As his policy turns on a dime, pity those tasked with justifying his actions

if i look back, i am lost

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@tariffs-tradewar
As his policy turns on a dime, pity those tasked with justifying his actions
トランプ関税で揺らぐ「半導体の国際供給網」、巨大テック企業のAI投資バブルも崩壊危機
ダイヤモンド編集部,村井令二 によるストーリー
生成AI(人工知能)のけん引で成長してきた半導体市場が転機を迎えている。トランプ米大統領による半導体関税の導入が現実になれば、半導体業界を支えてきた国際分業によるサプライチェーンを混乱させることになりそうだ。米巨大IT(ビッグテック)が巨額資金をつぎ込むAI投資の“バブル”も崩壊しかねない。特集『絶頂か崩壊か 半導体AIバブル』の#14で、そのリスクに迫る。(ダイヤモンド編集部 村井令二)
China Sanctions U.S. Officials Over Hong Kong, Escalating Tensions with Washington | Times Now World
Chuyên gia: Trung quốc “né” trò chơi thuế quan, Mỹ “mắc kẹt” trong chính ván cờ mình tự vẽ | BLQT
78,897 views Premiered Apr 20, 2025 4 products
Vietnam Plus tagged products below. Learn more
Vietnam Plus | Trong khi Trung Quốc khéo léo né tránh các đòn thuế quan từ Mỹ, Washington lại đang mắc kẹt trong chính cuộc chơi mà mình tự tạo ra. Các đòn thuế quan từ Mỹ đang làm khó chính nền kinh tế của mình, trong khi Bắc Kinh, bằng sự kiên cường, vẫn giữ vững lập trường và thực hiện các bước đi chiến lược một cách cẩn trọng. Mỹ có thể gồng mình dưới sức ép, nhưng liệu có thể tìm ra lối thoát khi Trung Quốc đã luôn sẵn sàng với những nước đi đối phó mạnh mẽ?
Thời sự quốc tế 21/4: Nóng: Kế hoạch mật của ông Trump bị bại lộ, nghi ngờ danh tính người đứng sau
7,739 views • Apr 21, 2025 • 5 products
VẤN ĐỀ HÔM NAY tagged products below. Learn more
Tin tức mới nhất | Thời sự quốc tế: Nóng: Kế hoạch tuyệt mật của ông Trump bị bại lộ, sốc danh tính người đứng sau Tờ New York Times dẫn bốn nguồn thạo tin tiết lộ Bộ trưởng Quốc phòng Mỹ Pete Hegseth đã chia sẻ chi tiết các cuộc tấn công ở Yemen vào ngày 15/3 trong một nhóm chat Signal riêng tư gồm vợ, anh trai và luật sư riêng của ông.
This is Why America is LOSING While China is WINNING
144,803 views Apr 15, 2025
In this fascinating video, Professor Kishore Mahbubani dives into why the West, especially the United States and Europe, are on the decline, while Asia—particularly China and India—is on the rise. Trust me, you’ll want to hear his take on the shifting global power dynamics!
FP Weekend: The awful history of tariffs and depressions
A colorized illustration depicts the Tompkins Square Park riot in New York City on Jan. 13, 1874, when the city's police department clashed with thousands of unemployed workers during the economic depression following the Panic of 1873. Leslie's illustrated newspaper/Alamy
APRIL 12, 2025|VIEW IN BROWSER|SUBSCRIBE
Welcome to FP Weekend, our weekly showcase of book reviews, deep dives, and other features that step away from the drumbeat of the news.
This week, we dive into U.S. history to explore the economic wreckage that trade wars have caused in the past. In fact, all but one of the six economic depressions that the United States has suffered since 1800 were either directly caused or significantly worsened by tariffs or other trade restrictions, historian Scott Reynolds Nelson writes. Past trade wars also set off a cascade of unforeseen consequences, some of which changed the course of U.S. history forever—and not always in a good way.
Elsewhere, FP’s James Palmer reviews Perry Link’s The Anaconda in the Chandelier, a collection of essays that explore the joys of the Chinese language and the changing nature of Beijing’s clamp on free expression. Other reads look at the culture of violence in the Russian military and Netflix’s remake of “The Leopard,” an old Italian classic.—Stefan Theil, deputy editor
Essay
The Awful History of Tariffs and Depressions
What the 19th century teaches us about what happens next.
By Scott Reynolds Nelson
ssay
The U.S.-China Trade War Threatens to Undo Decades of Progress Against Global Poverty
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The U.S.-China Trade War Threatens to Undo Decades of Progress Against Global Poverty
The World's Poorest People Will Be The First Victims of a US-China Trade War
Mark Leon Goldberg
Apr 15
Last August, I hosted a live taping of Global Dispatches at the World Trade Organization. One of my guests was Ralph Ossa, the WTO’s chief economist. He had just released a major report — and it’s one I haven’t stopped thinking about in recent days.
For years, economists have warned about “decoupling” — the slow drift apart of the U.S. and Chinese economies. For most economists, decoupling is a problem. They argue that global trade is what drives growth and raises living standards (even if unevenly). However, the trend toward decoupling is very real, driven by a variety of political concerns in both Washington and Beijing. What made Ossa’s report so groundbreaking is that his team examined the implications of the logical extension of decoupling: the full fragmentation of the global trading system into two seperate blocs, one lead by the United States, the other China. In this scenario countries are forced to pick sides, and trading between the blocs largely dried up.
Upgrade to paid
This isn’t just a theory. Ossa’s research shows it’s already happening— and that was before the escalating trade war between the United States and China brought on by Donald Trump’s imposition of massive tariffs on all countries, but China most of all.
If full fragmentation occurs, the WTO report shows that global GDP could shrink by 7%, a loss of over $7 trillion from the global economy. The economic damage will be everywhere, but it will not be evenly distributed. No one would be hit harder than people in the developing world— particularly the poorest of the poor.
How to Strike Trade Deals in Record Time
A former U.S. trade negotiator describes how countries should navigate the Trump White House.
By Wendy Cutler, the vice president at the Asia Society Policy Institute.
April 15, 2025, 1:52 PM
U.S. trading partners must have breathed a sigh of relief last week when President Donald Trump announced a 90-day pause on the imposition of tariff rates above 10 percent. However, along with Trump’s economic team, they are quickly realizing that the three-month reprieve, while welcome, is an incredibly short time to hammer out trade deals. Typically, U.S. officials spend at least six months—twice the length of time of the current pause—just to develop their negotiating positions in consultation with Congress and stakeholders. Actual negotiations usually span several years. But as we are learning, these are not normal times.
Trump’s Second Term
Ongoing reports and analysis
Countries around the world are scrambling to pull together the best teams and develop strategies, tactics, and substantive offers for a trade negotiation with the United States. The very first thing these countries need to consider is whether they want to push to be at the front of the negotiating queue, a potentially attractive option if they conclude that going early may lead to softer deals. Some may decide that they are better off hanging back and watching how others fare first. This would allow them the opportunity to at least gain a better sense of which negotiating topics (or sweeteners) are of the most importance to the White House and potentially to learn
Mỹ chặn đường tiến quân mềm của ông Tập || Nhìn Chiến Lược
8,049 views Premiered 15 hours ago Mỹ chặn đường tiến quân mềm của ông Tập
✿ Bật nút chuông để nhận thông báo và là người đầu tiên xem video của Nhìn Chiến Sự.
Lawrence: Elon Musk is the biggest loser in Donald Trump's world war on economic sanity
3,456,450 views Apr 8, 2025 #tariffs#ElonMusk#Trump
MSNBC’s Lawrence O’Donnell details how Elon Musk is turning on Donald Trump over his tariffs without attacking Trump directly, asking “How many more billions is Elon Musk willing to lose before he does something more than just telling Donald Trump privately that zero tariffs are the way to go?”
Transcript
0:00HAVE A FUNNY FEELING.
0:01>> SERIOUSLY? YEAH. THANKS,
0:02LAWRENCE.
0:03>> THANK YOU.
0:04>> RACHEL. THANK YOU. AND SO, AS
0:07THE 77TH DAY OF THE SECOND TRUMP
0:10PRESIDENCY COMES TO A CLOSE, WE
0:13HAVE ARRIVED AT A.
0:15>> MOMENT.
0:15>> THAT WE. KNEW WAS COMING. AT
0:17SOME POINT, IT HAD TO COME. WE
0:18HAVE ARRIVED AT THE MUSK VERSUS
0:22TRUMP MOMENT. THE WORLD HAS BEEN
0:26WONDERING HOW LONG THE BROMANCE
0:28COULD LAST BETWEEN THE TWO MOST
0:29VOLATILE AND PUBLICLY IRRATIONAL
0:31MEN IN THE WORLD, ELON.
0:33>> MUSK AND DONALD TRUMP.
0:35>> DONALD TRUMP IS THE ONLY
0:36PRESIDENT IN HISTORY WHO HIRED.
0:38MULTIPLE WHITE HOUSE CHIEFS OF
0:40STAFF SEQUENTIALLY, ONLY TO END
0:41UP CALLING EACH OF THEM AN IDIOT
0:45BEFORE AND AFTER HE FIRED THEM.
0:48DONALD TRUMP'S FIRST SECRETARY
0:49OF STATE CALLED.
0:50>> DONALD TRUMP.
0:51>> AN EFFING MORON WHO'S
0:55DOCUMENTED.
0:55>> WELL DOCUMENTED.
0:56>> BY BOB WOODWARD AND OTHERS
0:58SAID THAT AFTER. DONALD TRUMP
0:59LEFT. A MEETING AND NOT LONG
1:01AFTER THAT, TRUMP'S FIRST
1:03SECRETARY OF STATE, REX
1:04TILLERSON, WAS PUBLICLY BEING
1:06ATTACKED.
1:07>> BY DONALD.
1:07>> TRUMP AFTER DONALD TRUMP
1:08FIRED HIM.
1:10>> THE PUBLICLY.
1:10>> MUCH ANTICIPATED BREAKUP OF.
1:12>> DONALD.
1:13>> TRUMP AND ELON MUSK SEEMS TO
1:16CENTER ON THE QUESTION OF WHEN
1:19WOULD.
1:19>> DONALD TRUMP.
1:20>> TURN ON ELON MUSK?
1:21>> THAT'S WHAT EVERYONE.
1:22>> WAS SPECULATING ABOUT.
1:23>> BECAUSE DONALD TRUMP.
1:24>> HAS TURNED ON VIRTUALLY
1:25EVERYONE WHO HAS WORKED FOR HIM
1:26IN THE WHITE HOUSE. BUT ELON
1:28MUSK IS THE RICHEST PERSON IN.
1:29>> THE WORLD.
1:30>> AND THERE IS NO.
1:31>> ONE.
1:31>> DONALD TRUMP WANTS TO KEEP IN
1:33HIS LIFE MORE THAN THE.
1:34>> RICHEST PERSON IN.
1:35>> THE WORLD, WHICH IS WHY.
1:36>> DONALD TRUMP.
1:37>> WAS WILLING TO SUFFER THE
1:37PUBLIC HUMILIATION OF ELON MUSK.
1:40PUBLICLY TAKING OVER A
1:41DISCUSSION IN THE.
1:42>> OVAL.
1:42>> OFFICE ABOUT ELON MUSK'S
1:45GOVERNING. POLICIES THAT LEFT
1:47THE ACTUAL PRESIDENT OF THE
1:48UNITED STATES HAVING ABOUT THE
1:50SAME AMOUNT TO SAY.
1:51>> AS ELON MUSK'S.
1:52>> FOUR YEAR.
1:52>> OLD SON. WE KNOW DONALD
1:55TRUMP.
1:55>> DOESN'T EVER. WANT TO.
1:57>> TURN AGAINST ELON.
1:58>> MUSK, BECAUSE HE NEVER WANTS
2:00TO LOSE ACCESS TO ELON MUSK'S
2:03MONEY, AND THE FEAR.
2:04>> THAT.
2:05>> THAT MONEY CREATES,
2:06ESPECIALLY IN THE.
2:07>> REPUBLICAN PARTY.
2:08>> AS LONG AS.
2:09>> DONALD TRUMP HAS.
2:10>> ELON. MUSK'S AT HIS SIDE, HE
2:13CAN.
2:13>> THREATEN ANY MEMBER OF.
2:15>> ANY REPUBLICAN MEMBER OF.
2:16CONGRESS WITH AN ELON. MUSK
2:18FINANCED. CAMPAIGN AGAINST THAT
2:21REPUBLICAN, THE NEXT REPUBLICAN
2:22PRIMARY ELECTION. AND SO IT HAS
2:24ALWAYS MADE MORE SENSE THAT WHEN
2:26THE BREAK COMES, IT WOULD BE
2:30ELON MUSK DUMPING. DONALD TRUMP.
2:33AND NOW ELON MUSK IS INDEED
2:36DUMPING.
2:36>> ON DONALD.
2:37>> TRUMP, CALLING.
2:38>> DONALD TRUMP'S TARIFFS
2:40STUPID.
2:42>> SO FAR.
2:42>> ELON MUSK.
2:43>> IS USING SURROGATES TO
2:44ATTACK.
2:44>> DONALD TRUMP.
2:45>> WHILE.
2:45>> ELON MUSK DIRECTLY ATTACKS
2:48TRUMP SURROGATES. ELON MUSK
2:51SHOWED NO. GRATITUDE TO.
2:52>> JOE BIDEN.
2:53>> WHILE ELON MUSK'S WEALTH
2:55SKYROCKETED EVERY DAY OF THE
2:57BIDEN PRESIDENCY. BUT HE'S
2:59ALREADY APPARENTLY DISTRESSED AT
3:02LOSING. MORE MONEY UNDER.
3:03>> THE TRUMP.
3:04>> PRESIDENCY THAN ANY OTHER
3:06PERSON IN THE WORLD. TONIGHT,
3:09ELON MUSK IS THE. INDIVIDUAL
3:12BIGGEST DOLLAR LOSER IN THE
3:15WORLD AS A. RESULT OF DONALD
3:17TRUMP'S WORLD WAR.
3:18>> ON ECONOMIC SANITY.
3:19>> AND SO ELON MUSK BEGAN HIS
3:23ATTACK ON DONALD TRUMP WITH AN
3:27ATTACK ON TRUMP'S SURROGATE,
3:28PETER NAVARRO, THE ONLY ECONOMIC
3:31ADVISOR TO A PRESIDENT TO HAVE
3:32SERVED FEDERAL PRISON TIME AND
3:34WHO IS THE AUTHOR OF THE
3:36DERANGED TRUMP NAVARRO TARIFFS.
3:38ELON MUSK TWEETED THIS ABOUT
3:40PETER NAVARRO, A PHD IN ECON
3:42FROM HARVARD IS A BAD THING, NOT
3:45A GOOD THING. IMAGINE WHAT THAT
3:48MEANS FOR DONALD TRUMP, WHO ONLY
3:50HAS A COLLEGE DEGREE FROM THE
3:51UNIVERSITY OF PENNSYLVANIA,
3:52WHICH SURELY ELON MUSK VALUES
3:54EVEN LESS THAN A PHD FROM
3:56HARVARD. PETER NAVARRO SHOT BACK
3:58AT ELON MUSK, CALLING HIM A CAR
4:00GUY AND WHO JUST WANTS, QUOTE,
4:02CHEAP FOREIGN PARTS, WHICH
4:04APPARENTLY IS SOME NEW FORM OF
4:07INSULT IN TRUMP WORLD THAT
4:09CLAIMS TO BE IN THE BUSINESS OF.
4:10HELPING AMERICA'S CAR.
4:12>> GUYS, AMERICA'S AUTO WORKERS
4:13AND.
4:13>> CAR MANUFACTURERS. BUT
4:15BECAUSE.
4:16>> DONALD TRUMP DOESN'T.
4:17>> UNDERSTAND HOW HIS TARIFFS
4:18ACTUALLY WORK, THE STOCK MARKET
4:20OF EVERY.
4:21>> AMERICAN CAR.
4:22>> COMPANY IS COLLAPSING. THEIR
4:24STOCK IS COLLAPSING, INCLUDING.
4:26ELON MUSK'S CAR COMPANY STOCK,
4:29WHICH COLLAPSED EVEN MORE TODAY.
4:32>> AFTER A.
4:32>> MORNING OF TRUMP INDUCED
4:35MADNESS AND THE STOCK. MARKET
4:36TODAY. A MEMBER OF THE BOARD OF
4:39DIRECTORS OF TESLA PUBLICLY
4:43ATTACKED. DONALD TRUMP ON
4:44TWITTER. AND YOU.
4:45>> KNOW.
4:45>> THAT WOULDN'T HAPPEN WITHOUT
4:47ELON MUSK'S APPROVAL, ESPECIALLY
4:50BECAUSE THAT BOARD MEMBER'S NAME
4:51IS KIMBAL MUSK, ELON MUSK'S
4:55BROTHER AND APPARENTLY. ELON
4:57MUSK'S AUTHORIZED SURROGATE AT
5:00TESLA TO PUBLICLY ATTACK DONALD
5:02TRUMP. KIMBAL, MUSK TWEETED. WHO
5:05WOULD HAVE THOUGHT THAT TRUMP
5:06WAS ACTUALLY THE MOST HIGH TAX
5:09AMERICAN PRESIDENT IN
5:10GENERATIONS? THROUGH HIS TARIFF
5:12STRATEGY, TRUMP HAS IMPLEMENTED
5:14A STRUCTURAL PERMANENT TAX ON
5:16THE AMERICAN CONSUMER. A TAX ON
5:19CONSUMPTION ALSO MEANS LESS
5:21CONSUMPTION, WHICH MEANS LESS
5:23JOBS, WHICH IN TURN LEADS TO
5:25LESS CONSUMPTION AND EVEN LESS
5:27JOBS. THAT CYCLE OF LESS
5:29CONSUMPTION.
5:29>> AND LESS.
5:30>> JOBS IS WHAT WE CALL A
5:33RECESSION, WHICH IS WHAT WALL
5:34STREET IS NOW PREDICTING, WITH
5:36WALL STREET ANALYSTS CALLING IT
5:38THE COMING TRUMP RECESSION. THIS
5:41WEEKEND, DURING A VIDEO.
5:42CONFERENCE WITH ITALY'S RIGHT
5:44WING LEAGUE PARTY, ELON MUSK
5:46REVEALED JUST. HOW DRAMATICALLY
5:49AND COMPLETELY HE DISAGREES
5:52WITH. DONALD TRUMP IN PRIVATE,
5:54WHERE HE. APPARENTLY CLAIMS TO
5:56URGE. DONALD TRUMP TO DROP.
5:59>> ALL TARIFFS.
6:01>> BETWEEN.
6:02>> EUROPE.
6:02>> AND NORTH AMERICA.
6:04>> I HOPE IT IS AGREED. THAT
6:06BOTH.
6:07>> EUROPE AND THE UNITED STATES
6:09SHOULD MOVE. IDEALLY, IN MY
6:10VIEW, ZERO TARIFF SITUATION,
6:12EFFECTIVELY CREATING A FREE
6:13TRADE ZONE BETWEEN EUROPE AND
6:15NORTH AMERICA.
6:18>> AND THAT.
6:20>> THAT WOULD BE MY THAT'S WHAT
6:21I HOPE I HOPE OCCURS.
6:25>> AND ALSO.
6:26>> MORE FREEDOM OF PEOPLE TO
6:27MOVE BETWEEN EUROPE AND NORTH
6:29AMERICA IF THEY WISH, IF THEY
6:31WISH TO WORK IN EUROPE OR WISH
6:33TO WORK IN AMERICA, THEY.
6:35>> SHOULD BE.
6:35>> ALLOWED TO DO SO, IN MY VIEW.
6:38SO THAT THAT HAS CERTAINLY BEEN
6:40MY ADVICE TO THE PRESIDENT.
6:43>> THAT HAS CERTAINLY BEEN MY
6:44ADVICE TO THE PRESIDENT. ALL
6:46RIGHT THEN. IN OTHER WORDS, ELON
6:48MUSK'S ADVICE TO THE PRESIDENT
6:49IS YOU'RE TARIFFS ARE COMPLETELY
6:51WRONG. NOT THAT YOUR TARIFFS ARE
6:53A LITTLE TOO HIGH, BUT THAT THE.
6:55TARIFFS SHOULD BE ZERO. THAT'S
6:58WHAT ELON MUSK SAID. HE'S
6:59TELLING. DONALD TRUMP. THAT IS
7:01BY FAR THE. MOST DRAMATIC
7:02DIFFERENCE IN OPINION ANYONE ON
7:04THE TRUMP TEAM HAS WITH DONALD
7:06TRUMP. ELON MUSK WANTS ZERO
7:09TARIFFS AND DONALD.
7:11>> TRUMP WANTS TARIFFS OF MORE
7:14THAN 100%.
7:17>> IS IT THURSDAY? I MEAN, IT
7:19FEELS LIKE THURSDAY ALREADY, BUT
7:20IT'S ONLY A COUPLE OF HOURS INTO
7:22MONDAY. SO I.
7:22>> WANT TO DO.
7:23>> A LITTLE TARIFF MATH.
7:24>> AND I KNOW WE GOT MEGAN.
7:26>> COSTELLO WAITING AS WELL. SO
7:28IF I IF I'M DOING THIS CORRECTLY
7:29OKAY, MAYBE I'M NOT. WE DO A 50%
7:32ADDITIONAL TARIFF PUNITIVE.
7:34TARIFF ON CHINA.
7:36>> SO IF I LAYER.
7:37>> THAT ON TO SOME OF THE
7:38TARIFFS THAT ARE KICKING.
7:40>> IN, AND I.
7:40>> KNOW WE ALREADY.
7:41>> HAVE 100% TARIFFS ON
7:42ELECTRIC.
7:43>> CARS.
7:43>> THAT WAS PUT IN PLACE BY THE
7:45FORMER.
7:45>> PRESIDENT BIDEN, BUT ON ALL
7:46GOODS THAT I THINK TAKES US
7:49ABOVE A 100% TARIFF. I THINK.
7:54>> THAT'S CORRECT.
7:56>> THAT WAS CNBC'S NEVER BEFORE.
7:59FRAZZLED BRIAN SULLIVAN, WHO DID
8:00AN HEROIC JOB OF TRYING TO KEEP
8:03UP WITH ONE OF THE CRAZIEST DAYS
8:04IN WALL STREET HISTORY TODAY,
8:06INCLUDING THE FALSE RUMOR THAT
8:08JOLTED THE STOCK MARKET THIS
8:09MORNING. SHORTLY AFTER 10 A.M,
8:11CNBC'S SCREEN FLASHED WHAT
8:13APPEARED TO BE GOOD NEWS FOR THE
8:15MARKET THAT WAS SUDDENLY FLYING
8:16AROUND SOCIAL MEDIA. DONALD
8:17TRUMP'S ECONOMIC ADVISOR, KEVIN
8:20HASSETT, WAS REPORTED ON ON THE
8:23SCREEN TO HAVE SAID THAT DONALD
8:24TRUMP WAS CONSIDERING A 90 DAY
8:27PAUSE IN TARIFFS FOR ALL
8:29COUNTRIES EXCEPT CHINA, AND THAT
8:31PUSHED THE STOCK MARKET STRAIGHT
8:33UP.
8:33>> LIKE A ROCKET.
8:34>> AT 10:17 A.M, THERE'S THE
8:37GREEN.
8:37>> GRAPH ON.
8:38>> YOUR SCREEN, GOING STRAIGHT.
8:40>> UP.
8:41>> AT 10:17 A.M.
8:44>> WE ARE JUST SEEING THE SAME
8:45HEADLINE.
8:45>> THAT.
8:45>> YOU GUYS ARE REACTING TO
8:47RIGHT.
8:47>> NOW ON THIS 90.
8:48>> DAY PAUSE IN TARIFFS ON.
8:49>> ALL COUNTRIES EXCEPT CHINA.
8:50WE ARE STILL TRYING TO CONFIRM.
8:52>> THIS OURSELVES.
8:52>> WITH.
8:53>> THE WHITE HOUSE, BUT.
8:54>> OBVIOUSLY A MAJOR CHANGE
8:55HERE, GUYS. AND REALLY.
8:56DIFFERENT RHETORIC, EVEN JUST
8:58FROM A COUPLE OF HOURS AGO FROM
8:59THIS WHITE HOUSE.
9:00>> NAVARRO, OF COURSE.
9:01>> ON CNBC SAYING THAT THIS IS
9:03NOT A NEGOTIATION. AND THEN
9:04AGAIN, HOWARD LUTNICK, THE
9:05COMMERCE SECRETARY, YESTERDAY
9:07WAS ASKED POINT BLANK WHETHER
9:08THERE WOULD BE ANY POSTPONING.
9:10BECAUSE THERE WAS SOME TALK OF
9:11THAT OVER THE WEEKEND. AND HE
9:12SAID, ABSOLUTELY NOT. IT'S SORT
9:14OF OBVIOUS THESE HAVE TO GO INTO
9:16EFFECT WHILE THE PRESIDENT
9:17RESETS GLOBAL TRADE. THE
9:18PRESIDENT HIMSELF HAS BEEN
9:19SAYING HE WON'T STRIKE ANY DEALS
9:21WITH CHINA AND THE EU, WHERE THE
9:23TWO COUNTRIES HE'S BEEN MOST
9:24FOCUSED ON, OR THE TWO TRADING
9:25PARTNERS, AND SAYING THAT THERE
9:26WAS NOTHING THAT THEY COULD
9:28OFFER BECAUSE HE WANTED TO SEE
9:29THE TRADE DEFICITS REDUCED. SO A
9:32BIG SHIFT HERE. WE WILL HAVE TO
9:34SEE IF THIS IS CONFIRMED.
9:35>> AND THEN CNBC'S INTREPID
9:37WHITE HOUSE. CORRESPONDENT EAMON
9:39JAVERS SENT THE. MARKET
9:41CRASHING.
9:41>> BACK DOWN.
9:42>> SIMPLY BY DOING HIS JOB AS.
9:44>> A REPORTER.
9:47>> WHEN I ASKED OFFICIALS HERE.
9:48>> IN THE WEST WING.
9:49>> JUST, YOU KNOW, A MINUTE AGO
9:52WHETHER OR NOT THERE WAS ANY
9:53CONSIDERATION.
9:53>> OF.
9:54>> A 90 DAY PAUSE, THEY SAID
9:56THEY. HADN'T HEARD THAT. THEY
9:57DON'T KNOW WHAT THAT IS, AND
10:00THEY'LL GET BACK TO ME,
10:00BASICALLY.
10:01>> ALL RIGHT.
10:01>> WELL.
10:02>> I THINK IT ALSO.
10:02EXTRAORDINARILY EXTRAORDINARY.
10:04>> TEN MINUTES IN.
10:04>> THE MARKET.
10:05>> WELL, LET'S.
10:06>> LET'S CALL.
10:06>> IT ABOUT. 20 MINUTES IN THE
10:08MARKET.
10:08>> ON WHAT MAY NOT.
10:09>> BE ACTUAL NEWS.
10:10>> GUYS, MINUTES LATER, THE GRIM
10:13REALITY.
10:14>> FINALLY SET IN.
10:16>> EAMON, REALLY? YOU CALLING
10:18THE WHITE HOUSE PRESS SECRETARY
10:20AND DEBUNKING.
10:21>> THESE HEADLINES. REALLY SENT
10:23THE MARKETS BACK DOWN.
10:25>> BUT BECAUSE IT.
10:26>> WAS NOT A.
10:27>> REAL HEADLINE.
10:28>> THAT TURNED THE.
10:28>> MARKET UP.
10:30>> YEAH. IN THIS CASE, BRIAN.
10:31>> FAKE NEWS WAS.
10:32>> FAKE NEWS.
10:34>> AND THERE YOU HAD A
10:35DEMONSTRATION OF JUST HOW
10:37QUICKLY THIS PROBLEM COULD BE
10:39SOLVED. AND WALL STREET NEEDS TO
10:42HEAR IS THAT.
10:43>> DONALD TRUMP.
10:43>> IS GOING.
10:44>> TO STOP DOING WHAT.
10:46>> HE'S DOING.
10:49>> JEFF, WHAT DO YOU MAKE OF THE
10:51MARKET ACTION TODAY?
10:52>> I KNOW IT'S KIND.
10:53>> OF A.
10:54>> LAME QUESTION.
10:55>> ON MY.
10:56>> PART.
10:56>> BUT I'M NOT GOING TO LIE.
10:58>> I DON'T KNOW.
10:58>> WHAT ELSE TO ASK.
10:59>> SULLY.
11:00>> IT HAS BEEN.
11:01>> CHAOTIC.
11:02>> WHEN CNBC'S ALWAYS STEADY
11:04BRIAN SULLIVAN IS SHAKEN TO THE
11:06POINT WHERE HE DOESN'T KNOW
11:07WHAT. TO ASK. THAT'S WHAT CHAOS
11:09LOOKS LIKE ON WALL STREET,
11:11ESPECIALLY WALL STREET TV. THE
11:13ALWAYS CAREFUL AND PRECISE
11:14ANDREW ROSS SORKIN BEGAN THE DAY
11:17ON CNBC, WONDERING ABOUT THE
11:20POSSIBILITY OF TRUMP
11:21ADMINISTRATION OFFICIALS,
11:22INCLUDING, OBVIOUSLY, DONALD
11:24TRUMP HIMSELF, ENGAGING IN
11:26INSIDER TRADING WITH THE
11:29KNOWLEDGE OF BEFORE IT HAPPENED,
11:31OF JUST HOW BAD THE.
11:33>> TRUMP.
11:33>> TARIFFS WERE GOING TO BE.
11:36>> GIVEN WHAT.
11:36>> THE GOVERNMENT'S BEEN DOING
11:37AND THIS ADMINISTRATION'S BEEN
11:39DOING, IT WOULD NOT SHOCK ME.
11:41AND I HATE TO SPECULATE.
11:42>> IF WE.
11:43>> WERE TO FIND.
11:44>> OUT THAT A WHOLE.
11:45>> BUNCH OF. PEOPLE WHO WORK IN
11:47WASHINGTON AS OUR ELECTED
11:48LEADERS, ONE WAY OR THE. OTHER.
11:49ULTIMATELY SOLD STOCKS.
11:50>> LAST WEEK.
11:51>> OR POTENTIALLY WORSE THAN
11:52THAT.
11:53>> SHORTED THE MARKET.
11:55>> DAN IVES.
11:55>> WHO HAS BEEN A CHAMPION OF
11:57TESLA STOCK FOR YEARS, SAID ON
11:58CNBC THIS MORNING THAT ELON MUSK
12:00HAS PERSONALLY DELIVERED, QUOTE,
12:03PERMANENT BRAND DESTRUCTION TO
12:06TESLA AND THAT.
12:07>> THE TRUMP.
12:07>> TARIFFS ARE THE.
12:08>> WORST THING THAT.
12:09>> COULD HAPPEN TO THE AMERICAN
12:11TECH INDUSTRY, WHICH IS SO
12:15DEPENDENT ON IMPORTED
12:17COMPONENTS.
12:20>> THE SAD.
12:21>> THING.
12:21>> AS SOMEONE SUCH A SUPPORTER.
12:23OF US TECH FOR.
12:24>> DECADES, IS THAT.
12:25>> WHAT THIS.
12:25>> HAS ESSENTIALLY DONE.
12:27>> IS CUT U.S. TECH.
12:28>> AT THE KNEES. IT WOULD BE.
12:30>> LIKE IN A.
12:31>> BASEBALL GAME.
12:31>> ME COMING.
12:32>> DUG.
12:32>> OUT. FOR THE. GAME LIKE,
12:34OKAY, YOU'RE NOT GOING TO HAVE A
12:35CATCHER, YOU'RE NOT GOING TO
12:36HAVE A SHORTSTOP AND NO LEFT
12:37FIELDER.
12:38>> GOOD LUCK.
12:38>> YOU SHOULD HAVE A GREAT GAME.
12:40BUT THREE.
12:40>> YEARS FROM NOW, I'LL GET YOU
12:41A. CATCHER OR SHORTSTOP.
12:44>> THAT'S THE PROBLEM.
12:46>> DAN IVES SAYS THAT. IF
12:47IPHONES HAVE TO BE MADE IN THE
12:49UNITED STATES, THEY WILL COST AT
12:50LEAST $3,000.
12:51>> AND THE WALL STREET JOURNAL
12:53TONIGHT POINTS OUT.
12:54>> THAT THE COST OF ALL CARS
12:56WILL INCREASE, INCLUDING CARS
12:57THAT ARE.
12:58>> BUILT IN THE.
12:58>> UNITED STATES.
12:59>> THE LOWEST PRICED CARS WILL
13:01INCREASE BY $2500 TO $4500, AND.
13:05>> HIGHER PRICED CARS.
13:06>> LIKE CHEVROLET SUBURBANS AND
13:07CADILLAC ESCALADES WILL GO UP
13:1010,000 TO $12,000, THE.
13:11>> WALL STREET JOURNAL REPORTS.
13:12>> USED CAR PRICES WILL ALSO
13:14CLIMB AS DEMAND INCREASES AMONG.
13:17>> CONSUMERS, WHO.
13:17>> DON'T WANT TO PAY HIGHER
13:18PRICES FOR NEW CARS. THE JOURNAL
13:20POINTS OUT THAT DONALD TRUMP'S
13:22TARIFFS ON STEEL AND ALUMINUM
13:24WILL MAKE THE PRODUCTION OF CARS
13:25IN THE UNITED STATES MORE
13:27EXPENSIVE, AND INCREASE PRICES
13:28OF AMERICAN MADE CARS, BUT THAT
13:31NEW CAR DEALERS LIKE GENERAL
13:34MOTORS AND FORD HAVE MORE THAN
13:36ONE WAY OF PASSING ON THE TARIFF
13:38INCREASES. INSTEAD OF BUILDING
13:39IN TARIFF INCREASES INTO THE
13:41LISTED PRICE OF THE CAR, FOR
13:43EXAMPLE, THEY MIGHT SIMPLY
13:44INCREASE THE INTEREST RATES.
13:46>> ON CAR.
13:46>> LOANS.
13:47>> THAT THOSE COMPANIES.
13:48>> OFFER TO COVER THE TARIFF
13:50PRICE INCREASES IN A MORE
13:52DISGUISED WAY. THIS WEEKEND, IN
13:54A SOCIAL MEDIA.
13:56>> POST, DONALD.
13:56>> TRUMP SAID, THIS IS AN
13:57ECONOMIC.
13:58>> REVOLUTION AND WE WILL WIN.
13:59HANG TOUGH. IT WON'T.
14:01>> BE EASY. REMEMBER ALL THOSE
14:03TIMES ON THE CAMPAIGN TRAIL WHEN
14:05DONALD TRUMP TALKED.
14:06>> ABOUT HOW.
14:06>> EASY IT WOULD BE TO IMPOSE
14:08TARIFFS THAT OTHER COUNTRIES
14:10WOULD HAVE TO PAY? HE WAS LYING
14:12EVERY TIME HE SAID THAT. AND NOW
14:13THAT MOST AMERICANS, INCLUDING
14:15MOST TRUMP SUPPORTERS, FINALLY
14:18UNDERSTAND THAT THEY WILL BE
14:20PAYING.
14:20>> DONALD TRUMP'S TARIFFS.
14:22>> ONLY NOW DOES DONALD. TRUMP
14:24TELL.
14:25>> AMERICANS IT.
14:26>> WON'T BE EASY. ELON MUSK
14:29KNOWS IT WON'T BE EASY. HOW MUCH
14:31MORE PAIN CAN ELON MUSK TAKE?
14:34HOW MANY MORE BILLIONS IS. ELON
14:35MUSK WILLING TO LOSE BEFORE HE
14:37DOES SOMETHING. MORE THAN JUST
14:39TELLING.
14:40>> DONALD TRUMP.
14:41>> PRIVATELY THAT ZERO TARIFFS
14:43ARE THE WAY TO GO? HOW MUCH
14:44LONGER CAN.
14:45>> DONALD TRUMP.
14:46>> RESIST THE ADVICE OF THE
14:48RICHEST PERSON.
14:48>> IN THE. WORLD TO.
14:49>> STOP TRYING TO DESTROY THE
14:51WORLD ECONOMICALLY? CNBC
14:54REPEATEDLY SAID TODAY THAT PETER
14:56NAVARRO.
14:56>> WON, MEANING.
14:57>> THAT IF THERE WERE ANY
14:59ARGUMENTS INSIDE THE TRUMP
15:00ADMINISTRATION ABOUT HOW WILD
15:00AND CRAZY THE TARIFF SHOULD BE,
15:02PETER NAVARRO WON. THOSE
15:05ARGUMENTS. BUT IF ELON MUSK
15:07PUBLICLY DUMPS. DONALD TRUMP, OR
15:09IF.
15:10>> DONALD TRUMP.
15:11>> PUBLICLY DUMPS ELON MUSK,
15:14THEN WHO WINS? TODAY, ELON MUSK
15:18TWEETED A VIDEO OF THE LATE
15:20CONSERVATIVE ECONOMIST MILTON
15:22FRIEDMAN IN PRAISE OF ZERO
15:26TARIFFS.
15:28>> THERE'S NOT A SINGLE PERSON
15:29IN THE WORLD WHO COULD MAKE THIS
15:31PENCIL. REMARKABLE STATEMENT.
15:33NOT AT ALL.
15:34>> THE WOOD.
15:35>> FROM WHICH IT'S MADE, FOR ALL
15:37I KNOW.
15:37>> COMES.
15:38>> FROM A TREE THAT.
15:38>> WAS.
15:40>> CUT DOWN IN THE STATE.
15:40>> OF WASHINGTON.
15:42>> TO CUT DOWN THAT TREE, IT
15:43TOOK A SAW TO MAKE THE SAW. IT
15:44TOOK STEEL TO MAKE THE STEEL. IT
15:46TOOK IRON ORE.
15:48>> THIS BLACK CENTER.
15:50>> WE CALL IT LEAD, BUT IT'S
15:51REALLY GRAPHITE. COMPRESSED
15:53GRAPHITE. I'M NOT SURE WHERE. IT
15:55COMES FROM, BUT I THINK IT COMES
15:56FROM SOME MINES IN SOUTH
15:58AMERICA. THIS RED TOP UP HERE,
16:00THE ERASER BIT OF RUBBER
16:03PROBABLY.
16:03>> COMES FROM MALAYA.
16:04>> WHERE THE RUBBER TREE ISN'T
16:05EVEN NATIVE. IT WAS IMPORTED
16:07FROM SOUTH AMERICA BY SOME
16:09BUSINESSMEN WHO, WITH THE HELP
16:10OF THE BRITISH GOVERNMENT.
16:12>> THIS BRASS FERRULE. I HAVEN'T
16:14THE SLIGHTEST IDEA.
16:15>> WHERE IT CAME.
16:17>> FROM.
16:17>> OR THE.
16:18>> YELLOW PAINT, OR THE.
16:19>> PAINT THAT MADE THE BLACK.
16:21>> LINES, OR THE.
16:21>> GLUE THAT HOLDS IT TOGETHER.
16:23LITERALLY THOUSANDS OF PEOPLE
16:26COOPERATED TO MAKE THIS PENCIL.
16:28PEOPLE WHO DON'T SPEAK THE SAME
16:29LANGUAGE, WHO PRACTICE DIFFERENT
16:31RELIGIONS, WHO MIGHT.
16:33>> HATE ONE ANOTHER.
16:33>> IF THEY EVER MET.
16:35>> WHEN YOU GO.
16:36>> DOWN.
16:36>> TO THE STORE AND BUY.
16:38>> THIS PENCIL, YOU ARE, IN
16:39EFFECT, TRADING A FEW MINUTES OF
16:41YOUR TIME FOR.
16:42>> A. FEW SECONDS OF THE.
16:45>> TIME OF ALL THOSE THOUSANDS.
16:46>> OF PEOPLE.
16:48>> WHAT BROUGHT THEM TOGETHER
16:49AND INDUCED THEM TO COOPERATE.
16:50>> TO MAKE THIS PENCIL?
16:51>> THERE WAS NO. COMMISSAR
16:53SENDING OUT OFFICES FROM.
16:54>> SENDING OUT.
16:54>> ORDERS FROM SOME.
16:56>> CENTRAL OFFICE.
16:57>> IT WAS A MAGIC.
16:57>> OF.
16:58>> THE PRICE SYSTEM.
17:00>> THE IMPERSONAL.
17:01>> OPERATION OF.
17:02>> PRICES THAT BROUGHT THEM
17:03TOGETHER AND GOT THEM TO
17:05COOPERATE TO MAKE.
17:06>> THIS PENCIL.
17:06>> SO THAT YOU COULD HAVE IT FOR
17:08A TRIFLING SUM. THAT IS WHY.
17:12>> THE OPERATION.
17:13>> OF THE FREE MARKET IS SO
17:15ESSENTIAL, NOT.
17:16>> ONLY TO PROMOTE. PRODUCTIVE
17:18EFFICIENCY.
17:18>> BUT
From “Liberation Day” to Chaos: Trump Pauses Most Tariffs While Escalating Trade War with China
421,916 views Apr 11, 2025 Latest ShowsSupport our work: https://democracynow.org/donate/sm-de...
President Trump has announced a 90-day pause on new tariffs for most countries and a steep increase to tariffs on China. The 125% tariff rate on China comes after China retaliated in an escalating trade war between the two largest economies in the world. For most other countries, a 10% tariff remains in place, but higher tariffs were paused just hours after they went into effect, causing global stock markets to shoot back up after a historic plunge. We speak with two economists, Nancy Qian and Joseph Stiglitz, about the “chaos” of the week since Trump’s initial unveiling of his tariff plan on April 2, which he termed “Liberation Day.” There is “no economic theory behind what he is doing,” says Stiglitz. He calls Trump a “schoolyard bully” who is upending international markets based on a flawed understanding of the role of trade deficits and the feasibility of reintroducing manufacturing to the U.S. economy. “We’ve just never seen anything like this before,” says Qian, who adds that China appears to be digging in for the long, drawn-out trade war that Trump has now ignited. Transcript: https://www.democracynow.org/2025/4/1...
Transcript
0:00global stock markets surged on Wednesday
0:02after President Trump announced a 90-day
0:04pause on sweeping new tariffs for most
0:06countries while at the same time
0:08escalating the US trade war with China
0:11trump raised tariffs on China to 125%
0:14after China increased tariffs on US
0:16goods to 84% following the Trump
0:18administration's initial tariff
0:20increases china has also taken other
0:23retaliatory actions including new
0:25restrictions on rare earth exports to
0:27the US as for most of the rest of the
0:30world a 10% tariff remains in place but
0:32the more sweeping tariffs were paused
0:34just hours after going into effect
0:36global stock markets had been tumbling
0:38ever since Trump announced the new
0:40tariffs on April 2nd on what he called
0:42Liberation Day the Trump
0:45administration's given conflicting
0:47accounts as to why Trump reversed course
0:50treasury Secretary Scott Bessant said it
0:53was Trump's quote strategy all along but
0:57Trump himself openly admitted he was
0:59concerned about the unraveling of the US
1:01bond market bond market is very tricky i
1:04was watching it but if you look at it
1:06now it's uh it's beautiful the bond
1:09market right now is beautiful uh but
1:12yeah I saw last night where people were
1:14getting a little queasy i think
1:17everything had uh well the big move
1:20wasn't what I did today the big move was
1:22what I did on Liberation Day on
1:25Wednesday the S&P 500 soared 9.5% and
1:29the Nasdaq jumped over 12% after Trump
1:32made his announcements about the tariff
1:33pause in a post on Truth Social just
1:36before 1:30 p.m earlier in the day Trump
1:39wrote quote "This is a great time to buy
1:42DJT."
1:43Democratic Senator an Adam Schiff is now
1:46calling on Congress to determine whether
1:47the Trump administration engaged in
1:49insider trading or market manipulation
1:52bloomberg is reporting the world's
1:54richest people added 304 billion dollars
1:56to their combined net worth on Wednesday
1:59the largest one-day gain in the history
2:01of the Bloomberg Billionaires Index
2:03we're joined now by two guests from Rome
2:06Italy nancy Chen is with us she's a
2:09professor of economics at Northwestern
2:11University co-director of Northwestern
2:14University's Global Poverty Research Lab
2:17founding director of the China Econ Lab
2:20her latest piece for Project Syndicate
2:22is headlined "Americans can't win from
2:25Trump's trade war." Joseph Stiglets is
2:28with us in studio here in New York nobel
2:30Prize winning economist Columbia
2:32University professor former chair of the
2:35Council of Economic Advisors professor
2:37Stiglets is also currently the chief
2:39economist of the Roosevelt Institute his
2:42latest book The Road to Freedom
2:44Economics and the Good Society we
2:46welcome you both to Democracy Now uh
2:48Professor Stiglets let's begin with you
2:50just overall respond to this roller
2:55coaster and if anyone has any doubt that
2:58global outcry matters and protests
3:00around the globe make a difference like
3:02what happened this weekend well just
3:04take a look at what happened yesterday
3:07can you talk about uh Professor
3:09Stiglet's your response
3:12there's been total chaos and one of the
3:16things that we know uh is that chaos is
3:21bad for the market um but there's been
3:24already uh lasting damage you know for
3:28the last 80 years we were trying to
3:30create a world where a borderless mar uh
3:34world at least borders matter less all
3:38of the sudden borders matter more and
3:42it's not only borders with those you
3:45don't like it's borders with our best
3:47friends in Canada so this is a new world
3:51where every country has to a ask a
3:54question that we never asked before
3:57what is the extent of our national
3:58economic sovereignty
4:00what will happen if some crazy person in
4:04another country in the United States for
4:06instance would suddenly raise
4:08tariffs 20% 10% 20% 50% 100% uh so there
4:15is no
4:17reliability in our relationships whether
4:20with friend or not so friend
4:23uh what is also clear is that Trump has
4:28no economic theory behind what he's
4:30doing and I think that's most disturbing
4:33both to me as an economist and to those
4:36who are on the other side of
4:37negotiations i've talked to some of
4:39these people and they say you know we
4:41don't know how to negotiate because the
4:43other side is not a normal a normal
4:46negoti negotiator you know normally the
4:48other side knows what they want uh
4:51there's a theory about how trade works
4:54uh that's not true here it's it's uh a
4:59different world so let me give you an
5:00example
5:02um Trump thinks that trade deficits by
5:07themselves and in particular trade
5:09deficits and goods reflect somebody
5:13treating us unfairly and it's based sort
5:16of on a premise that we are better than
5:19any other country so people should be
5:21buying more goods from us than we are
5:22buying from them it's absurd the
5:26magnitude of the multilateral trade
5:28deficit is just determined by the
5:31disparity between aggregate savings on
5:33the one hand and national savings and
5:36aggregate national demand uh investment
5:38on the other and if savings goes down
5:43then we'll have a bigger deficit now his
5:46proposal to have uh a big tax cut
5:51unfunded is effectively a lowering of
5:54national savings and that's going to
5:55make the multilateral national trade
5:57deficit larger then you look at the
6:00microeconomics i just want to make sure
6:02he makes a big difference between goods
6:04and
6:05services but we are in the 21st century
6:09not where we were in 1950
6:12services are the major part of our
6:15economy goods production manufacturing
6:17is 9 10% what are important service
6:22sector
6:23tourism education health what is he
6:27doing to those sectors look what he's
6:30done in the last few weeks he's
6:32devastated our education system
6:35the way
6:37his border immigration people have
6:41treated those wanting to come into our
6:44country with valid passport visas
6:48uh has discouraged tourism so he is
6:52hellbent at hurting America's major
6:56export industry tourism and education so
7:01he's making things just that much more
7:03worse in at the micro level and at the
7:06macro level so before I bring in uh
7:09Professor Nancy Chan uh I wanted to ask
7:11you you just said um earlier that chaos
7:13is bad for the market indisputable but
7:17how do you explain people are absolutely
7:19perplexed we had that in the
7:20introduction as well how is it that just
7:22as Trump declared a pause on these
7:24tariffs the market soared and not just
7:28soared I mean for the biggest daily gain
7:30since 2008 the uh S&P what explains that
7:35remember that the market had gone down
7:37enormously almost into bare territory in
7:40the two preceding days uh there is a lot
7:44of irrational exuberance at times in the
7:47market i my judgment is that they've
7:51made a mistake and the reason I think
7:53there's a mistake is the importance of
7:58trade with China in many ways is much
8:02larger than trade with
8:05Europe that we depend enormously for uh
8:12goods coming from China you know we buy
8:16cars from Europe if we don't have the
8:19European
8:20cars you know we suffer a little bit but
8:23it's not a big deal if we don't have the
8:26ingredients that go into so many of our
8:29goods or if those ingredients go up
8:33twice in price that's a big disturbance
8:36mhm so I'm anticipating that there will
8:40be actually a very big disturbance from
8:44these enormous unprecedented let me
8:47emphasize
8:48unprecedented tariffs against China and
8:52China's retaliation including their
8:56restrictions on exports of minerals
8:59rarers that we need for our production
9:02mhm so uh Professor Nancy Chan if we
9:05could get you to respond to uh the scale
9:08of these tariffs and what you think the
9:11impact on the Chinese economy and also
9:13the US economy will be on these 125%
9:17that the US has imposed on China and 84%
9:19that China's imposed on the US
9:24like Professor Siglett said these tariff
9:27rates are unprecedented they are so high
9:30it's really difficult for us to
9:32calibrate exactly what the cost will be
9:33on everyone except that we know it's
9:35going to be enormous you know already
9:38we're seeing contracts that are being
9:40cancelled between Chinese suppliers and
9:42American importers business
9:44relationships that took decades to build
9:48are now being paused because these
9:50tariffs are so high that no one can be
9:54profitable can stay in business and
9:56continue to import and you know the
10:00thing about tariff rates is if you
10:02increase it a little bit then maybe
10:04people can take the hit by the by by
10:07people I mean you know the firms the
10:09exporters and the importers but if you
10:11increase it a lot and they can't meet
10:13their bottom line then they just have to
10:16stop and we've just never seen anything
10:19like this before and what does it mean
10:22for the US if we can't get parts from
10:25China and also what does it mean for
10:27China if they have to shut factories
10:31factories that are supporting families
10:33you know and children that were relying
10:36on these export jobs so I think the cost
10:39for both economies is going to be
10:42colossal we'll see a little bit of it in
10:44the short run and if this continues
10:47we're just going to see it exponentiate
10:49over time let me ask you Professor Chen
10:52um about the Treasury Secretary
10:54Bessant's comments when he said you know
10:56this was all planned the question is of
10:59course was uh insider trading planned
11:01trump boasted yesterday the greatest
11:04increase in the stock market that the
11:06country it had ever seen and of course
11:08the question is um how these
11:11billionaires and perhaps I can't say
11:14this i know this I don't know this uh
11:16that Trump himself benefited yesterday
11:18as it rose buying early uh but Bessant's
11:22comment um you might even say Trump goed
11:25China and they showed themselves to be
11:28the bad actor that they
11:33are your comment Professor
11:38Chen i think we just lost Professor Chen
11:41in Rome Italy so we'll put that question
11:44to Professor Stiglets well uh I don't
11:48think they anticipated uh this kind of
11:51response uh the kind of language they
11:55used was a a schoolyard bully uh it was
12:01they didn't show us respect and of
12:03course China's view was US broke
12:06international economic law uh we have an
12:09international framework that the WTO
12:13that is supposed to determine how
12:16countries uh uh determine trade policy
12:20and we just threw that whole agreement
12:23that we played a key role in writing we
12:26threw it in the dustpan uh uh so uh the
12:31argument that oh he didn't show me
12:33respect is the kind of language you hear
12:36from from bullies uh I don't think we
12:40expected them to act uh so
12:43respondently i was in China uh about two
12:46weeks ago and it was very clear that
12:49they were ready for another uh round
12:53because they had seen how erratic Trump
12:57was and there is a fundamental asymmetry
13:00that I think uh Trump and his team
13:03doesn't fully grasp uh the asymmetry uh
13:07is that uh China will experience a
13:11deficiency in aggregate demand as they
13:13lose their exports you can shift that
13:16demand to producing
13:19domestically and they've been trying to
13:21do that for a number of years this is
13:23going to move much harder to shift
13:26supply so we are in a tighter bind I
13:30think than China so Professor Chen is
13:33back with us um Professor Chen that
13:36comment of the Treasury Secretary um
13:38that um this was all planned and that
13:40Trump successfully managed to go China
13:43so that they would show themselves to be
13:45the bad actors that they are and Vance's
13:48comment the day before referring to the
13:50Chinese peasants
13:54i it's really hard to believe that all
13:57of this was planned as a strategy to get
14:00to China uh you know for a bunch of
14:03different reasons one is you know the
14:06unique adversarial relationship between
14:08China and the US is well known and it's
14:11been going on since the first trade war
14:13so there's really no new information to
14:15be learned the second is that the
14:18Chinese and the US had actually been
14:21negotiating and the Chinese had shown
14:23themselves to be really willing to
14:25negotiate and really not desiring a
14:27trade war so you see that for example in
14:30the negotiations over the Tik Tok deal
14:33so under the Biden administration it was
14:36uh Tik Tok was asked to divorce itself
14:38from its Chinese owners Bite Dance at
14:40the time the Chinese government said no
14:42way we'll never let by dance sell Tik
14:45Tok to Americans but then under the
14:47Trump administration what we saw was
14:50that you know the negotiations proceeded
14:52quite rapidly and 2 days before it
14:56became official that's when the US hiked
14:59up tariffs on China to another 34% so
15:02that just doesn't feel like a well
15:04planned strategy another way to ask it
15:07is to say well what has the US
15:10government achieved now that it couldn't
15:13have achieved without raising tariffs
15:16for the entire world right what did it
15:18achieve by increasing tariffs for uh
15:22islands with only penguins on it what
15:24was the point of that did that tell
15:26anyone anything about American strength
15:30or about uh China and the answer has to
15:33be no there's that cartoon going around
15:35first they came for the cats then they
15:37came for the penguins they're mean uh I
15:41wanted to ask about the the broader
15:43implications of what it would mean for a
15:46massive uh cut in trade between uh the
15:49US and China uh the World Trade
15:51Organization said Wednesday that this
15:53escalating tariff war could cut trade
15:55and goods between the two countries by
15:5780% and trade between uh China and the
16:00US accounts for 3% of global trade all
16:03global trade so what would that mean
16:04what are the fallout effects of that on
16:07other countries uh much smaller
16:09economies um and professor Stiglets this
16:12point that you made about um having
16:15broken the US having broken uh
16:17international economic law Bernie
16:18Sanders issued a statement yesterday
16:20saying that what he's done is actually
16:22unconstitutional that Trump does not
16:24have the authority to make you impose
16:26the tariffs that he has so if you could
16:28comment on on both those things so let
16:30me begin by first emphasizing there's
16:33going to be a big economic effect on the
16:36United States
16:38because the time it takes to bring
16:40manufacturing back in the United States
16:43even if he were successful uh is not 3
16:47months uh not even a year two
16:51years i've talked to firms that have
16:54thought about bringing manufacturing
16:56back to the United States they say we
16:57don't have the logistics we don't have
16:59the supply uh uh uh chains that you need
17:03to bring complex manufacturing back and
17:07modern
17:08manufacturing is robotic so even if we
17:12brought manufacturing back there aren't
17:15going to be many jobs so the reality is
17:18that his picture of bringing back us
17:22back to the
17:241950s that's never never going to happen
17:28but what's going to happen in the
17:29meanwhile we're not going to be able to
17:31get those goods that Americans want we
17:35saw what happened when the supply chains
17:37got interrupted after the pandemic and
17:40after the Russian invasion of Ukraine uh
17:43prices soared uh some goods more than
17:46others and that's the world we're going
17:48to be back in uh that's going to affect
17:52of course not only the United States but
17:54every other country if the Fed acts like
17:56it normally does when prices go up it
17:59raises interest rates we're going to go
18:01back into station that's Trump's ear i
18:03mean you've got the trade whisperer um
18:06uh Peter Navaro um right who was uh you
18:10know top uh economic trade guy in the
18:14first administration then went to prison
18:16is now out and continually cites the uh
18:20economist Ron Vero for why it's
18:22important to trade uh to uh impose
18:26tariffs and it turns out that Ron Vera
18:28is just an anagram of Navaro he doesn't
18:32even exist you can't make this stuff up
18:35and now of course uh Donald Trump would
18:38call reporters for years as John Baron
18:40so it's very similar uh also a fictional
18:43person in fact it was Donald Trump um so
18:47who is advising him and what about the
18:50fact that people like Elon Musk joined
18:52with the broligarchy of the other
18:55billionaires against what he was doing
18:57attacked Navaro non-stop calling him a
18:59and a sack of bricks but said that
19:02was an insult to bricks well I mean
19:05you're there is no one that he seems to
19:08be listening to uh in many ways uh Trump
19:14is giving protectionism a bad name uh
19:17there is an argument that you can say
19:20that carefully
19:23constructed policies can help build
19:26particular industries so UAW President
19:29Sean Feain makes that argument yeah in
19:31particular industries it has to be
19:32crafted more important for developing
19:35countries than developed we we don't
19:37need that as much as a poor developing
19:39country but sometimes you can use
19:42carefully crafted trade policies to do
19:45that but
19:47his broad-based policies his going after
19:50Canada his going after the penguins
19:54makes absolutely no sense and what he's
19:59bringing back is the concern that we've
20:02had that uh political economists have
20:05had for a very long time it could be a
20:07source of corruption when you negotiate
20:10in a non-transparent way what happens is
20:15bribes get paid you you say "Take off my
20:19tariff and I'll give you money money
20:22either directly to you or to your
20:25campaign coffers." So we are going back
20:28into a non-transparent world
20:32where for instance the billionaire tech
20:35bros can help shape global tech policy
20:39in international trade to the detriment
20:42of the entire world he's already done
20:44that he's made a big deal about the EU
20:48changing its laws that try to create
20:51competition in the tech sphere to try to
20:55make sure that
20:57there's AI safety and and uh social
21:01media safety content moderation he's
21:05attacked these fundamental laws and all
21:08this is going to be going on secret and
21:10with a lot of uh dirty stuff and just
21:14boast like he did the the other night um
21:17I've got all these countries kissing my
21:19uh I won't say it but it rhymes with
21:21grass narina okay um and just before we
21:24conclude uh Professor Chan if you could
21:26give us an idea what is happening in
21:28China what are you hearing about how uh
21:31industries there are preparing for
21:33what's to come
21:37so China uh the voices in China are
21:40surprisingly calm you know the
21:42government's trying to strike a balance
21:45between preparing the people for
21:47economic pains to come and getting
21:49people into a mindset of solidarity you
21:52know they're blaming obviously they're
21:54blaming this entire these tariff hikes
21:57on the Trump administration and the US
21:59government and people find that
22:01convincing in this case at the same time
22:04they're also trying to not stir up too
22:07much nationalism so they've been really
22:09careful to actually censor how high the
22:12tariff hikes have been by the US they've
22:15been careful and you know my reading of
22:18what's going on is that they're creating
22:21space so that they can get out of this
22:23right so that there's a face- saving way
22:25to negotiate and get out of this trade
22:28war if an opportunity presents itself
22:31and you know in the meantime of course
22:33the central bankers the industries
22:36everyone is lining themselves up for um
22:39a deep and long trade war
'This is amateur hour': Joseph Stiglitz on Trump tariffs and China
211,610 views Apr 12, 2025 The Fourcast | PodcastEconomic relations between the US and China are effectively over as the world’s two largest economies trade blows in a tit-for-tat trade war that’s brought the global world order into a new era.
As Xi Jinping calls on the EU to join him in opposing President Donald Trump’s ‘bullying’, where does this leave the rest of the world? Is globalisation over? On this episode of The Fourcast, Matt Frei is joined by Joseph Stiglitz, a Nobel Prize-winning economist, former adviser of Bill Clinton and former chief economist of the World Bank. Produced by Ka Yee Mak, Tom Gordon-Martin, Simon Stanleigh and Michael Saliba.
Transcript
0:00what Donald Trump is doing is shooting the US in the foot he's doing more than
0:06anybody has ever done to actually harm American exports this is vintage chaos
0:13the most damaging thing for the United States is not the trade war it's the
0:18attack on our science an attack on our universities attack on the institutions
0:25that gave us really the comparative advantage in technology it's where we
0:34are welcome to another special edition of the forecast from Washington DC a rather stormy Washington DC as you can
0:42tell and the storm kind of reflects the political and economic mood at the moment here to unpeel the onion of this
0:49is extraordinary week of events on the markets and in the White House behind me
0:55i'm very happy to say I'm joined by Professor Joseph Stiglets one of the most eminent economists in this country
1:00amongst other things he was economics professor at Columbia University chief economist at the World Bank and of
1:06course a Nobel laureate welcome Professor Stiglets nice to be here so I
1:12want to start off with a quote that caught my eye this morning from Bill Aman one of the billionaire hedge fund
1:18buddies of President Trump who was panicking uh about seven days ago about
1:23the markets going down too quickly for his liking and then when there was a
1:28reprieve to most of the tariffs of 90 days announced by the White House and the markets shot up this guy Mr aman
1:36said "Vintage out of the deal this is a brilliant president do you agree with
1:42him no and you have to remember that market then went down again uh this is
1:48vintage chaos uh that we've seen uh uh uh a really trademark of uh Donald Trump
1:57and how dangerous is this chaos which seems to be soldiering on not just for
2:02the US economy but the world economy very dangerous you know we've had 80
2:08years of trying to create a rule of law a world in which borders didn't matter
2:15very much where we created uh complex and long supply chains and uh all that
2:24is being uh thrown in the dust bin uh it means that countries can't take
2:31advantage of comparative advantage as they did before they can't rely on the
2:36rule of law as they did before uh and uh
2:42uh business really doesn't like the kind of uncertainty chaos and uh the absence
2:50of a rule of law of course Trump and his friends in the White House would say
2:56this is about red addressing the unfairness uh against America on trade
3:02this is about making sure that China eventually after this trade war finishes
3:07behaves correctly in terms of its trade practices do they have a point a very
3:12small point let me make it clear the United States and to some extent Western
3:18Europe wrote the rules of the game and so it's ironic that we are now
3:24complaining that the rules of the game that we wrote are working and we wrote
3:30them let me make it clear for the interests of American corporations and
3:35other western corporations American financial institutions we wrote them for our advantage and now we're complaining
3:43the system is unfair you know what I hear is yes there may be some unfairness
3:48but it's tilted towards the United States not away from the United States the problem here is that he is
3:56interpreting trade deficits and particularly deficits
4:02in goods as a symptom of unfair trade i mean and the logic is a very simplistic
4:10logic that we're better than any other country therefore we ought to be exporting more than we're importing and
4:17therefore if we're importing more it must mean that somebody's uh doing something naughty uh the fact of the
4:24matter is when you have a a trade deficit uh at a multilateral level it's
4:32a symptom of a macroeconomic problem in particular
4:37it's a symptom that the country's aggregate domestic savings is less than
4:44its domestic aggregate investment and there's going to be a capital inflow to make up for that difference
4:52and corresponding to that capital inflow is a trade deficit it's that simple yeah
4:58so basically what Donald Trump was trying to do was punish foreign countries for not buying American goods
5:06so this isn't just about tariffs this is about the inability or the unwillingness or the unaffordability of places like
5:12Cambodia or Laos or Vietnam to buy expensive American stuff that they may not want exactly and it's ex there's
5:20even a deeper flaw that uh in a modern world we've moved from just trade and
5:29goods to trade in goods and services you know uh uh manufacturing is only less
5:35than 10% of the US economy uh in GDP and employment services are multiple uh of
5:44of uh goods and United States is a major exporter of services health services
5:51financial services tourism and what Donald Trump is doing is shooting the US
5:58in the foot if you look at what he's done in terms of the attack on our
6:04universities one of our most important institutions uh it makes it uh more
6:09difficult for us to export our uh educational services if you look at what
6:15he's doing to tourists including from the UK and from other countries wanting
6:20to come to the United States there's uh the threat that they will be put in detention shipped off to some place and
6:29uh without uh the kinds of normal safeguards that you expect in a democratic country so that's
6:36discouraging uh tourism so he's doing more than anybody has ever done to
6:42actually harm American exports so the tariffs that he's imposed I mean the
6:48ones against China seem to be going up every day i think the last time I looked there was 140% uh American tariffs
6:55versus 125 from China then of course all the other tariffs that may or may not come back in 90 days time i mean the
7:01last time we had tariffs like that was in 1903 uh more than a century ago is that the
7:08mindset of Donald Trump do you think that you know early 20th century is that where he's gone back to very much so
7:16when the US was a dominant power uh he want you know this make America great
7:21again is a a a going back to a world that no longer exists a world where
7:27manufacturing dominated where the US dominated and we could basically uh get
7:33away with uh anything uh United states now is less than 20% of global
7:40GDP and uh China in terms of purchasing
7:46power parody is a larger economy than the United States and there's another
7:52asymmetry that Donald Trump hasn't fully grasped that
7:58uh when we're imposing these high tariffs on uh China it creates an
8:07aggregate demand problem for China and they've been worried about that and they
8:12anticipated that and correcting an aggregate demand problem is not as
8:18difficult as correcting an aggregate supply problem and what the tariffs
8:25against China are doing is creating an aggregate supply problem because our
8:31supply is so dependent on complex supply
8:36chains in which China plays a central role you know we saw that after the
8:41pandemic uh and when Russia invaded Ukraine remember uh in those days there
8:47were these interruptions to supply and uh we had enormous inflation and we couldn't get some critical goods uh
8:56that's what Donald Trump is doing he's creating
9:02unnecessarily those supply side interruptions that we experienced just a
9:08few years ago the other thing of course he wants to do and two things really he wants to increase the revenue the amount
9:14of money the American government makes uh from these tariffs and he wants to bring jobs back to the rust belt to all
9:21those manufacturing towns that have been desolate for decades now are those not two contradictory things because of
9:28course the less people sell to to America the less revenue there'll be from tariffs and you know the jobs don't
9:35necessarily come back as if no one's going to buy the stuff that they produce it's actually worse that you just described because uh first if we get
9:44manufacturing back uh it's going to be modern manufacturing you know I just was
9:51saw a factory in China where they're producing uh a thousand cars a day with
9:562,000 workers most of the production was done by robots uh modern manufacturing
10:02is very advanced and China now has a comparative advantage in engineering
10:10uh which is at the core of modern manufacturing so uh because we have not
10:16invested in railroads we've not invested in logistics uh we have a comparative
10:23disadvantage in some of the core ingredients for uh manufacturing
10:29secondly it takes a long time to produce uh uh many of the
10:35manufact to to create the factories and given the chaos that he's uh uh created
10:43uh firms are going to be worried about moving into the United States thirdly
10:48most importantly he's raised uh the p tariffs on steel aluminum uh key
10:57ingredients into the production of other goods and by increasing the cost of
11:05production he makes American exports less competitive so in fact while he may
11:13create a few jobs in say steel or aluminum he destroys many more jobs in
11:20the sectors that in the fir areas where we use steel and aluminum so he again is
11:27engaged in job destruction so uh when economists look at the whole portfolio
11:36of what he has done it's much more job destruction than job creation i wonder
11:42because it makes so little economic sense what he's been doing whether this is just really political and what it's
11:49really about is trying to limit the expansion of China put China back in its box because as you've just said you know
11:56when it comes to infrastructure when it comes to innovation when it comes to production and maybe even you know
12:01services down the road China a nominally communist state is beating America at
12:08the capitalist game that's right you know uh in some areas we we do have
12:15enormous strengths and one of our strengths was our universities uh our uh
12:21research establishment and he in the last three months has done more to
12:26damage that than any competition with China so over
12:32the short medium and long term he's really undermining the uh strength the
12:40key strength of the United States it's like uh he's been attacking the United States far more than uh China has been
12:48doing uh any damage uh there's another element uh that one
12:56can't underestimate and that is uh the amateuress amateuress of uh his team you
13:04know I've talked to uh people who've been enga countries engaged in negotiations uh it's not like the normal
13:14negotiation where uh one side comes in both sides come in with a sound
13:21understanding of economics a strong view of what they want uh and uh you have
13:28experienced uh and well-informed uh negotiators uh this is amateur hour and
13:37so you have some people who may be bright may have been really good on Wall
13:43Street but that doesn't mean that they have any fundamental knowledge of the
13:49deep intricacies of economic policy and so you have people who've been working
13:54on these issues for decades and trying to interact with somebody who's just
13:59begun to think about these issues they find it frustrating but also I wonder if
14:04it's amateur hour because what's far more important for Donald Trump and the people around the cabinet table is
14:11loyalty to the boss than any kind of expertise which might involve them contradicting him that's right and
14:18there's an element of what is going on of a cultural revolution you know we've
14:25been talking about China and and China went through a uh a devastating cultural
14:30revolution and it was that experience that led to them to
14:36their reform and openness uh strategy which over 45 years has had led to the
14:43highest rates of growth and the largest numbers of people moved out of poverty
14:48in the history of mankind uh we didn't learn the lessons of China's cultural
14:55revolution and what I see going on right now on the attacks on the universities
15:00the attacks on expertise are have a a a kind of close relationship uh to what
15:07happened uh it's sort of like the establishment failed me that's what uh
15:14failed us uh and uh these are the elites that look down on us and it's not true
15:21they were trying to create a better world for everybody but there's that grievance and uh so uh uh they're going
15:31to shoot the country in the foot by uh
15:36destroying uh the uh expertise and in this trade war between China and the US
15:44which seems to be getting worse every day what are the consequences of that going to be for China for us and also
15:50for the world economy well as a we said for for 40 45 years we've tried to
15:58create this global economy based on complex supply chains comparative advantage and uh the whole the the
16:06standards of living on average around the world uh have increased and numbers
16:13of people moved out of poverty enormous the closing of the gap between China and
16:18the United States and the fact that China now in terms of the standard way of measuring uh these the purchasing
16:27power parody China is now larger than the United States still per capita income is much lower but it has four or
16:35five times the number of people so that it is a larger economy uh the United
16:40States resents that and professor Graham Allison uh at uh Harvard
16:46has talked about this as the fusidities trap that the country that was number
16:52one doesn't like the number two country coming up and uh uh uh threatening their
16:59dominant uh position well um China has
17:05been thinking about this issue for a long time after the first Trump
17:11administration they they began a process didn't go fast enough didn't go far
17:17enough but uh are now and have
17:22anticipated what the United States is doing so they are relatively well
17:28prepared you know they've had some adverse event spent nobody could have anticipated CO they didn't manage CO
17:34well uh but uh where they are today uh They are in a deeply uh optimistic uh
17:42position uh deepseek uh the banks in robotization
17:48uh their integration to the global economy uh give them a set a sense of
17:54confidence um so uh I think uh with
18:00difficulty they're going to be able to manage through this uh on the other hand as I said before
18:07um the Donald Trump has not fully anticipated the extent to which our supply chain is
18:15so dependent on China and just breaking it like that
18:21I'm afraid we'll have some consequences for the United States including inflation and the Fed is going to
18:27respond to the inflation by raising interest rates we're good chance of having the worst of
18:34all possible works works stagflation uh which means that we will have a a
18:41recession and inflation uh the critical question he wants the United States uh
18:50to be great again will he restore manufacturing to
18:57the United States uh will he restore America's dominance uh in this area uh
19:06there will be some movement of some firms back to the
19:11United States that will occur but overall because as I say we're a service
19:17sector we're a knowledgebased economy and I said that well before Donald Trump
19:23came on the scene uh in the key areas that are important for a 21st century
19:30economy we'll be worse off and uh uh so I think that
19:39the adverse consequences of this chaos for the United States are going to
19:45be quite significant now the really interesting question I think is Europe
19:52um Europe uh finds it difficult uh to work
19:59together uh the attack by the US against Europe has been uh uniting uh a lot of
20:10discussion about the creation of a European defense force for a long time and there seems to be a significant
20:16movement in that direction uh if Europe gets united
20:22uh responds strongly to the war in Ukraine creates a European defense force
20:28scraps some of the uh constraints that they've imposed on their fiscal policy
20:35uh and reassesses uh its trade relationships with China and uh the rest
20:43of the world i think Europe can navigate its way through this very difficult
20:50period and emerge actually stronger uh uh rather than being a sort of a
20:56dependent on the United States there will be a uh more united uh Europe as a
21:03very important and I would say the critical uh uh country in the world uh
21:10country or region uh supporting democracy and human rights so that's my hope uh a lot rest on what
21:18Europe does where does this leave uh Britain the piggy caught in the middle if you like between uh the European
21:25Union and the United States which which with which it hopes it still has some kind of special relationship i think
21:33it's important for the UK to cast uh its plot with human rights and
21:41democracy and unfortunately uh Trump is moving away from both of
21:48those and so when I say UK has to cast its lot lot with human rights and
21:55democracy that means it has to move back towards Europe and that doesn't mean it
22:01has to rejoin the EU but it does mean it has to coordinate and be an active part
22:08of the European defense force cooperate uh with industrial policy uh climate
22:15change uh uh creating uh a kind of new
22:20multilateralism which unfortunately uh for a while may not the US won't be at
22:26the center uh the EU will the center uh
22:31and uh the UK can be an important partner of the EU just back to China
22:38briefly what are the ways in which China which is the second biggest holder of American debt can retaliate against the
22:47United States in this trade Well I don't think it will actually do anything about quote dumping uh its uh US uh treasury
22:56bills uh uh it would not be in its own interest to drive down the the the price
23:01of those uh treasury bills it could do that but I don't think uh that will happen china uh has uh many cards in its
23:10hands uh it is the the dominant player in a whole set of uh na minerals and uh
23:19other natural resources while we weren't paying attention it it developed this
23:25dominance in materials that are essential for your
23:30smartphone for for renewable energy uh you know it's
23:36really quite remarkable that if you thought that there was a a a conflict of
23:41that kind you would have begun to to try to uh make sure you had the natural
23:47resources that would make you able to uh have what might be called national
23:54economic sovereignty but the f first Trump administration didn't pay any
23:59attention to that uh it was more concerned with grievance and and I would
24:05say another uh wor trade policy but not with the extreme chaos that we have
24:12today there's one other dimension obviously that it could uh uh undertake uh it's no longer dependent
24:21in the way that it was 25 years ago on American investment uh it has an enormous amount
24:28of savings you don't have that kind of savings uh it has far more engineers
24:35than we do so uh it's uh in many areas
24:40uh equal to or surpassed American engineering so its dependence on
24:46American firms has gone down uh so take one example um that uh might
24:54be very salient uh in in EV electric vehicles China's
25:02electric vehicles BYD and a whole set of other companies are now much better much
25:09cheaper than Tesla so it could tax it could tax the profits
25:16of Tesla uh not worry that well uh Tesla might say uh we're not going to invest
25:23anymore in in in China they don't need Tesla's investment uh Apple makes a
25:29significant fraction of its profits uh from China and uh it could tax uh Apple
25:37more so ex this is not what it wants to do uh it wants to continue an
25:44arrangement of of cooperation it's their leaders have made it very clear they
25:50want to cooperate but uh they're not going to cau
25:56uh they're not going to uh be subservient and to put it in a broader
26:03historical context which many Americans don't uh take into account you remember
26:10uh in the middle of the 19th century uh there were trade wars
26:17Uh those trade wars were actually with guns uh Europe with the support of the
26:24United States invaded China and demanded
26:30demanded that China open up its doors to opium to the sale of opium they were
26:37called the opium wars and it was a disaster for China but we insisted this
26:43was what fair trade free trade was about china had to open its doors to opium
26:49it's ironic that now we're talking about phenot but uh that that history which
26:56led to the what are called the concessions uh uh and uh Shanghai and uh
27:04uh other cities um uh in China uh where they had to give up territory where
27:11Europe powers ruled effectively that memory is still there and so uh I do not
27:19see any way in which China is going to cowtow to the United States where uh
27:25Donald Trump demanding something uh of China is going to get uh the resolution
27:32it has to be a dialogue based on uh uh
27:38equality and uh you know one of the problems here is they're more informed
27:45and they've been better trained United States universities uh their experts
27:52actually know more about economics in many cases than than the negotiators
27:57that we're sending from the United States so briefly would you say that what Donald Trump has done what he's
28:03decided to do for political and perhaps economic reasons has hastened the ascendancy of China and the decline of
28:11America yes it's true i don't think the damage necessarily in terms of this
28:16relative position is permanent u but it's very very deep
28:25uh the most damaging thing for the United States is what is is not the
28:32trade war it's the attack on our science an attack on our universities attack on
28:40the institutions that gave us really the comparative advantage and technology
28:45where we are today so his attack on those fundamental institutions uh
28:54probably is the most damaging thing but equally damaging is the attack on the
29:01rule of law you know the the way in which he's trampled on the safeguards uh
29:08uh the the uh just ignoring the law uh
29:14and um the last Nobel Prize uh in economics was given for
29:22uh uh studies that emphasize something that I and a lot of other people have
29:28talked about for a long time what has given rise to the wealth of
29:33nations to uh the success of countries like the UK the United States Western
29:39Europe uh is the rule of law the kind of certainty that that gives for investment
29:47and uh uh he's destroyed that so this
29:54sort of went of destroying attacking science and universities
30:00attacking the rule of law and then attacking the trade framework and the
30:07international rule of law uh has really damaged the United States uh I think
30:13very seriously and of course one of the things that's really suffered is trust in the United States and trust in the
30:19United States is one of the things that has always upheld the dollar the US dollar as the currency of reserve i mean
30:26you've effectively had a golden credit card for decades is there a danger that that golden credit card will now be
30:32demoted to silver or heaven for even bronze uh you're absolutely right and
30:38let me say emphasize something that that uh uh many of us again have talked about
30:43for several decades the importance of soft power it was US soft power that was
30:49really much more important than our hard power people respected us uh because we
30:55were a carry country a successful country uh people looked us at us and
31:03said we want to be like that uh now when people look at the US and say no we
31:08don't want to be like that uh look what he's doing uh to the universities look
31:14what he's doing to the uh rule of law look at the inequality look at the
31:19oligarchy the role of money the corruption uh so uh we are uh losing our
31:28soft power another example of the shooting ourselves in the foot uh when
31:34he uh destroyed shut down USA aid
31:40overnight it resulted in thousands
31:45of children dying in Africa because they couldn't get the medicines it again
31:51undermined respect for the United States what kind of country could do that uh
31:58you know it's an embarrassment so uh he has destroyed our soft power now to come
32:04to the more narrow question of the dollar as a reserve currency china
32:11already anticipated uh this problem uh it used to hold two two trillion or more
32:21dollars in its reserves uh the latest numbers that I've heard reported are
32:29it's down to 700 billion it's diversified uh gold euro
32:35uh uh Japanese yen uh so uh this march
32:41away from the dollar as a reserve currency is already uh way um you know
32:48uh Trump wants to have it both ways it wants to uh have the dollar as a reserve
32:56currency but also not have the one critical disadvantage of the reserve
33:04currency uh and that advantage is that if you are a reserve currency people
33:12will be accumulating dollars if they're accumulating dollars that is equivalent to a capital
33:22inflow and a capital inflow is equivalent to a trade deficit he doesn't
33:29like the trade deficit but you cannot be a reserve currency without having a
33:35trade deficit the trade deficit normally gives rise to deficiency of aggregate
33:41demand that deficiency of aggregate demand requires
33:46uh fiscal stimulus that fiscal stimulus means a fiscal deficit uh and uh the
33:56hawks the fiscal hawks in the Republican party don't like that the UK understood this uh under Kanes and uh some people
34:05say it was uh Kane's insight to say let's not be a reserve currency
34:12uh let's get rid of this hot potato and uh that had undermined the strength of
34:19uh UK um Triffin talked uh a great professor
34:26uh in the last century talked about uh what was called the Kriffin paradox that
34:31the reserve currency create to maintain that reserve currency you have to get
34:37more and more uh uh debt deficits accumulating over time and that of
34:44course as that debt increases the confidence in the reserve currency
34:49decreases and so he said you know there's there's a a kind of tension here
34:55um now the way frontline wants to resolve this is uh to break the laws of
35:03arithmetic and just destroy economics uh the particular proposal that he has uh
35:11uh has been I don't know if you've heard about the Marlego accord uh and one
35:16feature of that is that countries around the world would uh accept trade in their
35:24T bills for century bonds but uh uh which did not yield any uh interest uh
35:32and officials and other governments that I talked about and say what do you think about this they say "Well that's
35:38equivalent to a default." And so uh what
35:44some people in the Trump administration are talking about is a default on the dollar if that discussion continues uh
35:51that of course will undermine the US as a reserve currency
35:57finally Professor Stiglets I mean Scott Bessent the Treasury Secretary said the other day "The next four years of this
36:03administration are going to be about Main Street and not about Wall Street," a kind of populist message from a rather
36:10unlikely man to be honest if what's happening at the moment means pain on
36:16Main Street inflation job losses do you think that American society can sustain
36:22that or will there be a mass kind of electoral rebellion against Donald Trump and his people i think there will be an
36:29electoral rebellion uh what many Americans are now worried about is will
36:35we have free elections in 2026 you really think that's a danger that
36:41you won't have free elections well remember what happened in 2020 donald Trump tried to
36:48overturn a free and fair election where Joe Biden won by 7 million
36:56votes he tried to overturn that now one can't help but ask the question
37:03if you accumulate a lot of power if you show that you're willing to trample the
37:10rule of law is it not conceivable that you would use that power and your
37:17insensitivity to the rule of law to maintain your power and it's not that
37:23difficult because all you have to do is intervene in a limited number of
37:30elections because we have red states we have blue states and then we have purple states and so if you intervene in enough
37:38of the purple states you can ensure that you uh maintain power so because we are
37:46a divided country it's not like he has to shut down the whole electoral process
37:52all he has to do is intervene in a relatively few
37:58uh uh stakes congressional districts and uh we will not have free and fair
38:06elections that is the worry is America becoming the most powerful banana republic the world has ever seen i think
38:14that's the worry and it's a banana republic in so many ways when we talk about banana republics we often talk
38:21about leaders who uh don't have expertise uh who govern on whims with
38:28author authoritarian figures uh who uh may have flawed views grievances
38:37uh and uh it's their whims and their misconceptions obsessions which uh
38:44dictate uh economic uh and other social policies and uh we've never had a banana
38:54republic with so much military uh power and uh that is what is so scary
39:02professor Joseph Stiglets thank you very much indeed for joining us on this special edition of the forecast from
39:07Washington DC it's been a pleasure
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Transcript
0:00[Music]
0:19hello and welcome to this CNBC TV18
0:21special the global markets have been in
0:23a state of mayhem ever since President
0:25Trump decided to go through with his
0:27tariff policies
0:29in fact 9:30 a.m today India's tariffs
0:32have kicked in at 26% uh the other
0:35worrying aspect that's come in overnight
0:37is President Trump reiterating the call
0:39on tariffing pharmaceuticals remember
0:41pharmaceuticals have been exempt so far
0:43but this is the second time in the last
0:45few days that President Trump has talked
0:46about tariffing pharmaceuticals like
0:49we've never seen before in his words
0:51president uh Trump also speaking at a
0:54dinner last night uh and claiming that
0:57countries were calling him up leaders
0:59were call were calling him up to try and
1:01get deals done uh the USR of course
1:04making it clear at this point in time
1:06that there will be no exclusions uh to
1:08what has been proposed by the US as far
1:11as tariffs are concerned but to talk us
1:13through what we should now expect as far
1:15as America's intent to do business with
1:18the world is concerned the impact of all
1:20of this on the global economy and more
1:22importantly how India finds itself
1:24positioned in the global markets is
1:26noted economist and a very vocal critic
1:28of the tariff policies jeffrey Saxs
1:31thank you very very much for joining us
1:32here on CNBC TV18 a lot has happened
1:35over the last few days a lot has
1:37happened overnight as I pointed out as
1:39you look at these tariffs and playing
1:42themselves out what worries you the most
1:44today uh if something wipes out 10
1:48trillion dollars of market
1:50capitalization in two days you're
1:52probably on the wrong track the United
1:55States is uh on the path of wrecking the
1:58world economy once again i say once
2:01again because the US has a bad habit of
2:03wrecking the world economy it did it in
2:061930 with tariff increases the infamous
2:11Smoot Holly tariffs which were one of
2:14the major provocations that led to the
2:17worldwide great depression of the 1930s
2:20it did it in 2008 by blundering in uh
2:25its uh forced bankruptcy of Lehman
2:27Brothers on September 14th 2008 and that
2:32put the world into a tail spin the Great
2:35Recession now it's doing it a third time
2:38this is out of the fervid imagination of
2:41one person this is not US policy this is
2:45not congressional policy this is not US
2:48public policy this is Donald Trump's
2:51policy he is singlehandedly wrecking the
2:55world economy uh and I think uh the
2:58damage is going to be done before it
3:02gets undone so we're not in a good
3:05situation the markets are not the only
3:08ones telling us that we're hearing from
3:10business people all over the world that
3:14longmade value chains supply chains for
3:18critical commodities for consumer goods
3:22for industrial products for making uh
3:25automobiles for making smartphones you
3:28name it are being profoundly disrupted
3:32and uh we have uh somebody uh laughing
3:36as the world economy burns uh and that
3:40is our president so this is not at all
3:44uh a case with the silver lining
3:47unfortunately well it doesn't look like
3:49there is any silver lining at this point
3:51in time professor Saxs but you know you
3:53talked about the wrecking ball approach
3:55that President Trump seems to have taken
3:57and the impact it's going to have as far
3:58as global growth is concerned but let's
4:00talk about America uh you know Larry
4:02Frink saying we're already in a
4:04recession bill Aman one of the biggest
4:06supporters of President Trump coming out
4:08and saying we're headed into a long
4:10winter now uh as far as the economy is
4:13concerned the impact so far has largely
4:15been felt in the financial markets uh
4:18when do you start to see this impact the
4:20real economy
4:23if the survey data uh are correct uh
4:27we're going to see it in consumer
4:29purchases declining sharply in the
4:32coming months because consumer
4:34sentiments are falling through the floor
4:37uh that means that we're going to have a
4:40significant demand shock in addition to
4:43all the multiple supply shocks of
4:46disruption of global supply chains
4:50these businessmen expected to be making
4:52fortunes at a businessfriendly
4:55administration for them to be speaking
4:57out after they invested so much money to
5:00buy the presidency for this person uh is
5:02also indicative of their state of mind
5:06so I think what we're hearing again I'm
5:11not a short-term macro forecaster but
5:13we're hearing that the odds now are odds
5:17on for a US recession uh in 2025 odds on
5:22on a US recession in 2025 but let's talk
5:25about the latest development with
5:27respect to China and the president
5:29saying that China is going to be
5:30tariffed higher another 50% which takes
5:33the total quantum to over 100% china
5:36saying it will retaliate with counter
5:38measures now do you believe uh that the
5:41possibility of China selling US bonds it
5:44holds about 800 billion in US bonds
5:46directly uh you know there are many in
5:49the market who believe that that will be
5:51the option of last resort how do you
5:53believe China is likely to play this out
5:57china of course has been diminishing the
6:00share of its foreign exchange reserves
6:02held in dollars for several years now
6:05china is not naive when it sees that the
6:09US has confiscated the reserves of
6:12several countries now in which the US
6:15has geopolitical
6:17uh opposition so the
6:19US took and froze of course the more
6:23than $300 billion dollars of Russian
6:25reserves technically in Belgium and
6:28Euroclear uh the US grabbed the foreign
6:32exchange reserves of Venezuela it did
6:34the same for Iran it did the same for
6:36Afghanistan it did the same for North
6:39Korea the US weaponized the dollar well
6:43before this latest uh round of trade
6:48hang grenades so China already has been
6:52diminishing its holdings of dollars the
6:54bricks have been uh working on and I
6:58hope that they accelerate uh non-dollar
7:01payments because we're going to need the
7:03world's going to need alternative ways
7:05to make payments when you have this kind
7:08of obstreporous and uh unstable uh
7:13government at what is now the core of
7:15the payment system in the world um so
7:19China definitely will not just sit there
7:21with its forex reserves and dollars
7:24whether it will act abruptly uh in a
7:29reaction or whether it will gradually
7:31continue the direction of selloff I
7:34don't know but it will continue in the
7:37direction of of disgorging itself of US
7:41denominated assets you know the question
7:43is whether this is the end of American
7:45exceptionalism and you certainly seem to
7:47believe that it is but is it also the
7:49end of China's isol isolationism uh has
7:54the Trump administration the unintended
7:56consequences of this tariff policy as
7:59well as the way that he's going about
8:01addressing friends and foes will it push
8:04people to actually re-engage with China
8:06well first it's not the end of American
8:08exceptionalism and that what America is
8:10doing is absolutely exceptional just
8:12exceptionally damaging so it's the end
8:15of a different a different kind of
8:17exceptionalism it's the end of American
8:18leadership i would say it's the end of
8:21other countries looking to the United
8:23States as a
8:25stabilizer as a rule-based order
8:28although that was quite frayed already
8:31but now no one could utter those words
8:35with regard to the United States
8:38similarly China was not in any way
8:40isolationist it was the ma major trade
8:43partner of probably 150 countries in the
8:46world but China has aimed for the last
8:50decades to be a
8:53responsible participant in the
8:55international system not to put its head
8:58out too far uh in uh in leadership uh
9:03Dong Xiaoping famously advised China b
9:07your time keep your head down we need to
9:10rebuild after a
9:13long century and a half of economic
9:17difficulty what they call the century of
9:19humiliation um and so Dong Xiaoing said
9:22"Keep your head down." Now China can't
9:24quite keep its head down uh China is
9:26under direct attack by the Trump
9:30policies and this is uh one of the core
9:34dimensions of the Trump policy part is
9:37protecting
9:38uh American uh economy in a very naive
9:42and I think doomed to fail way but part
9:45of it also is a hostile action visav
9:49China especially uh which is that China
9:54must be broken in its global success
9:57story because it's a uh a competitor
10:00with the United States so China now has
10:04to take a more uh leadership role i
10:08think China will have to uh enable the
10:11Renman B to play a more international
10:14currency role it's been very gradual
10:17step by step but I think it's going to
10:19have to accelerate china I think
10:22will accelerate the calls for the bricks
10:25of which of course India is a founding
10:28crucial member to play
10:31a somewhat of a balancing role to the
10:34United States in the international scene
10:37especially calling on the bricks to
10:39reinforce their open trade with each
10:41other because after all the bricks is
10:43more than 40% of the world economy it's
10:47about half the world population it
10:49matters a And so I think that grouping
10:52is going to play a more important role
10:54so I believe that
10:57China reflected on this and said we're
11:00we're not going to be bullied we're not
11:03going to be blackmailed we're not going
11:05to be cornered by the United States and
11:07so the brawl is very real right now and
11:10very dangerous
11:12[Music]
