In the last week, president Trump’s latest trade policies have provided a whole lot of whiplash for Americans, their wallets, and the global economy. Part of Trump’s tariff plan includes maintaining and increasing his tariffs on China, one of the U.S.’s largest trading partners. China spends billions on American agricultural products every year, meaning American farmers are likely to get caught in the middle of Trump’s trade war, again. MSNBC’s Alex Wagner travels to Johnston County in North Carolina to hear from farmers who are standing by Trump, even as he stands down his own policies. Then, a conversation with The Atlantic’s Annie Lowrey on what this all means for our global economy.
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Note: This is a rough transcript. Please excuse any typos.
(Music Playing)
Alex Wagner: It has been a week that shook the world, literally. This is how it all started, mostly, last Wednesday.
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Donald Trump: In a few moments, I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world. Reciprocal, that means —
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Alex Wagner: And this is what happened pretty much immediately.
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Reporter: On Wall Street today, a second day of dramatic losses and high anxiety over Donald Trump’s global trade war.
Reporter: Last week’s spill on Wall Street erased nearly $6 trillion from the market.
Reporter: Recession forecast growing. JPMorgan now expecting the economy to contract under the weight of the tariffs, and that a recession will drive unemployment up to 5.3%.
Reporter: The ripple effects of President Donald Trump’s sweeping tariffs concerning for shoppers. The cost of toys, phones, cars, all expected to spike.
Reporter: The president of the European Commission said in a statement, the global economy will massively suffer, adding that the consequences will be dire for millions of people around the globe.
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Alex Wagner: And then, just as abruptly as it began, on Wednesday afternoon, Trump decided to hit pause, sort of.
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Reporter: It’s an extraordinary bit of governing by social media posts. Less than a day after these tariffs went into effect, the president says he is pausing or substantially reducing most of them. A 90-day pause for most countries —
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Alex Wagner: Instead of a total reorientation of global trade, President Trump has decided to impose smaller universal 10% tariffs on every American trading partner, except China.
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Reporter: The new rate that President Trump has added in tariffs against China so far this term is 145% on Chinese imports.
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Alex Wagner: And China has stated it will impose an 84% tariff on all American exports, and that is a huge deal. For context, China and the U.S. traded an estimated $585 billion in goods last year, according to data from the U.S. government. The vast majority of that, $440 billion was America importing Chinese goods.
So despite the fact that the markets celebrated Trump’s, I guess we’ll call it, U-turn on Wednesday, despite the fact that the Dow soared by nearly 3,000 points at the end of trading, despite all of that, the reality is that this trade war is not over yet, not by a long shot. If America and China hold firm on these announced tariffs, it will touch nearly every sector of our economy. And we have some idea about what that might look like, although admittedly, smaller in scale.
The last time the U.S. and China clashed on trade, there was one group hit particularly hard, American farmers. And in his second term, President Trump is asking them to bear with him again.
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Donald Trump: The tariffs will go on agricultural product coming into America and our farmers starting on April 2nd. It may be a little bit of an adjustment period. Probably, you have to bear with me again, and this will be even better. That was great.
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Alex Wagner: Trump has tried to suggest America’s farmers were the beneficiaries of his trade war with China in his first term, when he put a 20% tariff on 60% of trade between the two countries. The USDA reports that farmers lost $27 billion due to these foreign trade actions. Trump and Biden sparred over this in a 2020 presidential debate.
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Donald Trump: China is paying. They’re paying billions and billions of dollars. I just gave $28 billion.
Unidentified Woman: Your sanctions?
Donald Trump: Listen, I just gave $28 billion to our farmers.
Unidentified Woman: That’s China.
Donald Trump: Which one?
Joe Biden: Taxpayers’ money.
Donald Trump: Yeah, you know the taxpayers, it’s called China.
Joe Biden: Not true.
Donald Trump: China paid $28 billion, and you know what they did to pay it, Joe? They devalued their currency, and they also paid up. And you know who got the money? Our farmers, our great farmers, because they were targeted.
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Alex Wagner: And yes, American farmers did receive money as a result of that trade war, but it wasn’t China who paid them. It was the U.S. government. According to the Council on Foreign Relations, 92% of the revenue that the first Trump administration generated from its trade war with China was funneled right back into subsidies for America’s farmers, to help them stay afloat because they were drowning as a result of Trump’s trade war.
But back then, Trump’s success, at least in the agricultural sector, was measured in his ability to breakeven. This time around, though, it is unclear whether Trump will be able to solve this fairly massive problem of his own creation.
North Carolina, for example, is a state that grows, among many things, a lot of tobacco. And one of the largest buyers of that tobacco is China. Beyond the market for American produce, there are the supplies and farming equipment, which depend on manufacturing from places including China. And all of that may now get exponentially more expensive, given Trump’s latest tariffs.
Seventy-seven percent of farming-dependent counties voted for Donald Trump in the 2024 election. So farmers are a significant base of the president’s support. But they also happen to be in potentially significant financial peril because of his actions. So we sat down with some of them to hear how they are thinking about their futures at the start of a second trade war.
(Music Playing)
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Unidentified Man: You don’t know which direction and what the president is really thinking at this time.
Alex Wagner: Right.
Unidentified Man: If we look at how his past actions have been, it’s almost like the bark is worse than the actual bite itself.
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Alex Wagner: On this episode of “Trumpland with Alex Wagner,” we’re going to Johnston County, North Carolina, to speak with some of the farmers who helped put Donald Trump back in the White House.
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Kim LeQuire: We do a lot of praying. We have a lot of faith, and our faith is in God and not in administration.
Unidentified Man: I would rather face this trade war than a category 4 or 5 storm coming off the coast of Wilmington.
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Alex Wagner: And hear what Trump’s tariffs mean not just for them, but for the entire country.
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Annie Lowrey: They were willing to put the American economy in a recession to do what? To magically transform us back into the economy of the 1870s? It didn’t even make any sense.
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Alex Wagner: It’s Tuesday afternoon, and we are in the car driving to Pace Family Farms, which is in Clayton, North Carolina. It’s green. It’s April, and it’s the beginning of planting season. We’re going to be speaking with a number of farmers, many, if not all of whom voted for Donald Trump and now are in the crosshairs of his tariff war.
These are the people who are most immediately and directly affected by China not buying as many soybeans from the United States or looking elsewhere for agricultural exports. Every hour brings a kind of new development in this saga. But we’re here because, you know, there’s a real practical human impact to all of this, and these are the people that are going to feel it the most. And they also happen to be Trump supporters.
North Carolina is an interesting place to see how farmers are feeling about Trump’s tariff strategy. In terms of agricultural production, the state ranks first for tobacco and sweet potatoes. It’s number two for turkey and hog production, and for sales of Christmas trees.
The 2022 census reported over 42,000 farms in the state. But the amount of land used for agricultural production has been declining since 2017. What hasn’t wavered, however, is support for Donald Trump in the state’s rural counties. Data from the 2024 election shows that some of North Carolina’s already red counties turned an even deeper shade of red.
About a 45-minute drive from the Raleigh-Durham Airport, we turn onto a dirt road with a big sign that reads Pace Family Farms. Michelle Pace Davis is a sixth-generation farmer who runs this 120-acre farm.
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Michelle Pace Davis: Our family has been farming for over a hundred years.
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Alex Wagner: She walks me out into a nearby field of strawberries, one of their main cash crops.
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Michelle Pace Davis: This field right here was tobacco. 2017 was our first year with strawberries and opening our whole farm up to the public.
Alex Wagner: Look at this, it’s perfect.
Michelle Pace Davis: Yeah. So you can go ahead and pick it.
Alex Wagner: Really?
Michelle Pace Davis: Yeah.
Alex Wagner: Oh, my God. This is so awesome.
Michelle Pace Davis: You can’t bet the farm for a strawberry.
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Alex Wagner: Pace is a public-facing farm. People can buy produce directly on site, or pick their own berries. On Tuesday, before Trump’s latest tariff maneuver was announced, Pace Farms hosted us, along with a few other local farmers.
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Ryan Roberson: I’m Ryan Roberson. We grow row crops, corn, soybeans, sweet potatoes.
Cody Waters: My name is Cody Waters. My wife and I grow watermelons and row crops.
Brandon Batten: I’m Brandon Batten from Four Oaks, North Carolina. We grow flue-cured tobacco, corn, wheat, soybeans, grass hay, cereal rye, and beef cattle.
Kim LeQuire: Kim LeQuire, Princeton, North Carolina. We grow tobacco, soybeans, cotton, wheat, corn, sweet potatoes, and watermelons.
Michelle Pace Davis: I’m Michelle Pace Davis right here in Clayton. So we have you picked strawberries, corn, tomatoes, all your fresh local produce that we’re able to grow here in North Carolina, we grow.
Alex Wagner: For context, who’d you guys vote for in the 2024 election?
Unidentified Man: I’m proud to say I voted for President Trump.
Unidentified Man: Same here, both times.
Alex Wagner: Both times?
Unidentified Man: I voted for Trump.
Unidentified Man: Yeah, both times.
Kim LeQuire: Both times.
Michelle Pace Davis: Both times.
Alex Wagner: Both times. Did you vote both times for Trump?
Unidentified Man: I voted for him this time.
Alex Wagner: So everybody here voted for him in 2024. How has the last week been for you?
Unidentified Man: There’s a lot of uncertainty.
Michelle Pace Davis: Yeah.
Kim LeQuire: I was going to say uncertainty.
Unidentified Man: Yeah, there’s a lot of uncertainty. It’s just the direction. You don’t know which direction the president is really thinking at this time.
Alex Wagner: Right.
Unidentified Man: Because you’d like to think in the past, if we look at how his past actions have been, it’s almost like the bark is worse than the actual bite itself. And with a lot of things around the world today, you know, people get in their normal routine, and it’s easy to put something off or push it under the table and just avoid it.
Alex Wagner: Status quo.
Unidentified Man: And avoid it. And then this really gets people’s attention, it has gotten the whole world’s attention. (Laughter)
Kim LeQuire: It has.
Unidentified Man: That’s what I feel like he’s trying to accomplish with this.
Alex Wagner: So how do you guys make calls? How do you prepare? China said it would fight to the bitter end. So part of it is under the president’s discretion and controls. Some of it isn’t. You guys are working on real margins. So how does that make an impact on your day to day?
Unidentified Man: I’d say a lot of our decisions really are made in January and February. So we’ve already gone down a path, and we’re kind of committed right now. So we have to just pray and hope that everything works well, because we’re kind of locked in. There’s only so many things you can do. And at this point, it’s late in the game for farmers.
Alex Wagner: What does that practically look like?
Unidentified Man: We’ve signed our tobacco contracts in January and February, a lot of which is exported to China. We’ve already got our guest workers’ applications in. They’re arriving next week. So our plants are growing, ready to go to the field in a week or two. So the season started. It started in January, really, for us.
Alex Wagner: What concerns you? What’s the biggest X factor for you when you think about this?
Unidentified Man: The American farmers are very good at what we do, and we need trade partners to market our surplus. The loss of any trade partner, or the threatening of a new trade partner, potentially, because of tariffs or other issues is a problem for American farmers, irregardless of the commodity that you produce.
Alex Wagner: Right.
Unidentified Man: I’d say another big concern is we export a lot of our soybeans to China. And so this fall, when we’re harvesting beans, is there going to be a home for those beans? We don’t know yet.
Kim LeQuire: With agriculture and maybe some of the other industries is we’re having all of these costs up front. So I mean, just like, you know, you’ve got to buy your seed, you’ve got to buy your fertilizer, our labor, all these inputs are going in right now.
Alex Wagner: Right.
Kim LeQuire: And so we’re not going to be harvesting until the fall. And so, you’re having all these costs coming in.
Alex Wagner: Up front.
Kim LeQuire: And so you’re having to figure out, again, how are you managing that and then hoping what’s that market going to be whenever it’s time to sell it, to get all your money back. And so I think that’s one thing that’s different than from some of your other industries is they’re able to put that cost already on the consumer.
Alex Wagner: Yeah.
Kim LeQuire: So whenever that TV, or that furniture, or your clothes, that’s already marked up at Walmart.
Alex Wagner: Right.
Kim LeQuire: Whereas we really can’t mark up. We can’t go to the grain elevator and say, I need $5 of bushel right now. That’s not how it works.
Alex Wagner: Right.
Unidentified Man: Yeah.
Alex Wagner: Do you think all the farms that are around today are going to be there by the end of the year?
Unidentified Man: No. They’re going out left and right.
Unidentified Man: Yeah.
Unidentified Man: Yeah, we’re losing farmers around our area constantly, and it’s sad. Good farmers too.
Unidentified Man: Yeah.
Alex Wagner: All of this is intended to give America a stronger hand, and to shore up these industries that have been in decline or been so volatile to help you guys. And I think at least on the outside, it seems tragic that all of these factors may conspire to shutter more farms instead of strengthening the hand of the farmers.
If you guys could communicate anything, what would you say about the position you’re in and how you’re looking at the future?
Unidentified Man: We live in a world economy now. I mean, yes, we want to bring manufacturing jobs back to United States, but there are certain industries to where it’s just not feasible for us to manufacture those products here. I don’t see the United States being able to go in there and make blue jeans, and shirts, and socks, because we can’t. If they did, there’s not going to be enough money to buy a pair of socks.
Alex Wagner: This is a global economy.
Unidentified Man: Yeah, this is a global economy. We don’t want to have to ask for aid. We want to be able to make a profit and provide for our families. But I think last time Trump was in office, he did help out with a financial aid package to try to help bridge the gap from what we lost with the tariffs. So I would say one of the things is consider that, you know, to help us out to bridge that gap. We’re probably going to need it if this continues to drag out.
Alex Wagner: The assistance that the president put in place after the last tariff increase basically erased the financial gains from that tariff increase, which I think left a lot of people scratching their heads like, well, why are we doing this to begin with? How do you think about all that?
Unidentified Man: What I would say to the president is stand with us. Agriculture is always on the front lines of tariff and trade wars because of how much we export. You keep hearing short-term pain for long-term gain. I would just tell them to stand with us and make sure we get to that long-term gain.
I feel like in the last trade war, we kind of went through the short-term pain and I’m wondering where the gain was maybe. We came out of it in a little bit of turmoil, and then the administration changed and we had a couple of bad years with weather events. I would just say stay the course and stand with us.
Alex Wagner: I think some people have not forgotten that and they’re saying, well, you know what, the people that voted to put this president in office, this is your guy. And if this is your guy, you got to roll with the policies he enacts. And why should the rest of the country that didn’t vote for him be bailing out farmers? I mean, there are people in this country that are like, you guys voted him in. You have to live with the consequences.
Unidentified Man: That’s right. And they’re also those same people oftentimes demand that farmers address climate change and farmers adapt different technologies. And we have responded in spades with soil health initiatives, cover crops, using less inputs to produce more on less land with less water, and higher labor costs.
But those same people that make those demands are not willing to pay the cost for the American products in the store. They will buy the cheaper imported products, that their daily wage rate is less than what we have to pay an hour for our H-2A workers that are coming in. And the disparity when you’re having somebody tell you how to do what you do best for a living and then not be willing to pay for the demands that they’re making is laughable, and that’s what we face.
We’re fighting with one hand tied behind our backs because we’re having to meet the regulations that are imposed to produce the quality food and address all of these other social issues we may or may not be responsible for. But at the same time, we’re not seeing a return in the marketplace because American products are too expensive.
Michelle Pace Davis: What’s different with this presidency versus some of the ones in the past is as a candidate, he came out as a businessman. And so, I mean, whereas some of the people in the past, they’ve only been senators or they came from the political side on up. Whereas he came from a business. He didn’t have any political experience before.
Alex Wagner: I mean, he did file for bankruptcy multiple times.
Michelle Pace Davis: Yeah.
Alex Wagner: Does that part bother you?
Michelle Pace Davis: Yeah. But I think he understands businesses and I think that he sees this as a negotiation, as a business deal, and so just hoping that all that business sense is going to be able to come out and help the American consumer.
Alex Wagner: They’re the largest tariffs in a century. They’re larger than the Smoot-Hawley tariffs, which many people say directly contributed to the Great Depression. Does that worry you?
Kim LeQuire: You know, of course, those concerns are in the back of my mind, but we’re optimists. We do a lot of praying. We have a lot of faith, and our faith is in God and not in administration. It’s kind of a wait-and-see game. I think the main thing is it’s not to overreact and get too nervous. I mean, stay the course.
Unidentified Man: Those of us that have weathered the storms and gotten through the tough times in the past, I mean, in North Carolina, every year we prepare for a major hurricane.
Alex Wagner: You bet.
Unidentified Man: You know, every three or four years, something drastic is going to happen. In North Carolina, you can go from being extremely dry and losing crops because you’re afraid to death that you’re going to burn up from the heat and the drought.
Alex Wagner: Yeah.
Unidentified Man: But three weeks later, you’ll have 8 or 10 inches of rain. So we’re used and we’re accustomed to that. Now, it’s just that much more challenging that we’ve got to get through it and weather this economic storm.
Alex Wagner: The storm. This is the thing I think that confounds people. You’re talking about acts of God, acts of nature, hurricanes, rainstorms. This isn’t that.
Unidentified Man: That’s right.
Alex Wagner: This is a person in the White House making decisions.
Unidentified Man: True.
Alex Wagner: Does that frustrate you at all that it’s as unpredictable as the weather?
Unidentified Man: In the world now, we need certainty and we need consistency.
Alex Wagner: Yeah.
Unidentified Man: And you look at trade and demand and market prices, and people say, well, you know, cotton prices are the slowest they’ve been in 30 or 40 years. And a lot can be said the same way with soybeans and corn. All of our markets are depressed right now. And the only way to really succumb to that, you know, we’ve got to be sending stuff on boats going across the seas.
Alex Wagner: Yeah.
Unidentified Man: And we’ve got to create demand. We need to be working to create trade and create demand, and build relationships and not tear them down.
Kim LeQuire: But I think that’s also where part of not just, you know, the president comes into play, but I think that’s where also a lot of the cabinets and staff, and all your other department agencies come into play and making sure we have those relationships.
Alex Wagner: Do you think the president has that?
Kim LeQuire: I mean, I think he knows he’s got people in place and I’m hoping that that’s what he can rely on. Crops are growing, they’re going in the ground. And as Ryan said, we’re committed. And so just being able to also make sure that hopefully by the time it’s time to harvest in July, August, September, something is maybe coming into play. We’re actually maybe able to see those benefits.
Unidentified Man: I would rather face this trade war than a category 4 or 5 storm coming off the coast of Wilmington straight towards us.
Alex Wagner: I just can’t get over the fact though, that you’re talking about like something that is completely beyond your control versus like someone who’s —
Michelle Pace Davis: I think that he is. (Laughter)
Alex Wagner: Very existential conversation.
Kim LeQuire: My grandfather lived to be 90 years old, and a farmer came to our office probably several months before he died and was just reminiscing about some of the wisdom that my papa had told him. And this particular farmer had had a terrible year farming. I mean, he didn’t know if he was going to make it or not. And my papa casually said, it’s going to be all right. I mean, it’s not always going to be fun, but it’s going to be all right. And that’s kind of what gets us through.
Unidentified Man: I think farmers are eternal optimists. You know, everyone at this table is from a generational farm.
Alex Wagner: Yeah.
Unidentified Man: You don’t hear about that in other industries. You don’t hear people say, I’m a third generation dentist. Our ties to the land and to produce, and we’ve been through hard times. Yes, it’s not fun. Yes, it costs equity and money. And sometimes farms go out of business.
But agriculture is the one or one of the only industries in America that hasn’t outsourced abroad. Eighty-five percent of what happens on my farm, that is completely out of my control.
Alex Wagner: Yeah.
Unidentified Man: So I have to do the very best I can at managing that 15% of inputs and costs, and labor, and marketing, and signing the best contract, and doing the best job that I can, and leave the other 85% up to the good Lord. And that’s all we can do. Whether it’s weather, or disease, or a hailstorm, or an epidemic —
Alex Wagner: Or an administration?
Unidentified Man: — or administration, and we just weather the storm.
Alex Wagner: I’m trying to understand as a political journalist, whether you think that people who support this president are going to have the same attitude that you guys do, I guess more broadly in the farming section.
Unidentified Man: Well, he got elected to shake things up and to change, you know, what a lot of Americans consider the status quo.
Alex Wagner: Yeah.
Unidentified Man: So at some point, you have to trust the American people who made the decision. And, hey, it may work out well, it may not, but we’ll get to decide again in four years.
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(Music Playing)
Alex Wagner: We’ll have more “Trumpland” in just a second, right after a quick break.
(Announcements)
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Donald Trump: I was watching the bond market. The bond market is very tricky. I was watching it. But if you look at it now, it’s beautiful. The bond market right now is beautiful. But, yeah, I saw last night where people were getting a little queasy. Well, the big move wasn’t what I did today. The big move was what I did on Liberation Day.
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Alex Wagner: That assertion is certainly up for debate. On Wednesday, Treasury Secretary Scott Bessent denied that a mass sell-off of U.S. government bonds forced President Trump to unwind some of his global tariffs. And who’s to say, really? But no matter the motivation, Trump’s decision to institute a 90-day pause on his so-called “reciprocal tariffs” does not bring all of the economic chaos to a halt.
To understand what could still happen, I spoke with Annie Lowrey, who’s a staff writer for The Atlantic and covers the economy and politics. She has been keeping very close tabs on all of this. We spoke shortly after Trump’s announcement on Wednesday.
(Begin Audio Clip)
Alex Wagner: We started today believing that we were in the middle of a global economic recession. We may still be. On Truth Social, the president is starting to say, “Be cool.” That’s how he started the day. “Everything is going to work out well,” and ended his Truth Social post saying, “You have to be flexible.” The Dow is up over, I think, 3,000 points. What the hell just happened?
Annie Lowrey: So the trade war started basically as soon as he got into office. So we had these early tariffs on Canada, Mexico, and then steel and aluminum. And then a week ago, there was this “Liberation Day” announcement of much larger tariffs than the markets were expecting. And it wasn’t out of line with what Trump had been saying that he wanted to do for a really long time, but the tariffs were enormous. So there’s a 10% base rate on all countries.
Alex Wagner: Yeah.
Annie Lowrey: And then additionally, high “reciprocal rates,” they weren’t actually reciprocal, on 60 countries, territories, trading blocks. These numbers were like the most Calvinballed thing I have ever seen. They implemented tariffs on countries that have a trade surplus with the U.S., right?
Alex Wagner: Right.
Annie Lowrey: They implemented tariffs on countries that do not export anything to the United States, on a territory, Diego Garcia, that is occupied by American and British troops, by a territory that is occupied entirely by penguins. This led to a lot of disturbances in the market and a really big market rout.
And then in the past couple of days, it wasn’t just equities that were involved, it was bonds. So we saw a lot of volatility in bond markets that are normally pretty stable. And then all of a sudden, as we saw a decline in the price of stocks, we saw a decline in the price of bonds, which is weird, right?
Alex Wagner: Yeah.
Annie Lowrey: Normally, we expect bonds to go up when stocks go down. But it seemed like there were some actual liquidity problems in some markets. And in response, Trump announced a reduction in tariffs to a slightly less boneheaded, but nevertheless still really high level. So that’s where we are.
These are huge tariffs. These are going to cost American consumers hundreds of billions of dollars a year, in the thousands of dollars per family. And it’s a really bad situation still. I would not overinterpret the market reaction. We’re in for a rough time.
Alex Wagner: It bears discussing the 90-day pause. What’s your expectation there? Because there was so much turmoil, literally nobody but President Trump seemed to think any of this was a good idea. Is he just buying time to sort of save face? Or do you think that we’re actually going to be revisiting all this in 90 days?
Annie Lowrey: I wish that I had a great answer for you, but the tariffs were nutty to begin with. The Liberation Day rates were nutty. We still have really high tariff rates with this new paused policy. We have this threat of big, nutty tariffs to be implemented on all of our trading partners whenever he decides.
The rationale for the tariffs makes no sense. He is not going to reshore manufacturing back to the United States with this policy. He is not going to eliminate our bilateral trade deficits, which have nothing to do, or close to nothing to do with trade barriers anyway. And he’s apparently decision-making by the seat of his pants.
The rates that were announced last Wednesday, he basically picked a couple hours before the announcement. Apparently, USTR had created a couple tariff schedules, and he chose like the most nonsensical one. It made no sense.
And then, today, you know, apparently, the bond market convinced him. But what’s to stop him from just doing this at random? Even the justification, is this about fentanyl? There’s no fentanyl coming in from Canada, right? Is this about bilateral deficits? What is this actually about? He insists all these countries are ripping us off, but what are they doing?
Alex Wagner: Yeah. Scott Bessent, the Treasury Secretary, came out after Trump made his announcement on the tariffs and said that all of the countries, except China, will be brought down to a universal 10% tariff, which we talked about in these next three months. And then every single one of these tariffs is going to be a “separate bespoke negotiation. Like, that seems fully bonkers that he’s going to be negotiating a separate tariff rate with every single country as if to just warn them, “Hey, hey, hey, if you think you’re getting off with this 10% tariff,” which in and of itself is highly dubious, there could be more pain down the line.
Annie Lowrey: I mean, we’ve had foreign trade officials, foreign prime ministers say that they’ve tried calling the White House and that they can’t get through to them.
Alex Wagner: Yeah.
Annie Lowrey: Trump unilaterally blew up 14 free trade agreements, right? How are you going to negotiate with this many countries? How are you going to do it? What do you even want from a bunch of these countries? You’re going to go one by one? We had a bunch of longstanding free trade agreements that he’s in violation of. I wouldn’t be surprised if a lot of this goes to the World Trade Organization.
You know, it’s like a minor point, but one thing I keep on thinking about is that trade agreements are notoriously hard to negotiate. For the TPP, which was the Trans-Pacific Partnership that Obama negotiated, it took years. They did 18 formal rounds. Every business lobby, every union in multiple countries went to negotiate these tariff amounts.
What are they going to be negotiating? What’s the point? Does Trump even have a sense of exactly what policy concessions he wants from every single one of these countries? Does he even know that some of these countries exist? I’m not convinced.
Alex Wagner: You make a point in your piece today for The Atlantic, about how the American political system and its failure is effectively causing people to really rethink investing in America, being part of the American market. It’s just upending the intersection between politics and the global economy, and the way in which Trump has made a mockery of our democracy. It’s going to have real, both immediate and long-term consequences for this country.
Can you talk a little bit more about that in terms of the economic impact of this, not just today and 90 days from now, but just in terms of how other countries on the global stage see America?
Annie Lowrey: Absolutely. So fundamentally, the United States has benefited from the fact that when global investors want to go to a safe asset, they go to an American asset. They go, at their core, to American bonds, to Treasury bonds. And there’s kind of two things that I think about this. If on the margin, you start to see some major investors say, you know what, let’s do some Euro bonds. Let’s not do dollars. Let’s do some Euro bonds. Or when we’re buying American bonds, we actually want a higher yield on these, right? We want more money for giving the United States an investment.
I think you could see both of those things, and those will lead directly to higher borrowing costs, not just for the American government, but every American household and every American business. And it doesn’t have to be this kind of dramatic, oh, you know, the United States is no longer the reserve currency type of thing. You can have like scales and degrees of difference that can translate into billions of dollars because the global market is so huge. I would really, really worry about that.
And when you talk to investors right now, a lot of what they’re saying is like are they going to default on the debt? Are they going to like just stop paying contracts out? Are they going to do other weird, unexpected stuff with absolutely no appreciation of the consequences for people’s lives? They were willing to put the American economy in a recession to do what? To magically transform us back into the economy of the 1870s? It didn’t even make any sense.
So I really, really think that the effect could be long term here. I am thinking more seriously about the risk of default, and the risk of just insane policy having terrible effects over the course of the next three years and possibly longer.
Alex Wagner: It sort of bears spending a little bit more time on China, like 125% tariff increases on Chinese imports, and China announcing retaliatory tariffs of 84% on U.S. goods. I mean, talk to me a little bit about the practical implications of that for the American consumer who, by the way, presumably voted Donald Trump into office in 2024. Because the economy felt not good to them, inflation felt not good to them. The price of eggs felt not good to them. The price of goods felt not good to them. And now, we have this with China.
Annie Lowrey: So think about it in two ways. So one is that you and me and everybody else here purchases a bunch of stuff that’s made in China. So a lot of clothing, textiles made in China. Those are going to mechanically become more expensive. So just straight up consumer goods, they’ll become more expensive.
In fact, the price increase might be so much that companies will take goods from China, send them to another country like Vietnam, and ship them in from Vietnam to avoid the tariff, which is also going to raise prices because that’s an additional layer of cost. It means that they need to hire boats and warehouses, and set these systems up, and work with the Vietnamese authorities and change things. There’s that.
Then American manufacturers tend to produce goods with foreign parts. So cars are like a famous example of this, that a car assembled in the United States is probably made from parts from all around the world. And every time you cross the border, you would hit a tariff. So just having manufacturing and assembly in the United States is going to get more expensive because of these tariffs.
And again, a lot of companies will try to evade the tariff. But still, you know, some things will come in and they’ll just be twice the cost, I guess.
Alex Wagner: You know, I was down in North Carolina yesterday, speaking with a bunch of farmers who were Trump supporters. And admittedly, this is before Trump changed his course this afternoon. But what struck me was the degree to which these folks who brought him back into office felt like; A, they could and would weather the storm, and that their support for Trump’s overall sort of mandate or his agenda to reset the trade imbalances and to make America great again quite literally, they were still 100% behind that.
And they believed in him. They believed in his business acumen. Do you worry that there’s a cleave between the sort of economic reality and the political reality on something that should be fairly uniform across both sectors?
Annie Lowrey: I do. I think that we now have a group of partisans on the right and on the left in this country, who will support a party no matter what it does. And I think that this is probably particularly true for Trump supporters. I think that you see a tremendous amount of rationalization.
That said, he’s taken his own poll numbers, and we’re only two and a half months into this administration. And without a bailout, farmers are going to go out of business. They don’t have a lot of capacity to pass price increases onto their consumers because they tend to produce commodities where the price is set externally, right?
Alex Wagner: Yeah.
Annie Lowrey: So you produce grain, you produce milk, you sell it on. It’s not like you can say, oh, it’s $5, not $4 now. You have no capacity to do that. So without a bailout, farms are going to go out of business, especially small farms. Small businesses are more vulnerable to this because they don’t have the financial resources of big companies that might be on a stock exchange, that kind of thing.
And I think that this stuff will really matter when it comes into a recession, when you start to have business bankruptcies, when you start to see rising prices. Think about just how mad people were about the price of eggs. Now, we’re talking about everything. You go to buy your kid a pair of soccer cleats and they’re like $70 and you thought they would be $25.
This is not going to go well, and I think you’re so right to point out that people were really mad about inflation and the cost of living crisis. And this is going to make it worse.
Alex Wagner: Yeah. Or maybe it’s enough for him to announce 125% tariffs on China, back off three months later and say he did what he was going to do, and that he gets credit for that. It’s just in Trumpland, everything is upside down.
Annie Lowrey: Yeah. And what is coming next? I’m really worried about the debt ceiling. I’m really worried about the spending bill. I’m really worried about all of these things. And I do think that it’s true that with Trump, he’s like this bulldozer and just the number of piles of sand that he’s crashing into makes it impossible to kind of hold on to anything.
But this is big and it’s pretty clear that this is going to be like one of the signal policies of his administration. And I think, you know, this isn’t over. We’re going to get a bunch more crazy stuff down the line, when one morning he wakes up and he decides like, oh, we’re not trading with the EU anymore, or whatever else it is.
Alex Wagner: Great. We’ll have another podcast on that when that happens.
Annie Lowrey: Exciting.
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Alex Wagner: We’ll be back next Thursday with a new episode of “Trumpland with Alex Wagner.” To get this show and other MSNBC podcasts ad-free, be sure to subscribe to MSNBC Premium on Apple Podcasts. As a subscriber, you’ll also get exclusive bonus content. And if you like what you’ve been listening to so far on “Trumpland,” please don’t forget to rate and review the show.
Also, we have some exciting pod news for us at MSNBC. Three of our podcasts are nominated for Webby Awards; “Into America,” “Why Is This Happening?” and “Prosecuting Donald Trump,” now known as “Main Justice,” are all up for awards. Check out our show notes to see how you can vote for each show and help MSNBC take home some hardware.
“Trumpland with Alex Wagner” is produced by Max Jacobs, along with Julia D’Angelo and Kay Guerrero. Our associate producer is Janmaris Perez. Our crew included Bill Hennessey on audio, and Liam Lee and Katherine McNamara on camera. Our audio engineers are Bob Mallory and Mark Yoshizumi, and Bryson Barnes is head of audio production. Matthew Alexander is our executive producer, and Aisha Turner is the executive producer of MSNBC Audio. And I’m your host, Alex Wagner. We’ll see you next week.