Consider This from NPR - Trump’s economy is marked by uncertainty. What could more tariffs mean for you?

Episode Date: October 1, 2025

When President Trump came into office, he promised to fuel an economic boom with a magic bullet: tariffs. They're taxes added to a wide range of imports. And money is coming in, more than $30 billion a month so far. Eight months into Trump's second term, it’s unclear what the larger impact of these tariffs will have on the economy. Despite that, the president keeps promising to roll out new ones. NPR's Chief Economic Correspondent Scott Horsley explains.For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org.Email us at [e-mail] episode was produced by Erika Ryan, Kathryn Fink and Lauren Hodges. It was edited by Adam Raney, Courtney Dorning and Raphael Nam. Our executive producer is Sami Yenigun.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

When President Trump returned to the White House, he promised to fuel an economic boom with a magic bullet. Tariffs. President Trump's sweeping global tariffs for more than 90 countries have come into effect. A further 25% tariff on India. 50% tax on kitchen cabinets and bathroom vanities. A 100% levy on branded drug imports into the United States. Money is coming in as a result of the tariffs. More than $30 billion a month so far from a wide range of goods.

The president celebrated the influx of tariff revenue last week and unveiled additional sweeping tariffs. Because of tariffs, we're doing unbelievable. We're making more money than we ever have made. But what all of this means long term for American consumers and American businesses is still unclear. If you are Scott Horace Lisa, some sectors are being hit hard. It's odd because, you know, domestic factories are supposed to be the beneficiaries of the president's trade policies. Instead, they've really been struggling. Consider this. Eight months into Trump's second term,

We still don't yet know what impact these tariffs will have on the economy. The president keeps rolling out new ones anyway. From NPR, I'm Scott Detrow. Pssps, did y'all hear? Code Switch is one of Tom Magazine's top 100 podcasts of all time, baby. Mm-hmm. They called our show, quote, a kind of cultural compass, never preachy, always curious, about the roots of inequality in people's lived experiences.

I mean, I'm biased, but we couldn't have put it better ourselves. And we're digging into all this every week. So make sure you catch the next episode of Code Switch on the NPR app or wherever you get your podcasts. It's considered this from NPR. with me to talk about the impact of President Trump's tariffs on trade policy, on the economy, is NPR chief economic correspondent Scott Horsley. Thanks for being here. Great to be with you. So let's start with this week's news, this latest round of tariffs. Trump says he's rolling out new

tariffs. What is the latest industry to be targeted? Yeah, it's going to be hard to keep up. But I think this week, the president has targeted softwood lumber and movies. Now, we already have pretty steep tariffs on lumber from Canada, but the president apparently thinks those are not high enough. And he's disappointed to see movie production in countries other than the United States. So he's threatened not for the first time to add attacks on those, although it's not entirely clear how that would be calculated. That gets to my next question, though. The president will threaten tariffs, then not implement them or he'll put them into effect and then they'll be paused or the courts will weigh in.

This latest round, how likely do we think these are to actually be implemented and how is industry responding? Yeah, it is hard to say. As you point out, some of Trump's tariff threats never really materialize. He's threatened, for example, to tax foreign films before, and we didn't see any movement on that. But you can't just dismiss these tariff threats out of hand because a lot of them, he does follow through on. Last week, the president threatened to impose tariffs on name brand pharmaceuticals and kitchen cabinets and big trucks. So the list of import taxes does continue to grow. Let's rewind to the beginning of the year. What are the different areas that we have seen tariffs put in place already? Remind us of the greatest hits. Oh, gosh, it's almost everything the United States imports, including a lot of things we don't really produce in our own country, like bananas and coffee. The Yale Budget Lab has kept a running tally of all the tariffs that the Trump administration has imposed. and it counts that the average tax rate right now on imported products is close to 18%. That's compared to about two and a half percent at the beginning of the year before Trump went back to the White House. So this is the highest average tariff rate we've seen since the 1930s.

And as you say, the president just keeps rolling out new import taxes. 1930s, not exactly a great decade when it comes to economics. Experts warned that these tariffs would shock the markets, that the world ran on free trade, and this would just gum everything up. And yet we are seeing at this point in time the stock market surging. What do we know about the broader impact of these tariffs? Yeah, the stock market's gain has been a turnaround because when the president first started imposing these double-digit tariffs, investors were nervous, and we saw big drops in the market.

In fact, the White House backed off some of its tariffs in response to those stock market drops. But more recently, Wall Street seems to have made its peace with the tariffs, at least for the time being. You know, taxing imports has put some upward pressure on inflation. Lumber tariffs, for example, are not going to help bring down the cost of housing. And adding a 50% tax on coffee from Brazil doesn't make your breakfast any cheaper. But investors seem to be saying that limited price increase is manageable. Some sectors of the economy are being hit harder than others, though. Manufacturing in particular has taken a beating.

We just got a monthly report on the factory sector this morning from the Institute for Supply Management. And once again, they are saying tariffs are playing havoc with their businesses. It's odd because domestic factories are supposed to be the beneficiaries of the president's trade policies. Instead, they've really been struggling. Farmers have also been hurting. China has not bought any soybeans from U.S. soybean farmers this year. And so grain prices are really depressed. Trump has actually talked about using some of the revenue that tariffs are bringing in to provide a lifeline for farmers, as he did the first time he was in the White House.

Farmers would take that. But most of the farmers I talk to say they would rather have markets and trade rather than foreign boycotts and aid. And that gets to another thing I was wondering. You've done a lot of these stories. I've done some stories as well, looking at individual businesses, trying to make long-term decisions, trying to plan months and years down the line. And, you know, I went to a distillery in Virginia, and they're saying we don't know when to order glass bottles. We don't know where to order it from because week to week the tariffs we're dealing with could be different. What have you seen big picture about how that paralysis in individual businesses is affecting consumers?

Well, as you say, it's just really hard to plan a business when you don't know what your costs are going to be a week from now, let alone six months from now. And if the president can impose a 50% tax by a social media post, that's really worrisome. I've talked to importers who say they are just flying blind. They have to place orders with factories in Asia now, not knowing what the tariff rate's going to be next spring when the goods arrive at a port here in the United States. I've talked to importers who have thought about maybe shifting operations out of China, for example, to some other country, only to have goods from those countries now being taxed and even high. rates than Chinese products are, you have companies that have said they'd like to set up shop here in the United States, but they don't know what their competitive posture is going to be because the tariff target keeps changing. And then you've got companies like Nvidia that are told

they won't be allowed to sell their advanced computer chips to China unless they give the federal government a share of the proceeds. It's just a very unpredictable environment. And usually we say that when things are even more unpredictable than normal, that's not good for business. One other unpredictable factor here is the eventual ruling we all anticipate from the Supreme Court on all of this. What can you tell us about that, what we've seen in the court so far? Yeah, the White House has justified most of the tariffs the president has ordered this year by pointing to a 1970s law known as AEPA that never actually uses the word tariff. And opponents have argued that law doesn't actually give the president the authority to impose import taxes. all the courts that have looked at the case so far have agreed with those critics.

And so now it's up to the Supreme Court, which is going to hold oral arguments in just over a month's time. If the high court agrees with the lower courts, then a lot of these tariffs will just go away. And the government may even have to refund some of that $30 billion a month that it's been collecting. Now, the White House says that would be catastrophic. But, you know, remember, until January, the government was charging an average tariff of, you know, less than two and a half percent. and the Republic managed to endure. Even if the Supreme Court does rule against the president and these AEPA tariffs, it doesn't mean there'd be no tariffs.

The president still has authority to issue tariffs under other statutes. But it would take away sort of his most wild of wild cards. I wanted to ask about two other big economic factors that are swirling around here. One is something we've talked a lot about. It's been one of the prevailing storylines in this Trump administration. And that is his big immigration crackdown. And you have even had the president express some worries about how this is affecting the labor market. What are you seeing?

Yeah, it's changed things in a big way. The number of people coming into the country has dropped sharply while the number of people leaving the country, either voluntarily or because they're being deported, has gone up. And in fact, forecasters at the Brookings Institution and the American Enterprise Institute say there's a possibility that we will have a net outflow of immigrants this year for the first time in more than six decades. And that has enormous consequences for the job market and for the economy overall. For example, we have seen in recent months a big slowdown in the number of jobs that employers are adding. What we don't know is how much of that is because businesses don't want to hire as many people

because they're not selling as many goods or services, or how much is because they're not finding as many would-be workers. It's probably some combination of that. And of course, immigrants don't just provide labor for the economy. They also shop and spend and pay taxes. So if there are a lot fewer immigrants, that has other economic consequences as well. It would be nice to have a really clear picture of what's happening both with the job market and with the workforce. Unfortunately, a key report that would have come out on Friday with lots of useful information about exactly those things has now been postponed as a result of the government shutdown. we're going to have to wait a little bit longer to know what's going on with the labor market. And of course, that's one other economic factor here. You have, you know, scores of federal employees who won't be receiving paychecks. President Trump is threatening to fire many federal employees. Any sense, since we have the luxury of having been through many shutdowns at this point, any sense how a government shutdown affects or complicates an economic situation?

Well, historically, government shutdowns have not had enormous macroeconomic effects. You know, they're a disruption. They cause some temporary displacement. Ultimately, the federal workers get back pay. So the macroeconomic effects tend to be pretty limited. That could certainly change if the Trump administration were to follow through on plans to impose mass layoffs and really remake the federal workforce. We've already seen hundreds of thousands of federal workers cut so far into this administration. If we add to that, the impact could be more. But the economic data is another factor here. You know, the government produces all sorts of economic indicators on the job market, on

inflation, on GDP. Those are all compiled by government workers, and they're not being compiled during this government shutdown. And so we're at this moment where we're at this really sensitive time for the economy. The job market appears to be slowing down. Inflation's picking up. Policymakers at the Federal Reserve, for example, are trying to figure out how to navigate through these choppy water.

And now some of their key navigational instruments have been covered up with black electrical tape that's marked government shutdown. So, you know, they're flying blind. A lot of businesses are flying blind. To be sure, there are other sources of economic data. They're private sources. There are, you know, there are various other places you can go. But nobody has the reach of the labor department and the Commerce Department that go out there and survey tens of thousands of businesses and households every month and put all that information together for us. It's a real public good, and we're going to have to do without it as long as this shut down last.

That is Scott Horstley and PR's chief economic correspondent. Scott, thanks so much. Good to be with you. We want to take a moment here at the end of the show to note something important. Today, October 1st, is the first day in more than 50 years that public media operated without federal funding. And the reason that we are still here today is because of you. We have heard from a lot of listeners who were worried or confused that their favorite NPR podcasts and programs would go away after Congress rescinded funds for public broadcasting this summer. And, well, it is true that public media is now in the midst of an immense challenge to reinvent how it operates.

NPR is committed to that process. As long as you keep listening, we are not going anywhere. So thank you for, first of all, doing that for listening. And thank you for your broader support. This episode was produced by Erica Ryan, Catherine Fink, and Lauren Hodges. It was edited by Adam Rainey and Raphael NAM. Our executive producer is Sammy Yenigin. It's Consider This from NPR.

I'm Scott Detrow. Want to hear this podcast without sponsor breaks? Amazon Prime members can listen to Consider This sponsor-free through Amazon music. Or you can also support NPR's vital journalism and get Consider This Plus at Plus. NPR.org. That's plus.npr.org.