AILSA CHANG, HOST:
To hear President Trump tell it, tariffs are perhaps the political equivalent of duct tape - you can use them to fix almost anything. For example, they are a negotiating tool. He used the threat of tariffs to pressure Canada and Mexico to implement border policies he liked. Tariffs are also a revenue source to Trump that might help offset his proposed $4.5 trillion in tax cuts. And, in Trump's view, tariffs can be a shield to protect American manufacturing jobs from overseas competition. The thing is tariffs can't actually be all of those things at once. And so with tomorrow's planned announcement of even more tariffs, we wanted to try to answer a seemingly simple question - what is President Trump's goal with tariffs? For that, I'm joined by Rana Foroohar. She's a columnist for the Financial Times. Welcome.
RANA FOROOHAR: Oh, thank you for having me.
CHANG: So a lot of people who've been critical of Trump's tariffs have pointed out these different stated purposes seem at odds with each other. Like, to raise revenue, you have to apply the tariffs long term - right? - so then they're no longer a bargaining chip. And if tariffs are successful in getting companies to stop importing and they boost manufacturing in the U.S., well, then you're losing tariff revenue, right?
FOROOHAR: (Laughter).
CHANG: So how does the Trump administration explain all these contradictions? Do they explain them?
FOROOHAR: (Laughter) Well, they haven't explained them well, and I think that that's one of the reasons that markets have actually been very jittery in the last few days and weeks. And just to step way back, I mean, this is an experiment that really hasn't been tried in 40, 50 years. So what we're talking about is a big change to the way the American economy and the global economy potentially works. There are a lot of reasons for it. I want to even caveat a little bit further before I get into those and say you always have to count his psychology as part of the equation here.
CHANG: Yeah. Let's talk about that because Trump often talks about his belief that the U.S. has been ripped off by other countries through their tariffs. Is that true?
FOROOHAR: It's hard to say ripped off when you look at how successful the U.S. is, and rich, compared to really any other country. That said, you could look at the tariff numbers themselves. Average U.S. tariffs on the rest of the world are around 2%. Europe, EU, would be about 5%. China would be about 10%. So you could look at those numbers and say, hmm, something's not fair here. Maybe we need to rejigger things.
CHANG: Well, that's interesting. Well, Trump describes trade deficits as subsidies that we are paying to other countries. Would you characterize it that way - subsidies?
FOROOHAR: I wouldn't look at it as subsidies, and I don't get quite as worked up about the actual trade balance as Trump and some of his advisers do. But what I would say is that we have kept tariffs very, very low and allowed a lot of countries access to the U.S. market with the idea that the way you make an economy work is by driving up stock prices and lowering consumer prices. And having a very, very open market has allowed that to happen. But there have also been ways in which domestic industries - critical minerals, semiconductors, electric vehicles - when you don't support those industries, they can go abroad. And then in times of crisis, you may regret that.
CHANG: Trump did tell NBC over the weekend that he, quote, "couldn't care less" if automakers raise their prices. So if costs to consumers aren't his metric for success, then what do you think is his metric for success here?
FOROOHAR: So I think that there are a number of economic nationalists within the administration that see tariffs as a way to reindustrialize, as a way to bolster critical areas - not just the economy but for security. Ships would be one good example. I mean, China's got about 5,500 seagoing vessels. America has a little over 180. That's a problem if you're in a war. But you have to do things at home and abroad if you want to actually support industries for economic or political or security reasons, and I don't see the home piece of this yet. I just see the tariff piece of it.
CHANG: Rana Foroohar is a columnist for the Financial Times and the author of "Homecoming: The Path To Prosperity In A Post-Global World." Thank you so much for joining us today.
FOROOHAR: Thank you for having me. Transcript provided by NPR, Copyright NPR.
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