How many trade wars are we in right now?
25:40 Share

Trading shouldn't have barriers. When Robinhood started, it was built to make trading more accessible. Now, Robinhood offers more sophisticated trading tools. Experience the future of trading on Robinhood Legend, the all-new desktop platform that harnesses intuitive design to deliver a seamless experience for traders, free to use with a Robinhood account.

The future of trading is fast, powerful, and precise. Experience it now on Robinhood Legend. Sign up today. Investing is risky. Robinhood Financial LLC member SIPC is a registered broker-dealer. Other fees may apply.

We're all getting older. Can't help it. But that is going to mean some things for this economy.

From American Public Media, this is Marketplace. I'm Kai Risdell. It is Monday today. This one is the 2nd of June. Good as always to have you along, everybody. Hey, stop me if you've heard this one before, would you?

This might or might not turn out to be a big week trade war wise. Reuters reports today that the Trump administration has given the entire planet basically until Wednesday to make its best offer on a trade deal as the White House races the five ish weeks left until its self-imposed 90 day deadline for those April 2nd tariffs to kick in. I could give you the latest updates here.

But honestly, that's kind of the problem. There have been so many seemingly incremental moves, they're all kind of starting to feel the same. Allow me, if you would, to quote Marketplace's Kristen Schwab in our news meeting this morning. I've lost the plot, she said. So we sent her out to find it.

It's a simple question that I thought would have a simple answer. How many trade wars are we in right now? I would not call it a trade war per se. I would call it a trade tussle.

If it's just kind of general U.S. policy, then one big trade war. So we're either in trade wars with multiple partners or we're on the verge of trade wars with multiple partners. That's Olu Sonola, Lena Mosley and Mary Lovely, whose answers range from zero to three-ish trade wars. Point is, Trump's tariffs today are much bigger and broader than his tariffs in 2018. Those were implemented through a formal process, says Mary Lovely at the Peterson Institute for International Economics.

It was done using rule of law, the U.S. law. There was an investigation and targeted tariffs passed on the basis of national security. The current round seems much more subject to President Trump's whims and how he feels. Which makes it hard for trading partners to propose solutions, says Lena Mosley, a professor of international affairs at Princeton.

It's maybe not entirely clear what the objective is. Is the goal to bring jobs back to the U.S.? Is it about fentanyl, immigration, technology, national security? Mosley says this, plus the lack of process, has made it hard for other countries to trust the U.S. If I were a foreign government, I would worry that even if I did get to a deal, that there was nothing to kind of ensure that he would stick to that deal. Regardless, Olu Sonola at Fitch Ratings says we should get used to tariffs.

Anytime there's a geopolitical issue, trade is seen as part of the tool in the toolkit. So I expect it to remain uncertain for at least the next three years. Sonola and the others say what's most likely to stop them is a rattled bond or stock market, pleas from giant corporations, or a recession.

I'm Kristen Schwab for Marketplace. Today on Wall Street was one of those days, apparently, where traders were unbothered, shall we say, by all the global trade suras. We will have the details when we do the numbers. The Senate of the United States, as you may know, is a place of rules. There's the unanimous consent rule that lets things get done in a hurry if all 100 senators agree.

There's the filibuster rule, which lets things not get done at all unless 60 of them agree. There's the reconciliation rule, which lets certain kinds of spending bills get done if only 51 of them agree. And then within that reconciliation rule, there are other rules, including something known as the Byrd rule. I mentioned all of the above earlier.

Because the world's greatest deliberative body, your mileage may vary on that characterization, is set to take up that big tax and spending bill the House passed a couple of weeks ago. And as Marketplace's Kimberly Adams is about to tell us, that bird rule within a rule could wind up changing what's in that spending bill pretty significantly.

Pushing legislation through Congress using reconciliation lets it get around the filibuster, that 60-vote requirement for regular bills, and it shortens floor debate. But, says Laura Dove, a fellow at the American Enterprise Institute, Then you need to make sure that it's actually budgetary, that any policy you're making in these laws are directly tied to a budgetary impact and cannot be, quote-unquote, merely incidental to the policy you're trying to effectuate.

That's the Byrd rule, named for the late West Virginia Democratic Senator Robert Byrd. It means you can't just say, hey, this will cost money or save money, so let's throw it in the package. You need to have a really good argument for why there's policy in there, and it has to be strictly necessary. So now the Senate is going through the House bill looking for anything that might violate the Byrd rule. Section by section, line by line, word by word.

Bobby Kogan is senior director of federal budget policy at the Center for American Progress. Both Democrats and Republicans are going through the entire bill and scrubbing it, prepping for their arguments before the parliamentarian. The Senate parliamentarian is the arbiter of what does and doesn't make it through the so-called birdbath.

Congress does love its puns. And the advice she gives, which Senate leadership usually takes, can drastically shape the final version of the bill, says Sarah Binder, a senior fellow at the Brookings Institution. The Byrd rule is just one of the very few things remaining that protect the rights of individuals and minority party senators when Congress moves on these major landmark pieces of legislation.

And folks are already flagging some major policies in the reconciliation bill as possible violations. The ban on states regulating AI, the move to block federal courts from enforcing contempt rulings, and some tax provisions that look like retaliation. Those are just the kind of policies a birdbath can potentially wash away. I'm Kimberly Adams for Marketplace. ♪♪

Good morning. Neela Richardson as I live and breathe. This is so funny. You're double fisting the coffee this morning and you can't even hold your own microphone. This one's for you. Oh, I love you. This one, it is a latte. That latte delivery was last month when I met up with ADP chief economist Neela Richardson. We are here for some energy symbolized by this coffee cup. By the coffee.

If you're a regular listener to this program, you might recall that we were in Cumberland County, Tennessee last fall, a place with one of the oldest labor forces in the country. As part of a series we're calling The Age of Work.

It's about how changing demographics, specifically the aging American labor force, are shaking up the global economy. ADP handles payroll for more than 40 million workers all over the planet, which means it's sitting on reams of data about workers in this economy and everywhere else. And I should say, ADP Research is funding this project. So having looked at one of the oldest labor forces in America,

For the next 10 days or so, we're going to explore the other end of the demographic spectrum, a place with one of the youngest labor forces in the country. You know what? I woke up in a really great mood because I woke up to these mountains over here. They're like right here. Any guesses? Utah County, Utah, about an hour south of Salt Lake City at the foot of the Wasatch Mountains in downtown Provo.

This is a unicorn in the United States, a county where the youth population on average, the working population, is 10 years younger than the national average. Just to put a finer point on that, the median age of the U.S. population, that's half are older, half are younger, is around 39. The median age here, 25 and a half. We are going to see how that demographic changes.

affects what happens here in this county. But let me ask you this. We're all getting older, as we talked about, and as people have been saying for a very long time, demographics are destiny. What does this county tell us about the American economy and eventually the global economy that we're going to do in the rest of this series? Utah County, as I said, is unique. And not every county can replicate every facet of Utah County. But what we're going to try to see is what aspects of the county that we can replicate. ♪

That's the mystery we're trying to solve here. Utah County looks different than the rest of the country. In the last U.S. Census period, that's 2010 to 2020, Utah was the fastest growing state in the nation, number one out of all 50. Part of that is because of Utah's high fertility rate, and we'll get to that.

But it's also got a super low unemployment rate. Utah County's is a full percentage point lower than the United States as a whole. And it's become a technology hub and a hotbed of entrepreneurship.

This county is in a sweet spot in the sense that real estate, both commercial and residential, is cheap enough. For now. For now. That you can have that great idea and execute it. But, you know, success brings about its own problems. And one of those problems is it becomes more and more unaffordable. And then that determines who can start businesses and who can have that kind of lifestyle. Yeah.

You got here yesterday afternoon. I got here last night. You had a chance to poke around. What did you find? What did you see? I saw a lot of things. I would love to show you if you don't mind taking a walk. Are we going for a walk? We're going to take a walk, actually.

This is Neela Richardson taking control of this interview, ladies and gentlemen. I'm going to show you this county. Oh, man, this is funny. There's a lot of fun stuff to do here. All right. And if we were staying another week, we could even, you know, go line dancing again. We're not going line. When you say again, let's remember that you're the one who line danced. I did not and will not. Okay. All right. There are about 80,000 college students here, Brigham Young University and Utah Valley University mostly.

And as a result, downtown Provo has kind of a vibe. It's got a historic main street, string lights over patio seating areas. A lot of these new businesses are built for a young workforce that wants to have fun. We passed one place focused on clean comedy, no naughty stuff. Family friendly. So they're not working blue here in Provo. That's right. Which brings up something that is inseparable from the economy of this place.

You cannot talk about Utah County without talking about the LDS Church. Mormons, as its members are commonly known. Utah County is about 80% Mormon. It's among the most Mormon counties in Utah. And I told you that's inseparable from the economy here because it's true. This college town, it's a college town. It has one bar. Also, Mormons tend to get married young and they have lots of kids, which affects housing and childcare and dating.

Nationalize this for me. What's the analog nationally to the cultural factor here, the religious factor here that keeps, number one, people here and keeps the labor force growing through family dynamics, right? What's the national analog? Because the way it stands right now, it ain't going to be immigration. Right. So...

There's a lot of ways to answer that question. What we'll see in our couple of days here is that this is an economy that has found its entrepreneurial backbone again. So to answer your question, the analog is young business. Maybe not young demographics, but young business. And anyone can start a young business. It doesn't matter how old you are. We've spent months looking into the economy and the culture of Utah County. And over the next two weeks, we're going to introduce you to some of the people we met there.

Some of them young, some of them less so. But one thing all of them have in common is an understanding of how the economy is changing around them. Because even with everything that makes Utah County unique, and there is plenty, it's not immune to the economic forces shaping all of our lives. We're going to meet our first Utah County entrepreneur after the break. But first, let's do the numbers. ♪

Down, Dostro's up 35 points today, less than a tenth percent, 42,305. The Nasdaq gained 128 points. We'll call that two-thirds of 1%, 19,242. S&P 500 up 24 points, four-tenths percent, 59,35. That looming increase in steel tariffs the president promised on Friday, a boon for domestic steel companies on Wall Street today. Cleveland Cliffs found 23%. Nucor up 10%, as was Steel Dynamics. I would just add here, steel is used everywhere.

throughout the entire economy. You're listening to Marketplace. Building a business may feel like a big jump, but OnDeck small business loans can help keep you afloat. With lines of credit up to $100,000 and term loans up to $250,000, OnDeck lets you choose the loan that's right for your business. As a top-rated online small business lender, OnDeck's team of loan advisors can help you find the right business loan to fit your needs. Visit OnDeck.com for more information.

Depending on certain loan attributes, your business loan may be issued by OnDeck or Celtic Bank. OnDeck does not lend in North Dakota. All loans and amounts subject to lender approval.

♪♪♪

Now at Verizon, we're locking in low prices for three years guaranteed on MyPlan. And you can get a single line for just $45 a month when you switch and bring your phone. That's our best price ever on unlimited welcome with auto pay plus taxes and fees guaranteed for three years.

Because at Verizon, we got you. Visit your local Chicago Verizon store today. $20 monthly promo credits apply over 36 months with a new line on unlimited welcome. In times of congestion, unlimited 5G and 4G LTE may be temporarily slower than other traffic. Domestic data roaming at 2G speeds. Price guarantee applies to then current base monthly rate. Additional terms and conditions apply.

Add a little curiosity into your routine with TED Talks Daily, the podcast that brings you a new TED Talk every weekday. In less than 15 minutes a day, you'll go beyond the headlines and learn about the big ideas shaping your future. Coming up, how AI will change the way we communicate, how to be a better leader, and more. Listen to TED Talks Daily wherever you get your podcasts.

This is Marketplace. I'm Kai Risdahl. Neil was talking about young businesses before the break and how they're key to the lessons Utah County might hold for the U.S. economy as a whole.

We are going to get to them in due course, but we're going to start with the culture here and one person who defines both its opportunities and its obstacles. Hi, how are you? Good to meet you. That's Nila. Hi, good to meet you. Good to meet you too. Nila and I met Tyler Jackson, a 29-year-old real estate investor who

on a tree-lined residential street outside one of the dozen or so properties that he owns. It's a beautiful day for a tour. Yeah. Do you guys want to hop in the Prius? I could show you around. Don't mind telling you, it was kind of tight in the back of Tyler's beat-up, 20-year-old, but completely serviceable Prius. He showed us the kinds of homes he has built a career on. That's a duplex right there. As we're driving by, I can point out

duplexes everywhere that were built in the past by some entrepreneurial investor, right? Tyler's pretty typical of young people here in Utah County. He's a BYU alum, married with three kids under the age of five, and he is a lifelong entrepreneur. Can you talk a little more about being an entrepreneur? Because it sounds like you had a background of entrepreneurship. Yeah. So I'm the youngest of 10 kids, and...

My dad never made more than like $24,000 a year growing up. So we grew up like poor, right? Tyler started his first business breeding rabbits when he was in middle school. Worked his way up in high school to dairy goats and cattle. Entrepreneurial preparation perhaps for his future as a real estate investor. I'm stopping here because there's a duplex that is a good example of

There's low rise off to the left here? Yes. Of like what could be a house hack, right? I would say. What is house hacking? Yeah, good question. So house hacking means somebody typically gets an owner occupied loan. Look specifically for a duplex, a triplex, a property that has multiple living areas. It could be a home with a basement apartment, something like that.

They live in one unit and then they rent out the other unit to cover their mortgage or heavily subsidize their mortgage. And then if they want to, they're only required to live there for one year and then they can move after that to do it again.

Tyler's done that over and over and over again, mostly in Utah County, where there are lots of houses suited to multifamily living. That home has a basement apartment right there. This house has a walkout basement. Then you got fourplex, fourplex, fourplex, right? When he was a sophomore in college, Tyler used about $30,000 he'd saved up in high school to make a down payment on a house with an attached studio apartment.

Today, he and his wife own 12 properties. It's a $6.5 million real estate portfolio. And he helps other young people like him buy properties and become landlords themselves. He's done that 150 times. My goal is by the time I'm 30 to have enough cash flow that I could retire if I wanted to. How old are you now? 29. So by next year... So you're going to make it?

We're close. And then what do you do? Because you've got another 50 years to kill, man. To be able to retire. That's the key, right? I'm not going to retire. Now, here's where you're probably thinking, wait, people in their 20s buying duplexes and triplexes? Young people have a hard enough time affording housing as it is. But Utah County, as I said, is unique. How does the typical student that you work with get the money for their first job?

acquisition, their first property. Usually, to be frank, 70% of them, it's from door-to-door sales. Remember how I said LDS culture is inseparably linked to the economy here? Well, we learned a term in Utah County that everybody there seems to know, summer sales.

It's a thing because, like Tyler, a lot of Utah College students have experience going door-to-door on church missions. So I left when I was 19, I think. Where'd you go? I went to Australia, Western Australia. Definitely helped me deal with rejection a lot more. I'll say that. Companies know this group has that experience.

So they recruit Utah college students to sell solar panels or home security systems or pest control door-to-door all over the country. Some of them earn $50,000, $80,000 in a summer, and they live on as little of that as they can, and then they put however much they can in on a down payment, 3% down or 5% down. 5% of how much? What's the price range? $500,000 is the most usual, yeah, right now.

In reality, quite a few of Tyler's clients get parents or family to co-sign their loans. Tyler himself got his brother-in-law to co-sign his first property, which he eventually leveraged into 11 more. There is, like Nila said as she handed me that latte, a culture of entrepreneurship here. When you look around at these houses, you just see dollar signs, right? Yeah.

No. Well, kind of. I see a lot of wear and tear, a lot of maintenance. There's your landlord, brother. But for every landlord, like Tyler, there are a whole lot of young families that just need somewhere to live.

It's not hard to find renters around here then? No, no. Especially since interest rates have shot up, it's like pretty much double the cost to buy if you were to make an entire house payment versus rent. So there's still, because it's a growing population, there's still a ton of rental demand. So what's the monster under your bed?

What's like the... What's the thing that worries you? It's all rainbows, earthquakes, earthquakes. No, to be honest, I don't have earthquake insurance on any of my properties. So that is it. Macroeconomically, you don't seem to worry? Like in terms of, okay, our rent's going to go down over time? Well, in terms of there's a trade war on, ships are coming into the ports of Los Angeles half empty. That is going to ripple through the economy. I mean, you're worried about any of that?

Does any of that mean that the people that live in the United States are going to go live somewhere else? No. Or the people in Utah County are going to live somewhere else. Right, right, right. No, no. So that's like, and this is the main principle fundamentally that I had to make sure was there. Because I'm building my entire house of cards, you could say, on this principle that tenants are going to pay rent. And because of that, I'm going to be able to cover the mortgage even when the economy is bad, right? Yeah.

So I'm like, okay, if somebody loses their job, they either are going to have to sell their house probably or get foreclosed on, unfortunately. And if that happens, they have to rent. How old were you in 2008?

2008, that's a great question. I was probably 13. So everything I'm telling you right now is literally based on looking at the HUD data of what did rents look like? What did the vacancy rate look like? How did that? That was what I paid attention to and studied the most because that was a huge question for me. I watched my brother. He had flipped over 120 homes and he ended up losing everything.

I was really traumatic seeing that. And so that, like those experiences planted a seed in me where I, my investment strategy now is I'd much rather make a dollar a day for the rest of my life than a hundred dollars today. Remember, this is a 29 year old married three kids under the age of five with a six and a half million dollar real estate portfolio.

It's like I'm literally driving a 2004 Toyota Prius, even though everything I've told you, all of a lot of my demographic is all about delaying gratification. Right. And just like keeping keeping costs as low as possible, investing and saving. Yeah. So that's one example there. I'll show you guys a few more.

Tyler Jackson is one young person in this economy working on his family's future, which, if you step back for a minute, is kind of what this series is about. All of our economic futures. There are huge structural changes coming as American workers get older. And there are going to be, because of that, opportunities and obstacles that will affect almost everything in this consumer-driven economy. And we know they're coming. The thing about demographics is that they're predictable.

So for the next couple of weeks, lessons to be learned from one of the youngest counties in America. Tomorrow? There are over 200 businesses working on this floor. Utah County Startup Culture.

This final note on the way out today, a quick glimpse into American factories. Spoiler alert, it ain't great. Something called the ISM Manufacturing PMI came out today. That's the Purchasing Managers Index on Manufacturing from the Institute of Supply Management. Suffice it to say, it's one of those closely watched indicators. I'll spare you the weedy data points. They were bad.

Instead, I will give you the anecdotal responses from companies that took part in the survey. Here's one from a computer and electronics firm. Government spending cuts or delays as well as tariffs are raising hell with businesses. No one is willing to take on inventory risk.

Here's another one from a chemical company. Most suppliers are passing through tariffs at full value to us. The position being communicated, it goes on, is that the supplier considers it a tax and taxes always get passed on to the consumer. Very few are absorbing any portion of the tariffs. If only there was a program that said that all the time. Ah, never mind.

Our daily production team includes Andy Corbin, Nicholas Guillaume, Maria Hollenhorst, Eurek Penobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM.

This Old House has been America's most trusted source for all things DIY and home improvement for decades. And now we're on the radio and on demand. I think you're breaking into this wall regardless. I was hoping you wouldn't say that. I need to go and get some whiskey, I think. I would get the whiskey for sure. Subscribe to This Old House Radio Hour from LAist Studios, wherever you get your podcasts.