An economist says Donald Trump's 'liberation day' could better be described as 'watch your wallet day'.
The US President will be announcing his next round of tariffs in about half an hour.
Dartmouth College Economics Professor Douglas Irwin say tariffs could be across the board or set specifically to each country.
He told Mike Hosking a blanket option would create a lot of economic pain.
Irwin says that includes fruit, clothes, shoes, and other manufactured goods.
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Speaker 1 (00:00):
Liberation Day. Details has been revealed in about an hour
and a half's time Rose Garden at the White House.
Of course, a lot of speculation as to how this
is going to play out. As far as the Mexican concern,
They're not interested in tit for tech.
Speaker 2 (00:14):
We do not.
Speaker 3 (00:15):
Believe in an eye for an eye, a tooth for
a tooth, because that always leads to a bad situation.
Of course, measures are taken, because measures are taken on
the other side, but the dialogue must continue. It's not
about tit or tat, but about what is best for
Mexico and how to face the situation.
Speaker 1 (00:33):
North to the other border. Doug Ford, who once upon
a time threatened to cut the power off to New York.
Of course Ontario Premiere he not so upbeat.
Speaker 2 (00:41):
President Trump calls a liberation day. I call it termination
day because a lot of people are going to be
terminated from their jobs now.
Speaker 1 (00:48):
Dartmouth economics professor Douglas Owan's with us. Douglas, very good
morning to you.
Speaker 2 (00:52):
It's good afternoon here.
Speaker 1 (00:54):
What's your vibe. How's this going to unfold? Are we
going to get specific detail? If we get specific detail,
do we get retelling immediately? Or eventually or what.
Speaker 2 (01:03):
Well, it's interesting that there were press reports even this
morning from Bloomberg and elsewhere that even the White House
hasn't finalized and decided on what exactly the tariff plan
will be, so it could be there working on it
this very moment. We might get something very vague about
plans for the future, with nothing announced in specifics, but
we could also have a specific plan. And basically there
are two that the White House is considering. One is
(01:26):
universal tariffs, which would mean in across the board tariff
of maybe twenty percent that number has been bounced around
a bit or something like that, or reciprocal tariffs, in
which case it wouldn't be uniform across the board, it
would be specified different levels to different countries. So we'll
just have to wait and see what comes out.
Speaker 1 (01:44):
We've got a couple of reports, so I've heard a
couple of leaks so far. There were three different teriffs
they're going to announce at four o'clock this afternoon New
York Times, something like ten, fifteen and twenty. I've just
also heard that the White House is filed twenty five
percent on cars, So I don't know where this guys
what's the vibe in America in terms? I mean, I
(02:04):
don't know if you realize this, Douglas, in nineteen eighty
two eighty three, we became free traders. We have a
plenty as of free trade in this country right in
the world building. And so we just don't get this.
This is insanity, economic insanity. How does it get explained
to the American people?
Speaker 2 (02:23):
Well, I think they're going to feel it very soon
in their pocketbook. You know, I talked about Liberation Days.
Some other people are calling it watch your wallet day.
With twenty five percent tariffs on cars, that's going to
push up the price of new cars and used cars aliked,
let alone the steel and the parts involved as well.
And if these if we have anything like what is
(02:43):
being talked about universal tarifs are what have you? Everything
from the price of avocados and fresh fruits to manufactured goods, clothing, shoes,
everything's going to go up to some extent. And so
it's not going to sort of reindustrialize America the way
the president wants. It's just the cost Americans a lot exactly.
What's sort of ironic about this situation is that the
(03:04):
American people are not really demanding this. They didn't re
elect Trump for this reason. Trade is very low on
the priority list of any American American business was not
asking for this. They weren't clamoring for high terriffs because
there would be besieged by foreign competition. This is really
because Congress over the years is delegated a lot of
trade making power to one person, the president, on the
(03:26):
assumption that we'd have a reasonable president would reflect the
national interest, and unfortunately we don't have a reasonable administration
and one person can make these big changes.
Speaker 1 (03:35):
This is the fascinating thing for me. There's so many
shifting goalposts, fentanyl and illegals across the border. Even if
you agree with it or don't agree with I get
what he was trying to do. I get it, do
something or else we want to slightly with terrorists. That
bit I get. And American product into Europe gets a
twenty five percent tariff, right will match you. I get
that part. But what I don't get is the belief
that somehow the entire world is going to relocate to
(03:58):
America to build all their factories, to build products at
the cheapest price possible, that American consumers are going to
lap up because it isn't going to happen.
Speaker 2 (04:07):
Well, the problem is that the administration has had a
multitude of rationales for these tariffs. Sometimes it's to raise
revenue so we can cut income taxes. Sometimes is to
close the trade deficit, which the President really focuses on
as his measure of unfair trade, despite the view that
economists dissent from that. In general, reshoring jobs, national security, fentanyl,
(04:31):
as you said, migration flows. So it's very hard for,
first of all, other countries to respond when you don't
know exactly what the rationale for the tariffs is. It's
also very hard for the American business community to understand
are these permanent tariffs or temporary tariffs, because you don't
make big investment decisions based on the whims of tariffs
that could go up or down within a matter of
weeks or months.
Speaker 1 (04:51):
No shortage of poles at the moment, suggesting America is
going to slow, if not slowing already in a recession
is possible.
Speaker 2 (04:57):
What's your view, Well, I think there's a risk of that,
and it would be a self inflicted wound. The President
inherited an economy and reasonable shape, four percent of unemployment
growth at a modest pace. But the tariff policies, which
once again are coming a little bit out of the blue.
He had always talked about them, but never front and center.
(05:17):
The business community wanted an agenda of tax cuts and deregulation,
and they're getting tariffs, and so they're holding off an investment.
Consumer confidence has plummeted just in the past month or so,
and so if you get consumers and businesses holding back expendsures,
this could be an own goal, a recession that comes
from the White House.
Speaker 1 (05:38):
Wackiest time, Douglas, appreciate your expertise very much. Douglas, who
who's Dartmouth economics professor? Fun fact, you talk about the
cars of the problem, So, of course there is no
such thing as an American made car. It simply does
not exist, even though there are factories in America that
might cars. Other bits and pieces come from other parts
of the world. So they've worked out or somebody worked
(05:59):
out the other. I was reading, Toyota is going to
be the worst hit of all the manufacturers. Toyota do
things slightly different from some of the others. Everyone's going
to get hit, but Toyota's going to be the worst hit.
A car part on average. Apparently. Here's a fun fact.
A car part gets exported ten to twelve times on
average each part, because a part becomes a part, becomes apart,
becomes a part before it becomes the ultimate part in
(06:19):
the car, so it's exported ten to twelve times. For
more from the mic Asking Breakfast listen live to news talks.
Speaker 2 (06:25):
It'd be from six am weekdays, or follow the podcast
on iHeartRadio.
Liberation Day. Details has been revealed in about an hour
and a half's time Rose Garden at the White House.
Of course, a lot of speculation as to how this
is going to play out. As far as the Mexican concern,
They're not interested in tit for tech.
Speaker 2 (00:14):
We do not.
Speaker 3 (00:15):
Believe in an eye for an eye, a tooth for
a tooth, because that always leads to a bad situation.
Of course, measures are taken, because measures are taken on
the other side, but the dialogue must continue. It's not
about tit or tat, but about what is best for
Mexico and how to face the situation.
Speaker 1 (00:33):
North to the other border. Doug Ford, who once upon
a time threatened to cut the power off to New York.
Of course Ontario Premiere he not so upbeat.
Speaker 2 (00:41):
President Trump calls a liberation day. I call it termination
day because a lot of people are going to be
terminated from their jobs now.
Speaker 1 (00:48):
Dartmouth economics professor Douglas Owan's with us. Douglas, very good
morning to you.
Speaker 2 (00:52):
It's good afternoon here.
Speaker 1 (00:54):
What's your vibe. How's this going to unfold? Are we
going to get specific detail? If we get specific detail,
do we get retelling immediately? Or eventually or what.
Speaker 2 (01:03):
Well, it's interesting that there were press reports even this
morning from Bloomberg and elsewhere that even the White House
hasn't finalized and decided on what exactly the tariff plan
will be, so it could be there working on it
this very moment. We might get something very vague about
plans for the future, with nothing announced in specifics, but
we could also have a specific plan. And basically there
are two that the White House is considering. One is
(01:26):
universal tariffs, which would mean in across the board tariff
of maybe twenty percent that number has been bounced around
a bit or something like that, or reciprocal tariffs, in
which case it wouldn't be uniform across the board, it
would be specified different levels to different countries. So we'll
just have to wait and see what comes out.
Speaker 1 (01:44):
We've got a couple of reports, so I've heard a
couple of leaks so far. There were three different teriffs
they're going to announce at four o'clock this afternoon New
York Times, something like ten, fifteen and twenty. I've just
also heard that the White House is filed twenty five
percent on cars, So I don't know where this guys
what's the vibe in America in terms? I mean, I
(02:04):
don't know if you realize this, Douglas, in nineteen eighty
two eighty three, we became free traders. We have a
plenty as of free trade in this country right in
the world building. And so we just don't get this.
This is insanity, economic insanity. How does it get explained
to the American people?
Speaker 2 (02:23):
Well, I think they're going to feel it very soon
in their pocketbook. You know, I talked about Liberation Days.
Some other people are calling it watch your wallet day.
With twenty five percent tariffs on cars, that's going to
push up the price of new cars and used cars aliked,
let alone the steel and the parts involved as well.
And if these if we have anything like what is
(02:43):
being talked about universal tarifs are what have you? Everything
from the price of avocados and fresh fruits to manufactured goods, clothing, shoes,
everything's going to go up to some extent. And so
it's not going to sort of reindustrialize America the way
the president wants. It's just the cost Americans a lot exactly.
What's sort of ironic about this situation is that the
(03:04):
American people are not really demanding this. They didn't re
elect Trump for this reason. Trade is very low on
the priority list of any American American business was not
asking for this. They weren't clamoring for high terriffs because
there would be besieged by foreign competition. This is really
because Congress over the years is delegated a lot of
trade making power to one person, the president, on the
(03:26):
assumption that we'd have a reasonable president would reflect the
national interest, and unfortunately we don't have a reasonable administration
and one person can make these big changes.
Speaker 1 (03:35):
This is the fascinating thing for me. There's so many
shifting goalposts, fentanyl and illegals across the border. Even if
you agree with it or don't agree with I get
what he was trying to do. I get it, do
something or else we want to slightly with terrorists. That
bit I get. And American product into Europe gets a
twenty five percent tariff, right will match you. I get
that part. But what I don't get is the belief
that somehow the entire world is going to relocate to
(03:58):
America to build all their factories, to build products at
the cheapest price possible, that American consumers are going to
lap up because it isn't going to happen.
Speaker 2 (04:07):
Well, the problem is that the administration has had a
multitude of rationales for these tariffs. Sometimes it's to raise
revenue so we can cut income taxes. Sometimes is to
close the trade deficit, which the President really focuses on
as his measure of unfair trade, despite the view that
economists dissent from that. In general, reshoring jobs, national security, fentanyl,
(04:31):
as you said, migration flows. So it's very hard for,
first of all, other countries to respond when you don't
know exactly what the rationale for the tariffs is. It's
also very hard for the American business community to understand
are these permanent tariffs or temporary tariffs, because you don't
make big investment decisions based on the whims of tariffs
that could go up or down within a matter of
weeks or months.
Speaker 1 (04:51):
No shortage of poles at the moment, suggesting America is
going to slow, if not slowing already in a recession
is possible.
Speaker 2 (04:57):
What's your view, Well, I think there's a risk of that,
and it would be a self inflicted wound. The President
inherited an economy and reasonable shape, four percent of unemployment
growth at a modest pace. But the tariff policies, which
once again are coming a little bit out of the blue.
He had always talked about them, but never front and center.
(05:17):
The business community wanted an agenda of tax cuts and deregulation,
and they're getting tariffs, and so they're holding off an investment.
Consumer confidence has plummeted just in the past month or so,
and so if you get consumers and businesses holding back expendsures,
this could be an own goal, a recession that comes
from the White House.
Speaker 1 (05:38):
Wackiest time, Douglas, appreciate your expertise very much. Douglas, who
who's Dartmouth economics professor? Fun fact, you talk about the
cars of the problem, So, of course there is no
such thing as an American made car. It simply does
not exist, even though there are factories in America that
might cars. Other bits and pieces come from other parts
of the world. So they've worked out or somebody worked
(05:59):
out the other. I was reading, Toyota is going to
be the worst hit of all the manufacturers. Toyota do
things slightly different from some of the others. Everyone's going
to get hit, but Toyota's going to be the worst hit.
A car part on average. Apparently. Here's a fun fact.
A car part gets exported ten to twelve times on
average each part, because a part becomes a part, becomes apart,
becomes a part before it becomes the ultimate part in
(06:19):
the car, so it's exported ten to twelve times. For
more from the mic Asking Breakfast listen live to news talks.
Speaker 2 (06:25):
It'd be from six am weekdays, or follow the podcast
on iHeartRadio.
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