Trump's New Tariffs, Global Tariff Reactions, TikTok Deadline

Speaker 1 President Trump says tariffs will spark a rebirth of American industry, but U.S. exporters are bracing for the worst.

Speaker 2 The retaliatory tariffs are going to be really ugly and it's going to kill the man.

Speaker 3 Will Trump's gamble on a trade war pay off?

Speaker 1 I'm Michelle Martin. That's Layla Fadel, and this is Up First from NPR News.

Speaker 1 We also get reaction from markets and leaders around the world.

Speaker 4 The administration's tariffs have no basis in logic, and they go against the basis of our two nations partnership. This is not the act of a friend.

Speaker 3 And TikTok has until Saturday to find a new owner. A number of high-profile buyers are lining up, but who is leading the pack? Stay with us.
We'll give you the news you need to start your day.

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Speaker 3 President Trump is building an economic barrier designed to limit imports and encourage domestic manufacturing.

Speaker 1 Starting this weekend, Trump plans to charge a minimum 10% tax on virtually all foreign goods coming into the U.S., with imports from dozens of countries facing much higher levies.

Speaker 1 Speaking in the White House Rose Garden yesterday, Trump said the tariffs would help spark a rebirth of American industry.

Speaker 9 We're going to produce the cars and ships, chips, airplanes, minerals, and medicines that we need right here in America. The pharmaceutical companies are going to become roaring back.

Speaker 9 They're coming roaring back. They're all coming back to our country because if they don't, they've got a big tax to pay.

Speaker 1 Early reaction to the president's move has been mostly negative. Stock futures fell sharply overnight.
The European Union has threatened countermeasures, and other U.S.

Speaker 1 trading partners are expected to retaliate with tariffs of their own on U.S.

Speaker 3 exports. NPR's chief economics correspondent, Scott Horsley, joins us now to break this down.
Good morning, Scott.

Speaker 10 Good morning, Lila.

Speaker 3 All right. So, you know, President Trump promised high tariffs throughout the campaign.
So is anyone actually surprised by this move?

Speaker 10 I think they're surprised by the magnitude. For example, we're talking about a 20 20 percent tax on goods coming in from the European Union, much higher than the U.S.
charges today.

Speaker 10 In other ways, though, this is not surprising.

Speaker 10 Despite the United States' wealth and power, Trump has been complaining for decades that this country is being taken advantage of, and he's determined to fight back with tariffs, even as financial markets have been flashing red, saying don't do it.

Speaker 10 Now, Canada and Mexico, two of our biggest trading partners, are being spared these additional tariffs for now, but Trump is slapping stiff due taxes on imports from economies around the world, even for products we cannot produce in the U.S., like the coffee and banana you might be having for breakfast this morning.

Speaker 3 Oh, wow. So how did the White House decide who pays what?

Speaker 10 Trump calls these reciprocal tariffs, saying they're simply designed to match the trade barriers that other countries impose on U.S. exports.

Speaker 9 That means they do it to us and we do it to them. Very simple.
Can't get any simpler than that.

Speaker 10 But the White House later acknowledged it would be too hard to calculate the actual trade barriers from every other country.

Speaker 10 So they just picked an arbitrary number they thought would be high enough to chip away at each country's trade surplus with the U.S.

Speaker 10 And the result is a huge tariff increase, a 24% tax on imports from Japan, a 34% tax on imports from China, in addition to the 20% tariffs that were already in place.

Speaker 10 Now, other countries might absorb some of that cost, but a big part will be paid by businesses and consumers here in the U.S.

Speaker 3 So let's talk about that. What's the potential economic effect of that?

Speaker 10 Economists say it will likely mean higher prices and slower growth. Consumers are nervous, so are exporters.

Speaker 10 Tim Fiore conducts a monthly survey of factory managers for the Institute for Supply Management. He says they're already bracing for retaliation.
Here it comes, and we're already seeing that.

Speaker 2 And we have manufacturers in the U.S. already feeling that experience.
So the retaliatory tariffs are going to be really ugly. I mean, it's just going to kill demand.

Speaker 10 Domestic manufacturers are supposed to be the beneficiaries of this trade war, but factory orders, output, employment were all down last month in anticipation.

Speaker 3 And what about international fallout?

Speaker 10 This is an enormous gamble. The U.S.
launched a similar worldwide trade war back in the 1930s. It did not end well.

Speaker 10 The notorious Smoot-Hawley tariffs are widely considered to have worsened the Great Depression. And economists say Trump's new import taxes are even more draconian than those almost a century ago.

Speaker 3 NPR Scott Horsley, thank you, Scott.

Speaker 7 You're welcome.

Speaker 1 We have more now now on the international response to President Trump's sweeping new tariffs. It's been swift.

Speaker 3 Yeah, leaders across the world have reacted with dismay and confusion following President Trump's announcement.

Speaker 3 Some are preparing countermeasures targeting the U.S., while others are hoping to strike up negotiations.

Speaker 1 For more on this, we turn to Beijing now with NPR's John Rewich. John, good morning.
Good morning. How have global markets taken the news?

Speaker 11 Well, the fallout in markets has been far and wide. You know, some of the countries that are hardest hit by the tariffs and actually that are most dependent on trade with the U.S.
are in Asia.

Speaker 11 And we saw a broad sell-off here from Hong Kong and China to South Korea, all the way down to Southeast Asia. Markets were down.

Speaker 11 Trump put a 24% tariff on Japanese goods, which apparently surprised markets there. The Nikkei 225 dropped close to 3% today.

Speaker 11 In Vietnam, which has been a huge beneficiary of U.S.-China trade friction as manufacturers have moved south of the border, Trump hit it with one of the highest tariff rates, 46%.

Speaker 11 And the country's Ho Chi Minh stock index shed nearly 7% on on the day. In Europe, it seems to be a similar story of selling.

Speaker 11 You know, economists are recalibrating their expectations now, and investors are just nervous.

Speaker 1 And what about governments? How are governments around the world reacting?

Speaker 11 Unhappiness and frustration so far. I mean, many say these tariffs were unwarranted.
Here's Prime Minister Anthony Albanese of Australia, which got the bare minimum 10%.

Speaker 4 The administration's tariffs have no basis in logic. and they go against the basis of our two nations partnership.
This is not the act of a friend.

Speaker 11 Britain was hit with the minimum 10% also, but the Prime Minister's office there expressed some relief that the country wasn't hit with 20% like the EU.

Speaker 11 Speaking of which, the European Commission president said Europe was open to negotiations but working on countermeasures in case the talks fail.

Speaker 11 You know, President Trump has signaled that he's open to deal making, so many countries are taking these sweeping tariffs as kind of an opening salvo for negotiations.

Speaker 11 Others are looking at a range of options. You know, Japan, Brazil, China have suggested that tariffs break World Trade Trade Organization rules.

Speaker 1 What about in China where you are? What's been the reaction there?

Speaker 11 Well, the Commerce Ministry issued a statement calling for the removal of these tariffs, and it says

Speaker 11 protectionism leads nowhere. China's been hammered by tariffs before and was frankly girding for this moment.
The across-the-board tariff rate on Chinese imports to the U.S. now is about 54%.

Speaker 11 Trump was talking about 60% while he was campaigning, so it's not far off from that.

Speaker 11 Professor Wu Xin Bo of Fudan University in Shanghai thinks China will retaliate once the Trump tariffs take effect in a few days. And then hopefully at some point the two sides can talk.

Speaker 12 If neither side doesn't want to get locked down in a lose-lose situation, we have to find our way out.

Speaker 11 But he thinks China can afford to punch back and then wait for a bit to see if Trump administration feels some heat from all these tariffs.

Speaker 1 Any sense of how damaging these tariffs will be to these countries?

Speaker 11 Yeah, I asked Jack Jiang about this. He's a professor at the University of Kansas and he runs the trade war lab there.
He says it kind of all depends.

Speaker 13 I still hold out a sliver of hope because it depends on how much trade destruction happens, and that depends on how much retaliation we're going to see.

Speaker 11 You know, a lot of economists think these tariffs are going to be a big global shock anyway and could push many countries into recession.

Speaker 1 That is NPR's John Worch in Beijing. Thank you, John.

Speaker 10 You're welcome.

Speaker 3 The owners of TikTok have until Saturday to sell the app.

Speaker 1 Earlier this year, lawmakers passed a law banning the app, citing national security concerns unless it sheds its China-based owner, ByteDance.

Speaker 1 Following his inauguration, President Trump said he would not enforce the ban, which was still the law, and that he'd hold a public auction to sell TikTok over the coming months.

Speaker 1 Many bidders have lined up, including one from a YouTuber known as Mr. Beast and a separate offer from Amazon.

Speaker 3 But leading the pack is software company Oracle, according to NPR's Bobby Allen, who joins me now. Good morning, Bobby.
Good morning.

Speaker 3 So why is Oracle's offer the Trump administration's preferred plan?

Speaker 14 Yeah, for several reasons. First, Oracle already operates almost all of TikTok's cloud, so Oracle systems are, you know, already supporting the app.

Speaker 14 Secondly, Oracle has experience with high-level national security data. For instance, Oracle does cloud computer work for parts of the government, including the CIA.

Speaker 14 And finally, Oracle is run by billionaire Trump supporter Larry Ellison, and he has been setting the stage, Layla, for this deal for years by warming up to Trump, by defending Trump.

Speaker 14 Ellison even hammered out this deal that we're talking about right now, which involves leasing TikTok's algorithm from its current owner, the Chinese company ByteDance.

Speaker 3 Leasing an algorithm.

Speaker 3 Is that even a thing?

Speaker 14 No, it's not really a thing, to be honest. It's extremely unusual.
But a source close to the negotiations explained the logic behind it this way. A new U.S.

Speaker 14 entity would be created, led by Oracle, that can oversee TikTok. Okay.

Speaker 14 And this new entity would lease TikTok's algorithm from ByteDance that would get around having to have the Chinese government sign off on the selling of the algorithm, which has always been an open question as to whether Beijing would approve that or not.

Speaker 3 But I don't understand that because I thought the whole idea of the TikTok ban was to split TikTok from China. Would this plan do that?

Speaker 14 Yeah, that's it depends on how you see that, right? It's been a very divisive thing in the White House, which is full of China hawks.

Speaker 14 And this is the big question: whether leasing the TikTok algorithm would mean China does not control it.

Speaker 14 This gets to why Congress passed a law forcing TikTok and China to break up in the first place, as you've mentioned.

Speaker 14 And lawmakers of both parties remain concerned that China will use TikTok to influence Americans to steal their data.

Speaker 14 Trump is hoping this deal, though, will put those fears to rest, but there is no guarantee.

Speaker 3 Okay, so is there a timeline when this all might happen?

Speaker 14 Yeah, Trump is set this Saturday as the deadline for when TikTok needs to be sold. Most are expecting a deal to be announced sometime before then.
The question becomes, how is China going to respond?

Speaker 14 Under the Oracle deal under consideration in the White House, they're making a concession to ByteDance by allowing ByteDance to keep a minority stake in the company.

Speaker 14 It's worth noting that, you know, Trump's stiff tariffs on Chinese imports are part of the TikTok conversation.

Speaker 14 Chinese authorities, I think, were hoping TikTok could be used as leverage to get a better deal on tariffs, meaning, you know, if China supported a TikTok deal, maybe they would get some relief on tariffs.

Speaker 14 But it doesn't quite look like that is what happened.

Speaker 3 And so you're telling me that Mr. Beast doesn't have a chance?

Speaker 14 No, Mr. Beast doesn't have a chance.
It's really sad, I know.

Speaker 10 Mr. Beast.

Speaker 3 All right. Thanks, Bobby.

Speaker 1 Thanks, Layla.

Speaker 3 And that's a first for Thursday, April 3rd.

Speaker 1 I'm Layla Faulden. And I'm Michelle Martin.
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