Jeff Stein
Appearances
Today, Explained
An America First trap
How many tens of thousands of American workmen are living on Canadian money today?
Today, Explained
An America First trap
I'm glad you asked that because people have been asking me that, you know, are we in one? And when are we going to be in one? How is this going to start? It's already here. And the main things really are targeting our three biggest trading partners, China, Mexico, and Canada, Mexico and Canada. really to the shock of everyone in the world, including some people close to the White House.
Today, Explained
An America First trap
Mexico and Canada have come in for the steepest tariffs despite being our closest allies. So, you know, in the first few weeks here, we were looking at about $1 trillion of new tariffs being, of imports being subject to tariffs. And about $2 trillion of additional imports are potentially going to be hit by imports starting April 2nd, according to the plan that Trump has laid out.
Today, Explained
An America First trap
So that would cover you know, pretty close to everything the United States imports from foreign countries.
Today, Explained
An America First trap
In return, China has threatened and imposed tariffs on a number of U.S. agricultural and other exports. Canada has threatened, although not yet imposed, retaliatory measures on electricity used by Americans in the north and other U.S. exports to Canada. Mexico has threatened or moved forward with, you know, a number of retaliatory tariffs that will hurt U.S. exports to our southern border.
Today, Explained
An America First trap
You know, when I talk to businesses, what they say overwhelmingly is, look, if we had any confidence that Trump was going to impose these tariffs and keep them, even that would be better than what is the current status quo, which is that business leaders don't know from one hour to the next what Trump is going to do. I mean, last week, Trump threatened 50% tariffs on Canadian steel and aluminum.
Today, Explained
An America First trap
And by the end of the day, by the end of the day, just a few hours, those had been rescinded. And that means that nobody can plan, nobody can make investment decisions because how do you balance out what your sort of revenue and expenses projections will look like in six months if you don't know what the tariffs are going to be in a few hours?
Today, Explained
An America First trap
And, you know, we've seen a real, real scary plunge in consumer confidence, in investment, in expectations of inflation from consumers and all these things happening. combined to suggest that there's a chance that the economy could just sort of fall off a cliff next quarter.
Today, Explained
An America First trap
And when you talk to businesses who are saying that they're massively pulling back investment, that could filter through to the macro economy very quickly.
Today, Explained
An America First trap
So what the president and his advisors have been sort of gesturing towards is an attempt to really rebalance the entire global financial system. And there has been a critique of America's role in global capitalism that's shared by large parts of the left and large parts of the labor movement.
Today, Explained
An America First trap
And that critique is essentially that America has absorbed through its excess demand the manufacturing capacity and the productive capacity of the rest of the world.
Today, Explained
An America First trap
What he's getting at is that the American dollar has been very, very strong for quite a long time. And because the dollar has become the backstop of the global financial system... We buy imports at a very cheap rate. And while that sounds great and many economists say that it is great, our ability to buy Chinese and Vietnamese and Mexican and German exports on the cheap has hurt markets.
Today, Explained
An America First trap
American manufacturing jobs and sort of hollowed out the Midwest and many parts of this country that were dependent on the ability to export to other markets.
Today, Explained
An America First trap
And Trump is engaging in this really radical attempt to wrench the global financial system out of really the place it's held in the global financial system since the Bretton Woods agreement that followed World War II and create a system in which our manufacturing prowess returns because we're shaking up or currency and monetary agreements with the rest of the world.
Today, Explained
An America First trap
That, however, is not going to be accomplished by tariffs. And it is really, really hard to imagine how Trump can undo sort of what's happened in the last 60, 70 years in three to four years. But I think it gives a clue and sort of helps explain why he keeps saying, you know, maybe we'll have to stomach some short-term pain to achieve that sort of new order.
Today, Explained
An America First trap
Right now, America really benefits from something I think, you know, we kind of take for granted, which is that we are able to print huge amounts of money. I mean, our debt and deficits are sort of unparalleled in the developed world. We have, you know, $35, $36 trillion in debt. And the reason that we can do that is in part because America's dollar is viewed as such a safe asset.
Today, Explained
An America First trap
And that creates demand for our debt, which allows us to, you know, afford pretty low taxes with a with the amount of government spending that we have. And that fiscal imbalance is enabled in part by America's status as sort of the global financial backer, backstop.
Today, Explained
An America First trap
If that were to change in the world that Trump is talking about, you would see, you know, not only it get more expensive to buy foreign goods, you know, costs for American consumers would rise, but it would also lead to this really difficult relationship
Today, Explained
An America First trap
rebalancing of our fiscal situation which could be quite painful because it would require either major tax hikes or cuts to spending programs that people really depend on whether that loss could be offset by the increase in American exports is a tricky bet but it's such a profound transformation that it's really hard to even imagine what that could look like
Today, Explained
An America First trap
We've really seen, I mean, during the campaign, it was an interesting phenomenon because voters kind of liked the tariff talk. We would do stories that called into question whether Trump's tariffs would have crippling effects for the global economy. But the polls were very clear that voters largely supported Trump's tariffs.
Today, Explained
An America First trap
And they believed him when he said that they were taxes on foreign countries, not Americans, even though that's not really true. In the last few weeks, because of the massive uncertainty that Trump has created, we've seen voters begin to sour on the tariffs.
Today, Explained
An America First trap
Hey, don't tariff me. Don't do a tariff on me. It's really, I mean... It's almost a joke to think about the extent of the hostilities with Canada. I mean, Trump, when he was running, his campaign ads were not, help me stick it to those dastardly syrup-eating Quebecois. It was about lowering prices at the grocery store.
Today, Explained
An America First trap
And the idea that Americans writ large are hungering for deepening of hostilities with the Canadians is... Something that I don't know about you guys, but I don't encounter a lot of Canadian, anti-Canadian sentiment in my daily life. And I don't think most Americans feel that way.
Today, Explained
An America First trap
I mean, here I think, you know, this is a little beyond my remit, but it's really worth looking at the broad scope of just how unencumbered the president has been during his first few weeks in office. I mean, one of my other beats is covering sort of the federal budget in Doge, and they are daring the courts to rein them in or Congress to rein them in.
Today, Explained
An America First trap
I think in that context, it looks very clear to me that Trump, you know, he's in his second term. He has replaced, you know, more independent cabinet members with people who are much less willing to push back. His allies in the Republican Congress are also very fearful of a primary and are currently very unwilling to speak back against him.
Today, Explained
An America First trap
In that environment, it does not seem inconceivable that the market could fall further and further. I mean, we're already in correction territory.
Today, Explained
An America First trap
And given that context, I think there's a lot of reason to be concerned that we could enter a recession and Trump could say, hey, it's worth it long term for this quasi-quixotic attempt to rebalance the global financial system in just a few years in a way that that has, I think it's fair to say, never before been tried.