Jeanne Whalen
Appearances
Apple News Today
How tariffs could transform the auto industry
So I think there's a lot of lobbying happening between the companies and the government about what will be on that list.
Apple News Today
How tariffs could transform the auto industry
One of the big employers in the Detroit region, Stellantis, which makes Jeeps and Chryslers, shut down two factories in Mexico and Canada temporarily as it tries to figure out how these tariffs are going to affect its business. And that caused the company to then also temporarily lay off 900 people in Michigan and Indiana who supply parts to those factories.
Apple News Today
How tariffs could transform the auto industry
He's estimating that those tariffs alone will cost an additional 1,700 jobs at things like restaurants and dry cleaners and hotels and all of the industries that support the auto industry.
Apple News Today
How tariffs could transform the auto industry
They were nervous because, you know, there have been all of these prognoses that these tariffs will add so much cost for the automakers that the automakers are going to jack up their prices even more on new cars. And if that happens, more people will stop buying new cars. And that means the automakers will cut production and there could be layoffs.
Apple News Today
How tariffs could transform the auto industry
I think what they're trying to figure out right now, one is which auto parts are going to be included on the list of things that get tariffed.
The Journal.
Is the Economy… OK?
So the GDP, that means gross domestic product. And what that is simply is that's the value of everything that we produce in the United States. The value of all goods that we produce, like apples and sneakers and furniture. And it's the value of all services that we produce here. Haircuts, manicures, legal advice.
The Journal.
Is the Economy… OK?
So the GDP report actually on its face looked not great. It showed that the economy shrank by 0.3 percent in the first quarter. Actually, though, the shrinkage was a little bit of an accounting trick.
The Journal.
Is the Economy… OK?
What GDP is, it's the value of everything we produce in the country, goods and services. It's apples and sneakers and haircuts and manicures. So we look at how much consumers spend, we look at how much businesses spend, and we look at how much the government spends on goods and services. And then we also add in to that total everything that foreigners spend on stuff that we export.
The Journal.
Is the Economy… OK?
And then we get that big number. And from that big number, we subtract. all of the stuff that we import into the country. And so that's how we calculate the value of everything that the U.S. is producing each quarter. So when imports really surge, when they go up a lot, we're subtracting a lot, a big number from that total number. And
The Journal.
Is the Economy… OK?
We, this past quarter, imported way more than we normally would because of this fear about tariffs. So after Trump won the election last fall, a lot of companies started immediately bringing in a lot more goods because he had talked during the campaign about tariffs. He was going to start using more tariffs.
The Journal.
Is the Economy… OK?
We had a huge surge in imports because a lot of businesses were trying to import a lot of stuff before the tariffs hit.
The Journal.
Is the Economy… OK?
I think that that is how economists would interpret this past quarter.
The Journal.
Is the Economy… OK?
So some of what we're seeing right now reflects Trump's actions and some of it doesn't. So the GDP report, for example, covers January, February, March. Trump took office at the end of January. So part of the GDP report was during Biden's term, obviously. And it takes time for a president's actions to make a mark on the economy.
The Journal.
Is the Economy… OK?
and in what's on our store shelves. So we're not really seeing that yet.
The Journal.
Is the Economy… OK?
I think that's right. Yeah, sure. I mean, you know, if we're going to say this is Trump's GDP report, we'd want to look at a quarter when he was in office for all three months, right? But yes, I think it's fair to look at this as a transition period.
The Journal.
Is the Economy… OK?
There had been a lot of bracing for a bad job report this time around because I think economists thought, well, we've had several weeks, more than a month of some of these tariffs now, and some businesses might be really cutting back a lot on hiring. But in fact, we saw that there were more jobs added last month than many economists thought.
The Journal.
Is the Economy… OK?
And overall, businesses have also so far been pretty reluctant to cut workers. They're not hiring at the same furious pace that they were several years ago after the pandemic, but they're not really laying people off. partly because we've had this labor shortage because they're worried about being able to find people again if they need them in the future.
The Journal.
Is the Economy… OK?
And I think you're right. There has been a lot of focus on the government layoffs, which have indeed been very stark for D.C. and other communities. But they haven't been big enough yet to create a real dent in the national labor picture.
The Journal.
Is the Economy… OK?
Despite all of these shocks happening to the economy with tariffs, with Doge and the government cuts, the underlying economy has remained fairly strong.
The Journal.
Is the Economy… OK?
There are a lot of surveys that are coming out now. So different groups survey U.S. consumers and businesses. And those surveys have really been looking more negative over recent months. Businesses and consumers have grown a lot more worried. And some are saying, we're not planning to spend as much this year. Businesses have said that we're maybe going to cut back on some of our capital spending.
The Journal.
Is the Economy… OK?
That could slow down the economy for sure if businesses and consumers are spending less.
The Journal.
Is the Economy… OK?
That's right. The uncertainty of it all is the main problem. The businesses that I speak with say everything is on hold right now. And there are some exceptions to this, which I can get into. But a lot of businesses are saying, look, we don't know what's going to happen tomorrow. We don't know whether we're going to be paying 145% tariffs on things from China or 50% or 5,000%. We don't know.
The Journal.
Is the Economy… OK?
We're not going to build that new factory right now. We're not going to hire a ton of new people right now because things are so chaotic and it's very hard to plan when you don't know what's going to be tweeted about tomorrow.
The Journal.
Is the Economy… OK?
More certainty is always better, absolutely, for the economy. The more certain everyone is that things are going well, the more likely they are to spend and to keep the economy growing. What would it take to get more certainty?
The Journal.
Is the Economy… OK?
I think if President Trump really rolled back his tariffs and said, OK, we've reached trade deals with all of these countries and we're lifting these emergency tariffs and we're not making any more changes, that would create certainty. It would also create certainty for him to say, OK, and really mean, look, I'm not rolling back these tariffs. The 145% on China is here to stay.
The Journal.
Is the Economy… OK?
All of these other tariff levels, the 10% universal tariff I put on goods from all countries is here to stay. We're not making any changes. That would create more certainty for companies where they could at least start planning with some knowledge that, OK, now this is the new reality. We've got a plan for this. I'm not saying that that would make the economy keep growing strongly.
The Journal.
Is the Economy… OK?
I think if we have 145 percent tariffs on China for good, that would be really rough for our economy for a long time. But at least it would create some certainty that would allow companies to start making adjustments.
The Journal.
Is the Economy… OK?
There were a couple of data reports last week that showed that the economy is holding in and is more stable than many thought.
The Journal.
Is the Economy… OK?
This is a transition economy, transitioning to what we don't really know yet. There are tons of fears that we're heading to a worse place, and there is some hard data to show that those fears are real. And the biggest piece of hard data, I would say, is this huge decline in shipping traffic from China. I think that is the data point that everyone is focused on right now.
The Journal.
Is the Economy… OK?
What will the lack of those ships do to our store shelves and to prices? But at the moment, we're still a little bit in this holding pattern where the collapse of the arrival of the ships hasn't quite happened yet. And the economy still looks pretty good. So we're in a holding pattern.
The Journal.
Is the Economy… OK?
It shows that we have a really resilient economy. It has been able to withstand a lot of the early shocks from the Trump administration. And it's wise to kind of reserve judgment, I think, over the next several months until we see more data and not to just assume that the sky is falling. If it is falling, we'll see it. And we'll see it in the next three, four, five months.