Trump's new tariffs set to take effect this week, but much is uncertain

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Speaker 3 I love it. Hey there, it's the NPR Politics Podcast.
I'm Ashley Lopez. I cover politics.

Speaker 4 And I'm Danielle Kurtzladen. I cover the White House.

Speaker 3 We also have NPR chief economics correspondent Scott Horsley here.

Speaker 4 Welcome back, Scott.

Speaker 5 Great to be with y'all.

Speaker 3 And today on the show, we're talking about the latest tariff news as well as some political fallout on the economic front. Danielle, let's start with a quick update on where we stand with tariffs.

Speaker 3 What tariffs are due to take effect this week? And what's still sort of like uncertain at this point?

Speaker 4 Let me just try to run through it all. First of all, what will take effect?

Speaker 4 First, this week, that set of country-by-country tariffs that Trump signed last Friday are going to take effect later this week.

Speaker 4 Now, these are the tariffs he first announced on April 2nd, that day that he called Liberation Day. He had a big White House Rose Garden celebration with that big chart he held up.

Speaker 4 Well, then he delayed those. He delayed them again to August 1st.
He wrote some letters to countries saying, hey, here's the tariffs that we're going to impose on your goods.

Speaker 4 Well, now he's delayed them one more time to later this week, August 7th. So that is what is supposed to take effect this week.
Now, there's another tariff that just took effect.

Speaker 4 This is a tariff on Canadian goods of 35%. Trump signed this last week.
It went into effect on Friday. And this is on Canadian exports to the U.S.

Speaker 4 that aren't covered by the USMCA, the trade deal that Trump signed in his first term. Now, USMCA covers around 40% of Canadian exports as of last year.

Speaker 4 So still a lot of Canadian goods are going to be be covered here. So, you also asked, What's uncertain? Well, a lot is uncertain.
He could delay tariffs again.

Speaker 4 So, a lot of these trade deals that Trump has announced or talked about, for example, with South Korea, Japan, even when he sits down and has a big press available with Ursula von der Leyen, the president of the European Commission, those deals, even though he's talked a lot about them, are not done.

Speaker 4 Many of them are still being negotiated. They're not signed yet.
So, those are still uncertain themselves. One more thing that's uncertain is there are a bunch of tariffs in process on specific goods.

Speaker 4 We have tariffs called Section 232 tariffs on steel and aluminum, some copper goods that are in effect. Well, there are some that are in process and might take effect any time.

Speaker 4 Pharmaceuticals, aircrafts, aircraft parts, the Commerce Department is investigating those. So that's just a partial rundown, but that's a lot already.

Speaker 5 If you take us all in, the average tariff on the stuff that we import in this country is now up somewhere around 18 percent.

Speaker 5 That's six times what the average tariff was before Trump returned to the White House in January. So we're paying a lot more for imported goods now than we used to.

Speaker 5 And just to add one more wrinkle of uncertainty to what Danielle was talking about, a lot of these tariffs are being ordered under a 1970s emergency law, and there's an open court case about whether that's even legal, whether that law actually gives the president the power to levy tariffs.

Speaker 5 There was a hearing last week where the appeals court seemed pretty dubious about the White House arguments that this is a legitimate use of the president's power.

Speaker 5 Typically, it's up to Congress to levy tariffs. So we'll see how that plays out.

Speaker 3 Yeah. So like there's a lot we don't know.

Speaker 3 We don't know about how things are going to shake out. But I mean, there have been some tariffs that have already taken effect.

Speaker 3 Scott, like what economic impacts, if any at all, have we seen so far of what has already gone into effect?

Speaker 5 Well,

Speaker 5 the effects have been somewhat muted so far, and that's partly because importers stockpiled a lot so good to get ahead of the tariffs.

Speaker 5 It's partly because, as Danielle said, some of these levies have been delayed or scaled back.

Speaker 5 But economists have been warning for months that a protectionist regime like the one the president has ordered is going to be a drag on the economy.

Speaker 5 And we're starting to see some evidence that that's actually happening.

Speaker 5 We got new GDP numbers last week, which when you combine it with the first quarter GDP, suggests the economy is only growing about half as fast as it did in the two previous years.

Speaker 5 We've got inflation numbers, which are beginning to show these tariffs working their way to the prices that consumers pay. And we expect to see more of that.
The effects have been

Speaker 5 limited so far. We're not going back to

Speaker 5 four decade high inflation like we had a few years ago. But we have seen inflation start to creep up again.
That is moving in the wrong direction.

Speaker 5 And that's largely because of these tariffs on imported goods. And it's starting to look like we're seeing an impact on the job market.
Last Friday, we got a really dismal jobs report.

Speaker 5 It showed a lot fewer jobs were added in July than had been forecast. And revised figures basically erased the jobs that we thought we'd added in May and June.

Speaker 5 So it looks like we're seeing fewer jobs, higher prices, and slower economic growth. Some of that can be laid at the foot of these tariffs.

Speaker 3 Yeah. And Danielle, I wonder if this is a place where Republicans might start pushing back a little bit against the president.

Speaker 3 Obviously, Democrats are voicing unhappiness with all of these policies, but I wonder if we've heard any opposition from Republicans yet.

Speaker 4 We've seen some kind of tepid opposition is maybe a good way to put it. Now, Congress often has a big part to play when there are major trade deals.

Speaker 4 For example, they voted on the USMCA that Trump signed in his first term. This is a big part of what they do constitutionally.

Speaker 4 And while they've given the president some ability to set tariffs, it is still a power that they have.

Speaker 4 Earlier this year, we heard some noises from, for example, lawmakers from ag-heavy states, farm states, because they were quite worried because China buys a lot of American agricultural goods.

Speaker 4 A lot of these other countries do too. And these lawmakers were afraid other countries were going to retaliate, which would make it harder to sell agricultural goods overseas.

Speaker 4 Similarly, earlier this year in June, Politico got a hold of a letter where some Republicans in Congress asked the White House very nicely to please consider not tariffing aerospace equipment as they are considering.

Speaker 4 So we are hearing some pushback. Democratic Senator Amy Klobuchar of Minnesota, she was on morning edition this morning and she sits on the Joint Economic Committee.

Speaker 4 She said that a lot of her Republican colleagues, maybe they don't really like the tariffs, but they're just afraid to speak out.

Speaker 6 Not just on the Joint Economic Committee, but throughout the Senate, people behind closed doors, they say they don't like these tariffs if they're Republicans, but yet they still vote to rubber stamp what he's doing time and time again.

Speaker 5 They get it.

Speaker 6 They're hearing from their own constituents. Congress should just reassert itself, get its power back.

Speaker 4 So what she's saying is that politically, these Republicans just feel their hands are tied by Donald Trump, who is the leader of their party.

Speaker 4 Maybe he's not, maybe he's not popular with Democrats and Independents. Republicans still like him, and Trump still has the power to get you primaried in a red House district or in a red state.

Speaker 4 And they're still scared of him.

Speaker 5 Now, one thing we might say about these tariffs is they are bringing in a lot of money for the government. They're raising a lot of revenue.

Speaker 5 On the order of $30 billion a month is coming into the Treasury. That's going to be something that's going to be...
you know, maybe challenging for lawmakers to give up.

Speaker 5 But remember, a lot of that money is being paid by American taxpayers, whether it's businesses or end consumers. That's who's footing the bulk of this bill.

Speaker 3 Yeah. Well, we're going to take a quick break.
More in a moment.

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Speaker 3 And we're back. On Friday, President Trump fired the head of the Bureau of Labor Statistics.
Scott, can you explain to us what this agency does and why this particular move is significant?

Speaker 5 Sure. Well, the BLS is one of the premier statistical agencies within the federal government.
It compiles not only the monthly jobs numbers, but also the consumer price index.

Speaker 5 It keeps tabs on all kinds of economic indicators. And as we said, the jobs report that came out on Friday was not pretty.

Speaker 5 It showed far fewer jobs added in July than forecasters had expected, and it showed that there was virtually no job growth in May and June as the president's tariffs started to take effect.

Speaker 5 Now, every president has to contend with

Speaker 5 jobs numbers that are not great every once in a while. President Trump is happy to claim credit when the jobs numbers are in his favor.

Speaker 5 But rather than take responsibility, in this case, when the jobs numbers were disappointing, he fired the messenger. He called for the ouster of the commissioner of the Bureau of Labor Statistics.

Speaker 5 And that's really something that drew criticism from across the board.

Speaker 5 Economists, left and right, said that there was no basis for Trump's claim that the jobs numbers had been manipulated to make him look bad. It's very destructive.

Speaker 5 And to be clear, there's nothing that's less reliable about these numbers. It's just that the president has now cast doubt on the way the numbers are constructed.

Speaker 5 And look, the BLS is an apolitical professional statistical arm. They are not shading the numbers.
This is a spin-free zone.

Speaker 5 The BLS famously says, you know, the glass is neither half full nor half empty. It's an eight-ounce glass with four ounces of liquid.

Speaker 5 They just call balls and strikes. And it does make you wonder what happens next month if the BLS comes out and let's say the jobs numbers are rosy next month.

Speaker 5 Are we going to believe that or are we going to think that the president and his minions are putting their thumb on the scale? He was just taking a play from the authoritarian playbook.

Speaker 5 And it's the reason that statistics in those kinds of countries generally are not regarded as trustworthy. On the contrary, U.S.
economic statistics are generally considered very trustworthy.

Speaker 5 Lots of businesses and lots of policymakers look to those statistics to guide their decision-making. And now the president is really jeopardizing that objective view of reality.

Speaker 3 Aaron Powell, I mean, as Scott noted, Daniel, like, this does fit into a larger pattern of how Trump reacts to information he doesn't like, right? Like, how do you see this situation?

Speaker 4 I mean, Trump has cast out on data he doesn't like, like you said, from day one. Think back to when he first came into office in 2017.

Speaker 4 He had his press secretary, Sean Spicer, come out and say that his crowd was the largest crowd ever to witness an inauguration, period. Well, that was demonstrably untrue.
It was a flat-out lie.

Speaker 4 And since then, we've had Trump say that the voting numbers in 2016, when Hillary Clinton beat him in the popular vote, that that wasn't true, that he actually won in 2020 when he didn't.

Speaker 4 He has said that polls that don't benefit him aren't real. And this term, it's not just saying that numbers aren't real, it's deleting data from government websites.

Speaker 4 It's trying to tweak the census in a way that might benefit Republicans.

Speaker 4 Now, all of this matters, first off, because Should data go missing, for example, it means you have a less complete picture of how the country looks.

Speaker 4 But even if people merely mistrust or distrust the data, you still have dire consequences. I mean, the consequences of people not trusting the 2020 election numbers was January 6th.

Speaker 4 The idea of a democracy is that everyone looks around and decides together what needs fixing. And people can disagree on what needs fixing or how to fix it, and they have since time immemorial.

Speaker 4 But if people don't trust the data or even don't have it, that means it's harder and harder to even look around, to know what's happening, and to agree on what reality is.

Speaker 4 And that just makes problems bigger, more intractable, and ultimately then it just makes a democracy weaker and less effectual. If he continues this trend, as he has, the consequences are huge.

Speaker 3 And my sense is like this is an effort.

Speaker 3 to fix a political problem, but in reality, you know, I wonder, Danielle, and Scott as well, like voters will feel economic effects whether or not a job report looks good or not.

Speaker 3 I just wonder how effective will this be in actually solving a sort of problem he'll have with voters down the road.

Speaker 5 Yeah, you can put black tape over the thermometer, but people can tell if they're sweating. And

Speaker 5 if their grocery bill goes up, if they lose their job, if their wages aren't keeping pace with inflation, they'll know. I mean,

Speaker 5 certainly former President Biden learned that the hard way, that all the rosy pronouncements from the White House briefing room don't count for much when people don't feel like their lived economic experience is improving.

Speaker 5 So people will make their own judgments regardless of what numbers come out of the BLS.

Speaker 5 But having objective, reliable data from the BLS really is a public good, and it's disheartening to see that attacked.

Speaker 4 Right. And Senator Klobuchar also talked about this on Morning Edition.
She said, essentially what Scott is saying is that, yeah, people feel the economy anyway. Here's what she said.

Speaker 6 While the President's answer may be to fire the well-respected statistician that puts the numbers out who's supported by his previously appointed statistician. He called her firing wrong.

Speaker 6 What he was trying to do there is create an alternative universe. People's grocery receipts don't lie.
Their rent doesn't lie. Their child care costs don't lie.

Speaker 6 He has literally taken a jewel of economy and creating a mess. And most importantly, it's on the backs of regular people.

Speaker 4 And honestly, all of this made me think of another moment in Trump's first term when he suggested that maybe we don't need to test for COVID so much and then the COVID numbers will go down.

Speaker 4 Well, on the one hand, people are still going to get COVID.

Speaker 4 Yeah, you can make that argument, but on the other hand,

Speaker 4 it's good to know how much COVID is out there so you know how bad it is and who needs help.

Speaker 4 It's kind of analogous in this situation. Yeah.

Speaker 3 And Sky, well, what comes next now? Like, can Trump install his own person to run BLS? And I mean, if he does, like, what what happens now?

Speaker 5 Trevor Burrus, Jr.: For now, the agency is being run by the deputy, who's another career professional. The president will get to install his own nominee.

Speaker 5 That person will have to be confirmed by the Senate, so we'll see what kind of scrutiny that person gets and what sort of questions they get.

Speaker 5 I imagine they'll get some tough questions from Democrats, but obviously Republicans have a majority in the Senate.

Speaker 5 Also, the revisions that we're talking about in the jobs report last month, those are the monthly revisions.

Speaker 5 Every month, the Labor Department comes out and gives us revised data for the two previous months.

Speaker 5 But we also get an annual revision.

Speaker 5 That's when we get to compare the monthly jobs numbers, which are compiled from a survey, with more complete information that employers all over the country file with their

Speaker 5 state offices. And it's less timely, but it's more accurate.
So once a year, the Labor Department reconciles those two numbers.

Speaker 5 We're going to get our first look at that annual revision in early September.

Speaker 5 Now, last year, when that revision came out, and it showed that fewer jobs had been added on the last year of President Biden's watch than initially reported, Trump said it was a huge scandal that the administration had been caught cooking the books.

Speaker 5 Not at all. It was simply a routine process of reconciling the numbers with more complete information.

Speaker 5 We'll see what happens when the revised numbers come out in September and we see how the initial reports of job growth under the Trump administration compare with more complete information.

Speaker 3 Yeah, a lot to look out for. All right, let's leave it there for today.
Thank you for sharing your reporting with us, Scott.

Speaker 5 Great to be with you.

Speaker 3 I'm Ashley Lopez. I cover politics.

Speaker 4 And I'm Danielle Kurtz-Laban. I cover the White House.

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

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