Riding Trump's tariff 'rollercoaster' | Global News Podcast

Hi, I'm Celia Hatton and welcome to the. Global News podcast on YouTube where we. go behind the headlines. Today we're. looking at the fallout from Donald. Trump's latest trade tariffs. Last year. he laid sweeping levies on dozens of. countries, but in the last few days they. were struck down by the US Supreme. Court. President Trump responded with. guess what? New tariffs. So what does. this mean for the future of global. trade? That's a question for our BBC. economics editor, Fisizel Islam. Fisel,

I want to get to the global reaction to. these tariffs in a moment, but first, let's talk about what's going on inside. the US. We're hearing words like chaos. and roller coaster a lot at the moment. >> Yeah. And actually, you can't separate. these two things out. And I think that's. the lesson. Obviously, understandably, people sort of wait for what comes down. from the White House via social media, via proclamations. In this case, the. chaos on the roller coaster. I mean, this is just a microcosm of it, but we.

had thought that the 15% tariff was. going to apply immediately. That was. what was announced on Saturday, although. that was an increase from Friday, which. was 10%, which was obviously a. replacement for the Supreme Court. knocking down the previous version of. these tariffs. And indeed, let me let. you into a little secret as to the BBC. I wrote a radio report saying 15% has. just come in. went to bed, woke up and. lo and behold, it was 10%. Unexpectedly. uh in terms of the formal notice that. came out of the US Customs Department.

and so that was quite interesting. So. again, you're you're sort of there was. some relief uh else around the world. where people thought they were going to. be hit, but also just general like, okay, how long is this going to last. now? And then you have this delicate. game of uh is it 3D chess or 4D chess? And I can never quite get it right uh. about, well, what are you playing now? It was quite clear, you know, that that. Donald Trump unusually over the past 12. months sort of assumed control over this.

tariff uh weapon as it were, using it as. a weapon. Uh using it as a form of. diplomacy, using it as a form as a as a. bludgeon to change the US economy uh to. create more factories and jobs. Um but. he's not in control anymore. He is not, as one of my a British business figure. put it, he's not emperor of tariffs. anymore. So there was a strategy we. should you know explain that the. president and you know it's a thought. through strategy thinks that. globalization went too far. You know, most of the rest of the world thinks the.

US benefited hugely from globalization, the era of Nike and McDonald's, you. know, those brands, cheap uh labor in. factories, frankly, in the in East Asia. making economy and the world's biggest. economy. >> and it did pretty well out of the era. But of course, the the fruits of that. win were not equally distributed in. places like the rust belt. And so if. you're concerned with that and those. areas voted for Donald Trump and you. want to return the factories, you can. see the logic behind tariffing imports. and saying that you're going to build.

those factories in the US instead. You. can see it. That's the argument. Now, if. the tariffs are like 140% one month, 100% the next, then 30%, then 10%, then. 15%, then 10%. Then they only last for. 150 days and then at the end of the 150. days it's up to Congress uh really to. decide whether they get extended. whatever the rate eventually is. That is. just the most extraordinary uncertainty. one can imagine. But it's extraordinary.

that at the end result of the past four. days chaos is the Chinese just chomping. their popcorn benefiting from a 10% rate. which is far lower than the 140 the. penal rate we were talking about seven. or eight months ago and yet at the same. time sort of gently as they were at the. World Economic Forum last month saying. to the rest of the world I mean um enjoy. your chaos with the USA um we'll defend. the multilateral rules-based trade. system. We're your stable partner here, which is what they do.

>> How are other economies trying to cope. with this? You mentioned China. >> Well, I think that they were playing. this for the past seven, eight months, because it was always questionable that. the president had the executive power to. to do what he did. I talked about. Congress assuming control in 6 months. time in terms of extension of what are. now called section 122 tariffs. These. are the things that have just come in. today to replace the Supreme Court. tariffs. Now, that is actually just the. uh. it's a return to what was normal.

Normally, it's Congress that controls. trade and tariffs, and that is a. long-held constitutional position. So, that is why the president lost the. Supreme Court case. The politics that go. around that more traditional setting of. trying to persuade Congress is very. different to trying to, if you like, you. know, impress one person. the European. Union, for example, were past masters. identifying those pain points. politically in Congress. All of that. suddenly becomes, you know, very real. Again, you're then butting up against.

consideration in the US over the. midterms. Uh the popularity in general. of these domestically, my understanding. is in Poland terms, they're not very. popular. It certainly wasn't very. popular the threat to Europe to use. tariffs over the Greenland issue, for. example. you know, and I heard that very. clearly from, you know, Republican. senator who I spoke to, uh, Tom Tillis, you know, leading Republican senator. openly calling out the lack of. popularity of of the ad his. administration's trade strategy. So, so.

you asked me very very correctly, well, let's do the US response, let's do the. European response. I think one of the. lessons of the past year is is we pay an. awful lot of attention obviously to what. happens out of the white house but the. reaction what an economist would call. the reaction function of the rest of the. world really matters and I'm taken back. actually to that Mark Carney the. Canadian prime minister's speech at. Davos which he talks about middle powers. and he talks about middle middle powers. trying to deal with hedgeimens so you.

know big powers in the world the two big. powers essentially China and the US but. he was saying you if you all deal. individually, you have to have quite a. sycopantic relationship. You're sort of. dancing around trying to impress one. person. If you act together calmly, you. diversify, you trade with each other, then there are other possibilities. available. And I think that's what. you're you're seeing now. You're seeing. you're seeing the rest of the world will. be thinking actually we managed to trade. with each other quite a lot. Um the net result of everything we've. seen, the chaos we've seen over the past.

four or five days is that the average. tariff rate is now lower. Unbelievably. the Chinese and the Brazilians and the. Indians who were you know being hit with. hard tariffs are the great beneficiaries. of the past few days. Um and it starts. to look quite quite different. >> So are we seeing a real shift then? Are. we seeing countries outside of the. United States. really essentially get a little bit fed. up with having to worry about what's. happening in the midterms, worry about. what's happening in the in 150 days when.

when Congress has to vote on on the. latest round of of tariffs and think. actually maybe our smarter strategy is. to forge ties with other economies. Maybe that's the more stable path. Is. that what you're seeing? >> Well, I think it's both of those things. And so you've seen, for example, the. Canadians, they have more than made up. for the loss in in exports to the US, which is obviously by far and away the. biggest trading partner, but the loss um. has been more than made up for by. increased exports elsewhere. You're. seeing a slew of trade deals for UK,

India, EU, India, Latin America, you. know, just, you know, there's a big plan. to forge together the European Union. with the CPP, the Pacific Trade Block. that happens to include the UK. Um so. you know there's that going on. Um which. is just a ne which is a sensible. strategy when you can't really trust. what's going on necessarily. Uh but then. you sort of think well what are we. dealing with? You we're dealing with. sort of imperial power essentially sort. of a single person having just with a. stroke of a pen being able to apply a.

trade policy. Well no now it's one. that's checked and balanced by the. courts and by Congress. What about those. big trade deals that the US was in the. process of negotiating? What now? >> It seems like the US trade. representative and I would imagine. people like the Treasury Secretary Scott. Bessant wants to keep on to the winds. there. Um, but some of them have not. been nailed down. But there's a bigger. canvas here which is I was in the room.

in the US Treasury when I heard Scott. Besson and Jameson Greer the Treasury. Secretary and trade representative say. to the rest of the world basically it's. us it's the world against China and. you're with us aren't you? Aren't you? Aren't you? No. Well and the rest well. if you want that why are you starting a. trade war with us? So so the what are. they trying to achieve? Um is he trying to raise we still don't. really is he trying to raise money to. abolish some sort of federal income tax? Is he really trying to move jobs in. factories? Is this about China? And.

depending on where you where where you. go on that view, you'll get a different. response. So yes, that trade deal. process is still happening. It still. counts for something. Um but it's being. tested. So Fisel, you're a person who spends a. lot of your time speaking with people. around the world. You know, politicians, economists, business people. I wonder. what your sense is of this shift, you. know, away from trade with the United. States. Is this a temporary thing or is.

this a more permanent shift, do you. think? >> Well, I think a lot depends on what. China does and China's approach to this. situation because I think what's. happened is China has, you know, again, I was at an international meeting and a. Chinese, it was a Chinese businesswoman. turned around and said, "We understand. you a lot more than you understand us to. to to privately." And I think they have. been watching what's happening with. America. They take things very patiently. and they think, well, this is an. opportunity to show that we can be a. good partner. Now, if they're also.

planning to invade Taiwan and do other. things and I don't know, help evade some. sanctions with Russia and, you know, I. don't know, help prolong the Russia. Ukraine war, that's not going to go down. so well. Um but at the minute they're. playing a a hand which is attempting to. make the case at least to some parts of. the west that they can be a stabilizing. influence and and the wink the wink here. is unlike what you're seeing from the US. right now. And I don't think these. things have to be absolute. So you have.

a China that might be a slightly more. stabilizing force than you would imagine. and you have the US being a less. stabilizing force and so you have a sort. of tilt. Now this is a full-on. rebalancing. Again, Prime Minister. Carney going to China was quite. interesting. Just look at the list of. the world leaders that have turned up in. Beijing in the past six weeks. Is that. re if the aim of all of this really was. to counteract China? Would success look like half the G7. turning up in Beijing signing deals at.

lower tariffs? >> Fisel, thank you. The BBC's economics. editor, Fisizel Islam. Well, if you. liked this episode, please do subscribe. to us here on YouTube. And if there's a. story you want us to cover, leave a. comment below. If you want to hear more. international news, you can also hear us. on the Global News podcast. Listen. wherever you get your podcasts. Bye-bye.