The following is a lightly edited transcript of the April 1 episode of the Daily Blast podcast. Listen to it here.
Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR network. I’m your host, Greg Sargent.
By all indications, President Trump will announce this week that he’ll impose sweeping new global tariffs on imports across the board. Though we don’t know the details, Congressional Republicans are already scrambling wildly to try to protect their states and districts from the fallout. Meanwhile, a Fox News poll finds that Trump is tanking on the economy, with the public turning against tariffs in particular. Another poll from The Associated Press also has terrible news for the president on this front. We feel compelled to point out that all of that negative fallout has already kicked in even before the tariffs have started. So how much worse could this all get? We’re talking about all this today with Jared Bernstein, former chair of President Biden’s Council of Economic Advisers and now a visiting scholar at Stanford. He has a new piece on his Substack predicting the consequences could be quite dire. Thanks for coming on, Jared.
Bernstein: Thank you for inviting me. It’s a very important topic.
Sargent: Indeed. So the latest is that on Wednesday, on “Liberation Day” as Trump says, he’s scheduled to announce his tariffs. What do we know about what Trump’s going to announce, and what do you expect in the way of specifics, Jared?
Bernstein: Well, the answer to “What do we know about what Donald Trump is going to announce?” is always going to be vague by definition because he’s just been lurching around on this. But there’s a possibility that we’ll see higher tariffs on China, tariffs on Canada and Mexico, on steel and aluminum, on auto parts and cars from many different places. And the largest increase, if it should occur, would be reciprocal tariffs, and that would be on many different countries with whom we trade.
Sargent: We are talking about across the board tariffs on Canada and Mexico, right?
Bernstein: I think there’s a decent chance that we’re looking at across the board tariffs on all of our trading partners. That’s certainly in some of the things that we’ve heard from administration spokespeople, even as of today.
Sargent: So let’s try to crystallize for listeners what’s wrong with something that broad-based. Now, President Biden kept in place some of the more targeted tariffs from Trump’s first term. There’s obviously a place for targeted tariffs, but Trump wants to do something much, much broader. In your piece, you pointed out the tariffs are a tax on imports that consumers pay, and that Goldman Sachs has now downgraded its forecast for U.S. economic growth and raised its forecast for inflation. Jared, why do you think the tariffs are going to do that to economic growth and inflation? Can you make it simple for us?
Bernstein: Sure, and you made the key distinction already. It’s not so much what the tariffs are going to do; it’s what sweeping tariffs are going to do. The type that we just discussed a minute ago—targeted tariffs on narrow goods that come into the country—would be felt on that particular good, but not economy-wide. You want it simple? Here is simple. We’re talking about making a ton of things that consumers buy more expensive. It’s truly that simple.
If you want to add a couple of layers of nuance, which I think are quite important, the consumers that disproportionately purchase those things tend to be middle- and low-income consumers—so this is a regressive tax. And you mentioned these forecasts. What the tariffs do is they slow growth and they raise prices. That’s called stagflation. Typically, slower growth would be associated with declining inflation, but tariffs push both of those important variables in the wrong direction.
Sargent: And why would the tariffs slow growth?
Bernstein: Simply because they make both production and consumption more expensive. Now we already established that because tariffs are a tax on imports, the things that people buy that come from abroad will be more expensive. That’s the import tax. Very straightforward. And let’s face it, walk down the aisles of any retail store, including a lot of supermarkets, and you’re going to see a lot of imports. So that right there is the consumer side.
I think what’s a little less obvious is the production side, so here’s the thing. Forty-five percent of our imports are not consumer goods; they’re inputs into the production process here. There are things that U.S. domestic manufacturers buy when they make things here. So tariffs not only hurt consumers, they hurt domestic producers. Now, if anyone hearing this thinks, Well, how could that be the case? ask yourself why many of these very producers are against these tariffs. They’ve literally gone to the White House and said, Can we get an exemption? So in many cases, if you’re a U.S. manufacturer who imports some of your inputs into your production process, these kinds of tariffs make your production more expensive.
Sargent: This is the puzzling thing for a lot of us laypeople. How can Donald Trump be talking about revitalizing American manufacturing—reshoring, making sure that America makes everything again, including sneakers or whatever he thinks he wants American workers to be making now—when he’s taxing the inputs into manufactured goods? Won’t it actually work against his stated goal?
Bernstein: It will, and it has in the past. In Trump one, when he implemented a far smaller set of tariffs, we had the very dynamics that I’m describing to you. This is empirical information. It’s not a theory. This happened before. I think the answer to your question—again, it’s hard to get into his head, but he clearly doesn’t know these facts that we’ve been discussing or if he knows them, he doesn’t believe them—is he has a very simple model. If you make something from another country more expensive, then people will buy the domestic, the American brand. You’re going to the store and there’s an avocado from America and an avocado from Mexico. You just made the one from Mexico more expensive, so you’ll buy the one from America.
So here’s the problem: There’s no avocados from America. Not none—but relative to what we import from Mexico, there’s hardly any. Problem two, as we’ve just discussed, it’s not that simple because there’s so much imported inputs in things we produce here. But he has a very simple model. And interestingly and revealingly, when someone said yesterday or the day before, These are going to raise car prices, Donald Trump said, I couldn’t care less. Obviously, a lot of people ran with that, and I understand; it’s a gotcha moment. But really what he was talking about is I couldn’t care less if imported cars cost more because they’ll be more competitive with domestically produced cars. Again, what he doesn’t know is that so many of our domestically produced cars come out of a North American production chain, which involves the United States, Canada, and Mexico.
Sargent: Right. If I understand this correctly, the other cars that will cost more due to his tariffs are the ones made in the U.S. out of imported parts that now have tariffs on them, right?
Bernstein: Yeah. Let’s make it very concrete. A very reputable, I think was one of the Wall Street firms, estimated that a Ford truck would cost somewhere between a $9,000 and $10,000 more due to the North American tariffs.
Sargent: And by the way, listeners, Ford is not an imported truck.
Bernstein: Well, it is a partially imported truck. It’s got stuff in it from Mexico and Canada.
Sargent: Right, but it’s associated with America.
Bernstein: Ford is an American company, yes.
Sargent: Right. It’s made in America. It’s considered Ford tough, made in America. So let’s go to this Fox News poll. A Fox anchor questioned Trump’s press secretary Karoline Leavitt about this on Monday, and Leavitt just brushed it off. But in the poll, 56 percent of voters disapprove of Trump’s handling of the economy, and only 43 percent approve. And importantly, 53 percent believe tariffs will hurt the economy, which is a new high. It’s up from 39 percent who believed that in 2024 during the campaign. Fox also finds that right now, 69 percent say tariffs will increase prices. Jared, what I take from all this is that the public debate over tariffs is not just not favoring Trump. It’s that voters are hearing press coverage of this issue. They’re hearing economists warn that across-the-board tariffs are going to raise prices. It’s becoming real for people now, and they’re focused on it. Your thoughts, Jared?
Bernstein: Yeah, there’s two words you said there that I think are pretty important: “press coverage.” The media has taken a hit, and justifiably so—I was in the Biden administration, and I thought that there was a lot of negativity around almost any economic issue that came up—but I think the media has done a very good job of explaining this consumer price pass-through, the fact that imports are a tax that will hit American consumers.
Another thing you just said is also worth picking up on. A minute ago, you asked me what’s Trump thinking and, of course, I don’t know. But it is the case—that a lot of polling and even some academic work showed that voters, particularly voters in places that have been hurt by globalization and an unfair competition, like tariffs; they think tariffs should help them. That was probably a motivator for some of this thinking, and that’s been shifting. You just gave some poll numbers where it went from a minority of respondents to a majority who now understand the tariffs will hurt them. So the ground is shifting a bit in this regard.
Sargent: I think also what’s going on here is that for most voters who aren’t really paying close attention, they hear tariffs and they just hear something along the lines of, President is going to stand up and protect me. That’s what they hear, until the details get focused on.
Bernstein: Strong agreement. I think that the authoritarian strongman beat up other countries is very much in here. Trump once was asked, Why are you so tough on Canada? Eighty percent of Canada’s exports are to America. And what Trump essentially said is, I’m going to hurt Canada and Mexico because I can, because they’re so dependent on us. Now that is not a good economic rationale, but that is probably a strongman rationale.
Sargent: Jared, I think what we’re getting at here is that when low-information voters hear Trump say “tariffs,” they start by hearing, He’s standing up for me, he’s protecting me from outside threats. But very, very quickly, that morphs into understanding what he’s doing as something indiscriminate wanton and reckless.
Bernstein: I think that’s right. And I think it’s really important. It would be worth our while to dig deeper into this as those who are trying to help people understand the damage of the Trump agenda because you’re right. In Trump’s mind and some of his advisers’ mind, people should hear “tariffs” as helping protect economically vulnerable people against those who are “ripping us off.” As you just said, quite quickly, people have been led to understand that this is going to raise their costs and actually hurt their living standards. To me, this is a key to a that’s not what I voted for agenda that I think is very important right now [to point out for] the nonMAGA Trump voter who didn’t vote for canceling the federal minimum wage, allowing tax cheats to rip off the IRS, hurting Social Security, making overdraft fees come up, all of the stuff that they’re doing versus renaming the Gulf of Mexico and chairing the Kennedy board. To, whenever we can, point out how folks who helped put Trump there because he thought they would help them are being hurt by his policy is very important.
Sargent: Agreed. The new Associated Press poll in fact is even worse. It finds that 38 percent of Americans approve of Trump’s handling of trade with other countries—38 percent—and 40 percent approve of his handling of the economy. Trade is one of the worst issues for Trump in the AP poll. I think that’s remarkable. Remember, we’ve been told for years on Trump’s willingness to take on elites on trade, these bad actors outside that are trying to screw us as you put it a little earlier. That’s been key to his political mystique and strength for a very long time, and I strongly suspect that he just can’t imagine that he could lose this debate.
Bernstein: Yeah, there’s another piece of this, Greg. Again, I’m in full agreement with what the way you just teed it up. You asked me earlier, What is Trump thinking? I think one of the things that he and some of his team haven’t learned is that 2025 is not 2017. In 2025, you have a bunch of Americans who are coming off some very stressful things, beginning with the pandemic and, of course, going through an inflation that led to cost levels that people are still unhappy with. So when you get a bunch of economists and responsible journalism out there saying, Here is what tariffs will really do to prices and costs.... Some of these are Wall Street firms that are doing analysis, not people who are fighting the resistance. These are folks who are just doing the analysis, and they’re saying, This is going to raise the cost of a Ford truck by $10,000. That sounds really bad to a lot of people right now. So it’s a different time than it used to be.
Sargent: Well, I’ll tell you who does know how bad the politics of this could get: Republicans in Congress. Politico reports that dozens of GOP lawmakers are privately fearing that more tariffs will hike prices, hurt farmers, shake markets. And Republicans are scrambling all over the place to try to protect their states and districts from the tariffs by doing things like teaming up with industry groups to look for exemptions from the tariffs and so forth. Now, the White House is saying there won’t be exemptions this time. I’d like to see that to believe it. Either way, this is a pretty clear indicator that Republicans are frightened of the politics here. They know they’re going to get blamed when this all starts. What do you think?
Bernstein: First of all, let me agree with you that there will be exemptions. I’d be very surprised if there wasn’t. One of the things that Trump loves in his transactional mode is to make rules and then give special favors to people, which ends up generating all kinds of complications and uncertainties and complexity. That’s bad economic policy, of course. But on the politics, I’m sure you’re right, and I’m sure that’s why Republicans aren’t even showing up for their own town halls. I think the better question is: What are Democrats doing about it? What are Democrats doing with this? But we’re out of my lane now.
Sargent: Well, I’d be curious to know what you think. President Biden did keep some of Trump’s tariffs, and President Biden has been, as you well know, at the forefront of trying to reinvigorate industrial policy in the U.S. Again, maybe some voters hear the word “tariff” and they think, What’s wrong with protecting American workers? What’s wrong with protecting American industries? How should Democrats approach this? Just to be clear, I don’t think that this is a hard issue for Democrats. I think they should take it on. But I’m just curious on how do you think they should do it? What should they say?
Bernstein: Well, I’m not exactly sure what they should say in a speech writing sense, but I think what they should say is the problem with tariffs is that they don’t accomplish any of those goals. They don’t help American industry. They don’t help American workers. And again, when we say tariffs in this conversation, we mean the sweeping broad tariffs that Trump is imposing. There’s nothing wrong with industrial policies to stand up domestic production on our shores. And, of course, we worked hard on that and were pretty successfully in key sectors like clean energy production, electric vehicles, batteries, microprocessors, infrastructure, public goods. All of that is extremely important. And in fact, if you take the approach that we took, we were having a lot of success. The amount of construction of factories in this country doubled over our watch, so that was working. I think what you want to ask yourself if you’re a Democrat is what works, and what doesn’t. And sweeping tariffs don’t. They have a terrible track record.
Sargent: Very much so. Well, Jared Bernstein, I hope Democrats are listening to you. It’s a case they should be making very strongly, and I think it’s going to get easier for them as well once this really gets going. Jared, thank you so much for coming on with us. Great to talk to you.
Bernstein: My pleasure. Thank you.
Sargent: You’ve been listening to The Daily Blast with me, your host, Greg Sargent. The Daily Blast is a New Republic podcast and is produced by Riley Fessler and the DSR Network.