Morning Joe - Morning Joe 4/4/25

Episode Date: April 4, 2025

China strikes back as stocks slide after worst day since 2020

Generally speaking this was far worse than had been anticipated certainly by the market which thought in many investors I've spoken to thought it already baked in I know especially given the action we saw the last couple of days the expectations and then you had a lot of things going around the last few days whether it was 10% or 20% across the board or what it might be but calling these reciprocal is not really we don't we don't know we're done using that word using that because that's just, I don't want to call it a lie.

It's dissembling. All right. Having fun at CNBC yesterday, Willie. It was about as volatile a day on Wall Street as they've seen since the beginning of the panic, the COVID panic. This is a tear of shockwaves circle the globe.

The New York Times showing what all the markets were doing around the world. Wall Street Journal stocks suffer steepest slide since 2020. Also covered there. And also something that caught my attention, George Clooney on the front of the art section on Broadway for Good Night, Good Luck. That looks fascinating, but probably not what many people want to talk about right now. You know, Willie, a savage day yesterday, about 5%. The market's going down by 5%, going down all across the globe. I will say, as I did after the president's announcement a couple of days ago, I took

a look at futures and saw that there was going to be a precipitous drop yesterday. I did the same thing after hours yesterday, and it looks like some of the stocks are in the green, most of them pretty leveled off. So we'll see if the president absorbs a second big day. We don't know if that's going to happen or not, a big loss. But if he does not and if there are people that go in and start trying to buy and start trying to buy today, then it will seem like these massive numbers that the president put forward with tariffs may, as they were saying, may start being baked in, but baked in or not, regardless,

yesterday was a historic day. A lot of people and a lot of places lost a lot of money in their retirement accounts. Well, President Trump predicted it would be a historic day, and it was, but not for the reasons he said it would be. The future is down again this morning, Joe. The Dow down about 400 as we sit here right now, another full percentage point.

We'll see if that holds as the markets open in a couple of hours. But yeah, I mean, it was striking to see not just how hard the markets were rattled across the world, but also the condemnation across the world from leaders, from allies, from financial aid business people, people who on many other issues and in fact on most economic issues side with Donald Trump saying this is wrong headed, it's a mistake and the evidence was in the markets yesterday. We're going to break down all of this with Steve Ratner and our panel of analysts.

We also have the cohost of our fourth hour, Jonathan Lemire. He's of course a contributing writer at the Atlantic, covering the White House and national politics. Columnist and associate editor for the Washington Post, David Ignatius. The host of Way Too Early, Ali Vitale. As I mentioned, former treasury official,

Morning Joe Economic Analyst, Steve Ratner. And NBC News National Security Editor David Rode Joe. Yeah, let's just put a fine point on this once again, Jonathan Lemire, and you've done this, you've covered the president through several elections. You certainly have studied in what he said about tariffs. I think it's so important to underline to Americans after yesterday, this important to underline to Americans after yesterday, this massive day of economic loss on Wall Street, that this isn't something that he dreamed up over the last month or so. You know, a lot of times in the first term people would accuse the president of just going randomly wherever he wanted to go on

economic policy or a military policy. Donald Trump, at his core, has believed in tariffs since 1987. We're going to show you a Dick Gephardt ad, a famous Dick Gephardt ad from the 1988 presidential campaign, where he talks about the importance of tariffs and how that was center of mind in the 1988 campaign for a lot of people. You go back that far, Donald Trump has been talking consistently about tariffs. So he had this planned. He promised during the campaign he was going to do it. He even said tariffs are like his favorite word in the English language.

So and also, he and Elon Musk both said Americans were going to have to face some hardship getting from globalism to where they believed they needed to be with protectionism. So again, this isn't something he just dreamed up. This is actually a calculated plan to follow through on something that he has believed in for about 50 years now. Yeah, Trump has declared it, as you know, to that tariff is the most beautiful word in the English language. He later amended it. He's like, well, maybe God, maybe love, but I do like tariff.

And he is someone who has changed his views on so many issues so many times over the decades, including switching political parties. But there are a few things that have crystallized. They all kind of date from the 1980s. Some of them are cultural references, including the importance of Time magazine. And then others are economic and then mostly tariffs. This is something he has now believed for 40 odd years in public forum, probably longer privately. He believes in tariffs. Now, economists largely disagree.

They say what he thinks tariffs will produce won't occur not at this moment for the nation and global economy But this is not something that he dreamed up over a weekend at Mar-a-Lago This is something that he has wanted to do now the implementation That was fuzzier. That has been something that has gone back in the White House AIDS the Economic Council Outside advisors administration officials have spent the last couple of weeks trying to figure out exactly how to do this, to hit that April 2nd Liberation Day target. And certainly I was talking to a couple of administration officials yesterday who said, one of them said to me, all we've been talking about now for weeks is tariffs, and it's

finally here. But in the last 48 to 72 hours before the announcement, they decided to go big, really big. And Joe and Willie, that's the last point to make here, is that there's been a thought, especially in the business community, that his talk of tariffs, a negotiating tactic, a bluff. He said it repeatedly on the campaign trail. A lot of his crowds really cheered for it.

They wanted this to happen. They wanted the tariffs to happen. Business leaders less so, thinking he might just be negotiating. But Joe, that's what I kept hearing over and over yesterday. This is not a negotiating tactic. These are real. Eventually it will lead to deals. It will lead to sides sitting at a table and coming up with something else. But these are not going anywhere, not anytime soon. Well, and again, you're right. The MAGA base cheered for this. Steve Bannon will be the first to tell you they cheered for this.

They wanted this. You go back to 2016, Willie. His closing argument was that two-minute ad that Steve Bannon put together. It was just an absolute indictment on globalism and what it had done to working class Americans. What a lot of politicians warned back in the 90s and the early 2000s what some of these trade deals would do to working class Americans. So their attitude, a lot of their admires are, how can it get any worse?

We will see very soon. But just again, just we've been talking about going back to the late 80s, just to put a time capsule on this to explain how long Donald Trump has believed that tariffs needed to be implemented. It goes back to the time when Japan was on the rise economically and they were buying times, they were buying 30 rock, they were buying Pebble Beach and they were buying all these American landmarks. People were up in arms. They were very angry. And that's really when Donald Trump started locking in on the need for

tariffs and pushing back against these countries. Yeah, you can find interviews, and we've played some of them over the last couple of weeks, on NBC in the 80s when he's talking about the power of tariffs and how our government should use them more effectively. And then just go back to the presidential debates in 16 and 24. And he has asked, won't these tariffs raise prices on everyday Americans? He says, absolutely not. We're about to find out.

As I mentioned, stock futures in the red again this morning after President Trump's sweeping tariffs sparked that massive sell off yesterday. Stocks losing more than $3 trillion in market value. In response, analysts with JPMorgan raised their risk of a recession this year now to 60 percent. Despite the economic turmoil, President Trump appeared unfazed yesterday, telling reporters it's all part of the plan and the tariffs give his administration leverage over other countries. I think it's going very well. It was an operation like when a patient gets

operated on and it's a big thing. I said this would exactly be the way it is. We have six or seven trillion dollars coming into our country and we've never seen anything like it. The markets are going to boom, the stocking is going to boom, the country is going to boom and the rest of the world wants to see is there any way they can make a deal. Every country is called this. That's the beauty of what we do. We put ourselves in the driver's seat. If we would have asked some of these countries, almost of these countries to do us a favor they would have said No, now they'll do anything for us

But we have tariffs they've been set And it's gonna make our country very rich Are you open to deals with these countries if they're calling you? Well it depends if somebody said that we're gonna give you something that's so phenomenal as long as they're giving us something that's good For instance with TikTok as an example we're going to give you something that's so phenomenal, as long as they're giving us something that's good. For instance, with TikTok as an example, we have a situation with TikTok where China will probably say, we'll approve a deal, but will you do something on the tariffs? The tariffs give us great power to negotiate. We always have. I've used it very well.

So Steve Ratner, the president's still suggesting that these are just negotiating tools as $3 trillion of wealth are erased yesterday and prices are sure to go up in the coming weeks and months. What do you make of the case he's attempting to make here? Well, first of all, his case is not always that clear. There are two ways to think about what he might be trying to accomplish. One would be to lower tariffs so that we can export more to these other countries and have what he would call fairer trade, more level playing field, whatever.

The other would be that he thinks he's somehow going to restore manufacturing back to where it was in the 1970s, 50s, whatever whatever and build lots of factories and we're going to keep these tariffs high in order to keep other stuff out and build manufacturing capacity here They're both a fantasy but for but for different reasons On the first one when you look at that when you look at the test some of the tariffs He's put in against other countries, especially a Vietnam Cambodia Bangladesh against other countries, especially Vietnam, Cambodia, Bangladesh, they are not in a position to buy much from us. It is normal, and I can get into the economics of it, but I'll spare them for the moment.

It's normal of them to run a trade deficit with a country like ours, and we get, in return, cheaper, better goods that Americans have been enjoying now for many years. And so it's really not clear what the end game is here that's going to make any sense. It doesn't feel... Remember in Trump 1.0, he put a bunch of tariffs on and then he quickly started negotiating and a bunch of them came off and he announced deals with Canada and Mexico and so forth. He feels much more dug in on this time. And I would also make the point, he said in that clip that things are going

exactly as he thought they would. Is he really saying that he expected the stock market would roll over and drop by 4% and three trillion dollars of wealth would be wiped out? Was that his idea of it going exactly as he expected to? The market had no idea this was coming. It was a terrible, it's a terrible shock. I don't know anyone who thinks it's a good idea. And as you said in that JP Morgan reference, the recession odds have now gone up into the 50-60% range. And you know, David Ignatius, this is about that he, again, has been saying was coming, that he was willing to take. And it reminded me yesterday as I was as I was seeing the stock market go down,

but also seeing that this is what Donald Trump has said he was going to do because we were going to have to get to the other side of unwinding globalism. It reminded me about what you said after I very aggressively was opposing the Iran nuclear deal, you said, Joe, it's an existential bet. It's an existential gamble. And I think this is the economic side of it. I was reminded by Vin Weber, a Republican House leader who got elected in 1980.

He said, this is what everybody, now, Vin Weber against these tariffs. He's a Reagan free trader. But he said, a lot of this reminds me of what people were saying about us in 1980, when we had Graham Rudman, Art Laffer with his curve, Jack Kemp, supply side politics. Everybody said we are going to blow the system up and it worked. So, Vin Weber said, even though I'm against these as a policy matter, he's taking an existential bet, much like Ronald Reagan did on supply-side economics and much like Barack Obama did on the Iran nuclear deal.

The question is, in this case, it's one thing when you're cutting taxes for Americans, it's another thing when prices are going to be going up at Walmart. So Joe, he's making a bet, but he's making a bet with our money. He's making a bet with the retirement accounts of every American. He's making a bet with the business futures of every American company that exports. He's making a bet with farmers who need export markets that now will be close to them. It's easy to say he's making this great bet and, you know, watching him yesterday, I had the sense that this is a president who is in love with what economists almost universally

say is a bad idea. But he's convinced of it. He looks serene as he says, oh, I knew this was coming. So as you said, he's making a bet. It's not his money. It's the United States of America that's on the craps table here. So I think we're in for an enormously difficult period.

How people adjust over time. It's not just yesterday's stock market fall or today's. The talk, as Steve Radner was just saying, is now about increasing likelihood of a recession, increasing likelihood of inflation returning because you have these big increases in prices caused by the tariffs. Inflation expectations, a lot of what inflation is is people expecting that it's coming. Inflation expectations up big time. And so you have a possibility of the worst of all possible worlds in which you have both inflation and stagnation of the

economy. The dreaded term is stagflation. No president ever wants that and so I think that's that must be people, sensible people in the White House have to be thinking is that where we're heading into and what are we going to do about it. Now Ali I'm sure the pressure is rising for Republicans on the Hill. I mean, you know, these are the same people who told us Joe Biden lost the election because of the price of eggs. Any of us that were talking about protecting democracy, the rise of fascism, oh, far too esoteric, far too esoteric, Joe, your heads are in the clouds. This is about the price of eggs and a gallon of gasoline.

And you know, they were right. I mean, that's what the election ended up turning on if you listen to a lot of voters. It was a stubborn inflation. Here, we're talking about the price of cars. We're talking about the price of homes, the price of what you rent, the price of what you buy sneakers

that you buy at Walmart, the price of what you rent, the price of what you buy sneakers that you buy at Walmart, the price of, you know, just go down the line. I am curious, what are you hearing on the Hill from for Republicans and, and are they showing any signs that they're going to start speaking out against tariffs? Well, they've clearly still got those economic political lessons front of mind because it's on this, not the issues related to democracy or January 6th or Zelensky and foreign policy that are actually starting to make them speak out in a more broad fashion. You've got, for example, one of the veteran Republican members, Senator Chuck Grassley of Iowa.

So when David talks about farmers, this makes sense as to why. Introducing a bipartisan bill to try to claw back a little bit more control here from the congressional perspective. Part of this bill would say that Trump would have to notify Congress, that Congress would have to approve new tariffs within 60 days, but also that Congress could try to cancel the tariffs when they deem it fit. So just trying to claw back a little bit of control here. We'll see what the fate of that bill is, but notable that Grassley is one of the people

behind it. But then you've also got Trump loyalists and allies from Ron Johnson to Ted Cruz to Jerry Moran of Kansas saying that they don't love this idea of tariffs. That's not shocking, though Trump has long talked about it. But they are also still willing to say that while they see flashing warning signs, they're going to be patient, at least for now. Watch. Look, I think it is a mistake to assume that we will have high tariffs in perpetuity.

I don't think that would be good economic policy. I am not a fan of tariffs. And the announcement yesterday, look, time is going to tell in the next month or two or three what happens if the result of yesterday's announcement is a lot of our trading partners across the globe dramatically reduce the tariffs they charge on U.S. goods and services, and the consequence of that is the U.S. government dramatically cuts the tariffs that were announced yesterday, that would be a great outcome. That would be good for America. If the result is our trading partners jack up their tariffs and

we have high tariffs everywhere, I think that is a bad outcome for America. Tariffs are a tax on consumers and I'm not a fan of jacking up taxes on American consumers. So my hope is these tariffs are short-lived and they serve as leverage to lower tariffs across the globe. The consequences are yet to be fully known, but I would have thought they would have been less dramatic, less significant and more targeted. I think we ought to be focused on our economic adversaries and be less damaging to our economic allies. What about the impact on Kansans specifically in the ag industry?

So I've said this from the beginning that we often experience retaliatory tariffs that come against our commodities, and it's very damaging. So some real unhappiness there on Wall Street, interestingly, from some Republicans and David Rhodes, certainly from foreign capitals. We just heard the senator there talk about our economic allies and economic adversaries. There could be real national security implications here too. Yeah, I think there are two people who are very happy with how this rollout has gone. That would be President Xi in Beijing and President Putin in Moscow.

The loss of $3 trillion in value and the instability that people feel here. But more importantly, as Steve mentioned earlier, three countries that are targeted are countries that the US has been trying to coax into an alliance against China. That would be Vietnam, Cambodia, and Bangladesh. They're not cheating us. I mean, this again, and it was said earlier, these are not reciprocal tariffs. There's not anything that Canadians aren't... The Canadians, there are countries that have certain exports that are just, they can produce.

Countries grow bananas, they grow coffee. We can't. Therefore, we have, they grow coffee, we can't. Therefore we have a trade deficit in coffee with Colombia. Canada has a kind of heavy crude that is refined very well in US refineries. That's just an asset they have. So there's a sense when you're trying to work with allies that you're alienating them, you're bullying them, you're making false claims that they're somehow cheating the United States.

That drives them to a more reliable partner, and we can put Russia aside. That partner is China. So everyone stay with us. Steve Ratner is going to head over to the Southwest wall for a closer look with his charts at the potential economic impact of these tariffs and who actually pays for them in the end. Plus, a Fox News commentator pushes back on the White House's deportation strategy to send migrants to a prison in El Salvador.

You're watching Morning Joe. We're back in 90 seconds. They work out every day trying to turn out a good product at a decent price. Then the Korean government slaps on nine separate taxes and tariffs. And when that government's done, a $10,000 Chrysler K-Car costs $48,000 in Korea. It's not their fault we can't sell our cars in a market like that, and I'm tired of hearing American workers blame for it. I've been criticized for my trade policy, for saying it's time to open up markets,

to push down trade barriers like those Korean taxes and tariffs. The Gephardt Amendment calls for six months of negotiation. If that doesn't work and I'm president, we have to walk away from that table. The Koreans will know two things. They'll know that we'll still honor our treaties to defend them, because that's the kind of country we are. But they'll also be left asking themselves, how many Americans are going to pay $48,000 for one of their Hyundai's? It's your fight to vote, volunteer, contribute. Dick Gebhardt. That takes you back a long way. 1988. In 1988, Dick Kephart and a lot of Democrats

were fighting for tariffs. They were fighting for what they would call fair trade. Lost that fight. A lot of populist Republicans that came in with me, including myself, were arguing the same thing in the mid-90, arguing against NAFTA and WTO, arguing against MFN for China, and argued that without protections, a lot of Americans in middle America would lose their jobs. They did lose their jobs. And here we are 30, 40 years later, and the question is, can you get those jobs back? Because people like Dick Gephardt lost that fight back in the 1980s. Can it be unwound?

You have 40, 45 years of history of globalism. Can that be unwound? Steve Ratner, I know your answer already. It cannot. Most economists say it cannot. Most of Wall Street says it cannot. And yesterday suggested that they basically let their money talk on what they believed regarding tariffs.

Yeah, Joe, look, you can't put the genie back in the bottle. We can spend a lot of time, kind of like who lost Vietnam, we can spend a lot of time debating what happened in the 90s and the early 2000s and how we ended up with a much, much larger trade deficit and many fewer manufacturing jobs. But what's done is done, and now we are where we are, and the question is where do we go from here? And the market's answer very clearly is we don't go in this direction, that this is not going to be productive. It is simply going to hurt our economy.

So let's take a look at a couple of those numbers. Let's start with the stock market yesterday. We talked about the almost 5% drop. This is actually $5 trillion of wealth lost since the inauguration. The stock market had already been starting to go down as people got more and more nervous about what Trump was or wasn't going to do. So huge drop. But here's what's actually quite interesting.

The stock market drop here was actually larger than the stock market drop in every other major index, every other major country. In Japan, it was down 2.8%. In Europe, it was down 2.6%. In the UK, just 1.6. And in China, just 0.6%. So why is that? Trump thinks he's hurting all these people.

He thinks everything is a negotiation where somebody wins and somebody loses, and he thought he was the winner. And we turned out to be the loser. And the answer is because based on a set of projections from the budget lab up in New Haven, we are the loser. The impact of this, the long run impact on GDP of this is actually going to be projected anyway, to be worst on the US of any other major country that we trade with except for Canada.

Canada has a special problem, they export a lot of oil to us. We are net oil exporters, but we do bring in some Canadian oil for complicated reasons, I'll spare you. But essentially, they believe that we will have the worst economic impact. Actually, it could be positive in the UK. Trump's tariffs on the UK are only 10% among the lowest. The EU tenths of a percent, Mexico tenth and so on, and China only negative point two because these countries have other things they can do. Their consumers are not going to be paying the cost of these tariffs because they're on the other side of it and therefore they are actually going to have slightly better

economies than they would have had. So the irony is we're the worst. And yes, in terms of that JP Morgan projection, I think we are definitely in the 50%, 60% recession odds for this year. This economy is going to soften materially. Yeah, Goldman Sachs bumped up their probability of a recession as well. Had been a long shot about a week ago, not so much now.

Let's move to your second chart, Steve, putting this into some historical perspective. Yes, Democrats in the past have advocated for tariffs, targeted tariffs. Joe Biden had them in place as recently as a few months ago, but we've never seen anything quite like this. No, we haven't, Willie. And so since we're talking in history, well, I'll just start there a little bit. And you can see back in 1980, tariffs haven't been coming down for a long time since World War II.

But you can see in 1980, we have a meaningful tariff rate. But then this is what Joe was talking about. All the trade agreements brought our tariff down, down, down to just around 2%. This circle is Trump-Biden. You can see Trump did some tariffs in his first term. Tariff rate went up a little bit. This is, for all of his talk in the first term, this is all that happened. Biden brought them down part way.

And now we have this. And this, coming across here, this is 1909. The last time we had tariffs at this level was in 1909. Now, many of us studied in school about the recession and about how we put tariffs on. Some say that it caused the recession, it didn't, but it exacerbated the recession. The famous Smoot-Hawley tariffs, that tariff rate here was actually a little under 20%. So these are not only the highest tariff rate here was actually a little under 20 percent so these are not only the highest tariff rates we've had in more than a century but higher

than we had when we had what every historian would tell you were the worst tariffs we've ever put in place until now so let's turn to some of the individual impacts because obviously the market goes down but all the other stocks do different things. And so we had a fairly disparate impact. And there are good reasons, and I'm not going to go through all these, but I'll give you a couple of examples. Nike down 14%. All of, I shouldn't say all, probably virtually all of their clothing and their shoes and their sneakers and so forth

are made in Southeast Asia, which have some of the highest tax tariff rates, as we'll talk about in a minute. Boeing is a huge exporter of planes to other countries. Those countries can now buy AirBuses. Could be really bad for Boeing's business. Apple makes virtually every iPhone that they sell in China. 54% tariff coming into effect there. Amazon, you would be surprised at how many packages you order from Amazon that are actually shipped directly to you from somewhere overseas where they're made and a high tariff will

now be paid. JPMorgan, the banks could be facing pressure for another reason, and so on and so forth. I'll just mention quickly down here, Walmart and Costco, why did they do comparatively well? Because they have such buying power that they are likely to be able to hold down their price increases and take market share from other retailers. All right, let's move to your last chart, Steve, and it's time for a little math because the Trump administration has been selling some of the numbers he put up as tariffs that these other countries, including allies, have placed on

us when really it's just kind of a trade deficit that they used funky math to come up with so help our viewers understand the numbers that the administration is presenting uh... well i'm gonna do my best to help but their math that would not get them through math class either economics wouldn't get three cannot express the math isn't going to get through math class but let's talk about what they did. So first of all, just to put some stark numbers next to it, you can see these are our top

trading partners. And what the tariff rates are going to be, European 20%. China is actually now 54% because he added 20% earlier in the year, so that gets up to 54. Japan 24%, South Korea 25%, Taiwan 32. You'll notice China, Mexico, and Canada not on here because he did separate deals with them also and they will pay some tariffs but he does have that trade agreement he negotiated with them before. But one of the points I want to make is that some of the highest

tariff rates, the way he did this and I'll explain that in just one second, some of the highest tariff rates are under some of the poorest, most struggling countries in the world. And so Bangladesh is now going to pay a 37% tariff rate on stuff they sell to us. South Africa, 30% and so on. So this is going to cut our purchases from these countries dramatically. It is going to hurt these countries' economies dramatically, it is not just bad economics, it's bad foreign policy, and it's inhumane.

So you ask how do they calculate it, I'm sure everybody has seen this formula before, I'm joking, and I'm not going to go through it all, but we've got a lot of Greek letters here, we've got epsilon, we've got phi, we've got all this stuff, but basically, Willie, it comes down to what you just said. The way they think about this, they think that if there is a trade deficit, then by definition the other country is manipulating trade, and therefore they have to calculate the tariff based on the size of the trade deficit relative to how much they send us. So the bigger the trade deficit relative to what they send us, the higher the tariffs.

It makes no sense. You're not going to find an economics professor on the planet who's going to tell you this is the right way to look at it, but it's emblematic of the whole mess they've created. Well, and that thing to your right makes no sense to me. In fact, it scares me greatly. Please, let's not talk about it again. Math formulas. Steve Ratner, thank you so much for being with us. We always appreciate it. And you can hear Steve talk about the impact of Donald Trump's tariffs

in the latest episode on New York Times podcast. The opinions are, of course, you can watch these segments on YouTube. I mean, we're finding out these Ratner's segments on YouTube. Just, I mean, Willie, sometimes a million views. Like this guy, he's sort of, you know, it's like what Justin Bieber was doing at the beginning of his career. This kid, this kid, Ratner, has a future. So anyway, you can pick it up on YouTube. But Willie, go ahead. I was just gonna say, that's how Justin Bieber started. I'm just throwing that out there.

On YouTube, strumming a guitar, singing songs, look at him now. Yeah. Ratner's next. And then, Bieber had his guitar, and Ratner has these math charts that make me sweat. That's right.

I mean, it makes me very nervous. I don't like to even look at them. Don't even look at them. So anyway, David Ignatius, talk to us if you will, because you were, this is, this is, this is your, your gig. You work this side of the margin, talking to foreign leaders every day, talking to foreign diplomats every day, talking to foreign thought leaders every day.

And talk about, I would suspect, there has to be like a one-two punch. First, the battle over Ukraine diplomatically, the battle against the EU, the back and forth. And of course, it's important to note that he seems to have fairly positive relations with Keir Starmer, fairly positive relations with Macron right now on a personal level and some other leaders. But still, a huge disconnect against the EU and other allies across the Pacific.

I'm wondering what the one-two impact of this is, where first of all, it's sort of a divide militarily and diplomatically, and now you have this divide economically. So, Joe, our allies and trading partners in many respects are the same. China is an exception, huge trading partner. But generally, we have been seen as the leaders of the system that provides security in terms of our overwhelmingly powerful military and the nuclear umbrella we provide for our friends and allies that keeps the world safe. And we've also been seen as the guarantor and manager, in effect, of the global economic

and financial system. The Federal Reserve is the dominant voice in every financial capital around the world. The Fed makes an announcement, the whole world immediately responds. So the world is used to our leadership and has prospered as have we as a country. We forget just how prosperous the United States has been in these decades of declining tariffs. So I think the world fears that as the United States, under Trump, deliberately moves to break the system in which the United States was leader. There's anxiety about what will come next.

And yes, there is the beginnings of exploration of other possibilities. Closer alliance among the European countries and standing separately from the United States on both security and economic policies. New deals with China. China is going to emerge as, in many countries' view, a factor for stability when the United States is moving things up and down. So this is going to be a period in which American leadership is doubted for the simple reason that Donald Trump is walking away from that role, thinks that role has been has been bad for the country and we're gonna feel significant

aftershocks of that. I just know one final thing in that little clip you showed, Dick Gephardt is talking about tariffs and he's saying you know South Korean trade policy is unfair but he stresses we will never walk away from the defense of South Korea. No country, responsible country, would ever do that. Well, that's what Donald Trump is moving toward. Not just the economic side, but the security side. That double whammy, I think, Scott, the world shook up. Yeah, to underscore David Ignatius' point, that struck me as well.

And certainly, that's what other capitals are wondering about. David Ignatius mentioned China. David Rhoade, we've got some breaking news. The Chinese finance ministry just moments ago announced that they will match President Trump's plan for 34% tariffs on goods from China with its own 34% tariffs on imports to the United States. Additionally, they're adding 11 companies

to a list of unreliable entities, basically barring them from doing a business in China, and are putting on strict limits on exports on certain rare earth elements that are used from everything as no tier from electric cars to smart bombs. So we've had the Treasury Secretary, last 36 hours, repeatedly warn other countries, don't retaliate, don't retaliate, just sit back and watch. Beijing wasn't listening. They're not, and the futures as a, on Wall Street are dropping right now.

So potentially, I want to be realistic here, a global trade war is beginning. And again, the problem here, and if there's all countries to question fair trade, it's China. And then we should be confronting China directly. Instead, these tariffs apply to every country in the world, every single one. And that's the problem here is that it's so broad. We're not helping our allies, hurting our enemies. And countries are going to fight back. I mean, politics is local. President Xi in China can't simply roll over for his own domestic political reasons. The Prime

Minister of Canada, the election that's happening there. So the way this is being done, this sort of bullying, random, and in many ways false claims forces country to turn against us. And then just to back up what David Ignatius said, one of the extraordinary proposals that was brought up in terms of NATO was that, again, this bedrock of the Western alliance against Russia, if a country isn't paying enough money in Donald Trump's view towards its own defense, United States was considering not defending them. And this gets back to that Gephardt ad and why this is so destructive in terms of foreign

policy. You know, Gephardt said he would defend Korea. We've said for 50 years we will defend NATO allies. That has brought stability, prosperity. This is all just completely unprecedented. You know, and Willie, I've been hearing for several years now, when even when there was pushback on much smaller matters in the Biden administration from leaders in Europe and across the Middle East, they in fact are saying the same thing. They say, you Americans, you think you're the only game in town.

You think you're the only country that we can deal with, that you can tell us to go to hell and we have no options and we'll just sit there politely with our hands folded in our lap. And they always come back and say, no, we have China. If you don't do a deal with us, we can get a better deal from China. And that's exactly what David is saying right now. This is not a monopoly. It is not a unipolar world. It is at least a bipolar world, and really a tripolar world, if you look at the power of the EU

and their economic might as well. So, we can't just tell other countries to go pound sand because those other countries won't pound sand, they'll pick up the phone and they'll call Beijing. That's exactly right. And it was captured best a couple of days ago when the territory secretary Besant said out loud

to our allies, to all these countries, getting ready to have these tariffs slapped upon them, do not retaliate, sit back, slapped upon them. Do not retaliate. Sit back. Take it in. That was his quote. Well, they're not sitting back and taking it in. Clearly now with these new tariffs from China and European nations looking for workarounds

around the United States. NBC News National Security Editor David Rode and The Washington Post David Ignatius, thank you both. Coming up here, Vice President JD Vance blames what he calls radical left judges for blocking some of the administration's deportation plans. But one Fox News legal analyst is calling it due process. Morning Joe is coming right back. Time now for a look at some of the other stories making headlines.

Hungary is moving to withdraw from the International Criminal Court. It comes as Israeli Prime Minister Benjamin Netanyahu made a trip to that country for an official state visit. The first time the Israeli leader traveled to Europe since the ICC issued an arrest warrant for him for alleged war crimes. Hungarian Prime Minister Viktor Orbán flatly rejected the court's request to take Netanyahu into custody. Dr. Mehmet Az will now oversee health insurance for millions of Americans. The Senate confirmed his nomination to lead the Centers for Medicare and Medicaid Services in a party line vote. Oz, who ran that unsuccessful campaign for U.S. Senate in Pennsylvania,

says he will focus on the president's agenda to, quote, make America healthy again. And Bruce Springsteen is set to reveal 83 previously unreleased songs. The so-called Lost Album albums will include seven full-length records. The music was written between 1983 and 2018 and will debut on June 27th. Can't wait for that. Still ahead, Democratic Senator Tim Kaine of Virginia will join the conversation after some Republicans voted in favor of his resolution to repeal Donald Trump's tariffs on Canada.

Morning Joe's coming right back. A little bit of a dreary day in New York City, 6.52 in the morning, some serious rain across middle parts of the country flooding and all kinds of stuff. We'll talk about that a little bit later. Let's talk though, Jonathan Lemire about basketball this weekend. And let's start tonight with a couple of great games in the women's final four down in Tampa. You got the defending national champion, South Carolina, Dawn Staley's team playing against

Texas and SEC matchup. And then in the nightcap, you've got Yukon, the only two seed of all eight teams between men's and women's, all the rest are number one seeds in the tournament playing the overall number one seed in the tournament UCLA. But Yukon as a two seed is a seven and a half point favorite as Gino. This is unbelievable. Has Yukon in their 16th final four in the last 17 years. Yeah, that's pretty good. This is the chalkiest final four we've ever seen, both sides.

Yet, I think that the number, the only number two seed UConn feels like the team to beat. They have closed so strong. You know, I know they're UCLA number one overall seed, but Pageback is the rest. Gino has done it again. My money's on them tonight. You know give us a give us another Yukon South Carolina legendary showdown this evening in the women's side.

You know and then we have the start of four great days of college hoops for the men's starting tipping off tomorrow. Yeah and Ali I know you're a page Becker's fan. She's a superstar in our house she's been on fire lately at 31 in

the last game in the regional final 40 the game before that she'll be the number one pick in the WNBA draft she's great and a fun team top to bottom throw an easy fud the freshman superstar Sarah strong they're looking good.

Yeah yet another reason why everyone watches women's sports you've got these amazing players Paige Becker's and I'm with Lemire I would actually love to see the same matchup looking good. Yeah yet another reason why everyone watches women's sports. You've got these amazing players, pagebackers, and I'm with Lemire. I would actually love to see the same matchup of UConn and USC once again together, South Carolina. I'm interested in how it turns out. All right, we'll be watching that and then as we look ahead to tomorrow Joe, one of your alma mater's, Florida, the Gators, they have become a very sexy pick

to win the whole thing they are playing so well down the stretch won the SEC tournament they had to come back and win in the regional final but looked tough in those closing few minutes again another SEC matchup Florida Auburn in the first game and then Houston Duke I think Duke is probably still the favorite but Houston an underrated team as well be really fun night in San Antonio tomorrow. Yeah Duke the favorite there are a few people saying look for Houston to be able to out muscle Duke I don't think that's gonna happen Duke has too many good players Houston's had an inability to really match up well with teams that have more than one or two to great

players Duke has five. And on the other side, the SEC side, you know, Florida, you know, starting about three weeks back, two or three weeks back, really started to see Jonathan Lemire, like, sort of the quiet team to be watching and for others to be fearful of. Auburn could certainly win that,

but right now, it's hard not to think we aren't gonna get a Duke Florida matchup in the finals. That would be a great one. Yeah, that's exactly where I am too. Florida was my pick at the start of the tournament to win the whole thing. I admit though, if that's what we get Monday night,

Florida Duke, hard not to choose the Blue Devils. They have just blown people out. Cooper Flagg gonna be the number one player in the draft they've got a couple other NBA ready prospects are just so big a lot bigger than the other teams Willie. But this is it so it's a four number one seeds. So let's hope that the games tomorrow night live up to the billing.

Yeah, yeah, and of course Willie the Times Square basketball is exciting but Times Square of course, Willie, the Times Square basketball is exciting, but Times Square, of course, you would think that the banner would be going across saying, you know, talking about stocks crash market down all this stuff. For some reason, it's Godspeed, Mr. Bregman. I don't know. I guess Bregman had a good game yesterday. The Red Sox, you know, they keep winning a two game winning streak right now.

It's getting scary and they open up at Fenway today Willie. I know you're you gotta be excited. You know what I as John knows I say this all the time. I am excited actually when the Red Sox and Yankees are both good and competitive makes the more the season more fun. It makes August September October fun. So I'm up for it let's do it the Yankees sure they gave up seven runs last night but they scored nine just keep bat they keep bashing

home runs out of Yankee Stadium so that's this big and by the way let me say wait there's what you just said Willie what you just said Willie about about you know it's good when both the Yankees and the Red Sox are good. I want you to know Jonathan Lemire doesn't subscribe to that belief.

No one else in the world subscribes to that belief. They hate the Yankees and the Red Sox but there are teams.