Marketplace
What will Trump's trade war do to labor productivity?
May 1, 2025
Adam Posen, President of the Peterson Institute for International Economics, dives into the complexities of global trade imbalances and the effects of tariffs initiated during Trump’s trade war. He warns that these policies may hinder labor productivity and economic growth by causing businesses to hesitate on major investments. The discussion also touches on Coca-Cola's unexpected earnings amidst tariff challenges, the GOP's proposal to tax electric vehicle owners for road maintenance, and the cooling trend in the Sunbelt housing market.
26:10
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The trade war instigated by President Trump may lead to stagnant labor productivity due to businesses delaying major investments.
- Implementing tariffs might create manufacturing jobs, but could also inflate prices and potentially result in job losses in other sectors.
Deep dives
Imbalance in the Global Economy
The conversation centers on the notion of rebalancing the global economy, particularly regarding the U.S. trade policies. It is emphasized that the existing imbalances have largely resulted from domestic actions, including significant public debt and ongoing budget deficits, which pose risks to sustainable economic management. The discussion highlights that using tariffs as a solution to trade imbalances may not prove effective, as they could lead to recession rather than meaningful adjustments in trade relations. Ultimately, the potential impact of these trade policies is questioned, with the suggestion that they may not close existing deficits or improve long-term economic health.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
