All Else Equal: Making Better Decisions

Ep59 “Why Tariffs Are Not The Ultimate Trade Weapon” with Dani Rodrik

Apr 9, 2025

Dani Rodrik, Ford Foundation Professor of International Political Economy at Harvard, dives into the economic ramifications of tariffs in this conversation. He discusses how hyperglobalization sparked political discontent leading to recent tariff decisions. Rodrik critiques the effectiveness of tariffs as a modern trade policy tool and emphasizes the need for innovative strategies to rebuild the middle class. He highlights the intricate link between job satisfaction and economic health, advocating for a holistic approach to job quality.

32:16

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Dani Rodrik

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Quick takeaways

Tariffs disrupt trade relationships and may harm workers, highlighting the importance of balancing protective measures with economic health.

Current political dissatisfaction stems from globalization, necessitating a focus on addressing root causes rather than resorting to protectionist tariffs.

Deep dives

Economic Logic Behind Tariffs

The economic rationale for tariffs revolves around the impact on trade relationships and overall economic health. Economists traditionally argue that trade between two parties benefits both, as it allows for comparative advantages to be realized. However, tariffs can disrupt this balance and potentially harm certain individuals, especially those who may find themselves out of work due to foreign competition. The discussion emphasizes the need to consider both the benefits of trade and the consequences that tariffs may impose on workers in developed countries.

Intro

2min

Globalization's Double-Edged Sword: Economic Benefits and Political Consequences

3min

The Intersection of Job Satisfaction and Economic Policy

2min

The Complexities of Globalization and Wealth Distribution

2min

Tariffs and Economic Evolution

23min

With President Trump’s tariffs on Canada, Mexico, China, and other countries now in full swing, what consequences from an economic standpoint could the U.S. be facing? And what was the path that led us here?

Hosts and finance professors Jonathan Berk and Jules van Binsbergen put the tariffs question to economist and author Dani Rodrik. Rodrik is the Ford Foundation Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University, and the author of the book Straight Talk on Trade: Ideas for a Sane World Economy.

Beginning with the historical context and purpose of tariffs, the conversation covers how the political and social dissatisfaction with hyperglobalization opened the door for these extreme tariffs, whether or not they’re an effective tool in modern trade policy, and what alternative strategies exist to rebuild America’s middle class.

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All Else Equal: Making Better Decisions Podcast is a production of the UPenn Wharton Lauder Institute through University FM.