Plain English with Derek Thompson Trump’s Trade War Is Like Nothing America’s Ever Seen
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Apr 8, 2025 
Matthew Klein, author of ‘The Overshoot’ newsletter and coauthor of ‘Trade Wars Are Class Wars,’ joins to dissect Donald Trump's tariff strategy. Klein illuminates how these tariffs disrupt global markets and examines their intended outcomes amidst economic turmoil. They discuss the flawed methodologies behind the tariffs, critique their effectiveness in fostering American manufacturing, and explore alternatives like the Bipartisan Chips and Science Act. The conversation also highlights the importance of understanding trade dynamics within a historical context.
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Unique Financial Crisis
- This financial crisis is unique because it was intentionally induced by policy.
- There's no obvious preceding cause or concern like the housing crash or the pandemic.
Policy Experiment Analogies
- Turkey's attempt to control inflation by lowering interest rates backfired, causing currency devaluation and increased inflation.
- This policy experiment, similar to Argentina's Peronism, has precedents in poorer countries but is unusual for the U.S.
Flawed Tariff Methodology
- The White House's tariff methodology, based on bilateral trade deficits, is flawed.
- It overlooks crucial factors like services trade and the role of global supply chains.
