Trump's Tariff Tug Of War

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Hi, this is Emily from Fort Myers, Florida. My boss and I are dressed up as George Washington, ready to take on the local Rotary Club's cardboard boat regatta.
This podcast was recorded at... 1.08 p.m.
Eastern Time on Thursday, April 10th of 2025. Things may have changed by the time you hear this, but hopefully our Durham boat has not sunk to the bottom of the lake with us in it.
Enjoy the show. I so want to go to a regatta.
I thought you said you wanted to dress up as George Washington. I could see that for you, Franco, too.
I would do that, too. I'm down with it.
Hey there, it's the NPR Politics Podcast. I'm Asma Khalid.
I cover the White House. I'm Franco Ordonez.
I cover the White House as well. And today on the show, the tug of war over tariffs continues.
And a quick flashback to last week first. That's when President Trump's tariff policy went into effect on imported goods.
That was a universal 10 percent tariff on all countries, plus the threat of even higher tariffs. Stock markets reeled from the news.
Other countries retaliated with tariffs of their own on American-made goods. And now it looks like some of the president's tariffs are on pause.
So to help us make sense of all the twists and turns, we have called up a special guest, NPR's finance correspondent, Maria Aspin. She's joining us from New York City.
Hey there. Hey there.
And this is your first time on the show, right? So thank you so much. Yes.
Very excited to be here. Welcome, welcome.
Welcome, welcome. Well, Franco, I actually want to begin with you because I think it's important for us to contextualize what is actually happening with the tariff ecosystem.
I mentioned the president paused some of the tariffs. He walked some of them back yesterday, at least for now, temporarily.
Can you catch us up on what the current tariff formulation looks like? Yeah, I mean, it all is really kind of quite confusing. I mean, he did.
He imposed these very large tariffs on dozens of countries, only to end up reversing many of them on the day that they were to go into effect. Now, he still has the baseline 10% tariff on most all imports.
That's across the board, and that is a big deal. But it is much different than what he was threatening, those reciprocal tariffs, such as 46 percent on Vietnam, 24 percent on Japan, that were really freaking out people and those countries.
And those are on hold for 90 days. Now, top aides say they're in talks with those countries and working on what they have described as bespoke discussions, basically tailor-made talks with each of these countries.
But it's very unclear what those details are. Yeah, that was big news.
Franco, there was another big announcement that the president made yesterday in pausing those tariffs. He further escalated the tariffs on China.
Yeah. I mean, while he paused the tariffs on most of the countries, he actually escalated the tariffs on China to 145%.
That's a lot. That's a lot, which he said is punishment for retaliating against the U.S.
tariffs. He basically said, and all his aides said, that they rewarded those who kind of held firm and did not retaliate against the U.S.
And in response to this, China raised their own retaliatory tariffs to 84 percent. Maria, I want to bring you into the conversation here and ask you about how the markets have been responding to this all.
It seems like they've been getting a little spooked by this Trump White House's tariff policy. It's been wild.

I mean, since Trump announced the tariffs about more than a week ago, the markets have experienced a huge sell-off. Then yesterday when he announced this 90-day pause, they experienced this huge recovery.
And then now, as I'm watching the Dow Jones ticker, the Dow is down more than 1,900 points or 4.7 percent. The S&P 500 and the NASDAQ are also down.
And this is a global sell-off.

We've seen Asian and European markets also have these wild swings over the past week as everyone around the world is trying to digest how bad is the trade we're going to get?

What does it mean for businesses?

What kind of decisions can or can't we make about where do we maybe have to move our operations? Can we invest any money? Should we hire? Or is there going to be a recession? And so there is just a lot of uncertainty and fear being shown in the markets right now. And to be clear, that uncertainty and fear seems to be continuing today, even with the Trump administration's 90-day pause.
Yeah, because, I mean, there are still new 10% tariffs across the board, plus this escalation of tariffs on China. I think yesterday when Trump did announce this pause, at first there was this sense of relief that, oh,

okay, things are not going to be as bad as we feared. And they're not, at least it doesn't seem that way.
But investors and business owners and frankly, consumers are all realizing that,

oh, this is still going to cause a lot of changes. And again, to sort of step back a bit,

economists across the political spectrum say that tariffs are going to raise prices for consumers

across the political spectrum say that tariffs are going to raise prices for consumers across the board. And we've seen a lot of investment banks as well as CEOs and investors in the past week or so come out and say the aggressive tariff policy that President Trump has laid out could lead to a recession as well as a lot of other disastrous economic consequences.
Franco, do we have clarity on why President Trump ultimately did shift his position and call for this 90-day pause? It was quite the reversal. Now, I mean, I will say the message that the Trump administration is giving now is that this was all planned from the start, that you had to do this in order to bring reluctant countries to the table to start negotiating.
Trump was asked about this yesterday at the White House, and he acknowledged that the concerns about the market turmoil played a factor. Well, I thought that people were jumping a little bit out of line.
They were getting yippy, you know, they were getting a little bit yippy, a little bit afraid. You know, he not only talked about the stock markets, but he also talked about the bond markets, which is a usually safe corner for investors.
And it was just a really massive reversal because, you know, earlier he was really saying that he would not change. His aides were saying that he was not going to negotiate.
Trump himself just a few days ago even wrote that his policies will never change. And yet they did.
The bond market is kind of a if you know, you know, indicator. Bonds are generally seen as a safe haven, and they had been wild.
And yesterday when he was asked, Trump did actually mention that he had been looking at the bond market. Here's what he said.
Bond market is very tricky. I was watching it, but if you look at it now, it's beautiful.
The bond market right now is beautiful. But I saw last night where people were getting a little queasy.
Which seemed to be at least a tacit admission that, oh yeah, people were getting a little queasy. His advisors, some of whom are these very high finance guys, had probably been among those getting queasy.
Can you just explain to us what the bond market is and why it's important?

So U.S. Treasuries are basically the backstop of the market.

They are U.S. government debt.

The stock market can go up and down, but bonds are typically seen as safe. And when bond prices, along with dollar prices, are going down, that is a sign for investors to get really worried.

All right. Lots more to talk about, but let's take a quick break first, and we'll be back in a moment.
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And, you know, I think it's worth pointing out that Donald Trump has long believed in tariffs as a fundamental tool to help the American economy, to help American security. He's been talking about tariffs since the 1980s.
Decades. Right.
And even on the campaign trail, he famously referred to tariffs as the most beautiful word in the English dictionary. But I will say the use of sweeping blanket tariffs is an unconventional approach

to the economy. And I am curious, Franco, because I know you've been doing some reporting on

the president's economic advisors. Who in this moment are the influential voices

in President Trump's ear? Yeah. I mean, he's been talking about this for a long time,

often says, you know, the U.S. has been treated unfairly.
He blames trade barriers against the U.S.

Thank you. Yeah.
I mean, he's been talking about this for a long time, often says, you know, the U.S. has been treated unfairly.
He blames trade barriers against the U.S. for so many things, you know, causing the trade deficits that the U.S.
has with other countries. And it's for the people who are in his ear, you know, someone who like is really with him on that is Peter Navarro, who's the trade advisor at the White House and very much one of the people who gets into the nitty gritty of these things.
This week has been actually in a fight with Elon Musk, the billionaire entrepreneur about these tariffs. Elon Musk has been against them and really attacking Peter Navarro.
There's also Kevin Hassett and Jameson Greer, trade advisor. But two cabinet members who have really come under scrutiny through all this have been the Treasury Secretary Scott Besant, as well as Commerce Secretary Howard Lutnick.
And why have they come under scrutiny? Well, you know, Maria was talking earlier about some of the members in the administration who have been kind of queasy. And a lot of people point to Besant and Lutnik on these things because they come from Wall Street.
And, I mean, they were picked for those jobs. I mean, they have long, long careers in Wall Street before coming to the Trump administration.
Howard Lutnik led Cantor Fitzgerald, Scott Besant, the longtime hedge fund investor. So they were picked in part because of their experience and the feeling that Wall Street would trust that there were kind of, you know, reasonable voices, credible voices at the helm on this issue.
And it's also because of that, their own reputations and their own credibility has come under a lot of scrutiny because of all these things that are happening, this turmoil and the roller coaster that Maria is talking about. Can I ask a follow up there? Because you mentioned both the Commerce Secretary and the Treasury Secretary have this Wall Street experience.
And yet they have been out there touting these tariffs, particularly Howard Lutnick, the Commerce Secretary. They seem to be true believers of this policy, at least publicly in this moment.
And yet wouldn't they have known the market consequences that we've seen? I mean, I think that's a very reasonable question, but they work for Donald Trump. And when you work for Donald Trump or, you know, most any president, you have to walk a very fine line between following the direction of your boss, in this case, Donald Trump, and following, you know, perhaps the traditional path that you have followed for so many years.
You know, Howard Lutnick was actually a Democrat, you know, not too long ago. And yes, absolutely, Howard Lutnick became a cheerleader over the last few months and was really pushing, almost channeling Trump's rhetoric and language and pushing for these tariffs and saying that Trump would not back down, that these were going to last days, if not weeks.
But I will say it was interesting. I was at the White House.
I was in the room in the Oval Office. And I would sense a bit of relief from Howard L relief from Howard Lutnick, as well as Scott Besson, when this decision was made to pause the tariffs.
Maria, I'm curious where you see this all headed. What happens with this 90-day pause? And do you see any of Wall Street putting additional pressure on President Trump? It's been really fascinating to watch because corporate America and Wall Street generally was excited about President Trump coming back.
They were excited about his promises of lower taxes and deregulation. And in January, right after Trump was inaugurated, you saw CEOs like Jamie Dimon, who runs JPMorgan Chase, the biggest bank in the country, kind of shrug off the impact of tariffs.
You know, Dimon was speaking at the Davos conference and said, if it's a little inflationary, but it's good for national security, so be it. I mean, get over it.
It took a while and it took like a major sell-off in the markets that saw trillions of dollars evaporate. But this week, they finally started changing their tune.
I mean, Diamond has kind of escalated the pressure on Trump, again, very carefully. He's choosing his words with care.
But first of all, to step back, he is an elder statesman on Wall Street and has a lot of power in Washington. He is often talked about pretty much every time an administration changes, Republican or Democrat.
Diamond is talked about as a potential Treasury Secretary. So he's got a big megaphone.
And at the beginning of the week, he published his annual letter to shareholders in that document. He criticized the tariffs.
He said they would raise prices and hurt America's economic alliances. And then on Wednesday morning, he went on Fox Business and was asked whether or not the tariffs would cause a recession.
And this is what he said. I am going to defer to my economy at this point, but I think probably that's a likely outcome.
So that was Diamond ramping up the pressure. But I have to say,

while he has perhaps the biggest megaphone, there were a lot of Republican and pro-Trump investors speaking out this week. One of them was Bill Ackman, the very outspoken and very online hedge fund advisor who endorsed Trump for the election.
He doesn't have a super public profile, but the billionaire investor Stanley Druckenmiller was actually Besant's boss back when they both worked for George Soros. And in a post on X on Sunday, Druckenmiller said he did not support tariffs above 10%.
So here we are in this climate now where tariffs for the most part at 10 percent, obviously with the key big exception of tariffs on China. But it seems like there is still a lot of uncertainty.
We don't know what's going to happen in 90 days, right, Franco? And markets, businesses, they don't like uncertainty. So where do you see this going in the long term? I mean, I'll tell you what I'm watching.
I mean, we don't know what's going to happen in 90 days.

We don't know what's going to happen in the next week, though, either.

I mean, I'm really watching what's going to be happening with China. I mean, we have 145 percent tariffs going in on, you know, massive amount of goods that are imported into the United States.
It's very interesting listening to Trump and watching Trump talk about, you know, possible negotiations with, you know, China's Xi Jinping. You know, at the one hand, he's like really speaking very aggressively against China, calling Beijing the worst abusers in the world.
At the same time, he's complimenting Xi Jinping as a friend, as one of the smartest people, someone he respects, and saying that they will eventually reach a deal. But he also said he's waiting for Xi Jinping's call.
And we've seen that China and Beijing can dish it out as much as take it. Maria, what do you see as the long-term impact? And do you see any potential that Wall Street executives, let's say donor friends of the president, might have any influence over him changing that super high tariff rate on China? I think that's the hope.
I do think that there is a lot of skepticism and worry. And what I've heard from people on Wall Street and in the financial community is it is just so impossible to make some of the really big and expensive decisions that you have to make if you're running a large business.
I mean, on Monday, Home Depot's co-founder Ken Langone gave a pretty scathing interview to the Financial Times where he said that the president was being poorly advised. And he is a billionaire Republican donor, and he's very unhappy about the 46% tariffs on Vietnam because, although he did not say this, in 2019, after Trump instituted tariffs on China, Home Depot was one of many companies that moved a lot of sourcing operations to Vietnam.
And that can be a big, expensive multi-year undertaking. Now, Home Depot and other companies that sort of scrambled several years ago are looking at the future and saying, what do we do? Where do we go? Granted, the White House argument seems to be bringing those operations back to the United States, but that seems very difficult and perhaps prohibitively expensive.
All right. Well, Maria, thank you so much for coming on the podcast with us.
It was my pleasure. Thank you.
That is a wrap for today's show. I'm Asma Khalid.

I cover the White House. I'm Frank Ordonez.
I also cover the White House. And thank you all, as always, for listening to the NPR Politics Podcast.
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