The Daily - What to Expect From Trump’s New Trade Drama
Episode Date: July 10, 2025After months of delaying his most extreme tariffs, President Trump is now threatening to revive the most aggressive version of his global trade war.America’s trading partners, investors and consumer...s are bracing for impact.The Times journalists Natalie Kitroeff, Ana Swanson, Maggie Haberman and Ben Casselman sit down to discuss what we can expect and what Mr. Trump’s endgame might be.Guest:Ana Swanson, who covers trade and international economics for The New York Times.Maggie Haberman, a White House correspondent for The New York Times.Ben Casselman, the chief economics correspondent for The New York Times.Background reading: Mr. Trump revived his trade war, threatening steep tariffs on allies unless they reach deals with the U.S.What is a trade deal? He takes an expansive view.The threatened tariffs aim to settle scores with countries, no matter their size.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. Photo: Alyssa Schukar for The New York Times Unlock full access to New York Times podcasts and explore everything from politics to pop culture. Subscribe today at nytimes.com/podcasts or on Apple Podcasts and Spotify.
Transcript
Discussion (0)
From the New York Times, I'm Natalie Ketroweth.
This is The Daily.
After months of delaying his most extreme tariffs, President Trump is now threatening
to revive the most aggressive version of his global trade war.
Now America's trading partners, investors, and consumers are bracing for impact.
Today I speak with three of my colleagues, Anna Swanson, Maggie Haberman, and Ben Castleman,
about what we can expect and what Trump's endgame might be.
It's Thursday, July 10th.
Welcome to the Roundtable Economic Edition.
Anna, nice to have you.
Thanks for having me.
Ben, thank you for being here in the studio.
Great to be here.
Maggie, it is always a pleasure.
Natalie, it is so nice having you here, even if I'm not actually with you. We wish to be here. Maggie, it is always a pleasure. Natalie, it is so nice having
you here, even if I'm not actually with you. We wish you were here. I want to just set
the table for us a little bit. Ninety or so days ago, Trump instigates a global trade
war on a scale that the world has never really seen before. Reciprocal tariffs on a bunch
of countries. It's this seismic economic event. The U.S. stock market plunged.
Trillions of dollars in value are wiped out in a matter of days. I honestly can't remember an
economic event like this. And then because of all that fallout and the outcry, Trump
presses pause on a lot of it. The stock market recovers. And then everyone gets kind of used to the idea
that the trade war is on what seems like a hiatus. Now it feels like, to the degree that
it was ever suspended, the trade war is back. He's lobbing these new threats against countries
again on Wednesday. So, Ana, can you just lay out for me the current state of play?
Yeah, so actually this trade war was paused, but it never truly went away.
The president had paused his tariffs for 90 days in April to try to encourage other countries
to come to the United States and do trade deals instead of
getting hit with tariffs.
And in the last three months, we've seen this flurry of activity with other countries trying
to get some time on the schedule of U.S. officials to negotiate these deals.
But in the meantime, the president did actually go ahead with other tariffs on cars and steel, copper, pharmaceuticals.
So even though the biggest global tariffs have been paused, tariffs have been steadily
rising.
And right now, the overall average effective tariff rate for the United States has climbed
up to 17.6%, which is actually the highest that the United States has climbed up to 17.6%, which is actually the highest that the United
States has had since 1934.
Wow.
So, it might have felt paused, but it's actually kind of on in a way that does not feel insignificant.
It's real.
That's right.
It is on.
Of course, they're overshadowed by what the president is threatening to put in place just
in a matter of a few weeks.
He's now moved his deadline for countries to negotiate deals or face tariffs to August
1st.
A lot of countries are working toward these trade deals, and we've seen two of them announced
so far, pretty limited deals.
But for many, many more, the president is sending out these letters that are going out
globally this week
informing countries of the high tariffs that their products will be charged as of August
1st.
I just want to quickly ask about the deals that have come.
Ana, can you just tell me what are those?
How should we be thinking about them?
So one that the president announced with the United Kingdom in May is really what I would
call kind of a framework deal.
So the two sides agreed to lower tariffs on some certain products.
And then for a bunch of other things, they basically said, we're interested in cooperating.
Let's keep talking.
Got it.
The other big announcement that we've seen was with Vietnam last week. The president said on his social media
that he had reached an agreement with Vietnam
to lower tariffs on some of their products
to 20% with a higher tariff on some products
that would come from China,
and that Vietnam would open their markets to U.S. products.
However, nobody has since released any text of the deal
or even any fact sheets spelling
out what was agreed to with Vietnam.
So we really don't know at this point, if there is a deal, what it actually includes.
The only thing we have is the president saying on his social media account.
So not a ton of clarity.
It's not a lot of clarity.
It's not a lot of substance for 90 days.
But again, I also don't think that's particularly surprising because doing trade deals is hard
and it takes a long time.
And I think, you know, the administration and the world is kind of starting to see that.
Maggie, it's interesting he keeps pushing this deadline back.
What's going on here?
What's he up to?
Well, President Trump has a history of moving deadlines, as we know, both in terms of his life as a real estate developer and also from his first term in office.
He tends to buy himself more time to jump from one lily pad to the next.
And that's really what this is.
If you look at everything with Donald Trump as an ongoing negotiation, then this makes sense and follows a logical pattern.
The problem is that countries engaged in trade can't really function that way.
And so what's going on here is he is buying himself more time to come up with something
that he can call a win, whether that is a bunch of frameworks for trade deals, or he
is trying to see whether there
is some other kind of a mitigating factor he could get in terms of an announcement about
a company moving production to the US and so forth.
But it's a pretty broad range, Natalie, of what he would consider a win.
It's too early to say that this isn't working, you know, but it certainly is not the success
that Trump believed it would be.
I'm interested, Ben, in whether it surprises you that there have been so few deals up until
this point.
I mean, I understand that it sounds like the threat has not worked, but, you know, there
were a lot of countries on this list that were going to get hit by tariffs on liberation
day, as he called it.
Why didn't they come to the table?
I mean, what's going on there?
Yeah, I mean, I think on one level, it's not surprising, right?
The idea of 90 deals in 90 days was never plausible, right?
Trade deals take years to negotiate.
But I think that for a lot of these countries,
one, their leaders have their own domestic concerns.
They don't wanna be seen as caving to Trump.
And look, you know, Maggie made the point a moment ago about, you know, Trump having
a history of pushing out deadlines and backing down on some things.
I think that has been noticed by foreign leaders.
And there's a recognition that, you know, hey, if we, you know, string this out for
a while, like maybe we can, you know, get out of some of this.
Maybe some of this doesn't actually end up hitting us as hard, at least, as being threatened.
I think that is definitely true.
The countries have realized that they can kind of have some elastic approach here in
terms of what Trump will tolerate.
But there's a point that an economic expert made to me about how Trump seems to view these
tariff impositions as he keeps describing them, which is, I set
the level, you do what I want, you give up the terms that I want, and otherwise you're
going to be punished.
But some of these countries have seen that he doesn't necessarily abide by the deal frameworks
he says he's going to anyway.
So they don't have a ton of incentives to come forward and make concessions because
who knows what happens after that.
I just want to step back and think for a moment here about what the point of all of this is
for the Trump administration.
There are two big kind of ideas behind all of this as far as I understand it.
Get manufacturing back to the United States and raise money through these additional tariffs.
Where are we been on those fronts,
on the impacts of all of this so far?
And I want to first start with the easier of these two,
the raising money part.
How much money has been raised?
How big of a deal is it?
We're bringing in tariff revenue at record-setting rates.
You know, as Scott Besson, the Treasury Secretary,
referred to, having collected about $100 billion
in tariff revenue, that's a little misleading because we already collected tariff revenue know, Scott Besson, Treasury Secretary, referred to having collected about $100 billion in
tariff revenue. That's a little misleading because we already collected tariff revenue,
right? So it's about $50 billion of additional tariff revenue, but that's real money.
Okay.
But it's important to remember who's paying that, right? That's being paid by importers,
right? Which means American companies. And one way or another, that's going to end up passing through into the American economy,
whether that's through the companies paying it and losing it in their profit margins or
ultimately getting passed on to consumers.
So yes, it's revenue for the federal government, but it's revenue that you and I in some form
or fashion are ultimately paying.
But is that true? Because I'm wondering if we've actually seen the price increases that we were warned about.
Yeah, I mean, so I think it's funny, right?
Because the president is saying, oh, you know, tariffs are going to bring back manufacturing
jobs.
So far, we've been losing manufacturing jobs.
Critics are saying, oh, tariffs are going to raise prices and slow down the economy.
So far, prices have continued to moderate and the economy has remained relatively solid.
So, on some level, it's sort of defying all the narratives and the economy is kind of
trucking along.
Wait, can you just pause on that for a second?
Are you saying the prices haven't gone up?
Yeah.
So, it's complicated.
Overall inflation has continued to cool.
So, we have not seen this sort of big jump in consumer prices. If you zoom in and if you look at products that we're
importing from China, for example, you do see some evidence that some of that is picking
up, but not in a sort of a crazy way. And even though as Anna said, we have seen higher
tariffs than we've seen historically, it's not at this sort of wild level that was
being threatened back in April.
And so instead what we see is this sort of gradual impact, gradual erosion that's going
to take time to play out in the economy.
But for now, at least, even with this kind of historically high effective tariff rate,
we're not seeing prices go up yet, is what you're saying.
What does that mean?
What's going on there?
Does that mean companies are largely eating the cost of the tariffs, the $100 billion,
because that surprises me.
Aaron Powell I think it has surprised a lot of people,
but maybe it shouldn't have.
It's going to take time, even in the best of circumstances, for companies to figure
out how they're going to
make their pricing decisions, right? It's not like tariff hits and you immediately pass
on that price, right? That's something that takes time. And companies, because they saw
this coming, rushed to buy products, to import products. We saw a huge surge of imports in
the first months of this year as companies rushed to bring things in before the tariffs
hit. What that means is they've got a whole bunch of inventory that's sitting there that they
didn't have to pay the high tariffs on and that gives them a little bit of wiggle room
to make some decisions about how they're going to pass on these prices or not.
And then you have this uncertainty element.
You've got all of these companies that are sitting here saying, I don't know what the
– as Anna was saying, I don't know what the tariff is going to be.
I don't know what my tariff is going to be. I don't know what
my material costs are going to be. And so I think that there's a reluctance to make big decisions.
There's a lot of sort of putting it on hold, and that's true on the price level, but it's also true
on hiring, on investing. There's just kind of a pause in a lot of parts of the economy right now.
SONIA DARAGOS And then of course, there's the fact that when this first happened, you had some big companies
start to say, we're going to raise prices.
I'm thinking of Walmart.
And Trump comes out and really hammers them.
Maggie, I'm wondering if you think there's any chance that in addition to what Ben is
saying that there's a part of this where companies are seeing that and eating the cost because
they just don't want to piss Trump off.
I think that's 100% a reality here and I think that is where you see tariffs as a weapon
that he uses domestically, not just with countries overseas or companies that might be based
elsewhere.
He has shown that he is willing, Natalie, not just to publicly name and shame, which
is part of what you're talking about.
We certainly saw him do it, say, with Jeff Bezos,
when some element of Amazon was listing what the impact of the tariffs would be on certain products.
It wasn't across the website, but there was some aspect of it.
And that was undone in like an hour.
Anna, I want to turn now to bringing manufacturing back to the U.S.
That was the stated goal of these tariffs, right?
And obviously, manufacturing wasn't going to come back in three months.
But do we see any signs that companies are moving in that direction?
That they're at least trying to move some of their operations back to the US as a result
of all the tariff pressure they're seeing? So in the data so far, it seems like, no, we're not seeing evidence that, for example,
company spending on new factories is increasing.
It looks like company spending on new manufacturing facilities has kind of trended downward in
the last few months since Trump came into office.
We've also seen a loss in manufacturing jobs
in recent months.
So the overall jobs numbers for the United States
have been strong, but that's actually been buoyed a lot
by healthcare and certain sectors.
Actually factories are losing thousands of workers
in the last few months.
Yeah, and I think to piggyback on what Ana's saying there,
the way that these tariffs have been rolled out
have really sort of undermined some of the president's
stated goals on this.
And I hear that when I talk to economists,
but also when I talk to businesses.
So if you're a business right now,
if you're a manufacturer thinking like,
hey, maybe I should step up my manufacturing in the US,
you really don't have the information
you need to make that bet. You don't, you know, you say, oh, I I should step up my manufacturing in the US. You really don't have the information you need to make that bet.
You say, oh, I'm going to enjoy some protection here from these tariffs, and then they get
removed a month later, or they never take effect.
And so I think that even to the extent that these policies might sort of theoretically
work, this set of policies as they've actually been implemented is not likely to yield that
result.
Yeah, that's a great point. And I mean, moving supply chains takes, you know, many months
can take years and billions of dollars, right? So these are long term investments and the
president has been moving in contrast on kind of a daily or hourly timeline in terms of
shifting the strategy.
He's also been working from a framework as if it is still 1990 something.
We are in a very different economy.
A lot of what he is looking to restore is going to be, it's not just that it takes time,
it's that it's so impractical for some of these companies.
You can take Apple as an example.
To Ben's point, I'm not sure how much of this is going to materialize the way he believes
it will.
And I certainly know Tim Cook made that clear to him.
I feel like what all three of you are sort of saying is that we are just in really early
days here.
We don't quite have a verdict on this.
And maybe it's sort of misguided to even be measuring this by short-term gains.
Yeah, why are we doing this episode at all, Natalie?
I think what we can say with confidence right now is one, there are costs to these policies
that are ultimately going to be borne by the American people in one form or another.
And the benefits, whatever they might be, are not likely to be as clear as they might
be if these policies were rolled out in a
different way.
We're going to pause for a break because, Ben, not only are we doing this episode, but
we're going to do a whole other half of this episode.
And when we come back, we're going to talk about some of the bigger potential impacts of all of this tariff drama.
We'll be right back.
Ben, I have to ask about one of the big fears that has been baked into all of this from
the beginning, which is a
recession, the idea that companies could pull back on hiring and expanding, that people
would lose jobs, the economy would shrink.
That does not seem to have happened.
We've seen good job numbers month after month.
How should we think about the economy right now, Ben?
Yeah, so I think that if you, again, go back to that April 2nd period, there were a lot
of Wall Street forecasters, economists who were warning of a real risk of an imminent
recession as a result of that.
But then Trump pulled back.
And so what we're seeing now instead are predictions that rather than that being this one acute
thing that looks like a big recession, that it's more kind of a slow drip.
Somebody compared it to a Brexit scenario.
Britain leaves the European Union and instead of there being sort of some immediate recession,
their economy is just weaker for an extended period of time.
Yeah, yeah.
The sky didn't fall in the case of Brexit either.
You know, like we're not
seeing some major meteor hit.
Yeah, but we know from other evidence, right, that Americans are not feeling good about
the economy. And we saw a real decline in all measures of consumer confidence early
in Trump's term. What's interesting, right, is we went to the same thing under Biden,
right, when voters didn't feel good thing under Biden, right, when voters
didn't feel good about the economy, but they kept spending money and the economy basically
looked okay.
And here we are sort of again in the same realm of voters don't feel good, but they're
continuing to spend and we don't see that much evidence of economic damage.
Maggie, do you get the sense that there's any hesitancy in the White House right now
about restarting these tariffs,
you know, like that pushing for these broader tariffs now might have a negative impact on
the economy when you have all of these vulnerabilities potentially with voters around this, you know,
at a moment when they don't feel that good about it.
Yeah, people keep saying to me, Trump's poll numbers are sliding. And it's really choose
your own adventure. His numbers are actually pretty stable. They've gone down a little bit, certainly
on how the voters view him in terms of the economy. That has changed on that
specific question and that's a warning sign for him. Where his advisors get
concerned is that he has turned talking about tariffs into his entire public
facing economic discussion and that does risk having voters start to get concerned
about what it means for them,
and maybe make that association of,
oh, this is why Mike paycheck is not going as far as it was.
But Trump has proven remarkably durable
at being able to keep saying something
that isn't necessarily the case,
and having his voters believe it.
I just want to make sure I'm getting this. Maggie, you're saying his numbers on the economy
have changed, like people have kind of soured on him
in that respect?
Yeah, if you look at the cross tabs, Natalie, on Trump,
I'm paraphrasing on what the exact question is,
because every pollster asks it a little bit differently.
How people feel about his handling of the economy,
it used to really be his calling card.
It was his strength over Hillary Clinton in it used to really be his calling card.
It was his strength over Hillary Clinton in 2016.
It was certainly his strength over both Joe Biden and then Kamala Harris.
That is now underwater, that specific metric.
There are warning signs that voters are not happy.
It's just not that they are necessarily saying, and therefore I wish Trump wasn't president
or, and therefore I don't want Republicans to be in power.
One thing to remember about this president, Natalie,
is, I mean, he has, to be fair to him,
been saying that NAFTA was a terrible deal for 30 years.
But he didn't discard NAFTA, he redid a version of it, right?
I mean, we're not looking at, like, an entirely wholesale change in trade.
What you just said, Maggie, is sort of that while Trump talks about kind of reimagining
the global system of trade and these kind of big maximalist terms, at the end of the
day, what we've seen in his record is that he does a
deal.
He is making changes, but he's not upending the whole system.
No.
Well, he's upending the whole system in the sense that there's a lot of chaos and unpredictability,
right?
Sure.
And people don't feel like they can know what's happening day to day.
But inconsistency is not an entirely changed dynamic.
And this is not some whole new economy.
He is a developer who, yes, he has built some properties like Trump Tower, but often what
he does is he takes over somebody else's partly built property or a property that didn't work
and then changes them into a Trump property.
And there's some aspect of that now, what he is doing.
We've been talking about a situation in which Trump is not building something for scratch.
He's not remaking the system out of whole cloth.
You know, companies are maybe betting on that.
I'm wondering if China, if the relationship with China is the exception. You know, it's been the stated priority of this trade war for a long time now.
Ana, is that still the case?
Does Trump still have his eyes trained on China?
Is he still wanting to go big, at least in his aggression, trade-wise with that country?
You know, it's true that the subtext of a lot of these global trade negotiations has been about China.
So with Vietnam, part of what the president said had been agreed to is that the Vietnamese will have lower tariffs on products that they send,
but then higher tariffs on products that have a certain amount of Chinese content
in them.
But it's really not clear how the United States is going to enforce that.
But we know that's something that they've been discussing with other nations in Asia,
Malaysia, for example.
It's something the Trump team has brought up with Europe and Mexico.
Right.
That does seem directed at isolating China, right?
Yeah, yeah, no.
I mean, there's definitely a kind of global effort
to look at Chinese products that are getting
into the United States through other countries
and finding these loopholes into the United States.
So that activity has been going on
since the first Trump administration
when we had really high tariffs on China.
And there definitely is part of the negotiations right now that aims to counter that.
I want to turn to the markets here, because we saw that after Liberation Day, the first
kind of April tariff day, the market seemed to play a pretty outsized role in moving
Trump to scale back, to put those tariffs on pause.
Do you think that the market's going to react to this new chapter of the trade war the way
that it did last time?
Do we have any early signs of that?
And if not, why?
I mean, so far, they certainly have not.
And it seems that for the most part, investors are betting that this is a bluff again, and
that there will be further extensions.
Now, that raises the risk that if these actually do take effect and it looks like they're going
to stick, then the markets will react in a much larger way.
There are hints of concerns among bond buyers
that are related not just to tariffs now,
but also to this big, beautiful bill
and the trillions of dollars that it added to the debt.
I think that's where the concerns are now
in the bond market, which could end up having a real impact
on Trump and what he's able to do,
but we're not seeing the kind of violent reaction that we saw back in April.
Okay.
Just stepping back, I want to think about where we are here and the reality that Trump
is still in this kind of half in half out trade war.
I want to talk about how we think about that in the larger context of how Trump uses his
power.
I think it's fair to say that the president has been remarkably successful at exercising
his power over all kinds of realms in these first several months of his term and basically
forcing many people to bend to his will.
Congress, universities, law firms, Iran even.
Why does it seem like these trade deals are exempt from that?
Or like the one thing that seems to be beguiling him?
Maggie?
Because you can't, threats work to a point with global trade and with global markets,
but they have their own sets of concerns and dynamics and behaviors
He has levers that he is able to push and pull with say
Universities or law firms that he was threatening with executive orders or even you know individuals
You can't force the markets
To bend to your will the same way you can't force other countries
To bend to your will the same way and what can't force other countries to bend to your will the same way. And what ends up happening is because
the world is built on alliances,
you risk pushing countries towards your adversaries,
not closer to you, not just militarily,
not just in terms of defense alliances,
but in terms of trade and in terms of all kinds
of other dynamics.
And I do think the backing off hurts him.
I think on some fundamental level, Trump has been able to rewrite the political rule book
in the US.
He's been able to write the legal rule book to some degree in the US, thanks to both Congress
and the Supreme Court.
He can't rewrite the rules of economics.
And there's this fundamental level that he could go and impose these steep tariffs on China, on the European Union, all of these countries.
He apparently has the power to do that. But he can't control what happens as a result of that.
And I think if you're a company right now, you do not have the confidence that whatever gets put in place is going to be the long run reality.
And so there's going to be a lot of hedging of bets. There's going to be a lot of spreading around of supply
chains and probably some inefficiencies
that result from that.
Anna?
Yeah, no, I agree with Ben.
I think the economy is a really big and complicated place.
So we don't immediately see some of the effects
of these tariffs,
but they are there and they are real.
It's hundreds of billions of dollars
that the United States is collecting,
and that has real implications for trade and for companies.
Ben, I'm just struck by the fact that you said
that he can't rewire the economy, right?
But at the same time,
it appears like he is doing all of these really big things to put his stamp on it.
I do think this is Trump's economy now, right? He spent the first several months of his term
trying to blame things on Joe Biden. You know, I won't take any view as to how voters will
view this, but certainly he's been able to put in place the tariffs that he wanted to put in place.
He's been able to get his tax bill through.
He blamed some things on Jerome Powell, the Fed chair, but he's going to get his own Fed
chair starting in May when he gets to appoint somebody.
So we are at a point where whatever happens in the economy, there's no one to blame or
no one to take the credit if things work out other than him.
This is his economy at this point
Thank you guys so much for being here we really appreciate your time
Thanks, Natalie
Thanks. Great to be here. Thanks for having us.
On Wednesday, President Trump posted letters informing a host of additional countries that
they should prepare for double-digit tariff rates, bringing the number of countries facing
new tariff threats to 22.
The highest tariff rate that Trump threatened was 50% on Brazil.
The Brazilian president responded by saying the country would retaliate.
We'll be right back.
Here's what else you need to know today.
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Today's episode was produced by Diana Nguyen, Sydney Harper, and Olivia Knatt.
It was edited by Mark George with help from Paige Cowitt, contains original music by Dan
Powell and Alicia Baitoop, and was
engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben
Landsberg of Wonderly.
That's it for the daily.
I'm Natalie Kitraleth.
See you tomorrow.