'American Empire Is in Decline': Economist Richard Wolff on Trump's Trade War & Tariffs
Democracy Now! with Amy Goodman
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Apr 3, 2025 Latest Shows
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As President Trump finally unveils his global tariff plan — setting a baseline 10% tariff on all imported goods, with additional hikes apparently based on individual countries' trade balances with the United States — economists like our guest Richard Wolff warn it will have grave economic effects on American consumers and lead to a recession. Wolff says the Trump administration's tariff strategy is borne out of an ahistorical 'notion of the United States as a victim' despite the fact that 'we have been one of the greatest beneficiaries in the last 50 years of economic wealth, particularly for people at the top.' In response to the growing economic fortunes of the rest of the world and the associated decline in U.S. hegemony, Trump and his allies are 'striking out at other people' in desperation and denial of an end to U.S. imperial dominance. '[It's] not going to work,' says Wolff.
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Transcript
- 0:00
- this is democracyow
- democracynow.org the Warren Peace Report
- I'm Amy Goodman Global stock markets are
- tumbling after President Trump unveiled
- the biggest hike in global tariffs in
- modern US history including a 10%
- blanket tariff on all imported goods
- from
- about 185 countries In addition many US
- trading partners including the European
- Union China and Japan will see even
- higher tariffs China now faces a total
- 54% tariff Trump announced the plan
- during a speech in the Rose Garden at
- the White
- House My fellow Americans this is
- Liberation Day waiting for a long time
- April 2nd 2025 will forever be
- remembered as the day American industry
- was reborn the day America's destiny was
- reclaimed and the day that we began to
- make America wealthy
- 1:00
- again Going to make it wealthy good and
- wealthy For decades our country has been
- looted pillaged raped and plundered by
- nations near and far both friend and foe
- alike American steel workers auto
- workers farmers and skilled craftsmen We
- have a lot of them here with us today
- They really suffered gravely They
- watched in anguish as foreign leaders
- have stolen our jobs foreign cheaters
- have ransacked our factories and foreign
- scavengers have torn apart our once
- beautiful American dream The impact of
- Trump's tariffs are expected to be felt
- around the world While Trump claims the
- tariffs will boost the US economy many
- economists fear it could lead to a
- recession or worse Trump's trade war
- could also shift global alliances as
- countries seek new trading partners
- China Japan South Korea have already
- announced plans to increase trading ties
- and coordinate their response to Trump's
- tariffs We begin today's show with
- 2:00
- Richard Wolf professor of economics
- ammeritus University of Massachusetts
- Ammeris visiting professor in the
- graduate program in international
- affairs at the New School He's the
- founder of Democracy at Work and hosts a
- weekly national TV radio program called
- Economic Update The author of a number
- of books including most recently
- Understanding Capitalism and the
- Sickness is the System: When Capitalism
- Fails to Save Us from Pandemics or
- Itself Professor Wolf it's great to have
- you with us again Well start off by
- responding to and were you surprised
- shocked or do you you guess that well
- about 185 countries were going to have
- see increased or tariffs On the on the
- one hand we knew something like this was
- coming On the other hand the sweep and
- the scope of it does make you stop Mr
- Trump is right It is a changing moment
- in American history and world history
- But I think his representation of what's
- going on is completely fantastical and
- 3:01
- has only to do with the self-promotion
- uh that he is engaged in most of the
- time It was never foreigners who did it
- to us This notion of the United States
- is a victim We have been one of the
- greatest beneficiaries in the last 50
- years of economic wealth particularly
- for people at the top just like him Uh
- it has nothing to do with foreigners
- taking advantage of us This attempt to
- make himself strong and powerful
- relative to others to blame the
- foreigner These are cheap shots that a a
- real president wouldn't do And there's
- the most important point The American
- economy is in trouble The American
- empire is in decline We don't want to
- discuss it in this country We engage in
- denial and instead we are striking out
- at other people a sad way of handling a
- decline The British Empire declined
- before us So did all the others We are
- 4:02
- now at that point We had a great 20th
- century 21st century is different You
- have to face those problems That's not
- being done What's being done is to say
- we have difficulties but they're all
- somebody else's fault and we're going to
- solve it by punishing
- them I would like to point out as you
- suggest quite rightly Amy that the rest
- of the world is not going to sit by The
- United States does not have the power it
- had in the 20th century It is not in the
- position it seems to imagine itself when
- the secretary of of the treasury added
- to Mr Trump's comments that he warned
- the rest of the world not to
- retaliate That would imply that if they
- do there would be escalation Yes he said
- there will be
- escalation Well nothing will guarantee
- more escalation than if they do nothing
- 5:00
- because then it's an invitation to Mr
- Trump to keep doing it as each of these
- efforts doesn't work Given how dramatic
- this was yesterday is it possible he was
- deciding this to the very last second as
- they put this off And um explain exactly
- You're a professor you're a teacher Most
- people don't even realize how tariffs
- work Okay A tariff is a tax It's just a
- particular tax that got that name It
- used to be called import duty All it
- means is when something comes into the
- United States that was produced outside
- and is brought in to be sold it has to
- pay a tax as literally as it crosses our
- border into our country It is paid by
- the American company that brings it in
- which may pass it on to the consumer
- Usually what happens and the tax goes to
- Uncle Sam It goes to Washington Mr Trump
- loved to suggest that tariffs were paid
- by the others a little bit like Mexico
- 6:00
- would pay for the wall Never happened
- It's not going to happen here either
- It's an American tax Is there something
- remarkable that clues you in to how big
- a change this is That the Republican
- party which has branded itself as the
- anti-ax party for a century is now
- imposing the most massive tax imaginable
- Why this big change because we have big
- big problems and this kind of slapping
- the rest of the world is an attempt to
- solve a little bit of them but it is not
- going to work because we don't have the
- power to do it anymore
- I want to go to UAW President Sean Feain
- uh who supports Trump's new tariff
- saying last week we applaud the Trump
- administration for stepping up to end
- the free trade disaster that's
- devastated workingclass communities for
- decades Fain spoke Sunday on CBS's Face
- the Nation
- We've seen over 90,000 manufacturing
- facilities leave the United States We've
- 7:00
- seen uh in the big three alone in the
- last 20 plus years 65 plants have closed
- Um you know and so look tariffs aren't
- the uh total solution Tariffs are a tool
- in the toolbox to uh get these companies
- to do the right thing and and and and
- the intent behind it is to bring jobs
- back here uh and and you know invest in
- the American workers if they're going to
- bring jobs back here You know they need
- to be life sustaining jobs where people
- can make a a good wage a living wage
- have adequate health care and have a
- retirement security and not have to work
- seven days a week or multiple jobs just
- to scrape to get by paycheck to paycheck
- Well while UAW President Sean Feain
- praised Trump's tariffs he also said he
- had great concerns about President
- Trump's move to eliminate contracts for
- 700,000 federal workers the firing of
- workers at the National Institute of
- Health and other agencies I was a bit
- disappointed I like John Fain many of us
- do But this was disappointing to say
- 8:00
- basically I will support the president
- because he does something that might
- help my union Even though Sean Feain
- knows as most economists do that if you
- put a tax on the goods coming in they
- will go up in price because we have to
- pay that tax now And that will lead to
- domestic producers able to raise their
- prices because their competitors from
- abroad are stuck with this tax So we
- expect a boost to inflation which is
- going to hurt the working class of this
- country in in a very serious way
- especially if it if it builds on itself
- which often happens when you do tariffs
- like this And I want to remind everyone
- including Sean Feain that that the auto
- workers also represent workers in places
- that need export markets that produce in
- America and sell abroad When those
- countries retaliate as they likely will
- we will lose export markets and that
- 9:00
- will mean fewer jobs And no one let me
- stress no one now knows whether the jobs
- lost from this trade war will be greater
- or smaller than any jobs that are gained
- It is a big risk being taken by Mr Trump
- And if it doesn't go well it'll be very
- bad for the American economy It will
- produce the recession folks are worried
- about because if the prices go up people
- buy less and that loses jobs When you
- look at all of this this is an
- incredibly risky effort to blame the
- world punish the world and then cross
- his fingers which is what he's doing
- hoping it comes out all right Reminds me
- of a fed a football metaphor This is a
- Hail Mary pass You throw it down the
- field you hope it bounces into your
- team's hands but that's all it is a long
- shot And it's a sign of how troubled the
- American economy now is
- 10:01
- If you can put this in the bigger
- picture uh talk about the tax cuts and
- how they fit into the tariffs the what
- is it something like 4 trillion dollars
- in tax cuts and who benefits and then
- talk about the other issues that
- President Trump keeps saying that
- they're not going to touch even though
- uh what many call his co-president Elon
- Musk whether he steps back from being
- you know giving speeches or not uh going
- after social security issues like
- Medicaid
- Let me start with the tax issue The
- biggest single thing that Trump did in
- his first presidency was the tax cut of
- of December
- 2017 And when that tax cut was written
- into law it had a sunset It expires this
- year 2025
- If that is expiration is allowed to
- happen corporations and the rich who
- were the big bene beneficiaries back
- then will face a big tax cut He doesn't
- 11:00
- want to do that because that's his base
- That's his donor support He doesn't want
- to have those taxes go back up Well then
- what is he going to have to do If he
- keeps on spending and he doesn't let
- those taxes go back up he's going to
- have to borrow trillions as we have been
- doing He doesn't want to be the
- president who keeps borrowing trillions
- in part because the rest of the world is
- a major creditor of the United States
- and they're not going to continue to do
- it the way they have So he's in a jam He
- has to do
- something So his hope is to savage the
- expenditures in this country Look what
- he's doing Mr Musk stands there with a
- chainsaw to give us the clear
- implication I'm I'm going to solve the
- problem on the backs of the working
- class I'm firing them all I don't care
- what the rest of the working class
- suffers I'm going to fire all these
- people without notice without plan
- Calling this efficient is a silly joke
- An
- efficient process takes time takes
- 12:02
- experts You're not doing that You're
- just wholesale firing Calling that
- efficiency is an attempt to fool people
- but shouldn't make any difference Mr
- Trump is now in a jam He can't get out
- of this without in some way solving the
- problem that has been built up And there
- is no way other than the one he's doing
- because it's the last gasp of how to
- take away from the mass of the people
- the ability to borrow I mean let's be
- honest If you put a tariff you make
- everything coming in from abroad more
- expensive That means people will buy
- less of it They'll shrink their standard
- of living If American companies take
- advantage of the tariff which they
- always do by raising their prices that
- will also hurt the working class you are
- emiserating your workers in order to try
- to solve the problem you haven't solved
- before But here's the irony that may in
- 13:01
- the end come back to haunt us Europe has
- been unable to unify under the umbrella
- of American alliances
- The enmity of the United States is
- bringing Europe together better than the
- alliance was able to do And as you
- pointed out very important China Japan
- and South Korea with long histories of
- animosity and tension are getting
- together to cope with this Wow We are
- unifying the whole world If you want the
- big picture in my judgment after World
- War II George Kennan taught us about
- containment We're going to contain the
- Soviet Union The irony which the
- philosopher Hegel would enjoy we are
- becoming contained We are isolating
- ourselves The votes in the UN are the
- United States alone or the United States
- and Israel and two or three other
- countries the isolation politically the
- isolation now economically We are the
- 14:03
- rogue nation for the rest of the world
- We may not want it We may not agree but
- it doesn't really matter if that's how
- they perceive us And that's what's
- happening You talked about South Korea
- Japan and China joining together One of
- the biggest announcement of tax cuts was
- against Taiwan It's just a little more
- complicated for Taiwan to join that
- group And also and also another one was
- Vietnam which got a very heavy whack I
- mean is there no recognition of what the
- United States did to that country Maybe
- you wouldn't want to crush them with
- this kind of a thing after
- I as I'm saying this is a change This is
- a sign to the world that as the United
- States empire declines This is a nasty
- place that's going to you know gesture
- and thrash around doing damage
- everywhere as it copes with its own
- 15:01
- decline Former Greek finance minister
- Jiannis Varafakus recently wrote a piece
- headlined Donald Trump's economic master
- plan He wrote quote this is what his
- critics don't understand They mistakenly
- think he thinks that his tariffs will
- reduce America's trade deficit on their
- own He knows they won't Their utility
- comes from their capacity to shock
- foreign central bankers into reducing
- domestic interest rates Consequently the
- euro the yen and the uh remend will
- soften relative to the dollar This will
- cancel out the price hikes of goods
- imported into the US and leave the
- prices American consumers pay unaffected
- the tariff countries will be in effect
- paying for Trump's tariffs Do you agree
- with that Professor Wolf No Even though
- Giannis and I do a lot of work together
- so normally I I defer to him He's
- wonderful in his analysis I don't think
- this is correct Is it a possible outcome
- Yes You know we're in a situation let me
- 16:00
- put it this way tariffs are not new
- They've been around for hundreds of
- years uh if you teach a course in
- international economics which I've done
- you you tell students here are thousand
- books here are 5,000 articles we know
- and the answer is when you impose a
- tariff you don't know what the outcome
- is because it depends on everything else
- going on Interest rates exchange rates
- of currencies rising or falling
- economies around the world You can't
- know in advance It's a very risky thing
- Which is why for the last 50 years we
- have had administered by the US
- something called free trade or
- neoliberal or globalization All of that
- is over now The United States can't win
- anymore in that system So it is
- reverting to economic nationalism And
- that's a fundamental shift that throws
- the world It was the accepted wisdom for
- 50 years 50 the last 50 years not to do
- 17:02
- what Mr Trump is doing now If you want
- you can think that everybody who thought
- that way for 50 years was wrong and Mr
- Trump the genius is
- correct But that would be a long shot
- Better bet he's trying to save his own
- political life and he's trying to cope
- to his credit with a declining economy
- without having to admit that that's the
- case This won't end well it it normally
- doesn't And what we're going to see is
- the fighting against one another of the
- Europe block the Asian block the
- American
- block at a time when the United States
- is weaker than it has been economically
- and politically Look at the debacle in
- the Ukraine as well The misunderstanding
- that the Russians could turn to the
- Chinese and the Indians to cope with the
- costs of that war in a way that hadn't
- been calculated and as turning out to
- shape the outcome And it's not a
- 18:00
- question of which side you're on but
- just watching how it lines up That's the
- problem 30 seconds As you often talk
- about are you seeing this as the
- beginning of the end of American empire
- Yes I think we are already in 10 12
- years of that decline It
- can't Here's a single best statistic If
- you add up the GDP you know the total
- output of goods and services in a year
- for a country of the United States and
- its major allies the G7 it's about 28%
- of global output If you do the same
- thing for China and the bricks it's
- about
- 35% They're already a bigger block of
- economic power than we are Every country
- in the world thinking about building a
- railroad or expanding its health program
- They used to send their people to
- Washington or London to get help
- They still do but when they're done they
- send the same team to Beijing New Delhi
- Sao Paulo and they often get a better
- deal The world is changing and the
- 19:02
- United States could cope but as with
- alcoholism you have to admit you have a
- problem before you're in a position to
- solve it We have a nation that does not
- yet want to face what this all adds up
- to
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