President Trump doubles down on tariffs

0:00It's Consider This where every day we go deep on one big news story. Today, President Trump is doubling down on tariffs. In February, the Supreme Court struck down his sweeping tariffs. President Trump was visibly angry. The court ruled that he couldn't impose tariffs under a law called the International Emergency Economic Powers Act. During a press conference shortly after that ruling, Trump responded with this. But other alternatives will now be used to replace the ones that the court incorrectly rejected. We have alternatives. Great alternatives. Alternatives, as in alternative laws that the administration might use to authorize tariffs.

0:41Today, the Trump administration brought that plan to fruition by imposing a new set of tariffs on more than 80 countries. Consider this. After the Supreme Court struck down Trump's previous tariffs, he is doubling down with new ones. What's different this time, and how could it affect the average consumer?

1:09From NPR, I'm Elsa Chang.

1:43This week on the NPR Politics Podcast, we uncover a pattern in political ad spending. As the midterms get closer, Republicans are leaning into an issue they've won on before, immigration. We look at their message and also what Democrats are saying on the issue in a very different way. Listen now on the NPR Politics Podcast.

2:13It's Consider This from NPR. President Trump's tariffs have caused an array of problems for him. They have raised prices. They've caused other countries to retaliate. And polls show that voters don't like these tariffs. Nevertheless, he has remained remarkably firm in keeping tariffs as a cornerstone of his economic agenda. imposing a new wave of tariffs on Friday. Here to tell us more are NPR White House correspondent, Danielle Kurtzleben and NPR senior business editor, Rafael Nam. Hello to both of you. Hey there. Hey. Hey. Okay, Danielle, I want to start with you. Can you just tell us more about these newest tariffs?

2:49Like, what are they replacing exactly? Right. So these new tariffs have two tiers, 10 % and 12.5%, and they cover all of the biggest U.S. trading partners, which are responsible for almost all of the imports to the U.S. Now, that said, some major categories of goods are exempted here, like energy and some types of foods. Now, these new tariffs will replace a temporary global 10 percent blanket tariff that Trump put into place right after that Supreme Court decision you mentioned. That tariff expired this week. These new tariffs took their place. Now, to impose these new tariffs, the administration is using a law intended to counter other countries, quote, unfair trade practices.

3:29In this case, the U.S. is accusing all of its major trading partners of not doing enough to fight the use of forced labor. Now, not everyone buys that rationale. Democratic Representative Richard Neal from Massachusetts said in a statement that Trump is just hunting for legal justifications and that the new tariffs are, quote, too convenient to be taken seriously. And wait, these weren't even the only tariffs that Trump imposed this week, right? Right. He also announced new tariffs on some specific categories of Canadian goods. Those are 50 % tariffs, so they're pretty high. And they're set to take effect in just under a month.

4:06The administration said those are to retaliate against Canada's own retaliation against U.S. tariffs last year. We're in this time when the cost of living is such a top concern for so many households. How do you think these tariffs will affect those households? The good news is that, if you can call it that, is that they're not significantly higher than the tariffs they are replacing. But they are still a lot higher than they were at the start of the second Trump administration. And this has a real impact on American families, especially at a time, like you said, Elsa, when the cost of living is a real concern.

4:42It's also that the war with Iran has led to a big increase in gas prices. The budget lab at Yale University says the latest tariffs will add a little under a percentage point to consumer inflation. And in dollar terms, that means an additional tax of$1 ,100 to households per year, essentially. All of this clearly has a knock-on effect, according to Natasha Saron, the president of the budget lab. Inflation rises because of tariffs. People therefore spend less. And the end result is a hit to the economy. This is how she put it. You never make up that. It's sort of a permanent decline in the economy's strength as a result of this type of policy.

5:25And that's why many economists think tariffs are a really bad idea. Well, given that tariffs are adding to people's financial problems, why go through with them? Well, this White House has a couple of policy reasons. First, they often use tariffs as leverage to get concessions from other countries on trade agreements. And it's possible, by the way, that that could happen with these new Canada tariffs I mentioned. Like I said, there's almost a month until they go into effect. And the U.S. and Canada still need to sit down and renegotiate the USMCA trade pact. So these tariffs could change or disappear during those negotiations.

6:02Now, the White House's main rationale for tariffs is that they will revitalize manufacturing. That boom has not materialized yet in jobs. In fact, there are fewer manufacturing jobs now than when Trump took office. Now, the White House has also claimed trillions of dollars in new investment as a result of trade deals stemming from his tariffs. New investment could result in more jobs, but also the numbers have been unclear, and we still have to see when or if all of that money materializes. Exactly. Okay, so Rafael, the administration is saying tariffs will pay off, but we're obviously living in the present moment.

6:36What kind of effects are these tariffs having right now? So besides the higher cost of living, the main thing is that it does make things unpredictable. Take the Federal Reserve. Tariffs are just another complication at a time when policymakers are grappling with higher energy costs and high borrowing costs. For example, the average 30-year mortgage just hit its highest in nearly a year. All of this could make it more likely the Fed will have to raise interest rates this year, which goes against the president who has been arguing that the Fed should be lowering rates. But for businesses today, the effects of these tariffs are real.

7:14You've heard us say this time and time again. Businesses hate uncertainty. And right now, that's what they're getting. Not only that, the president has a habit of threatening to impose additional tariffs all of a sudden. He did that with Canada earlier this week, for example. And Saren at the Budget Lab says those kinds of Southern actions make life extremely tough for businesses. And so I think that makes it like really challenging from the perspective of businesses who are trying to plan to understand like what their costs are going to be. And also then what prices they're going to have to charge consumers for these goods if you don't have any real sense of the ways in which the policy is evolving.

7:58So Trump may be arguing tariffs will pay off, but businesses, though, are not feeling it right now. OK, Danielle, just make this make sense. Like, how do these tariffs make sense politically with midterm elections approaching? Well, that's really a gamble, I think. Trump's pro-tariff argument is essentially, I'm using these now to make great deals they can bring in some revenue, but the biggest economic effects will show up eventually. Now, some voters may buy into that long-term narrative, but polls have shown that tariffs have grown less and less popular. And that, along with higher gas prices from the Iran war, has dragged the president's approval down.

8:34Now, if you're a Republican running this November, you have a tough question. Do you try to create daylight between yourself and Trump on tariffs? And if you do, how do voters react and how does the president react? Both of those things are very unpredictable. That is NPR's Daniel Kurtzleben and Rafael Nam. Thank you to both of you. Yeah, thank you. This episode was produced by Michelle Aslam and Karen Zamora with audio engineering by Ted Meebane. Our director is Jonas Adams. This was edited by Rebecca Metzler, Mallory Yu, and Timbi Ermias. Our interim executive producer is Courtney Dorning. And thanks to our Consider This Plus listeners who support the work of NPR journalists and help keep public radio strong.

9:14Supporters also hear every episode without messages from sponsors, and they get to unlock bonus episodes of Consider This. Learn more at plus.npr.org.

9:30It's Consider This from NPR. I'm Elsa Chang. This message comes from Bombas. Bombas compression socks help keep legs fresh on travel days, work days, leg days, and more. That's all-day relief with everyday style. Go to bombas.com slash NPR. This week on Here and Now Anytime, can a$25 ,000 pickup with crank windows change the game for American electric vehicles? We can design, engineer, assemble, all American, and it's affordable and it's something that people love. A Detroit startup says there's an appetite for bare-bones EVs made in America. That story on Here and Now anytime. Listen on the NPR app or wherever you get your podcasts.