There is significant confusion surrounding President Trump's tariffs, the messaging around these policies, and which tariffs have actually gone into effect.
Yahoo Finance Washington Correspondent Ben Werschkul joins Market Domination Overtime hosts Josh Lipton and Julie Hyman to discuss the tariffs imposed on China, Canada, Mexico, and all steel and aluminum imports entering the US
Despite the back-and-forth, these tariffs are having a significant economic impact, reducing long-term GDP (gross domestic product) and could potentially cost the US over 300,000 jobs.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
There's been a ton of back and forth and lots of confusion when it comes to President Trump's tariffs, but what's actually been enacted? Well joining us now is Yahoo finances Ben Worschel. Ben, walk us through it.
For sure. Hey, I'm good to be with you, Josh. So I feel like I'm on with you guys every afternoon to try and make sense of the kind of the herky jerky day and it's a little bit quieter on the trade front today. So as you mentioned, I tried I wanted to kind of lay out exactly what's real, even though we've seen sort of so much get backtracked, there's a lot that Trump's been enacted that has been real. And the bottom line um from from a lot of ex experts is that it's it's actually about two times Trump's entire first term in terms of the economic impact. So there's three, there's three tariffs, main tariffs that have actually been implemented. They're in, they're in, they're in effect. The first one is 20% duties on China. This is this is one of Trump's first actions and then he doubled it last week. Um that's on top of Trump 1.0 and Biden tariffs, so that actually gets the tariffs on China in an aggregate. Some goods are higher and some goods are lower to about 30%, which I know is about halfway to Trump's promise of 60% tariffs on China. So that's that's those are real tariffs on China. Second is 25% duties on Canada and Mexico. Even with the backtrack last week on sort of all duties, this is still a significant tariff that's in place. It's around 450 billion in imports according to an estimate by the Tax Foundation. And then the third came into effect today, which is 25% tariffs on steel and aluminum. And even though Trump floated for about 8 hours 50% tariffs on Canadian steel and aluminum and backtracked on that, the 25% still went in across the board and there's there's there's large effects there. So the Tax Foundation has done the hard work on this and this is a lot of these numbers that come in. Um they estimate that Trump's 2018, 2019 tariffs, basically his entire first term represented reduced a long-run GDP by 0.2 percentage points. This time around, if he does nothing else, he just sort of leaves back, leaves everything he's done in place, we're talking 0.4% um in terms of long-run GDP. So so in the neighborhood of twice as much and that that works out to over 300,000 jobs less because of these tariffs according to their estimate. Um and this is emblematic of a couple kind of larger themes of Trump is that he is shown again and again even as the markets question how serious he is, he is serious about tariffs and he has kind of an end goal here of big tariffs with significant revenues that that that that are that are that are significant for the federal budget, which currently makes up about 2%. And then the second point here is that even as the day-to-day is incredibly jerky, he wants to kind of reorient the trading system and sort of the chaos is a little bit of the point here. So it's there's even though, you know, I'm sure I'll be back tomorrow to talk about sort of whatever the threat of the day is and where it went away. The at the end of the day he is implementing significant tariffs um so far.
Well, and Ben, as you wrote, um whereas Trump in his first term was sort of famously fixated on the stock market as um sort of grading him, he doesn't seem to care about a grade this time. He cares more about these tariffs. And I I think that um what market participants are struggling to perhaps see through, even as we see have the uncertainty day in and day out is what he is trying to achieve sort of holistically with these tariffs.
Yeah, for sure. I mean, it's I the way I try to kind of characterize the story today is that it's not that he doesn't care about markets. I think he still does to a certain extent. It's just he cares about tariffs so much more this time. Especially even he cared a lot about tariffs the first term, but he cares about them even more this time. And it's it's that he really has this vision of these going into effect the way he phrased it today was we're going to take back a lot of what was stolen from the US. So that's his viewpoint and he wants these tariffs to be big and in place to do that and it's led to this idea that there's kind of going to be short-term pain that he's proven more willing to accept than markets than markets thought that in his view at least will get us to long-term gain um in terms of a more fair trading system and a closer to a balanced budget in the on the US.
