Tariffs and the global fallout
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Hi, I'm Cardiff Garcia, and this is The New Bazaar. Coming up on today's show. We wanted our models to say, if you do this, these bad things will happen. And so please don't even try. That wasn't enough. They wanted to try. Chad Bowne on Trump's tariffs. What comes next? And just what the hell is going on?

Everyone, Cardiff here. I am joined in the studio by trade economist Chad Bowne of the Peterson Institute for International Economics. Chad, I'm not going to go through your whole resume. Suffice to say that, in my opinion, you are one of the great trade economists and you

probably my single favorite follower of real-time trade activity. You're not one of these dudes who gets like stuck in theory and things like that. You're on this every single day. Is that an accurate way to describe what you do? Yeah, I'm probably a little bit too much so. Too much so? Yeah, the last...

a few days have been entirely just trying to keep up with tariffs tariffs tariffs tariffs tariffs that's a good place to start how would you describe your emotional situation right now i'm a little tired um yeah president trump has been quite busy uh changing his mind about what he's doing with tariffs and one of the things that i do is to try to measure them

and uh and put them to data measure the size of the tariffs yeah how much trade is being covered what countries are being covered are they going up going down whatever and uh he's just been doing a lot of things and it's been a lot of work i have a question that's a little bit tongue-in-cheek but there's a serious point there too which is you know you dedicate your life really to following trade activity describing it keeping people informed but also i think advocating for good trade policy

It seems like in the last week we've gotten the exact opposite. How would you describe it? Yeah, I'm not sure it's been just the last week, but I think that the last week has been particularly bad. The rollout on, I think it was April 2nd, of we're going to do lots and lots of tariffs on lots and lots of countries at levels we haven't seen in a really, really long time.

Took everybody by surprise. So that's not great. And then when certain countries decided to respond, he said, well, tariffs on you aren't enough. We're going to raise them even further. And that wasn't great. And I think markets sort of responded in ways that suggest it wasn't great. And then, you know, it's really understated. Yeah. And then yesterday it all sort of ended or it seemed it sort of ended. Right. So the president out of nowhere on Truth Social in the afternoon posts that

that, you know, all those tariffs that are a lot of the tariffs that we were going to impose on the rest of the world. Now, I'm not going to do that. I'm going to put them on pause for 90 days or something, you know, with one exception, of course, and that China thing that's out there. Where there was an escalation, not a de-escalation. Yeah. And they're just, they just keep going up and up and up and up and up on China. We should tell listeners, you and I are speaking now at 4.14 PM on Thursday, April 10th, because things are moving so fast that by the time this comes out tomorrow, Friday, we're

Something else might have changed. I don't know. But here's where actually we should begin the meaty part of the chat, which is just explaining to people what happened in the past week and giving some clarity to all of this. Now, I think if anybody has even remotely an interest in listening to this podcast, then they have a good sense of it. But who knows? Maybe in three months, like for posterity, we should give some sense of exactly what happened. So,

on Wednesday of last week, April 2nd, I think. Donald Trump announced a whole bunch of tariffs. The tariffs were super high on a lot of countries. For example, I think the EU had 20% tariffs. I think other places had 25%. They were in the 40-something percent for, I think, Cambodia and even some smaller countries.

Simultaneously, the stock market started collapsing as the announcement was made. It kept collapsing throughout the week. And curiously enough, so did the treasury market. In the last few days, it started falling too.

I know that this part of the market, that's not your thing. So let me just tell everybody how unusual that is, that usually what happens is that when the stock market falls, people rush to treasuries and that's considered a safe haven. So what seemed super alarming in the last few days was that

The safeness of treasuries maybe started being called into question. There may have been a generalized loss of confidence in American assets, period, no matter what they are, even literally the safest ones. And then Trump seems to have changed his mind yesterday. And so what ended up happening was that now all those other countries that had those very high tariffs now have 10% tariffs.

China's have gone even higher. Where are the tariffs on China as of literally right this second? Yeah, so as of literally, and it could change by the time we get done. So as of right this second, they are at 135%. So that's a huge number, right? I mean, it's just- If you import something that usually costs 100 bucks, that now costs 235 bucks. Exactly. Is that right? Yeah, yeah, it's a lot.

And, you know, this is it's up a lot. Right. So if you think back to the first Trump administration, and this is when you and I got to know each other originally. Oh, yeah. The first trade war, which seemed bad at the time. That was nothing. That was absolutely terrible at the time. But looking back at that stage, right, U.S. tariffs on China went from 3% starting point to 19%. We thought, oh, my gosh, that's terrible. So the Trump administration, the second one comes around. They're starting off tariffs around 20%. And now they're 135% in a matter of.

to in a bit months, right? So it's just, these are numbers we haven't seen before. So it's going to be a big deal. I was reading about the estimates that economists at Bloomberg were making about what happens when tariffs go, I think they just pegged it at 100%.

And once they go higher, it effectively means that it becomes unprofitable to have almost any trade at all with China. Is that a realistic possibility that if these tariffs persist where they are, if this trade war doesn't get de-escalated, the one with China specifically, that we might just have trade with China going to zero? So there's a lot of what economists call variation across products. So some products will have lower tariffs and some will have higher tariffs. And some products are –

high profit margin products, right? And for those companies can probably eat a bit more of the tariffs into their profits and continue to the trade, right? China might continue to be the low cost supplier of someplace because they've got a really efficient supply chain. So even with a reasonable size tariff on some of these products, we may still continue to import things from them.

But the general point is you're exactly right. At some level, these tariffs become prohibitive, meaning you're just going to stop importing the thing from China. And then the question is, where does it go to next? Where does production go to next? Right. It's not as if Americans are going to stop wanting to purchase physical things. So we're going to get it from somewhere. And the question is, well, are those supply chains going to move to other countries?

And when we first saw those tariffs rolled out, as you mentioned last week on the Vietnams and Thailands of the world that were in the 40 percent range, all of a sudden we thought, well, gosh, that's really bad, too. And maybe the supply chains won't move out of China into those other places in Asia, which are right nearby. Where are they going to go to then next?

Well, maybe this is part of President Trump's plan, his idea. He wants that stuff to come back to the United States. Okay. Maybe some of that stuff would come back to the United States. But if so, and we're producing a lot of those things here, it's going to be a lot more expensive than what we're used to paying for a lot of those things. Workers just cost a lot more. You know, there's a lot of expenses in the United States that aren't out there in other countries. And

And so if you want to do more of that manufacturing stuff here, which is maybe what he wants to achieve, it can happen. I'm not going to say that we, because Americans do want to buy physical things. They're not going to accept not having, you know, iPhones and shirts and things of that nature. It's just that they have to be willing to pay a whole lot more for it. The way I was thinking about it was that

If some of these policies manage to successfully re-employ a lot of Americans in the domestic manufacturing sector here, it'd be kind of like a monkey's paw situation, right? Like that is a success that you don't necessarily want. It makes people poor, right? For one thing, those jobs making lower tech, lower value goods that right now we import from abroad, if we started making them here, well, those aren't going to pay super high wages, not in inflation adjusted terms, right?

And on top of it, they would be more expensive to make here, which means that they would be sold to consumers for a higher price. So everybody's poor, workers, consumers, and of course workers are consumers. So it just, it means dragging the economy back into the past. That kind of seems like what you're describing here. Exactly. And, you know, some of these jobs,

Aren't great, right? They aren't things that Americans necessarily want to do So, you know garment workers folks that sew together clothing and or stitch together sneakers or things like that They do really really important work. It's really really hard work You know, it's not probably that the jobs that you know, a lot of Americans will necessarily aspire to it's an important, you know set of set of jobs and important work and

But in a lot of emerging markets, developing countries, having those kinds of jobs is really a step up from what their next best alternative might otherwise be, which might be subsistence farming, right? Or something else that's even tougher and pays lower wages.

And in the United States, we haven't really focused on those kinds of jobs in that part of the economy and doing that kind of work in a really, really long time. It's not because it's not important. It's just because Americans have typically had better employment opportunities, right? So that's one thing. And then the second is,

companies are always looking to make money. And if workers are really, really expensive, then they'll find ways to automate and, you know, use robots to ultimately make those things. And so that the argument that, well, we're going to do it more of that manufacturing stuff here in the United States, because there's all kinds of great jobs that are going to come alongside it. Not sure that's generally the case, right? We may just end up, yeah, we may be doing more of the manufacturing, but the jobs may not be there with it. Right. And I think that's,

Folks sometimes confuse those two things as always coming together. Yeah, totally. Your colleague, Douglas Irwin, also a great trade economist, trade historian, wrote this great line where he said, Mr. Trump is a 20th century man presiding over a 21st century economy who wants to take it back to the 19th century. Yeah. That sounds like what you're describing here. 100% and absolutely correct. And

One of the other things that Doug and I actually, just before I came in here right now, that he and I are working on together is trying to make sense of how big the tariffs are that have been announced reverse, but now we're maybe at a level that we're going to be at for a while. How big these are in historical perspective, right? Our current estimates are, we talked about U.S.-China tariffs, but the overall tariffs the United States now has on the world writ large are

They were about 3% when the Trump administration took over in the middle of January, and they're now probably somewhere at 15% to 20%, and we haven't seen those levels since the 1930s.

right it also represents just a massive effectively tax hike on americans yeah yeah how big we're talking what hundreds of billions of dollars here yeah and you know the other important element about tariffs and imports is they are traditionally applied to the folks that can least afford to pay them low-income people middle-class types they're regressive tax it turns out that

you know, lower income folks in society, they tend to benefit from international trade, from access to, you know, if it's low cost t-shirts or sneakers or things like that, then what they would otherwise have to pay domestically. So it's not only that there's going to be a tax increase associated with the tariffs, but the tax, the effect of the tax increase is going to disproportionately fall on those who can least afford to pay it.

I was reading something about the categories of goods that we tend to import, and it's a lot of clothing, like you said, textiles, I think certain foods, and that just naturally takes up a bigger chunk of the paycheck of lower-income folks than of everybody else, right? Yeah, and another thing that's different this time around from the first Trump administration and all the tariffs they imposed there was –

Interestingly, that time around, they mainly applied their tariffs to what economists call intermediate inputs, the stuff, the widgets that you need, that companies need to make something else. So like an American company would import, I don't know, parts or a machine or whatever tools to make goods in America. And if the cost of those things goes up, then the cost of making the good goes up. Exactly. But what happens with that is,

It takes a while for the end consumers, people like you and me, to actually see the effect of the tariffs because we're not the ones buying the thing that now faces the higher tariff. We may buy something that has important parts and components to it that are now having to cost more that these companies have to pay. So they want to pass those costs along to us eventually through higher prices, but we're not seeing it directly. This time around, it's a very different story.

that the tariffs especially on china are now going on final goods they're now going on things like iphones and toys and video game consoles and computers and all that kind of stuff that were completely absent from the tariffs of 2018 2019 so the consumer reaction may be very different this time around as well we'll have to see what the the impact is on on ultimately prices so if people for example

You know, if the price of electronics or a smartphone goes up, you know, 70% or something like that, or more, maybe, I don't know, you know, depending on the tariff, it's up to 100 and something percent now, the price of your smartphone might double. Yeah.

Yeah, we could see that. That wouldn't be outside the realm of possibility at this stage. What are some of the other effects that this can have on the way American businesses themselves also function? Like, for example, American businesses that even aren't affected by the tariffs might take that as an opportunity to raise the price of what they do because they have less competition, right? Yeah, exactly. So if you think about...

Tariffs historically have been imposed on a lot of different sectors. One is, you know, steel. If now you face less competition and you make steel in the United States, it's not as if you're going to continue to offer low-priced steel. You're going to say, well, I face less competition. Let me raise my prices, you know, so I can earn higher profits because of that. And so it's natural for them to do that kind of thing.

The challenge though is in a globalized economy that can ultimately make American companies writ large less competitive, right? Because if their foreign competitors get access to these cheaper inputs because they don't have to pay tariffs on them and they're now more competitive than American companies that are trying to sell their things in Europe or Brazil or somewhere else.

they're now less competitive than they would otherwise be. So it can have a negative effect along that dimension too. I guess it's a double whammy because there's that effect, which makes it harder to export things abroad. But there's also the possibility, the likelihood and the reality that other countries will just retaliate and have, you know, high tariffs on American goods as well. Exactly. And that's what we saw, you know, the first time around in 2018, 2019, China has already announced retaliation this time, Canada, uh,

The Europeans announced something, but then decided to pause it. And so we'll see. Maybe there will be some differences. We're also in a different geopolitical climate this time around than we were last time. Obviously, Europe is in a very different situation with the war going on in Ukraine. The Ukraine war, yeah. And through NATO, I think they're very concerned about what the Trump administration's approach is going to be to their own military security.

And so they're here. You have an example of trade spilling over into other areas. And so they might be saying to themselves, look, there's a chance we don't want to actually escalate things with with President Trump. We've seen how he reacts when other countries retaliate against his tariffs by escalating further. We're worried about that because it could spill over and affect our military security and other dimensions, too.

- I have a question about services as well. 'Cause I think, as I understand it, most of the tariffs right now, both ours and the ones that other countries have imposed on us are in the goods trade, but the US makes a lot of services, produces a lot of services and also exports a lot of services to other countries. How might this end up affecting that? - That's, I think, one direction that this could head that we, or maybe the Trump administration hadn't anticipated.

Europe especially has talked about how they might retaliate in ways that go outside of goods. So outside of just putting a retaliatory tariff on American farm exports or American American bourbon or whatever, American bourbon. Um, and you're right. I mean, we export a lot of both financial services, but obviously then internet services as well. Tech. Yeah. Tech. So, you know, Google, Apple, Facebook, Amazon, uh,

uh, Netflix, right? Historically, they just have been able to do their things, right? It's really hard, uh,

Since they don't cross a physical border, they don't have to go through customs checks. They're not assigned what customs officials call a tariff code for their goods, so they don't get a tariff. But now countries might think about, are there creative ways that we could tax them that maybe we haven't in the past that might be a form of retaliation against the United States? So I think that's something that the Europeans, especially that they're exploring. I'm not sure where they'll end up on that.

But I think what you've raised is an issue that is in this imbalance world, right? Where President Trump is obsessively focused on

the trade in goods and that's sort of all that he looks at. The idea that the United States imports more physical stuff from the world than we export to the world. He doesn't consider other things, one of which is services, but he doesn't also consider other vulnerabilities that are out there as well where other countries might retaliate. And another one, aside from services, is other countries deciding they want to cut us off from things through their exports. They might voluntarily say, "Ah, you really need this thing? Well, we're going to stop sending it to you."

And so the big worry that has been out there for a number of years now, I think probably especially since the pandemic kicked in, is when we had all kinds of product shortages.

are for things like critical minerals from china right so these are nobody knows what these things are but you know lithium cobalt we just say all the words yeah but we need them to make a lot of really advanced you know stuff weaponry even the defense sector uses them um i think advanced electronics stuff like that exactly you know for the future we need we need all of them and the challenge is

China makes all of them. Yeah. Where do you find them otherwise? Yeah. So they're in the ground sort of all over the world, but then you got to take the rocks out of the ground and send them somewhere to be processed into something. And all that processing basically takes place in China. And so the concern is that they might cut us off. Right. And my colleague at the Peterson Institute, Adam Pozen, had a really nice piece in foreign affairs earlier this month where he's basically making that point, which is

It's not clear that you want to poke in the eye this country that you think you have leverage over because you buy a lot of their stuff. They could sell their stuff to other countries. They could sell their stuff domestically when really they might have leverage over you because they can cut you off from things that you need where there are no alternative sources. You know, what's super interesting about that is that

It's the exact opposite of what I think some Trump administration officials have been claiming, which is that because we are the buyer of those goods,

that China and other countries won't be able to find somebody else to take them. And so therefore they are strategically vulnerable. But this goes back to the fact that like we import a lot of different kinds of things, including those intermediate goods, but also including, for example, I think some components that like go into, you know, medicines and pharmaceuticals and things like that. In addition to our exporting some of those things as well. This is really complicated. These supply chains are very sophisticated and,

And if you look at some things that we buy a lot of from China, it won't be so easy to find somewhere else to get them. Yeah. Yeah. And I think that that's exactly it. And it's, it's not things that you're like, ah, we could live without that thing. Some of those things are essential, right? You mentioned medicines and certain pharmaceutical products, right? You can't live without that stuff, right? If you're sick. So yeah,

That's, I think, a big worry is that we're a lot more interdependent and maybe dependent than we'd like to be and probably certainly than you might like to be when you're starting a trade war with a country like that. We've got this 90-day period during which tariffs on non-China countries are going to be 10%.

The administration, as of right now, is claiming that 10% might just be the thing that's here to stay while we negotiate with those countries. But what's weird about that to me is that 10% is still a lot higher than the tariffs that we had on them going into last week. What is the incentive for other countries now to lower their trade barriers against us, which is what we claim to want? What the administration claims it wants is to use the threat of these tariffs to then get them to lower their trade barriers. But

They already have lower trade barriers than the ones we've just said are permanent. So I just, as a negotiation strategy, I just, I don't quite get that. Do you? You're not the only one. Okay, there we go.

- Well, I mean, I think one motivation would be that it could get worse, that maybe he is serious about, you know, at the end of the 90 day pause. - President Trump, you mean? - Yeah, raising the tariffs back to those higher rates that he had threatened, right? And they were technically enforced for like a 24 hour period. So I'm not gonna let anybody forget that they were actually there. - They weren't there, okay. - I calculated them and they were actually there for a while.

And so I think that is a real fear that some countries have. And so they may be willing to make deals just at a second best. You know, it's not as good as it once was or it could be, but they're really fearful that maybe maybe President Trump is serious and maybe he will put those higher tariffs on unless they they're anchored at that higher figure now. But they will be anchored at the higher figure. Yeah. And that is I mean, I don't mean to dismiss this at

all. That's a huge, huge thing. Especially for the smaller countries that really depend on the American consumer. I get why that threat could be real and they might lower their trade barriers, but those countries also don't buy that much from America relative to the size of the American economy. But the European Union, for example, we do have a lot of trade with them. And so I guess for the really, the big players, you know, in the global economy, I still don't quite get it, but fair enough. Yeah.

I want to do something before we start talking about some of the, what I see as the contradictions in this trade policy, which is,

I want to talk about the other tariffs that were already in place, which I think people are starting to forget about, but those were pretty big too. And those also apply to Canada and Mexico, but they're a little bit tough to disentangle. So I just, I want to make it clear for everybody what's going on. So let's start with Canada and Mexico specifically. We have a trade agreement with the two of them, the USMCA, which President Trump himself negotiated. It was essentially NAFTA 2.0, right? Right.

A lot of goods that are compliant with that agreement, those still go back and forth across the border at 0%. And compliance in this case means that the goods were made somewhere within North America. Is that how that works? Yeah, so roughly. There's what the trade nerds call rules of origin. And what it basically means is there has to be enough

content, enough of the stuff that's been done in Canada, Mexico, or the United States that makes up the total value of a good for it to qualify for getting a zero tariff crossing a border. And it depends on the product.

So for automobiles, for example, I forget what the exact rate is. I think it's in the 70%, right? Okay. That high, like that much of- 70% of an automobile is composed of parts that were sourced somewhere in North America. That car can go back and forth across the border within Canada, US, Mexico at zero tariffs. Exactly. Okay, great. So those goods are still going back and forth at zero tariffs, but there's a lot of other goods that are not covered by that trade agreement.

those goods do have some tariffs on them, correct? Yeah. And so let me give you an example, but let's go back to cars. So the challenge is if you didn't meet those, what are called rules of origin requirements. So maybe you get your engine, maybe you're a German automaker and you assemble the vehicle in Mexico, but you really like the engines that come out of some plant in Germany.

And so you don't want to produce them locally. Okay. But the engine is a big part of the value of a car. So maybe it doesn't satisfy that 70 something percent requirement. What did you have to pay in the old days? The tariff you had to pay in the old days was only two and a half percent. So sometimes for these car companies, they would say, it's just not worth it for us to redo our whole supply chain. Like who cares? So we'll just pay the two and a half percent. Well, now all of a sudden with a set of tariffs that have been announced so far, some tariffs are

on the Canada-Mexico thing, if they're not compliant, there's 25% right there. Yeah. So that 2.5% might not be 25%. And now it's a big deal to bring that engine in from Germany. You don't want to do that. But it's even worse because in addition to the USMCA, the Canada-Mexico tariffs that you mentioned, there's a separate set of tariffs that President Trump has imposed as well on cars, on automobiles also of 25%.

So now it's, you've gone from two and a half percent at 25, 27 and a half percent to now at another 20, 52 and a half percent, right? And for those cars coming into the United States from Mexico, that just might not have been quite compliant with those rules. Now they're way more expensive. Now they're way more expensive. And so some of these car companies may be saying to themselves, I got to shut down this production line because it's not just not worth it for me to roll these cars off anymore because I'm not willing to, you know, eat the costs of selling these things into the U.S. market.

So that's, I mean, that's, I think, a real thing that may be happening as we speak. It's too early to look at the data to know for sure, but you hear rumblings and announcements from car companies saying they're thinking about things. I think this is really one of the worrisome things that has gone under the radar so far. It's interesting, too, because cars are a big ticket item for a lot of people. So it's a problem if the cost of cars goes way up.

the supply chains for cars, as I understand it, are very dense and complex going back and forth. It's not like you just build the thing in Mexico, send it to the U.S. to sell to an American consumer and you're done. It's like the parts themselves get assembled on like all three, in all three countries, right? That's exactly right. And so the concern is that, you know, so, you know, some car brand that you or I would know about, whether it's

GM or Ford or Stellantis or Toyota or one of the car companies that's doing this kind of thing, maybe they're making these decisions and maybe they're doing it in Mexico. And so President Trump maybe thinks, ah, well, you know, that's only going to hurt things in Mexico. But no, no, no. The company in Mexico was buying a huge chunk of their parts from suppliers in the United States who all of a sudden are losing their business because the companies have had to shut down their production lines.

And if those suppliers, maybe if I don't know, transmissions or tires or wheels, you know, all the things that go into car, they suddenly aren't going to be able to sell any more to the companies in Mexico, then their suppliers are going to lose businesses too. And that's the real big concern is this just feeds back through the supply chain and hurts lots and lots of companies, lots of workers and really spills over. And those tariffs are in place now and they have not been deescalated the way everything else was yesterday, right? Those are still there. They're still there. The Canada, Mexico ones went into effect in...

March. The autos ones were kind of caught up. They went into effect on April 3rd. So they were kind of caught up in the frenzy of that April 2nd announcement. And I think folks forgot about them and really haven't been paying attention to them because there's been so many news about other kinds of tariffs. But yeah, those are very much tariffs that are now there that these companies and people essentially have to pay. And then in addition to those tariffs on Canada and Mexico,

There was also steel and aluminum tariffs. Those also are in place, right? And those have not been changed. What are those about?

So this one is an old story, too. Back in the first Trump administration, they imposed tariffs on steel and aluminum. And then for some of the countries, mainly partners and allies, so Canada, Mexico initially, then Japan, the UK, European Union later on under the Biden administration, they basically got deals and were able to get the tariffs taken off of them under certain special arrangements. Right.

President Trump came back in and he said, nope, all those deals are now done. We're basically going to reapply all the tariffs on steel and aluminum that we applied during the first term. And we're actually going to raise the tariffs on aluminum. They were only at 10% before to now 25%. So yeah, so that's basically reestablishing a lot of tariffs for that particular sector. That's aluminum coming in from any country? Aluminum coming in from any country. And so now going back to autos again.

you know, the other thing, autos, you use a lot of steel and aluminum, right. To, to build these cars, bumpers for, you know, I don't know, an F one 50 or something like that is, are these metals now all of a sudden their costs for a lot of these inputs are 25% higher too. So yeah. That's an easy one to understand too. Steel and aluminum, you use it for cars, you use it for like big things, you know, I think that's easy to understand. And, and,

At the same time, I think we were contemplating at some point putting tariffs on like lumber. That's still up in the air. Have those been put in place yet? Or is that still theoretical? They've announced investigations for lumber. Again, primarily we import lumber from Canada. So there's a little bit of a President Trump has-

Something going on with the Canadians, right? Yeah, the administration. Because we bring in aluminum and steel from a lot from Canada. Exactly, they're the main source of a lot of these things that we buy. So yeah, lumber is an investigation that's ongoing. Copper is another one that's ongoing. Copper is, by the way, used for a lot of electronics and all kinds of other things. Piping that goes into your houses. Yeah, exactly. And then...

They haven't been announced yet, but if you read the fine print of these executive orders for the tariffs that have been announced over the last week or so, they also mentioned sectors like semiconductors and pharmaceuticals. And so the anticipation is that they will soon start investigation in those as well and could lead to more tariffs in those places too. Wow. And now think about some of the things that we just mentioned, steel, aluminum,

lumber, copper. These are all things, for example, that you might use in the construction or improvement of a home, right? Like these are definitely things that are going to, that's going to hit, you know, Americans' pocketbooks. Home building construction. And then, I mean, this isn't part of the tariff story as well, but-

The administration has been doing a lot to try to discourage migration, right, into the United States. And a lot of workers in the construction industry in particular are oftentimes migrant workers. And so if that share of the workforce disappears, that's another factor which could significantly increase migration.

building costs, construction costs, and have challenges in that sector of the economy as well. All right. So we've got these tariffs on Canada and Mexico. We've got steel and aluminum tariffs. We've got sort of looming tariffs on lumber and copper. And that's all separate from the big events of the past week, which I now want to return to. There were some things that also didn't make sense about a lot of these tariffs. And I'll give you just a simple one.

One of the justifications given by supporters of Donald Trump, or not just supporters, but officials, was that the U.S. runs bilateral trade deficits with a lot of other countries, and it's important to close those. Now, economists disagree that that matters, that bilateral trade deficits matter, but

But what was interesting to me was that we also imposed those higher tariffs on some countries that the U.S. runs trade surpluses with, bilateral trade surpluses with. Australia was the one that comes to mind, but they got hit too. Yeah, yeah, yeah. And that's absolutely right. So, I mean, it's hard for economists to make sense of- Yeah, the consistency of it. But the point here is that these tariffs went up

Seemingly indiscriminately, right? Like the tariffs themselves were set at different higher levels, but for everybody, they went up a ton. Even if you didn't have a trade surplus with the United States, even if you don't export more to the United States than you buy from the United States and Australia and all those countries of the world, you still were hit with a new 10% tariff. And that is just, was astonishing. Yeah.

There was a lot of commentary on the specific formula that the administration used in order to set the tariff rate on different companies.

At this point, it's become clear that not only was that formula super inappropriate for what they were trying to do, but they also applied it incorrectly. So that was the – I'll let people look that up rather than trying to do a math equation via podcast, right? But had you ever seen something like that? What would be a more normal approach if you're trying to figure out what the right tariff is given the motivation of the administration? Yeah, absolutely.

As an economist, economists are always looking for rationality. And so it was sort of like- You can't apply rationality to something that exists purely in this strange dimension. Just figure out the formula. And we gave them the right formula. Maybe they would do the right- I think the answer is more simple. And it's just that the president wanted to apply tariffs and- High ones too. High ones too. So I think what's different in this administration and in maybe others is-

I do think there is sometimes a role for tariffs, right? And I think oftentimes economists get shut out of these conversations because the thinking is, ah, economists are only concerned about efficiency, right?

And any time they think if they just ask an economist, the economist will just say, no, never tariffs, that kind of thing. Exactly. And I think the answer is more nuanced than that. It's no, there's a better policy. Tell me what your objective is. Usually there's a better policy than a tariff to help you get to that objective. Right. And in the sense of we can do it at less cost.

to workers, to consumers, to whatever. Rarely is a tariff the first best thing to help you get there. We should actually give an example of this because I think there is a very big difference between a kind of broad-based tariffs on everybody approach versus having a specific objective where a tariff could make

- Which could maybe be used after other ideas have been exhausted. - Yeah, so let me give you- - It's limited, right? Like it's very limited. - Let me give you, I think, what I think is the best one, which is, you know, something like semiconductors, right? So the argument coming out of the pandemic and with some of the geopolitical conflict around the world is maybe we need more semiconductor production in the United States, right? - For national security reasons. - For national security, even for resilience reasons.

Oh yeah, if there's another pandemic, we have some at home that we can have.

They're all essentially made in one spot. You know, some more than 90% are made on the island of Taiwan, right? Which itself is a sort of a risky geopolitical place. It's a geopolitical risk, but also, you know, they suffer from typhoons and wildfires and droughts and earthquakes. And you just think that's, wow, it's not good to have all the production of one thing in one place. You want more diversification, right? So how do you get that diversification? You could use tariffs, right?

Right. The way an economist thinks about tariffs is tariffs affect basically two things. Yes, they increase domestic production. They're sort of like a subsidy. But the challenge with them is they also raise prices to consumers. And so ideally, if what you want, what you're worried about is we want to increase production here in the United States. Well, then why not just do the subsidy thing?

Right. And then not have the suffering of the higher cost to consumers. And so that's where the industrial policy comes in. Right. This was the CHIPS Act in the United States. And it's not the only country that's doing this kind of thing. Japan has also been subsidizing TSMC to get more production outside of Taiwan. Germany was doing the same thing as well. Right. Yeah. And so there's arguments to if you're worried about geographic concentration in that.

There's arguments for using policy to help get that diversification, get production elsewhere. It's just, let's think smartly about how we do it. Subsidy is a cheaper way of doing it than something like a tariff. I would also say that even in the example that you just gave, if you want to include some tariffs as part of a strategy to get more resilience to

and to have more domestic production of semiconductors. What you're describing is a tariff applied in a very particular way to one specific product, not even to one country, to one product from one country. That is so, I mean, it almost sort of gives a sense of what a dramatic economic mistake it is to apply such massive tariffs everywhere else indiscriminately across the world, right?

When the one example that like where terrorists maybe could be part of a reasonable strategy. And I agree that's worth, that's a worthy conversation to have. The application of them is so targeted and limited. Yeah. You know what I mean? Yeah. A hundred percent. And that's, that's, I think that a big difference here, right? Is there doesn't seem to be,

Looking at this from a strategic perspective, it is very non-discriminatory. They're just going on to everything. Everywhere, yeah. And when you're doing that, you're not showing preference or trying to incentivize the things that you're most worried about, right? Which is maybe some things like semiconductors. Now, if they impose extraordinarily high tariffs...

for those products, right? These are the things that they have so far hinted at that they may do separately down the line tariffs for those kinds of sectors. Then yeah, I guess relative to the 10% ones, like if they're going to do a 500% tariff on semiconductors to try to incentivize more of that here in the United States, that would be differentiating a bit.

I think the challenge here when you start to think about, I don't mean to go on and on about semiconductors, but the other challenges at this moment in time in the United States when we're worried about AI and building up our capacity and making sure that we have global leadership and something like that, and you want to have all the data centers being located here, it seems to me the last thing you want to do is to raise the cost

to all the companies that are building those data centers in terms of, you know, the semiconductors and all that kind of equipment that you would need to install in those facilities to make that kind of thing work. And if you use tariffs, that's effectively what you're doing, right? You're raising the cost of the buyers of those things in ways that aren't ultimately going to allow them to be competitive. What do you see as the role of

the us dollar and its strength versus other currencies versus its weakness versus other currencies how it fluctuates how it affects trade and in particular what do you make of essentially what's happened to the dollar in roughly the past week since all this chaos began so i'm going to be honest this is one of these areas that's not my area of expertise luckily i work at a place

the Peterson Institute where we're basically split in half. You have people like me that are the trade nerds and we get to look at tariffs and just look at tariffs, tariffs, tariffs all day. And then I have these amazing colleagues that all they do is, you know, look at macroeconomic issues in the dollar and focus on those kinds of things. So luckily I have not been the one that's been tasked with tracking that part of the economy over the last week.

But I think to be fair, it's a huge issue, right? And this is part of the motivation as well that the Trump administration has put forward, worried about the relative position of the dollar. And it's an area that's, I think, up for important debate, certainly the strategy and whether this strategy of using tariffs to try to tackle some of the underlying concerns that they might have.

is really the right way to go. Yeah. When we were setting up, by the way, you mentioned that you've had some stories of the past week, lots of sleepless nights, a lot of like surprise events. What's a good story of just trying to keep up with all this stuff? Well, you know, we've been trying to calculate what the changes in the tariffs are. And this administration is not great about providing the details. So President

Trump tweets something or put something out on Truth Social, but it's lacking a little bit of granularity as to what's actually happening. So we got to wait for, you know, the executive order and are there going to be products carved in, which countries are affected? I guess the exception to that was last week when he made the announcement, right? And he was holding up the big posters.

of which countries are gonna get hit with which. That was the one exception where the visual aids right there in the announcement. But for the most part, that's not how policy in the Trump administration gets rolled out. So there's just a lot of late nights putting those kind of things together. My favorite story though was Kai Risdahl, right? - Sure, the host of Marketplace Radio. - The host of Marketplace, somebody that we all know and love as the voice of radio in the United States.

Been on Marketplace talking about trading nerdy stuff lots of times, but had never before talked to Kai one-on-one. And so I had the opportunity for the first time yesterday. And this was on Wednesday, April 9th. This was the day the tariffs were going on. And so we spoke and we were speaking at 1.15. Oh, no. At 1.18, it's when President Trump...

made the announcement that basically all or most of those tariffs were now off. And so we got done with the interview. And then I saw that announcement and I said, my bucket list item of talking to Kyra's doll has now been made moot.

Oh, you guys didn't run it back? So he called me back two minutes later and said, we've got to figure out how to talk about this now, given that it's all changed. So we managed to figure it out, but it was great. But it just reminds me as well that in this era, you can't have any conversation without, if you're a trade nerd like me, without first checking Truth Social to see if, have the tariffs changed in the last 10 minutes before I go live on something? Because

at least more than a handful of times, it actually has, right? And you just have to be prepared for almost anything to come out of the White House these days. And to be honest, I'm a little nervous because we're recording this. It's now almost five o'clock on Thursday, April 10th.

You know, we have to do a lot of like mechanical stuff to the recording before we publish it live. It'll probably go out sometime Friday afternoon when people can finally hear this. And I'm very nervous that tomorrow everything's going to just change. It'll wipe out this entire interview. I'm sure it will. We're still going to run it. And that's me telling the listeners right now. We're still running it. But that's really funny that after a week.

of assessing these extraordinary announcements, those moves in the markets that were just mind blowing. You're having this conversation with Kai on like this very high profile radio program and three minutes into the interview, everything gets undone. - Everything gets undone. - Yeah.

Did the interview run? It did. It did. The new interview, the retake? Well, they included a bit of both of it. And I think it was great. It kind of showed also the moment that this is the world in which we now live, right? This is the reality that we have to confront. Yeah, the perils of doing this kind of thing, too. Everything changes in real time. Yeah.

I've had the fortunate opportunity to work in government for two different administrations. So I was in the White House and the Obama administration, and then more recently in the State Department in the Biden administration. And it's just very interesting to watch how different administrations announce policy.

In those administrations, there was so much preparation for the rollout of a policy and then making sure everybody was on board and, you know, it was maybe over the top in terms of letting countries know that it was. And of course, with President Trump, it just seems like it's the exact opposite. Sometimes it seems as if the president is announcing things that maybe his cabinet officials don't even know are happening. I had no idea, yeah. The most amusing thing was after he reversed course yesterday,

his supporters, his officials went out there and were starting to say, "Oh, this was all part of some grand plan. This was what we were planning to do all along." And then he himself went out in public and said, "No, no, I just saw that everybody was freaking out. So I just changed my mind and decided this is the approach we're gonna take." - Yeah. - Tough situation. - Yeah, it was instinct or something like that. - Yeah, I'm just going by instinct more than anything else really, you know? And that's how you know things can change at any moment.

I was reading through your resume before we started just to get the background, get ready for the intro and all that stuff, right? And I saw something that I didn't know about you actually, which is that you once did a year in residence at the World Trade Organization, the WTO. The WTO is of course,

this legendary institution that has been a part of the rules-based global trading order that emerged essentially after the Second World War. Back then it was called something else, and then later it became the WTO. But it has existed in some shape or form for decades now, and it's a place where essentially countries can agree on the rules. When they have disputes, they can take it to the WTO. And it's pretty clear that

Trump administration has no time for that. That's been kind of sidelined. It still exists. But my question for you is,

Do you think that that world might be lost to us, that the sort of rules-based liberal trading order has suffered now a permanent blow because, well, I mean, the president, President Trump, essentially feels free to ignore previous trade agreements altogether. And by doing these things almost whimsically, by his own admission, by instinct –

There really just is no certainty there. There is no agreement on what the rules are. It's over, right? How worried about this are you? Yeah, no, I'm very worried. You know, I probably spent the first 15, 20 years of my career not only getting the opportunity to spend some time in Geneva at the WTO, but that was what my research was all about, trying to understand what

What makes countries be able to cooperate and get along and live in a rules-based, when does it work and when does it not work kind of things? And we're clearly now in a moment where it's not working. So there is this big question of why. A big part of it is President Trump, certainly, but I don't think that's all of it. At some level, and I saw this in my own time in government, there kind of is a bipartisan consensus in Washington now that the WTO hasn't been a great

fit for some of the challenges that are facing the the global trading system i think the big one is probably china right as i look at it china is an amazing country and has been able to do incredible things in the last 40 years of you know pulling hundreds of millions of people out of poverty and it's an incredible success story

But it's an economic model and it's a system that doesn't really align well with ours and with the market-oriented democracies of America.

our traditional friends and allies in Europe and Japan, all these kinds of things. So I think there is a fundamental underlying there there when it comes to China. And it's pushed us into a challenging situation that President Trump has forced the issue and it may blow up and we'll see where things go. But it's definitely the case that we're in a new world. It's much less rules-based. In many respects, it was a better world. It was a more orderly world when we were sort of all playing by it.

or at least when China was less important, say, and everybody else was playing by a different set of rules as China became a bigger player on the scene and was playing by a different set of rules.

The rules kind of didn't work anymore. But the big question is, what do we do next? And that's where I don't think anybody really knows. And it's not clear what the Trump administration's vision for the future is. If it's not the WTO thing, what is their thing? And that's where I think a lot of us are a little bit scrambling is what their vision of a future would look like. They're suggesting they want to individually negotiate with 70 countries or whatever to

That sort of thing is really hard. It's so hard. Especially if you do business in the U.S., by the way. It's like, what kind of certainty does that give? You have no idea what something's going to cost. Exactly. And I think that's one of the really big challenges that a lot of businesses and companies are facing at the moment is they...

They don't know what markets they're going to have access to in the future and under what terms, right? What are my costs going to be if I have a plant in the United States and I'm trying to make stuff? I'd ultimately like to be making things not just for American consumers but for the world. But am I going to be able to afford it if tariffs are really high? And so I got to pay really high costs to get all the inputs of the things that I need to make stuff? Is that going to be leaving the United States an attractive place to make my investment compared to somewhere else?

And if other countries are going to be retaliating, how does this play out? I think there's just a lot of uncertainty that businesses face when you move out of a rules-based world that they had been comfortably inhabiting for a long period of time into this one where it's all about whimsy and who does what when it comes to tariffs. This is, I guess, kind of a personal question. But given all the time you spent at the WTO, presumably you've gotten to know a lot of people who work there.

There has to be some sense of just personal disappointment that the world is taking this turn. Oh, yeah, absolutely. And yeah, there's a lot, me personally, you know, and a lot of my friends worked in kind of developing and trying to understand a system to try to create a better place for the world. The challenge with the WTO is even though it's not working great for the United States,

at the moment and i think a lot of the challenges there again go back to to china and and and by extension a lot of other countries as well europe japan korea you know it's not just the united states that has these these issues with china but for a lot of countries in the world the wto is a extraordinarily important thing right these small countries

that can't come to the United States and say, we're going to have leverage over you. We're going to bargain with you. No, they're reliant on an open rules-based certainty guaranteeing environment, which is what the WTO provided for them. So the really big concern

is, you know, if you're a humanitarian, right, is that kicking away the WTO and the rules-based system, we'll be able to live with it in the United States. We'll figure it out. The big guys will be able to figure out. It's really all the little countries in the world that are super reliant on something like that. What are they going to do in this new environment? And that's, I think, what's most concerning. Yeah. And interestingly, though, it's not just if you are a humanitarian, it's if you believe that commerce, that

markets, capitalism can work to make people better and that there are some glorious virtues to a markets-based system. Well, this provided...

a global markets-based system. It was a part of it, I should say. It was a, you know, and so presumably if you are of that disposition, then you also believe that that's a better way to go about it than, I don't know, things like foreign aid, which can be very tricky and which also frankly is sort of out of favor right now as well. And so you're sort of, you're destroying in some sense, the market option, the markets-based option.

Exactly. You know, it's markets, it's the rule of law. The WTO, you know, maybe went a little over the top in terms of stressing the role of legal disciplines and lawyers as opposed to... That's another podcast. Yeah, I know. But I think that's exactly right. I mean, it creates that certainty and allows for markets and incentives to

allow countries to trade, which then allows them to take advantage of foreign markets for their economic development and their growth, and to be able to engage with the rest of the world, right? And if you're looking for a world that

isn't built on favoritism, right, but is built on the rule of law and markets and incentives to make progress, the WTO has actually done a really tremendous job at contributing to that world. And it would be terrible. I'm not saying it's going to disappear, but it's certainly, you know, in a situation where it's tough times for the organization at the moment. I've been thinking about the intellectual atmosphere that preceded this moment, not just over the last

few years or even the rise of populism or anything like that in the last decade, but even going back multiple decades. One of the things that's been interesting is that because I think that liberal rules-based order existed for so long in the wake of the Second World War, that like anything else, it can become quite easy to take it for granted. And a number of economists have pointed out that

While trade can be wonderful, it also has had some side effects in that a lot of individual counties, small towns that had maybe one big factory that then lost out to trade with China or to trade with the rest of the world, that those places when they de-industrialized were unable to essentially adapt, right? And a lot of people in those individual communities really suffered for it for generations. And-

I think when people talked about trade, increasingly over time, members of both parties started with that story instead of the story, trade is good. Free trade is excellent. It has benefits that are diffuse, but they're enormous and they're great for the world. And by the way, there are these side effects and we absolutely must do something better. And I think what ended up happening was that people started with the side effects of

And they sort of gave some acknowledgement that, yeah, yeah, trade has these positive effects. Yeah, it's fine. But they didn't start with trade has amazing positive effects, big effects, right?

And we, by the way, we absolutely must deal with like these people who are suffering in these places. Now, I would argue that policymakers did not do enough for the people suffering in those places. But the story wasn't balanced or it became more imbalanced over time. And I think what ended up happening was that we just started leaving off the trade is good part of it when that should have been the first sentence, the more heavily emphasized sentence. And

Now we're in a situation where it's kind of hard because I think folks on the left, left of center, you know, people who describe themselves as, I guess, liberals or left wing, I should say, progressives, right, for many years have made the case and with some justification that, hey, we've got to do something about these terrible side effects. But they were not making the case that, like, we have to preserve, like, the open trading system anymore.

And so now that it is folks on the right, or at least a contingent of the right, the right-wing populist, the Trump administration, their followers, their voters, who are now the protectionists, it has become kind of a politically lonely situation to be the one saying, trade is amazing, trade is awesome. And I wonder to what extent that contributed to the world we're in now.

This is outside of, I know, as you mentioned, like outside of the thing you studied directly, but I'm just kind of curious to know, like as somebody who follows trade all the time, what you think about that? Yeah, no, no, no. I think about that probably far too much. And I don't have a good answer for you. And I think you characterized it absolutely perfectly. The way I think about it is trade is complicated. And so every time I try to have a conversation with somebody about trade, I struggle.

try to have the nuanced discussion of pointing out the amazing parts of it. We get access to goods and services at lower cost than we would otherwise. We get access to products that wouldn't otherwise exist but for trade, and that's all great. But at the same time, not everybody benefits from trade. And so if we want those good things, we probably need to do more to address the fact that not everybody benefits. And I think

You nailed it, but we have been very bad, especially in the United States at acknowledging that piece, acknowledging it with policy, right? We've done a really good job of talking a lot about it over the last 15 years, especially. It's been a very big part of the American conversation. You're talking about those places that have suffered from more trade. But we've seen very little in terms of actual policy to do something about it, right? I

I would say that trying to do something about it isn't tariffs, right? To the extent that we've done something about it, it's President Trump's approach with tariffs. The challenge with tariffs is you might raise protection and that might incentivize that industry to come back into the United States, you know, the thing that left to now go to China or to somewhere else. But there's no guarantee that it's going to end up

back in that same spot where it once was. - Or that it won't impoverish people in other places. - Yeah, exactly. So if you really want to do something to help those people,

that we're suffering, you've got to do something for them explicitly. And that's just not something that we've really ever tried to do in the United States in terms of policy in any really, really big way. And so my concern is we've just never gotten around to that, right? We came talking about it, blaming things, but we're never actually focused on helping the workers in the communities that have suffered, right? And that's where I think the emphasis should be. Not that it's an easy policy problem,

It's really not. It's not like there's some off the shelf policies that if we just did this, it would all work out. There's been a big debate in economics over the last, you know, this is especially come back probably the last five years or so about place based policies, right? And whether or not they can work or not. We don't have a lot of evidence like that. They have been effective in the past, but it's also partly because we haven't done a lot of experimentation to really try to figure out what works and what doesn't work. And we haven't really tried. Right.

right and so i think there's scope there to at least make more effort than we have in the past to try to really target the things that that are troubling us yeah i would say i think it's clear that we haven't tried enough and across enough for the us right some things seem to have worked right i mean i think immigration to these places certainly high skilled immigration seems to work quite well as place-based policy i think some other things that have been tried again not everywhere and not enough of it like

have also worked in some places and in some other countries, by the way. Yeah, that's another point, too, is that other countries do this much better than we do. The United States has been, you know, for 50, 60 years, just kind of hands off. We opened up to trade, but we really didn't have the social safety net there to help workers that were negatively impacted that may have lost their jobs because of having to face competition from, you know, workers or imports coming from other places.

But also because, you know, we don't do that for other reasons why people lose their jobs either, whether you lose your job because of a robot or some new technology or people just decide they don't want the thing that you're making. You know, you're a bank teller back in the day. We're old enough to remember what bank tellers were right before ATMs. All the bank tellers lost their job, right? We didn't have special programs that were bad at that in the United States. Other countries do better at that kind of thing.

Right. Helping workers and people have lifelong training. Right. To make sure that they can transition into new jobs and the parts of the economy that are growing. Just an area of the U.S. that we've never been particularly good at. Let me see if I can try to end on a hopeful note. And by hopeful, I don't mean I actually expect this to happen, but it might happen and it would be a happy outcome. And I just want to get your take on it.

We've run this week-long experiment that appears to be continuing in some shape as a months-long experiment now. And if you look at the big movements in the markets, if you look at the way that so many people have responded, the emergence of some problems that I think are going to get worse the longer that this uncertainty about trade continues is going to be a big problem.

One possible silver lining, and I say it's a silver lining because it's not the main thing. The main thing is that people are going to suffer from it. But one possible silver lining is that it might end up discrediting these protectionist impulses, these protectionist ideas for a very long time. The thing that sucks is that it's possible that you need a lot more destruction than we've had so far and that more people have to suffer. And that's just awful, right?

You know, and then on the other side of that, it's possible, again, that people will see this and say, yeah, we can't do that anymore. Like we got to go back to the rules based approach or we have to lower these trade barriers. Trade is actually good. If you look at surveys of the American public, a lot more of them actually think that trade with other countries is an opportunity than think it's a threat. And so I just I wonder if this experiment, as destructive as it might prove to be, is

might at least as a silver lining have the effect that we'll go back to a better way of doing this stuff, lower trade barriers, and that some of the ideas more importantly will be discredited for a very long time. I'm hopeful and I want to be optimistic. And as a researcher and a scholar and somebody who's in favor of evidence-based policymaking,

This is hopefully a teachable moment. We didn't want to have to go through this. We wanted our models to say, if you do this, these bad things will happen. And so please don't even try. That wasn't enough. They wanted to try. We got now some real world evidence about how great things didn't go. And so hopefully that's enough, but I'm not sure. I think we have to keep our guard up and have to keep working and keep making the arguments about when policy ideas are really bad, continue to make those arguments and

But yeah, now we do have another data point that we can point to and say, the last time we tried to do this, that's what happened. And I don't think we want to have that happen again. So maybe let's think of a different idea to try to tackle whatever it is that the problem is that you're worried about today. Any parting thoughts for our listeners? You've had a hell of a week and you're going to have a hell of a month and it's going to continue. You know, trade is, is,

so important and in a way that I think maybe we didn't appreciate before. One of the reasons I wanted to talk to you was precisely that I think it has been until this point kind of underappreciated as a part of the economy. What would you want to leave people with, given not just the lessons of the last week, but something maybe about trade that you think is really important to emphasize that maybe people just don't appreciate? Yeah, I think it's what you just said, right? I want people to pay attention to

There will be fallout over the next couple of weeks as some of the tariffs, there's a lot of new tariffs out there that have kind of gone under the radar because it's like they're not as high as they could have been, right? So people have kind of forgotten about them. There's a lot of tariffs out there that are really high. There are going to be some bad things that happen in the economy. I want folks to be paying attention and trying to figure out why.

If you can't, you go to the store and you can't get something or suddenly it's more expensive. I want you to investigate why. It may not be because of the tariffs. Like all kinds of shocks happen in the economy, but be inquisitive and look and try to get to the bottom of it. And if it is because of the tariffs, you know, I think we want to think about that a little bit. Is there a reason why maybe I'm willing to accept that? Or maybe our economy should be willing to accept a higher cost or something for that?

but maybe not in a lot of these instances the really indiscriminate use of the tariffs i think aren't necessary and i think there are lessons learned for us as individuals and as voters to make responsible choices for who we elect to be as our as our leaders out there in the world and um how we want to have them leading us on the world stage where can people find your stuff

So you can go to the Peterson Institute website. My writing is all- P-I-I-E.com, I think. You got it. And I also host a podcast called Trade Talks where we talk about trade. And so, yeah. Great show. Former co-host Samaya Keynes was on the show recently. She's now at The Economist. She's a favorite of ours. She's now at the Financial Times. Oh, I'm sorry. She's at the FT. I'm sorry. No, no. She's a columnist at the FT and she hosts a podcast called-

At the FT, an excellent economic show. You got it. She's fantastic. I got used to saying she was at The Economist for so long. But no, I definitely know she's at the FT and she does great work there. Yeah, yeah. And she and I created the podcast back in the first Trump administration when there was such demand about trade. And given all of the craziness on the tariffs last week, I had to bring her on to help me explain to the world again, to help me co-host. In a sense...

relive some old times. It wasn't quite as crazy in the first Trump administration, but it was a little bit crazy. - It's an intensification of old times rather than reliving them. - This past week has been really crazy. So I'm looking forward to the 90 day pause on the tariffs. I hope it's an actual pause and I'm looking forward to getting some sleep. - Chad Bowne, thanks so much, man. - Thanks for having me.

And that's our show for today. You can find links to Chad's work, including his real-time trade tracker at the Peterson Institute in the show notes for this episode.

The New Bizarre is a production of Bizarre Audio. Adrian Lilly is our sound engineer, and our music is by Scott Lane and DJ Harrison of Subfloor Studio. Please follow or subscribe to The New Bizarre on your app of choice. And if you enjoyed today's show, please leave us a review or tell a friend so that others can find out about us. If you want to get in touch, I'm on Twitter as at Cardiff Garcia. You can also email me directly at cardiff at EIG dot org. And we'll see you next episode.