1 00:00:03,470 --> 00:00:05,710 Speaker 1: You're listening to a CNA podcast. 2 00:00:12,130 --> 00:00:14,529 Speaker 1: My answer is very simple. If they complain, if you 3 00:00:14,529 --> 00:00:17,849 Speaker 1: want your tariff rate to be zero, then you build 4 00:00:17,850 --> 00:00:20,250 Speaker 1: your product right here in America because there is no 5 00:00:20,250 --> 00:00:23,399 Speaker 1: tariff if you build your plant, your product in America. 6 00:00:23,930 --> 00:00:27,450 Speaker 1: US President Donald Trump speaking after he unveiled duties on 7 00:00:27,450 --> 00:00:32,409 Speaker 1: more than 180 countries and territories. His so-called reciprocal tariffs 8 00:00:32,409 --> 00:00:33,049 Speaker 1: aimed at 9 00:00:33,098 --> 00:00:37,540 Speaker 1: Allies and adversaries alike. I'm Arnold Gay and I'm Elizabeth Neo. 10 00:00:37,650 --> 00:00:41,479 Speaker 1: This is a special episode of the CNA Correspondent podcast. 11 00:00:41,729 --> 00:00:45,240 Speaker 1: Arnold and I are actually playing the role of correspondent 12 00:00:45,240 --> 00:00:49,330 Speaker 1: today as we dig into the slew of numbers unleashed 13 00:00:49,330 --> 00:00:52,879 Speaker 1: by the Trump administration. This is one of the most 14 00:00:52,880 --> 00:00:56,650 Speaker 1: important days in my opinion, in American history. 15 00:00:57,099 --> 00:01:02,889 Speaker 1: It's our declaration of economic independence. For years, hardworking American 16 00:01:02,889 --> 00:01:06,330 Speaker 1: citizens were forced to sit on the sidelines as other 17 00:01:06,330 --> 00:01:10,720 Speaker 1: nations got rich and powerful, much of it at our expense. 18 00:01:11,089 --> 00:01:14,709 Speaker 1: But now it's our turn to prosper. OK, so Arnold, 19 00:01:15,010 --> 00:01:18,610 Speaker 1: Trump tariffs for dummies, how is it going to work? OK, 20 00:01:18,769 --> 00:01:21,209 Speaker 1: so Mr. Trump spoke in the White House Rose Garden. 21 00:01:21,620 --> 00:01:25,679 Speaker 1: In the crowd, administration officials, along with rank and file 22 00:01:25,680 --> 00:01:29,839 Speaker 1: steel workers and auto workers, he held up a big 23 00:01:29,839 --> 00:01:34,430 Speaker 1: poster listing terrorist nations charged the United States, and then 24 00:01:34,430 --> 00:01:37,759 Speaker 1: the reciprocal duty Mister Trump will be charging. 25 00:01:38,139 --> 00:01:42,470 Speaker 1: So for China, for example, the president says they charge 67% 26 00:01:42,470 --> 00:01:47,629 Speaker 1: on American imports. The reciprocal tariff will be 34%. But 27 00:01:47,629 --> 00:01:50,760 Speaker 1: then you add on 20% existing tariffs imposed since Mr. 28 00:01:50,830 --> 00:01:55,260 Speaker 1: Trump came back to power, it adds up to 54%. 29 00:01:55,709 --> 00:01:59,059 Speaker 1: For the EU, the White House says they charge 39%, 30 00:01:59,110 --> 00:02:01,709 Speaker 1: so the reciprocal tariff is 20%. 31 00:02:02,129 --> 00:02:06,629 Speaker 1: Basically, it's always half. The tariffs are imposed in stages, 32 00:02:06,750 --> 00:02:09,669 Speaker 1: so 10% starting on April 5th and then the rest 33 00:02:09,669 --> 00:02:14,589 Speaker 1: starting April 9th. Yes, so that 10% being the universal 34 00:02:14,589 --> 00:02:20,080 Speaker 1: baseline tariffs on all imports. Some US trading partners, they're 35 00:02:20,080 --> 00:02:23,589 Speaker 1: just facing that alone and they include the UK, 36 00:02:24,285 --> 00:02:29,014 Speaker 1: Australia and Singapore, but others are taking hard hits. And 37 00:02:29,014 --> 00:02:32,085 Speaker 1: I know, as you pointed out, China is looking at 34% 38 00:02:32,085 --> 00:02:38,274 Speaker 1: reciprocal tariffs. Then we've got Japan looking at 24%, India 26%, 39 00:02:38,375 --> 00:02:46,964 Speaker 1: Indonesia 32%, Thailand 36%, Vietnam 46%, and Cambodia, 49%. And 40 00:02:46,964 --> 00:02:48,434 Speaker 1: Donald Trump has still called them. 41 00:02:48,880 --> 00:02:53,250 Speaker 1: A discounted reciprocal tariff and this higher rate is being 42 00:02:53,250 --> 00:02:57,720 Speaker 1: placed on countries that the administration thinks hasn't been playing 43 00:02:57,720 --> 00:03:01,220 Speaker 1: fair instead of that 10% universal. So what we have 44 00:03:01,220 --> 00:03:04,559 Speaker 1: to understand is that these reciprocal tariffs will sometimes go 45 00:03:04,559 --> 00:03:08,639 Speaker 1: on top of other tariffs, like with China. In other cases, 46 00:03:08,758 --> 00:03:12,199 Speaker 1: if there's a tariff in place that's higher for certain products, 47 00:03:12,440 --> 00:03:15,600 Speaker 1: like some metals, that tariff will apply. 48 00:03:15,929 --> 00:03:21,130 Speaker 1: Another case in point, China's EVs already have a 100% tariff. 49 00:03:21,320 --> 00:03:25,000 Speaker 1: That is a lot and that is not all for China. 50 00:03:25,038 --> 00:03:29,389 Speaker 1: It's e-commerce market, touted as the largest in the world, 51 00:03:29,679 --> 00:03:33,399 Speaker 1: is another target. The administration offered more details on the 52 00:03:33,399 --> 00:03:37,229 Speaker 1: de minimis changes. Earlier it signed an order to end 53 00:03:37,229 --> 00:03:40,479 Speaker 1: the de minimis tariff exemptions and we now hear that 54 00:03:40,479 --> 00:03:43,309 Speaker 1: this will take effect on the 2nd of May. 55 00:03:43,690 --> 00:03:47,169 Speaker 1: Now the de minimis exemption allows packages worth as much 56 00:03:47,169 --> 00:03:51,009 Speaker 1: as $800 from China and Hong Kong to enter the 57 00:03:51,009 --> 00:03:54,289 Speaker 1: US duty free. And so this means that there is 58 00:03:54,289 --> 00:03:59,429 Speaker 1: more pain coming for a discount marketplaces like Tu and Xin. 59 00:03:59,889 --> 00:04:03,330 Speaker 1: There's more, millions of more packages for US customs and 60 00:04:03,330 --> 00:04:05,690 Speaker 1: Border Protection staff to sort through. 61 00:04:06,309 --> 00:04:09,839 Speaker 1: So what President Trump really seems to be signaling is 62 00:04:09,839 --> 00:04:13,490 Speaker 1: that this is the end of globalization as we know it, 63 00:04:13,880 --> 00:04:17,919 Speaker 1: the end of international trade. Chronic trade deficits are no 64 00:04:17,920 --> 00:04:22,359 Speaker 1: longer merely an economic problem. They're a national emergency that 65 00:04:22,359 --> 00:04:26,589 Speaker 1: threatens our security and our very way of life. So Liz, 66 00:04:26,799 --> 00:04:29,799 Speaker 1: what does it all mean? Now we've seen markets here 67 00:04:29,799 --> 00:04:32,440 Speaker 1: in Asia fall on the news, though not as much 68 00:04:32,440 --> 00:04:33,600 Speaker 1: for stocks in Singapore. 69 00:04:34,190 --> 00:04:39,260 Speaker 1: With investors perhaps thinking the city-state got off easier perhaps. 70 00:04:39,769 --> 00:04:42,988 Speaker 1: US futures are crumbling, adding to the losses Wall Street 71 00:04:42,988 --> 00:04:43,789 Speaker 1: has taken. 72 00:04:44,089 --> 00:04:47,320 Speaker 1: In the weeks since President Trump showed he meant business 73 00:04:47,320 --> 00:04:51,070 Speaker 1: on tariffs. Yeah, absolutely. It was a bloodbath. In fact, 74 00:04:51,279 --> 00:04:55,589 Speaker 1: Matt Maley from Milliack told me that the country's specific 75 00:04:55,589 --> 00:05:00,160 Speaker 1: reciprocal tariffs won't do much to erase uncertainty from the markets, 76 00:05:00,200 --> 00:05:04,729 Speaker 1: and it could also spell trouble for the upcoming earnings season. 77 00:05:05,089 --> 00:05:09,130 Speaker 1: It can actually, if anything, make things more uncertain because 78 00:05:09,369 --> 00:05:12,480 Speaker 1: people are saying, OK, now, it seems like the administration 79 00:05:12,480 --> 00:05:14,380 Speaker 1: is really going out, you know, with the worst case 80 00:05:14,380 --> 00:05:16,868 Speaker 1: scenario right now and they'll be able to back off. 81 00:05:17,130 --> 00:05:20,250 Speaker 1: But since it's the worst case scenario and not and 82 00:05:20,250 --> 00:05:22,369 Speaker 1: not anything easier, which I think a lot of people 83 00:05:22,369 --> 00:05:24,850 Speaker 1: were hoping for, it means that, you know, where, where, 84 00:05:24,890 --> 00:05:25,250 Speaker 1: where are they? 85 00:05:25,309 --> 00:05:27,299 Speaker 1: To meet in the middle. The middle isn't quite as, 86 00:05:27,579 --> 00:05:29,859 Speaker 1: as good as people had thought before. So this is 87 00:05:29,859 --> 00:05:32,459 Speaker 1: something that's going to create more confusion and, you know, 88 00:05:32,660 --> 00:05:35,260 Speaker 1: especially when we're moving into earnings season in the US 89 00:05:35,260 --> 00:05:38,019 Speaker 1: in just over a week, it just does not bode 90 00:05:38,019 --> 00:05:40,029 Speaker 1: well for the kind of thing that will give people 91 00:05:40,029 --> 00:05:43,329 Speaker 1: confidence to step back into this market. It's not just investors. 92 00:05:43,339 --> 00:05:45,339 Speaker 1: It's business executives who don't know how to, how much 93 00:05:45,339 --> 00:05:45,510 Speaker 1: could 94 00:05:45,559 --> 00:05:47,790 Speaker 1: Should they spend? How much should they pull back? How 95 00:05:47,790 --> 00:05:50,670 Speaker 1: much should they cut back, etc. In fact, a sign 96 00:05:50,670 --> 00:05:54,899 Speaker 1: of how unnerved investors are, they're fleeing to safe haven gold, 97 00:05:54,988 --> 00:05:59,589 Speaker 1: which earlier hit a new high of more than $3160 98 00:05:59,589 --> 00:06:03,260 Speaker 1: an ounce, and analysts say that the reciprocal tariff action 99 00:06:03,260 --> 00:06:05,670 Speaker 1: is much more serious than expected. 100 00:06:06,160 --> 00:06:09,109 Speaker 1: Now here is Edward Eldon. He is a senior fellow 101 00:06:09,109 --> 00:06:13,600 Speaker 1: at the Council on Foreign Relations. It's really a declaration 102 00:06:13,600 --> 00:06:16,959 Speaker 1: of economic war on the whole world, and I don't 103 00:06:16,959 --> 00:06:22,440 Speaker 1: think any of us expected anything quite that dramatic. We're 104 00:06:22,440 --> 00:06:25,859 Speaker 1: looking at something fundamentally different, and Donald Trump trying to 105 00:06:25,859 --> 00:06:30,630 Speaker 1: remake the American economy as a protected economy rather than 106 00:06:30,630 --> 00:06:34,959 Speaker 1: an open economy. That is a radical, radical transformation. 107 00:06:35,200 --> 00:06:37,989 Speaker 1: That I don't think his supporters really get yet, but 108 00:06:37,988 --> 00:06:41,230 Speaker 1: they will figure it out. And so even longtime allies 109 00:06:41,230 --> 00:06:45,229 Speaker 1: like Japan are not spared. The Japanese Prime Minister said 110 00:06:45,230 --> 00:06:48,950 Speaker 1: earlier this week, he wanted to negotiate in an effort 111 00:06:48,950 --> 00:06:52,399 Speaker 1: to head off those tariffs, but Donald Trump is hitting 112 00:06:52,399 --> 00:06:55,589 Speaker 1: the country with a 24% levy anyway. 113 00:06:55,988 --> 00:07:00,299 Speaker 1: Japan's trade minister Yoji Muto said that Japan is leaving 114 00:07:00,299 --> 00:07:04,549 Speaker 1: all options open to respond to the tariffs. Here's Mr. 115 00:07:04,709 --> 00:07:08,428 Speaker 1: Trump again. 94% of the cars in Japan are made 116 00:07:08,428 --> 00:07:13,779 Speaker 1: in Japan. Toyota sells 1 million foreign made automobiles into 117 00:07:13,779 --> 00:07:16,950 Speaker 1: the United States, and General Motors sells almost none. 118 00:07:17,750 --> 00:07:21,350 Speaker 1: Ford sells very little. None of our companies are allowed 119 00:07:21,350 --> 00:07:24,989 Speaker 1: to go into other countries, and I say that friend 120 00:07:24,989 --> 00:07:28,109 Speaker 1: and foe, and in many cases the friend is worse 121 00:07:28,109 --> 00:07:30,950 Speaker 1: than the foe in terms of trade. Now, given the 122 00:07:30,950 --> 00:07:35,959 Speaker 1: size of Japan's auto industry with 59,000 smaller firms supporting 123 00:07:35,959 --> 00:07:39,829 Speaker 1: eight major car makers, our senior correspondent in Tokyo, 124 00:07:40,130 --> 00:07:43,920 Speaker 1: Ishida says that is bad news for Japan. According to 125 00:07:43,920 --> 00:07:48,880 Speaker 1: Japan's Finance Ministry, Japan's auto and auto-related exports to the 126 00:07:48,880 --> 00:07:53,559 Speaker 1: United States total over 8.3 trillion yen in 2024, which 127 00:07:53,559 --> 00:07:57,040 Speaker 1: is about $56 billion US dollars, and all of that 128 00:07:57,040 --> 00:08:01,549 Speaker 1: makes up about 40% of Japan's exports to the United States. 129 00:08:01,959 --> 00:08:02,720 Speaker 1: So you would think. 130 00:08:02,820 --> 00:08:07,359 Speaker 1: that countries with existing free trade agreements will be spared, right? 131 00:08:07,609 --> 00:08:11,049 Speaker 1: Not true at all. Singapore, Australia, and South Korea all 132 00:08:11,049 --> 00:08:16,369 Speaker 1: hit by levies ranging from 10% to 25%. Well, South 133 00:08:16,369 --> 00:08:20,730 Speaker 1: Korea's acting president Han Dok So Thursday ordered emergency support 134 00:08:20,730 --> 00:08:24,760 Speaker 1: measures for industries and businesses that will be impacted by 135 00:08:24,760 --> 00:08:25,410 Speaker 1: President Trump. 136 00:08:25,739 --> 00:08:31,100 Speaker 1: Sweeping tariffs. Canberra called the 10% tariff on Australian exports 137 00:08:31,100 --> 00:08:34,710 Speaker 1: totally unwarranted, but said it would not be retaliating. 138 00:08:34,979 --> 00:08:39,218 Speaker 2: The administration's tariffs have no basis in logic, and they 139 00:08:39,219 --> 00:08:42,710 Speaker 2: go against the basis of our two nations partnership. This 140 00:08:42,710 --> 00:08:45,820 Speaker 2: is not the act of a friend. Today's decision will 141 00:08:45,820 --> 00:08:48,059 Speaker 2: add to uncertainty in the global economy. 142 00:08:48,510 --> 00:08:52,099 Speaker 2: And it will push up costs for American households. It 143 00:08:52,099 --> 00:08:55,489 Speaker 2: is the American people who will pay the biggest price 144 00:08:55,820 --> 00:08:59,848 Speaker 2: for these unjustified tariffs. This is why our government will 145 00:08:59,849 --> 00:09:04,099 Speaker 2: not be seeking to impose reciprocal tariffs. We will not 146 00:09:04,099 --> 00:09:06,809 Speaker 2: join a race to the bottom that leads to higher 147 00:09:06,809 --> 00:09:09,200 Speaker 2: prices and slower growth. 148 00:09:09,580 --> 00:09:13,359 Speaker 1: Yeah, and we're also hearing from China, which said it 149 00:09:13,359 --> 00:09:19,130 Speaker 1: firmly opposes those sweeping new US tariffs and vowed countermeasures 150 00:09:19,130 --> 00:09:23,239 Speaker 1: to safeguard its own rights and interests. And I'm also 151 00:09:23,500 --> 00:09:26,919 Speaker 1: looking at a post from Casey Barnett, the head of 152 00:09:26,919 --> 00:09:31,010 Speaker 1: the American Chamber of Commerce in Cambodia, who issues a 153 00:09:31,010 --> 00:09:34,189 Speaker 1: stark warning. He says that the reciprocal tariffs on Cambodia, 154 00:09:34,219 --> 00:09:35,738 Speaker 1: that is 49%. 155 00:09:36,260 --> 00:09:39,900 Speaker 1: If not aggressively addressed within the next couple of weeks, 156 00:09:40,020 --> 00:09:45,539 Speaker 1: will destroy the Cambodian economy and create a deep economic recession. 157 00:09:45,609 --> 00:09:49,500 Speaker 1: We're looking at a loss of several 100,000 jobs in 158 00:09:49,500 --> 00:09:52,739 Speaker 1: a country with a population of only 17 million, and 159 00:09:52,739 --> 00:09:55,358 Speaker 1: he also flags the possibility of social 160 00:09:55,409 --> 00:09:59,839 Speaker 1: Instability and rapid capital outflow. OK, so we've been talking 161 00:09:59,840 --> 00:10:03,039 Speaker 1: a lot about the pain for other countries. Where and 162 00:10:03,039 --> 00:10:06,039 Speaker 1: what does the US stand to gain? Well, White House 163 00:10:06,039 --> 00:10:10,039 Speaker 1: trade adviser Peter Navarro estimated the US would raise about 164 00:10:10,039 --> 00:10:14,719 Speaker 1: $600 billion to $700 billion a year from tariffs. 165 00:10:15,380 --> 00:10:19,460 Speaker 1: We have some estimates here from Exeder on the revenue 166 00:10:19,460 --> 00:10:23,340 Speaker 1: from the new US tariffs. Yeah, so $149 billion coming 167 00:10:23,340 --> 00:10:28,210 Speaker 1: from China, $63 billion coming from Vietnam, Taiwan $37 billion 168 00:10:28,219 --> 00:10:32,819 Speaker 1: and Japan, $36 billion. But people are skeptical. Economists expect 169 00:10:32,820 --> 00:10:37,030 Speaker 1: the Trump administration's tariff policy would generate a much lower 170 00:10:37,030 --> 00:10:41,219 Speaker 1: amount of revenue than Mr. Navarro claims. Some project that 171 00:10:41,219 --> 00:10:43,659 Speaker 1: total revenue could even be less. 172 00:10:44,745 --> 00:10:48,986 Speaker 1: The reality is that this story isn't complete. Trump has 173 00:10:48,986 --> 00:10:52,995 Speaker 1: not been deterred by drops on Wall Street, falling consumer sentiment, 174 00:10:53,346 --> 00:10:57,596 Speaker 1: or recession fears. But Frank Lavin, former Undersecretary for International 175 00:10:57,596 --> 00:11:01,466 Speaker 1: Trade at the US Department of Commerce, says rising discontent 176 00:11:01,466 --> 00:11:04,486 Speaker 1: among Americans will. I think if this goes more than 177 00:11:04,486 --> 00:11:06,425 Speaker 1: 30 days, we're going to see an impact in the 178 00:11:06,426 --> 00:11:09,346 Speaker 1: unemployment numbers. And then you have broad discontent in the 179 00:11:09,346 --> 00:11:11,625 Speaker 1: United States, meaning if it's a little bit of pain, 180 00:11:11,666 --> 00:11:12,156 Speaker 1: a little bit of 181 00:11:12,312 --> 00:11:15,231 Speaker 1: Location for a few weeks that might be acceptable, but 182 00:11:15,231 --> 00:11:16,791 Speaker 1: if it goes on for more than a few weeks 183 00:11:16,791 --> 00:11:20,271 Speaker 1: and the unemployment numbers start trickling up, I think President 184 00:11:20,271 --> 00:11:22,581 Speaker 1: Trump will pay a price for this politically. The tariff 185 00:11:22,581 --> 00:11:26,861 Speaker 1: plan is complex and there's still so much we don't know, 186 00:11:26,952 --> 00:11:30,361 Speaker 1: like questions like how flexible President Trump will be or 187 00:11:30,361 --> 00:11:34,461 Speaker 1: if he really means make your goods in America or else, 188 00:11:34,711 --> 00:11:38,231 Speaker 1: we also don't know how countries will react and how 189 00:11:38,231 --> 00:11:40,591 Speaker 1: the global supply chain will be impacted. 190 00:11:40,830 --> 00:11:43,250 Speaker 1: Yeah, and today and in the coming days, we will 191 00:11:43,250 --> 00:11:46,159 Speaker 1: be hearing from businesses that are going to be navigating 192 00:11:46,159 --> 00:11:50,650 Speaker 1: this new normal. Here is Vince Tercy of Kraft Brewery 193 00:11:50,650 --> 00:11:53,840 Speaker 1: Dissolver in the state of North Carolina. 194 00:11:54,289 --> 00:11:56,010 Speaker 2: Nothing is safe from these tariffs. 195 00:11:56,909 --> 00:12:01,539 Speaker 2: Uh, the policy essentially is a total loss for small businesses. 196 00:12:01,750 --> 00:12:04,469 Speaker 2: It's based on the idea that we can just start 197 00:12:04,469 --> 00:12:08,390 Speaker 2: manufacturing everything here overnight, and that's not how a free 198 00:12:08,390 --> 00:12:09,750 Speaker 2: trade market existed in the first 199 00:12:09,750 --> 00:12:10,219 Speaker 2: place. 200 00:12:10,590 --> 00:12:14,349 Speaker 1: So there's a window between now and Saturday, April 5th 201 00:12:14,349 --> 00:12:18,789 Speaker 1: for countries to negotiate before the baseline 10% tariff kicks 202 00:12:18,789 --> 00:12:21,549 Speaker 1: in and then another 4 days or so before full 203 00:12:21,549 --> 00:12:23,939 Speaker 1: tariffs take effect on the 9th of 204 00:12:24,094 --> 00:12:28,334 Speaker 1: April, will countries be combative like China, or will they 205 00:12:28,335 --> 00:12:31,814 Speaker 1: take their cues from the Australian Prime Minister who's protested 206 00:12:31,815 --> 00:12:35,174 Speaker 1: strongly but has chosen not to retaliate? Yeah, one thing 207 00:12:35,174 --> 00:12:38,695 Speaker 1: for sure, what they decide will potentially impact jobs, inflation, 208 00:12:38,734 --> 00:12:40,854 Speaker 1: and of course the global economy. 209 00:12:41,580 --> 00:12:44,789 Speaker 1: Alright, that's it for this special episode of the CNA 210 00:12:44,789 --> 00:12:48,609 Speaker 1: Correspondent podcast. A reminder you can catch reports from all 211 00:12:48,609 --> 00:12:53,059 Speaker 1: our correspondents on CNA's YouTube channel and CNA.Asia, and please 212 00:12:53,059 --> 00:12:57,500 Speaker 1: note the TV episodes of CNA Correspondent air every Wednesday 213 00:12:57,500 --> 00:13:00,820 Speaker 1: at 9:30 p.m. The team behind this week's edition is 214 00:13:00,820 --> 00:13:05,049 Speaker 1: Sai Ye, Clara Ong, Christina Robert, Craig Dale, Tiffany Ong, 215 00:13:05,159 --> 00:13:08,099 Speaker 1: I'm Arnold Gay with Elizabeth Neo. Thank you very much 216 00:13:08,099 --> 00:13:10,739 Speaker 1: for joining us. Thanks everyone, until next time.