Deep Dive
Shownotes Transcript
It's Tuesday, February 4th. I'm Jane Koston. This is What A Day, the show that was really excited to find out that it's almost the weekend until being told just now that it's Tuesday. On today's show, Trump signs an executive order that could do something perhaps with TikTok or perhaps not. And New York Governor Kathy Hochul introduces measures to protect doctors prescribing abortion pills out of state.
But let's start with the economy and tariffs, Trump's favorite word and the subject of pretty much endless commentary over the last few days. We are recording the show on Monday evening. And as of right now, President Donald Trump's promised tariffs on Canada and Mexico are on hold for at least 30 days.
Here's Mexico's President, Claudia Sheinbaum, explaining through an interpreter how her conversation with President Trump went on Monday morning. At the end, he asked how long we could put the tariffs on hold. And I told him, let's put them on hold permanently. He then asked, well, for how long? I responded, let's pause them for a month. And I'm confident that in a month, we will deliver results for both his people and Mexico.
In return for the pause, Mexico agreed to send 10,000 troops to the U.S.-Mexico border, which sounds great for Trump, except for the fact that Mexico already has 15,000 troops deployed to the U.S.-Mexico border, which they did in 2019, which was, to be clear, a while ago. Also on Monday, Canadian Prime Minister Justin Trudeau announced that he had a, quote, good call with President Trump and that Trump agreed to pause the tariffs on Canadian goods for 30 days, which
Though much of what Trump thinks he got out of Canada already happened. He said that Canada is going to be implementing a $1.3 billion border plan where they talk about reinforcing the border. I should note, that's actually something that Trudeau announced and Canada announced back in December, about mid-December. So we have arrived at a classic Trump moment. He and his supporters get to declare victory while actually not doing very much.
If you're like me, you're a little confused. Was this all a negotiation tactic? Doesn't Trump just absolutely love tariffs? What is a tariff war anyway? And are we just going to keep doing this? To get some answers to these questions, I called up Scott Lincecum. He's the vice president of general economics and trade policy at the Cato Institute. Scott, welcome to What Today. Oh, thanks for having me. So Scott, let's start off with a very basic question. What is a tariff war?
Well, it is apparently when the president of the United States announces he's going to apply taxes on about a trillion dollars worth of goods and
What happens is you have a government will decide to impose taxes on imports of a certain amount. And foreign governments tend not to take that lightly. They tend to respond for both strategic and political reasons. They apply their own tariffs. The next thing you know, there's tariffs on everything. And we're all a little poorer. Here's what gets me.
Trump's original executive order, he said threats of, quote, illegal aliens and drugs, including deadly fentanyl, are the reason the administration has declared a national emergency and introduced these tariffs. Right. One, is there any merit to that claim? And would these proposed tariffs actually curb how much fentanyl is in the United States? Yeah, this is what really gets me about all of this. Fentanyl overdoses are a terrible tragedy. However, for
First, some basic facts. Overdoses in the United States have fortunately been declining now for a long while. Fentanyl trafficking appears to be down as well. Fentanyl overdoses appear to be down. This is all good. Legal border crossings are down. They've been down for a year.
And there is absolutely nothing that a tariff on avocados from Mexico and crude oil from Canada is going to do to stop Americans from consuming illicit drugs, whether they come from Mexico or Canada or China or anywhere else. So there's an immense disconnect between the perceived problem and the proposed remedy. No.
Now, on the other hand, Trump has said that the U.S. has a trade deficit. It stands at about $122 billion overall. Our trade deficit with Canada alone is about $75 billion.
First, what does that mean and how does it compare to previous administrations? Yeah. So a trade deficit is simply when a country imports more stuff than it exports. The United States has run persistent trade deficits for decades now. This is actually not an economic problem to be solved. Trade deficits are driven by demand.
big macroeconomic factors, savings and investment patterns. Our government spends more than it takes in. Americans like to spend more than they save. Countries actually like Germany and China, they actually do the opposite. This creates trade deficits along with our dollar's value as a reserve currency.
even more meaningless than the overall trade balance because they're just counting gross value of goods. They don't actually look what's inside those products because, you know, like a lot of stuff we import from Mexico actually has American content in it, but that doesn't show up in the trade balance.
So there's absolutely no reason to even care about bilateral trade balances. And yet Trump uses them as some sort of weird scorecard for trade policy and whether we're winning at trade. So tariffs are obviously one way to address trade deficits. But what are other solutions and how have previous administrations handled it? I mean, the way you're sounding, it sounds like previous administrations have just been like, it's a thing. We're fine. Well,
So Reagan, going back a long way, actually did something that can affect trade balances. He negotiated the Plaza Accords, which was a currency agreement. And that did have a material effect on the trade balance for a while. But since then, presidents have talked about trade balances occasionally, but they've mostly ignored them.
As a trade policy matter, there's just not much you can do to affect the trade balance. Sometimes you'll hear folks talk about fiscal policy. You know, we should actually raise taxes or cut spending, and that can affect our trade balance in turn. But there hasn't really been an obsessive focus on the trade balance in other administrations like there has been under the Trump administration.
Now, I was alive in October of 2024, and I believe you were as well. I was. And you might recall that one of Trump's big promises from his campaign was that his administration was going to curb inflation and bring down prices. But then...
he won the election. Right. And he said himself that one, bringing down prices is very hard to do, which is true. And he said that Americans could feel some quote pain from the very tariffs he wants to impose, but it'll be good for us for reasons.
What do people need to know about how tariffs will impact them if they go into effect? Because something I keep thinking about is like even the most American of American products probably uses goods that come from Canada, Mexico, China. I think the first thing we need to do is talk about what inflation is. So inflation is a general increase in the overall level of prices in an economy.
typically driven by monetary policy, maybe some fiscal policy and other stuff. Tariffs tend not to drive inflation.
What they tend to do is increase relative prices. So the price of a tariffed widget will go up or a car will go up, but not the prices of everything. Global tariffs, like what Donald Trump has proposed, well, they can increase prices one time, but it's still not technically inflation. The reality is that broad-based tariffs would increase prices in the United States. Okay, so-
None of us know what's going to happen next, but what countries do you think Trump could target next? Because we don't know anything as of 2 p.m. Pacific, 5 p.m. Eastern. We don't know what the deal is with tariffs on China. We don't know. Right. What countries do you think Trump may want to target next with regard to tariffs?
Yeah. So I think China is a given. I've long said that additional tariffs on Chinese imports were kind of my base case scenario with kerfuffles coming up elsewhere and some potential tariffs here and there. And it seems like that's what we're going to get out of this. Beyond China, look, I think it's inevitable at some point you're going to see additional tariffs on
Things in the automotive supply chain, whether it's coming from Mexico, Chinese-related EVs, or similar things from Europe, that seems to be next on Trump's list. He keeps saying he's going after Europe next.
Steel and aluminum, I think, is another big one. Trump had tariffs on that. He removed them from Canada and Mexico. Now the steel industry is big mad that potentially Chinese metals are getting in from Mexico, which is just, they're just protectionists. They just want to be able to charge higher prices. So I'd expect to see some stuff there. And then probably some stuff on other things like semiconductors and other national security supposedly related things as well.
But I should note, and I always caution, trying to get into Trump's head on this stuff is a fool's errand. You know, the guy really likes tariffs, but we also know that Trump doesn't like crashing the markets. He doesn't like people blaming him for, you know, expensive avocados on the Super Bowl. So I think we can, you know, there's some reason why.
that we can put forth on this, but a lot of it is really uncertain. That uncertainty still has a cost. Uncertainty weighs on investment. Last Trump administration, the Fed economists said this cost us billions of dollars in potential investment. Federal Reserve today is saying they're holding off on lowering rates because they're worried about what's going to happen next with trade policy. So these things have real costs, even if we're not getting new tariffs tomorrow.
Scott, thank you so much. This has been so helpful. My pleasure. That was my conversation with Scott Lincecum, Vice President of General Economics and Trade Policy at the Cato Institute. We'll get to more of the news in a moment, but if you like the show, make sure to subscribe, leave a five-star review on Apple Podcasts, watch us on YouTube, and share with your friends. More to come after some ads. What Today is sponsored by Acorns. Acorns is a financial wellness app that makes it easy to start saving and investing for your future.
You don't need to be an expert. Acorns will recommend a diversified portfolio that matches you and your money goals. And you don't need to be rich. Acorns lets you get started with the spare money you've got right now, even if all you've got is spare change. Sign up now and join the over 13 million all-time customers who have already saved and invested over $22 billion with Acorns. Head to acorns.com slash wad or download the Acorns app to get started. Pay
Paid non-client endorsement. Compensation provides incentive to positively promote Acorns. Tier one compensation provided. Investing involves risk. Acorns Advisor LLC and SEC registered investment advisor. View important disclosures at acorns.com slash wad.
Driving yourself. Eh, that's kind of stressful. But chilling in the back of a car that drives itself? Whoa, kind of cool. Hail Autonomous Rides 24-7 with Waymo One. New riders, download the app and use code MAGIC, all caps, for up to 30% off your first three rides. See terms in app.
Celebrate Black History Month with the Rap and Hip-Hop Pre-Game Station, presented by Target. And celebrate Black Creators with the Target Black History Month Collection. Because the more we come together, the more we create together. Launch Rap and Hip-Hop Pre-Game now, brought to you by Target. Here's what else we're following today. Headlines. Democrats have repeatedly made clear that we will work with anyone to make life better for the American people.
House Minority Leader Hakeem Jeffries sent a letter to his colleagues Monday laying out a 10-part plan in Democrats' continued effort to, quote, push back against the far-right extremism. In the letter, Jeffries called the recent White House Office of Management and Budget order that froze federal funding, quote, illegal and said it, quote, must be choked off in the upcoming government funding bill, if not sooner. The government funding deadline is March 14th.
Jeffries also mentioned plans to introduce legislation to, quote, prevent unlawful access to the Department of Treasury Bureau of the Fiscal Service payment system, an apparent response to Elon Musk's team getting access to the Treasury Department's payment system as part of his Doge initiative over the weekend. In a press conference Monday, Jeffries said Democrats are ready to work with anyone to get things done for the American people. Which include driving down the high cost of living, securing the border and keeping communities safe.
We are ready to work with our Republican colleagues, but they have to stop doing the bidding of their billionaire buddies. Jeffrey's plan also includes the continued effort to combat several executive actions like ending birthright citizenship, the firing of inspectors general, and terminations of federal civil service employees.
"Every dollar we spend and every program we fund, that will be aligned with the national interest of the United States. And USAID has a history of sort of ignoring that and deciding that they're somehow a global charity separate from the national interest." Secretary of State Marco Rubio told reporters Monday that he's the acting director of USAID, the U.S. Agency for International Development. There's a ton going on here, and this story continues to develop. Did I mention Rubio was in Central America when he announced his appointment?
Rubio sent a letter to Lawmakers Monday writing, quote, USAID may move, reorganize, and integrate certain missions, bureaus, and offices into the Department of State, and the remainder of the agency may be abolished consistent with applicable law.
Thousands of USAID staffers have been laid off since Trump took office. And on Monday, some employees and lawmakers were blocked from entering the headquarters. The agency works to provide food aid, emergency relief, and other health programs in more than 100 countries. At a press conference, Democrats, including Senator Brian Schatz of Hawaii, stood up to Trump and Musk. If you want to change an agency, introduce a bill and pass a law.
You cannot wave away an agency that you don't like or that you disagree with by executive order or by literally storming into the building and taking over the servers. That is not how the American system of government works. Schatz told The Wall Street Journal that he would place a blanket hold on all of Trump's State Department nominees by objecting to a Senate procedure that speeds up the confirmation process until the administration stops attacking USAID.
So other countries have sovereign wealth funds and they're much smaller countries and they're not the United States. We have tremendous potential in this country. Tremendous. You're seeing that's what's happened just in a short period of time. In Monday's Oval Office signing fury, President Donald Trump signed an executive order directing the secretaries of the Treasury and Commerce Departments to create a sovereign wealth fund to help fund new projects and TikTok. TikTok.
And as an example, TikTok, we're going to be doing something perhaps with TikTok and perhaps not. If we make the right deal, we'll do it. Otherwise, we won't. But I have the right to do that. And we might put that in the sovereign wealth fund, whatever we make, or if we do a partnership with very wealthy people, a lot of options. The sovereign wealth fund would act outside of the Treasury Department and the Federal Reserve and would require congressional approval.
Trump gave very few details about the fund and where the money is coming from. In Europe and the Middle East, sovereign wealth funds are some of the largest institutional investors. According to the BBC, Saudi Arabia and Norway's funds are some of the largest and are supported by the proceeds of fossil fuel sales. Even Democrats have mulled over creating a fund. But acquiring TikTok wasn't exactly their goal. This fund does, however, align with Trump's plan to have the federal government partner with an uber-wealthy friend of his to buy the Chinese-owned app.
Last week, a Louisiana grand jury issued an arrest warrant for a New York-based doctor after she was charged with a criminal felony for allegedly prescribing abortion pills online to a pregnant minor in Louisiana.
But New York is not exactly known to just give in. On Monday, New York Governor Kathy Hochul announced that she is not only refusing to sign an extradition order for the provider, she signed a law shielding the identities of prescribing doctors on abortion prescription labels. Going forward, when a doctor, a provider prescribes an FDA approved medications like mifepristone and mizopristone to terminate a pregnancy,
They're going to simply have the name of the health care practice on the label rather than the name of the provider. Governor Hochul mentioned upcoming legislation that mandates pharmacies comply with providers' requests to leave their information off prescription labels. Other states, they want to target, harass, scare, intimidate doctors and patients. Now that may be okay in a place like Louisiana, maybe Indiana.
But those are not our values here in the state of New York. And that's the news. One more thing. A funny thing about Trump 2.0 is that you get the return of all these side characters you kind of remember from the first time around. It's fun, except the opposite of fun. Case in point, Darren Beattie.
Secretary of State Marco Rubio just hired him to be the Undersecretary of State for Public Diplomacy. Now, if that name sounds familiar, it's because he worked in the Trump administration the first time, until he got fired. Trump speechwriter Darren Beatty was fired last Friday as revelations surfaced that he'd spoken at a conference alongside prominent white nationalists. See, Darren Beatty has a history. A history of saying racist and horrifying shit, and saying racist and horrifying shit a whole lot. Generally on Twitter.
Like when he said last October, quote, competent white men must be in charge if you want things to work. Unfortunately, our entire national ideology is predicated on coddling the feelings of women and minorities and demoralizing competent white men. Or when he demanded that black conservatives, quote, learn their natural place and bend the knee to MAGA.
By the way, he said that on January 6th, 2021, in the midst of the Capitol insurrection, which he praised, he's fine with China taking control of Taiwan. He says that the Uyghur ethnic group, currently facing extreme persecution by the Chinese government, is being better treated than rural white Americans. They aren't. And that any Uyghur who objects is a Uyghur supremacist. And he isn't a huge fan of America's role in the world, saying sarcastically last May, quote,
It's critical that the USA remain the global superpower so we can shove butt sex, drag queens, and most disgusting of all, the WNBA down everyone's throats. In fact, if I had to say that Darren Beatty had one specific ideology, it's this. America sucks. In fact, that seems to be the general view of a swath of the weirdo right. America is too gay, too black, and too feminine to really be a world power.
To people like Beattie, America would be so much better if we were more like China or Russia, especially with Vladimir Putin, because, quote, Russia is a major power that rejects the woke ideology at the core of the American regime. Oh, and Beattie definitely thought the Ukraine war wouldn't happen. And now Darren Beattie is supposed to be the public face of American diplomacy, a man who thinks that the worst things about America are people like me. Great.
Before we go, in case you missed it, Senator Cory Booker joined Stacey Abrams last week on Assembly Required. They had a great conversation on how to communicate effectively with your elected representatives and support organizations pushing back on the new administration. They also share tips for amplifying useful Democratic information online. It's a helpful listen and made us feel a little more hopeful in this environment. A new episode drops this Thursday, so tune into Assembly Required wherever you get your podcasts and on YouTube.
That's all for today. If you like the show, make sure you subscribe, leave a review. Remember that you have a voice and can make a difference and tell your friends to listen. And if you're into reading and not just about how public opinion is a major driver of what Trump does and doesn't do, despite how much he and his allies lie about that fact, like me, what a day is also a nightly newsletter. Check it out and subscribe at crooked.com slash subscribe. I'm Jane Koston and never, ever shut up.
Waterday is a production of Crooked Media. It's recorded and mixed by Desmond Taylor. Our associate producers are Raven Yamamoto and Emily Fore. Our producer is Michelle Alloy. We had production help today from Johanna Case, Joseph Dutra, Greg Walters, and Julia Clare. Our senior producer is Erica Morrison, and our executive producer is Adrienne Hill. Our theme music is by Colin Gillyard and Kashaka. Our production staff is proudly unionized with the Writers Guild of America East.
Driving yourself. Eh, that's kind of stressful. But chilling in the back of a car that drives itself? Whoa, kind of cool. Hail Autonomous Rides 24-7 with Waymo One. New riders, download the app and use code MAGIC, all caps, for up to 30% off your first three rides. See terms in app.
Celebrate Black History Month with the Rap and Hip Hop Pre-Game Station presented by Target. And celebrate Black creators with the Target Black History Month Collection. Because the more we come together, the more we create together. Launch Rap and Hip Hop Pre-Game now. Brought to you by Target.