Counting the ways tariffs disrupt our economy

In today's competitive world, your ideas need to stand out.

But who has time to design a presentation? Gamma is your AI design partner that transforms your concepts into stunning presentations, websites, social media content, and more in minutes, not days. No coding or design skills required.
Visit gamma.app, that's G-A-M-M-A dot app, and start creating professional content as fast as as you can think it up for free. Marketplace listeners get special access to one month of Gamma Pro free with promo code Marketplace.
Gamma, how good ideas get into the universe. Missions to Mars, driverless cars, AI chatbots.
Feels like we're already living in the future. Well, Robinhood is built for the future of trading.
Robinhood's intuitive design makes trading seamless so you can spot opportunities and take control of your trades. You can now even trade your stocks and crypto all in one place.
Sign up for a Robinhood account today. Investing is risky.
Robinhood Financial LLC, member SIPC, is a registered broker-dealer. Cryptocurrency services are offered through an account with Robinhood Crypto LLC, NMLS ID 1702840.
Robinhood Crypto is licensed to engage in virtual currency business activity by the New York state department of financial services.

How are tariffs affecting this economy? Let us count the ways from American public media.

This is Marketplace. Yeah, so I'm not actually going to count the ways that President Trump's trade policy is affecting this economy because the show is only half an hour.
But ways number one, two and three for us today are in this order. Supply chains, steel and oil.
Supply chains, of course, are about availability of materials at reasonable costs, both of which tariffs affect and not in a good way. Businesses do have some recent experience with supply chain disruptions.
So Marketplace's Justin Hoh made some calls about lessons learned from the pandemic that might apply today. Up until this week, Ken Gidden, the owner of Rothman's, a men's clothing store in New York, would order 20 suits a week from one of his suppliers in China.
But on Monday? We decided to buy 200 of them. Giddens says one reason was to get them in before tariffs on Chinese imports take effect.
Another was to buy himself some time to find other vendors in different countries. Giddens says all the supply chain congestion that happened during the pandemic taught him how important it is to have multiple suppliers.
The economic world always evolves. So if one road is blocked, another one will open up.
That said, the pandemic also taught retailers that having too much inventory can be a drag, especially if the economy and consumer demand slows down. Jason Miller is a professor of supply chain management at Michigan State University.
If we front load today and demand drops, let's say in the next two or three months, then we're stuck with all this inventory that we then have to discount. Loading up on inventory also requires businesses to shell out a lot of cash up front, says Nicole D.
Horatius, a professor at Columbia Business School. Firms right now are trying to make the decision is, do I want to tie up that capital by having excess inventory in my system? Or am I willing to endure shortages? And right now, many businesses don't even want to make that decision.
You know, let's not change anything. Let's just hold tight to see what happens with the dust settling.
That's Ben Coates, the CEO of Revel Bikes in Colorado. He says there are just too many unknowns.

Do the tariffs stand? How do you manage them?

Do we stay the course and not worry about it?

Do we move supply from Taiwan to Vietnam because the tariffs are lower?

Coates says any lessons he learned during the pandemic don't apply to those kind of questions.

I'm Justin Howe from Marketplace.

Wall Street today, lower across the board, but not by much.

We'll have the details when we do the numbers.

Steel is way number two for us today. The tariffs are affecting this economy.
And the obvious question, if you remember that back in Trump one, steel and aluminum tariffs were the tariffs. The question is, how is this time difference? We called our go to Lisa Goldenberg, the president of Delaware Steel Company, to get the answer.
The part that's new is the amount of energy it takes to sustain this amount of chaos is more than everyday business. Navigating through one day it's literal, the next day it's conceptual, the next day it's a notion, the next day it's policy.
That just requires an enormous amount of focus and energy. My job is to buy low and sell high.
And what we learned from the last tariff experience is that what goes up must come down. So it's kind of a last man standing.
The first sales out the door, you can make the most money, whatever you're left with after you replace the steel at a higher cost and then have to sell it, you lose money. So the trick is to make enough that you don't have to give it all back in losses.
You've been doing this a long time and we've been talking for no, no, no pejorative intent there. But but look, you are you are here's a better way to say that you are deeply experienced in this.
Yeah. Almost 40 years.
You have a wide network of contacts here and abroad. And I want to ask you two questions.
First of all, what's the what are the conversations you're having like with your professional colleagues here in the United States about what the chaos of President Trump's trade policy is doing? Well, I think that steel is a unique environment in that it's generally a very pro-conservative economic environment. And in particular, more than not pro-Trump.
The level of chaos is not what people expected. And most people are saying things like, well, overall, we think that a lot of good's going to get done.
It's just the way it's going to get done is not going to be the way I would do it, but it's all going to work out. So I think there's a lot of kind of backpedaling on blanket support, but long view, people think that this is going to go in the right direction, but the here and now is far too turbulent for anyone to stomach.
What about then the contacts you've made in your decades overseas and the American reputation overseas? Well, overseas is a whole other thing. Canadians think that we've lost our mind and they're angry.
And generally speaking, when you're having trade, quote, issues, unquote, you negotiate, you have summits, you discuss, and then you walk away saying, geez, we've got an issue. We better work on that.
But because the administration came in and said, there's been issues, so we're going to deal with it. And this is how we're going to deal with it without actually coming to the table.
It's like being served divorce papers when you didn't know there was a problem. So people are very, very betrayed.
I was going to ask you whether you worry about the future of the American economy, but based on what you've said, I'm just going to ask you, how worried are you about the future of the American economy? I think that the next four or five months are going to tell a lot. If we can sort of get through the next four or five months bouncing around some really crappy days, the market falling apart, some rallies, some nonsense, back and forth, back and forth, back and forth, we can get through it.
But what does get through it look like, though, Lisa? What does get through it mean? A mess. It looks like a mess.
This is the level of volatility and mind-changing and lack of balanced forethought. And in this environment with this president, there's a lot of emphasis on the stock market and growth, which really only pertains to the uber wealthy.

For the rest of the group, the workers, the people that the president swore to stand by, at the end of the day, there is no data that supports that tariffs create jobs, that tariffs improve the lives of the worker.

It just doesn't track.

Lisa Goldenberg, president of the Delaware Steel Company in Pennsylvania.

Lisa, thanks so much. It's really good to talk to you.

And I appreciate, as I always do when I talk to you, your absolute frankness.

Thank you, Kai.

Oil would like to get in on the President Trump's tariffs

or messing up a global trade conversation. It is way number three for us today.
The International Energy Agency has revised down its expectations for global oil demand growth, saying, and this is a quote, escalating trade tensions have negatively impacted the economic outlook, which makes sense. Trade wars means there's less cargo moving around the world, which means less demand for fuel to move said cargo.
Not great for oil producers who've seen prices soften a lot lately in what was already an oversupplied market. And lest you forget, the United States is at this moment the biggest oil producer in the world and a net crude exporter.
Marketplace's Elizabeth Troval has that one. Even with all the uncertainty right now, independent oil analyst Tom Kloza is sure about one thing.
We won't be seeing $100 barrels of oil anytime soon. The fear of a trade war is hamstringing oil demand.
The price of WTI or West Texas Intermediate is hovering around $60 per barrel, which is not low enough to kill the U.S. oil patch.
But it's not exactly giving drill baby drill vibes. The Reistad Energy analyst Matthew Bernstein.
$60 per barrel puts growth at risk for U.S. oil producers.
If WTI prices dip lower. $50 WTI, frankly, puts their business model at risk.
Which is plausible if we see a full slate of tariffs returned. That would have really consequential effects for U.S.
oil output. But wait a minute.
Don't lower oil prices help tamp inflation? Yes, though fuel prices are a smaller percentage of consumers' budgets than they once were. Garrett Golding is with the Dallas Fed.
And this is primarily the result of just more fuel-efficient vehicles. It's also important to consider why oil prices have dipped.
Tom Kloza again. We're seeing low oil prices,

but we're seeing low oil prices because we're seeing an economy that's clearly stumbling.

So it's looking like a good year for consumers at the pump.

Just don't check your 401k. I'm't like going up there because I hate looking at all that debris.
That gets just like depressing. like, depressing.
The long road to recovery for businesses in Altadena. First, though, let's do the numbers.
Dow Industrial's off 155. Today, four-tenths percent, 4,368.
The Nasdaq subtracted eight points, less than a tenth percent, 16,000 to 823. The S&P 500 down nine, two-tenths percent, 53 And 96.
The trade war is hitting Boeing. Beijing has ordered a halt to deliveries of its planes to Chinese carriers and that those carriers stopped buying parts and equipment from the plane maker, which I think we can all agree is now safe to call beleaguered.
Boeing descended 2.4 percent today. Oil today, by the way, just going back to Elizabeth's spot, $61.53 West Texas.
70 years as of today. That's how long April the 15th has been tax day in the United States.
Bonds up, yields down 4.34 percent on the 10-year. You're listening to Marketplace.
Certified financial planners are ethical, educated, and experienced professionals committed to acting in your best interest. That's why when it comes to your finances, it's gotta be a CFP.
CFP professionals can offer advice on a wide range of issues, including reviewing your investment portfolio's allocation, handling an inheritance, rolling over a company retirement plan, building education savings, dealing with consumer debt, reviewing your options for life insurance, and more. Find your CFP professional today at letsmakeaplan.org.
Did you know that the average professional spends up to five hours a week making slide decks? What if you could create professional presentations, websites, social media posts, and more in minutes instead of hours? Gamma takes your messy notes or outline and instantly transforms it into stunning content that's ready to share. No coding or design skills required.
Start for free at gamma.app. That's G-A-M-M-A dot app.
Marketplace listeners get one month of Gamma Pro free with code Marketplace. You have ideas.
Gamma brings them to life. You set the gold standard for your business.
Your website should do the same. Wix puts you at the helm so you can enjoy the creative freedom of designing your site just the way you want.
Want someone to bounce your ideas off? Talk with AI to create a beautiful site together. generate on-brand content, images, media, and simply change or fine-tune any of it along the way.
Whatever your business, manage it from one place and tie it all together with a personalized domain name. Gear up for success with a brand that says you best.
You can do it yourself on Wix. If your job at a healthcare facility includes disinfecting against viruses, you know prevention is the best medicine.
And maintaining healthy spaces starts with a healthy cleaning routine. Grainger's world-class supply chain helps ensure you have the quality products you need when you need them.
From disinfectants and cleaning supplies to personal protective equipment, so you can help deliver a clean bill of health. Call 1-800-GRAINGER, click grainger.com, or just stop by.
Grainger, for the ones who get it done. This is Marketplace.
I'm Kai Rizdahl. I was out for a walk with my dog the other day in the hills up north of downtown Los Angeles.
And once we got up to the top of where we were going, I could see a whole stretch off to the east that was discolored. It was a couple of miles wide.
Easy. And it took me a minute, but then I realized it was the burn scar from the Eaton fire.
If you drive around up there, you can see the rebuilding happening. Dump trucks on almost every street, workers in yellow vests and hard hats fixing light poles and power lines, people from the EPA and the Army Corps of Engineers, clipboards in hand, and business owners trying to figure out what to do next.
You know, for me personally, it's completely taken the wind out of my sails. This is like the nightmare that you never think you're going to have.
It's hard to tell what construction costs are going to be going forward, what the cost of labor is going to be, what the cost of materials are going to be. In essence, I can't move as fast as I want to move.
The unknowns of this whole thing, the expenses, how long it's going to take, whether people are even going to come back, those are all real for the Altadena economy. And we're starting a series today about Altadena businesses because Altadena's recovery depends on those businesses.
A series, we should tell you, that's going to have to go for a while because rebuilding after a natural disaster like this takes a long, long time. You can see that right in the heart of Altadena's business district.
So I'll tell you what, it's been like a month since I've been up here. You forget.
You forget. It's unbelievable.
If you look at a map of the burn zone, you'll see that almost all of Altadena falls within it. 18 people died in that fire.
More than 9,400 structures were destroyed. Homes, unattached garages and commercial properties.
More than a thousand others were damaged. Joey Galloway owns one of those properties.
I'm Kai. Nice to see you.
How are you? Nice to see you. Here's Radio 101.
You just got all the microphone up to your mouth. That's it.
I got to tell you, I signed up for a beginning voice acting class next. Everybody's like, you got the pipes.
Joey owns the commercial block that we're standing on.

He calls it Mariposa Junction.

Two brick buildings, separated by

an alleyway, 13 business tenants,

retail shops, offices,

restaurants, a little bit of everything.

Give me a little history. I mean, you're born and raised in here.

How'd you come to acquire these buildings?

My father purchased...

My father's a real estate investor. My whole family's a real estate

investor. My grandparents, uncles, they all invested in real estate in the area.
My father bought this building 42 years ago. An African-American family owned it.
He knew the owner. So my dad bought it.
It was just kind of one of those things. My dad just, let me go talk to this guy.
You were a kid. You were like 12-ish, right? Yeah.
Yeah. In the 1960s and 70s, Altadena became known as an L.A.
suburb where black families were able to buy homes and businesses.

Before the fire, about 43,000 people lived here. Median income around $129,000.

And something you hear a lot when you're here is that a lot of those families have lived and owned businesses in Altadena for generations. Families like Joey's.
One of these buildings is intact, right? Not able to be occupied right now for a whole lot of reasons. But all the businesses in it are mostly intact.
25 feet to the, what is that, west, it's a shell. Now what you gonna do rebuild um rebuild there's a melted bike frame from the bike store blackened buckets and shelves from the hardware store and just a ton of other debris that is completely unrecognizable all that's standing is a buckled brick wall i've never had to deal with anything that was a total loss.
So it's kind of a learning curve for me. Because of the extent of the damage and the size of the building, I retained a public adjuster.
Like I just, I don't have the time or effort to help you out with insurance. Yeah, yeah, I can't.
I just, I have too much on my plate. Public adjusters, by the way, they work for the person making the claim, not the insurance company.

How long are you going to give it?

We're talking three years.

Easy, right?

And you're just going to keep, you're going to keep plugging away.

I asked my, before I answer that question, I was talking to my public adjuster and I said,

hey, I don't like going up there because I hate looking at all that debris.

Like, it's just like depressing. I said, I want to get it cleared out now.
and I said, hey, I don't like going up there because I hate looking at all that debris. It's just depressing.

I said, I want to get it cleared out now.

He's like, you can't touch it.

You're going through insurance.

No.

Touch anything.

In essence, I can't move as fast as I want to move.

Granted, we've known each other for like 20 minutes, but you strike me as a guy who doesn't like to sit still.

So the inactivity that comes with this place must be killing you. Or have you found a little moment of zen? The building's keeping me busy.

Yeah, you know what my moment of zen is? I go to the beach every weekend. I just got

back from the beach last night. Really, that's my moment of zen.
But I got to tell you another

thing. I was up here probably almost every day of the week.
That hardware store, True

Value, it's the anchor store. And it's like the hardware store in the neighborhood.
But I was up here every day for two reasons. One, I have a storage facility in the back.
But two, I had an account with them. So I bought most of my parts from my apartment buildings from them.
Besides the properties here, Joey owns a couple apartment buildings down in Pasadena. So I was up here, let's say, five days a week, sometimes six.
Now it's maybe I'm up here every two weeks, if that. Insurance is going to cover rebuilding expenses in full, plus 30 months of lost rent.
But it's not only this building that Joey needs to worry about. Right next door, in the one that's still standing, not a single of the six businesses leasing space there have reopened yet.
They could technically open if they wanted to, but they kind of had the same mindset I did with all this debris around here. For starters, I'd have to go in and do all the smoke and so forth, work and so forth.
If I had my insurance company do that, and they opened up, once the debris was removed, I'd probably have to go back and do it again. Yeah, this doesn't make sense.
Have they told you that they intend to open back up in this location? Every one of these businesses has said they're coming back, with the exception of Sudeca. Sudeca's a woman's clothing shop on the corner.
The owner's still trying to figure out if she can reopen.

But if she doesn't come back,

Joey's going to need to find somebody who will.

You say you're going to rebuild.

You didn't really hesitate.

My question is, how are you going to do it?

Here's why I'm asking.

You've got to figure out the tenant situation, right?

You've got to get people to want to come back to do business,

but you've got to get people to live here and work here and shop here. That's like the least of my concern.
For reals? For reals. For reals.
If, if people who lost their homes don't come back, somebody is going to come back. Somebody is going to fill that void, that void.
You're not going to see vacant lots in Altadino. It's, on the flip side, you know, when bad things happen, sometimes there's some opportunities there.
You know, I hate to say it under these circumstances, but I see opportunity. Look, you're a businessman.
I see opportunity. I don't think all my tenants are going to come back, and I'm not worried about it.
Not worried, but he does figure it's going to take him three years to rebuild. Three years before his biggest tenant in the building that burned can move back in.
Tell me who you are and what you do for a living. My name is Jimmy Orlandini.
My family owns Alzean Hardware. Tell me what we're looking at.
My my baby this is my hardware store uh you know i'm technically third generation hardware uh my grandfather bought a store in east la in the 60s that my dad still has and he runs um we bought this store in 2010 um The store's been here forever.

It's been a part of the community forever.

And when we came in, we just redid it,

and the community just fell in love with it,

and it was an amazing store.

Like Joey Galloway, Jimmy Orlandini's part of a multi-generational family business.

He grew up in Altadena and still lives here.

When did you find out that this building had burned?

It was probably about 8 o'clock in the morning on Wednesday morning. Jimmy had evacuated the night before with his wife and his three kids.
First thing the next morning, he drove back in to check on the store. I think it was about 8, 8.30.
My dad actually, before he even checked on his house, he drove up here to see the store, and he came down and he just looked at me and said, the store's gone. And then about two minutes later, I got a text from Joey with a picture of the store on fire.
Since the fire, Jimmy's been coming up here at least once a week. What do you do up here, though, Jimmy? There's nothing you can do here, man.
You know, we still have, we have garages in the back. We have four of them.
I have inventory in there that I've been, you know. This store we treated like, kind of like our hub.
All our big orders came here and then we dispersed it to the other stores as we needed. It's just made it easier.
So this fire actually has disrupted, not completely, but your business model, right? Yes, completely. Yeah, because those stores are out of product that they only make sense for us to order full truckloads.
Oh, yeah. And I have no way of doing that.
One, the other stores don't have the area to take the product. And two, I have nowhere to store it.
Some of his customers are reaching out to Jimmy directly. he's been meeting up with them in front of the store or at their homes to do small order drop-offs.
Now what are you going to do? I'll rebuild it. No doubt? No doubt.
Yeah, it's coming back. We're looking for a temporary place.
There's not a lot of commercial buildings left that will take us in.

You know, hardware's, it's a little rough on buildings. Yeah.
Um, right now we're mainly focused here in Altadena, but there's not much. How, yeah, their camp inventory's got to be pretty low, right? Pretty low.
And demand is super high. There are a few businesses in Altadena that survived, but their customer clientele is gone.
And it's going to be very difficult for them to come back right now. This is a terrible thing to say, but that's an opportunity for you.
For me. I'm hoping that it could be something where it kind of benefits both of us because we come in and rent the space while they recover.

Right.

It's just been difficult.

You know, I had one realtor that works with hardware stores, and he's like, I tried.

Good luck.

I don't think it's going to happen for you. You know, anything that's left, they're going to charge you an arm and a leg, and they're not going to want a temporary tenant.
If you are going to sign a temporary lease, they're going to want a premium, you know, especially for a hardware store. Can you pay a premium right now? No, no, not at all.
Most of the quotes he has are more than double the rent he was paying Joey before the fire. It's not a stretch to say that more than in most places, the local economy here depends on the community here.
Altadena is kind of like a cul-de-sac. It fits snugly into the foothills of the San Gabriel Mountains.
It's surrounded on three sides by wilderness, so you can only get here by driving up the hill from Pasadena. You don't just pass through.
So with so many people who used to live here scattered

everywhere, all the businesses in town aren't going to have, for a good long while anyway,

the community that they need to survive. Coming up on the program tomorrow.
We did our best to

try and place as many of the employees as possible with other clubs and other locations.

A story from one of the biggest employers in town. This final note on the way out today, we did a story the other day, maybe last week, I think, about Delta Airlines pulling its earnings guidance for the year because of, you know, tariffs, uncertainty.
Unusual to pull guidance, but not unheard of.

United, though, has decided to go Delta One better.

The company said in an investor update today, it's not pulling its guidance.

It said, hey, things could go one of two ways. If things stay stable, we'll make as much as $13.50 a share.

If things get worse, United said, it'll be half that.

Which I think makes United and airlines our number four away.

But President Trump's ass are messing up the global economy, huh?

Our digital and on-demand team includes Carrie Barber, Jordan Mandy, Dylan Mienten and Janet Wynn,

Olga Oxman, Ellen Rolfes, Edward Silva, Virginia K. Smith and Tony Wagner.

Francesca Levy is the executive director of digital and on-demand.

And I'm Kai Rizdahl.

We will see you tomorrow, everybody. This is APN.
If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance. Financially Inclined from Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of.
I'm the host, Janelia Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can afford,

and how to talk about money with friends and family.

Listen to Financially Inclined wherever you get your podcasts.