America's Talking - U.S. Markets Take Steepest Dive Since Pandemic Amid Tariff Worries

Episode Date: April 4, 2025

(The Center Square) – U.S. markets took their steepest dive Thursday since the pandemic hit in March 2020 as investors worry about how the U.S. economy will handle President Donald Trump's latest tariffs. The Dow industrials dropped 1,679 points, or 4%. The tech-focused Nasdaq slumped 6%. The S&P 500 fell 4.8%. The dollar slipped to its lowest level of the year. It was the sharpest one-day decline since March 2020, when many states shut down large parts of the U.S. economy to slow the spread of COVID-19. U.S. markets plummeted after Trump's "Liberation Day" for U.S. trade on Wednesday, when he announced a 10% baseline tariff on all countries that will take effect Saturday. Trump also put higher individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China, India and Vietnam, among others.Support this podcast: https://secure.anedot.com/franklin-news-foundation/ce052532-b1e4-41c4-945c-d7ce2f52c38a?source_code=xxxxxxFull story: https://www.thecentersquare.com/national/article_20573298-9c41-45a7-8b5d-2615ba81229b.html Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Greetings, everyone, and welcome to America in Focus, powered by the Center Square. I'm Dan McAulb, chief content officer at Franklin News Foundation, publisher of the Center Square Newswire service. President Donald Trump this week enacted sweeping new reciprocal tariffs on countries that place such taxes on U.S. imports. The move drove stock prices lower, but Trump says the short-term pain will be followed by an economic boon of new jobs, investment, and fairer trade. Joining me to discuss this is Casey Harper, Washington D.C. Bureau chief for the Center Square, Casey? Let's start with the specifics on the tariffs. What is Trump doing here? Yeah, I mean, it depends on who you ask, but what Trump says he is doing is he is leveling the playing field on global trade. He says for a long time, other countries around the world have taken advantage of the U.S. They have tariffed us. Even some of our closest allies have had tariffs on us, and we just let it go because we're America, because we're rich, we're wealthy. And as other countries have tariffed us and we've refused to do the same to them, manufacturing in the U.S. has just precipitously declined. And now we don't hardly, we don't make much here anymore

because we make it in other countries. And in those other countries, they pay often slave wages. They have, you know, no safety protocols. It's very dangerous to work in these countries. And by the way, they totally destroy the environment because they have no, hardly any environmental regulations. The benefit of that for Americans is that they can buy very cheap things. The downside is the environment's destroyed. People die making it. They work in slave wages. And American manufacturing, it can't compete with these people who are basically, you know, making slave wages. So Trump's saying, we're going to put tariffs. It's going to increase prices for Americans. There's going to be some pain, is the word he used. Although I'm not sure how much he would

acknowledge the prices are going to go up. But the trade-off on that is that long-term companies will have an incentive to build in the U.S. because it won't be so cheap to just build something in a poor country and import it over here. Actually, this week, a couple of countries have basically removed or lowered their tariffs against the U.S. So Israel's won, and then Vietnam cut their tariffs. They had very high tariffs. And so that's part of the other side of this reciprocal tariffs. idea is that yes, we tariff people to the degree they tariff us, but it's possible that long term we both get rid of the tariffs because they have an incentive to get rid of their tariffs because there's a lot of reasons for that. Because they're paying a price to you now.

So everywhere from, you know, some of our allies like Japan, we're putting tariffs on them now, South Korea, another huge ally, Taiwan, we're tariffing them. We import a lot from them. Of course, the EU, China, the United Kingdom. And, and they, And there's other countries that, you know, maybe it aren't as close of an allies, but we do import a lot, places like, you know, Brazil and Pakistan. And, you know, there's a long list. And you can see that actually is some reporting at thecentersquare.com. We have a chart in Brett Rowland's story that lays out all these different tariffs. But there's many countries being tariff now. And it's possibly going to bring in a lot of money, too, to help raise revenue for the federal government.

Yeah, I get the feeling this is not. short-term game, but a long-term one. And just to fully evaluate what these new tariffs are going to mean, it's not something that we're going to know in a week or a month if they continue, unless other international countries decide to lower their tariffs on U.S. goods, we're not going to know the true impact for quite a while. Would you agree with that? I would. I think these deals are going to be getting negotiated. This basically sets the stage for a lot of trade negotiations, a lot of deals being made. And also, you know, it's going to take time to see whether these promises of more domestic manufacturing in the U.S. really come to fruition.

I mean, we're not going to see that in a week. It's going to be, you know, really decades. It takes a long time to build a factory and then start producing. And it's going to take even longer to build, you know, several factories, enough factories to reinvigorate parts of the country that used to be manufacturing hubs and are no longer. Now, with that being said, just because we get more manufacturing doesn't mean it's going to be in the Midwest. where it used to be. There's benefits for being in the Midwest, but, you know, that's not necessarily where everything's going to be. The economy's changed a lot. There's new tech hubs in the U.S., places like Miami, like Austin, so tech manufacturing could very likely go to places like that.

But, you know, like you said, time will tell. Building out a whole new manufacturing base will take time. So Trump's message is patience, I think. Of course, in the short term, as we wrote about at the center square.com yesterday, we're recording us on Friday morning, by the way. Yesterday, the Dow's dropped 4%, the Dow dropped 4%. Nasdaq, 6%, S&P 500 fell 4.8%. So markets haven't opened yet today, but they will soon. We'll see how it goes there. One underreported part of these Trump tariffs, Casey, that you wrote about, had to do with what's known as the de minimis cause.

Can you explain what that is to our listeners and what the impact is? Sure. So for years and years, Chinese companies have been allowed to show. ship small packages into the U.S. and not pay any taxes or import costs as long as the package was less than $800. And so there's actually millions and millions of packages. I think it's like four million packages a day coming to the U.S. from China that don't pay any fees to come across, you know, to come into the country because they're considered less than $800. This will come from companies like TAMU, like Shine or Sheen, I could be saying their own, but TAMU is a big one.

and, you know, you might buy some headphones that may or may not work, you know, and you ship them from China, right? And these are companies that compete directly with U.S.-based companies like Amazon, right? Yeah. Yeah, exactly. And, you know, there's a House committee studied this issue specifically, studied, you know, the Chinese government in 2023 released a report and said that basically these companies are so intertwined with slave labor.

The different products are made with, you know, wages that are. not really a living wage at all. And so the price, it's just, we really come to the forefront that the price to buy, you know, cheap headphones made from China is that the people that made them are basically slaves, that they destroyed the environment. And by the way, it puts American companies out of business who can never compete with Chinese slave loop. I think we've always known this intuitively and thought it was kind of weird, even as kids, that everything just said made in China or made in Taiwan on it. But that's how it's been. And then the other thing, J.D. Vance, the vice president has been talking a lot about this and a few others is that it's possible we're about to go to war with China. I mean, we've been on

the verge of war with China for many years. And the moment China attacks Taiwan, we're going to be at war with China. And it turns out a lot of our stuff is made in a country that we're about to be a war with, possibly. And how is that going to work when our prescription drugs are made in China and now we're a war with them? I mean, there's a real question of some of these essential goods like prescription drugs, you know, like, you know, microchips and certain metals. And there's a lot of things that you really need, one, just to survive as a country, but two, especially in wartime to survive. And we rely on many of those things coming from China. And so I think there's a J.D. Vance is making a national security argument that we need to bring a lot of this manufacturing home because of, you know,

we've seen with Russia, for instance, what's happened with, you know, the EU is so reliant on Russian oil and gas. I mean, they're totally dependent on Russian energy. And yet they're so having to navigate this weird thing where they oppose Russia's invasion to Ukraine, but they're buying oil from Russia that's funding that war. So it's, they've tried to cut back on that in different things, but that's the reality they're facing now. And J.D.V.S. saying we don't want to be in that situation with China. Well, thank you for joining us today, Casey. This is certainly a story that is ongoing, we'll be developing. And listeners can keep up with it and more at thecentersquare.com. Thank you.