It's unclear what Trump's latest tariffs liberate us from. Tariffs can be good policy when done right, but this latest round is scrambling America's alliances and economy. This episode was produced by Devan Schwartz and Gabrielle Berbey, edited by Jolie Myers, fact-checked by Laura Bullard and Amanda Lewellyn, engineered by Patrick Boyd and Andrea Kristinsdottir, and hosted by Noel King. Transcript at vox.com/today-explained-podcast Support Today, Explained by becoming a Vox Member today: http://www.vox.com/members President Donald Trump after signing executive orders imposing tariffs during the “Make America Wealthy Again” event in the White House Rose Garden. Photo by Andrew Harnik/Getty Images. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What happened on 'Liberation Day' and the day after?
April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again. It was Liberation Day.
April 3rd, the day after, won't be remembered, if we're being honest, although there was some notable news. The stock market fell freely and precipitously. People panic bought everything from cars to wine to almonds. And those were just the texts that I got. CEOs lost their minds.
But honestly, this is just a disaster. of idiocy that I can't even tell you beyond proportions. In technicolor. Lower prices. That's the whole reason that this is set up the way it is.
And America's allies, Mos Def, got on a call with China. Today on Today Explained, we celebrate our day after Liberation Day.
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Megan Rapinoe here. This week on A Touch More, we are launching our much-anticipated book club, and we're doing it with Abby Wambach and Glennon Doyle, who will introduce their upcoming book, We Can Do Hard Things, Answers to Life's 20 Questions. Plus, we've got some fun and important updates from The W and the NWSL, and of course, we've got a new Are You a Megan or Are You a Sue?
Check out the latest episode of A Touch More wherever you get your podcasts and on YouTube.
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Chapter 2: Who are the hosts and contributors of this episode?
The golden age of America begins right now. On Today Explained.
I'm Noelle King with Abdullah Fayyad. He covers policy at Vox, including trade. And this week, Abdullah wrote a piece about how tariffs are not all bad. Abdullah, in his first term, President Trump utilized tariffs. Then he was elected again, and he's utilized them even more. As of Liberation Day and this big announcement, do you understand what his philosophy on tariffs is?
Chapter 3: What is President Trump's philosophy on tariffs?
It's really hard to understand what Trump really sees in tariffs altogether. And that's because he really seems to view them as a solution to everything. He's been railing about tariffs for a long time. And since he came in this time around, you know, he went out swinging for tariffs for all these different reasons.
They've treated our farmers badly. Look, our country's been ripped off by everybody. That stops now. They manipulated their currency, subsidized their exports, stole our intellectual property.
not just a matter of addressing trade deficits or protectionism for our domestic manufacturers of helping industries grow in the United States. He's also talked about tariffs for curbing immigration and fentanyl. He's talked about tariffs as a means, as a negotiating chip to close in on a TikTok deal with China.
You know, because every point in tariffs is worth more money than TikTok.
So, you know, they're kind of all over the place. He wants them to raise a lot of revenue for the United States. And he also seems to want to use them, you know, for the more traditional protectionist policy of helping prop up domestic industries, you know, like certain manufacturing industries, be it, you know, steel industry, automakers, the auto industry and things of that nature.
So economists will often tell you that tariffs are a tool. And Donald Trump seems to be saying, yes, they are. And they're not, you know, a hammer or a wrench. They're a Swiss army knife. You can do anything with them. Why is that a problem, if indeed it is?
You know, tariffs are a tool, you know, in the industrial policy toolkit. And there are times where they can be useful. But the problem is, is when you over rely on them, you know, the costs are much greater than the benefits.
You know, when Trump is implementing tariffs in the way that he is, broad-based tariffs on all imports, 10% and higher, you know, from countries, be they adversaries or allies. When you're implementing tariffs that way, the costs are going to be higher than the benefits because essentially, you know, tariffs are a consumption tax.
They are indirectly a tax on consumers because companies will eventually raise their prices in order to offset the tax. So consumers do bear the brunt of tariffs. Prices will go up. There will be an inflationary aspect of this policy which will probably get people upset.
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Chapter 4: Why are broad tariffs considered problematic by economists?
So you wrote about when tariffs can be used beneficially, narrowly. What are some examples of when tariffs are a good idea? What did economists tell you?
they are a tool that ought to be used sometimes. And I think one example of this is part of the reason countries might be interested in levying a tariff on imports is to protect certain industries that serve the national interest. It could also be because out of national security reasons, you want to have some level of control over the supply chain so that in the event of a war or a pandemic,
A disruption in the supply chains won't make you have a shortage of a crucial good. So there are reasons why you want to prop up certain domestic industries, and they can serve you well. One example of this is that if we import a lot of goods from, say, China, which has bad labor laws and labor protections and very low wages –
those goods are going to be cheaper than goods produced in the United States. Part of the reason why goods that are made in the United States are very expensive is because we have higher labor costs. Now, that puts American companies in a difficult spot because then they have to choose between either having competitive prices or paying their workers well.
So you have to balance that out as a government and think about – You know, what exactly is the problem that we're trying to solve here and how can tariffs be a tool? Should they be a tool that we use here to solve that problem? And in some cases, the answer is yes.
Right. So when President Trump made his announcement in the Rose Garden and he said he's going to put tariffs on imported cars and the goal of that is to make sure that Americans buy American cars. That seems like that really narrow focus that economists are telling you is useful if you're going to implement a tariff. So would they approve of the tariffs that Trump has placed on foreign autos?
Well, that's again why Trump, you know, in theory, a lot of what he says might make sense if you don't pay too close attention to what he's doing. You know, if you implement tariffs on foreign cars, domestically manufactured cars will be more appealing for consumers because they might be cheaper. But the reality of this policy is that he's going to slap a 25 percent tariff on foreign cars.
And he's also going to slap a tariff on auto parts. So the expectation here is not just that foreign cars are going to get more expensive for American consumers, but domestic cars are going to get more expensive because producing them, manufacturing them is going to cost more.
So the cost of production for American car companies is going to spike even if they are producing their cars here in the United States.
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Chapter 5: When can tariffs be beneficial and what examples do economists provide?
To be honest, I don't really know. I have no idea because I don't think it's possible for them to raise that much money. You know, tariffs used to generate a lot of federal revenue before we had things like an income tax. The reality, though, is that tariffs can't replace the income tax, especially in the way that Trump himself is talking about tariffs. Because
He's talking about tariffs as something that he will lift if countries agree to his terms on certain things. You know, like you can't really talk about this as a permanent revenue stream while also talking about it as a negotiating chip for other things. You kind of have to pick a lane and understand why you're implementing them in the first place.
All right. So the American economy is made up of many different things. We've got Main Street, Wall Street. We've got the markets. We've got who is employed. We've got what things cost. Americans deeply worried about inflation for a while now.
When you talk to economists, what do they tell you about how all of these new tariffs that Donald Trump announced on Liberation Day, what do they tell you about how they'll affect the American economy?
I mean chances are they will affect the American economy pretty negatively and chances are they will affect people's wallets really negatively. Essentially, you're not necessarily guaranteeing that American prices are going to stay stable. Manufacturing in the United States will become more expensive because you're going to still be importing raw materials that have tariffs on them.
So the cost of production is going to go up also for American companies. So we are going to see prices rise. The question is, That we don't really know right now is to what degree we're going to see price hikes across the board or in certain industries.
But this is likely, if this is a policy that Trump sticks with, which I think is a big if because he has been so back and forth on this for a long time. That could, you know, anger a lot of people. It could cause people to fear for, you know, their economic stability, their financial stability rather, you know, and whether or not they're going to be OK in a year from now.
And, you know, that's why, you know, one of the economists I was talking with who was talking about how tariffs can sometimes be beneficial and how you can tailor them to be beneficial is he was just saying, don't judge the tool by the craftsman that's mishandling it. So that's kind of what we can expect.
Abdullah Fayyad, his article, What a Better Tariff Policy Could Look Like, is at Vox.com. Coming up, we pivot to Asia.
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Chapter 6: How do Trump's tariffs on foreign cars impact American consumers and manufacturers?
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The regular season's in the rear view, and now it's time for the games that matter the most. This is Kenny Beecham, and playoff basketball is finally here. On Small Ball, we're diving deeper to every series, every crunch time finish, every coaching adjustment that can make or break a championship run. Who's building for a 16-win marathon? Which superstar will submit their legacy?
And which role player is about to become a household name? with so many fascinating first-round matchups. Will the West be the bloodbath we anticipate? Will the East be as predictable as we think? Can the Celtics defend their title? Can Steph Curry, LeBron James, Kawhi Leonard push the young teams at the top?
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Chapter 7: Can tariffs generate significant revenue for the U.S. government?
You're listening to Today Explained.
I'm Mike Bird. I'm the Wall Street editor at leading magazine, The Economist. We call it a newspaper internally. Just to be clear, I'll get in trouble if I don't say that.
We reached Mike Bird in New York. He was based in Asia, where many of the Liberation Day tariffs are aimed for many years. And Mike's first response when he heard the list of tariffs yesterday.
They really are very, very steep. So I was looking across a group of them where the tariffs run to between 24 and 46 percent, depending on the country. So, yeah, very, very steep, considerably more than I think I was expecting, considerably more than most investors were expecting. It's a It's really extensive and broad.
It's really extensive, it's broad, and it's throughout Asia. We've got China, Taiwan, Japan, India, South Korea, Thailand. What are we hearing today from leaders of those countries? Anything notable?
There's a big range of reactions, and I think that reflects the difference in both relationships with the US and sort of some different strategies going on. So the Chinese government reaction to note that the tariffs are sort of deeply unreasonable, that it's a sort of attack on the rest of the world, basically, is probably the least surprising of these.
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Chapter 8: What are the expected economic effects of the new tariffs on inflation and consumer prices?
But I think it's more interesting to break down the countries that are really much closer diplomatically to the US. So the cabinet of Taiwan called the Trump tariffs deeply unreasonable and highly regrettable. Korea said that they were studying what was happening.
At this moment... Our mission is to protect the safety of the people, secure national interest during the trade war, and swiftly devise solutions to pressing national issues through cooperation with the National Assembly.
The Japanese trade minister did call the move extremely regrettable.
Following this announcement, we have once again conveyed to the U.S. government that the recent measures are extremely regrettable.
But a lot of these countries are a little bit more circumspect and a little bit more, a little bit quieter, precisely because they have these very tight security relationships with the U.S. And they're very, very keen not to upset D.C., basically. So, yeah, there will be a little bit of a reserved reaction from some of them.
Let me ask you about the president's argument on reciprocity.
Reciprocal. That means they do it to us and we do it to them. Very simple. Can't get any simpler than that.
So when Trump held up his chart, it showed that Vietnam, for example, levies a 90 percent tariff on goods coming from the U.S. South Korea, 50 percent tariff. Donald Trump is saying these countries put tariffs on American goods and I'm going to fix it. Is he right? And if so, why was this going on?
So to be clear, we should start by saying there are trade restrictions that other countries put on the US. In some cases, they're steeper than the ones going in the other direction. That, from first principles, is a reasonable thing for US policymakers to be upset about. But
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