The Jacob Shapiro Podcast The Thing about Tariffs
Mar 7, 2025
In this engaging conversation, Wendong Zhang, a Cornell University Assistant Professor and economist specializing in tariffs, shares his insights on the multifaceted impacts of tariff policies. He discusses who is affected by tariffs and the potential economic ripple effects across various sectors. The dialogue also touches on the complexities of global trade wars, retaliation strategies, and the implications for countries like the U.S., China, Canada, and Mexico. Zhang provides an objective analysis, making it clear that understanding tariffs goes beyond a simple good or bad narrative.
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Trade Model Disruptions
- Trump's trade policies, like steel and aluminum tariffs, impact existing trade models.
- Further analysis is needed to model reciprocal tariffs and their potential for retaliation.
Impact of Trade Wars
- Trade wars cause economic damage for all involved countries.
- The US economy, being larger, experiences a smaller percentage loss of GDP compared to smaller economies like Canada.
Retaliation in Trade Wars
- Countries retaliate in trade wars not just for economic reasons, but also to send political messages.
- Canada's retaliation would hurt their own economy more than it would hurt the U.S.