The ‘Toxic' Uncertainty Around Trump's Tariff Threats
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On this week's episode of Trumponomics, we ask what it is exactly US President Donald Trump may be trying to accomplish with his tariff threats and trade wars. Host Stephanie Flanders, Bloomberg's head of government and economics, is joined by Anna Wong, chief US economist at Bloomberg Economics, and Bloomberg reporter Shawn Donnan, who covers economics and trade policy, to discuss.
On Feb. 3, North America came within hours of a multibillion-dollar trade war thanks to Trump. Now delayed by a month, it's a conflict that would swing a wrecking ball through the economies of Mexico and Canada, and in the process, raise questions about a regional compact that sits at the foundation of America's global competitiveness. Trump put off his repeatedly threatened 25% tariffs against America's neighbors, but the 78-year-old Republican's 10% tariffs on China did take effect. The Chinese government instantly retaliated with tariffs on natural gas, coal and other products—and the threat of an anti-monopoly investigation against Google.
As Donnan explains, there's 'huge uncertainty around Trump's trade policy,' which itself is probably 'the most toxic thing for the economy. Businesses stop making investments, they stop hiring and you start to get a slowdown not just in Canada and Mexico, which would get hit hard by tariffs, but in the US economy.'
Donnan and Wong, who worked at the Federal Reserve and in the first Trump administration, unpack what if anything is driving Trump's strategy, how that could play out with other trading partners and how damaging his policies could be for global growth.
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