‘We're Playing With Fire': The Risks of Trump's Tariffs on China

New York Times

09-04-2025

In this episode of 'The Opinions,' the deputy Opinion editor, Patrick Healy, talks to Binyamin Appelbaum about the goals of President Trump's tariffs and the risks they pose to America's place in the global order.
Below is a transcript of an episode of 'The Opinions.' We recommend listening to it in its original form for the full effect. You can do so using the player above or on the NYT Audio app, Apple, Spotify, Amazon Music, YouTube, iHeartRadio or wherever you get your podcasts.
The transcript has been lightly edited for length and clarity.
Patrick Healy: I'm Patrick Healy, deputy editor of New York Times Opinion, and this is The First 100 Days, a weekly series examining President Trump's use of power and his drive to change America. And that drive has certainly been on display over the last week.
Trump's tariffs have already cost the world trillions of dollars, and now America is in a trade war with China. We hit them with tariffs; they've hit us back. The European Union is starting to retaliate, too. To unpack all this, I asked my colleague Binyamin Appelbaum to join me today. He covers economics for Opinion.
Binya, thanks for being here.
Binyamin Appelbaum: Glad to be here.
Healy: During the election season, you wrote editorials warning voters of the dangers of Trump's economic plans, including tariffs. When Trump announced the details of his tariffs last week, I think a lot of people were puzzled and even surprised by the scale, scope and approach. Did anything surprise you?
Appelbaum: I think it was surprising to see him go forward with such a maximal version of tariff policy. Trump has always, or at least for the last half-century, taken the view that trade imbalances with other countries are a problem, that we need to do something about them. But it has always been the case that he had other priorities and objectives, too. He was a guy who believed in tax cuts and deregulation for the purpose of stimulating economic growth, who kept an eye on the stock market as an indicator of the well-being of the nation. And in his first term there was a sense that he was balancing those somewhat competing priorities.
What's kind of fascinating is that this time around, we're not getting the full version of Trump; we're getting the full version of one part of what has always been important to Trump, and it seems to be coming at the expense of some of the other things that he traditionally has worried about. The question is: Why is he so focused on this? Even if it's coming at the expense of some of those other things.
Healy: What is the problem that Trump is trying to solve? Is the escalation in tariffs that we're seeing going to solve it, or have a chance at solving it?
Appelbaum: I think we've talked before about my view that Trump is an acute diagnostician. He is really good at putting his finger on things that are wrong with America. It's kind of his secret sauce. And in this case, I think it is absolutely true that an era of free trade in which the United States sought to maximize the amount of commerce it was doing with other nations, including China, did not deliver on the promises that politicians made.
Some people profited enormously. Other people lost their jobs and saw their lives derailed. Economists had told us that trade was sort of an unmitigated good, that it would increase the size of the pie, and all we had to do was make sure everyone was getting a larger piece. It turns out that isn't so easy to do. The winners win, and they're not excited about sharing with the losers.
But moreover, he saw that America wasn't winning in some fundamental sense, that we were undermining our ability to compete in the global economy, our ability to innovate, our ability to defend ourselves, our ability to take care of ourselves during a pandemic. That the hollowing out of our industrial base was causing a lot of problems that hadn't been anticipated by the wise men who put these policies into place. And when Trump stood up and said, 'We need to do something different,' I think it's fair to say that he had a point.
Healy: I think he did have a point. I think Trump has always believed — and you can disagree with how he defines it — in an idea of American greatness. I think when Trump would spend time in parts of New Jersey, parts of New England, where we're both from, parts of, the middle of America, you would see these hollowed-out parts of the country that even a winner like him in the game of business and finance could see as a part of America that had been left behind — where there were no solutions for vast swaths of people, including people who weren't just in his base.
Does Trump have a broader plan or strategy for how to execute these tariffs in a way that has the most benefit for America? Because it seems like right now he's going country by country to try to make deals, which is very Trumpian, but there's not this sense of all stakeholders together as presidents have traditionally done. Do you have confidence that he actually knows how to land the plane in a way that benefits all of those people?
Appelbaum: To me, one of the most evocative encapsulations of this era of trade is that there was an amusement park on the outskirts of Youngstown, Ohio, which is a big industrial city historically. It had a lovely carved wooden carousel. As Youngstown broke down, that amusement park was forced out of business, and eventually the carousel was purchased and moved to New York. You can now visit it on the waterfront in Brooklyn, where it sits in this glass case.
That's kind of the story of what happened in this country over the last 40 years. The folks in Youngstown obviously got left behind. Most of them were not able or willing to move to New York and pursue better lives there.
And Trump's premise is that he can reverse that — that he can put the genie back into the bottle. But I think your question is very much to the point because it is not clear that he has any plan for doing that. It is not clear that anyone could have any plan for doing that. It is much easier to break things than to fix them.
Healy: It feels like a big part of the plan, and I'm using air quotes, is about the rush, like he is a president who is running out of time. I find myself looking at companies — and you know how companies operate better than I do. How in the world can they bring manufacturing back to America in a swift enough and complete enough way where the global economy and the supply chain don't break down? I look at a company like Nike and I'm having trouble imagining them opening up all these factories that are going to offer the wages and the worker conditions and the standards that we would expect in America, where they're not going to either be losing money or running into incredible snags.
Does Trump's goal of a massive, swift rushed reindustrialization have any kind of shot? Or is this just about putting a lot of things in action and sort of seeing what's able to come through?
Appelbaum: I think there will be individual victories. There will be companies for whom it makes sense to reshore production and to open a factory in the United States to expand their work forces here. But in general, the answer is that rushing is the wrong way to do this.
If you really wanted to shift the nature of the American economy, you would need consensus in the American political system because what we have right now is a president who will have essentially less than four years at this point to pursue this agenda. Then we'll have a national election, and it's quite possible that the other party will prevail.
If you're an American corporation, or a corporation from anywhere in the world, and you're thinking about building a factory here, that process can take four to six years before it opens, and you could very easily be in a position where your new factory opens in a very different political environment where the tariffs have been rescinded. Then the reasons for which you opened the factory no longer pertain. So that's No. 1 — the timescale here is off. By immediately implementing the tariffs, Trump isn't paying attention to that time scale.
If you wanted to encourage manufacturing to come back to the United States, there's no reason to implement the tariffs immediately. What you should do is announce that tariffs will be phased in over the period of time that it would actually take to build a new factory, avoiding the short-term pain while still maintaining the incentives to move production back here. This isn't just a rushed policy, it's a careless one. It's a thoughtless one, and it's a counterproductive one relative to Trump's own stated goals.
As is often the case with him, even when he has a clear sense of what's wrong, even when he has some vision of how to fix it, the execution is terrible.
Healy: I think about places like Youngstown that you mentioned and look at the rushed and careless nature of this policy and I wonder if Trump really believes, in the end, in the long-term goal of reindustrialization of America, or if this is more about that negotiation country by country, seeing what better deals he can get. He believes so deeply in leverage. I think he, like a lot of American presidents, has looked at China in particular and said, How do we get more leverage in this relationship? Are tariffs the answer, or an answer? Do we know, in terms of getting leverage in that U.S.-China relationship, in a way that could have a positive impact for this country?
Appelbaum: I mean, it hasn't worked yet. We've now had tariffs on Chinese goods at a fairly high level for years. There's no evidence that these have made life sufficiently uncomfortable for China, that it is willing to make significant concessions on the kinds of issues that the United States cares about.
I think the way to conceptualize China is there are nations with whom the United States has a relationship and who are invested in that relationship, not just economically but politically, in terms of national defense, in terms of their goals and values. And with those nations, Trump can effectively use tariffs as leverage to renegotiate at least some of the terms of those relationships. It is extremely plausible that Canada will make significant concessions to the Trump administration in order to maintain its economic relationship with the United States.
But China is in a different category. It doesn't see itself as dependent on the United States or as necessarily interested in maintaining good relations with the United States. I think we're playing with fire. We're talking about a nation that already sees itself in many respects as being in a state of conflict with the United States. And if we exacerbate that and ratchet up tensions, the effect may be not to encourage them to draw us closer, but instead to push us further away.
Healy: I want to talk a little bit more about China's response here, because it's so obvious that tariffs on China are different than they are in a lot of other countries, say, like Madagascar. They make a lot of stuff we need, and unlike their American counterparts, Chinese leaders don't have to worry about what the voters will think when they get hit with tariffs or reciprocal tariffs. Will China's retaliation, do you think, be the thing that finally forces Trump to back down on some of this kind of rushed, careless strategy that he's been pursuing? Or is it likely to be other forces?
Appelbaum: For the same reasons that I don't think China's going to be especially responsive to us, I don't think we're going to be especially responsive to China.
This is a political standoff, not an economic one, at a very fundamental level. I don't think either side is inclined to bend. And to the extent that there is a bipartisan consensus about trade policy, at this point, it essentially consists of the view, in both parties, that we ought to be in a more confrontational posture with respect to China.
And I would say that even economically — to the extent that there's a justification for tariffs — it has more to do with China than anywhere else. There's no question that China aggressively subsidizes its industrial output, that it has built competence in areas where we could be competitive, and that things like electric vehicles or solar panels or other forms of emerging green technology are areas in which we are essentially allowing China to emerge and dominate the global market with long-term consequences that are not good for the United States.
What's fascinating about that is, what Trump is doing is simultaneously raising tariff barriers on China and undermining our ability to compete in those kinds of areas. He's pulling back from exactly the kinds of industries that you would want to be sheltering from foreign competition and to encourage growth in. We've seen companies pulling back from investments in battery manufacturing here in the United States. Ostensibly, if you were running an industrial policy aimed at increasing manufacturing, that's exactly where you'd want to see growth. But Trump is simultaneously building the wall necessary to protect that industry and then destroying the industry himeself.
Healy: If I'm Canada or Mexico or a European country, do I hope that this political standoff between China and Trump will be the thing that unravels or takes the wind out of the sails of what Trump is trying to do?
Appelbaum: For Europe, this is a really interesting moment because I think it's increasingly clear that the United States and China are both pushing toward a world in which nations are going to have to choose. And they're going to have to choose whether they want to invest in their economic relationship with the United States or their economic relationship with China. I think what's happening in China is not going to make it easier for the E.U. to negotiate with the United States, but it forces them to make the choice of whether they want to pay the kind of price that Trump is demanding.
Healy: Binya, I want to go back to your point that the trade war with China right now is political, not economic, because the costs of the war are going to be hitting consumers — the price of goods was so much of a driving force in the last election. What kind of political pain do you think the Republican Party can withstand?
Appelbaum: I think around China there's a real danger that political justifications allow significant economic pain.
There was a bipartisan consensus in Washington for decades that pursuing our economic advantages with China, trading with them, would further our political goals. The idea that, opening up China to the world would moderate the Chinese government over time. And that has turned out to be flatly wrong.
There is now a bipartisan consensus that China is a political danger to the United States, that its national security goals, its economic goals, are antithetical to ours, and that they need to be treated as an enemy. The thing about that is that it moves it out of the space of rationally assessing how much economic damage are we doing and into the space of national defense, and the national interest, that we need to be willing to endure pain in order to push back against China. I think that points to the reality that there probably, at this point, is not a level of economic pain in terms of the tariffs on China that's going to be sufficient to reverse that aspect of the policy. I think our relationship with China has shifted fundamentally at this point in ways that I tend to regard as irreversible.
Healy: Are there ways to tell whether the tariffs are worth it with regard to China? China is seen across party lines as an enemy, as an adversary that needs to be dealt with. But at the same time, are the tariffs the way to do it? Or is it just trying something?
Appelbaum: I don't think they're the way to do it. Tariffs are having the effect, basically, of reducing trade with China, but not of drawing our allies closer to us.
There was a moment a couple of weeks ago when the governments of South Korea, Japan and China got together to talk about what is the best way to push back against the Trump administration. That ought to have set off alarm bells across Washington. Any reasonable configuration of American foreign policy going forward clearly has to involve Japan and South Korea working with us to counterbalance China. The fact that we're now pursuing a tariff policy that is pushing those nations into talks with China is incredibly dangerous to our national interest.
Healy: In Trump's first term, he seemed pretty attuned to what the markets were doing. He cared about that. He cared about what his friends were telling him when he was out golfing. Lately we've heard from the hedge fund billionaire Bill Ackman speaking out against the tariffs. Even Elon Musk has criticized Peter Navarro, Trump's top trade adviser. And as you told us the last time, Trump is so dedicated to the idea that countries who spend money to import goods are just losers. Do you think that the billionaires speaking out might change his mind, or are we just seeing a different Trump than we did the last time?
Appelbaum: I would say a couple of things about that. The first is that I think one lesson he took from his first term is that some of the warnings about the consequences of his behavior were overstated, and that the downsides that people predicted, the economic calamities, they just didn't materialize. And in his view, the lesson there is that he should have gone harder.
I also think he's hardened in his views. The way that he talks about trade, it's intensified. It's something we often see with older people: They sort of lose some of that nuance and become really hardened in their convictions. It's hard to listen to him and not get the sense that part of what we're listening to is a grumpy old man who thinks he knows the truth and is determined to impose it on everyone else.
And then I wouldn't discount the possibility that someone succeeds in convincing him that this is not in his interest, or even perhaps in the nation's interest. But I think it's going to take a lot more pain to get there — that the threshold for him to change his mind about this just clearly seems higher than it used to be.
Healy: So much of what we're talking about, and so many of my questions for you, have been oriented around the view, what will it take to change Trump's mind? I'm listening to myself and thinking I'm asking the wrong question in that regard. This is a guy who thinks that at this stage of the game, big and bold is what's needed. The Americans need Greenland. The Americans need an entirely new industrial policy. It's as if the scale of the change or the scale of the ideas is the point. I'm wondering what you think the right question ultimately is to ask about Trump, if it's not really about what will it take to change his mind. Is it something different?
Appelbaum: I think the right question to ask is: What will it take to change his party's mind? Congress has the power to check this tariff policy. The Constitution is very clear that the power over commerce rests with Congress. Congress has delegated that power to the president. I think if this gets worse, to me, it is much less likely that Trump himself decides to change his mind than that congressional Republicans reach a point where their own political fortunes are dimming and they say, basically, 'You know what? We need to impose some limits on this tariff policy. We need to intervene.'
Healy: Do you see an end game with these tariffs? Do you see it as a country by country negotiation, that by summer we'll have all of these very specific and narrow deals in place, or something different?
Appelbaum: We do seem to see that the Trump administration is making a big point of highlighting the fact that it's talking to some of these other countries about deals. But there's this war inside the administration about how to use those negotiations and what the goals of those negotiations should be. And to this point, at least, Trump appears to be siding with the maximalists and that doesn't give me a lot of confidence that we're headed to a quick resolution.
Healy: Binya, thanks for being here.
Appelbaum: My pleasure.