The following is a lightly edited transcript of the April 8 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.
As the global chaos grows around President Trump’s tariffs, the Mad King is now raging wildly in many different directions. He repeatedly erupted over China’s reciprocal tariffs, threatening all manner of dark retribution. He also exploded at Republicans because a handful of them are now moving to rein in his power; to put it mildly, he’s not taking it well. Faced with all this turmoil, Trump is trying to argue in all kinds of ways that the tariffs are already getting results, but the arguments don’t add up. And we think the cracks that are now showing in GOP support for him are a meaningful development. It’s becoming clearer that this is all going to get harder and harder for him to hold together. Today, we’re trying to unravel all this with Kathryn Anne Edwards, an economist and prolific social media commentator who has a good new piece arguing that the coming recession will be entirely a creation of Trump’s policies. Kathryn, thanks for coming on.
Kathryn Anne Edwards: Thank you so much for having me.
Sargent: Let’s take stock. The markets continue to crater with no signs in sight of any stabilizing. On Truth Social, Trump erupted repeatedly over China’s reciprocal tariffs, declaring that if China does not withdraw its tariffs by tomorrow, the United States will impose an additional 50 percent tariffs on them. In another tweet, he raged that China’s markets are now crashing, which is supposed to show he’s winning or something. Kathryn, where are we right now, and how seriously do you take Trump’s latest threats toward China?
Edwards: This is something that I’ve always found rather bewitching about Trump: He is an incredible liar—just [look at] statistically the number of lies and untrue things that he would say and that he repeats, going back all the way to Obama wasn’t born here; the man is not trustworthy—and, at the same time, he is true to his word. He said he would do tariffs, and so many people would like to think that he wasn’t actually going to do it—that he wasn’t actually going to have the wealthiest person in the history of the world destroy the federal government; that he wasn’t actually going to deport people who might belong here; and that he wasn’t actually going to have tariffs. So you have this twin nature of someone who is in some ways very honest about what he was going to do, even if he is very dishonest in the things that he says.
So from the most level-headed perspective I can offer on what to make of this China retaliation, this is why you don’t start a trade war. Whatever the notion of economic goal that a tariff could accomplish or assist, you cannot control how other people or other countries react. This is why tariffs are terrible policy—because you don’t have power to tell another country what to do. This is the version of I’m going to walk up and sucker punch you in the face, but you’re not allowed to kick me and you’re not allowed to bite me and you’re not allowed to get a friend to help. You don’t get to dictate rules in a street fight that you started. This is why so many economists had said, Whatever you think tariffs will accomplish, their costs and their spiraling tit-for-tat retaliation is never going to be worth whatever the gain is. And we’re living that one day at a time.
Sargent: It’s interesting that you say that because that really is what’s going on with Trump. It’s the very thing that’s frustrating him so much. He’s supposed to be winning their submission, and they aren’t submitting. So he’s just going to keep dialing up the threats until he gets the result he wants. It doesn’t seem like he’s capable of taking a moment to be a little thoughtful and ask himself the question that you suggested, which is, Is this a really good idea? Do the underlying assumptions make sense?
Edwards: Exactly. And it might be why tariffs aren’t vested in the power of the executive and the Constitution. You put them with Congress where they have many people contributing, where you have negotiations that had to be held, where you have to get people on board with your plan. It’s a deliberate process. It’s meant to be like our tax system. It’s meant to be deliberate and deliberated. You don’t want so much economic policy being shot from the hip of someone who has a temper, and that’s why most economic policy doesn’t flow through the president most of the time.
Sargent: Yeah, exactly. If anything, he’s confirming exactly why we don’t want him to have this unilateral power. Speaking of which, there’s some meaningful movement among Republicans. Six GOP senators have joined the bill that would give Congress the authority to kill new tariffs. The bill requires Congress to pass a joint resolution of approval of any new tariffs, or they expire after 60 days. Trump is threatening to veto this bill, but the absurdity, Kathryn, is so glaring. He’s dramatically abusing his power here by unilaterally imposing the tariffs based on this invented national emergency—the basis of which is trade deficits. So with a bill like this, Congress would be asserting that Trump doesn’t have these extraordinary powers. And again, that’s why he’s raging. He doesn’t have the powers, but he rages at the very idea that Congress would actually dare to assert itself toward him.
Edwards: Even for people who would find themselves sympathetic for wanting to shake up the world—people who want to think that the U.S. needed to see big changes or that the economy wasn’t working, so why not have destruction?—you’re also seeing from all of this the heart of the problem of his executive power: There’s no points of leverage over him. He doesn’t take constituent calls. He doesn’t go out into his district and have to meet people who run coffee shops and people who run tea houses and people who are small manufacturers who are seeing their supply chain hit. This is just a personality fight, an ego fight. Whereas your members of Congress, like it or not, even if they don’t agree with you, do have to ask you for a job and do have to answer to you.
There’s a reason why so much of our high-stakes economic policy is therefore rested with them—because there’s accountability over Congress, even if that’s hard to believe now. There’s an accountability over Congress that simply does not exist over the president. And this tension over the tariff fight, and how much is at stake for the economy, illustrates why this needs to go back to a deliberative process. And if we really do need tariffs, you’ve got to articulate that. You’ve got to sell that. You’ve got to put in contingency plans for the retaliation that will undoubtedly occur. And you’ve got to to give people a chance to protect their constituents.
Sargent: A hundred percent. Trump is now raging wildly about even this tiny handful of Republicans breaking with him. He said on Truth Social, “Don’t be a PANICAN,” which is a play on Republican, and warned them against being—
Edwards: Is it a play on Republican?
Sargent: Yeah, “panican.”
Edwards: Oh, I read it and I went, I’m sorry, what am I reading here? What’s happening?
Sargent: Right. And then he clarifies and says, Don’t be weak and stupid, meaning the handful of Republicans who, in his mind, are only trying to rein in his power because they’re just getting scared and not because he’s actually lighting the world on fire. Look, I think he knows that once cracks show up in support for him, it gets exponentially easier little by little for others to join as this gets more out of control. How do you read what’s going on with Republicans right now, Kathryn?
Edwards: What I would give to be a fly on the wall of a Republican office and the phone calls they’re getting. I was reading about a month ago that because of these town halls in which Republican members of Congress were getting yelled at that they had some informal policy memos circulating of, Just don’t do town halls anymore. People were upset about what was going on with the federal government and now they’re terrified of what effect tariffs will have. And you see your 401(k) balance slide by 5 percent, by $50,000. That scares people to their core. I would imagine that a lot of Republicans are feeling the heats, and they’re feeling the pressure of a very upset constituency who do not want to see the political world be upended the way that it is. They’re demanding accountability, and I think Republicans can only fight off that pressure from their constituents for so long.
I would say that people’s intuition isn’t wrong. This is a very dangerous game for the economy to play. It’s a dangerous game to play with prices. It’s a dangerous game to play with export markets that a lot of American producers rely on. And it’s a very dangerous game to play with supply chains. What probably a lot of Republicans are coming to realize is that on January 19, unemployment rate was 4 percent; GDP was supposed to grow 2.5 percent in the annual rate for the quarter; and prices were under 3 percent. Anything that changes in such a short amount of time can only be squarely their fault. I really do wonder if they’re starting to get so afraid of how quickly the economy could turn and wanting to get ahead of it, forestall it if they can.
Sargent: Yes, we haven’t even seen the negative fallout from the tariffs. It seriously kept rolling in a big, big way—and when it does hit, the pressure on House Republicans and marginal districts is going to get pretty intense. I think we’re going to see a bill coming very soon, if it hasn’t come out while we’re talking, from House Democrats and then a companion one from Senate Democrats that would terminate the national emergency that Trump is using as a fake justification for the tariffs. I think that’s a tougher one for Republicans to get behind than the other one that we talked about earlier. But still, little by little, this is going to get tough for Republicans. Like I say, the actual negative consequences haven’t gotten really, really terrible yet. Where do you see this going? How terrible is it going to get?
Edwards: It just depends on how long the tariffs accumulate and what retaliation we see. We have no idea how bad the retaliation will get or when, and it doesn’t take long for a single country to really flick someone in the eye who’s a concentrated part of the economy. What I mean by that is tariffs can be incredibly destructive to a small set of people. For example, you’ve got a supply chain that rests on one good from one country, and it becomes 50 percent more expensive—your whole business model then is out the window. And I think that the backlash toward inflation is palpable in the air, and also the idea that that will be excelled. We’re going to bring the economy willingly back to high inflation through policy. That’s a lot. That’s very tough for people to swallow and hard for Republicans to sell.
The data that will start to turn alarming really won’t start to come in until maybe end of April, but it’ll be May and June where if these do have a deleterious effect on the economy quickly, which they are projected to do. They’ll start showing up in May and June data releases. At the end of April, we’ll get the first quarter’s growth, which really could go either way if it’s going to be negative, but it’s certainly not going to be strong. I think it’ll be weakly positive, a weak amount of economic growth in the first quarter. And then it’s a series of data releases after that.
One thing that economists watch is public earnings reports from public companies because they say not just what they earned but project how they’ll do in the future. If tariffs are hitting your supply line, in a public earnings call, you have to say like, We will grow less over the next six months because of this, this, and this. And if an earnings call is bad, and if a lot of earnings calls are bad, you tend to see not necessarily panic but accumulating downgrading of expectations. So you’re getting a whole other data point that’s concentrated to one company but holistic of how the economy is doing for producers and sellers that you don’t necessarily get from, say, an unemployment report.
Sargent: Yeah. And I think when Republicans start getting a real earful from their constituents, even much worse than it is now, you’re going to see a whole other level of panic from Republican lawmakers. I want to try to get into one of the arguments Trump is making here. He had a series of tweets where he claimed that due to his tariffs, numerous countries around the world now want to make deals with the U.S., including Japan. This is supposed to mean that they’re going to now stop treating us unfairly thanks to his toughness. That whole line about them treating us unfairly is ridiculous. But putting that aside, let’s say for the sake of argument that other countries are knocking down our doors to make deals—would it even be that much to boast about? Given everything that’s going on, aren’t we still in a horrible spot right now and sliding into worse places? How much can we gain from these deals? What do you make of that big argument he’s making?
Edwards: For the most part, I have found that these tariffs really lack an articulation of a goal. What are we moving toward? What are we trying to accomplish? When do we know that we’ll get there? And this idea of, Oh, they’re going to come kiss the ring and we’ll have a better deal—well, what does a better deal look like? What is that? It’s funny; it’s incumbent upon the administration to explain that, and they really haven’t. What I’ve noticed is that the broad motivation for tariffs is that it’ll bring jobs back. But then, of course, as tariffs are coming out and are hitting the economy so hard and making people so worried, it’s all about negotiation. Those two things are really in contrast and in conflict with each other. You can’t have an economic policy that is meant to long-term bring jobs back to the U.S. by reducing the amount we trade if it’s all just leverage to get a better deal in the short term.
I was on a WNYC show that was a call in, and one of the people who called into the show about tariffs is starting his first board game company. He has investment money and he’s contracted with a board game manufacturer in China to make the game. But of course, now that tariffs are announced, he has no idea what his production costs will be or if he’ll able to afford to launch his company, his new game. I think that this is a great case study of what a tariff is supposed to do.
In one version of the world, tariffs are meant to onshore domestic production of board games, so we’re going to close off trade relations with China in order to protect the domestic board game industry. In that version of the world, you’ve got to find a factory, find investors, find equipment, find people, get it all started. And then you can start making board games—lots of which are really hard to do if the market is tanking and there’s not a lot of investor funds to be had.
In the other version of the world, if it’s not to build out domestic board game manufacturing, tariffs are just a negotiating chip. In which case, any type of movement toward domestic production would be immediately superseded by renegotiating a deal with China. It then wasn’t about getting board game production to the U.S.; it was about just making board game imports cheaper. This guy is basically left wondering which way the world is going to turn as he wants to start his company because it’s not clear what the tariffs are trying to do. And certainly in the case of the former, if you did want to grow domestic board game production, you would do all of those things before the tariff. The tariff would be the last thing you did when you had the factory and the machines and the people and you were all ready to go. So it’s a struggle to find a coherent economic policy from this because manufacturing and negotiation are in conflict.
Sargent: And also, is manufacturing board games a good job? Is that how we make America great again, by getting a lot of native-born—presumably since we’re kicking out all the immigrants, native-born—Americans to get jobs putting together little monopoly pieces?
Edwards: And what would they make? I’ve always thought that this drive toward manufacturing is so misplaced—not because I don’t think they’re good jobs, but because I don’t think those jobs will be increasing in the future. We have shoes now. We had shoes in 1925. We’ll have shoes in 2125. If you imagine a shoe factory a hundred years ago versus a shoe factory a hundred years from now, I can bet that the first picture you think of is a grainy black and white photo with 200 people bent over a production line. And in 2125, I doubt there’ll be a person in the room. This is a lot of economic pain to throw around for an industry that decreasingly uses people.
And if you really wanted to have good middle-class jobs in the U.S., you would identify the jobs that can’t be exported and replaced by a machine, and you would ensure that those jobs are high quality and well-paid. What made a manufacturing job good is that they were high-paying, had health, and had retirement. That’s not special to manufacturing. That’s just special to labor economic policy. The jobs that can’t be exported that need people like are teachers, nurses, doctors, childcare workers, a lot of these pink-collar jobs that have never had the type of economic leverage to demand higher quality. Not to mention the retail sector—people who work in kitchens, people who bring you food, people who take your bag up to your room when you check into a hotel. We have a massive sprawling low-wage service sector. You could make that into the middle class if you really wanted to, but I don’t think we want to. I think we prefer to lament about the lost past, but it cost a lot to destroy the future.
Sargent: I think you’re getting at a very deep incoherence that really animates not just Trump but also MAGA. Can we talk big picture about where you see Trump’s arguments headed? What’s going to happen over the next six months? We’re going to see the arguments really start to break down more and more visibly. Do you think that’s going to actually have an impact on him and Republicans? How badly do you think the arguments are going to be unmasked as complete bullshit? And what do you think will happen when that does happen?
Edwards: I’m not sure. To me, there’s a lot of historic economic issues that are coming to a head right now. And for one thing that we know, what tariffs are certainly distracting from is a negotiation over a completely opaque and unknown $4.6 trillion at a minimum tax cut that we have no idea the details of when the U.S. is already running $1.5 trillion deficits and plunging headlong toward a recession. You want to pass the most expensive tax cut....I think that might be the most expensive piece of legislation in U.S. history. You want to pass that as quickly as possible while we’re heading into a recession, as supply chains are hurting.
This is coming to a head of: Are we really going to sacrifice all of our economy to bring back unionized manufacturing jobs as opposed to thinking of something more creative? Are we really going to bankrupt the federal government for a tax cut that serves very little articulated economic purpose? At some point, are we going to address problems of basic rights in our labor market for workers that have long been not addressed? We don’t have paid sick days. We don’t have childcare. We’ve got a very aging population, and none of their kids have paid family leave to take care of them as they die. There are the actual issues in our economy, and there’s this incredible focus on issues that are being invented, so at some point you have to wonder when reality is going to win.
Sargent: It’s a really good question. I think what you’re putting your finger on is the fundamental truth—that MAGA, the ideology of it, the set of tropes and images and ideas that we associate with it are really just founded on sand. Folks, if you enjoyed this with Kathryn Anne Edwards, check out her podcast, Optimist Economy. Kathryn, thanks so much for coming on with us today.
Edwards: It’s been a pleasure. Thank you so much for having me.
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.