Trump's Tariffs Take Shape — How Will They Impact You?

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Speaker 3 Hey there, it's the NBAR Politics Podcast. I'm Deepa Shivaram.
I cover the White House.

Speaker 6 I'm Danielle Kurtzlaben. I also cover the White House.

Speaker 4 And I'm Tamer Keith. Guess what? I also cover the White House.

Speaker 3 Do we all cover the White House? Heck yeah. Woo.
Okay, so today on the show, a lot to get into. President Trump has announced his big economic policy: tariffs.
Here he is at the White House yesterday.

Speaker 7 We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers.

Speaker 7 And ultimately, more production at home will mean stronger competition and lower prices for consumers.

Speaker 3 All right, Danielle, let's start with the basics here. What is the crux of this new policy?

Speaker 6 All right, there's a lot to say here, so interrupt me when you need to. So, first of all, this policy you could say there's two parts to it.

Speaker 6 One is a baseline 10% tariff on imports from virtually all countries, not all, but virtually.

Speaker 6 That's the minimum tariff that Americans will pay, American companies will pay for imports from all over the world. And then there's higher tariffs for dozens of other countries.

Speaker 6 What the White House did here was they did a math equation that they said would measure how unfair another country's economic policies, tariffs and otherwise, are to the U.S.

Speaker 6 If that unfairness equation spat out a number below 10% for a certain country, that country's new tariff rate is 10% now. If it spat out a number above 10%, well, that's the new rate.

Speaker 6 So for dozens of countries, including big allies, important trading partners, the tariffs are much higher than that 10%. For the EU, it's 20%.

Speaker 6 For Vietnam, 46%.

Speaker 6 A lot of goods come from Vietnam. For China, counting other tariffs and these new ones, 54%.

Speaker 6 Those are huge. And that means also one more thing I want to add here.
The White House had sold these as reciprocal tariffs.

Speaker 6 That let's say if the EU charges 10% on shoes made in America, hypothetically, then the U.S. would charge a 10% tariff on shoes from the EU.
That is not what happened.

Speaker 6 These are not really reciprocal tariffs.

Speaker 3 Okay, so just one clarifying point here, because tariffs are kind of one of those words that I feel like get thrown around a lot. And do we really know what that means?

Speaker 3 So when these tariffs go into effect, the cost of imports will go up, right? So that means that companies importing goods from these other countries will pay more money to import those goods, right?

Speaker 8 Yeah.

Speaker 4 And in theory, those other countries or the maker of those sneakers in Vietnam could say, you know what, we'll eat part of this, but you're going to have to eat another part of it.

Speaker 4 We don't know how exactly that will shake out, but what we do know is that

Speaker 4 US importers are going to have to pay more for these products. And inevitably, that is going to get passed on to U.S.
consumers. And we're we're not just talking about sneakers.

Speaker 4 We're talking about raspberries and coffee and clothing. Fast fashion does not get made in the United States.
It is your dishwasher.

Speaker 4 It's, you know, and when you have to replace a dishwasher, oh boy, it's not a small thing.

Speaker 4 It's your flat screen TV in all likelihood. It is.
many cell phones.

Speaker 3 I just want to put this into context because it's not like tariffs on a very minor level, small, like minuscule moments kind of happen.

Speaker 3 You know, in any administration, there are these conversations about tariffs. Congress is always talking about tariffs.
But for this level, right, for this, am I correct?

Speaker 6 I wouldn't even say that. Okay.
Like Trump uses and talks about tariffs so much more than past administrations have.

Speaker 6 It's the comparison is just off the charts. I mean, you had thoughts about investigations into the possibility of imposing tariffs during the Obama administration, during the George W.

Speaker 6 Bush administration. You'd have the occasional look into that.

Speaker 6 Generally, they were looking at like multilateral trade deals, things like TPP and that sort of thing.

Speaker 6 And TPP is the Trans-Pacific Partnership, forgive me, a big multilateral trade deal that largely President Obama, his administration worked on with a bunch of mostly Asian nations.

Speaker 6 At any rate, that is a lot of past trade policy. That is not Trump trade policy.
His trade policy is tariffs, threatening them, withdrawing them, and imposing them.

Speaker 4 Essentially, President Trump has had an idea. He has had this idea for 40 years, as far as we know, ever since microphones have been put in front of him, which is that trade deficits are a bad thing.

Speaker 4 And this is an effort to undo that. He also has an idea, which I think a lot of people agree with

Speaker 4 on some level, that the U.S. manufacturing base has been hollowed out over the last 40 plus years.
We don't make socks in America anymore. I just took off my blazer so I could see where it was made.

Speaker 4 It was made in China. My shirt is from India.
My pants are probably from Bangladesh or Cambodia.

Speaker 4 There are a lot of things that we don't make in the United States anymore. The reason for that is that it's expensive to make them in the United States.

Speaker 4 And so what President Trump is saying is

Speaker 4 if you don't want a tariff, then you've got to make it in the United States. No more making things in other countries.
No more shipping jobs overseas.

Speaker 4 I mean, this is, on some level, this is something that administrations, Democratic and Republican, agree with.

Speaker 4 It's maybe even a point more Democrats would make, that American jobs have been offshored and big companies have gotten wealthy.

Speaker 3 But one element of this that is like a little confusing, and you touched on this earlier, Danielle, is the extremely high numbers for countries like Vietnam, Cambodia, the Falkland Islands, like places that I don't really know if I've had a shirt made in the Falkland Islands before.

Speaker 4 You probably haven't. I looked it up.

Speaker 3 What is it? Yeah, there you go.

Speaker 4 I looked it up and they export

Speaker 4 $27 million worth of stuff to the United States. So not a big part of our economy, but a big part of theirs.
And it is mollusks,

Speaker 4 fish fillets.

Speaker 3 Okay, cool. Probably have consumed some of that.

Speaker 3 But my question is, like, what is the risk here for some of these countries saying, okay, you kind of applied this equation to us and it may not make sense for us.

Speaker 3 So we're going to slap back our own tariffs.

Speaker 6 Oh, high, very high.

Speaker 6 Before this even happened,

Speaker 6 before Trump made the announcement yesterday, the new PM of Canada, the top trade official in the EU, both said we are prepared to do retaliatory tariffs. And that is one big risk of this policy.

Speaker 6 This is one thing, for example, that American farmers are very worried about because a sizable part of farm income in the U.S. comes from exporting soybeans, corn, wheat, all of that stuff.

Speaker 6 If the U.K. puts an additional tariff on American corn, that means we sell less corn to the U.K.
that means farmers sell less product. And those farmers, many of them, supported President Trump.

Speaker 3 One last thing, actually, there are some disagreements maybe with what the White House is saying versus what economists think about this.

Speaker 3 Tam, how is the White House sort of spinning the economic impact of this?

Speaker 4 What economists are saying is that this is going to hurt American consumers. Prices are going to go up.
It is going to hurt American businesses. Some might benefit, but a lot of them could be hurt

Speaker 4 because their inputs are going to get more expensive.

Speaker 4 Or, you know, the company that moved all of its production to Vietnam to avoid the China tariffs is now, oh gosh, facing tariffs almost as high in Vietnam.

Speaker 4 And to put a finer point on it, they are arguing that this could crater the U.S. economy.
The risk of a recession was elevated in the last 24 hours.

Speaker 4 What the White House is saying is a bunch of things. They're saying, stick with us.
We are going to, and Vice President J.D.

Speaker 4 Vance said it on Fox and Friends today, this could take a while, but we are completely and totally restructuring the U.S. economy.

Speaker 4 And to do that is going to take a while, and there may be some pain, but we are going to create great American jobs and we are going to make America wealthy. That is what they are saying.

Speaker 3 All right, we're going to get more into that after this break.

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Speaker 3 All right, and we're back.

Speaker 3 So to both of you, how do these tariffs, this announcement, how does it play into the broader ethos of what Trumpism is about and what the Trump White House is kind of trying to do with their, you know, message, for lack of a better word?

Speaker 6 Yeah, well, this is firmly in line with what Trump has believed from day one, what he announced back when he was running in 2015.

Speaker 6 And as Tam nodded to earlier, he's been talking about tariffs for decades, since well before he stepped formally into politics.

Speaker 6 This is firmly in line, especially with economic nationalism, which is something his advisor Steve Bannon talked a lot about when Trump first became president in 2017.

Speaker 6 The idea being that it's kind of economic isolationism, that America should be more self-sufficient, and that globalism is bad. This is the opposite of globalism.

Speaker 6 This whole interconnected supply chains going everywhere. We get so many goods from overseas.
The U.S. is so heavily a consumption-focused economy that that's bad.
That all needs to switch backwards.

Speaker 6 And that also fits in very hand-in-hand with Trump's broader isolationist view, right? That multilateral institutions,

Speaker 6 NATO, the UN, that all of that stuff is antiquated, that it is, as he says, America first.

Speaker 3 It's America first, but then also like America first and America alone.

Speaker 5 Right.

Speaker 4 Yeah. And not to like go back to the Depression era, but at the beginning of the Great Depression, there was a decision made and there was the Smoot-Hawley Act.

Speaker 4 And essentially, they put in place a whole bunch of tariffs as an effort to say, like, we are focusing on America. We are going to...
get our way out of this.

Speaker 4 And what happened is the Great Depression was extremely long and extremely terrible. And economists widely believe that it got worse because of that.
And also, it isolated the U.S. on the world stage.

Speaker 4 And that isolationism, no doubt,

Speaker 4 helped feed what led to World War II.

Speaker 3 I was going to say, like, we don't call it a trade war for nothing. Like, there is conflict that happens from this.

Speaker 6 Correct. And, you know, we talk a lot about economists.
And of course, the economics matter. But I was talking to an economist about all of these tariffs a couple weeks ago.

Speaker 6 And he was like, this isn't just about prices. One benefit of trade, of having a strong trade relationship, is countries that trade a lot don't go to war with each other.

Speaker 6 Like it is hard to have a hot or cold big conflict with a country that you are sending and buying a lot of goods to and from.

Speaker 6 And that is another very big part of what we're going to be watching going ahead and of the big risks from this.

Speaker 3 I want to get into the politics of this too, because the main point of Trump's campaign message from an economic standpoint was to lower costs, right?

Speaker 3 Like the Biden White House made everything too expensive. Biden broke the economy, et cetera, et cetera.
Trump said he wanted to put more money in people's pockets.

Speaker 3 And that was a huge part of what he was selling to voters. But as we have pointed out multiple times in this podcast, costs are about to go up for consumers.

Speaker 3 It is a big political risk in a way.

Speaker 4 Yes. And they are asking, I think, for patience to let this play out.

Speaker 4 But there is a very real possibility that when you go to the store in the next six months, you're going to be like, whoa, what just happened here?

Speaker 4 And the challenge and the political risk here is: there was a Fox News poll out over the weekend that said 69%

Speaker 4 of people believe that these tariffs are going to make the things they buy more expensive.

Speaker 4 There was a CBS YouGov poll that said a majority of people believe that Trump should focus on tariffs less and focus more on bringing costs down.

Speaker 4 His approval rating on the economy is the lowest it has ever been going back to his first administration as well. The economy is supposed to be his strength.

Speaker 4 And the fact that it is a weakness, these are all flashing lights that say it is quite possible and likely.

Speaker 4 And, you know, the president did a Rose Garden event to make sure if this doesn't work out the way he says it will, the public is going to blame him and his party.

Speaker 4 Now, if it does work out, he gets all the credit.

Speaker 6 Correct. I mean, I do think it's important to step back here also and talk talk about what exactly the White House thinks will happen here.

Speaker 6 And the big thing that they have really put at the center of talking about tariffs, they've said tariffs will lead to all sorts of great things and will improve

Speaker 6 revenue and so on. But their big thing is manufacturing.
And when they say they want to reshape the U.S. economy, Donald Trump is trying to reverse a decades-long move in the U.S.

Speaker 6 economy away from being a goods-producing economy. We are much more a service-oriented economy now.

Speaker 6 And by service, I mean like healthcare, hospitality, that sort of thing, as opposed to manufacturing and farming and that sort of thing.

Speaker 6 The desire to bring back some of those manufacturing jobs that were lost to both technology and trade, especially with China, is something Democratic presidents have really wrestled with as well.

Speaker 6 This is not a strictly partisan issue in terms of how free or not-free trade should be. Bernie Sanders back in 2016 also said, hey, I would impose tariffs, sure.

Speaker 6 It's not a Republican thing to impose tariffs, but it is a Trumpist thing to impose tariffs, especially in this way.

Speaker 6 And

Speaker 6 the big question

Speaker 6 is, can you do that? Can you bring back that much manufacturing? And also, are those even good jobs? High-tech, skilled manufacturing, those jobs can pay real well.

Speaker 6 If you bring back, you know, SOC manufacturing, is that going to pay well? And is that going to be worth it for the trade-offs that creates for the economy? And also, how long does that take?

Speaker 6 It takes years to build a factory. The lead time on this could take so long.
And that's another thing we're wondering is how long is Trump willing to let the pain go on to wait to see results?

Speaker 3 How much patience do the American people have? Especially when, Dam, I want to ask you about this too. We were talking about this earlier.

Speaker 3 You know, to scale it back even further, Trump also has a history of making really big announcements, sometimes even about tariffs, and then walking them back 48 hours later.

Speaker 4 Yep, he sure does.

Speaker 4 And I think that a lot of business leaders and Republicans in Congress have been negotiating with themselves over the last six months or year and a half or even longer to say, he's not really going to do this.

Speaker 4 This is a negotiating tactic. He is just negotiating.
Howard Lutnick, the commerce secretary, was on CNN earlier today. He was pressed repeatedly on whether this is just a negotiating tactic.

Speaker 4 And he kept saying, no, we aren't negotiating.

Speaker 4 The way that this White House is talking about this policy, that this isn't about just we're being ripped off, but that we need to completely restructure the United States economy, I'm not quite sure how you say, oh, never mind, we made a great deal.

Speaker 4 We can keep things the way they were. So I don't know if they are sort of rhetorically boxing themselves in.

Speaker 4 I don't know if he really is serious this time or if He is going to start announcing deals and countries are going to come groveling. We don't know.

Speaker 4 And in the meantime, that uncertainty is creating all kinds of chaos and confusion, and you know, like already impacting people's financial lives.

Speaker 5 Correct. Yep.

Speaker 4 Yeah.

Speaker 3 Well, on that note, we're going to leave it there for today. I'm Deepa Shivaram.
I cover the White House.

Speaker 6 I'm Danielle Kurtzlavan. I also cover the White House.

Speaker 4 And I'm Tamara Keith. I also, also, also cover the White House.

Speaker 3 And thank you for listening to the NPR Politics Podcast.

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