Odd Lots
Brad Setser on the Damage From Trump's Gigantic Tariff Shock
Apr 5, 2025
Brad Setser, a senior fellow at the Council on Foreign Relations, delves into the implications of Trump's tariffs on global trade. He highlights the U.S.'s choice to go it alone rather than collaborate with allies, which has ignited fears of a recession. Setser analyzes how these tariffs have led to reciprocal actions from China and explores potential strategies businesses might adopt to shift production overseas. He critiques the simplistic reasoning behind tariffs, advocating for a more nuanced understanding of global trade dynamics.
28:51
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Quick takeaways
- The Trump administration's sweeping tariffs signify a departure from traditional trade practices, prioritizing domestic interests over global collaboration.
- While the tariffs create opportunities for companies to circumvent high rates by relocating production, they risk imbalancing trade relationships and complicating global supply chains.
Deep dives
Impact of Tariffs on Global Trade Relationships
The recent tariff announcements by the U.S. administration mark a significant shift in the country's trade strategy, primarily aimed at reorienting its economic relationships with global trading partners. This move has sparked panic in the markets and prompted retaliatory measures from countries like China, highlighting the escalating tensions that could reshape international trade dynamics. The decision to impose high tariffs reflects a calculated policy choice, which differs from previous economic crises that followed a more conventional playbook. As this new policy unfolds, it raises questions about the long-term ramifications for both the U.S. economy and its relationships with major trading partners.
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