Marketplace - How about those new tariffs?

Episode Date: June 26, 2024

Over the past few months, the Biden administration has announced new tariffs — on top of existing Trump-era ones. The period for public comment on them is nearly over, so we’ll hear business owners’ views on the levies’ likely impact on sales. Also in this episode: An all-female fire crew burns barriers, Google phases out infinite scroll and the U.S. semiconductor industry sorta relies on a hard-to-win visa lottery.

Thank you to those who donated during our May fundraiser and to those who gave it year round. Support is still needed though to end our budget year on target. So please help power this important resource. Would you make a budget year end gift at marketplace.org slash donate? Hey, remember tariffs? Yeah, they're still a thing from American public media. This is Marketplace.

In Los Angeles, I'm Kyle Rizno. Wednesday, today, 26 June. Good as always to have you along, everybody. It has been a minute, I think, since we've talked tariffs and we bring them up today with an eye to the calendar. President Biden has kept most Trump-era tariffs in place and over the past couple of months has added a slew of his own and increased others on everything from EVs to solar cells to batteries to electric vehicles, again, to steel and aluminum and beyond.

The Office of the U.S. Trade Representative has been on the receiving end of, well, let's call it input about those tariffs from businesses big and small in this economy. Friday is the end of the 30-day public comment period on those comments. So Marketplace's Brie Benishaw brings us up to date. For CEO Ed Richardson, new tariffs on Chinese magnets and steel would be great. The tariffs would help balance the playing field. Richardson heads Thomas and Skinner, based in Indianapolis. It makes high-performance magnetic materials that go into medical equipment, for example. Some of those products require specialized steel, something Richardson says China subsidizes,

giving it an unfair advantage. We only use domestic steel. That's what our customers prefer, in some instances, require. So the tariffs are going to make our pricing more competitive with producers who use the Chinese steel. But one stayed up. In Michigan, Stephen Weichel is very frustrated with new tariffs on a material called tungsten carbide, which his company, Lincoln Precision Carbide, uses to make cutting tools used in manufacturing.

Basically aerospace, automotive, John Deere, Harley, anything that needs carbide cutting tools to cut what they're making. The tariffs are going to make his tools more expensive. All of a sudden, we're going to become uncompetitive and people will start buying elsewhere, out of the country. And he says there aren't any producers in the US who make the materials he

has to buy from China. So he says those tariffs are protecting nobody. Where you stand depends on where you sit. Bill Reinch is a senior advisor at the Center for Strategic and International Studies. He says some industries may find ways to adapt, others will raise prices, and others may fail. In a sense, they are all paying the price for protecting or developing other industries,

deemed more critical. The key question, Reinch says, is whether those protected industries will then improve or stagnate. Tariffs, if you keep them on for a very long time, they end up stifling innovation. But that, he says, is a long-term problem. In the short term, the message from these tariffs to businesses is clear. Unwind from China as fast as you can. In New York, I'm Sabri Benashur for Marketplace.

On Wall Street, today, technology led equities higher. We will have the details it displays those search results. reminder here, controls attach over 90% of the global search market is changing the way it displays those search results. Starting today, it's going to be removing what's called the continuous scroll feature where search results go on basically forever without you having to click through to the next page. The company says it will deliver faster results. This is just the latest in a series of changes to the world's most dominant search engine, as Marketplace's Megan McCarty Carino reports. There is a practical reason for Google to make this change, says Chirag Shah, a professor

of information science at the University of Washington. Most users never get past the first results, but he says the reversal fits with a bigger shift underway at the search giant. It's all about the way you influence user behavior. When you provide all the links, he says, it's an invitation to click away all over the internet. Shrink that list down, and you narrow users' focus. And we know that the extreme version of this

is forget about the list of results. I'm giving you one answer. One answer generated by artificial intelligence. Last month, Google rolled out what it calls AI overviews as it fends off competition from upstarts like chat GPT. A large language model now summarizes the relevant information contained in top links and displays it with the results. This is a great reset.

Daniel Newman, a tech analyst at Futurum Group, says generative AI is revolutionizing the way we interact with content on the internet. Will we even call it search? It's now our interactive personal digital bot assistant. Great for people looking for a quick answer. Not so great for sites that rely on clicks for monetization, says Garrett Johnson, a professor of digital marketing at Boston University. Definitely content creators should be very alarmed by the increasing pressures on their business.

He says it could also challenge companies that sell digital advertising, like Google. And it's not clear yet how revenue from AI tools, which require much more computing power and electricity, will make up the difference, says analyst Charlie Miner at Third Bridge. This is a much lower margin product as we sit here today. The initial estimations were it could be up to five times more expensive to run an AI search. He says Google seems to be making a play to hold on to users with flashy AI and figure out how to monetize them later.

I'm Megan McCarty-Corino for Marketplace. You don't need to have AI to know that the Marketplace Morning Report, David Brancaccio and the gang will get you everything you need to know to start your economic day. Check it out. We had an update a couple of months ago from Vanita Cooper, one of our retail regulars. She's in Tulsa, Oklahoma, who had decided to sell her store. It's called Silhouette Sneakers and Art, which she had opened back in 2019. There was a lot of intention behind that decision because the store is in the Greenwood neighborhood,

historically known as Black Wall Street in Tulsa. So with that sale in the rear view mirror, we gave the new owner a call to see how things have been going. I am Kellan James, new owner of Silhouette Sneakers and Art in the historic Greenwood of Tulsa, Oklahoma. I've been wanting to run a business of my own since I started working. I mean, like at the age of 16,

I started working with sneakers and that really kicked it off for me. Like, man, this would be awesome if I could do this in my way, in my own style and have fun with it. I think maybe three years ago, I was coming in the store all the time, like I usually do, and Bonita Cooper, the former owner, she just was like, there may be a time when I might not be able to do this and do the other things that I want to do in life.

And man, we should really have a conversation about, you know, the next step. If something were to happen to maybe I can sell it to you. It was really something that never felt real through even throughout that whole process until me and my wife, Nia, we went down and signed papers. And then they called me and said, everything was good and we could start.

You know what I mean? It was not even until that point to where I was like, oh boy, we really did this. And of course you're happy about it, but you're also like, oh my God, we did this. So now we got to step up. So now we got to step up. What I remember about my first day running the store was really just, that was kind of the same kind of feeling like, what am I doing here on the other side of this

counter? You know what I mean? And I remember thinking to myself the first day was like, soak it in, really just enjoy it. I remember also I was like, man, make sure you got your best shoes on. So your best niggas. So that was it. The biggest challenge for running this business has been understanding the ins and outs, the business, the paperwork. I have to understand what I'm spending it on and why. That's been an adjustment and it's been a great challenge. I'm excited about it and it's been good. Running a business on Black Wall Street means everything.

I remember as a kid, my dad would take me right down the street to T's Barber Shop. This is right on Greenwood. I remember being there and I understood. My pop used to talk to me all the time about what this area meant to the city, what it meant to the town. And so now to be in this position where I am running a business in this same location where a lot of people benefited of and made the best out of, you know, hard times, it means everything to me.

Kellen James now on the other side of the counter as he said at Silhouette Sneakers and Art in Tulsa, Oklahoma. We're in wildfire season out here in the American West and state and local and federal agencies have been getting ready, training wildland firefighters to both respond to and prevent what are becoming more frequent and hotter fires. It is a difficult, of course, and dangerous job, but a lot of firefighters say it's rewarding work that keeps them outside and helps them make a positive difference. But wildland firefighters are mostly men. A program though in western Colorado is looking to change that as Aspen Public Radio's Caroline

Yanez reports. In the mountains of western Colorado, Rae Shalseisle is getting ready to start her work day, unpacking her chainsaw and other tools next to a large pile of branches and brush. I was working an office job before this and I quickly found out I hate office jobs. For the past several months she's been an assistant lead on a crew of wildland firefighters, one made up entirely of women. We've been here before the green-up and now we get to see all the flowers blooming out here now, and it's really, really pretty up here.

This developmental crew is designed to get more women into fire jobs. The Forest Service estimates that up to 87% of its wildland firefighters are men. Lathan Johnson with the Bureau of Land Management says the program has two benefits. Federal agencies get important work done before the height of fire season, the program has two benefits. Federal agencies get important work done before the height of fire season, and their workforce is starting to look

a little more like society as a whole. Whether it's on a wildfire or whether it's on something we're doing here in the office, having that diversity in gender, I think has always made it better to you. When the 10-month program is over, the women will be certified to fight wildfires for federal agencies. They'll have completed all the training they need. This morning, the crew has just arrived in the field, and they're getting ready, checking earplugs, putting on gloves and gaiters, and adjusting chains on their chainsaws. Crew member Ellie Zare says when they're not out here, the women get mentorship, help

with their resumes and advice on seasonal jobs. They're all so supportive. They want more women in fire and they're so happy that we have this program and they each keep showing us what we should pack and what we should expect. And what they should expect is a lot of hard work, not necessarily for high pay. Minimum wage for federal firefighters is around $15 an hour, which is what the crew is making now. These women work long days carrying heavy loads, sometimes clearing their own trails as they go. They often camp near the job site instead of sleeping in beds.

The crew starts spinning a patch of overgrown gamble oak trees with chainsaws. Ava Heller, another assistant crew lead, says the hard work is rewarding. I feel like I'm actually making a difference out here and doing something meaningful, which is like so so awesome. And that's probably my favorite part of the job, apart from working with all these wonderful people. Program coordinators say about 80% of the women who participated in the program in years past go on to have jobs in fire for at least the next season. Rachel Seil says she feels like she now

has lots of career options. You can go into, like, the science side of fire. So you can go in after prescribed burns and look in how to, like, mend those lands or hell attack and hot shot and, like cruisers are all like initial attacks. Seil says getting a chance to learn the job in a welcoming environment is huge. Using like all of these like bigger tools and all this machinery and stuff like that and not feeling judged and not feeling like you're inferior.

She says she'll finish out the season on a fire crew, and wherever she ends up next, she plans to stay in natural resources. In Western Colorado, I'm Carol Añones for Marketplace. Coming up! We are on the order of tens of thousands of jobs short. That is a lot of jobs. First though, let's do the numbers. All right, here you go on a Wednesday.

The Dow Industrial has inched up 15 points. That's less than a 10%. Probably should have just said it was flat. 39,127. The NASDAQ gained 87 points, a half percent 17,805 there. The SP500 up eight points two tenths percent 54 and 77. Shares of Rivian Automotive, you might have heard this already today, jumped 23 percent after announcing a Volkswagen investment of as much as five billion dollars. We're gonna

work on a software project for EVs. FedEx announced a number of cost-cutting measures to the tune of $4 billion company-wide. That is alongside better-than-expected quarterly earnings. What do you think happened next? Why yes, FedEx shares did surge 15.5% today. Stacey Vanek-Smith was telling us yesterday about that persistent negative vibe session we got going despite all the headline data. A recent survey from the Philadelphia Fed shows the pessimism extends to consumers' personal financial outlooks too. People who are most worried about making ends meet are those who are currently able to pay all their

bills. The anxiety is on the rise as well, even for high-income earners. More than a third have responded to make $150,000 a year or more express concerns about covering their bills. You're listening to Marketplace. At Alternative Access Funds, we believe that all people deserve the ability to invest in a wide variety of asset classes. That is why we launched the NYSE-listed ETF ticker AAA, an ETF containing floating rate bonds that seeks capital preservation and income while mitigating the effects of changes in interest rates. NYSE-listed ticker AAA.

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before investing. The prospectus contains this and other important information about the investment company and is available at www.aaetf.com. Please read it carefully before investing. Distributed by ALPS Distributors Inc. Here's the deal, gang. Marketplace is for the public good, not for profit. We count on you, our listeners, to help us cover the costs of the reporting that you rely on.

We are going to remain free and accessible to everybody. That's part of our mission. But if you're in a position to donate, we are counting on you. Please give what you can right now at marketplace.org slash donate or click on the link in the show notes. This is Marketplace. I'm Kai Rizdal. We don't do a whole lot of personal finance here, but this is a pretty basic rule.

To the extent you can, you gotta save for retirement. And it turns out people are taking that to heart. Vanguard, which, yes, does offer a lot of retirement accounts and options, released its annual How America Saves report this week. And people are putting more money into their 401Ks now. 7.4% of earnings in 2023, almost 12% if you include employer contributions. Marketplaces Kaylee Wells explains why that's happening now. The big catalyst here is called automatic enrollment. So if you start working somewhere

that provides a 401K, for example, and you don't get around to signing up for it, your employer will just do it for you. And a recent federal law is actually about to make that mandatory. Jeff Clark, Director of Defined Contribution Research at Vanguard, authored the report. He says the benefits don't stop there. Automatic enrollment doesn't just increase how many people participate. It increases how much people are contributing. David Deming, Ph.D. Automatic Enrollment Plans are also defaulting employees in at higher starting rates. They default participants

in at rates of 4% or more. He also says two-thirds of these participants now have their savings managed professionally, including by folks like David Deming. He is a certified financial planner and founder of Deming Financial. You've got a big wave of young folk coming in and the different generations. Those young folks, he says, are taking better advantage of the benefits their employers provide. And they are, I think, because of the internet and different things.

They have more exposure to it, to having some knowledge. All of that is good news, says Richard Johnson. He's a senior fellow at the Urban Institute, but he says, I don't think it changes the basic storyline that for many people, their retirement outlook is pretty grim. His other point? This report only considers folks who actually have a retirement account, which is just over half of U.S. households.

The good news is not enough to fundamentally change that story. Johnson says that saving 7.4% of one's income for retirement, as the Vanguard report found, still wouldn't be enough for folks to be financially stable in retirement. He says workers should be aiming for closer to 10%. I'm Kayley Wells for Marketplace. We've talked a good deal on the program about the Biden administration's industrial policies, the infrastructure law, the inflation reduction act, and most particularly the CHIPS Act and semiconductors. The White House and Congress are spending about $50 billion

to boost domestic chip production, but there is a catch. The catch is people doing the work, tens of thousands of people, including electrical engineers. But if you look at American universities, a majority of students in the relevant masters and PhD programs are coming from overseas. Even as the visa program that helps get

those advanced degree students into semiconductor jobs here, that program has gotten more overwhelmed. Places Elizabeth Troval has that story. Just a couple of months ago, President Joe Biden took the stage in Syracuse, New York. He spoke about federal funding for new semiconductor manufacturing facilities while standing between signs, reading, investing in America.

Took action to make sure these chips were made in America again, creating tens of thousands, and I mean tens of thousands of good-paying jobs. In construction, manufacturing, engineering, jobs that, at least at first, the industry will be scrambling to fill. We are on the order of tens of thousands of jobs short of filling these when the facilities themselves are ready to come online. John Cooney is with Semiconductor Industry Association, SEMI,

and says while the U.S. is playing catch-up to build up the American-born workforce, We rely heavily on the H-1B program across the industry. The H-1B visa program is a lottery system for educated foreign workers in specialized fields. It's a lottery because there are far more applicants than the 85,000 visas that are available each year. Intel engineer Harshad Sridhi was among the more than 400,000 applicants awaiting an answer

this spring. It was definitely a huge worry. A huge worry because this was his last shot at the H1B after graduating a couple years ago. I've spent like almost a decade in this country doing good research, blood, sweat and tears went all of this. Whatever future I expected out of my time in the U.S. kind of hands in balance. Lucky for him, Surti did get an H1B for this upcoming year. But that doesn't mean his visa woes are behind him. Like many semiconductor engineers, he's from India and is facing a growing backlog to get his permanent residency or green card.

I've seen many, many, many people who just like are disheartened by this and are now just giving up hope. He's seen workers move to Europe or Canada because of visa issues. And he's thought about that option, that he'd rather stay in Portland where he can snowboard, rock climb, settle down and buy a house. I do want to build a life in the U.S. because my job is here. I really like it here. So, but this uncertainty of if I can stay in the U.S.,

it kind of hinders me in making any long term plans. The demand for semiconductor workers is increasing, but the visa cap isn't much different than what it was in the 1990s. A decade ago, roughly 70% of H-1B visas were approved. For the upcoming year, the grant rate was less than 20%, according to a Cato Institute analysis of government data. Immigration attorney Sandra Sheridan-Regadine has tracked how that's impacted a major semiconductor employer she works with.

For H-1B applicants there? Even just of those that are at their last-ditch effort, only about 37% of those are getting the visas. So the remainder of that, which is 63%, they have to figure out what to do with these people. Employers could move them to other countries. Some workers may decide to go back to school to extend their stay. Others may qualify for other kinds of temporary visas. But it all interferes with company operations.

That investment went into that talent and now it's kind of disrupting the work. While the U.S. government may be investing in a new era of semiconductor manufacturing, the immigration laws supporting that workforce still face 20th century limitations. I'm Elizabeth Troval from Marketplace. This final note on the way out today in which this program takes no position on the merits of today's Supreme Court decisions, but does note for the record a footnote from Justice Barrett's majority opinion in Morphy v. Missouri in which the court dismissed for lack of standing a complaint about the Biden administration contacting social media companies to fight what the White House said was misinformation. Anyway, the relevant footnote says in full, since the events of this suit, Twitter has

merged into X-Corp and is now known as X. Facebook is now known as MetaPlatforms. For the sake of clarity, we, Justice Barrett wrote, will refer to these platforms as Twitter and Facebook as they were known during the vast majority of the events underlying this suit. Honestly, same. Our Media Production team includes Brian Allison, Jake Cherry, Jessen Duller, Drew Jostant, Gary O'Keefe, Charlton Thorpe, Juan Carlos Torrado, and Beko Einman. Jeff Peters is the manager of Media Production, and I'm Kai Rizdall. We will see you tomorrow, everybody. This is APM.

Hey everyone, it's Rima Grace, host of This Is Uncomfortable, here to let you all know about our summer book club. Every other week we're going to recommend a book that our team loves that gets at some uncomfortable topic around money, class, our relationship to work. We'll feature a wide range of recs including classics like E.M. Forrester's A Passage to India, page-turning novels like Naomi Alderman's The Future, and personal finance books like Paco de Leon's Finance for the People.

Join This is Uncomfortable's Book Club by signing up for our newsletter. Be sure to sign up today at marketplace.org slash book club.