0:00

days, there is a lot of news.

0:02

It can be hard to keep up

0:04

with what it means for you, your

0:06

family, and your community. Consider this, From

0:08

NPR is a podcast that helps you

0:11

make sense of the news. Six days

0:13

a week, we bring you a deep

0:15

dive on a story and provide the

0:17

context, backstory, and analysis you need to

0:19

understand our rapidly changing world. Listen to

0:21

the Consider This Podcast from NPR. Hey

0:27

there, it's the NPR Politics Podcast. I'm

0:29

Tamara Keith. I cover the White House.

0:31

This week on the pod, we are

0:34

doing something a little different. Taking a

0:36

look at some of the policies and

0:38

decisions President Trump has made in the

0:40

first 100 days of his second term. Today,

0:43

how the president's economic policies

0:45

are causing uncertainty around the

0:47

world. It starts with tariffs,

0:50

taxes on goods imported to the

0:52

United States. Those taxes are paid

0:54

by importers who then typically pass

0:56

the cost on to consumers. Trump

0:58

has extolled the virtue

1:00

of tariffs. The word

1:02

tariff is a very misunderstood word. You've

1:05

heard me say, I say

1:08

it kiddingly, but it's one

1:10

of the most beautiful words in the

1:12

dictionary. It really is. And

1:14

said the benefits are

1:16

massive. We're taking a tremendous amount

1:18

of money with the tariffs. But the

1:20

markets have disagreed. The Dow Jones

1:22

industrial average is down since the start

1:24

of the year. Grocery

1:26

prices are still high. Consumer

1:29

sentiment is way down. And

1:31

economic forecasters are raising their

1:33

odds of a recession coming.

1:35

So today... Let's talk about Trump's

1:38

economic policies, how they work, what

1:40

their goals are, and whether they

1:42

are meeting those goals. With

1:44

me, my fellow White House

1:46

correspondent, Asma Hallad. Hey there. And

1:48

business correspondent, Alina Seljuk. Hello,

1:50

hello. Hello. So, Asma, let

1:52

us start with the basics. Just

1:54

walk us through where we

1:56

stand right now. with tariffs.

1:59

In terms of tariffs, look, I mean,

2:01

the president has outlined a whole bunch of

2:04

tariffs on things like the steel industry,

2:06

the auto industry. But the central

2:08

vision of this was something that he

2:10

and his administration described as being reciprocal

2:12

tariffs, which were going to be just

2:14

sort of somewhat arbitrary numbers slapped on

2:16

a whole bunch of countries around the

2:18

world in his view to equalize trade.

2:20

He said that the US was being

2:22

ripped off, that there was a trade

2:24

deficit, and he wanted to sort of

2:26

just improve that trade. balance in his

2:28

view. And so he

2:30

slapped these numbers on, then he

2:32

rescinded them. And where we

2:34

are at this point is he

2:36

has kept in place a

2:39

broad -based 10 % tariff on pretty

2:41

much every country in the

2:43

world, with the exception of Mexico

2:45

and Canada. And in addition

2:47

to that, he has 145 %

2:49

tariff on China. China,

2:51

in response, put 125 %

2:54

tariff on American goods.

2:57

experts say that means is that virtually, if those

2:59

tariffs remain in place, you've halted

3:01

trade between two of the

3:03

world's biggest economies, and that's really

3:05

key here. What is

3:07

the goal here? I realize that's

3:09

a loaded question because there

3:12

have been many stated goals. The

3:15

President has long believed

3:18

that tariffs are

3:20

a useful— to,

3:22

in his view, bring manufacturing

3:24

back to American soil. He

3:26

also views tariffs as a negotiation

3:28

tactic for a whole bunch of other

3:31

things, whether that's immigration or fentanyl.

3:33

coming into the United States. I mean,

3:35

he views this as a one -size

3:37

-fits -all tool for many different policies.

3:39

And there's also a bit of a

3:41

contradiction there, which is that if

3:43

you have companies moving their manufacturing to

3:45

the United States, then they're not

3:47

paying the tariffs. So the

3:49

revenue you're promising from the tariffs would

3:51

go down. It kind of one contradicts

3:54

the other. What does

3:56

this mean for U .S. businesses? How are

3:58

they reacting to it? How is it affecting

4:00

their business? I think, obviously,

4:02

American businesses vary. Some

4:04

of them make stuff. Some of them don't

4:06

make stuff, but sell stuff that they bring from

4:08

abroad. Across the board, they've

4:11

built their businesses around a global

4:13

trade that free -flows around the

4:15

ability to bring in parts

4:17

and components and build their machines

4:19

here and then export those

4:21

machines abroad or around being able...

4:23

ship bridal gowns from China

4:25

because that's where most affordable bridal

4:27

gowns are made. And then

4:29

you put them in a store

4:31

here and charge people reasonable

4:33

prices that people are used to

4:35

paying. up

4:39

and down, this is in, this is out, tariffs

4:42

are in, tariffs are gone, tariffs are

4:44

paused, maybe coming back, maybe not. The

4:46

word I hear a lot is obviously

4:48

uncertainty. We talk about uncertainty a lot.

4:50

Companies small and large are having a

4:52

really difficult time kind of planning along.

4:54

I've talked to some that are playing

4:56

the waiting game. They're thinking this is

4:58

all going to blow over. Most

5:00

say that if it doesn't blow over,

5:02

they will have to start raising prices.

5:05

And whether it's a supplier kind of

5:07

in the chain of companies, Whatever

5:09

that increased price is, it

5:11

starts trickling upward or downward,

5:13

I suppose. And

5:16

at the end of the day, if you have

5:18

a small shop and you're bringing, I keep talking about

5:20

bridal gowns, and the

5:22

bridal gowns are now 145 % more

5:24

expensive coming into the US, well, you're

5:26

no longer going to charge $1 ,000.

5:29

This is a much more expensive bridal

5:31

gown now. Have you spoken with

5:33

businesses that are moving their operations to

5:35

the US? If one of the

5:37

goals of this is to bring America's

5:39

golden age of manufacturing back. Is

5:41

that in the works? It's actually been

5:43

in the work since 2018 for some of

5:45

the companies. So in 2018, there was

5:47

a long period when many companies, manufacturing companies

5:49

specifically kind of thought to themselves, is

5:51

this a real thing that we're going to

5:53

live with forever? And when it became

5:55

a real thing that we're still living with,

5:58

a lot of companies decided to open

6:00

some manufacturing in the US. I

6:02

talked to a guy whose

6:04

company makes power supplies for

6:06

industrial machines like your X -ray

6:08

machine in a hospital, for

6:10

example. Their

6:13

choice at the time was to say,

6:15

let's move some of our manufacturing to Malaysia

6:17

and Thailand, because obviously China is much more

6:20

expensive now. They thought they were brilliant. And

6:23

now they're sort of dealing with the fact

6:25

that, oh, that's actually costing a lot. But

6:27

then he says a lot of his peers

6:29

did start opening manufacturing here in the US,

6:31

in Texas, in California, moving it from

6:33

Mexico or from China. It is not

6:35

at all like flipping a switch. And

6:37

also he said moving one line of

6:40

production cost $100 ,000. Just

6:42

to move it from one to another. And

6:44

fundamentally, China has been the

6:46

cheapest place to do all operations.

6:48

So if you're moving it

6:50

from China to Malaysia, that's already

6:53

an 8 % to 20 %

6:55

increase in a cost. If

6:57

you're moving it to the US, that is

6:59

an even higher cost. All right. Well, we

7:01

are going to take a quick break. And

7:03

when we get back, more on Trump's economy. Climate

7:09

change is drying up some water

7:11

supplies and making others undrinkable. That's

7:13

why Hira Now Anytime is covering

7:15

the hunt for fresh water. From

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a pipeline in the Great Lakes

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to the science of desalination to

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extreme recycling that turns sewage into

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clean drinking water. That's Hira Now

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Anytime, a podcast from NPR and

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NPR's Pop Culture Happy Hour, we

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8:12

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8:15

Malcolm Gladwell presented NPR's Throughline

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podcast with a Peabody

8:19

Award, he praised it for

8:21

its historical and moral clarity. On

8:24

ThruLine, we take you back in

8:26

time to the origins of what's

8:28

in the news, like presidential power,

8:30

aging, and evangelicalism. Time

8:32

travel with us every week

8:34

on the ThruLine podcast

8:36

from NPR. And

8:39

we're back. And we mentioned

8:41

that there's been a lot of

8:43

stock market volatility as a result

8:46

of these on again, on less

8:48

again, off again, on again tariffs.

8:51

And the president has tried to say that he

8:53

doesn't care about the markets anymore, but

8:55

now he is at least

8:57

on rhetoric softening on China. I

8:59

don't know if it gets

9:01

beyond rhetoric, but Asma, you've been

9:04

reporting on what he's been

9:06

saying about these China tariffs, which

9:08

as a reminder, are 145%.

9:10

Yeah. I mean, those are huge

9:12

tariffs. Experts will say that these

9:14

are just levels of tariffs that

9:16

we have not. scene, and I

9:18

think that's important to keep in

9:20

mind. But in terms of

9:22

what we're hearing from the president, I've

9:25

been describing it as a shift

9:27

from the tough posture he and

9:29

his economic advisors were taking with

9:31

China. You remember this at the

9:33

beginning. He was saying tariffs might

9:35

require some sort of economic pain,

9:37

but it would be worth it.

9:39

He's now saying this week that

9:42

that 145 % tariff won't remain

9:44

that high. I'm not going to say,

9:46

oh, I'm going to play hardball with China.

9:48

I'm going to play hardball with you, President Xi.

9:50

No, no. We're going to be very nice. They're

9:52

going to be very nice. And we'll

9:54

see what happens. But ultimately, they have to

9:57

make a deal because otherwise they're not

9:59

going to be able to deal in the

10:01

United States. And we want them

10:03

involved. And they continue to create this

10:05

environment where companies that are trying to

10:07

decide whether to move manufacturing or to

10:09

raise prices, they don't

10:11

know whether these are

10:13

reasonable decisions to make in

10:16

light of unknown decisions

10:18

that the White House will

10:20

make. It actually continues

10:22

the uncertainty and people not

10:24

knowing how to react to whatever

10:26

is coming down the pike. Alina, you

10:29

have been focused on... consumers and consumer

10:31

prices. You have a market basket that

10:33

you've been checking back in on, which

10:35

I love. In part, President

10:37

Trump won in 2024 on an

10:39

economic message that focused on everyday

10:41

Americans who were struggling with higher

10:43

costs, who kept talking about groceries

10:45

and gas prices being high, and

10:47

his message was, I will lower

10:49

these costs. What is the

10:51

picture now? Well, caveat

10:54

immediately, presidents don't have

10:56

too much power to flip a switch

10:59

and change how much things cost

11:01

at your grocery store. And

11:03

there are a lot of

11:05

concerns about tariffs eventually leading to

11:07

higher prices on the store

11:09

shelves. President

11:12

Trump came into his

11:14

second term as the economy

11:16

was fairly stable, inflation

11:18

was cooling, unemployment pretty

11:20

low, wages growing. People

11:22

were sort of anxious about their budgets

11:24

and were clearly sort of choosing to

11:27

buy necessities over not

11:29

necessary things. But

11:31

generally things were kind of

11:33

going along. Now what you

11:35

have is some prices are higher, some

11:37

prices are lower. It's like any

11:39

other time. You

11:41

have unemployment still pretty strong, which I

11:43

think jobs and wages are driving

11:45

a lot of people to keep shopping.

11:47

And so we're seeing people going

11:50

out to eat, people still buying stuff.

11:52

One thing we have seen sort

11:54

of on the downside is extreme

11:56

anxiety. Consumer sentiment from

11:59

the University of Michigan has some

12:01

of the lowest numbers for

12:03

how people feel about the

12:05

future of the economy in

12:07

decades. The other thing that

12:09

did happen is in March, people bought

12:11

a lot of stuff, big ticket items,

12:13

in advance in anticipation of tariffs. So

12:15

you also see a lot of defensive

12:17

spending, I guess is the term. You

12:19

had particularly people buying lots and lots

12:21

of cars. out of worry that prices

12:24

for cars will jump up. So were

12:26

you saying that the effects of

12:28

the tariffs haven't actually really been

12:30

felt at cash registers yet? Exactly.

12:32

You know, when President Trump says short term,

12:35

what was it? Short term pain? We

12:38

haven't seen that yet. It hasn't kicked

12:40

in yet. Tariffs, most of

12:42

the sweeping ones are just kicking

12:44

in this month. Many companies

12:46

are still selling through the stuff they

12:48

had before. They'd shipped it before

12:50

they stashed it. Now they're selling it.

12:52

Obviously, they're not going to wait

12:54

until it's the last widget that they

12:56

have to start raising prices,

12:58

but they will wait enough time

13:00

to see how this trade

13:02

negotiations might shake out or something

13:04

else might change. So the

13:06

big price increases that could potentially

13:08

happen, they have started to

13:10

trickle out on some individual items, but

13:13

not dramatically across your supermarket. I

13:15

do think that consumer

13:17

confidence, consumer sentiment metric

13:19

is really key because When

13:22

you look at both that number, but also

13:24

if you look at public opinion polling, Pew

13:27

Research Center has some new data

13:29

out this week that shows the confidence

13:31

in Trump's handling of the economy

13:33

is low. It is underwater, less than

13:35

50%. It is his lowest confidence

13:37

rating this and on this measure of

13:39

the economy in surveys dating back

13:41

to 2019. And that is important for

13:43

a man who ran on a

13:45

promise to improve the economy, because if

13:47

people don't feel good about the

13:49

economy, that is affecting how they view. Trump

13:52

overall. Yeah, and I remember you

13:54

being at a cabinet meeting,

13:56

I think, asking the president, what

13:58

about this consumer sentiment number? Yeah,

14:00

he was dismissive of the idea that people

14:02

were feeling any sort of economic anxiety. But

14:04

the reality is, and this is something that

14:07

I think the Biden administration also his predecessor

14:09

struggled with, There is economic data, and

14:11

then there's the way that people feel about

14:13

the economy. And if at some point as

14:15

the president you don't reconcile with that, that's

14:17

when I think people sort of start distrusting

14:19

the economic message. And at

14:21

this point, I think, you know,

14:23

look, some economic data is good,

14:25

right? But people don't feel great

14:27

about it, and you can't keep

14:29

telling people, hey, things are great

14:31

when they don't feel like everything

14:33

is great. To go back to

14:35

my Bridal gowns example, the owner

14:38

of that store, he told me

14:40

he supports the president's goals. He

14:42

supports the president's push to level

14:44

the playing field globally and close

14:46

those trade deficits and get America

14:48

on proper trading terms with a

14:50

number of countries. Super

14:52

stressed out about his business and he was

14:54

saying what am I supposed to do? Where

14:56

else am I supposed to get these affordable

14:58

bridal gowns? They're only made in China and

15:00

his argument was that you can't sort of

15:03

put sweeping tariffs on all of the world

15:05

and expect businesses not

15:07

to close. And I think this is

15:09

what makes this moment particularly challenging

15:11

for a number of American businesses is

15:13

what I've heard is, in the

15:15

first Trump term, there was some degree

15:17

of predictability. They understood his vision

15:19

was to really tackle China. And so

15:21

some of them moved their supply

15:23

chain lines to Vietnam, Indonesia, elsewhere.

15:25

This time around, when you've got

15:27

blanket tariffs on a chunk of the

15:30

world, there isn't clarity on where

15:32

else to go. And what you

15:34

hear from the Trump White House, is that

15:36

they are negotiating deals with a whole bunch

15:38

of countries. They say they are in conversation

15:40

with some 90 plus countries. Of course,

15:42

the challenge here, as you know, Tam, is

15:44

that it takes a long time to actually negotiate

15:46

a trade deal. And so how do

15:48

you walk back from the tariffs you've already put

15:50

in place? Well, and in the meantime, This

15:53

conversation about American -made goods is

15:55

sort of taking center stage, and

15:58

I've talked to so very many small

16:00

business owners, and I asked them that

16:02

question, can you just get your stuff

16:04

here domestically, like shoes, clothes? Well, first

16:06

of all, not a tremendous amount of

16:08

manufacturing of shoes, clothes, toys, home decor.

16:11

So much packaging is done in China,

16:13

so even if you make some

16:15

stuff here, is often cheaper

16:17

to ship it to China, package it there, and

16:19

then ship it back. Everyone is

16:21

sort of making these very complicated supply

16:23

chain choices. But as a small business, you

16:26

talk to someone who says, They

16:28

sell boots that are American made

16:30

and I sell boots that are from

16:32

China. And the boots that are

16:34

American made are $400. Who is

16:36

going to buy them, right? Some people

16:38

will, but just the price difference or the

16:40

same bridal gown guy, he says, I

16:42

sell, you know, an American made dress and

16:44

it is $4 ,000. Who is

16:46

going to buy that? It's a

16:48

very particular choice that people make to

16:51

buy American made because we are

16:53

so used to having prices of imported

16:55

goods being so much cheaper. Okay,

16:57

Alina Seljuk, thank you so much for

16:59

joining us. Thank you. And that is

17:01

all for us for today, tomorrow on

17:03

the pod, Trump's immigration policies and efforts

17:05

to reshape the federal government. I'm Tamara

17:07

Keith. I cover the White House. And

17:09

I'm Asma Khalid. I also cover the

17:11

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