Is Trump’s Trade War Strategy Working?

0:00Today's episode is brought to you by ChatGPT for Business. As a listener of this podcast, you're looking for ways to help teams move faster, make sharper decisions, and turn scattered context into work they can use. ChatGPT for Business can help. ChatGPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in ChatGPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact sales to learn more.

0:37When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property, liability, or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one-time decision. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive.

1:11That means working with companies to identify where they're exposed, decide what matters most, and put practical standards in place so risk is managed as part of day-to-day operations. And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering, and claims experience developed over time. Learn more at thehartford.com slash risk mitigation. As industries evolve faster than ever, companies need an environment that accelerates strategic growth. And Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

1:56With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios. Podcasts. Radio. News. But our top story this morning, President Trump sets a 10 % minimum global tariff. There's been a flurry of deal making and deal breaking in the run up to President Trump's August 1st tariff deadline. President Trump has announced the framework for a trade deal with the United Kingdom. China, of course, emerging from that meeting, saying an understanding was reached to extend the tariff truce, while the U.S.

2:37side is still saying nothing is final until President Trump signs off on it. A major trade deal with the European Union. Philippines, Indonesia, and the United States' fifth largest trading partner, Japan. Late last night, just hours before the deadline, Trump signed an executive order announcing new U.S. tariffs on dozens of trading partners. Trump said the new tariffs will go into effect next week, on August 7th. Bloomberg Economics reports that if all the announced levies are implemented as promised, the average U.S. tariff rate will go up to more than 15 percent. The most surprising thing to me is how President Trump has turned people's perspective on trade around completely in just a matter of months.

3:22Brendan Murray has overseen trade coverage for Bloomberg since 2019. Trade deals in the traditional sense are about increasing trade. What President Trump is doing is literally designed to lower trade, to bring production home, and to sever some of those economic ties with countries that we've been doing business with for a long time. As the world braces for Trump's reciprocal tariffs to actually, for real this time, hit global trade, Brendan says the whiplash of the trade war isn't over. Because many of the details of these trade deals are still a moving target. What we're seeing is the Trump administration hammering out the broad frameworks, trying to get some headline numbers that jump off the page and to get some commitments from countries that have been unwilling to open up their markets or invest more in the U.S.

4:20than they have in the past. So is the strategy working? I'm Sarah Holder, and this is The Big Take from Bloomberg News. Today on the show, making sense of Trump's latest trade deadline. I sit down with Bloomberg's global trade editor, Brendan Murray, to discuss where things stand in the president's ongoing trade war, how much work remains, and how Trump has reshaped America's approach to trade deals.

4:53It can be challenging to keep up with the shifting terms of Trump's trade war and all the deals his administration is trying to broker. Brennan, how have you been making sense of this? Do you have a big whiteboard up in the office or something? Yeah, I guess you could say it's a whiteboard, but it's more like an Excel spreadsheet, a timeline, some Post-it notes and, you know, a bunch of sort of random things that you, you know, you have to move around. This is a very fast moving story. President Trump will say he's doing well in trade negotiations with big economies. And then the next day he might say, you know, deals off, you know, you're facing a tariff of 20 percent or whatever.

5:34You've been overseeing Bloomberg's trade coverage since 2019. I'm wondering how this negotiation process has been different than ones you've seen before. I think it's been very different. The first way it's been different is that trade negotiations are notoriously long, grueling. They go back and forth. They go between governments and then governments go back to their industries and they go line by line. And that takes time. And the biggest difference with President Trump's trade deals are they're in warp speed. They are they're they're moving in weeks and a couple of months rather than a couple of years.

6:14So that's just the way President Trump operates and did so in the private sector. And he's he's taken that style to governing in the White House and using tariffs as kind of the big point of leverage that he can use over countries in these discussions. How do geopolitics come into play when we're talking about the trade deals of the Trump presidency versus how trade deals have historically been negotiated? Yeah, I think what we're seeing emerging is President Trump see tariffs as a way to not only reorder the global trading system that he's complained about since the 1980s, but to get countries in line with what he thinks that the U.S.

6:55priorities are. We've seen it on a number of cases recently. We've seen it with Brazil when he's threatened Brazil with a 50 percent tariff because of some things going on in their domestic politics. We've seen it most recently with India where he says, we're going to put a 25 percent tariff on you across the board and we're going to penalize you for buying Russian oil. He's also intervened in the Cambodia-Thailand conflict and said, you know, trade is going to be painful for you if you don't call a ceasefire. And so he's really using tariffs as a tool of foreign policy, not just of economic policy anymore.

7:31Do you think that strategy will be able to be used in the same way even after these deals are set in stone? Or is the answer that they'll never be set in stone? Yeah, I don't think they're really ever going to be set in stone. President Trump is feeling pretty emboldened by these trade deals that are coming together. They kind of feed on themselves. Once you get Japan, then you've got leverage over South Korea. And once you get leverage over South Korea, then you get leverage over other countries in Southeast Asia. The same goes for the European Union. And, you know, once you can get Germany on side, then, you know, France has to go along with it.

8:07So I think there's a there's a sense that this isn't going to end after August 1st, that this is going to be an ongoing way that President Trump conducts his diplomacy as tariffs that he can use to accomplish what he's trying to accomplish in the world of geopolitics as well. After the break, how Trump's trade goals stack up against reality. on the global stage.

9:02and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact sales to learn more. Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers.

9:39Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together. Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. Everyone's talking about how AI is transforming work, especially in sales.

10:15While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster, with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart.

10:46Trump's so-called Liberation Day unleashed tariffs and chaos into the global economy in April. Since then, his administration has announced a handful of new trade deals with details that are changing by the day. So, Brendan, when you think about the president's stated goals and when you think about the effect that this trade negotiation strategy has already had on our relationships with other countries and on the economy, both domestically and abroad, is this strategy working? Well, so far, I'll tally up a few of what we have so far. We have deals with big economies like the European Union, Japan, the UK, South Korea, and a handful of countries in Asia.

11:29And the total of those announced deals so far, that's about 25 % of the global economy. So that's not a small number. Most people would say those are accomplishments, but getting those from fact sheets and social media posts into actual enforceable binding agreements is a whole nother step that we're still going to have to see play out because you see these big numbers thrown out from Japan or Korea or the European Union, these purchase agreements where they say, we'll buy this hundreds of billions of dollars worth of American products, American energy products. for instance. Those are going to take a lot of calculating to even see if there's the capacity to do that.

12:13But this strategy isn't working for everyone. The most obvious example of that is India. India was in the lead pack a couple of months ago when these negotiations started off. President Trump said, nobody's ever done a deal with India. I'm going to do a deal with India. And he came out recently and said, you know, no deal, 25 % tariff. Now, he did leave that open to further negotiations. But it's a strategy that's had mixed success. And there's a lot still to verify and to see how it's executed to say that it's working and that it's actually successful. Well, we've also seen a lot of headlines on countries agreeing to something seemingly not related to the trade deal, like a promise to buy more gas, for example, or these investment deals and purchasing agreements that you mentioned, with details to be hammered out later.

13:03How atypical is that to see these kinds of ancillary agreements being made on top of trade negotiations? Well, it's pretty atypical if you compare it to the way trade has operated for the past several decades. Trade in the globalized system that emerged from the Second World War was based on a consistent lowering of tariffs and a sense of the more we trade with each other, the better off we are. What we're seeing from the Trump administration increasingly in these agreements to purchase certain goods from the U.S. is something called managed trade. It's basically the government saying, here's how much you should buy rather than the companies that need these materials deciding for themselves.

13:52Some would say it's coercive. It's what China has done is kind of push its weight around and with smaller countries. And it's leading down a road, the critics would say to where it's less efficient for the economy, it's not the most effective way to run the global trading system. Is it fair to say that managed trade kind of flies in the face of free trade? Is managed trade free trade's opposite? Yeah, I mean, I think there's all sorts of different kinds of mechanisms for managed trade, but this is a government dictating to a certain extent what one country should purchase from it rather than the private sector deciding what it should purchase from abroad.

14:32So it is a big sea change from the way things have run in the past. Now, it's not uncommon for countries to agree to say, we will purchase your supplies over another country's supplies because that country is an adversary's defense. Weapons is a good example of that. But to have it applied broadly to a trading relationship is something that we haven't seen for a long time. Brendan, you've talked us through the fact that trade deals often take years to hammer out, and these new deals have been figured out in a matter of months. Has this process fundamentally changed the way trade negotiations might unfold?

15:12Is this going to be a hallmark of the Trump administration, or could it ripple beyond it? Well, so far, none of the other countries that Trump has engaged with have gone toe-to-toe with him and adopted this approach. This is the approach Donald Trump brought to the White House from his experience as a real estate developer. I'm not sure we're going to see other countries that are still committed to a globalized free trading system suddenly turn protectionist and start adopting the same approach. There's a lot of analysts who would say, you know, the U.S. is a big economy, But there's another 75 percent of global GDP out there for us to do business with.

15:56And a lot of countries will just do less trade with the United States and we'll try to find some others where we can continue along the principles of a rules-based trading system geared toward lower tariffs without the U.S. in the picture. Does that scare the analysts you speak to? I think a lot of people see this as the free trade pendulum swinging back in the other direction under President Trump. But how far that swings, whether that takes the whole world with it, is still an open question. We're watching this experiment in real time, and nobody really knows where it's going to end up.

16:34This is The Big Take from Bloomberg News. I'm Sarah Holder. The show is hosted by me, David Gura, Juan Ha, and Saleha Mosen. The show is made by Aaron Edwards, David Fox, Eleanor Harrison Dengate, Patty Hirsch, Rachel Lewis-Kriske, Naomi Eun, Julia Press, Tracy Samuelson, Naomi Shaven, Alex Sugiura, Julia Weaver, Yang Yang, and Taka Yasuzawa. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. Thanks for listening. We'll be back on Monday.

17:40We'll see you next time. and code to roll out quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact sales to learn more. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive.

18:16And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

18:54With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org.