Boeing aircraft, duty-free no more

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Grainger, for the ones who get it done. All right, gang, we've got some things we have

got to talk about. From American public media, this is Marketplace.
in Los Angeles I'm Kyle Riznal. It is Monday today, the 21st day of April.
Good as always to have you along, everybody. We are going to start today with a thought experiment, and it goes like this.
What do you suppose would happen if you took the world's strongest economy, a place where unemployment was at historic lows, GDP growth was solid, if not spectacular. Consumers, while somewhat cranky as they historically are, were generally feeling pretty good about things.
And that country's place in the global economy was respected and, in fact, envied. What do you suppose would happen if what has happened here happened? The markets today give it away.
The dollar is selling off. U.S.
Treasuries are selling off. Stocks are selling off.
And America's place in the global economy is suspect, if nothing else. We've gotten Martha Gimel on the phone to talk things over.
She is the executive director and co-founder of the Budget Lab at Yale. Martha, it's good to talk to you again.
Thank you for having me. What do you make of the day's events in the markets? We'll start there.
I mean, in some ways, it's more of the same that we've been seeing over the last couple of weeks. You're seeing the world decide that the U.S.
is a much riskier place to do business and acting accordingly. That is not a good thing.
It's not. You know, the U.S.
has had this really privileged place in the economy that has let us do all kinds of fun things like deficit spend at really, really low rates. And that's really great to do.
And lots of countries would love to be able to do that. But part of the reason why people have felt so comfortable doing that is that the United States has been perceived as the safest place you could possibly be.
We've never defaulted on our debt. The independence of the Federal Reserve has been unchallenged.
We have been seen as having very steady governance. And all of a sudden, markets are thinking, well, wait a minute, what if we can't hold on to any of that anymore? Let's talk for a second about those low rates at which we have been able to borrow.
The tenure today, 4.39, 4.4, a precipitous rise over the last number of weeks as the gravity of the tariff thing has hit home. You are the director of the Budget Lab at Yale.
As Congress starts talking about tax cuts and fiscal policy, who knows what they're going to do? Talk to me about what this is going to do sort of domestically. Yeah.
I mean, anytime that interest rates go up, it's not good for our fiscal outlook. We have to pay more money in interest instead of spending it on other things.
It also means that any future borrowing becomes much more expensive. And in fact, it's possible that part of the reason why interest rates are going up is investors are starting to get a little concerned about how much money the United States is spending, particularly because we've been in an expansion.

And it is highly unusual that we are deficit spending at this rate and considering even more deficit spending.

Well, keep going on the whole more deficit spending.

We are going to have to keep selling those treasury bonds and bills at higher interest rates.

So the money is going to cost us more. The money is going to cost us more.
And it's coming at a time when Congress is thinking about spending trillions and trillions of dollars in more tax cuts. Not particularly well-targeted tax cuts, I should say.
And so that is in keeping with this sort of broader narrative that's emerging that the United States is just not being a very responsible government right now. Worth a note here that every time we get a nasty gram from the credit ratings agencies, they all say fiscal policy and political dysfunction is the problem in the United States.
Yeah. I mean, if you look at everyone who's ever said, oh, maybe the US, it really hasn't been about whether or not we could handle the debt load or we could figure this out.
It's really been a political concern. And I think one of the things that you've seen people increasingly saying is that there had been this amount of political risk that markets frankly just had not wanted to price in.
It was too unthinkable that the safest place to do business that frankly underpins a lot of international finance was actually becoming riskier and that that was something that they were going to have to adjust to. And so you've seen markets kind of sticking their heads under their pillows and going, nope, nope, everything's fine.
Everything's fine. And then over the last couple of weeks, what you've seen is the pillows have gotten ripped away and they can't put their head under them anymore.
Right. And now the phrase risk premium is starting to be talked about in conjunction with the United States.
Let me ask you super quick about the politics of this in the person of Jay Powell.

You got about 30 seconds. How destabilizing, not would it be, but how destabilizing would it be in the current environment if the president tries to fire Jay Powell? Extremely.
I don't need more than that. It is almost impossible to think through how bad it would be for markets if the president fired J-PAL.
The thing that has been sort of keeping people together, even with the amount of disruption we've had, is that, well, you can rely on the Fed. The Fed will keep inflation expectations anchored.
The Fed will figure this out. The Fed will look through this, et cetera.

And if markets don't have that to hang on to anymore, things get very itchy very quickly.

Martha Dimble at the Budget Lab at Yale.

Thanks, Martha.

Appreciate it.

Thank you for having me.

Wall Street today?

No, just no.

We will have the details when we do the numbers. All right, here's another one on the America's place in the world thing.
Should you be looking for a visual of the escalating trade war between the United States and China? A Boeing 737 MAX with a logo of China's Xiamen Airlines touching down in Seattle over the weekend should do it for you. That came after Bloomberg reported that Beijing last week told the airlines to stop taking delivery of Boeing jets.
Now at least two that had been at an assembly plant near Shanghai have left that country. Marketplace's Henry Epp explains how tariffs are complicating the business of building aircraft, one of the biggest manufacturing and export industries this country has.
Tariffs are not something the commercial jet sector is used to. Civil aircraft and their engines and components have moved about much of the globe duty-free ever since a free trade agreement in 1980.
By that time, airlines in the U.S. were deregulated and demand for air travel was rising, says Daniel Bubb, associate professor at the University of Nevada, Las Vegas.
And so by having this free trade agreement, it enabled them to have planes manufactured at a very fast pace and be delivered in order to meet this demand. And aircraft building became an international venture.
Richard Abulafia at Aerodynamic Advisory says while Boeing assembles its jets in the U.S. They do a lot of business with Canadian companies, British companies, French companies.
Half of the engine for the 737 MAX is French. Adding import taxes could drive up the company's costs.
But perhaps more worrying, says Henry Hardewelt at Atmosphere Research Group, if countries fail to reach trade deals with the U.S., they could follow China's lead. Airplanes are a very visible target to use to express your displeasure.
And ordering them back to the U.S. sends a message.
Still, there's global demand for American jets. So those planes China sent back? Boeing will attempt to resell them to airlines elsewhere.
And I think they'll find a ready market. Boeing has a backlog of over 6,000 jets, so they can repaint those planes depending on who's buying.
There's another way uncertainty around tariffs could hurt aircraft makers, says Samuel Engel, a lecturer at Boston University. Already, air travel bookings have slowed this year.

When the economy declines, airlines have less demand for their service and therefore are less inclined to place orders for aircraft.

On the other hand, he says,

It is simply a truism of this industry that there is an enduring demand for people to

get together face to face.

Which could give planemakers enough of a lift, despite tariffs.

I'm Henriette for Marketplace. There's data out today from Redfin that while it sure doesn't feel like a buyer's market out there, it's data that does show sellers have less leverage than they used to have.
44% of sellers are giving concessions to their would-be buyers. That's up from 39% of them a year ago.
Marketplace's Elizabeth Troval has more on why we're seeing more home sellers sweeten the deal with things like mortgage rate buy-downs and shelling out to pay for home repairs. Even in a hot housing market like Denver, sellers are having to get their hands dirty.
Realtor Amanda Snicker negotiated with one recently who at first refused to pay for repairs. They were pretty extensive.
It needed a new roof. It needed a new boiler.
Repairs totaled around $100,000, but the buyers refused to continue without them, which had already happened with the seller twice before. So? The seller ended up taking care of all of those costs prior to my clients purchasing.
Something unheard of, say, during the pandemic selling spree. Part of that is because buyers are jittery right now with all the uncertainty in the economy and fluctuating interest rates, says Daryl Fairweather with Redfin.
So if interest rates suddenly go up before a buyer has a chance to lock in a rate, a seller might try to help to make sure the deal goes through. In Las Vegas, George Kiprios with the Las Vegas Realtors Association says concessions are happening as much now as ever.
At his firm, most of the buyers are asking for something and they're getting it. Which means for the Vegas market, neither the sellers nor the buyers have all the power.
It's balancing out, which is great. That's Realtor Stephanie Grant, who says buyers are getting some relief while interest rates are high.
Sometimes they may want a credit towards repairs. Sometimes they may want credit towards buying down their interest rates.
Realtor Tyler King says he helped a family get into a home in Portland, Oregon at the top of their price range. They offered below asking price and...
We asked for even a small credit of, I think, $5,600 or something for some repair stuff that we wanted. And the seller agreed to it.
He says there's a lot more negotiating happening, with fewer sellers lining up multiple offers. I think buyers are getting a little braver and willing to ask.
He says while the Portland market still favors sellers, it's less of a seller's market than before. I'm Elizabeth Troval for Marketplace.

Staying with housing here for a minute, the National Association of Realtors says 62% of recent homebuyers are married, which kind of stands to reason because have you seen home prices and mortgage rates? Two incomes are barely enough. Here's today's installment of our series, Adventures in Housing.

My name is Eric Reinemann.

My wife and I closed on a house on the 28th of February, 2025, in Middletown, Delaware.

Back in 2013, I joined the service and lived with the service for 10 years. I got out of active duty and then moved back in with my parents.
I met my now wife in May of 23. I made a comment about how cute the dogs were and we just started chatting and everything kind of fell into place and she lived lived with her parents.
So we both just wanted to get out of our parents' house. We were financially stable enough to actually put a bid on the house.
We were on the hunt for about a month and a half. And we were finding houses that were good houses, but in bad neighborhoods or like bad houses in like OK neighborhoods.
At the prices that were just astronomically ridiculous, like really, you're going to put this house for $280,000 and there's a giant leak in the roof. so I sat down with her and I was like, I think we need to up our money, up the loan that we want, and let's really start hammering down places that we think we can do.
But my income was varying because I'm an EMT. My mortgage loan guy said the VA would have denied us getting the amount of the loan that we wanted without my wife's income in part as well.
I had already asked her to marry me anyway in December. So we were planning on doing a whole wedding, you know, a year from now, but we were like, okay.
And it took us two weeks of planning. It was actually done in my parents' living room.
And then a week later, we signed the paperwork for the house. It was nuts.
It was a wild ride that full month of February.

This townhouse was actually the first house we walked into and we were like, wow, look at that.

Oh, that looks good. Like, look at the backyard.

This was the first and only house we put a bid in because we'd walk into another house and it just didn't feel right.

And, you know, we walked into this one and we're like, let's do it. It's nice to come home to her instead of my parents.
You know, we see each other now all the time. And we get to live in a house with nobody telling us what to do or how to do it.
We make our own rules. Eric Reinhardt in Middletown, Delaware.
We cannot do this series without you. So if you're a first

time buyer or even just trying to be one, tell us about it, would you? Marketplace.org slash

Adventures in Housing. coming up what we are doing in this country now is going to be a generational long impact education and immigration but first let's do the numbers.
Dow Industrials down 971 today, 2.5% finished at 38,170. The Nasdaq subtracted 415.2 and 6 tenths percent, 15,870.
The S&P 500 down 124, 2.4 percent, 51 and 58. It was worse during the day, I'll tell you that.
Hertz gave back 5%. Today, rival Avis budget down 4 and 2 thirds percent.
Henry Epp was telling us about plane makers caught up in the current trade tensions. Boeing descended 1.6% today.
NVIDIA down 4.5%. Advanced micro devices off 2 and 2 tenths of 1%.
Bond prices down. Yield on the 10-year T-note rose 4.41%.
And you're listening to Marketplace. There's an online MBA that students say is transformative, empowering, exhilarating, and that creates a supportive community.
It's the IMBA from Geese College of Business at the University of Illinois. The IMBA attracts students from all around the world and top faculty work with you personally.
The IMBA is an amazing online experience with a flexible schedule and an affordable price tag. To learn more, go to onlinemba.illinois.edu.
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This is Marketplace. I'm Kai Rizdahl.
Consumers, as we reported a time or two, I believe, did a whole lot of spending last year, which, on the one hand, is good. That's what drives most of what happens in this economy.
But also there can be too much of a good thing. Late credit card payments reach record highs at the end of last year.
That's according to data from the Philadelphia Fed. And the percentage of accounts doing just the minimum monthly payment, also a record high.
Marketplace's Kaylee Wells explains why this economy is shattering some not-so-great records. The Philadelphia Fed started tracking this back in 2012.
Andy Kish with the Federal Reserve Bank of Philadelphia says long-term and short-term factors are colliding to set records. Short-term, there is a little bit of a seasonal element to it.
This data is from the end of 2024, and consumers always carry more credit card debt during the holiday shopping season. Longer term, both credit card delinquency rates and the share of accounts paying just the minimum payment has been rising over the past four years from pandemic lows.
So this has been a slow building trend. It's building in part because people don't just use credit cards for one-time big ticket expenses and emergencies.
Chip Lupo is an analyst with WalletHub. People are now using their credit cards for everyday expenses.
When the everyday expenses collide with the unexpected expenses and you're running up those balances and you're unable to even make the minimum payment. And Lupo says most consumers don't actually pay attention to the interest rates on their cards or know how bad missing payments can be for their credit rating.
Add that lack of financial literacy onto an inflationary environment where stuff is getting pricier by the day. And Ayelet Fishback says it can be hard for consumers to know what to do.
She teaches consumer behavior at the University of Chicago.

What would a responsible consumer do now? Should you run and buy a car or a washing machine or a cell phone, are prices going to come up? All that uncertainty and instability, she says, can lead consumers into something called learned helplessness. I have no control over the future.

I cannot get out of that.

I might as well spend until the bank says no more.

Next quarter's numbers might look less scary with declining consumer sentiment and no holiday spending bump.

But Andy Kish with the Philadelphia Fed says

that won't necessarily be a reversal, just a moderation.

I'm Kaylee Wells for Marketplace.

According to the Associated Press, over the past couple of weeks, the Trump administration has revoked the visas or legal status of more than a thousand international students, undergraduate and graduate. That's a conservative number.
Other sources do have it a good deal higher. The rationale given by Secretary of State Rubio for some of those revocations is unacceptable to the government's actions or attitudes toward the Israeli-Palestinian conflict.
The rationale for canceling the visas of many others remains unclear. Immigration, as has been said many a time on this program, is a labor story.
And historically, many of the 1.1 million international students who studied in the United States last year, especially graduate students, would enter the American labor force in the high demand jobs in technology and business and engineering. Whether that continues is an open question, as Marketplace's Matt Levin reports.
It was hard to get anyone to talk to me outside UC Berkeley's International House. That's the dorm for international students just across the street from campus.
An American stranger asking foreign students where they're from and what they're studying? Nowadays, that raises eyebrows. Are you from ICE? I know.
I thought someone was going to ask for this. She was asking if I was from ICE, Immigration Enforcement.
Perhaps not surprising, at least 23 Berkeley International students have had their legal status revoked. One current international student agreed to talk.
We're not using his real name or where he's from. You know, with all of these people disappearing and all of that jazz, I don't want, like if I say something bad, it feels like in this country, like if you criticize the government, you disappear as a guest.
You know what I'm saying? So I wouldn't want my name to be on it. He's getting his PhD in chemistry.
And because Berkeley has the number one chemistry graduate program in the country, once he's done, he'll likely get plenty of lucrative offers from big American biotech companies. But he's not sure he wants to stay in the U.S.
That's partly because he just prefers home. But also...
When you see an administration doing what they're doing, and it's like, yeah, then it's like, I'm not interested. If you don't want me here, then I don't want to be here.
You know what I'm saying? What we are doing in this country now is going to be a generational-long impact. Hani Fareid teaches computer science at Berkeley.
You are creating a multi, multi, multi-year impact on science and discovery and innovation that will cripple the U.S. 10 years, 20 years, 30 years down the line.
According to the National Science Board, student visa holders are in more than half of the PhDs in computer science, engineering, math, and statistics at U.S. universities.
Fareed specializes in digital forensics. His graduate students work on technology to try to tell whether an image or video has been manipulated by AI.
He says most of the graduate students he's worked with come from abroad, and after completing the program, most work in the U.S. A common employer was actually the U.S.
government. So now under this administration, why would anybody go work at the government? I certainly wouldn't recommend it.
The appetite will be zero. The Trump administration has said it is targeting international students who have disrupted universities in pro-Palestine protests or engaged in illegal activity.

Here's Secretary of State Marco Rubio earlier this month at a press briefing after a cabinet meeting. No one's entitled to a student visa.
The press covers student visas like there's some sort

of birthright. No, a student visa is like me inviting you into my home.
If you come into my

home and put all kinds of crap on my couch, I'm going to kick you out of my house. Multiple lawsuits

have been filed against the Trump administration, citing a lack of due process for foreign students back outside uc berkeley's international house that phd chemistry students is beyond the visa cancellations the u.s just makes it tough for high-skilled immigrants to stay and work here it's very funny right, because inherently America is built on migration. A lot

of the people who have come here and changed the game weren't American beforehand. So why are we

making it difficult for people to stay? He says the money he might make in the U.S. will be hard

to turn down, but he is interested in how much Canadian companies could pay him. I'm Matt Levin

for Marketplace. This final note on the way out today, a labor market data point from the New York Fed.
They track what's called the reservation wage, the lowest wage workers would be willing to accept in a new job. Back in November, it was a hair over $82,000 a year.
That is, a worker would not leave the job they currently have for anything less than that. Last month, says the New York Fed, a bit more than $74,000.
Another way to think of that is that workers have gotten $8,000 less confident in their earning power.

That thing I said at the top of the show about what the last three months have done to this economy?

This is that.

Our daily production team includes Andy Corbin, Nicholas Guillaume, Maria Hollenhorst, Iru Ekbenobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio.

I'm Kyle Rizdahl. We will see you tomorrow, everybody.
This is APM. and editors, where each week they discuss the influence of technology and culture from the valley on our everyday lives.
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