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Date: 2025-07-02 Page is: DBtxt003.php txt00028316

TRUMP TARIFFS ... TRUMP'S ECONOMIC RABBIT HOLE MSNBC: Going down 'rabbit hole' to recession: Moody's economist breaks down impact of Trump tariffs Peter Baker Original article: https://www.youtube.com/watch?v=6csMiDIDoHs Peter Burgess COMMENTARY This conversation with NBC News senior business correspondent Christine Romans, New York Times chief White House correspondent Peter Baker, Punchbowl News co-founder Jake Sherman and Moody's Analytics chief economist Mark Zandi facilitated by Katy Tur was full of potential but not much real breaking news. Trump set the stage for a big 'announcement' and he did make an announcement, but it was something of an anti-climax because it was merely the 'starting gun' for something, and nobody really knew what that something would be! I am not seeing a clear 'pattern' ... rather the starting point seems to be some sort of 'animus' towards a particular country, region or product line! Trump has been identified as 'transactional' and certainly not 'strategic'. My expectation is that over a quite short period of time, America's trading partners will start to run rings round most of Trump's pro-America initiatives leaving America and Americans wondering what happened. I am 85 years old and have childhood memories going back to WWII. I was 5 years old at the end of WWII, and almost adult around 18 years old when Britain was able to end 'rationing' (circa 1958). Britain took a long time to rebuild after the war, in large part because of the war debt (lend-lease) that was being repaid to the United States. I visited Canada and the United States as a university student in the summer of 1960 and 1961. North America was incredibly rich at that time compared to the UK and most of Europe. People in North America were arrogant more than they were friendly! Much of this economic confidence disappeared with the Arab OPEC oil shock of 1973. Up to that point the US economy was profitable using crude oil priced at $3.50 a barrel! After the oil shock the price went to $13.50 and a year later to more than $30.00 a barrel. Since then the price has been more than $100.00 a barrel, rarely less than $30.00 and most frequently in the range of $50.00 to $70.00 a barrel. These high energy prices changed the competitive landscape for world trade ... with the USA always on the losing end. While the USA had a very big economy, it was also the world's most inefficient energy economy. This did not matter when crude oil was priced at $3,00 a barrel but mattered a lot when the price increased after 1973. None of the US Presidents in the 1970s ... neither Nixon, Ford nor Carter ... were able to address energy cost inflation successfully. Ronald Reagan implemented a 'solution' in the early 1980s, but it was more 'sleight of hand' and 'clever words' than foundational economic improvement for the USA. Under Reagan, American consumers began getting a massive amount of low priced goods from low cost overseas manufacturers. Some overseas factories were owned by American investors in low cost areas of the world including China. During the 1980s and the 1990s, the industrial heartland of the United States went into decline that has now lasted almost half a century! The Trump playbook seems to be seriously 'out of touch' with the realities of America's industrial history ... and likely doomed to failure. During the single 4 year term of President Biden, a huge amount of excellent foundational work was initiated to 'catch up' on years of 'underinvestment' ... most of which has now been halted by Trump. Trump has the ability to create 'news' but whether or not any of the news will eventually become a better economy is not at all clear yet! Trump seems to be essentially 'planless' but simply relying on a new 'tariff regime' to achieve the changes that are needed. This strategy is unlikely to work in face of global opposition ... and the outcome could be really bad ... worse that anything in this century or the last. Peter Burgess
Going down 'rabbit hole' to recession: Moody's economist breaks down impact of Trump tariffs MSNBC 8.36M subscribers Apr 2, 2025 #trump #rosegarden #tariffs President Trump will unveil sweeping tariffs at a Rose Garden event at 4pm today after the markets close. NBC News senior business correspondent Christine Romans, New York Times chief White House correspondent Peter Baker, Punchbowl News co-founder Jake Sherman and Moody's Analytics chief economist Mark Zandi join Katy Tur to break it all down. For more context and news coverage of the most important stories of our day click here: https://www.msnbc.com/ » Subscribe to MSNBC: / msnbc » Subscribe to MSNBC on TikTok / msnbc » Subscribe to MSNBC on Instagram / msnbc Download our new MSNBC app for the latest breaking news and daily headlines at a glance: https://www.msnbc.com/information/dow... Follow MSNBC Show Blogs MaddowBlog: https://www.msnbc.com/maddowblog MSNBC delivers breaking news, in-depth analysis of political headlines, commentary and informed perspectives. Find video clips and segments from The Rachel Maddow Show, Inside with Jen Psaki, Morning Joe, The Beat, Deadline: White House, All In, The Last Word, The 11th Hour, and more. Connect with MSNBC Online Visit msnbc.com: https://www.msnbc.com/ Subscribe to the MSNBC Daily Newsletter: https://link.msnbc.com/join/5ck/msnbc... #trump #rosegarden #tariffs Transcript 0:01 CONGRESSIONAL HISTORY. AND WITH THAT HISTORY LESSON NOW THROUGH. >> JOINING US. >> IS TO TALK. >> ABOUT THIS IS NBC. >> NEWS SENIOR BUSINESS. CORRESPONDENT CHRISTINE ROMANS, NEW YORK TIMES CHIEF WHITE HOUSE CORRESPONDENT AND MSNBC POLITICAL ANALYST PETER BAKER, MOODY'S ANALYTICS CHIEF ECONOMIST MARK ZANDI, AND PUNCHBOWL NEWS CO-FOUNDER AND MSNBC POLITICAL CONTRIBUTOR JAKE SHERMAN. >> ALL RIGHT. >> CHRISTINE. >> THE HOUR IS NEAR. YOU ARE HERE. TELL US WHAT YOU KNOW. >> YOU KNOW, I'M NOT EVEN GOING TO GUESS. >> WHAT THE PRESIDENT'S GOING. >> TO DO, BECAUSE THE REPORTING HAS BEEN ALL OVER THE PLACE. HE HAS SAID HE WANTED TRUE RECIPROCAL TARIFFS. >> IF SOMEBODY. >> HAS. >> A BIG. TARIFF ON A U.S. >> PRODUCT. >> HE'S JUST GOING. TO FLIP. >> IT AND DO. >> THE SAME THING BACK. >> TO THEM. THAT'S 200 TRADING. >> PARTNERS, 12,500. >> TARIFF LINES. >> THAT'S POTENTIALLY 2 MILLION TARIFFS. THAT WOULD BE REALLY HARD ADMINISTRATIVELY. I SUSPECT. >> IT. WILL BE. >> A LEVEL OF TARIFF PER COUNTRY, MAYBE BY SECTOR. WE JUST. >> DON'T KNOW FOR SURE. >> ALL RIGHT. SO PETER, ON THAT 1:02 HISTORY. >> LESSON ON. THE SMOOT-HAWLEY. >> TARIFF, ON WHAT HAPPENED IN THE GREAT DEPRESSION. I MEAN, THERE'S A LOT. >> OF CONSTERNATION. >> ABOUT DOING SOMETHING LIKE THIS AND NOT HAVING A PLAN BEHIND IT. IS IT. WRONG TO BRING UP THAT HISTORY. >> IN A MOMENT. >> LIKE THIS? >> WELL. >> I DON'T THINK IT'S WRONG, BECAUSE. >> IT. >> EXPLAINS WHY YOU HAVEN'T. >> SEEN A. >> PRESIDENT DO WHAT THIS PRESIDENT IS ABOUT TO DO. THE IDEA. >> OF THIS KIND. >> OF ACROSS THE BOARD. TARIFF POLICY. >> HAS BEEN ANATHEMA. >> TO PRESIDENTS OF BOTH. >> PARTIES, REALLY, IN. >> THE. >> POST-COLD WAR. >> ERA, BECAUSE. >> IN FACT. >> THE MEMORY OF THAT EXPERIENCE BACK IN 1930. DOESN'T MEAN IT'S GOING TO HAPPEN AGAIN, DOESN'T. >> MEAN THIS IS GOING TO BE THE SAME KIND OF TARIFF AS WE JUST SAID. WE DON'T. >> EVEN. KNOW WHAT. >> KIND OF TARIFF IT'S GOING TO BE. WE DON'T KNOW HOW IT'LL BE APPLIED. WE DON'T EXACTLY KNOW WHO IT'S GOING TO BE APPLIED TO. WE DON'T. >> KNOW HOW LONG. >> IT'S GOING TO BE APPLIED TO. HE SAYS THINGS ALL THE TIME THAT DON'T TURN OUT TO BE WHAT HE ENDS UP DOING. HE LIKES BEING UNPREDICTABLE. IN FACT, THAT'S PART OF. >> HIS. >> YOU KNOW, HIS MODUS VIVENDI. 2:00 SO HE COULD PUT ON THESE TARIFFS TODAY. AND THEN A WEEK FROM NOW DECIDE, WELL, I MADE MY POINT AND TAKE THEM OFF. AND THEN IT WON'T BE THAT BIG A DEAL IF HE LEAVES THEM ON FOR YEARS. THAT'S A DIFFERENT THING. WE DON'T KNOW. AND SO IT'S HARD TO MAKE ANY KIND OF PREDICTION. IT'S HARD TO MAKE ANY KIND OF PLANS. THIS IS WHY BUSINESSES ARE SO, YOU KNOW, UNSOILED, YOU KNOW, UNCERTAIN. >> AT. >> THIS POINT. THEY'RE SO UNNERVED BECAUSE THEY DON'T KNOW HOW TO PLAN FOR THIS KIND OF POLICY. >> YEAH. AND HE'S GOING TO BE ANNOUNCING IT AT 4 P.M. AFTER THE MARKETS CLOSED. SO WE'RE NOT GOING TO SEE THE REAL. >> EFFECTS OF IT UNTIL THE MORNING. I WONDER. >> WAS THAT PRE-PLANNED? DID THEY WANT TO DO THIS AT THE END OF THE DAY, SO THAT THEY WOULDN'T HAVE TO DEAL. WITH ANY SORT OF IMMEDIATE REACTION? >> YEAH. >> AND THAT WAY YOU GIVE. >> THE MARKETS AT LEAST A FEW HOURS TO ABSORB IT BEFORE THE OVERSEAS MARKETS BEGIN REOPENING IN ASIA, FOR INSTANCE. AND OBVIOUSLY BACK HERE IN THE UNITED STATES IN THE MORNING, YOU DON'T WANT IT TO BE SUCH AN INSTANTANEOUS KIND OF REACTION THAT CREATES EITHER A PANIC OR JUST, YOU KNOW, VOLATILITY OF THE KIND THAT YOU MIGHT IMAGINE. BUT THAT DOESN'T MEAN THEY'RE NOT GOING TO BE REACTING TOMORROW. THE MARKETS HAVE SHOWN IN THE LAST FEW WEEKS THIS IS NOT SOMETHING THEY'RE 3:01 COMFORTABLE WITH. YOU KNOW, THIS IS WHY PEOPLE WHO INVESTED IN THE MARKET THE DAY DONALD TRUMP TOOK OFFICE WILL HAVE LOST MONEY BECAUSE THE MARKETS HAVE BEEN GOING DOWN AND THE CLOSEST CORRECTION TERRITORY IN SOME CASES. SO I THINK THAT, YEAH, IT WAS AN EFFORT TO KIND OF MITIGATE ANY IMMEDIATE REACTION. BUT THAT DOESN'T MEAN THAT THERE WON'T BE A REACTION. >> YOU KNOW, THIS ADMINISTRATION IS. BANKING ON THE LONG TERM. BUT THERE WAS ONE QUOTE THAT CAME OUT OF CONGRESS, JAKE. >> SHERMAN THAT I THINK. >> SPOKE TO THE CONCERNS IN THE IMMEDIATE. TERM BEST. >> THIS WAS. >> FROM SENATOR JOHN KENNEDY. IN THE LONG RUN, IT WILL PROBABLY WORK. HE SAYS. THE PROBLEM IS THAT IN THE LONG RUN, WE'RE ALL DEAD. AND SO THE SHORT RUN MATTERS. HOW'S CONGRESS REACTING? >> WELL, THAT'S A QUITE A QUOTE FROM THE SENATOR. FROM LOUISIANA. WHEN THE LONG RUN, WE ALL WILL BE DEAD. >> THAT IS TRUE. >> LISTEN, THE BIGGER CONCERN, KATIE, IN ALL OF THIS IS THAT DONALD TRUMP DOES NOT FACE VOTERS AGAIN. I MEAN, UNLESS HE FINDS A WAY TO RUN FOR A THIRD TERM, WHICH WHO THE HELL KNOWS? BUT HE DOES NOT FACE VOTERS AGAIN. AND IN 580 DAYS, A THIRD 4:02 OF CONGRESS, NOT A THIRD, BUT, YOU KNOW, 280 SOMETHING REPUBLICANS DO FACE VOTERS AGAIN, AND THEY FACE THEM. >> EVERY WEEKEND. >> AND WE. >> WROTE EARLIER. >> THIS WEEK, I MEAN, IT'S EASY, EASIER FOR TRUMP TO. >> MAKE DECISIONS. >> THAT ARE DIVORCED FROM POLITICAL CONSIDERATIONS, RIGHT, BECAUSE HE HE SHUTTLES FROM THE WHITE HOUSE TO PALM. >> BEACH TO, TO. >> BEDMINSTER AND IS SURROUNDED BY PEOPLE WHO MOSTLY AGREE WITH HIM. MEMBERS OF CONGRESS DON'T CHALLENGE HIM. AND HE FEELS LIKE IN THIS TERM, AND PETER ALLUDED TO THIS, THAT HE CAN MAKE DECISIONS THAT HE THINKS ARE. RIGHT WITHOUT WEIGHING OTHER PEOPLE'S VIEWS. AND MEMBERS OF CONGRESS. >> BY THE. >> WAY. >> WHO ARE INHERENTLY REPUBLICAN MEMBERS OF CONGRESS AGAINST TRADE WARS. >> THEY DON'T THINK. >> THAT THIS TRADE WAR IS ANY BETTER THAN ANY OTHER TRADE WAR. SO IF YOU ARE A MEMBER OF CONGRESS, A REPUBLICAN MEMBER OF CONGRESS, AND YOU'RE GOING IN FRONT OF YOUR CONSTITUENTS AND A YEAR AND THEIR 401 S ARE SMALLER AND THEY'RE PAYING MORE. 5:01 >> FOR GOODS. >> AND PRICES ARE, YOU KNOW, PRICES HAVE GONE UP. THE MARKET'S DOWN, CONSUMER CONFIDENCE IS DOWN. AND THE ARGUMENT IS AMERICA WILL BE STRONGER AT SOME POINT IN THE NEXT DECADE. I DON'T KNOW HOW MUCH WEIGHT THAT HOLDS IN A YEAR THAT'S ALREADY STRUCTURALLY FAVORING DEMOCRATS. >> SO. >> I MEAN, AND THE WHITE HOUSE IS VERY AND REPUBLICANS ARE VERY WANT TO SAY TO ME, WELL, YOU JUST DON'T UNDERSTAND THIS. AND MAYBE THAT'S RIGHT, I DON'T. BUT THE FACTS THAT I'VE JUST LAID OUT ARE IMMUTABLE AND SEEM. TO BE AND. >> THESE. >> ARE WHAT IS THIS? >> THIS IS WHAT IS BEING RELAYED TO ME. >> BY REPUBLICAN MEMBERS OF CONGRESS, SOME OF. >> WHOM ARE SUPPORTIVE. >> OF THE PRESIDENT DOWN THE LINE ON THIS ISSUE. THEY HAVE SERIOUS CONCERNS. >> MARK. >> YOUR NAME WAS. >> BOUNCING AROUND. THIS ROOM A. >> LOT YESTERDAY BETWEEN ME AND CHRISTINE. >> WE WERE TALKING ABOUT SOME DIRE. >> PREDICTIONS THAT YOU. >> WERE MAKING. >> I'LL ASK YOU WHAT THE WHAT JAKE JUST MENTIONED. HE SAYS THAT HE'S HEARING FROM 6:01 REPUBLICANS. THAT HE JUST DOESN'T UNDERSTAND. DO YOU UNDERSTAND WHAT DONALD TRUMP IS TRYING TO DO HERE? >> NO. >> LET ME. >> SAY, KATIE. >> I WAS A GREAT HISTORY LESSON. AND EVERY TIME I HEAR. >> SMOOT HAWLEY. >> MAYBE I SHOULDN'T SAY THIS. AS AN ECONOMIST, I THINK. >> OF FERRIS BUELLER'S. >> DAY OFF. >> THAT WAS. >> A REALLY, REALLY GOOD MOVIE. >> YEAH. >> NO. >> I REALLY I'M. >> I'M I'M I'M CONFUSED. YOU KNOW, I, I, YOU KNOW, YOU GET. 100 ECONOMISTS POLLED. THEM AND, YOU KNOW, AND, YOU KNOW, ECONOMISTS ARE GREAT ABOUT. DEBATING EVERYTHING. WE CAN GET DIFFERENT OPINIONS. >> GET FIVE. >> OPINIONS FROM THREE ECONOMISTS ON TARIFFS. YOU KNOW, THERE IS NO DEBATE. I MEAN WE'VE GOT A LONG HISTORY. WE YOU KNOW, WE DON'T HAVE TO GO BACK TO SMOOT-HAWLEY. JUST GO BACK TO PRESIDENT TRUMP'S FIRST TERM AND THOSE TARIFFS. THE EVIDENCE IS QUITE CLEAR THAT. >> IT'S A LOSE LOSE. >> THERE'S JUST NO WINNERS IN A TRADE WAR. >> WITH HIGHER TARIFFS. >> CONSUMERS PAY AMERICAN CONSUMERS PAY A TAX ON AMERICAN CONSUMERS. SO VERY REGRESSIVE TAX. IT'S THE HARDEST ON LOW AND MIDDLE INCOME HOUSEHOLDS 7:00 BECAUSE. >> THEY DEVOTE A HIGHER. >> SHARE OF THEIR BUDGET TO IMPORTED GOODS. IT HURTS CORPORATE PROFITS. YOU KNOW, LOTS OF BUSINESSES USE IMPORTED GOODS FOR WHATEVER IT IS THAT THEY'RE PRODUCING. IT INVITES RETALIATION, YOU KNOW, AND IN THE LONGER RUN, YOU KNOW, IT REDUCES COMPETITION, RIGHT? SO IF YOU'RE PROTECTING AN INDUSTRY, THEY THEY'RE. NOT COMPETING. IF YOU DON'T COMPETE, YOU DON'T INVEST AS AGGRESSIVELY. THAT HURTS PRODUCTIVITY. AND ULTIMATELY IT HURTS COMPETITIVENESS. AND YOU'RE BACK YOU KNOW LOOKING FOR EVEN HIGHER TARIFFS. SO I DON'T KNOW I TOTALLY CONFUSED I DON'T. SEE ANY UPSIDE. HERE WHATSOEVER. I JUST SEE. >> NOTHING BUT DOWNSIDE. >> NOW I'M. >> HOPING THAT THE PRESIDENT FIGURES. >> OUT A. >> WAY TO PIVOT HERE AND, YOU KNOW. >> BACKTRACK ON. >> THE TARIFFS AND DECLARE VICTORY AND MOVE ON. I THINK HE DID THAT IN HIS. FIRST TERM. I'M HOPEFUL HE DOES IT AGAIN. IF HE DOES, THEN WE'RE GOING TO AVOID A RECESSION. BUT IF HE GOES FULL BORE HERE YOU KNOW SMOOT-HAWLEY 20% EFFECTIVE TARIFF RATES AND THERE'S NO LEEWAY. I THINK WE'RE GOING DOWN THE RABBIT HOLE. THAT'S A RECESSION. >> MAKE MAKE THE PREDICTION. 8:01 >> THAT YOU WERE. MAKING YESTERDAY. IN THE WASHINGTON POST. THERE WERE A SET OF PREDICTIONS. >> BUT WHAT'S WHAT'S THE WORST CASE SCENARIO? >> YEAH, THE WORST CASE. >> AND WHEN I SAY WORST CASE I DON'T EXPECT THIS. BUT, YOU KNOW, THIS IS KIND OF A BOOKEND TO GIVE YOU A SENSE OF THINGS. IF HE GOES FULL 20% EFFECTIVE TARIFF RATE. AND JUST FOR CONTEXT, BEFORE HE TOOK OFFICE, THE SECOND GO AROUND, THE EFFECTIVE TARIFF RATE WAS 2.5%. SO IF YOU GO TO 20, YOU'RE BACK TO SMOOT-HAWLEY. AND IF YOU ASSUME FULL RETALIATION. SO THE CHINESE ARE GOING TO RETALIATE TIT FOR TAT. BUT LET'S ASSUME CANADA, MEXICO, EU DO THE SAME THING. THEY, THEY, THEY COME BACK WITH A COMPARABLE TRADE ACTIONS. THEN WE GET A VERY SEVERE ECONOMIC DOWNTURN. JUST TO GIVE YOU A CONCRETE NUMBER, THE UNEMPLOYMENT RATE, 4%, WE'VE BEEN AT 4% NOW FOR THREE YEARS. THAT'S FULL EMPLOYMENT. THAT'S ABOUT THAT IS ABSOLUTELY AS GOOD AS IT GETS. THAT WILL GO TO WELL OVER 7% A YEAR FROM NOW. THAT'S THE KIND OF RECESSION THAT WE WOULD FACE IF HE ACTUALLY WENT DOWN THAT PATH. SO AGAIN, I 9:00 DON'T THINK THAT'S WHAT HE WERE. YOU KNOW, UNDER THE DARKEST SCENARIO, THAT'S THE WORST CASE SCENARIO. I DON'T THINK WE'RE GOING THERE. BUT THAT GIVES YOU A SENSE OF, YOU KNOW, WHERE WE WOULD GO IF, IF, IF THE WORST CASE SCENARIO WERE TO UNFOLD. >> I HATE CHRISTINE HAVING TO TRY TO PLAY. >> PREDICTOR OF WHAT DONALD TRUMP'S. >> REALLY. >> TRYING TO DO HERE. >> IT FEELS LIKE WE'RE DOING THE. >> WORK FOR HIM. >> IN THE PAST. HE SAID THAT HE'S THESE ARE ALL OPENING. >> NEGOTIATIONS. AND IT YOU KNOW. >> THEY TRY TO ARGUE THAT THIS IS THE WAY TO GET PEOPLE TO THE TABLE. IT'S THE WAY TO FORCE COUNTRIES. TO PLAY FAIRLY OR TO GIVE US BETTER TERMS. WE HAVE SEEN. >> SOME COUNTRIES. >> TAKE THE TARIFFS OFF IMPORTED AMERICAN. GOODS AHEAD OF THIS, IN. >> ORDER TO TRY TO GET ON DONALD. >> TRUMP'S BETTER SIDE. I THINK. >> VIETNAM WAS. >> ONE OF THE COUNTRIES. ARE ANY OF THE ADVISERS TELLING YOU THAT THIS IS THE PLAY HERE? AND IF SO, DOES DONALD TRUMP HAVE CONCRETE GOALS? >> I DON'T. >> KNOW, TO. 10:00 >> THE FIRST. >> PART OF. >> THAT QUESTION, AND. >> IN TERMS OF THE. >> GOALS. >> WE'VE SEEN. >> THAT GOALPOST. MOVING FIRST IT WAS FENTANYL, RIGHT. >> AND THEN. >> IT WAS RESHORING. >> US GOODS PRODUCTION. >> AND THEN IT WAS ALL THIS REVENUE THAT'S. >> GOING TO COME IN. WE'VE HEARD UP TO $6 TRILLION OVER A DECADE. BUT IF YOU ARE SUCCESSFUL. >> IN RESHORING. >> THEN YOU DON'T GET THE REVENUE. BECAUSE YOU'RE NOT GOING TO HAVE THINGS TAXED BECAUSE. >> THEY'RE. >> GOING TO. >> BE MADE. >> IN THE UNITED STATES. >> SO I DON'T. >> THAT THAT. >> DOESN'T LAST. >> LONG TERM. >> IF YOU REALLY ARE RESHORING. >> SO WHAT IS WHAT IS THE GOAL? GARRETT HAKE, OUR COLLEAGUE, USED THIS. >> GREAT ANALOGY. >> HE SAID THAT DONALD TRUMP. USES TARIFFS LIKE A SWISS ARMY. >> KNIFE. ALTHOUGH THAT WOULD HAVE A TAX ON IT I THINK NOW.

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