46: Trump's Trade Roadmap: From Hidden Plan to Radical Reality
Apr 21, 2025
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Dive into the intriguing trade roadmap crafted by Stephen Miran for the Trump era. Explore potential futures—from global cooperation that could revive manufacturing to the real risks of recession and inflation. The discussion highlights the intricacies of U.S. trade policy, the dollar's dual role, and the impact of foreign sell-offs on American assets. Tactics used in trade negotiations are examined, revealing a calculated approach amidst aggressive rhetoric. Finally, the unmatched manufacturing strength of China complicates U.S. economic strategies.
Stephen Miran's roadmap predictably influenced Trump's trade policy, aiming to address currency undervaluation but facing practical implementation challenges.
The hosts identify three possible future scenarios for U.S. trade policy, ranging from international breakthroughs to severe economic downturns.
Increased tariffs have negatively impacted American manufacturing, leading to job losses and raising concerns about the competitiveness of U.S. exports.
Deep dives
Restructuring Global Trade
The episode discusses a roadmap created by Steve Moran, the chairman of the Council of Economic Advisors, to restructure global trade, which was published in November 2024. This roadmap outlines strategies that closely mirror the recent tariff policies implemented by the Trump administration. Key among its proposals is the notion that the U.S. dollar has been overvalued due to other countries undervaluing their currencies, which hampers the competitiveness of American exports. The administration aims to counter this by raising tariffs, presenting this adjustment as a necessary negotiation strategy to level the playing field for U.S. manufacturing.
Premises and Predictions
The hosts evaluate the premises of Moran's document, arguing that some are flawed, particularly the notion that the strong dollar is merely a result of its status as a global reserve currency. They contend that the dollar's appreciation correlates more closely with the U.S. economic performance compared to other countries. Additionally, the idea that trade deficits automatically lead to budget deficits is challenged, with the hosts explaining how budget deficits can, in fact, drive trade deficits. The hosts also touch on the incorrect predictions made about the economic impacts of the proposed tariff policies, notably suggesting that they would stabilize the dollar while actually leading to its decline.
Consequences for Manufacturing and Trade
The impact of the implemented tariffs has resulted in a downturn for the American manufacturing sector rather than the revitalization anticipated in the roadmap. Many manufacturers are struggling due to increased costs for imported components that were previously economical, leading to job losses and heightened difficulties in production. In contrast to the hoped-for increase in U.S. manufacturing, industrial production reports indicate significant downturns, showcasing how the aggressive tariff policies are creating a counterproductive environment. This has raised concerns about the overall viability of U.S. exports as they become less competitive on the global stage due to rising costs.
Political and Economic Fallout
As the tariff implementation progresses, the hosts predict that the political landscape may shift due to increasing pressure on the U.S. administration to manage economic fallout. This includes concerns about inflation rising alongside stagnant or decreasing growth rates, leading to a stagflation scenario. The potential for increased political conflict, particularly regarding cooperation with international allies against China, is also emphasized. If the tariffs remain high and economic conditions worsen, the U.S. could find itself isolated while international relationships fray due to perceived punitive trade measures.
Best and Worst-Case Scenarios
During the discussion, the hosts outline various scenarios concerning the future of U.S. trade policies, ranging from optimistic outcomes to potential economic calamity. A best-case scenario involves negotiated agreements that reinvigorate the global trade landscape while simultaneously adjusting reliance on Chinese manufacturing. Conversely, a worst-case scenario hinges on continued tariffs leading to severe repercussions for both the U.S. economy and its geopolitical standing. This dialectic highlights the precarious balance of strength, economic policy, and international relations within a rapidly changing global trade environment.
Months before trade policy was on anyone's radar, Stephen Miran—now Chairman of the Council of Economic Advisers under President Trump—quietly published "A User's Guide to Restructuring the Global Trading System." In this episode, Ben and Cardiff dive into Miran’s roadmap and assess how Trump's policies in practice have diverged from Miran’s original vision.
Ben and Cardiff explore three key scenarios for the future trajectory:
Best Case: International dealmaking leads to a breakthrough, reducing tariffs globally, restoring trade relations, and strengthening US manufacturing sectors.
Base Case: A partial rollback of tariffs prevents catastrophic damage, yet still triggers an economic slowdown, accompanied by an interim inflation shock.
Worst Case: Continued tariff escalation triggers a severe recession, persistent stagflation, and prolonged economic and geopolitical turmoil.
The episode concludes with "surprise scenarios" that could rejuvenate growth despite an adverse economic environment. The hosts emphasize the high stakes and overwhelming uncertainty inherent in America's current economic trajectory.
For those who want to read the full, original roadmap:
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For a deeper dive into these insights and more, be sure to listen to the full episode of the Onward podcast.
Have questions or feedback about this episode? Drop us a note at Onward@Fundrise.com.
Onward is hosted by Ben Miller, co-founder and CEO of Fundrise. Podcast production by The Podcast Consultant. Music by Seaplane Armada.
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