The reverberations from President Trump’s new global tariffs have rocked financial markets and world capitals. American stocks have plunged, and foreign leaders have issued forceful condemnations.The Times journalists Michael Barbaro, Peter Goodman, Natalie Kitroeff and Jeanna Smialek sit down to try to make sense of Mr. Trump’s strategy and its consequences.Guest:Peter S. Goodman, who covers the global economy for The New York Times.Natalie Kitroeff, the Mexico City bureau chief for The New York Times.Jeanna Smialek, the Brussels bureau chief for The New York Times.Background reading: Read about how Mr. Trump’s one-for-one tariff plan threatens the global economy.The trade war set off “max pessimism” in the global markets.The tariffs have widened the chasm between allies and Washington.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. Photo: Scott McIntyre for The New York Times Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.
Chapter 1: What are Trump's global tariffs and their immediate impact?
President Trump's announcement of universal tariffs on the whole world, including the European Union, is a major blow to the world economy.
For Australia, these tariffs are not unexpected, but let me be clear, they are totally unwarranted. The system of global trade anchored on the United States that Canada has relied on since the end of the Second World War is over.
The consequences will be dire for millions of people around the globe.
While this is a tragedy, it is also the new reality.
Chapter 2: How are financial markets reacting to the tariffs?
coming on the air because the stock market is plummeting in response to President Trump's escalating trade war.
The Dow, the S&P 500, and the Nasdaq were all down more than 3% at one point.
Retail stocks in particular really selling off. Nike, Adidas, Lululemon.
Global markets are also taking a hit.
My fear, I gotta say, my fear is that stocks are down and they stay down for a protracted period of time.
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Chapter 3: Why are Trump's tariffs considered a global economic shift?
From The New York Times, I'm Michael Barbaro. This is The Daily. On Thursday, the fallout from President Trump's sweeping new global tariffs reverberated across financial markets and foreign capitals, spreading fear and, in many cases, fury. Today, we try to make sense of Trump's strategy and its consequences with three of my colleagues, Peter Goodman, Natalie Kitchoff, and Gina Smilak.
It's Friday, April 4th. So, colleagues, welcome to The Roundtable. Peter Goodman, thank you for being here in the studio. Great to be here. Natalie Kittoroff, thank you for joining us from Mexico City. Thanks for having me. And Gina Spilak, I don't know where in Europe you are.
I am in Brussels, sunny Brussels.
Thank you for joining us from sunny Brussels. We have assembled the three of you because you have tremendous experience covering the three regions of the world that are at the center of this historic and historically disruptive moment, Trump's sweeping global plans for tariffs, what he's calling Liberation Day for the U.S.
Peter, you have covered Asia for years and years, for the time you lived there for many years. Gina, you are covering Europe. Natalie, you are our economic authority on... Mexico, but really, in some sense, North America. So, my first question to the three of you, with 24 hours to reflect on what the president just announced, how big a deal is this? I want to start with you, Peter.
Honestly, difficult to convey how big a deal this is. This is an astonishing development. It is a development that takes direct aim at the mode of globalization that has dominated most of our lives. I mean, we have grown up in a world where we've been invited to imagine that place really doesn't matter.
If you've got container ships that can bridge the oceans and you send factory production wherever it's cheapest or most efficient, then factory in Ohio is the functional equivalent of a factory in China.
And whatever you think about these tariffs and how they're going to play and whether they're going to fix the problems that have popped up and emerged from trade policy, this is clearly taking direct aim at that sense of place isn't supposed to matter. That's right.
And where we essentially make policy on the strength of the argument that the consumer must be served and the consumer wants cheap stuff. And cheap stuff has, in the last few decades, come in from places like China, Mexico as well. And this is a reorientation of policy that at least, you know, on its face is about making We got to make stuff in the United States.
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Chapter 4: How is Asia targeted in Trump's tariff strategy?
Right.
So it's huge.
Gina, any argument that this is not a big a deal as these hyperbolic colleagues of yours?
are claiming it is i'm joking no no argument at all i think this is a massive deal i had someone earlier actually tell me that this is one of those before and after days you know we're going to remember the world before today and we're going to remember the world after it and it just sort of you know this is a moment that is going to fundamentally reorder the global economy potentially
And I think at the same time, I mean, I'm sitting in Europe right now where this is part of what is really a multi-pronged assault on the transatlantic relationship. This is part of a sort of decoupling that is happening between the U.S. and its trading partner, the European Union, which has, you know, for 80 years been among its closest allies.
And so I think it's hard to overstate what this means diplomatically and not just economically.
Okay, so now that we have absorbed the bigness of this all, I want to ask you all to help make sense of this as a strategy. And Peter, one of the things becomes very clear when you look at these tariffs is that as universal as they appear, they are seemingly pretty targeted at a familiar trade foe of the Trump administration, and that is Asia.
Look, it's always been about China, principally. And that's because China is the world's factory. It's the place where enormous amounts of investment went chasing cheaper wages. In the free trade era, yeah. In the free trade era, I mean. China has become the dominant purveyor of all kinds of things, from auto parts to chemicals to sneakers and clothing and exercise bikes.
So if you come at things, as Trump does, from the standpoint that a bilateral trade deficit, which is a fancy way of saying we buy more stuff from you than you buy from us, if you come at it from the standpoint that that's bad and a sign that you're getting ripped off, which is a concept that economists take real issue with, then China stands out.
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Chapter 5: What is the strategy behind tariffs on North America?
And moreover, Chinese companies moved a lot of investment into places like Vietnam and Cambodia, and they just exported their model to these other countries.
In other words, these manufacturers took a side door out of China into their neighboring economies, set up shop there, same problem with trade imbalance. That's right. So this is meant to catch that.
This is meant to catch that and divert production to friendlier places from the Trump administration standpoint.
Got it. So the goal, if we think about the focus on Asia, is to make it far more expensive for goods to come from Asia to the United States, thereby discouraging that trade scenario where all that stuff comes from those places. That's right. In the first place. That's right. Okay. That's a strategy that I think I can wrap my head around.
Natalie, what in your mind is the strategy here for the North American side of that equation?
Well, OK, it's not totally clear exactly what the aim is here. But as Peter just said, it sort of seems as though a big motive of these tariffs is to shut down Asia as a source of manufactured goods. And the tariffs that were announced on Wednesday did not include Mexico and Canada. Notably and obviously by design. Right.
There is this sense among some of the analysts that I've been talking to that the goal here, or at least a potential effect, is to strengthen the North American trading bloc. So where do you go if it's not Vietnam or China? You potentially go to Mexico. I mean, obviously, Trump's ideal is that you go to the United States.
But even if you don't go to the United States, a potential outcome here is that there is more incentive for manufacturers to make their stuff in Mexico, in the United States or in Canada. And there's a potential gain there for the North American trading block, which is that It gets preferential treatment.
We don't know if that's what's going to happen, but it certainly seems as though, as you said, Michael, the design might lead us there.
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Chapter 6: How do the tariffs affect the relationship with Europe?
So I think there are several reasons. I think one is that there are these strategic goals the Trump administration wants to get Europe to bend on. It wants them to change their digital regulation policies. It wants them to change some of their taxation policies. And so I think the goal is to negotiate on some of that.
I think there are also a few key industries that the administration cares about a lot that do matter in Europe. Cars are one of them. We definitely see this desire to reshore the automobile industry. And there are some really big car industries in Europe. Think BMW, you know, think the Audis of the world.
And so I think in this sort of multi-pronged trade war, Europe is very clearly in the crosshairs for reasons that are partially trade and economic related and partially actually quite a bit broader than that.
I want to pick up on cars and the idea of reshoring. And Natalie and Peter, how realistic is the idea, and it's not just related to Europe, that through these tariffs, the United States is going to be bringing more car manufacturing jobs back to the U.S.? We've talked at length about the fact that cars are made up of component parts assembled all over the world.
So this gets really tricky really fast.
30,000 parts in modern cars.
And it's astonishing.
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Chapter 7: Can tariffs bring manufacturing jobs back to the U.S.?
I think that cars are the most obvious place to drive the reshoring strategy. You know what I'm saying? We will stick you with tariffs if you don't make your stuff in the United States with a whole bunch of caveats. You know, let's take a look at a company like Hyundai. This is the group that owns not only Hyundai, the brand, but Kia as well. This is a South Korean company. Right.
So they've spent significant amounts of money setting up factories in Georgia And they did that with the understanding that they could tap the global supply chain for their parts and components. Now we're telling them you're going to pay more for steel, more for aluminum. We're not sure what is going to apply in terms of tariffs, if you're bringing electronics from Malaysia, from China.
And so the net effect of this could be, and we don't really know how this will play out, that Hyundai will say, well, whatever we're going to do, we're going to do it more slowly. Maybe we won't add that extra shift. In the U.S. Yeah. I mean, you could see the pressure to move faster, to reduce your import of finished cars from Korea, replace that with your domestically made cars.
Except, again, you don't know about your access to the global supply chain. It's not like you can just flip a switch and suddenly all the stuff you need to make a car just comes back to the United States. Right.
I just want to recap what you're saying. It's a little bit. complicated, very fascinating. A company like Hyundai did exactly what we in the U.S. say we want a company from South Korea to do. They moved more manufacturing to the U.S. Then we just hit them within the last 48 hours with all these new costs through these tariffs that are going to kind of undermine the fact that they moved here
in the first place.
Exactly. And so here's this policy that's supposed to be about bringing jobs back to the United States, creating more jobs for blue collar workers. And we've taken aim at some jobs that are already here. We have injected greater anxiety, added more variables and uncertainty to this large multinational company that did exactly what they were supposed to be doing.
Natalie, what Peter's describing is a kind of paralysis that might set in as companies look at these tariffs and fear that consumers are not going to be biting in this moment. Is that something you expect?
I mean, I think, you know, we're seeing a lot of uncertainty. That's true. And uncertainty does cause paralysis. But I think that we have to keep in mind that America is just the most important consumer economy in the world and companies are already trying to figure out how. to secure their duty free access to that market, you know, as much as they can. And I agree that uncertainty reigns.
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