shoes that come to the United States will not be as cheap as they were when they were coming from China. Now, here in the United States, if you're a shoe buyer, you're going to go into the store and that shoe that used to cost $80, maybe it costs a few dollars more as a result. And you're going to have to make a decision. Are you going to go ahead and pay those extra few dollars or are you going to not buy shoes at all, or are you going to buy shoes from a different manufacturer? And what we've seen from studies, for example, is that you see an adjustment across all these facets. You see a little bit of an increase in the domestic price, a little bit of an increase in purchases from other sources, and a little bit of a shifting of purchases from the supplier that was hit with the tariffs to the supplier. That's not. And I would anticipate that every US Company is going through a similar calculation. But by the way, Noel, the Trump people are also going through a similar calculation. They know perfectly well that if they impose tariffs on everything, people's toys are going to be more expensive, people's avocados are going to be more expensive, your iPhone is going to be more expensive. And people aren't going to like that. And if it causes an inflation problem, that could also push up interest rates. And people aren't going to like that either. And that's one of the reasons why I emphasize that just because Trump talked about tariffs in a certain way, it's not a guarantee that that's what we'll actually get. There will be a lot of thinking and negotiating and study about how those tariffs are implemented. And is there a way that they can exempt certain products or certain countries so that there isn't as much of an impact on the US Consumer?

[Noel King]

All right, so we understand why China would be frantic. Where else in the world is looking at Donald Trump's threats of tariffs and really freaking out?

[Greg Ip]

The first country that needs to worry is China, for all the reasons that we've been discussing. The second country that needs to really worry is Germany, maybe Europe more broadly, but especially Germany, because even though Germany is an ally and we don't think of them as a. An unfair trader, the way we think of China, like China, Germany has historically depended heavily on exports for its economic model, and that includes exports to the United States and exports to China. And right now, Germany is looking at a threat to both of those markets. They're finding that their sales to China are suffering because Chinese companies are competing with German companies and producing the same products, often for a much lower price and almost as good quality. So the German companies are worrying about losing sales in China and frankly, losing sales within Europe to Chinese competition. Now, they look across the ocean, and there are other big market, the United States. They're worried about what happens there. Holy cow. If Donald Trump imposes really steep tariffs on our automobiles, on our chemicals, on our motorcycles, all these other products, that's another loss of economic growth for us. And this all occurs at a time when the European economy, its own domestic economy, its consumers, are incredibly weak. You know, Germany is virtually in recession right now. So I think it's not an exaggeration to see that they are, as we say in economics, freaking out.

[Noel King]

Donald Trump has also been very antagonistic toward our neighbor Mexico. Now, I read. I was looking into this earlier this week, and I read that Mexico's economy minister said we might just do the same thing. We might just retaliate and put tariffs on US Imports. What would that mean? And why don't more countries Just threaten to do that. If you're going to do this to us, we'll do it to you.

[Greg Ip]

Well, I expect that countries that are hit with tariffs or threatened with tariffs will, in fact threaten to retaliate. And I expect that some will, in fact, go through that retaliation. And I think that is something of a flaw in the Trump argument. If you go back to his first term, when they hit our allies with tariffs on steel and aluminum imports, a lot of people in the Trump administration said they won't retaliate. The US Market is too important to them. Well, that was only partly true. Japan and South Korea, for example, did not retaliate, but Canada did. Let me be clear, these tariffs are totally unacceptable. Mexico did and the European Union did. It will hurt the European Union. It will put thousands of European jobs in jeopardy, and it has to be met by a firm and proportionate response. And that had very severe negative consequences. It had hurt American farmers. It hurt, you know, exporters of whiskey to the European market, for one example. We have to plan two, three, four, five years out for sales because, you know, we're putting that whiskey into barrels today. Making decisions today that could overcommit the amount of cash into your inventory could be devastating.

[Sequoia Capital Representative]

So that's where the conflicting feelings are.

[Greg Ip]

We don't understand why we're kind of collateral damage, to be honest with you. I think that it is definitely the case that you will see our trading partners say, we will not take this lying down. Okay, there's a two. Remember, they have domestic audiences, too. Just as Trump feels he has to stand up for American workers, the Mexican government feels like it needs to stand up for Mexican workers. European governments want to stand up for European workers, and the Canadian government wants to stand up for Canadian workers. And it's not really politically tenable for them to sort of just sit there and take it and not do anything in response.

[Noel King]

As we draw to a close. Greg, let me ask you this. We are told, based on what he has said, that President Elect Trump wants to remake a century old agreed upon global trade order, which is exciting in a way, if there are no really severe repercussions, which of course there very well might be. How close can Donald Trump come to really and truly changing the way the world does trade?

[Greg Ip]

Let's step back for a second. Why do countries trade? Trade is an amazing feature of modern economies. It allows every country to produce more and to consume more at lower cost and with wider variety than they could before. Countries should trade with each other for the same reason that people should essentially buy and sell from each other. It expands the market. It just makes all economic possibilities greater. And that was the driving principle of the reduction in trade barriers that the world enjoyed, including the United states, from the 1940s up until about 10 or 15 years ago. Donald Trump came along and he said, this deal isn't working well for the United States. And importantly, a lot of what Donald Trump said was true because there were countries out there, China number one among them, that were not playing by the rules that everybody else played by. And that had real costs. It had costs to American workers and to American firms. And so in thinking about what the trading system looks like a few years from now, I could think of a couple of possibilities. It's possible that Trump presses ahead with exactly what he said, raises tariffs on everybody, and then all those countries retaliate. They export less to us, we export less to them, trade shrinks, and everybody is worse off. There's another possibility here, which is that a lot of folks in the United States and in other countries say, you know, he's right, the trading system was fundamentally good, but it went off the rails at some point. We need to get together and we need to remake that thing. So I think another possibility is that we end up a few years from now with a trading system, but a different trading system. More tariffs here, more tariffs there. Not as low as they were 10 years ago, but not as high as they were like in the 30s, that's for sure. And perhaps a more realistic view of how China above all, but some other countries have not been playing by the rules. So I guess those are a couple of possibilities, Noel, that I would lay out for you that we might see a few years from now. But, you know, I think as we learned from the first term, one thing with Donald Trump you can be sure of us is that you should expect the unexpected.

[Noel King]

Greg ip, he's chief economics commentator at the Wall Street Journal. Today's show was produced by Amanda Llewellyn and Talima Shah. It was edited by Amina El Saadi. Fact Checked by Laura Bullard. It was mixed by Andrea Christen's daughter and Rob Byers. I'm Noel King. It's Today Explained.

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