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Speaker 1: On this episode of Newsworld. On Wednesday, April second, President

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Speaker 1: Trump held a press conference in the White House Rose

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Speaker 1: Garden to unveil his new tariff strategy, which he nicknamed

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Speaker 1: Liberation Day. For decades, many countries have imposed higher trade

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Speaker 1: barriers on the United States than America does on them.

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Speaker 1: President Trump's plan intends to strike back with tariffs that

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Speaker 1: are reciprocal, leveling the playing field with other nations. Here

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Speaker 1: to unpack the new Trump tariff policy, I am really

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Speaker 1: pleased to welcome my guest, David Beckworth. He's a former

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Speaker 1: international economist for the OST Treasury Department and currently a

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Speaker 1: senior research fellow with the Mercada Center and hosts of

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Speaker 1: the popular podcast Macro Music The David, welcome and thank

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Speaker 1: you for joining me on Newsworld.

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Speaker 2: Well, thank you speak your getting rich, steal honor to

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Speaker 2: be on your program.

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Speaker 1: Well, before we get to the tariffs, I have to ask,

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Speaker 1: what does macro musings mean?

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Speaker 2: You muse over macro economics because most people their eyes

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Speaker 2: roll when you say macro economics. So we try to

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Speaker 2: make it interesting. What can be sexy and fun about macroeconomics.

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Speaker 2: So we do our best and we have some fun

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Speaker 2: on the show.

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Speaker 1: So from your perspective as a professional economist, describe for

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Speaker 1: the average person the whole notion of tariffs. You know

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Speaker 1: what they are, why they're used.

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Speaker 2: Well, they have a long, rich history, so there's nothing

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Speaker 2: really new here, and in fact, we still have tariffs

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Speaker 2: even before Trump stepped in. We've had a long history

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Speaker 2: of it. We've also have a long history of negotiating

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Speaker 2: tariff treaties with other countries. The WTO is a good example.

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Speaker 2: World Trade Organization. But tariffs are effectively attacks on foreign

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Speaker 2: goods that come into the country, and there's a debate

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Speaker 2: to who actually bears the cost of that tariff. Would

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Speaker 2: the American pay for it or would the foreigner pay

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Speaker 2: for it? And I get into how we think about that,

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Speaker 2: but there's that question as well. You can think of

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Speaker 2: it as one among many policy tools a country can use,

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Speaker 2: and countries still do use for some objective.

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Speaker 1: What do you think Trump's reasoning is behind this sudden

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Speaker 1: dramatic shift in tariff policy.

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Speaker 2: Well, I think there's several things. I just think he

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Speaker 2: instinctually has for a long time disliked trade deficits. I mean,

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Speaker 2: going back to the eighties, everything we've seen like Japan.

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Speaker 2: We ran big deficits with Japan back when you were

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Speaker 2: in office, and then today it's China. And I think

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Speaker 2: probably the biggest items or the table centers is China

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Speaker 2: today and then probably Japan in the eighties. I think

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Speaker 2: he just has this visceral instinct that trade deficits are wrong.

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Speaker 2: I think what specifically now is happening, he feels like

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Speaker 2: as a mandate and he's willing to push things forward.

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Speaker 2: And I would say maybe a third thing maybe to

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Speaker 2: add to that, is there is something amiss that's happened,

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Speaker 2: something underlying the US economy that does need to be addressed.

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Speaker 2: I think it's something that can be better addressed other ways.

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Speaker 2: But I do think he's put his finger on some unease.

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Speaker 2: And people elected him for her reason, right, So I

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Speaker 2: do think there's some unease out there that he's trying

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Speaker 2: to solve, and I think there's other ways to do it.

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Speaker 1: Two pieces of data that I suspect affect him are that,

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Speaker 1: according to the UN US manufacturing as a share of

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Speaker 1: total manufacturing output worldwide, who was seventeen point four percent

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Speaker 1: in twenty twenty three, down from a peak in two

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Speaker 1: thousand and one. Of twenty eight point four percent. That's

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Speaker 1: a pretty big drop. And from nineteen ninety seven to

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Speaker 1: twenty twenty four, the estimate is that we lost around

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Speaker 1: five million manufacturing jobs and experienced one of the largest

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Speaker 1: drops in manufacturing employment in American history. Doesn't that sort

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Speaker 1: of require some kind of response.

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Speaker 2: Not necessarily. I mean, if you look at a country

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Speaker 2: for example, like let's pick Germany, Okay, Germany, I think

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Speaker 2: is a good country to compare ourselves to. Germany actually

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Speaker 2: runs trade surpluses. It's also a manufacturing powerhouse, as we

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Speaker 2: need no many be probably by many things from Germany

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Speaker 2: that's manufactured, but there if you look at the number

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Speaker 2: of manufacturing jobs in Germany, it also has been declining

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Speaker 2: over time. So in terms of employment, I think it's

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Speaker 2: the story of automation. Point you raised about total manufacturing output, right,

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Speaker 2: that share has gone down, and I would say that

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Speaker 2: is a result of us shifting what we do from

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Speaker 2: some manufacturing to things we do in Silicon Valley, Wall Street.

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Speaker 2: We export a number of items. Manufacturing is just one

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Speaker 2: among many. I would really stress though, the employment in

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Speaker 2: manufacturing itself is a symptom more of automation than I

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Speaker 2: would say jobs being export overseas. Now, it's true there

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Speaker 2: was China Shock, and I think you could argue to

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Speaker 2: China shock exacerbated that trend. But if you go back

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Speaker 2: and look at manufacturing employment as a percent of total

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Speaker 2: employment in the US, it's been declining since nineteen fifty

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Speaker 2: and the best story is automation.

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Speaker 1: I mean, the world has been reacting pretty negatively. Should

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Speaker 1: we be worried about that?

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Speaker 2: I think we should because we still have a robust

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Speaker 2: manufacturing sector, and I think the terriffs, the trade war

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Speaker 2: may actually hurt what we do have already. Again, just

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Speaker 2: to be clear, we still manufacture a lot of things,

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Speaker 2: but a lot of what we manufacture depends on imports

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Speaker 2: from other countries. So, as you well know, there's no

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Speaker 2: such thing as a truly probably American made car anymore.

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Speaker 2: There's cars made in America, but they have pieces that

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Speaker 2: come from other parts of the world. Those things have

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Speaker 2: pieces that are produce other states, other parts of the world.

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Speaker 2: So when we impose these tariffs, we're going to actually

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Speaker 2: affect our manufacturing base in the US. Now, I think

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Speaker 2: Trump's plan is in the long run, well let's make

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Speaker 2: those inputs in the US. But that takes time. It's

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Speaker 2: not easy to rebuild a COMPLI cadd manufacturing process here

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Speaker 2: versus overseas. I do worry that when they retaliate, it's

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Speaker 2: going to affect our manufacturing base, and of course the

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Speaker 2: obvious maybe first effect we would worry about. And especially

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Speaker 2: I think politically, I really worry about the twenty twenty

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Speaker 2: six Mitrum elections because I think if we have big

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Speaker 2: price shocks for consumers, I think they're going to vote

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Speaker 2: with their feet. So Trump benefited from the fact that

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Speaker 2: Biden really blew it on inflation, right, they had the

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Speaker 2: high inflation from the pandemic. That was great for Trump.

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Speaker 2: I just hope this doesn't come to bite him in

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Speaker 2: their rear if the terrorist lead to higher prices here,

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Speaker 2: at least temporarily.

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Speaker 1: I mean, it's intriguing to me that Trump makes this

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Speaker 1: big announcement and then the stock market just crashes. I

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Speaker 1: don't think there's any other way to describe what happened

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Speaker 1: in the next twenty four hours.

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Speaker 2: Oh no, it's awful.

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Speaker 1: I think the broad market in the next drop five percent,

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Speaker 1: The Doal Jones dropped sixteen hundred points, the nasdeck fell

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Speaker 1: six percent. Somebody said it's several trillion dollars in value

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Speaker 1: disappeared overnight. Was that a surprise or do you think

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Speaker 1: that was almost inevitable given the scale of the change.

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Speaker 2: I do think it was surprising that it's been this

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Speaker 2: strong and this persistent, because this happened on Wednesday, and

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Speaker 2: we're two days later and it's still happening, and it's

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Speaker 2: in the stock market. That is literally wealth that has evaporated,

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Speaker 2: which is going to affect spending down the road, which,

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Speaker 2: as you probably know knew that probably means a recession

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Speaker 2: at some point this year. If things continue, they may

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Speaker 2: turn around. But stocks are down, interest rates on tenure

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Speaker 2: treasury bonds are down, which usually means concerns about the economy,

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Speaker 2: copper oil, all these things that are very cyclical or

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Speaker 2: down which really don't look well for the future. It

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Speaker 2: was surprising that foul that much. But I think what

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Speaker 2: was also surprising they maybe explains to steep dropping the market,

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Speaker 2: is the fact that the tariff rates were so high,

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Speaker 2: these reciprocal rates. There was the ten percent universal rate,

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Speaker 2: and then China got thirty four, Vietnam got forty six,

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Speaker 2: EU got twenty. I just think people were surprised how

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Speaker 2: big the numbers were, and that probably hit them hard.

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Speaker 2: In fact, it's interesting if you go back to that

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Speaker 2: day when it's announced, the market actually improved the first

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Speaker 2: few minutes when he started talking, because all they heard

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Speaker 2: was ten percent universal tariffs. You remember he pulled out

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Speaker 2: that big board that had all the rates on it.

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Speaker 2: Then the market is like, oh my goodness, and then

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Speaker 2: it started tanking. So I think the scale of the

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Speaker 2: tariffs probably has some part of the story to it.

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Speaker 1: I thought the chart or big board as you put in,

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Speaker 1: was a very useful communications device. But the more I've

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Speaker 1: looked at it, I don't quite understand how they got

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Speaker 1: at the numbers. Can you explain how they buy country

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Speaker 1: produce these numbers.

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Speaker 2: Yeah, it's not the most shining part of the presentation.

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Speaker 2: Those numbers were constructed it to be blunt. They literally

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Speaker 2: took the trade deficit between that country and the US

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Speaker 2: and divided it by imports. So there really isn't any

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Speaker 2: connection to like trade tariffs they're imposing. There's no connection

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Speaker 2: to other trade restrictions. Sometimes country can impose trade restrictions

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Speaker 2: on our goods without having an actual tariff. They do

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Speaker 2: some regulatory trick. So when economists think about these trade restrictions.

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Speaker 2: There's both tariffs, there's other tools they use, and it

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Speaker 2: looks like none of that was considered. It literally was

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Speaker 2: let's take the deficit, and I think again, because Trump

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Speaker 2: dislikes these bilateral trade deficits, divide by the imports. It

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Speaker 2: is very ad hoc. I mean, Israel got pretty higher.

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Speaker 2: I forget the exact number, and Israel has no tariffs

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Speaker 2: on US at all, and yet we applied to this

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Speaker 2: reciprocal tarifle on Israel even though Israel has nothing. So

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Speaker 2: it literally was just let's take deficits, divide by imports.

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Speaker 1: If you're a really smart country and you've done really,

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Speaker 1: really well, you're now going to get punished.

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Speaker 2: Yeah, more or less. You know you mentioned earlier. Is

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Speaker 2: this something we should worry about? I do think it affects,

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Speaker 2: you know, long term relationships between the US and other countries.

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Speaker 2: I think what Trump has right is his focus on China,

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Speaker 2: and we need allies to fight China. You know, this

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Speaker 2: contest we're going to have with China, the economy, security,

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Speaker 2: all these things. We need allies at our side. And

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Speaker 2: I worry that this elevated trade war is really going

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Speaker 2: to push them away. Why would they want to come

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Speaker 2: to the table with us now if we've burned them

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Speaker 2: on trade.

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Speaker 1: You've recently wrote an article which I thought was interesting

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Speaker 1: called from Liberation Day to Stagflation Return For the average person.

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Speaker 1: Could you explain what stagflation is?

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Speaker 2: Stagflation is when you have both high inflation and high unemployment,

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Speaker 2: or another way of saying that is you have both

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Speaker 2: like a recession, the economy's weak and inflation goes up.

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Speaker 2: Usually they don't do that, so usually you have high inflation,

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Speaker 2: economy is running hot, and as you know, you're story

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Speaker 2: in New nineteen seventies classic case of this was an

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Speaker 2: awful time, a lot of malais. You can probably describe

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Speaker 2: better than I can. That's stackflation.

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Speaker 1: Do you expect, with this combined impact of raising prices

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Speaker 1: on imports and slowing the economy, that you could in

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Speaker 1: fact end up having inflation because prices go up at

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Speaker 1: the same time that you're having more unemployment.

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Speaker 2: Absolutely, And that's my big concern again, and this feeds

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Speaker 2: into the point made earlier. If we get some little

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Speaker 2: taste of stackflation, I really think it could hurt the

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Speaker 2: Chiopis prospects in twenty twenty six. But here's why I'm

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Speaker 2: concerned about this. So just off the bat, these are

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Speaker 2: really high teriff rates, and that means higher prices for

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Speaker 2: US consumers. And that's something that President Trump and his

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Speaker 2: team is acknowledged. They're like, look, there's gonna be some

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Speaker 2: pain and they hope will be long term gain. So

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Speaker 2: let's acknowledge you things are going to get more expensive,

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Speaker 2: number one. Number two, though US consumers are already scarred

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Speaker 2: from the high ENDLA in the pandemic. If you look

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Speaker 2: at any number of measures, they're very sensitive. In fact,

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Speaker 2: they're more sensitive now than they were in twenty eighteen

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Speaker 2: twenty twenty, the last time Trump imposed a trade war.

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Speaker 2: Of course, there was much smaller scale back then, but

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Speaker 2: he could afford to have more room to play because

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Speaker 2: people's inflation expectations were better grounded. But if you look

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Speaker 2: anything like survey measures, if you look at Google searches

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Speaker 2: for inflation, they're at a higher level now than they

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Speaker 2: were pre twenty twenty. You're kind of playing with fire here.

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Speaker 2: You're going to increase prices. People are looking for price

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Speaker 2: increases to panic and to react. And then on top

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Speaker 2: of that, we're running big budget deficits and they look

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Speaker 2: like they're only going to get larger, and I mean,

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Speaker 2: how do you pay for these deficits. Well, at some

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Speaker 2: point we got to print money. We've got to monetize

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Speaker 2: the debt. You create this atmosphere's man that looks like

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Speaker 2: there's going to be inflation and become self fulfilling, and

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Speaker 2: then the FED might become more politicized. So there's all

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Speaker 2: these pieces that are potentially put in place that could

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Speaker 2: lead to stag plation. I'm not saying it's going to happen.

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Speaker 2: If Trump were to pull back on the trade war,

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Speaker 2: if Congress were to step up and say no, we

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Speaker 2: don't want to do this, we could avoid it. I'm

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Speaker 2: just worried that kind of a perfect storm is brewing

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Speaker 2: and all the good that President Trump could do might

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Speaker 2: be undermined by it.

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Speaker 1: You made a point in some of your writing that

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Speaker 1: there's a potentially real threat to the Fed's independence. Why

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Speaker 1: does that matter.

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Speaker 2: We want a central bank, our Federal Reserve, to set

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Speaker 2: monetary conditions, so that's controlling interesting rates. Back in the

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Speaker 2: day that was controlling the money supply. We want to

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Speaker 2: do that in a manner so that they hit low inflation.

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Speaker 2: Now we can argue over what's appropriate low inflation, but

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Speaker 2: they target two percent, and we want them to have

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Speaker 2: full flexibility in getting to two percent. If the President

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Speaker 2: comes in and says, Nope, you need to cut interest

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Speaker 2: rates right now, because look, my trade war is causing

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Speaker 2: pain and Americans need relief, and that's something that I

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Speaker 2: could easily see happening. And if they don't want to

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Speaker 2: because inflation hasn't come down, they're going to be under

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Speaker 2: political pressure. And so if they cave, what happens then

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Speaker 2: is they cut rates, they feel more inflation, and we

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Speaker 2: get back to the stagflationary environment. Now I'm not saying

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Speaker 2: that's going to happen, but it could happen, and that

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Speaker 2: definitely happened in the nineteen seventies. Arthur Burns Lyndon Johnson.

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Speaker 2: There were a number of stories from the seventies where

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Speaker 2: the FED got politicized and contributed to that kind of environment.

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Speaker 1: Because Trump has been a businessman his whole career and

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Speaker 1: has scene recessions and has scene recoveries, what do you

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Speaker 1: think is in his head? Does he just see him

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Speaker 1: writing this out because economies go up and go down,

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Speaker 1: He's got to have some sense that the twenty six

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Speaker 1: election matters. There a certain amount of rolling the dice here.

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Speaker 2: That's a great question. I wish I could read his mind.

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Speaker 2: I know what's happening. He really thinks bilateral trade deficits

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Speaker 2: are an indication of weakness, and I'm happy to discuss

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Speaker 2: why I think that's wrong. But I think it's a principle.

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Speaker 2: You could say Trump is driven by principle maybe at

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Speaker 2: some level here, because he wants to fix I mean,

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Speaker 2: notice that those tariffs that were introduced. If you think

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Speaker 2: about it, it's a statement about a bunch of bilateral

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Speaker 2: trade deficits. It's not really a focus on the overall

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Speaker 2: trade balance of the US all these countries. I think

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Speaker 2: he just has this firm conviction. I do wonder what

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Speaker 2: he's thinking, because his advisors himself, they have to be aware.

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Speaker 2: He came out today and said, look, we're going to

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Speaker 2: stick this out. In fact, China announced they're going to

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Speaker 2: match the thirty four percent tariffs we're playing on them.

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Speaker 2: They're going to match it on us. And Trump says,

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Speaker 2: I'm in this for the long game. I mean, so

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Speaker 2: maybe there's a little ego when they're as well. But

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Speaker 2: I think maybe Trump's driven by principle and is willing

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Speaker 2: to kind of suck it up.

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Speaker 1: I was struck. I saw on YouTube an interview with

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Speaker 1: Trump I think in the eighties, and he's making the

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Speaker 1: same case. It's clear that he really does believe that

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Speaker 1: we've been taking advantage of and then we need to

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Speaker 1: reshape our international economic poss and this goes back forty years.

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Speaker 2: Yeah, for sure, I'm sympathetic to concerns about China national security.

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Speaker 2: There is a place to make sure we're producing our weapons,

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Speaker 2: not somebody else. You know, we want to be leading

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Speaker 2: the game in AI technology, whatever the cutting edges, there's

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Speaker 2: a case for that. I do think some of the

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Speaker 2: concerns about bilateral trade deficits are a bit misguided, and

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Speaker 2: they may lead us to a path that may ultimately

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Speaker 2: cause problems. We all run bilateral trade deficits in our lives.

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Speaker 2: I run a trade deficit at my grocery store. I

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Speaker 2: bring groceries home. I don't give them goods, my clothes, households, firms, countries.

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Speaker 2: Bilateral trade deficits aren't necessarily a bad thing. You can

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Speaker 2: argue maybe the US's overall trade deficit is a symptom

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Speaker 2: of where capital flows come and go from. But an

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Speaker 2: individual bilateral trade deficit, I think is a harder case

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Speaker 2: to make.

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Speaker 1: What is his legal authority to just arbitrarily raise in

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Speaker 1: lower tariffs? I mean, is that written into law that

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Speaker 1: the president can do that?

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Speaker 2: I think it's this emergency authority that and was given

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Speaker 2: to the president, this trade authority. I mean, you probably

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Speaker 2: know the answer that question better than I do. But constitutionally,

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Speaker 2: I think this is the point. Maybe you're getting that Constitutionally,

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Speaker 2: Congress should be the final arbitrar. The reason the president

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Speaker 2: can is because Congress has given some of that back

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Speaker 2: to the president, even though in the Constitution is supposed

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Speaker 2: to be with Congress.

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Speaker 1: So in a sense they've delegated it to him.

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Speaker 2: They have in most cases that makes sense because some

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Speaker 2: of these treaties are very complicated, right If you're doing

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Speaker 2: a massive free trade agreement with the European Union, lots

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Speaker 2: of countries involved, it's cumbresome to have Congress with a

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Speaker 2: bunch of people try to nitpick over. It's better to

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Speaker 2: have the executive brand to do it. But when you

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Speaker 2: have the scale as big as this, when it's a

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Speaker 2: massive trade war, and then maybe it's time for Congress

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Speaker 2: to set back in and say, Okay, is this what

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Speaker 2: we want? Maybe they do want to support Trump, but

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Speaker 2: let's talk about it. Look, Rand Paul is uneasy with it.

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Speaker 2: It was interesting today Ted Cruz came out. Now he

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Speaker 2: didn't stop Trump, but he's like, look, I'm concerned about

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Speaker 2: prices affecting my constituents. So maybe we're getting to see

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Speaker 2: some kind of groundswell. We'll see some people raise questions,

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Speaker 2: or maybe they're just covering their rears too. I don't know.

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Speaker 1: You go from a broad, general sweeping idea to a

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Speaker 1: specific series of actions, and then you be in to

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Speaker 1: have people who are affected by those actions point out

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Speaker 1: exactly what they mean in the real world, and all

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Speaker 1: of a sudden, it's a totally different conversation. I personally

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Speaker 1: would expect both the House and Senate to have hearings

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Speaker 1: and bring in the Trump team and say, tell us

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Speaker 1: how you got to this, walk us through this. It

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Speaker 1: just seems to me that it's a very large, dramatic

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Speaker 1: change carried out in one press conference. In that sense,

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Speaker 1: Franklin Roosevelt would be very proud of Trump.

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Speaker 2: Right right. This goes back to the point you made earlier.

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Speaker 2: Why was the market so surprised right economists. Market people

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Speaker 2: say the market is a powerful institution because it brings

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Speaker 2: together all the wisdom, all the insights of people who

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Speaker 2: have skin in the game. They get paid to follow

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Speaker 2: Congress closely, they get paid to follow the president and

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Speaker 2: the executive decisions closely. And if they were this surprised

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Speaker 2: by it, as evidenced by the crash of the markets,

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Speaker 2: it truly was something historical. I mean, and that's what

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Speaker 2: I've told my family is, guys, we are living through

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Speaker 2: in an historical moment. I mean, never thought I would

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Speaker 2: be living through a time like this. I thought this

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Speaker 2: is something for the textbooks, But I guess I'm living

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Speaker 2: in history.

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Speaker 1: I tell people all the time that this is the

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Speaker 1: fifth grade transformation in American history if you count Jefferson Jackson, Lincoln,

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Speaker 1: and Franklin Roosevelt. Whether or not Trump can pull it off,

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Speaker 1: we'll find out over time. But he clearly has an

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Speaker 1: sense of his own destiny of profoundly ending the Rooseveltian

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Speaker 1: era and the centralized bureaucratic structure that was the primary

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Speaker 1: a weapon of that era. And this is what people

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Speaker 1: do not under said. This is not just about the

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Speaker 1: United States. This is about every country. In the world.

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Speaker 2: Yeah. Absolutely, the international order is definitely being shocked long

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Speaker 2: and hard by this. I think it'll be some time

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Speaker 2: before we can all make sense of it. I believe

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Speaker 2: it's next week. They're having the Spring meetings at the

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Speaker 2: IMF and World Bank in Washington, d C. It happens

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Speaker 2: in the spring and the falls, you know, And what

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Speaker 2: happens is all the foreign finance ministers come into town,

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Speaker 2: all the central bankers come into town, they have meetings. Well,

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Speaker 2: I'm willing to bet money that these next meetings, all

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Speaker 2: these foreign finance ministers are going to bring an elevator

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Speaker 2: pitch to President Trump why their country should be exempt.

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Speaker 2: And this is maybe the final maybe critique I'll mention

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Speaker 2: of the terrace. I suspect Trump will be open to negotiation,

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Speaker 2: and that's who he is. That was one of the

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Speaker 2: critiques earlier is on off, on off, And if he

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Speaker 2: does that, there's going to be more uncertainty. The more

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Speaker 2: you change your mind, the harder it is for businesses

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Speaker 2: to plan and build plans and to hire people. So,

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Speaker 2: whatever your view is on terras the global trading systems,

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Speaker 2: if you could just like nail it down and then

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Speaker 2: let businesses plan and move ahead.

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Speaker 1: You've caught one of the great challenges of a Trumpean presidency,

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Speaker 1: which is he loves to negotiate. He has this very

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Speaker 1: deep belief that because we're the biggest economy, we have

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Speaker 1: far and away the greatest leverage, and so in a sense,

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Speaker 1: if he can get all these countries into bilaterals, he

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Speaker 1: has a feeling like he will almost always win because

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Speaker 1: our market is just so much more desirable. But I

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Speaker 1: think the downside of that is, do you create a

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Speaker 1: lot of uncertainty and make it almost impossible for businesses

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Speaker 1: to do any serious planning.

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Speaker 2: Yeah, we see evidence of that already, still plans auto factories,

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Speaker 2: There's even been some layoffs. But the PMI is a

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Speaker 2: measure of business plans, and a number of surveys have

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Speaker 2: shown that businesses are putting cash on the sideline and waiting.

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Speaker 2: And the question is how long they wait, because if

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Speaker 2: things change month to month, if nothing else, that uncertainty

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Speaker 2: may be a dragon economic growth, even beyond the actual

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Speaker 2: price shocks we get from tariffs.

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Speaker 1: I saw a study the other day. Overwhelmingly the companies

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Speaker 1: that are worth a trillion dollars are American, with the

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Speaker 1: exception of Saudi Arabian Oil and my Ramco and two

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Speaker 1: Chinese companies, and there are no European companies in that league.

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Speaker 1: But the American companies are all global companies. So imagine

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Speaker 1: you're sitting at Pappole or Google or whatever, and you're

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Speaker 1: trying to compute all of these different tariffs, and then

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Speaker 1: you're trying to compute the reaction of each country. It's

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Speaker 1: going to be a very complicated process, right, And I.

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Speaker 2: Have some concerns about this. Another one is this may

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Speaker 2: actually add more water to the swamp. Trump's doing an

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Speaker 2: amazing job draining the swamp. And you mentioned earlier like

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Speaker 2: shrinking the administrative state. I think that's the very long

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Speaker 2: overdue goal. I think I shared that view with you.

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Speaker 2: But what he's also doing, though, is opening the door

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Speaker 2: for lobbyists to plead the case for their country or

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Speaker 2: their industry. That is something that you cannot get away

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Speaker 2: if you're going to negotiate with all these countries. I

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Speaker 2: believe it was the first month or two when he

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Speaker 2: imposed the first head of terraffs on Canada Mexico, the

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Speaker 2: three big automakers in the US went to visit him.

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Speaker 2: That's just the signal of what's to come and who

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Speaker 2: has the deepest pockets to lobby I mean, K Street

435
00:23:32,520 --> 00:23:34,959
Speaker 2: is going to be happy about this and more than anyone.

436
00:23:35,720 --> 00:23:39,880
Speaker 1: This could be the lobbyist Richmond Act fair enough, Yes,

437
00:23:40,240 --> 00:23:42,119
Speaker 1: which would be the opposite I think of what Trump

438
00:23:42,200 --> 00:23:45,800
Speaker 1: and his supporters intended. Yeah, my guess is every country

439
00:23:45,840 --> 00:23:48,639
Speaker 1: in the world is going to be hiring somebody, and

440
00:23:48,760 --> 00:23:50,919
Speaker 1: then every major company is going to be hiring somebody.

441
00:23:51,280 --> 00:23:55,760
Speaker 1: And then imagine internally between accountants and lawyers trying to

442
00:23:55,840 --> 00:23:58,480
Speaker 1: sort out what this stuff means. And this is not

443
00:23:58,600 --> 00:24:01,880
Speaker 1: a binary game, is a multi partner game in which

444
00:24:02,680 --> 00:24:05,119
Speaker 1: Vietnam may make a decision which has an impact on

445
00:24:05,160 --> 00:24:08,160
Speaker 1: the Philippines, which then has an impact on Cambodia. It's

446
00:24:08,280 --> 00:24:13,600
Speaker 1: really going to be very dynamic and very complicated environment. Yeah,

447
00:24:13,840 --> 00:24:17,080
Speaker 1: for sure, You, on the other hand, will have many opportunities.

448
00:24:17,560 --> 00:24:20,360
Speaker 2: Yeah, you mentioned this is a great opportunity for lobbyists.

449
00:24:20,359 --> 00:24:22,399
Speaker 2: It's also a great opportunity for people like me who

450
00:24:22,480 --> 00:24:25,360
Speaker 2: work at think tanks and people like you who get

451
00:24:25,400 --> 00:24:28,159
Speaker 2: to talk about stuff like this. Unfortunately, it would be

452
00:24:28,240 --> 00:24:30,280
Speaker 2: nice if you could talk about other things. But I

453
00:24:30,359 --> 00:24:35,400
Speaker 2: do think the uncertainty the international intrigue between countries. What's

454
00:24:35,440 --> 00:24:37,000
Speaker 2: going to happen to the dollar? You know, the dollar

455
00:24:37,119 --> 00:24:39,400
Speaker 2: is this dominant currency. That's something I think a lot about.

456
00:24:40,000 --> 00:24:42,040
Speaker 2: I'm not sure this will make a big dent in

457
00:24:42,160 --> 00:24:45,840
Speaker 2: it keep pushing down this path. I myself want to

458
00:24:45,880 --> 00:24:48,919
Speaker 2: preserve the dollar's dominance. I think it's an amazing tool.

459
00:24:49,480 --> 00:24:52,080
Speaker 2: I think it allows for an amazing amount of financial

460
00:24:52,119 --> 00:24:54,400
Speaker 2: state craft. The fact that we're able to go after

461
00:24:54,600 --> 00:24:57,720
Speaker 2: terrorists and bad players overseas and lock them out of

462
00:24:57,800 --> 00:25:00,560
Speaker 2: the dollar system it hurts them. That's something I think

463
00:25:00,560 --> 00:25:01,320
Speaker 2: we want to hang on to.

464
00:25:02,000 --> 00:25:04,359
Speaker 1: Somebody once said that having the dollar is the reserve

465
00:25:04,440 --> 00:25:08,639
Speaker 1: currency is worth about five carrier battlegroups. It gives you

466
00:25:08,720 --> 00:25:11,960
Speaker 1: a level of weight in the world system that people

467
00:25:12,040 --> 00:25:14,920
Speaker 1: don't fully understand and appreciate. However, I have to say

468
00:25:15,320 --> 00:25:18,240
Speaker 1: I have a hunch, looking at the demographics in China,

469
00:25:18,960 --> 00:25:21,560
Speaker 1: that it's going to be very hard to replace the dollar.

470
00:25:22,280 --> 00:25:27,640
Speaker 1: There's just this underlying problem that there's no natural competitive replacement. David,

471
00:25:27,720 --> 00:25:29,080
Speaker 1: I want to thank you for joining me.

472
00:25:29,680 --> 00:25:29,800
Speaker 2: Now.

473
00:25:29,840 --> 00:25:32,679
Speaker 1: I'm a historian, not an economist, and therefore I'm always

474
00:25:32,720 --> 00:25:35,480
Speaker 1: excited to find somebody who actually thinks about this step

475
00:25:35,520 --> 00:25:38,320
Speaker 1: from an economic standpoint, and I want to let our

476
00:25:38,440 --> 00:25:40,920
Speaker 1: listeners know they can find out more about the work

477
00:25:41,000 --> 00:25:45,199
Speaker 1: you're doing by visiting the RCADAS Center's website at Mercadis

478
00:25:45,280 --> 00:25:48,040
Speaker 1: dot org. And thank you so much for helping us

479
00:25:48,080 --> 00:25:50,919
Speaker 1: try to understand this dramatically changing environment.

480
00:25:51,080 --> 00:25:52,600
Speaker 2: Thank you for having me on the program.

481
00:25:56,040 --> 00:25:58,640
Speaker 1: Thank you to my guest David Beckworth. You can learn

482
00:25:58,720 --> 00:26:01,239
Speaker 1: more about his work at the data center on our

483
00:26:01,320 --> 00:26:04,520
Speaker 1: show page at newtsworld dot com. Newtsworld is produced by

484
00:26:04,600 --> 00:26:08,919
Speaker 1: Gagwi Street sixty and iHeartMedia. Our executive producer is Guernsey Sloan.

485
00:26:09,280 --> 00:26:12,520
Speaker 1: Our researcher is Rachel Peterson. The artwork for the show

486
00:26:12,920 --> 00:26:15,800
Speaker 1: was created by Steve Penley. Special thanks to the team

487
00:26:15,840 --> 00:26:19,320
Speaker 1: at Ginwishree sixty. If you've been enjoying Newtsworld, I hope

488
00:26:19,359 --> 00:26:21,720
Speaker 1: you'll go to Apple Podcast and both rate us with

489
00:26:21,840 --> 00:26:24,760
Speaker 1: five stars and give us a review so others can

490
00:26:24,840 --> 00:26:28,080
Speaker 1: learn what it's all about. Right now, listeners of Newtsworld

491
00:26:28,080 --> 00:26:31,159
Speaker 1: can sign up for my three free weekly columns at

492
00:26:31,200 --> 00:26:35,440
Speaker 1: gainwistreet sixty dot com slash newsletter. I'm newt Gingrich. This

493
00:26:35,680 --> 00:26:36,320
Speaker 1: is Newtsworld