What Will Trump's New Economic Policy Look Like? Part 1
Jan 10, 2025
auto_awesome
Guests Jason Furman, a Harvard professor and former economic advisor under Obama, and Kimberly Clausing, a UCLA law professor and former Treasury official, dive deep into trade and industrial policy. They critique past economic strategies, especially free trade agreements, and discuss the complexities of tariffs aimed at boosting domestic production. The conversation also touches on strategic sectors like microchips and the important balance between national security and economic growth. Expect enlightening insights on the evolving landscape of American economic policy!
Trump's economic policy represents a significant shift from traditional Republican ideology, focusing on prioritizing ordinary Americans' needs.
The ongoing debate on trade policy highlights the tension between the benefits of tariffs for domestic production and the potential negative impacts on the overall economy.
Panelists stress the importance of targeted industrial policy to address national security concerns while avoiding the pitfalls of broad tariffs in economic strategy.
Deep dives
Diverse Perspectives on Economic Policy
The discussion on economic policy in the Trump administration brings together various viewpoints from seasoned economists. Participants include Rich Berkhauser, who has experience in the Council of Economic Advisors, Oren Cass representing American Compass, and Kim Klausing, a conventional economist. This diverse panel explores the implications of economic analysis during Trump's first term and potential directions for the next. The contrasting ideologies highlight the ongoing debates around critical issues such as trade policy, tariffs, and immigration, emphasizing the complexities of formulating effective economic strategies.
The Role of Economic Analysis
The role of economic analysis in the Trump administration is critically examined to understand how it influences policy-making. Economists have expressed discontent with their recommendations often being overlooked or misapplied, resulting in economic challenges. The panelists explore the failures of the past 25 years in providing sound advice, particularly regarding free trade and tariffs. Participants underscored the need for a reevaluation of traditional economic models to more accurately address contemporary challenges while rethinking the credibility of economists in this context.
Trade Policy and Its Consequences
Trade policy remains a contentious topic as participants deliberate on the impacts of tariffs versus free trade. Oren Cass posits that tariffs can support domestic production, yet Kim Klausing argues they distort the economy by raising input costs and triggering retaliatory actions. Klausing emphasizes that while tariffs may help some sectors, they can harm overall economic health and employment by disrupting supply chains and trade relations. The ensuing debate highlights the critical balance between protecting domestic interests and maintaining open trade channels in a globalized economy.
Industrial Policy and National Security
Industrial policy's significance in the Trump administration intersected with trade discussions, especially regarding national security concerns. The panelists emphasized the need for targeted interventions in industries deemed critical, such as semiconductor manufacturing and essential resources. Oren Cass suggests that national security pressures require a proactive government role, while Kim Klausing urges for careful evaluation of which sectors warrant protection without overreliance on broad tariffs. This nuanced perspective points to a shift in how policymakers must balance economic growth with safeguarding national interests.
The Future of Economic Strategy
The future direction of economic strategy under the Trump administration remains uncertain as the panelists contemplate the balance of tariffs and traditional free trade. With various factions within economic thought, the discussion centers on how policymakers will adapt to ongoing global challenges. Both industrial policy and trade strategies are expected to undergo transformation as the administration seeks to address economic imbalances. Ultimately, the panelists advocate for a rethinking of current practices to foster a sustainable economic framework that supports both development and practical governance.
President-elect Trump campaigned on a fresh economic platform prioritizing ordinary Americans, departing considerably from the Old Guard Republican Party that came before him. But how much of that innovative thinking will actually become policy in his second term?
Oren Cass appeared at the American Economic Association's annual meeting on a panel alongside former Council of Economic Advisors Jason Furman (Obama admin) and Richard Burkhauser (Trump admin) as well as economist Kimberly Clausing, to make sense of what will come next, and the forces that could try to slow down the president-elect's changes.
This is the first in a two-part series from the discussion, focused on trade and industrial policy. Stay tuned for more soon.
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode