Wall of duties: Trump’s towering tariffs

0:10Hello and welcome to The Intelligence from The Economist. I'm your host, Rosie Bloor. Every weekday, we provide a fresh perspective on the events shaping your world.

0:25Sudan's civil war has been bloody and protracted, but government troops recently took back Khartoum from the rebel occupying force. We assess the consequences. And if you haven't heard of Shonda Rhimes, you'll surely have seen her shows, which include Grey's Anatomy, Inventing Anna and Bridgerton. Our correspondent meets her and tries to unearth the secrets of her success.

1:01First up though.

1:15My fellow Americans, this is Liberation Day. I'm waiting for a long time. April 2nd, 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again. We're going to make it wealthy. Good well-being. Donald Trump's Liberation Day took aim at enemies and allies alike, jacking up tariffs on every country. Trump says the U.S. has been looted, pillaged, raped and plundered by other nations and promises his liberating taxes will usher in a golden age of plenty. But they're more likely to create a poorer, more unequal America.

2:08These tariffs take America's tariff rate back to levels not seen for more than 100 years. Rachna Shambhog is our business affairs editor. It was a hefty increase in tariffs, a higher end of what analysts were expecting, what I was expecting. A staggering press conference, really, both for the scale of the tariffs, but also listening to Donald Trump's justification for them, just a very distorted view of trade and America's economic history. And on top of that, there were these really arbitrary calculations being made on the tariff rates, which I think would worry America's trading partners around the world.

2:45And stock markets haven't reacted well. So this is a really staggering moment. Rachna, as you say, Trump has a particular version of history and economics that he likes to put forward. he says he's getting a fair deal for America. And you said he's made some rather arbitrary calculations. But what were the calculations that he actually applied to get these numbers? So what seems to have been announced is a 10 % baseline tariff on everyone. And then on top of that, a sort of reciprocal and reciprocal in inverted commas here, adjustment has been applied to a range of countries as well. Now, the way in which it was presented by Donald Trump was that this was some sort of adjustment, taking into account the fact that other countries charge America higher tariffs, or that they have what are called non-tariff barriers.

3:43So they have various rules and regulations, in his mind, value-added taxes, things that he argues tilts the playing field away from America's exporters and is unfair. Now, that's the argument which on its face is sort of misguided. On top of that, the way in which the number was calculated appears to really be random. I can't really describe it in any other way. What they seem to have done is taken America's trade deficit with a trading partner, divided it by goods imports from that country and said that this is the kind of unfairness charge. And then Donald Trump in this really extraordinary press conference holds up a board, a kind of game show contestant style.

4:24We didn't want to bring, it's very windy out here, we didn't want to bring out the big charts because it had no chance of standing. Where he says, well, because we're generous, we're going to take 50 % off this rate. And so China, you know, you're going to have an extra tariff rate of 34%. China, first row, China, 67%. That's tariffs charged to the USA, including currency manipulation and trade barriers. So 67%. The EU, you're going to have an extra tariff rate of 20%. But really, these are numbers being plucked from thin air. So I was going to ask you about that. I mean, these were kind of quite specific numbers that he used.

5:02Are any of them actually real numbers? No, I mean, as I said, there's sort of spurious calculation that's been done. The idea that a trade imbalance is unfair is something that economists wouldn't recognise. Trade is a mutually beneficial exchange. It's sort of like saying that a business has a relationship with a supplier. That's not fair, that the supplier should also be the customer of that business. So that's the kind of thinking that's going on here. There is a calculation that's been done, but it bears no relation to unfair trade at all. There may be some cases where countries don't play fair and where some sort of retaliation against that is warranted.

5:45But this across the board thinking that any trade that America does is cheating Americans. That's really how Donald Trump was talking about it is just utterly just wrong. Rajna I'm interested as well as being high tariffs actually different tariffs for many different countries and some different sectors how enforceable is all of this you're right Rosie so we've seen in addition to the announcements on reciprocal tariffs we had 25 % tariffs on cars and car parts coming in we've had tariffs also on steel and aluminium and the other announcement that came yesterday almost beneath the radar was the fact that the so-called de minimis exemption would not apply anymore.

6:33And this allowance in the rules that shipments below$800 would not be tariffed. And this really affects the shipments from Shein and Timu and e-commerce firms drastically because they tend to send low value packages. So all of these different rates, suddenly America's customs officials are going to have to enforce. The infrastructure doesn't really exist for customs officials to do that. So the bureaucratic exercise that this is going to involve is really mind-boggling. Tell me what it will actually mean for people who now have to live on both sides of these new tariffs. The reality is that this is a really big tax increase on America's households.

7:19Somebody will have to pay the cost of higher input prices. So the fact that goods coming in from abroad will have tariffs on them, that means the cost of them for America's businesses, American families, will have to rise. So this is a big tax increase. It also, as a result, means a spike in inflation for a time. Even before Liberation Day, the odds that economists were putting on a recession were rising. So economists at Goldman Sachs were saying that the chances of a recession this year were about 30%. I think those probabilities are going to start rising now. Longer term, the fact that businesses at home are shielded by this really steep tariff wall means that they don't have very much incentive to compete or innovate compared with if there were competition from abroad.

8:05And this is really undermining America's position as the world's most innovative economy. The consequences for the rest of the world are also, unfortunately, quite bad, especially, I think, countries in Asia, which have seen quite high reciprocal tariff rates. In China's case, it becomes really pressing that consumption at home starts taking up some of the slack. So I think it puts pressure on Xi Jinping to kind of think about how to reorient the economy and what needs to be done to protect the economy from a big trade shock. Rachna, you talk about Trump saying he's going to return US to the heyday.

8:41But what does he really think is the point of all this? What does he think is going to actually happen? Trump wants to return to something like the late 19th century, where America didn't have an income tax and relied on tariff revenues. So he wants to do a big, beautiful bill with tax cuts. One big, beautiful bill. And it will be that. It'll have everything, the big tax cuts and every incentive there is. Now, this is sort of misguided for many reasons, including the way he tells it, America became poorer as tariffs became lower over time. That's an empirical thing that you can look at, and that is just not the case.

9:18So that's one thing that he wants, to try and get some revenue out of this. The other thing is a way to bring jobs, manufacturing jobs, particularly to America. He kind of seems to prize manufacturing above all else, even above America's 300 million consumers, and that's another objective. Now, there may be a third objective because he may see some of these tax rates as a form of leverage. So for example, there's been talks about whether China could receive a bit of tariff relief in return for allowing for the sale of TikTok, which is Chinese owned. The fact that we are in a more protectionist world for the rest of Donald Trump's term seems clear, but there may be individual kind of negotiations that happen over the next few days, few weeks, and that will be something to watch.

10:08Ratchna, thank you very much for talking to me. Thank you, Rosie. And you can hear more about Liberation Day, Trump's so-called big, beautiful tariffs, and what they mean for the world on Money Talks, our business and finance show out later today.

10:37Sudan has seen almost two years of vicious civil war. For most of that time, the capital city Khartoum has been controlled by the Rapid Support Forces, or RSF. In mid-March, their leader Mohamed Hamdam Dagalo bragged that his forces would never retreat

11:00But a week later, and after days of fighting national troops did indeed break through and forced the RSF to flee across the Nile

11:13Sudanese government soldiers cheered as they paraded through the presidential palace It's perhaps the bigger shift since the start of Sudan's conflict But the country remains divided The recapture of Khartoum by the National Army marks a turning point In a war that has killed tens of thousands, displaced 12 million And caused one of the world's worst famines in decades Tom Gardner is our Africa correspondent The question now, though, is whether the National Army decides to halt the war or to expand it. Before we look at what might happen, tell me, how did the Sudanese forces manage to retake Khartoum?

11:57Well, they've benefited from a broad and diverse coalition that they've assembled since the early months of the war, when they lost most of the country, including Khartoum, to the RSF. On their side now, they have foreign backers, including Saudi Arabia, Qatar, neighbouring Egypt, which has reportedly provided air support. But then there are looser associates, which they've brought to their side more recently, including Russia, Turkey and Iran, which have sold the army weapons and drones. At the same time, at home, domestically, they've also built a broad alliance, but it's quite fragile. It includes voluntary local defence units composed of civilians enraged by the RSF's looting and terrorising a population under its control since the war began.

12:48It also includes rebel movements from the western region of Darfur and, more controversially, jihadist brigades with links to the ousted Islamist government of Omar al-Bashir. So suffice to say, these disparate forces may well disagree on what to do next. And what might they do next? There seem to be two main options. Their leader, General Bodhan, has until now stubbornly refused peace talks. But at least some of the foreign countries that have helped the army may press him to enter into negotiations with the RSF. They could, for instance, try to sweeten a deal by recognising an army-led government in Khartoum and maybe helping to pay the bill for the devastated city's reconstruction.

13:43However, as I said, there are these other groups also within the army's coalition, and some of them quite clearly will want the army to advance westwards from Khartoum and try to chase the RSF to its stronghold in Darfur. For example, the ethnic African groups from Darfur themselves who've suffered atrocities, including possible genocide, at the hands of the RSF since the war began, they might well want the army to continue its fight into their region. Either way, this choice, whichever road they take, could well splinter this shaky alliance. And which would be better, Tom, negotiate or press ahead?

14:30I think a push into Darfur could well end badly. I mean, the army's made the biggest gains in recent months in the centre of the country, in its traditional strongholds around the Nile Valley. A ground offensive to the west in Darfur would be a different story entirely. It would entail stretched supply lines. It would entail fighting on the RSF's home turf, Darfur. And look, this is where General Burhan himself got badly bogged down in the region 20 years ago, during the first Darfur war, which many listeners might remember. So it's very dangerous. But for now, at least, there seems to be little talk of a ceasefire or negotiations, at least in public.

15:25General Barhan, in fact, continues to say that his forces have, quote, no option of settling with the RSF criminals thanks to their atrocities.

15:42Omnously, his own air force is continuing to bomb civilians, including in Darfur. there was a strike on a market on March the 24th, which reportedly killed at least 54 people and injured dozens more. In Khartoum as well, there are alarming reports of lawlessness and revenge killings. I mean, some really gruesome videos have circulated in recent days, which appear to show beheadings of suspected RSF collaborators by groups allied with the army. So, Tom, we've talked before about the terrible toll that this war has taken on the people of Sudan. And once again, they're stuck in the middle. Yeah, absolutely.

16:23And the RSF, for its part as well, doesn't appear ready for peace either. That's despite saying, including in an interview with The Economist late last year, that they were ready for peace talks. In February, it announced the formation of a parallel government in the areas under its control, which raises the specter of the country splitting into multiple zones of control, its chief foreign supporter, the United Arab Emirates, also doesn't appear to have stopped sending it weapons. And given that basically all of Sudan's immediate neighbours, with the exception of Egypt and Eritrea, fall within the United Arab Emirates sphere of influence, I don't think it's going to be very challenging for the RSF to continue to resupply itself from neighbouring countries.

17:11So Tom, I think I ask you this every time, but is there any hope of this war ending? Well, certainly it was uplifting to see these scenes of celebration in Khartoum and other areas which have recently been liberated from the RSF. I mean, I think we should definitely emphasise how significant it is that the capital city, the jewel in the crown for all the groups fighting in this war is back under the control of the national army, the government forces effectively. That's significant, but does it mean the end of the war? Almost definitely not. I think we're entering now into a new phase of the war, but what exactly that will look like remains to be seen.

17:55Thank you, Tom. Good to talk to you. Thank you, Rosie.

18:15I grew up in a family of academics. And so watching TV wasn't like a huge part of our childhood. More books. For someone who didn't grow up watching a lot of television, Shonda Rhimes has had an enormous impact on the medium. And then I was in California and I'd gone to film school. and I had a baby. And nobody ever tells you that when you have a baby that you're never going to leave the house again. I watched a ton of things. I'd never really spent that much time watching television. And of course, we were just in that age where every show was on all the time everywhere. It was exciting to me.

18:51And I thought like, this is where all the good character developments happening, not in the movies. So I thought like, oh, I want to write television. Even if you've not heard of her, you'll certainly have heard of one of her shows. Her production company, Shondaland, has been behind some of television's most popular shows, including Grey's Anatomy, Scandal, How to Get Away with Murder, Inventing Anna and Bridgerton. Rachel Lloyd is The Economist's deputy culture editor. Shonda Rhimes is probably the most valuable person in television that you've never seen on screen. So Rachel, as you say, not everyone has heard of Shonda Rhimes.

19:27Just how influential is she? She's extremely influential. not many people in the world of TV can claim multiple hits. Even fewer can claim multiple hits across multiple genres. But Shonda Rhimes has achieved all of that. Grey's Anatomy, her first show, which debuted in 2005, is now the longest-running primetime medical show in America. It's also still 20 years after it premiered, the second most-watched programme on streaming services. And Bridgerton, as well, is Netflix's most popular original show in America. Between 2020 and 2024, Shonda Rhimes' show has brought in $2.4 billion in subscription and advertising revenue to streamers worldwide.

20:02She really emblematises the move from linear weekly broadcast shows to binge watching in the streaming era. So how has she managed that? What's the secret to her success? The main thing I think is that she really bears in mind the entertainment value. She is thinking always about how to create big set pieces, big moments that will draw in viewers and keep them coming back for more. So when she was writing for broadcast television, and it was shaped by advertising. There were six acts in a show and she would make sure that before the advert break, there was some big moment that would make people want to stay.

20:33It's slightly different now in streaming in that there aren't adverts in the same way. But her rule of thumb is that every 10 pages or so, there should be some exciting development that grips the viewer. And it can be some big emotional moment. It can be a big twist. It can be some other moment of drama. Some of the big storylines in something like Grey's Anatomy, it's when a patient came into the hospital with a bomb in his chest. You know, you want to see how that works out. Rachel, you've talked about all her successes. Has she had any failures? Absolutely. Before Grey's Anatomy, there was a show that was turned into a pilot, but it wasn't made.

21:02It was about war correspondence and executives just didn't really feel it was the right time. It was when the war in Iraq had just started, so it just wasn't the right moment. She made a sequel to Romeo and Juliet, a show called Still Starcrossed that didn't really work. But it was kind of a test case for Bridgerton and there was a lavish period drama with a diverse cast. And so in some ways, it was quite a good dry run for the company to see what would work. later. We make shows that we want to watch. And if we don't want to watch it, we don't want to make it. So really, it's that. If I'm compelled by it, then I know that I'll be interested enough to dig into it.

21:33And hopefully, an audience will follow us. So a lot of people would say that they're trying to make a show that they want to watch. What is particularly innovative about what Rhymes does? So in many ways, the production company itself is not that innovative. It seems to follow a quite traditional studio model. So Shonda Rhimes sits at the top of it. Underneath, she has a trusted roster of producers, writers, directors, people that she continues to work with. And we've seen that throughout Hollywood history. And what they're doing in terms of what Miss Rimes calls world building is also not that new.

22:03Disney, for instance, they have used entertainment titles as the basis for merchandise for a very long time. They've sold them to children. What Shondaland does is they sell it to adults. We stopped just storytelling and started world building a long time ago. Like we've started looking at it like that even. There's a whole to people whose job is to look at it in our company and go, maybe we could do this or maybe we could have a podcast or maybe we could do merchandise with that. Like they're thinking about those things because you don't want to sleep on it. You don't want to be late for it. You can buy tea that is branded as Bridgerton.

22:36You can buy rugs. You can buy biscuits. You can even buy a wedding dress that is Bridgerton inspired. So really what they're doing is creating these revenue streams that already exist, but applying them to the streaming model. And she's done such different shows, Rachel. What's she like herself? She was very interesting. And we had a long, wide-ranging conversation. I mean, she was quite guarded on certain things. I wanted to ask her about how she felt about Donald Trump's administration, for instance. It seems to me that her embrace of diversity, equality and inclusion initiatives, for instance, a complete opposite of what Donald Trump stands for.

23:09She's championed it on and off screen. But she didn't really want to talk about that. And I couldn't make her. Shonda Rhimes can't make everything that we're going to see on our TV screen so where are they looking beyond her? Broadcasters and streamers will be desperate to find the next Shonda Rhimes for the reasons we've said but that's going to be very difficult in a risk-averse entertainment landscape people just aren't taking the risks on junior or young or inexperienced writers in the way that they were when Shonda Rhimes was coming through network TV is declining but also streamers are a lot more parsimonious than they once were particularly in the wake of the pandemic and the Hollywood Strikes.

23:43We're just not seeing showrunners, even of kind of great stature and name, getting the same production deals that Shonda Rhimes has benefited from. It's going to be pretty tricky, I think, for the next Shonda Rhimes, wherever they may be. And her status as the queen of streaming seems assured for some time yet. Rachel, great to talk to you. Thanks so much. Thanks for having me.

24:18that's all for this episode of the intelligence we'll see you back here tomorrow