Ana Swanson

Yeah, his plan was to impose sweeping tariffs on America's three biggest trading partners, So a 25% tariff on Canada and Mexico virtually across the board, except a lower tariff on Canadian oil and 10% tariff on China. And that would include everything from cars, lumber, natural gas, beer, vegetables. pretty much everything that we're importing from those countries.

Yeah, his plan was to impose sweeping tariffs on America's three biggest trading partners, So a 25% tariff on Canada and Mexico virtually across the board, except a lower tariff on Canadian oil and 10% tariff on China. And that would include everything from cars, lumber, natural gas, beer, vegetables. pretty much everything that we're importing from those countries.

Yeah, well, I think both sides are eager to try to turn this into a symbolic and political victory for themselves, kind of regardless of what the terms of it are. And so the issue with judging whether or not they've made real gains here is that, particularly for Trump, the requirements that he was asking for to satisfy him were kind of vague and subjective.

Yeah, well, I think both sides are eager to try to turn this into a symbolic and political victory for themselves, kind of regardless of what the terms of it are. And so the issue with judging whether or not they've made real gains here is that, particularly for Trump, the requirements that he was asking for to satisfy him were kind of vague and subjective.

So it was never really clear what exactly Mexico needed to do to get these tariffs off. So- It's really up to the president to define what a win is, and I think he's going to find some way to proclaim a win for himself here.

So it was never really clear what exactly Mexico needed to do to get these tariffs off. So- It's really up to the president to define what a win is, and I think he's going to find some way to proclaim a win for himself here.

Well, yeah, I would think from the president and his supporters' perspective, they'll say yes. I mean, obviously the president is very attuned to the optics of his actions and how the public perceives them. But, you know, a lot of these concessions were already on the table, as my colleagues are saying, and were being repackaged.

Well, yeah, I would think from the president and his supporters' perspective, they'll say yes. I mean, obviously the president is very attuned to the optics of his actions and how the public perceives them. But, you know, a lot of these concessions were already on the table, as my colleagues are saying, and were being repackaged.

So, you know, I think his supporters will say this is the art of the deal. His critics will say this was a manufactured crisis. It also raises some questions about, you know, what will he do with other countries going forward?

So, you know, I think his supporters will say this is the art of the deal. His critics will say this was a manufactured crisis. It also raises some questions about, you know, what will he do with other countries going forward?

I think the president will see this as putting other countries on notice that he is willing to deploy tariffs, he's ready to use them, and the president will see that as a good thing. But there are certainly critics who will say that kind of uncertainty really erodes the rest of the world's trust in the United States to be this responsible stakeholder to Right.

I think the president will see this as putting other countries on notice that he is willing to deploy tariffs, he's ready to use them, and the president will see that as a good thing. But there are certainly critics who will say that kind of uncertainty really erodes the rest of the world's trust in the United States to be this responsible stakeholder to Right.

It just creates a lot of uncertainty for people around him.

It just creates a lot of uncertainty for people around him.

I think it's about America first. And it's about, you know, using the power of the American economy and deploying that as a weapon. You know, Trump knows that the American economy is extremely powerful and he likes to have that leverage to hold over other countries. And he also just really likes tariffs. You know, he said that in many ways that he likes them as a tool. They're very powerful.

I think it's about America first. And it's about, you know, using the power of the American economy and deploying that as a weapon. You know, Trump knows that the American economy is extremely powerful and he likes to have that leverage to hold over other countries. And he also just really likes tariffs. You know, he said that in many ways that he likes them as a tool. They're very powerful.

They're very immediate. I think we could also get into a situation where if people start to question whether or not the president is ready to deploy tariffs, he might have to deploy them, you know, just to show everyone that he's willing to use them. It's not really a source of leverage if you're not willing to go through with it.

They're very immediate. I think we could also get into a situation where if people start to question whether or not the president is ready to deploy tariffs, he might have to deploy them, you know, just to show everyone that he's willing to use them. It's not really a source of leverage if you're not willing to go through with it.

Well, according to the president, it's been pretty much all about the border. So he really was trying to pressure these countries, he said, to do more to stop flows of migrants and to stop shipments of fentanyl coming across the border. However, in the last couple of days, he also kind of mixed in the trade deficit.

Well, according to the president, it's been pretty much all about the border. So he really was trying to pressure these countries, he said, to do more to stop flows of migrants and to stop shipments of fentanyl coming across the border. However, in the last couple of days, he also kind of mixed in the trade deficit.

He said that these countries sell a lot more to the United States than they buy from them, and they would also have to fix that problem. number one domestic policy issue right now.

He said that these countries sell a lot more to the United States than they buy from them, and they would also have to fix that problem. number one domestic policy issue right now.

Yeah, so typically tariffs are used for trade reasons, to balance out unfair trade in a relationship. And Trump definitely thinks about tariffs in that way, too, and has plans for that type of tariff. But you're right here. It's all about using tariffs as a negotiating tool, as a source of leverage for things having little to do with trade, the border and fentanyl.

Yeah, so typically tariffs are used for trade reasons, to balance out unfair trade in a relationship. And Trump definitely thinks about tariffs in that way, too, and has plans for that type of tariff. But you're right here. It's all about using tariffs as a negotiating tool, as a source of leverage for things having little to do with trade, the border and fentanyl.

And I think what's happened is that President Trump has just discovered that tariffs are a really powerful tool and one that's immediately available to him as a president. He issued these tariffs using an executive order where he created a national emergency, and then he could go ahead and issue them right away.

And I think what's happened is that President Trump has just discovered that tariffs are a really powerful tool and one that's immediately available to him as a president. He issued these tariffs using an executive order where he created a national emergency, and then he could go ahead and issue them right away.

So he sees that as just a really powerful tool to force other countries to make concessions to him.

So he sees that as just a really powerful tool to force other countries to make concessions to him.

That's right. And this time, he is even more empowered to totally transform America's trade relationships.

That's right. And this time, he is even more empowered to totally transform America's trade relationships.

So Peter Navarro believes that tariffs are a very important tool to balance out America's trading relationships. That, as we talked about, countries like China have been cheating international rules by making products more cheaply than they should and stealing intellectual property. Mm-hmm. And basically, they're putting out goods that American businesses just can't compete with.

So Peter Navarro believes that tariffs are a very important tool to balance out America's trading relationships. That, as we talked about, countries like China have been cheating international rules by making products more cheaply than they should and stealing intellectual property. Mm-hmm. And basically, they're putting out goods that American businesses just can't compete with.

And so American businesses need kind of a shield from those products. And that shield is tariffs. How exactly is it a shield? Well, a tariff is a charge on a good when it comes over the border. So if companies are making their products outside the United States and they want to sell them inside the United States, they pay that extra fee.

And so American businesses need kind of a shield from those products. And that shield is tariffs. How exactly is it a shield? Well, a tariff is a charge on a good when it comes over the border. So if companies are making their products outside the United States and they want to sell them inside the United States, they pay that extra fee.

So the thinking is tariffs will incentivize companies to make their products inside the United States so they don't have to pay that fee.

So the thinking is tariffs will incentivize companies to make their products inside the United States so they don't have to pay that fee.

So I asked him about that, and he was pretty clear about his position.

So I asked him about that, and he was pretty clear about his position.

He said that tariffs will not hurt consumers. So I did want to push back on some of the economics of tariffs and also get your response. So, you know, first, there were quite a few studies that showed that American consumers did bear the brunt of the China tariffs that much of that cost was passed through. But then secondly, even more basically, I mean, stay with that.

He said that tariffs will not hurt consumers. So I did want to push back on some of the economics of tariffs and also get your response. So, you know, first, there were quite a few studies that showed that American consumers did bear the brunt of the China tariffs that much of that cost was passed through. But then secondly, even more basically, I mean, stay with that.

you know, a lot of very prominent economists, New York Fed, but other academic economists as well.

you know, a lot of very prominent economists, New York Fed, but other academic economists as well.

So recently I went to see him again with two colleagues from The Daily.

So recently I went to see him again with two colleagues from The Daily.

And you feel that the American people are on your side with that assessment that economists don't know what they're talking about?

And you feel that the American people are on your side with that assessment that economists don't know what they're talking about?

We met him at the Eisenhower Executive Office building, which is just west of the White House. And we sat down with him in his office to understand how he came to have these ideas about trade and tariffs.

We met him at the Eisenhower Executive Office building, which is just west of the White House. And we sat down with him in his office to understand how he came to have these ideas about trade and tariffs.

Setting economists and think tanks aside, I mean, even sort of common sense, right? So tariffs work by raising the price of foreign goods. And when the price of foreign goods go up, you know, that is what encourages people to buy domestic goods. I mean, isn't that the way that tariffs work?

Setting economists and think tanks aside, I mean, even sort of common sense, right? So tariffs work by raising the price of foreign goods. And when the price of foreign goods go up, you know, that is what encourages people to buy domestic goods. I mean, isn't that the way that tariffs work?

I asked him this question a couple of times. Aren't tariffs supposed to increase prices? Because that's how tariffs work. They make the foreign good more expensive so people buy American goods instead. But Navarro didn't really give me a direct answer.

I asked him this question a couple of times. Aren't tariffs supposed to increase prices? Because that's how tariffs work. They make the foreign good more expensive so people buy American goods instead. But Navarro didn't really give me a direct answer.

What would they do?

What would they do?

So your assumption is that they would lower their prices?

So your assumption is that they would lower their prices?

Instead, he talked about how Chinese companies would absorb some of the cost of the tariffs to keep prices low. Your goal is to help U.S. factories. But a lot of U.S. factories do buy components and parts from abroad. And, you know, I've talked to a lot of manufacturers who say that would raise their costs. It would make them harder, you know, harder for them to make things.

Instead, he talked about how Chinese companies would absorb some of the cost of the tariffs to keep prices low. Your goal is to help U.S. factories. But a lot of U.S. factories do buy components and parts from abroad. And, you know, I've talked to a lot of manufacturers who say that would raise their costs. It would make them harder, you know, harder for them to make things.

Does that kind of backfire on your agenda?

Does that kind of backfire on your agenda?

I also asked him about U.S. manufacturers who are buying parts from abroad and whether tariffs would hurt their business. And he didn't seem all that concerned with what I've been hearing from some American manufacturers. He just kept coming back to the idea that ultimately tariffs will incentivize both American and foreign companies to build factories in the U.S.,

I also asked him about U.S. manufacturers who are buying parts from abroad and whether tariffs would hurt their business. And he didn't seem all that concerned with what I've been hearing from some American manufacturers. He just kept coming back to the idea that ultimately tariffs will incentivize both American and foreign companies to build factories in the U.S.,

Which he believes will then lead to higher wages for Americans.

Which he believes will then lead to higher wages for Americans.

And he said these tariffs aren't happening in a vacuum.

And he said these tariffs aren't happening in a vacuum.

And now that he's in the role that he's in, what his ideas could mean for the country. So, Dr. Navarro, you are synonymous with Donald Trump and his agenda. But not all that long ago, you were a Democrat. So tell us that story. Where does that story start?

And now that he's in the role that he's in, what his ideas could mean for the country. So, Dr. Navarro, you are synonymous with Donald Trump and his agenda. But not all that long ago, you were a Democrat. So tell us that story. Where does that story start?

He argues that if the Trump administration is able to get the price of oil down, if Elon Musk and his team are able to cut government waste and red tape, and if Trump keeps taxes low, all of these moves together would reduce inflation and help the U.S. economy.

He argues that if the Trump administration is able to get the price of oil down, if Elon Musk and his team are able to cut government waste and red tape, and if Trump keeps taxes low, all of these moves together would reduce inflation and help the U.S. economy.

But what Navarro said is the most important part of all of this, why he's so focused on tariffs and bringing manufacturing back to the United States, is that it all comes back to national security.

But what Navarro said is the most important part of all of this, why he's so focused on tariffs and bringing manufacturing back to the United States, is that it all comes back to national security.

I don't think that he believes in those negative consequences, no. He doesn't believe in what most experts are saying, which is that all of these tariffs could end up really hurting Americans.

I don't think that he believes in those negative consequences, no. He doesn't believe in what most experts are saying, which is that all of these tariffs could end up really hurting Americans.

You know, he and the president are embarking on imposing tariffs at just a vastly bigger scale than we've seen in this country in many decades. And so it is kind of like a grand experiment really to see if they're right about how tariffs will play out for the American economy.

You know, he and the president are embarking on imposing tariffs at just a vastly bigger scale than we've seen in this country in many decades. And so it is kind of like a grand experiment really to see if they're right about how tariffs will play out for the American economy.

So when you started talking, what did you learn? So he talked about being raised by a single mom, how he was a latchkey kid. He also loved school, and he did well, and he goes on to Tufts University. And after he graduated in the 1970s, he's thinking he wants to see what the world is like and travel a little bit.

So when you started talking, what did you learn? So he talked about being raised by a single mom, how he was a latchkey kid. He also loved school, and he did well, and he goes on to Tufts University. And after he graduated in the 1970s, he's thinking he wants to see what the world is like and travel a little bit.

And then one day, kind of randomly, he's walking around the Berkeley campus and this guy asks him, hey, want to go to Thailand?

And then one day, kind of randomly, he's walking around the Berkeley campus and this guy asks him, hey, want to go to Thailand?

And that guy happened to be recruiting for the Peace Corps.

And that guy happened to be recruiting for the Peace Corps.

Yeah, he says he wanted to learn about different cultures and got to travel a lot around Asia.

Yeah, he says he wanted to learn about different cultures and got to travel a lot around Asia.

And when he came back, he ended up at Harvard studying government and economics in the 80s. He finished his Ph.D., he moves out to Southern California, and he starts teaching economics and public policy at UC Irvine. And then he decides to run for mayor of San Diego.

And when he came back, he ended up at Harvard studying government and economics in the 80s. He finished his Ph.D., he moves out to Southern California, and he starts teaching economics and public policy at UC Irvine. And then he decides to run for mayor of San Diego.

He loses that election, and over the next several years, a couple of huge economic policy shifts happen that really shape his thinking. First, in 1994, comes NAFTA, the North American Free Trade Agreement. And this is a really important moment for the U.S. economy because this was the first time that the U.S. was engaging in a free trade agreement with a developing country, Mexico.

He loses that election, and over the next several years, a couple of huge economic policy shifts happen that really shape his thinking. First, in 1994, comes NAFTA, the North American Free Trade Agreement. And this is a really important moment for the U.S. economy because this was the first time that the U.S. was engaging in a free trade agreement with a developing country, Mexico.

And then in 2001, China enters the World Trade Organization, this other big moment in trade that really shifts the politics of trade in America.

And then in 2001, China enters the World Trade Organization, this other big moment in trade that really shifts the politics of trade in America.

That's right. And it's after these big policy shifts when Navarro starts to see something happening with his students that bothers him.

That's right. And it's after these big policy shifts when Navarro starts to see something happening with his students that bothers him.

He's trying to figure out what's going on, and he lands on something that he calls the China price. And what's that? So he's observing this strange ability for Chinese firms to offer prices that are so much lower than other competitors. And he's saying that is starting to put U.S. manufacturers out of business. So he does a study to try to understand just how they're getting their prices so low.

He's trying to figure out what's going on, and he lands on something that he calls the China price. And what's that? So he's observing this strange ability for Chinese firms to offer prices that are so much lower than other competitors. And he's saying that is starting to put U.S. manufacturers out of business. So he does a study to try to understand just how they're getting their prices so low.

So one way companies could get their prices low is by paying their workers lower wages. But Navarro finds that China is doing a lot more than that.

So one way companies could get their prices low is by paying their workers lower wages. But Navarro finds that China is doing a lot more than that.

And he's so troubled by this that he ends up writing three books on China. The first was called The Coming China Wars. It just got skewered in the financial times.

And he's so troubled by this that he ends up writing three books on China. The first was called The Coming China Wars. It just got skewered in the financial times.

He's right that a lot of people agree now that the Chinese government was not playing by international trade rules. But even if they were, I think the entry of basically a billion people into the global economy would have been a huge shock either way. And it ends up being kind of complicated in terms of who benefited and who lost. Okay, so let's talk about that.

He's right that a lot of people agree now that the Chinese government was not playing by international trade rules. But even if they were, I think the entry of basically a billion people into the global economy would have been a huge shock either way. And it ends up being kind of complicated in terms of who benefited and who lost. Okay, so let's talk about that.

Tell me what some of the benefits are first. So the first benefit is that you do have a lot of Chinese people lifted out of poverty. So hundreds of millions of Chinese people who are moving out of poverty into the middle class. And then you have basically the American standard of living today created. How many people do you know who love Costco, who love to buy inexpensive things off of Amazon?

Tell me what some of the benefits are first. So the first benefit is that you do have a lot of Chinese people lifted out of poverty. So hundreds of millions of Chinese people who are moving out of poverty into the middle class. And then you have basically the American standard of living today created. How many people do you know who love Costco, who love to buy inexpensive things off of Amazon?

A lot of that is made possible by this China price, by Chinese factories making cheap goods. But there were definitely a lot of downsides as well. So you have a lot of US factories going out of business because they can no longer compete with the cheap prices that Chinese firms are offering. And you have millions of US manufacturing jobs that were destroyed.

A lot of that is made possible by this China price, by Chinese factories making cheap goods. But there were definitely a lot of downsides as well. So you have a lot of US factories going out of business because they can no longer compete with the cheap prices that Chinese firms are offering. And you have millions of US manufacturing jobs that were destroyed.

in that process, economists have found. And I don't think they anticipated just how hard the people on the losing end would be hit. There was this assumption that people who lost their jobs to trade could be helped to move to find other jobs or go through retraining programs that would give them even better jobs in this new economy.

in that process, economists have found. And I don't think they anticipated just how hard the people on the losing end would be hit. There was this assumption that people who lost their jobs to trade could be helped to move to find other jobs or go through retraining programs that would give them even better jobs in this new economy.

And they didn't anticipate, I think, that this transition was a lot more disruptive and painful. And the pain was really localized and vivid and sharp, particularly in the industrial Northeast and Midwest, where people now are really hurting because they don't have factory employment anymore. And economists have found that then other problems follow, like drug addiction.

And they didn't anticipate, I think, that this transition was a lot more disruptive and painful. And the pain was really localized and vivid and sharp, particularly in the industrial Northeast and Midwest, where people now are really hurting because they don't have factory employment anymore. And economists have found that then other problems follow, like drug addiction.

And these are all things that Peter Navarro was focused on, too, actually.

And these are all things that Peter Navarro was focused on, too, actually.

So Trump at this point has been complaining about China and its trade practices for a really long time.

So Trump at this point has been complaining about China and its trade practices for a really long time.

At one point, Trump is asked by the L.A. Times, what are some of your favorite books on China?

At one point, Trump is asked by the L.A. Times, what are some of your favorite books on China?

And he mentions one of Peter Navarro's books. So they start corresponding and... One thing led to another. Ultimately, then candidate Trump decides to bring Navarro on to his campaign.

And he mentions one of Peter Navarro's books. So they start corresponding and... One thing led to another. Ultimately, then candidate Trump decides to bring Navarro on to his campaign.

Trump wins the presidency, and Navarro is given a job in the administration working on trade policy. But he's still kind of an outsider. There are a lot of other more influential advisors in the administration at that point who are opposed to the idea of imposing broad tariffs. on foreign products.

Trump wins the presidency, and Navarro is given a job in the administration working on trade policy. But he's still kind of an outsider. There are a lot of other more influential advisors in the administration at that point who are opposed to the idea of imposing broad tariffs. on foreign products.

And so you come to a point where, you know, most of the other advisors are saying to president Trump, we can't do that. You know, we shouldn't impose tariffs.

And so you come to a point where, you know, most of the other advisors are saying to president Trump, we can't do that. You know, we shouldn't impose tariffs.

And Navarro prevails. And he helps to draft tariffs on China and on steel and aluminum from countries around the world.

And Navarro prevails. And he helps to draft tariffs on China and on steel and aluminum from countries around the world.

So they had really changed the American terms of trade with the rest of the world. They had imposed a lot of tariffs on things like metals and washing machines and over $300 billion of products coming in from China. And they had also signed a trade deal with China and reworked the North American Free Trade Agreement into a new deal. Wow. But then there's an interesting wrinkle to the story.

So they had really changed the American terms of trade with the rest of the world. They had imposed a lot of tariffs on things like metals and washing machines and over $300 billion of products coming in from China. And they had also signed a trade deal with China and reworked the North American Free Trade Agreement into a new deal. Wow. But then there's an interesting wrinkle to the story.

So Trump's orbit has changed a lot through the whole first term. New advisers have come in. They get fired. You know, people are in and out very quickly. But Peter Navarro, even though he's sometimes sidelined, is there the whole time. Yes. And when the January 6th hearing comes, Navarro is called to testify, and he shows his loyalty to Trump by refusing to hand over his notes.

So Trump's orbit has changed a lot through the whole first term. New advisers have come in. They get fired. You know, people are in and out very quickly. But Peter Navarro, even though he's sometimes sidelined, is there the whole time. Yes. And when the January 6th hearing comes, Navarro is called to testify, and he shows his loyalty to Trump by refusing to hand over his notes.

And then he is sent to prison for four months for failing to honor the subpoena.

And then he is sent to prison for four months for failing to honor the subpoena.

Right. So I met Peter Navarro when I was covering trade policy in Trump's first term. And he's an interesting person because he had a very unusual journey to the White House. And he had views about trade in China that were considered pretty unconventional and unpopular. But over time, these views have become one of the driving forces of Trump's trade policy. Exactly.

Right. So I met Peter Navarro when I was covering trade policy in Trump's first term. And he's an interesting person because he had a very unusual journey to the White House. And he had views about trade in China that were considered pretty unconventional and unpopular. But over time, these views have become one of the driving forces of Trump's trade policy. Exactly.

And he gets out of prison on the day of the Republican National Convention, and he flies directly from prison to the RNC to give a speech.

And he gets out of prison on the day of the Republican National Convention, and he flies directly from prison to the RNC to give a speech.

We put up trade barriers, you know, maybe that will hurt our trading partners. But the United States has the biggest, most valuable market. The United States will be, you know, maybe hurt, but will be less hurt than other countries. And we will end up being on top.

We put up trade barriers, you know, maybe that will hurt our trading partners. But the United States has the biggest, most valuable market. The United States will be, you know, maybe hurt, but will be less hurt than other countries. And we will end up being on top.

So we're still waiting to see how many other countries will respond. But a lot of them have threatened to retaliate. So we had been expecting Wednesday to be Liberation Day, but Thursday to be Retaliation Day.

So we're still waiting to see how many other countries will respond. But a lot of them have threatened to retaliate. So we had been expecting Wednesday to be Liberation Day, but Thursday to be Retaliation Day.

Other countries have been drawing up lists of American products that they could target, including farm goods, particularly products from red states where a lot of Trump supporters are located. And that could definitely hurt American exporters quite a lot.

Other countries have been drawing up lists of American products that they could target, including farm goods, particularly products from red states where a lot of Trump supporters are located. And that could definitely hurt American exporters quite a lot.

Yeah, I mean, it's certainly sustained quite a death blow this week. And I think if you were to ask President Trump, that would be his hope.

Yeah, I mean, it's certainly sustained quite a death blow this week. And I think if you were to ask President Trump, that would be his hope.

And then today, he was going to come out with what he has described as his biggest measure yet.

And then today, he was going to come out with what he has described as his biggest measure yet.

So at 4 p.m., Trump came out to the Rose Garden and he gave a speech.

So at 4 p.m., Trump came out to the Rose Garden and he gave a speech.

He talked about how America had been cheated for decades.

He talked about how America had been cheated for decades.

How now we're finally going to put the American worker first. and said that the global trading system hadn't worked for the United States and needed to be changed.

How now we're finally going to put the American worker first. and said that the global trading system hadn't worked for the United States and needed to be changed.

He announced two big types of tariffs. First, a universal tariff that will apply across the board to almost all trading partners, and then bigger reciprocal tariffs that go on top of that for countries that are bad actors in his eyes.

He announced two big types of tariffs. First, a universal tariff that will apply across the board to almost all trading partners, and then bigger reciprocal tariffs that go on top of that for countries that are bad actors in his eyes.

And the measures that he's announced were much bigger than many people were expecting.

And the measures that he's announced were much bigger than many people were expecting.

Yeah. So first, the president is imposing what he's calling a universal baseline tariff. And so this goes into effect on basically all trading partners except for Canada and Mexico. It's a 10 percent tariff that applies across the board.

Yeah. So first, the president is imposing what he's calling a universal baseline tariff. And so this goes into effect on basically all trading partners except for Canada and Mexico. It's a 10 percent tariff that applies across the board.

Yeah, that's right. And then on top of that, there are additional tariffs on dozens of other countries in return for what the president is calling their unfair trade and economic practices against the United States.

Yeah, that's right. And then on top of that, there are additional tariffs on dozens of other countries in return for what the president is calling their unfair trade and economic practices against the United States.

So by that, he means the tariffs that other countries are charging on American products, but also other barriers that they have to U.S. imports, other regulations that might make it harder for U.S. businesses or farmers to sell their products in those countries.

So by that, he means the tariffs that other countries are charging on American products, but also other barriers that they have to U.S. imports, other regulations that might make it harder for U.S. businesses or farmers to sell their products in those countries.

Exactly.

Exactly.

So when he held up that chart, we immediately started taking pictures of it and sharing it around because the numbers were a mystery to everybody up until he walked into the Rose Garden. And some of the numbers are pretty big. So the chart said, for example, that the U.S. would impose an additional 34% tariff on Chinese goods.

So when he held up that chart, we immediately started taking pictures of it and sharing it around because the numbers were a mystery to everybody up until he walked into the Rose Garden. And some of the numbers are pretty big. So the chart said, for example, that the U.S. would impose an additional 34% tariff on Chinese goods.

That comes on top of a 20% tariff that the president has imposed on China in recent months.

That comes on top of a 20% tariff that the president has imposed on China in recent months.

Right. And these big tariffs don't just apply to countries like China. They apply to some of our allies, too. So there's also an additional 20% tariff that'll be charged on imports from the European Union and a 24% tariff that applies to goods from Japan.

Right. And these big tariffs don't just apply to countries like China. They apply to some of our allies, too. So there's also an additional 20% tariff that'll be charged on imports from the European Union and a 24% tariff that applies to goods from Japan.

So the president has talked about having a lot of goals that he wants to accomplish with tariffs. He wants to reverse the trade deficit. He wants to bring manufacturing back to the United States. He wants to raise revenue. So before today, there was a question about what exactly he would do with these tariffs, what he would try to accomplish with them.

So the president has talked about having a lot of goals that he wants to accomplish with tariffs. He wants to reverse the trade deficit. He wants to bring manufacturing back to the United States. He wants to raise revenue. So before today, there was a question about what exactly he would do with these tariffs, what he would try to accomplish with them.

In the lead up to this announcement, we had reported that there were two camps in the White House. And so one was interested in this baseline tariff, this broad tariff that would apply to a lot of imports. And essentially, as imports came into the country, would raise a lot of revenue for the government. And that revenue could be used for other purposes like funding tax cuts.

In the lead up to this announcement, we had reported that there were two camps in the White House. And so one was interested in this baseline tariff, this broad tariff that would apply to a lot of imports. And essentially, as imports came into the country, would raise a lot of revenue for the government. And that revenue could be used for other purposes like funding tax cuts.

And then there was another camp that favored reciprocal tariffs. So these are tariffs that would be higher or lower based on other countries' trading practices, and which would really be used as a negotiating platform.

And then there was another camp that favored reciprocal tariffs. So these are tariffs that would be higher or lower based on other countries' trading practices, and which would really be used as a negotiating platform.

tactic to try to get those countries to lower the trade barriers that they have on the United States, lower their tariffs with the goal of having more trade and having more US exports. And so what Trump ended up announcing today was essentially a version of both.

tactic to try to get those countries to lower the trade barriers that they have on the United States, lower their tariffs with the goal of having more trade and having more US exports. And so what Trump ended up announcing today was essentially a version of both.

So he decided to do this baseline tariff that will apply broadly to all imports, will raise revenue for the government, he believes will also help to reverse the trade deficit, and then higher reciprocal tariffs that are really more directed at what he calls unfair behavior by other countries against the United States.

So he decided to do this baseline tariff that will apply broadly to all imports, will raise revenue for the government, he believes will also help to reverse the trade deficit, and then higher reciprocal tariffs that are really more directed at what he calls unfair behavior by other countries against the United States.

Yeah, the White House said in a call today that they weren't in a hurry to negotiate with other countries and negotiate. that though some countries had dropped their tariff rates in the last 24 hours, they should have done that decades ago. But in the executive order laying out these tariffs that Trump signed today, it does say that if countries either reduce those trade barriers or the U.S.

Yeah, the White House said in a call today that they weren't in a hurry to negotiate with other countries and negotiate. that though some countries had dropped their tariff rates in the last 24 hours, they should have done that decades ago. But in the executive order laying out these tariffs that Trump signed today, it does say that if countries either reduce those trade barriers or the U.S.

Well, it's been exciting. Liberation Day. That's right. We're here at 7.52 at night. Been a pretty full day.

Well, it's been exciting. Liberation Day. That's right. We're here at 7.52 at night. Been a pretty full day.

trade deficit with them drops, then those tariffs could come down.

trade deficit with them drops, then those tariffs could come down.

So the president said today in the Rose Garden that these numbers were calculated based on tariffs and tariffs. other trade practices that these countries use against the United States. But actually, when you look at the number, it seems like it's a simple calculation that's based on the size of the trade deficit that the United States runs with each of these countries.

So the president said today in the Rose Garden that these numbers were calculated based on tariffs and tariffs. other trade practices that these countries use against the United States. But actually, when you look at the number, it seems like it's a simple calculation that's based on the size of the trade deficit that the United States runs with each of these countries.

So essentially, countries that have bigger trade deficits get hit with bigger tariff numbers. Right. But it's also notable who was left out of the tariffs today. The tariffs don't apply to Canada and Mexico.

So essentially, countries that have bigger trade deficits get hit with bigger tariff numbers. Right. But it's also notable who was left out of the tariffs today. The tariffs don't apply to Canada and Mexico.

So we don't know why yet, really, but it was a big surprise. And I mean, I think the reason has to be that Canada and Mexico are such major trading partners for the United States. They've already been hit by fairly big tariffs by Trump in the last month that had put pressure on a lot of businesses that are making products in North America.

So we don't know why yet, really, but it was a big surprise. And I mean, I think the reason has to be that Canada and Mexico are such major trading partners for the United States. They've already been hit by fairly big tariffs by Trump in the last month that had put pressure on a lot of businesses that are making products in North America.

And they also have a trade agreement with the United States that says, President Trump himself negotiated in his first administration. And so goods that have been moving under that trade agreement have been exempted so far from the other tariffs that President Trump already hit Canada and Mexico with. Now, that doesn't mean that Canada and Mexico are getting off easy.

And they also have a trade agreement with the United States that says, President Trump himself negotiated in his first administration. And so goods that have been moving under that trade agreement have been exempted so far from the other tariffs that President Trump already hit Canada and Mexico with. Now, that doesn't mean that Canada and Mexico are getting off easy.

President Trump has also announced auto tariffs that will go into effect on Thursday. And those will hit Canada and Mexico quite hard because much of the supply chain for the auto industry is based in those countries and is imported into the United States.

President Trump has also announced auto tariffs that will go into effect on Thursday. And those will hit Canada and Mexico quite hard because much of the supply chain for the auto industry is based in those countries and is imported into the United States.

And the president has tried to kind of wave away those concerns about those tariffs, saying they're going to benefit workers, they're going to bring auto manufacturing and auto jobs back into the United States and benefit unions like the UAW, the auto workers.

And the president has tried to kind of wave away those concerns about those tariffs, saying they're going to benefit workers, they're going to bring auto manufacturing and auto jobs back into the United States and benefit unions like the UAW, the auto workers.

And the UIW has been one of the groups that actually has been very vocally in support of the tariffs, saying that they could reverse this disastrous trade policy and benefit workers. But a lot of other companies and unions and trade groups have expressed a lot more skepticism about how these tariffs are going to pan out.

And the UIW has been one of the groups that actually has been very vocally in support of the tariffs, saying that they could reverse this disastrous trade policy and benefit workers. But a lot of other companies and unions and trade groups have expressed a lot more skepticism about how these tariffs are going to pan out.

Yeah. So the president has a very different theory of how tariffs work than I think most economists do. The president thinks that tariffs bring factories back to the United States, that increases jobs for American workers, it pushes up wages, and that's good for the economy.

Yeah. So the president has a very different theory of how tariffs work than I think most economists do. The president thinks that tariffs bring factories back to the United States, that increases jobs for American workers, it pushes up wages, and that's good for the economy.

I think economists also think that those things happen, but they see a lot of other side effects happening from tariffs too, that in a lot of cases can offset those positive impacts from tariffs. So you did have today economists just racing to downgrade their forecasts for the US economy, lifting their expectations for inflation, saying that unemployment would rise as a result of this.

I think economists also think that those things happen, but they see a lot of other side effects happening from tariffs too, that in a lot of cases can offset those positive impacts from tariffs. So you did have today economists just racing to downgrade their forecasts for the US economy, lifting their expectations for inflation, saying that unemployment would rise as a result of this.

S&P Global saying that manufacturers were going to have to pay more for their inputs. So inflationary pressure would build as a result. So economists just see a lot of price increases from this. And then from that flows a slower economic growth, potential unemployment. So it's a very different picture of how tariffs impact the economy.

S&P Global saying that manufacturers were going to have to pay more for their inputs. So inflationary pressure would build as a result. So economists just see a lot of price increases from this. And then from that flows a slower economic growth, potential unemployment. So it's a very different picture of how tariffs impact the economy.

So the president likes to say that foreign countries, foreign companies will pay the tariffs. But a lot of times it's the company that is bringing the product into the United States that pays. And then a lot of times they will pass that cost on to the consumer. So we can think about an example. Let's say, Walmart is bringing a toaster in from China.

So the president likes to say that foreign countries, foreign companies will pay the tariffs. But a lot of times it's the company that is bringing the product into the United States that pays. And then a lot of times they will pass that cost on to the consumer. So we can think about an example. Let's say, Walmart is bringing a toaster in from China.

Yeah. So President Trump came into office promising to reorder the global trading system for the United States. And in the last few weeks and months, we've really seen him do that. He has announced sweeping tariffs on some of the country's biggest trading partners on Canada, on Mexico, on China. He's targeted different industries like automobiles and steel and aluminum.

Yeah. So President Trump came into office promising to reorder the global trading system for the United States. And in the last few weeks and months, we've really seen him do that. He has announced sweeping tariffs on some of the country's biggest trading partners on Canada, on Mexico, on China. He's targeted different industries like automobiles and steel and aluminum.

When Walmart brings that toaster in, they're now going to have to pay 34% of its price in the form of an additional fee to the US government. So does Walmart ask the toaster maker in China to eat that cost and accept less money for the toaster? Or does Walmart reduce its own profits? Or do they just jack up the price of the toaster and have the U.S., consumer pay more for it.

When Walmart brings that toaster in, they're now going to have to pay 34% of its price in the form of an additional fee to the US government. So does Walmart ask the toaster maker in China to eat that cost and accept less money for the toaster? Or does Walmart reduce its own profits? Or do they just jack up the price of the toaster and have the U.S., consumer pay more for it.

A lot of times it is the American consumer because companies tend to pass on the cost of those tariffs so that they can preserve their own profit margins and they don't have to see their own profits decline.

A lot of times it is the American consumer because companies tend to pass on the cost of those tariffs so that they can preserve their own profit margins and they don't have to see their own profits decline.

Yeah, I think it's definitely historic. It brings tariffs to rates that we haven't seen in nearly a century. And it changes the structure of U.S. trade and, to a certain extent, the U.S. economy. And it's going to be a big shock because the United States does rely on imports. Consumers rely on imports. Manufacturers rely on imports.

Yeah, I think it's definitely historic. It brings tariffs to rates that we haven't seen in nearly a century. And it changes the structure of U.S. trade and, to a certain extent, the U.S. economy. And it's going to be a big shock because the United States does rely on imports. Consumers rely on imports. Manufacturers rely on imports.

The president and his supporters argue that we might go through kind of a transition period, but in the long run, it's going to be worth it because we'll have more manufacturing in the United States and we'll restore that manufacturing.

The president and his supporters argue that we might go through kind of a transition period, but in the long run, it's going to be worth it because we'll have more manufacturing in the United States and we'll restore that manufacturing.

Yeah, I definitely think that is the case. So, you know, it really seems like this is the first day of, in trade, this new world order that President Trump has been promising. And he's really throwing out the old system that the United States worked out with other countries after World War II. He seems unafraid to demolish that system because he says it's been unfair to the United States.

Yeah, I definitely think that is the case. So, you know, it really seems like this is the first day of, in trade, this new world order that President Trump has been promising. And he's really throwing out the old system that the United States worked out with other countries after World War II. He seems unafraid to demolish that system because he says it's been unfair to the United States.

It hasn't worked for our country. What's the harm in blowing that up, essentially? So he has scrapped that old system that was built more on negotiation and cooperation with other countries. He's replacing it with basically a system of his own devising in terms of the tariffs that we're charging on other countries. And this is really a vision of America first.

It hasn't worked for our country. What's the harm in blowing that up, essentially? So he has scrapped that old system that was built more on negotiation and cooperation with other countries. He's replacing it with basically a system of his own devising in terms of the tariffs that we're charging on other countries. And this is really a vision of America first.

Yeah. So what should be a mutually beneficial partnership is proving to be quite tricky for the government. And the administration has tried to hedge its bets. It's been trying to give money to a lot of chip makers. And maybe surprisingly, the program's biggest success so far is actually this new plant in Arizona from a Taiwanese chip maker called TSMC.

Yeah. So what should be a mutually beneficial partnership is proving to be quite tricky for the government. And the administration has tried to hedge its bets. It's been trying to give money to a lot of chip makers. And maybe surprisingly, the program's biggest success so far is actually this new plant in Arizona from a Taiwanese chip maker called TSMC.

But typically he sees tariffs as his primary tool for bringing manufacturing jobs back to the United States and helping the U.S. economy. And he has really extensive plans to impose them around the world with our trading partners in order to do that.

But typically he sees tariffs as his primary tool for bringing manufacturing jobs back to the United States and helping the U.S. economy. And he has really extensive plans to impose them around the world with our trading partners in order to do that.

So I think they think it's a great thing that TSMC is here. This is the world's most advanced chip maker. And now the United States will have cutting edge chip manufacturing within its borders. It's still a little bit tricky because some of the U.S. governments say we still shouldn't trust a foreign headquartered company to make the most sophisticated military chips.

So I think they think it's a great thing that TSMC is here. This is the world's most advanced chip maker. And now the United States will have cutting edge chip manufacturing within its borders. It's still a little bit tricky because some of the U.S. governments say we still shouldn't trust a foreign headquartered company to make the most sophisticated military chips.

So, you know, that's why the U.S. government, after all of this, is still very interested in backing Intel as well.

So, you know, that's why the U.S. government, after all of this, is still very interested in backing Intel as well.

Yeah. So it's a very long term project. These chip plants are huge. They take many years to construct and to open. But stepping back, we already see that factory construction is up a lot under President Biden. You see these chip and electric vehicle battery factories and other factories sprouting up around the United States.

Yeah. So it's a very long term project. These chip plants are huge. They take many years to construct and to open. But stepping back, we already see that factory construction is up a lot under President Biden. You see these chip and electric vehicle battery factories and other factories sprouting up around the United States.

The Biden administration is also pointing to 115,000 jobs created in the chip industry. A lot of these are construction jobs, but other high paying manufacturing jobs should be on the way in the coming years.

The Biden administration is also pointing to 115,000 jobs created in the chip industry. A lot of these are construction jobs, but other high paying manufacturing jobs should be on the way in the coming years.

Yeah, it's got some momentum, but it's going to take a while before we really feel its effects. And you've seen Trump also come out and criticize it as wasteful, saying you don't need to give wealthy companies all this money. You just need to put a big tariff on them and then they'll move their manufacturing back to the United States. Hmm.

Yeah, it's got some momentum, but it's going to take a while before we really feel its effects. And you've seen Trump also come out and criticize it as wasteful, saying you don't need to give wealthy companies all this money. You just need to put a big tariff on them and then they'll move their manufacturing back to the United States. Hmm.

And that is a sharp contrast with the current President Biden, who really thinks that the way you keep jobs in the United States is by directly investing in American industry.

And that is a sharp contrast with the current President Biden, who really thinks that the way you keep jobs in the United States is by directly investing in American industry.

Yeah, I think that's right. Biden has spent a lot of money to start quite a few new factories, and that has created a relatively small number of jobs. And Trump spent very little money. He used tariffs instead. But that, you know, economists... think did not create a lot of new jobs overall.

Yeah, I think that's right. Biden has spent a lot of money to start quite a few new factories, and that has created a relatively small number of jobs. And Trump spent very little money. He used tariffs instead. But that, you know, economists... think did not create a lot of new jobs overall.

So it really depends on your willingness to spend government money, how much you're willing to spend to get those new factories and that manufacturing work.

So it really depends on your willingness to spend government money, how much you're willing to spend to get those new factories and that manufacturing work.

Yeah, and that's important. So many of Trump's tariffs have extended into the Biden administration. Many of Biden's investments will outlive him into the next Trump administration. Trump may be the one going to the opening ceremonies, getting the credit potentially as these investments come online. So these policies are definitely going to exist side by side.

Yeah, and that's important. So many of Trump's tariffs have extended into the Biden administration. Many of Biden's investments will outlive him into the next Trump administration. Trump may be the one going to the opening ceremonies, getting the credit potentially as these investments come online. So these policies are definitely going to exist side by side.

And I think one thing is clear that they're both protectionist policies. They're both setting up more barriers around the U.S. economy to try to protect factories inside the country. So the question is, is that enough to counteract these longer-run forces that we've seen that have been taking manufacturing jobs away from the U.S. economy?

And I think one thing is clear that they're both protectionist policies. They're both setting up more barriers around the U.S. economy to try to protect factories inside the country. So the question is, is that enough to counteract these longer-run forces that we've seen that have been taking manufacturing jobs away from the U.S. economy?

Yeah, absolutely. It's pretty remarkable that it was only a few decades ago that U.S. presidents were welcoming China into the world economy and everyone was proclaiming that the world is flat and that free trade should be the highest goal. And there's just been this big paradigm shift.

Yeah, absolutely. It's pretty remarkable that it was only a few decades ago that U.S. presidents were welcoming China into the world economy and everyone was proclaiming that the world is flat and that free trade should be the highest goal. And there's just been this big paradigm shift.

And the only argument now is about which approach tariffs or industrial policy works better and has bigger upsides and fewer downsides. So we don't know exactly yet what all this will mean for the U.S. economy. Will these policies lead to this manufacturing renaissance or will we see more inefficiencies, higher prices, inflation? Can we go too far with this approach?

And the only argument now is about which approach tariffs or industrial policy works better and has bigger upsides and fewer downsides. So we don't know exactly yet what all this will mean for the U.S. economy. Will these policies lead to this manufacturing renaissance or will we see more inefficiencies, higher prices, inflation? Can we go too far with this approach?

But even before we have all those answers, there's no sign yet that this is turning around. We're clearly headed for even more tariffs and more protectionism in the years to come.

But even before we have all those answers, there's no sign yet that this is turning around. We're clearly headed for even more tariffs and more protectionism in the years to come.

We appreciate it. Thanks for having me.

We appreciate it. Thanks for having me.

Yeah, it's a really interesting moment in trade policy where we're shifting from one tool to the other. Trump sort of having a big stick, Biden maybe offering a carrot. So Biden is trying to incentivize companies to manufacture in the United States. And in order to do that, he's giving them money.

Yeah, it's a really interesting moment in trade policy where we're shifting from one tool to the other. Trump sort of having a big stick, Biden maybe offering a carrot. So Biden is trying to incentivize companies to manufacture in the United States. And in order to do that, he's giving them money.

Yeah. So I covered trade during President Trump's first term. It was a very wild time for trade policy. He put tariffs on all kinds of things. He put them on solar panels, washing machines, hundreds of billions of dollars of goods from China. But I think a helpful example for us to look at is his tariffs on steel.

Yeah. So I covered trade during President Trump's first term. It was a very wild time for trade policy. He put tariffs on all kinds of things. He put them on solar panels, washing machines, hundreds of billions of dollars of goods from China. But I think a helpful example for us to look at is his tariffs on steel.

So steel was an industry that the United States had been pretty dominant in until it was gradually outsourced to cheaper places like China. And so China began flooding the market with cheap steel. It now makes over half of the world's steel. And Trump thought that was unfair.

So steel was an industry that the United States had been pretty dominant in until it was gradually outsourced to cheaper places like China. And so China began flooding the market with cheap steel. It now makes over half of the world's steel. And Trump thought that was unfair.

He also thought this was an issue of national security.

He also thought this was an issue of national security.

that the United States needed to have its own steel mills in the case of war to be able to produce its own metals.

that the United States needed to have its own steel mills in the case of war to be able to produce its own metals.

He imposed tariffs of 25% on foreign steel and 10% on aluminum. And those tariffs didn't just go on China or American rivals. He put them on countries globally, so even allies like Mexico and Canada.

He imposed tariffs of 25% on foreign steel and 10% on aluminum. And those tariffs didn't just go on China or American rivals. He put them on countries globally, so even allies like Mexico and Canada.

Yeah, so it might be helpful to remember what a tariff is here. So it's a tax on a good when it comes across the border. And the goal of that is to raise the price of foreign goods. And that means that consumers domestically have less incentive to buy that more expensive foreign good, and they have more incentive to buy the American-made good, which can now compete more easily.

Yeah, so it might be helpful to remember what a tariff is here. So it's a tax on a good when it comes across the border. And the goal of that is to raise the price of foreign goods. And that means that consumers domestically have less incentive to buy that more expensive foreign good, and they have more incentive to buy the American-made good, which can now compete more easily.

Yeah, that's right.

Yeah, that's right.

So other countries were not thrilled about this. They were quite angry. They responded by putting their own tariffs on American products, and they targeted some quintessentially American goods like blue jeans, Harley-Davidson motorcycles, whiskey. Suddenly, those products were going to get much more expensive in foreign markets because of those tariffs, and that would mean U.S.

So other countries were not thrilled about this. They were quite angry. They responded by putting their own tariffs on American products, and they targeted some quintessentially American goods like blue jeans, Harley-Davidson motorcycles, whiskey. Suddenly, those products were going to get much more expensive in foreign markets because of those tariffs, and that would mean U.S.

exporters would lose out. And American allies were also really upset by the concept that, you know, their exports of metals actually threatened U.S. national security. So particularly countries like Canada, which supplies metal for the U.S. military, thought it was pretty outrageous to be labeled a national security threat to the United States.

exporters would lose out. And American allies were also really upset by the concept that, you know, their exports of metals actually threatened U.S. national security. So particularly countries like Canada, which supplies metal for the U.S. military, thought it was pretty outrageous to be labeled a national security threat to the United States.

So it definitely worked. Demand for U.S. steel and aluminum grew, and U.S. steel factories started pumping out more metal. And there was a government study that showed that by 2021, U.S. steel production had increased by $1.5 billion a year.

So it definitely worked. Demand for U.S. steel and aluminum grew, and U.S. steel factories started pumping out more metal. And there was a government study that showed that by 2021, U.S. steel production had increased by $1.5 billion a year.

It did, but it also had a downside for other industries because there are a lot of industries in the United States that use steel and aluminum to make other things like cars or food packaging. Mm-hmm. So for those companies, they had to pay higher prices for the steel that they were buying to make into other products. And that ended up hurting them.

It did, but it also had a downside for other industries because there are a lot of industries in the United States that use steel and aluminum to make other things like cars or food packaging. Mm-hmm. So for those companies, they had to pay higher prices for the steel that they were buying to make into other products. And that ended up hurting them.

If you look at it from the perspective of car manufacturers, for example, you had the Ford CEO saying at one point that the metal tariffs had already cost the company a billion dollars in profit. Wow.

If you look at it from the perspective of car manufacturers, for example, you had the Ford CEO saying at one point that the metal tariffs had already cost the company a billion dollars in profit. Wow.

So the same study showed that as a result of those higher steel and aluminum tariffs, companies that use steel because they faced higher prices, their production actually went down by more than the production of the steel industry went up.

So the same study showed that as a result of those higher steel and aluminum tariffs, companies that use steel because they faced higher prices, their production actually went down by more than the production of the steel industry went up.

Yeah. So you could say, you know, yes, it accomplished its national security goals. Yes, it helped the steel industry. But in terms of overall U.S. manufacturing, the impact in the years right after the tariff was negative. But As it turns out, the tariffs were politically popular.

Yeah. So you could say, you know, yes, it accomplished its national security goals. Yes, it helped the steel industry. But in terms of overall U.S. manufacturing, the impact in the years right after the tariff was negative. But As it turns out, the tariffs were politically popular.

So one study showed that people living in areas more affected by Trump's tariffs were more likely to vote for Trump in 2020. And I think that stems from the feeling that even if tariffs didn't actually benefit these people, they felt that at least Trump was trying to do something about U.S. manufacturing.

So one study showed that people living in areas more affected by Trump's tariffs were more likely to vote for Trump in 2020. And I think that stems from the feeling that even if tariffs didn't actually benefit these people, they felt that at least Trump was trying to do something about U.S. manufacturing.

And so when Biden comes into office in 2020 and has his chance to create a trade policy, he keeps some of the Trump tariffs, but also decides to try something fundamentally different.

And so when Biden comes into office in 2020 and has his chance to create a trade policy, he keeps some of the Trump tariffs, but also decides to try something fundamentally different.

So Biden does choose to keep some of Trump's tariffs, but he has a different philosophy of the best way to protect American jobs. His approach is all about industrial policy. So using government dollars to help nurture manufacturing industries in the United States.

So Biden does choose to keep some of Trump's tariffs, but he has a different philosophy of the best way to protect American jobs. His approach is all about industrial policy. So using government dollars to help nurture manufacturing industries in the United States.

Biden got Congress to approve hundreds of billions of dollars of subsidies that could be given out in direct investments in cash to American companies. And that's a level of direct investment in corporations that we haven't seen since the Eisenhower administration.

Biden got Congress to approve hundreds of billions of dollars of subsidies that could be given out in direct investments in cash to American companies. And that's a level of direct investment in corporations that we haven't seen since the Eisenhower administration.

Yeah. And then he really directs this cash at targeted industries, industries that he sees as the businesses that we want for the future. Things like computer chips, electric vehicles and solar panels.

Yeah. And then he really directs this cash at targeted industries, industries that he sees as the businesses that we want for the future. Things like computer chips, electric vehicles and solar panels.

So let's focus on computer chips. Chips are in every technological thing that we use, everything with an on-off switch. Phones, cars, dishwashers, sophisticated military equipment, all are powered by chips. And the supply chain issues during the pandemic exposed a big problem, which is that U.S. companies design a lot of the world's chips, but we don't actually manufacture them.

So let's focus on computer chips. Chips are in every technological thing that we use, everything with an on-off switch. Phones, cars, dishwashers, sophisticated military equipment, all are powered by chips. And the supply chain issues during the pandemic exposed a big problem, which is that U.S. companies design a lot of the world's chips, but we don't actually manufacture them.

Yeah. Taiwan is a bit insecure because Taiwan is so close to mainland China and Taiwan, which China claims is its own and has threatened to invade.

Yeah. Taiwan is a bit insecure because Taiwan is so close to mainland China and Taiwan, which China claims is its own and has threatened to invade.

And so in 2022, the Biden administration works with Congress to pass the CHIPS Act.

And so in 2022, the Biden administration works with Congress to pass the CHIPS Act.

And that secures about $50 billion of funding to help increase the domestic manufacturing of chips and to invest in things like research and development.

And that secures about $50 billion of funding to help increase the domestic manufacturing of chips and to invest in things like research and development.

Essentially, this over the longer run transforms the government into kind of this venture capital firm that is looking at chip companies around the United States and deciding which ones of them to invest in, which ones of them deserve more money to grow.

Essentially, this over the longer run transforms the government into kind of this venture capital firm that is looking at chip companies around the United States and deciding which ones of them to invest in, which ones of them deserve more money to grow.

Yeah, and these are really large levels of tariffs. So this action is going to raise tariffs on some of America's closest allies like Canada and Mexico to levels that the country hasn't seen since the 1950s. Trump has tied this round of tariffs to goals for stopping immigration and drugs entering the United States.

Yeah, and these are really large levels of tariffs. So this action is going to raise tariffs on some of America's closest allies like Canada and Mexico to levels that the country hasn't seen since the 1950s. Trump has tied this round of tariffs to goals for stopping immigration and drugs entering the United States.

Exactly. So the government is making a bunch of investments in dozens of companies. And the single biggest recipient is a company called Intel. So Intel, a lot of people probably know of them. But, you know, there's been an issue with awarding this money to Intel, which is it's a company that lately seems like it's just a bit past its prime.

Exactly. So the government is making a bunch of investments in dozens of companies. And the single biggest recipient is a company called Intel. So Intel, a lot of people probably know of them. But, you know, there's been an issue with awarding this money to Intel, which is it's a company that lately seems like it's just a bit past its prime.

So Intel used to be this absolute powerhouse. They were the primary chip maker behind the personal computer boom. And in the 80s and 90s, they were a huge and successful company. But they've gradually lost that perch for a couple of reasons. They missed the boat on some major tech innovations.

So Intel used to be this absolute powerhouse. They were the primary chip maker behind the personal computer boom. And in the 80s and 90s, they were a huge and successful company. But they've gradually lost that perch for a couple of reasons. They missed the boat on some major tech innovations.

At one point, they turned down a deal with Apple that could have given them a piece of the smartphone market. And they never really got back into smartphones, which are obviously a huge use of computer chips. And then they also missed the boat with the kind of chips now that power artificial intelligence, which are made by companies like NVIDIA.

At one point, they turned down a deal with Apple that could have given them a piece of the smartphone market. And they never really got back into smartphones, which are obviously a huge use of computer chips. And then they also missed the boat with the kind of chips now that power artificial intelligence, which are made by companies like NVIDIA.

And as they lost that technological edge, they also started to outsource some of their own manufacturing to factories in Taiwan. So this is a complicated situation. The US government wants Intel to be its national chip champion. Intel wants to get back on top, but the company is still in rough shape and it's an open question whether this government money can help turn it around.

And as they lost that technological edge, they also started to outsource some of their own manufacturing to factories in Taiwan. So this is a complicated situation. The US government wants Intel to be its national chip champion. Intel wants to get back on top, but the company is still in rough shape and it's an open question whether this government money can help turn it around.

So we're at this moment where the government really wants Intel to be expanding its factories and hiring new people. But instead, the company's had to announce 15,000 layoffs and has said it needed to delay the opening of a big factory in Ohio. Wow.

So we're at this moment where the government really wants Intel to be expanding its factories and hiring new people. But instead, the company's had to announce 15,000 layoffs and has said it needed to delay the opening of a big factory in Ohio. Wow.

And we heard this very telling moment in our reporting where earlier this year at this gathering of tech executives and billionaires in Sun Valley, Idaho, Gina Raimondo, who's the Commerce Secretary, was meeting with chief executives from Microsoft and Google and other firms and encouraging them to order their chips from Intel's U.S. factories. And many of these companies have said no.

And we heard this very telling moment in our reporting where earlier this year at this gathering of tech executives and billionaires in Sun Valley, Idaho, Gina Raimondo, who's the Commerce Secretary, was meeting with chief executives from Microsoft and Google and other firms and encouraging them to order their chips from Intel's U.S. factories. And many of these companies have said no.

They're not convinced that Intel's technology is there yet.

They're not convinced that Intel's technology is there yet.