The NPR Politics Podcast - U.S. Trade War With China Escalates

Episode Date: April 9, 2025

Earlier this week, President Trump threatened to make the steep tariffs on China even steeper if China did not withdraw its retaliatory measures. Today, Trump kept his promise by levying a 104% tariff on Chinese goods that he then raised to 125% later in the day. This episode: White House correspondents Asma Khalid and Tamara Keith and international correspondent John Ruwitch.The podcast is produced by Bria Suggs & Kelli Wessinger and edited by Casey Morell. Our executive producer is Muthoni Muturi.Listen to every episode of the NPR Politics Podcast sponsor-free, unlock access to bonus episodes with more from the NPR Politics team, and support public media when you sign up for The NPR Politics Podcast+ at plus.npr.org/politics.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

When Malcolm Gladwell presented NPR's Through Line podcast with a Peabody Award, he praised it for its historical and moral clarity. On Through Line, we take you back in time to the origins of what's in the news, like presidential power, aging, and evangelicalism. Time travel with us every week on the Through Line podcast from NPR. This is Robert at the North Shore Model Railroad Club in Wakefield, Massachusetts. This podcast was recorded at

12.38 p.m. Eastern Time on Wednesday, April 9th of 2025. Things may have changed by the time you hear it, but here the trains are always on time. hear it but here the trains are always on time. I love that sound. Chugga, chugga, chugga. I thought it was drums initially. Hey there, it's the NPR Politics Podcast. I'm Asma Khalid. I cover the White House. I'm Tamara Keith. I also cover the White House.

And today on the show we're joined by NPR's China correspondent, John Ruich. Hey there, John. Hey, hey. So you have graciously agreed to stay up super late to join us from Beijing. What time is it, by the way? Uh, it's about 20 minutes till 1 a.m. Oh my gosh. Well, thank you for your service. True dedication. It's a rare opportunity to be on the show. I love it.

Well, today is Tariff Day yet again. It feels a bit like deja vu. Earlier this week, President Trump threatened to make the steep tariffs on China even steeper. If China did not withdraw its retaliatory measures, and well, today, President Trump kept his promise. There are now tariffs of 104% on Chinese goods. That went into effect at midnight. China responded by implementing a 50% tariff on US imports,

bringing its total tariff rate to 84%. And John, it seems like this trade war between the US and China is escalating and escalating. It's escalating, definitely. I mean, the magnitude is crazy. It's like nothing we've ever seen before. And these are crippling rates going in both directions. China had been retaliating to previous tariffs from the first Trump administration during the Biden administration, even at the beginning of this Trump administration with slightly smaller moves.

But, you know, the past few days, it's decided to just go toe to toe with the U.S. and it's spiraling through the roof Yeah And the US does import a lot of goods a lot of components that go into even things that are manufactured here in the US China is one of the United States largest trading partners and and John I do want to ask if you have a sense of what effect this new tariff rate could have on US consumers so I can answer that from a sort of point of origin of these products and these inputs type of perspective, you know, from businesses here in China are reeling, it seems.

You know, we talked with a freight forwarder today who said the people in his sort of orbit are talking about putting on hold their shipments to the U.S., just not shipping anything to the U.S. because it's unclear how the tariffs are going to be paid at this point. These tariffs go way beyond the average profit margin of Chinese products in the US. So exporters can't just absorb the tariffs. Capital Economics, this research firm, put out a note earlier today that struck me. It said, if the tariffs stay in place, Chinese shipments to the US could drop by 70 percent. What about the effects there in China during President Trump's first term? And we keep hearing this even now from Trump administration officials, this belief that China needs the United States market.

Oh, look, the US and China are the number one and number two economies in the world. They need each other, right? The US is important to China. China imports a lot of important things from the US machinery, electronics. But China has been diversifying, right? The US is important to China. China imports a lot of important things from the US, machinery, electronics. But China has been diversifying, right? Also, this trade frictions over the past six, seven years have been taking a toll. So the US share of Chinese imports overall has been falling. It fell from about 20% a few years ago to 15%, roughly. Oh, that's interesting. And so they've just been exporting those things to other countries over the last few years over the US? Yes Europe's a huge

market they've been diversifying in the global south markets right they've been expanding everywhere. US officials and that includes Scott Besant who was on the Fox Business Network this morning they are making the case that this is way worse for China than it is for the United States. They are making the case that this is way worse for China than it is for the United States They are these surplus country that their exports to the US are five times our Exports to China so they can raise their tariffs, but so what there are a couple of so what's that? I think you're important to get to, the US tariffs on Chinese goods and exports

that come into the United States, that is going to be paid at least in some part by American consumers. Things are going to get more expensive. It's a tax. And then on the other side of it, China imposing tariffs on things like soybeans coming out of the United States could have sort of a disproportionate impact on American farmers or specific industries that in particular count on exporting to China. Mm-hmm. All right, well on that note, let's take a quick break and we have lots more in just a moment. At Planet Money, we'll take you from a race to make rum in the Caribbean. Our rum from a quality standpoint is the best in the world.

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We ask questions you won't hear asked anywhere else. Listen to the Fresh Air podcast from NPR and WHYY. And we're back. And Tam, I just want to get a status update from you on the tariffs on all these other countries. We mentioned a whole bunch of countries. What is the status of those tariffs and any potential for a trade deal? There's definitely potential. And what I would say is, whereas last week, the overriding message coming from the White House was this is about restructuring the United States economy,

bringing manufacturing back to America. This is a national emergency. This isn't a negotiation. This week, after the markets have fallen multiple days, the bond markets are now going haywire and people that run banks are talking about recessions. Now the message is, oh no, this is a negotiation. President Trump is negotiating. Let's give him a chance. That's the message coming from Trump allies, Republicans in Congress, and others. Besant on the Fox Business Network this morning

talked about the negotiating. He says he's not going anywhere for spring break because he's going to be negotiating these deals. We have opened this process of negotiations country by country. It's going to be a bespoke, tailored process for each country. And as we strike these trade deals, I think that we will see greater and greater certainty. What's interesting to me about that is bespoke and tailored means they are, and apparently at least 70 countries have reached out. They are attempting to negotiate bilateral trade deals, new trade deals with 70 different

countries. That's the kind of thing that doesn't happen quickly or overnight. And so the question is like, how long are these current tariffs going to be in place? And in the end, what do these deals look like? John, Tam just mentioned there that 70 some countries have reached out to the Trump administration to try to negotiate a trade deal to lower the tariff rates. Has China at all reached out?

It doesn't look like they're blinking yet, but are they open to a deal? Yeah, they definitely are. The leadership has repeatedly said they're open to talking about it, but they're not going to do it under duress. Xi Jinping, the leader of China, has domestic political considerations. He doesn't want to be seen as bowing down to Trump, especially, you know, they're calling these tariffs blackmail, right? So under those conditions, he's not going to step back. China doesn't, you know, interestingly, they don't see these tariffs

as a discrete issue. It's related to everything. It's related to the ports in Panama, which has been an issue that everybody's been talking about lately. It's related to the TikTok deal. It's all in play as far as China's concerned, but the foreign ministry today demanded that the U.S. adopt an attitude of, quote, equality, mutual benefit and respect if it wants to start to talk about a deal. And from the Trump side of things, they are saying, you know, China made a huge mistake by retaliating. President Trump said, everybody else is coming to me and

begging for a deal, they should be doing the same. More or less. I wasn't an exact quote, but that's the sentiment. So where's the off-ramp for these two major economies? Because these are huge amounts of tariffs, unprecedented levels that we didn't even see during President Trump's first term. The people I'm speaking with here in China look, say that there's two things. One, China does not want a projected trade war. It's gonna be painful, it's gonna be damaging. They might think they're in a good position to be able to weather it for a few months, half a year, a year. Ultimately, they would like to do a deal and they're

looking for an appropriate off-ramp. But point number two is that they don't want to blink. They're not gonna blink first. Conditions have to be right. The problem is that if escalation continues, a really big concern is that China might start to target more US companies. I mean, we've already seen investigations launched into Google, NVIDIA, DuPont, these big American companies. Are these going to turn into court cases next? Do they start to target other companies? Are executives going to start to get detained or exit banned? We don't know. We've heard the Trump administration

talk about wanting to bring some manufacturing jobs back to the United States, right? And we've also heard the Trump administration talk about wanting to level the playing field with China. In fact, this is something we heard even from the Biden administration, that they felt like China wasn't always a fair trading partner. But it strikes me that these tariffs in this moment across the board are kind of contradictory

because it's not just China that the Trump administration is hitting. They have all these tariffs in all these other Asian countries. And so, you know, I was talking to a manufacturer here in Minnesota the other day, and he said to me in the first Trump term, he knew, OK, fine, they want me to move some of our manufacturing outside of China. So he moved, you know, some of his supply chain to Vietnam and to Indonesia. But this time around, he's like, I don't know where to go. Where do we go? Because Vietnam's getting hit by tariffs.

Indonesia's getting hit by tariffs. And so I don't understand what the big strategy is for this White House to have. Well, what the president would say and has said on Truth Social is, bring your factory to America, bring the jobs to America, make your stuff in America. But some of the stuff isn't made here. No, I know. It is not actually an end game. But that is the rhetoric coming out of the White House is, if you have a problem, just bring it to America. Now, that does not get into the issue of cost. bring it to America. Now, that does not get into the issue of cost. And, you know, President Trump ran and won on bringing down costs for Americans because Americans were upset about

inflation. If all of this causes prices to go up, and we will see that relatively soon, then that's going to be a political problem. But we have to remember that President Trump has believed that trade deficits are a negative, are the American people being ripped off, and he also firmly believes that the experts are wrong and he is right. So he has a different pain threshold than I think a lot of other people in politics might have.

And this game of chicken with the inflation rate is something that experts I've talked to think Xi Jinping is looking at and he says, well, I'm actually in a better political position than Donald Trump is because of the controls of society here, because of the way the Chinese political system works. All right, well, we are going to leave it there for today's podcast. John, thank you so much for being here. You're welcome. I'm Asma Khalid.

I cover the White House. And I'm Tamara Keith. I also cover the White House. And thank you all, as always, for listening to the NPR Politics Podcast. So a quick note here. After we taped this conversation, President Trump announced via social media a 90-day pause on the tariffs for most countries except China.

Most countries will be left with a 10% tariff rate, while China will immediately face a hike in tariffs to 125%. There is a lot more to discuss about this, and we're going to dig into all of that tomorrow. So come back for more. Psychologist Dolly Chugg studies the lengths we will go to protect the way we see ourselves. We care about whether we're seen as a good person, whether others see us as a good person, and whether we feel like good people. Ideas about our self-image. That's on the TED Radio Hour podcast from NPR. If you need a break from headline whiplash,

listen to NPR's All Songs Considered. On our latest installment of music to calm the nerves and recalibrate your day, we reflect on the goodness of others and the enduring power of love through the songs of Max Richter, Leah Bertucci, Ruichi Sakamoto, and more. Listen to new episodes of All Songs Considered every Tuesday, wherever you get podcasts.