Will August bring a wave of trade deals or a hike in tariffs?

Transcript

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Speaker 21 The theme of the economic week might be summed up as we'll see from American public media. This is Marketplace.

Speaker 21 In Baltimore, I'm Amy Scott in Vercai Rizdahl. It's Friday, July 18th.
Good to have you with us. So here we are at the end of the week, a pretty interesting one in the U.S.

Speaker 21 economy where some of the big questions about tariffs and the Fed remain TBD.

Speaker 21 And here with us to make sense of it all, or at least as much of it as we can get to in roughly six and a half minutes, are Sudeep Reddy at MSNBC and Ana Swanson at the New York Times. Hey, you two.

Speaker 22 Hey, Amy.

Speaker 14 Hi, Amy.

Speaker 21 All right. So, Sudip, we saw this week the first real evidence that the Trump tariffs are showing up in consumer prices.
How concerning is the CPI number we got?

Speaker 23 You know, just having evidence is so important right now. The signs were limited.
There are some in toys, in furniture, in some apparel.

Speaker 23 That's to be expected when tariffs go up like this.

Speaker 23 The real question for inflation is whether these are one-time price increases, which means they could probably be manageable, or whether this starts the effect of price increases feeding on each other, which becomes runaway inflation.

Speaker 23 We saw this take shape a little bit in 2021, certainly not anywhere close to this scale now as it was back then, but that led to a whole feedback loop that had more prices rising and labor costs rising and all these things that became just so untenable.

Speaker 23 And the Fed is still living with the consequences of that and trying to avoid having that same problem come up again.

Speaker 21 Ana, what do you think? I mean, for now, at least the Trump administration is promising higher tariffs starting on August 1st without many of the promised deals in sight. What is the end goal here?

Speaker 22 Well, you know, we've been debating that actually, and market investors have been debating that as well.

Speaker 22 Are we going to end up with higher tariffs or are we going to end up with dozens of trade deals, right?

Speaker 22 And it seems like many investors had been betting on the latter that some of these tariffs would be walked back.

Speaker 22 You know, I'm really not so sure anymore. I think recently signs have been pointing to the fact that the President is pretty satisfied with high tariff rates.

Speaker 22 He's taken to calling these letters that he's sending countries with their tariff rates in themselves a deal and saying, you know, I've done dozens of deals here.

Speaker 22 So I do think we will see some more

Speaker 22 deals

Speaker 22 in

Speaker 22 the weeks to come. But we're also going to see significantly higher tariffs as of August 1st.
And as Sadip was saying, that has potential to spill over into the economy as well.

Speaker 21 Well, let's talk about how consumers are holding up so far.

Speaker 21 Signs, at least from retail sales that came out this week, are that people are still spending, maybe because of concerns about coming inflation. Sadif, what's going on there?

Speaker 23 No,

Speaker 23 there's still so much durability in the economy.

Speaker 23 People are spending.

Speaker 23 Job growth has not fallen apart. There are signs here and there that there may be softening, but maybe it's just noise.

Speaker 23 You don't really have any deep signs of concern yet.

Speaker 23 I think, especially with the stock market pretty much at records and a mostly stable job market, people are going going to feel fine and consumer sentiment is showing that.

Speaker 23 Everything seems stable right now, but there are the things lurking in the background,

Speaker 23 like tariffs, like

Speaker 23 some increases in prices that

Speaker 23 they can feed on each other and turn into something that weighs on people across America.

Speaker 21 So I do want to turn to the Fed this week.

Speaker 21 Of course, President Trump stepped up his attacks on Fed chair Jerome Powell with reports saying the president was preparing to fire Powell, and the markets didn't like it one bit.

Speaker 21 Ana, bring us up to date on what's happening there.

Speaker 22 Yeah, so earlier this week, the president was at one point waving around a piece of paper with

Speaker 22 a letter to Powell that would fire him in front of House Republicans. He later really backed off of that, saying that he was, quote, highly unlikely to fire him.

Speaker 22 And it seems like the difference is really that he saw kind of markets revolt at that sentiment. I think with Trump, you know, you never really quite know how much he's joking.

Speaker 22 He likes to keep people guessing, but you do have to take him seriously when it comes to this threat.

Speaker 22 It's clear that the president really does want a pliable Fed chair, and that would be a big threat to the economy.

Speaker 22 You know, we're not necessarily at a moment where the Fed should be clearly cutting interest rates. Like Sudeep was saying, the economy looks pretty strong.

Speaker 22 There are these risks of tariff-related inflation in the coming months. And if he would fire Powell, that could be a big shock to the global financial system.
It could lead to market volatility.

Speaker 22 And then in the long run, it could also lead to higher borrowing costs for the United States.

Speaker 21 So, Deeb, why do you think the president appeared to sort of retreat from these threats this week?

Speaker 23 You know, there's some belief out there that the president is simply demonstrating power. He likes to show that he's in control and that he can do things.

Speaker 23 There's also a view that maybe he's looking for a fall guy if the economy stumbles and this kind of lays the groundwork to do that. It's possible.

Speaker 23 He's actually worried about the economy as a result of his tariffs.

Speaker 23 Hard to really know what that means. But

Speaker 23 I think when you see the market reaction to this, one thing the president does understand, he understands when the stock market falls, he understands to some extent how bond markets operate.

Speaker 23 He's a debt guy. He understands that.
And so

Speaker 23 there's a line here that he's kind of dancing around. But if you cross that line, then the great

Speaker 23 power here of the United States and the Federal Reserve starts looking a little bit more like Turkey and some other countries

Speaker 23 where things get ugly at that point. We had an experience with this in the 60s and 70s, and it took a pretty brutal period to recover from that.
And so

Speaker 23 I suspect the president has some understanding of the risk factors here, even as he does a little bit of a show, which he tends to do.

Speaker 21 And Ana, real briefly before we go, the next FOMC meeting is, I think, the week after next.

Speaker 21 Considered likely to hold steady at current rates, but what will they be watching for?

Speaker 22 Definitely. Yeah, considered likely to hold steady.
If there is a cut, September looks much more likely.

Speaker 22 You know, I think the question still right now is how much are tariffs going to,

Speaker 22 you know, spill over into inflation in the coming months? And how much is that going to weigh on the labor market? Right now, you know, the labor market looks pretty strong.

Speaker 22 The economy looks, the consumer all look, you know, pretty resilient. But we have started to see tariffs

Speaker 22 flow into some goods prices.

Speaker 22 And the question is just how, you know, how intense is that? How broad does that get in the coming months?

Speaker 22 And is that going to be going to weigh on growth as well at the same time that it pushes up prices?

Speaker 21 Like I said, we'll see. Sadib Freddy is at MSNBC Ana Swanson with the New York Times.
Thanks both of you so much.

Speaker 22 Thank you.

Speaker 23 Thanks, Amy.

Speaker 21 On Wall Street today, a little bit of this, a little bit of that. We'll have the details when we do the numbers.

Speaker 21 Early this morning, the House passed President Trump's package of billions of dollars worth of spending cuts called rescissions, sending it to the president to sign.

Speaker 21 The clawback of federal funding will have a big impact on foreign aid programs and, yes, public media.

Speaker 21 But some veterans of Capitol Hill appropriations fights from across the political spectrum are worried about what the rescissions mean for the balance of power in Washington and who really holds the power of the purse.

Speaker 21 Marketplace's senior Washington correspondent Kimberly Adams reports.

Speaker 24 The law allows the president to ask Congress to rescind funds for projects and programs the legislative branch already agreed to pay for, but there was something unusual about these rescissions, says Joshua Rowley, a research fellow at the Mercatus Center.

Speaker 26 Only Republicans supported the rescissions package. And so in that that case, right, it was breaking the precedent of Republicans and Democrats work together to decide how to fund the government.

Speaker 24 Usually, the parties have to work together to pass annual appropriations bills, because in the Senate, points out Bobby Kogan at the Center for American Progress, you need 60 votes to pass a spending bill.

Speaker 26 No party almost ever has 60 votes. So these things end up getting both parties to work and no one gets exactly what they want.

Speaker 24 But this time, after lawmakers struck a bipartisan deal in March to fund the government, Republicans alone just voted to change it, and they did it just as Congress is negotiating the next round of funding.

Speaker 24 Devin O'Connor is a senior fellow at the Center on Budget and Policy Priorities.

Speaker 26 And so the question for Democrats is, how can you know that whatever deal you try to reach with Republicans won't then just be cut again in the same way that just happened?

Speaker 24 The White House says more rescions are coming, and the administration's fine with them passing on a partisan basis.

Speaker 24 All of this could set up for a government shutdown in the fall if Democrats don't trust the GOP on a deal.

Speaker 26 In the bigger picture, what's at stake is whether the representatives who we elect and send to Congress are really the ones making the spending decisions for our nation.

Speaker 24 Philip Wallach is a senior fellow at the American Enterprise Institute.

Speaker 26 whether in fact they get to sort of offer their opinion but then it's the president and the people who work for him that are deciding what kind of spending actually gets done.

Speaker 24 And that, says Wallach, would be a major shift in how our constitutional system functions. In Washington, I'm Kimberly Adams from Marketplace.

Speaker 21 Elsewhere in federal spending cuts, big changes are coming to the Supplemental Nutrition Assistance Program, or SNAP, also known as food stamps.

Speaker 21 Many able-bodied adults will face new work requirements, and states will have to start sharing the cost of the program with the federal government.

Speaker 21 It's likely to result in many people losing some or all of their benefits, benefits that already don't go very far. A new analysis from the Urban Institute finds that in 99% of U.S.

Speaker 21 counties, SNAP does not cover the cost of a modestly priced meal. Marketplace's Samantha Fields has more.

Speaker 27 The average SNAP benefit is a little more than $6 per person a day.

Speaker 28 Think about what you could buy for $6.25.

Speaker 28 It's not a lot of money.

Speaker 27 Hilary Seligman at the University of California San Francisco says SNAP is intended to be supplemental, as the name suggests. It's the Supplemental Nutrition Assistance Program.

Speaker 28 But she says the reality is Most families who are receiving SNAP benefits are actually not able to put any additional money into their household food budget.

Speaker 27 And SNAP alone is not enough almost anywhere in the country to cover three modestly priced meals a day, meaning a meal that costs $3.41.

Speaker 27 That's how much people living just above the poverty level say they tend to spend on food.

Speaker 27 Stacey Dean at the Global Food Institute at George Washington University says with benefit amounts, the idea is...

Speaker 31 The food that you can buy should be nutritionally adequate, aligned with what people are generally buying, and also very modest, modest cost.

Speaker 27 But the government makes a lot of assumptions, Dean says, that people have access to a low-cost grocery store and to a full kitchen, and that they basically never waste food.

Speaker 31 SNAP benefits are set at a level where it is actually challenging for households to be able to purchase a basic nutritionally adequate diet.

Speaker 27 That's why many people on SNAP tend to buy cheap, high-calorie, processed food, says Elaine Waxman at the Urban Institute.

Speaker 25 One of the biggest risks when you're shopping for food is to buy things that are perishable because you can't stretch them over the course of a month.

Speaker 27 For a few years during the pandemic, the federal government expanded SNAP benefits and research shows that helped reduce both food insecurity and the poverty rate.

Speaker 25 We have learned a very recent lesson on exactly what we need to do. to improve food insecurity and help people put food on the table.
Unfortunately, we have walked away from those lessons.

Speaker 27 By cutting SNAP at a time when food prices are more than 20% higher than they were five years ago. I'm Samantha Fields from Marketplace.

Speaker 21 Coming up.

Speaker 32 All the homes in my community are off-grid, and I now own 55 acres of land.

Speaker 21 Living the dream in New Mexico. But first, let's do the numbers.
The Dow Jones Industrial Average decreased 142 points, 3 tenths percent, to finish at 44,342.

Speaker 21 The NASDAQ picked up 10 points, less than a tenth of a percent, of close of 20,895.

Speaker 21 And the S ⁇ P 500 fell less than a point, call it unchanged, to wrap at $6,296.

Speaker 21 Chevron is finally going to be able to buy Hess for $53 billion.

Speaker 21 An international panel in Paris ruled the competitor ExxonMobil did not have a valid claim to bid on Hess's oil fields in Guyana. Chevron sank 9 tenths percent, ExxonMobil declined 3.5%.

Speaker 21 You are listening to Marketplace.

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Speaker 21 This is Marketplace. I'm Amy Scott.
For 35 years, the U.S.

Speaker 21 Department of Agriculture has set aside pools of funding for loans, grants, and other assistance for what the agency calls socially disadvantaged farmers, specifically farmers of color, sometimes women farmers.

Speaker 21 This was part of an effort to address past lending discrimination by the USDA. But under the Trump administration, the agency is ending those efforts.

Speaker 21 It recently announced it'll stop considering race and gender in applications for many programs. Marketplace's Savannah Peters has more on what those changes could mean.

Speaker 33 In farming, access to capital is crucial, more so than in many other sectors, says economist Dania Francis at the University of Massachusetts Boston.

Speaker 33 You need lots of investment up front for land, equipment, seeds, and it's often months before farmers see a return.

Speaker 35 If you can't get the money up front, you plant later, right? If you plant later, you have a smaller harvest.

Speaker 34 It can make you miss an entire season, which is almost, you know, financially ruinous.

Speaker 33 The USDA is a key provider of low-interest loans that help farmers stay in business.

Speaker 33 And throughout the 20th century, minority farmers were routinely denied loans at local USDA offices across rural America.

Speaker 33 That often led to foreclosure and contributed to $326 billion worth of land loss for black farmers, according to Francis's research.

Speaker 34 My co-authors and I considered that a conservative estimate.

Speaker 33 The USDA's history of lending discrimination is well documented. The agency itself has acknowledged it.
Margot Schlanger is a law professor at the University of Michigan.

Speaker 33 She worked on civil rights issues at the USDA from 2022 to 2025 and spent time with victims of past discrimination.

Speaker 36 You hear story after story after story about, you know, women going in and somebody saying, honey, where's your husband?

Speaker 36 And story after story about folks saying, Latinos can work on farms, but they can't run them.

Speaker 33 Schlinger says one legacy of that discrimination is that less than 5% of American farmers are people of color, according to the USDA's latest tally. And only 9% of farms are run solely by women.

Speaker 33 Schlinger says targeted help was meant to repair the agency's relationship with those groups, like the 2501 program that's funded training and workshops for minority farmers since the 90s, or Biden-era debt relief for past victims of USDA lending discrimination.

Speaker 36 Those programs were designed to both communicate and ensure that USDA really was open for business with all types of American farmers and and ranchers.

Speaker 33 She says minority farmers can still apply for USDA grants and loans, but worries that if the agency isn't actively reaching out to them, progress toward diversifying the ag sector could stall out.

Speaker 36 We need American farms to be varied and healthy and economically viable across rural America.

Speaker 33 In part because farming is a rapidly aging profession and younger generations of Americans are increasingly diverse.

Speaker 33 The USDA didn't respond to an interview request, but instead sent a statement that the days of, quote, DEI-driven farm policy are over.

Speaker 33 The agency claims that past discrimination has already been addressed.

Speaker 30 Oh, that, I mean, that's a joke. It's a joke.
P.

Speaker 33 Wade Ross ranches cattle outside of College Station, Texas, and runs a community organization supporting small-scale black farmers in the state.

Speaker 33 He says many struggle to scale up and truly break into the business after being locked out of financing and ag markets for over a century.

Speaker 30 There's no commercial farmers who look like me out here. I'm telling you that we're on the outside looking in.

Speaker 33 Ross says the USDA's announcement sends a disappointing message, but it won't have much direct impact on the small-scale farmers he works with.

Speaker 33 He says USDA programs targeted at disadvantaged producers mostly benefited the small number who had managed to achieve commercial success, like that recent round of debt relief, which wasn't much help to struggling farmers who were unable to secure loans to begin with.

Speaker 30 Why would you have debt relief when you don't have a farm operation?

Speaker 33 Or a big enough operation to qualify for loans. He says the barriers to entry for farmers of color are deeply rooted and hard to overcome, especially without the federal government on board.

Speaker 33 I'm Savannah Peters for Marketplace.

Speaker 21 in the housing market, sellers have had the upper hand for years thanks to the low supply of homes for sale.

Speaker 21 But as you've heard on this program, and according to recent data from the mortgage technology firm ICE, things might be turning in the buyer's favor.

Speaker 21 Housing inventory has been rising over the past year, up 29% in June, year over year. Of course, everyone is looking for something different.

Speaker 21 And even with more to choose from, that perfect house can be elusive. Which brings us to the latest installment of our series, Adventures in Housing, where we're hearing from first-time homebuyers.

Speaker 32 My name is Laurel Santos. I am a 40-year-old first-time home buyer in Trace Piedras, New Mexico.
All the homes in my community are off-grid and I now own 55 acres of land.

Speaker 32 I live in an adobe home with 12 solar panels. I have my own water tank.
I have cisterns for water collection. I have my own septic tank.
I pay for internet but otherwise no utilities for me.

Speaker 32 I'm a big city girl. I've never thought I would ever live off-grid in my entire life.
I mean, I like hiking just fine, but I'm not that outdoorsy of a person at all.

Speaker 32 I closed on my house for $400,000,

Speaker 32 but my goal was never to test out the housing market at all. I initially just needed a little kind of a few days off work and away from everything.

Speaker 32 So I stayed at an Earthship, a traditional Earthship, in an entirely off-grid neighborhood for, I think it was a long weekend.

Speaker 32 I checked in Friday night, left Monday morning, and I go, wow, what an amazing place!

Speaker 32 Got an amazing view of the mountains and started being really curious about kind of off-grid living, just like how much it is to buy a place.

Speaker 32 So, a realtor sent me this place and I saw the price, and I couldn't say no to it.

Speaker 32 I'm trying to make this as 2025 as possible, but it is definitely sometimes feeling a little 1800s over here.

Speaker 32 The person who had lived here before hung their clothes to dry, and I'm very busy and not ready for the little house in the prairie life that much.

Speaker 32 And so had to have someone come out to install a vent for my dryer.

Speaker 32 I had to give up getting grocery delivery, kiss two-day delivery goodbye on packages. I now have a P.O.
box and have to drive 30 minutes to go to the grocery store and pick up my mail.

Speaker 32 But I gained a dog park essentially and have gained a lot of peace of mind.

Speaker 32 I think there's something to be said about when you stay in a place that is actually silent.

Speaker 32 When you live in a city, even a small city, there's traffic, there's street lights, there's things that kind of infiltrate your space all the time. And I'm literally in a place where it's silent.

Speaker 32 I hear crickets, and not even that sometimes.

Speaker 32 This is my first summer here. I don't have AC.
It's been kind of a warm summer, and I'm a little concerned about solar and the sun intake during the winter months when there are snowstorms.

Speaker 32 But we're just rolling with it. We're just gonna see how it goes.

Speaker 21 Laurel Santos at Tres Piedras, New Mexico. We can't do this series without you.
So, whether you're looking for your first place downtown or somewhere a bit more remote, please tell us about it.

Speaker 21 Marketplace.org/slash adventures in housing.

Speaker 21 This final note on the way out today, courtesy of the Hollywood Reporter.

Speaker 21 For the first time since Nielsen started tracking TV viewing by platform four years ago, over-the-air networks made up less than 20% of overall viewing last month.

Speaker 21 Streaming accounted for 46%, a new monthly high, with cable at just over 23%.

Speaker 21 Overall, TV watching grew by 3%, with kids and teens home from school, and you know how they're watching videos. The biggest biggest streaming service by share of viewers, YouTube, with 12.8%.

Speaker 21 Our theme music was composed by BJ Lederman. Marketplace's executive producer is Nancy Fergali.
Joanne Griffith is the chief content officer.

Speaker 21 Neil Scarborough is the vice president and general manager. And I'm Amy Scott.
Have a great weekend. We'll be back on Monday.

Speaker 21 This is APM.

Speaker 5 Keep your body and mind nourished all day with a whole body mealshake from Cachava.