August 1, 2025 • 10 mins
US President Donald Trump’s tariff strategy is reshaping trade, diplomacy, and the American economy. The levies have sparked turmoil in financial markets, but are already bringing in billions of dollars in revenue for the US Treasury. So far, the global economy has held up better than many economists expected, but how long will that last? Bloomberg’s Trade Tsar Brendan Murray joins host Stephen Carroll to discuss economic wins, diplomatic risks, and political payoffs of the most aggressive US trade policy in almost a century.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. I'm Stephen Carol and
this is Here's Why, where we take one news story
and explain it in just a few minutes with our
experts here at Bloomberg. The higher the tariffs, the more
likely it is that the company will come into the
(00:24):
United States and build a factory in the United States
so it doesn't have to pay the terror.
Speaker 2 (00:29):
The idea that Donald Trump is opening the world's markets
for Americans, the ranchers, the fishermen, are farmers, I mean,
these are amazing opportunities that no one in the world
has ever seen.
Speaker 3 (00:41):
We have a situation where there's kind of a lack
of data that's showing tariffs haven't filtered through to inflation.
On top of that, you have a situation where tariffs
are still being implemented globally as well as in the US.
Speaker 1 (00:57):
Tariffs are going to make us rich as hell. It's
going to break our cut keys businesses back that left us.
Donald Trump promised to put tariffs at the center of
his economic policy as US president, and he's delivered with
America's most significant protectionist shift in almost a century. Its
whipsad markets upended traditional alliances and push the world's largest
(01:21):
economy into uncharted territory. For Trump, tariffs are a way
of tackling what he sees as unfair trade relations while
raising government revenue and boosting American manufacturing. But it's a
risky strategy, which economists warren could drive up prices for
American consumers and hurt economic growth. So far, the US
(01:43):
President's been able to point to deals with major partners,
increased revenue from tariffs, and announcements of big investment by
companies in the United States. Does that outweigh the potential
economic and diplomatic damage. Here's why tariffs may deliver for Trump.
Joining me NAT's discusses Bloomberg's trades are Brandon Murray, Brandon,
(02:06):
good to talk to you. Starting then, with these deals
that President Trump has done so far, are they helping
to rebalance America's trade relationship with the rest of the world.
Speaker 4 (02:17):
Well, the unsatisfying answer is it's too early to tell.
But what Donald Trump has done over the past several
months is reorient the world's thinking about tariffs and how
the US's place in the global economy sits compared to
its trading partners. What we're looking at is his vision
(02:39):
of a universal tariffs, varying to some degrees country by country,
but ultimately countries that want to do business with America
to sell products to American consumers and businesses are going
to have to pay up. Now, it depends on the
deal that you make with the president, but fifteen percent
(02:59):
seems like like the baseline, and it goes up from there. Brazil,
which he's lashed out at recently, is going to pay
fifty percent if it goes through.
Speaker 1 (03:09):
So we've also had this string of announcements then by
companies of new investment in the US, like fifty billion
dollars recently from AstraZeneca. Do they represent the major boost
to American manufacturing that Donald Trump was looking for?
Speaker 4 (03:22):
Well, these are the kinds of commitments that the President's
trade strategy is designed to create. You incentivize companies to
produce their products in the US rather than in Switzerland,
or in India or various other places. So the design
of this patchwork of tariffs that President Trump is putting
(03:44):
in place is to drive production back to the US.
Donald Trump has been a protectionist for several decades, and
going back to the nineteen eighties when the big rival
in Asia was Japan for cars especially, and he's acting
on those instincts today and that he sees the fact
(04:06):
that there aren't Ford pickup trucks driving around the streets
of Tokyo or Chevrolet Camaros in the streets of Berlin,
and he sees that as a fundamental unfairness in the
global economy, and he wants those countries to open their
goods to US products and to bring the production that
has gone overseas in an era of globalization and low
(04:29):
tariffs back to the US.
Speaker 1 (04:31):
Okay, So that's the goal in terms of boosting manufacturing.
When it comes to the money that the tariffs are
bringing in for the US government, how much do we
know about what sort of revenue it's raising.
Speaker 4 (04:43):
Well, it's raising many billions of dollars a month for
the US Treasury, and there are estimates that this could
bring in three hundred to four hundred billion dollars. So
over the course of ten years, you know, you're talking
a couple trillion dollars. Depending on how durable those tariffs
are are and how high or low they go. President
Trump has said he will raise them or lower them
(05:06):
depending on how countries are complying with the deal or not.
So it's unclear how predictable those revenues are going to be.
But they are flowing into the treasury as we speak,
and they're going to get even wider and bigger if
he follows through on his promises.
Speaker 1 (05:24):
But who's paying for those tariffs?
Speaker 4 (05:26):
American importers, by law, pay the tariffs they pay him
to the Customs Bureau. And it's often comes out of
the White House that this is a country that's paying
the tariff that he imposes on them, but that's not accurate.
It is the walmarts, the small businesses that bring their
goods over from China or Europe or wherever, who are
(05:51):
footing this bill. And they are very vocal in their
complaints about this, and they will either take a hit
to their margins, they will try to buy from somewhere else.
Maybe they'll try to buy goods from the US, which
is what the Trump administration would hope they would do,
or they're going to pass those on to consumers in
the form of higher prices at the store. So there
(06:13):
are various ways this could go. The Trump administration thinks
that it will drive production home. There might be a
one time hit to prices, But ultimately the system will
resolve itself and kind of and all these wrinkles will
be ironed out over the long term, and the net
benefit will be that there will be more jobs in
the US and more more industrial production at that that
(06:38):
comes home from overseas.
Speaker 1 (06:41):
Given the changes that we have seen then and these
movements we've been discussing since the April second announcement, can
we say that Trump is delivering on his goals with
these tariffs.
Speaker 4 (06:52):
Well, he's delivering press releases, fact sheets, and announcements, but
in terms of the economic number, we don't see it yet.
Manufacturing employment over the past two months has gone down
by seven thousand each month. We are seeing some signs
in surveys that the Federal Reserve does. I'll read you
(07:14):
a couple of lines from the most recent Dallas Fed survey.
This is a furniture manufacturer who says tariff changes require
a sit back and wait attitude. There is no way
to forecast. Here's a mineral product manufacturer tariffs tariffs, tariffs?
Did I mention tariffs? And here's a textile product mill.
(07:35):
We are starting to see vendors and suppliers pass on
more price increases with tariffs being the explanation. So those
comments are just comments, they're not behavior yet, but you
can tell that the pressure from tariffs is affecting businesses
in a way that's not good for the overall economy.
Speaker 1 (07:55):
So where should we be looking to see the downsides
of this? For the US, the.
Speaker 4 (08:02):
First place to look will be business investment. These are
long term, high ticket investments that companies make in either
machinery or new facilities to grow their operations, to increase
their productivity. A lot of the uncertainty hovering over the
global economy and the US economy especially revolves around what
(08:23):
these tariff rates are going to be. Like, this is
a big cost that importers have to pay for. And
if you don't know what those costs are, or you
think they might go up or down indiscriminately depending on
the mood in the White House, then it's very difficult
to make these long term investments. So investments are sort
of the kind of the core driver of longer term
(08:46):
economic growth. And when it comes to what we're seeing
an investment now, there seems to be a pullback in
company's willingness to spend a lot of money right now.
Until they figure out how this tariff situation was itself.
Speaker 1 (09:01):
Christ Donald Trump's promises are made with the US in mind,
But what about the rest of the world and all
of this.
Speaker 4 (09:06):
Well, so far we haven't seen any retaliation. Is what
you would normally see. If a country puts fifteen percent
or higher tariff on your goods, you hit them right
back with fifteen percent, and you know, there you have
a trade war, and you know, whoever has the highest
threshold for pain over the longer term wins. And what
(09:27):
we haven't seen, with if the exception of China, is
very little retaliation. The world seems to be accepting the
fact that President Trump is unhappy with these global trade
imbalances and is doing something to address them, and they're
dealing with it, and they're taking the hit and perhaps
hoping that in a couple of years, you know, a
(09:49):
new president will come into the US White House and
may think differently about how trade should be conducted. So
at the moment, no one's really willing to stand up
and go toe to toe with the US, which is
what President Trump had assumed all along, that he would
be able to throw his weight around and the weight
of the US consumer and get the deals that he
(10:10):
wants and so far, although the deals don't have a
whole lot of substance or follow through in them yet,
that's the way it's playing out from their perspective.
Speaker 1 (10:19):
Okay, Brandon Murray, Blimberg's trades are Thank you very much.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to bloomberg
dot com slash explainers. I'm Stephen Carroll. This is here's why.
I'll be back next week with more. Thanks for listening.
Bloomberg Audio Studios, podcasts, radio news. I'm Stephen Carol and
this is Here's Why, where we take one news story
and explain it in just a few minutes with our
experts here at Bloomberg. The higher the tariffs, the more
likely it is that the company will come into the
(00:24):
United States and build a factory in the United States
so it doesn't have to pay the terror.
Speaker 2 (00:29):
The idea that Donald Trump is opening the world's markets
for Americans, the ranchers, the fishermen, are farmers, I mean,
these are amazing opportunities that no one in the world
has ever seen.
Speaker 3 (00:41):
We have a situation where there's kind of a lack
of data that's showing tariffs haven't filtered through to inflation.
On top of that, you have a situation where tariffs
are still being implemented globally as well as in the US.
Speaker 1 (00:57):
Tariffs are going to make us rich as hell. It's
going to break our cut keys businesses back that left us.
Donald Trump promised to put tariffs at the center of
his economic policy as US president, and he's delivered with
America's most significant protectionist shift in almost a century. Its
whipsad markets upended traditional alliances and push the world's largest
(01:21):
economy into uncharted territory. For Trump, tariffs are a way
of tackling what he sees as unfair trade relations while
raising government revenue and boosting American manufacturing. But it's a
risky strategy, which economists warren could drive up prices for
American consumers and hurt economic growth. So far, the US
(01:43):
President's been able to point to deals with major partners,
increased revenue from tariffs, and announcements of big investment by
companies in the United States. Does that outweigh the potential
economic and diplomatic damage. Here's why tariffs may deliver for Trump.
Joining me NAT's discusses Bloomberg's trades are Brandon Murray, Brandon,
(02:06):
good to talk to you. Starting then, with these deals
that President Trump has done so far, are they helping
to rebalance America's trade relationship with the rest of the world.
Speaker 4 (02:17):
Well, the unsatisfying answer is it's too early to tell.
But what Donald Trump has done over the past several
months is reorient the world's thinking about tariffs and how
the US's place in the global economy sits compared to
its trading partners. What we're looking at is his vision
(02:39):
of a universal tariffs, varying to some degrees country by country,
but ultimately countries that want to do business with America
to sell products to American consumers and businesses are going
to have to pay up. Now, it depends on the
deal that you make with the president, but fifteen percent
(02:59):
seems like like the baseline, and it goes up from there. Brazil,
which he's lashed out at recently, is going to pay
fifty percent if it goes through.
Speaker 1 (03:09):
So we've also had this string of announcements then by
companies of new investment in the US, like fifty billion
dollars recently from AstraZeneca. Do they represent the major boost
to American manufacturing that Donald Trump was looking for?
Speaker 4 (03:22):
Well, these are the kinds of commitments that the President's
trade strategy is designed to create. You incentivize companies to
produce their products in the US rather than in Switzerland,
or in India or various other places. So the design
of this patchwork of tariffs that President Trump is putting
(03:44):
in place is to drive production back to the US.
Donald Trump has been a protectionist for several decades, and
going back to the nineteen eighties when the big rival
in Asia was Japan for cars especially, and he's acting
on those instincts today and that he sees the fact
(04:06):
that there aren't Ford pickup trucks driving around the streets
of Tokyo or Chevrolet Camaros in the streets of Berlin,
and he sees that as a fundamental unfairness in the
global economy, and he wants those countries to open their
goods to US products and to bring the production that
has gone overseas in an era of globalization and low
(04:29):
tariffs back to the US.
Speaker 1 (04:31):
Okay, So that's the goal in terms of boosting manufacturing.
When it comes to the money that the tariffs are
bringing in for the US government, how much do we
know about what sort of revenue it's raising.
Speaker 4 (04:43):
Well, it's raising many billions of dollars a month for
the US Treasury, and there are estimates that this could
bring in three hundred to four hundred billion dollars. So
over the course of ten years, you know, you're talking
a couple trillion dollars. Depending on how durable those tariffs
are are and how high or low they go. President
Trump has said he will raise them or lower them
(05:06):
depending on how countries are complying with the deal or not.
So it's unclear how predictable those revenues are going to be.
But they are flowing into the treasury as we speak,
and they're going to get even wider and bigger if
he follows through on his promises.
Speaker 1 (05:24):
But who's paying for those tariffs?
Speaker 4 (05:26):
American importers, by law, pay the tariffs they pay him
to the Customs Bureau. And it's often comes out of
the White House that this is a country that's paying
the tariff that he imposes on them, but that's not accurate.
It is the walmarts, the small businesses that bring their
goods over from China or Europe or wherever, who are
(05:51):
footing this bill. And they are very vocal in their
complaints about this, and they will either take a hit
to their margins, they will try to buy from somewhere else.
Maybe they'll try to buy goods from the US, which
is what the Trump administration would hope they would do,
or they're going to pass those on to consumers in
the form of higher prices at the store. So there
(06:13):
are various ways this could go. The Trump administration thinks
that it will drive production home. There might be a
one time hit to prices, But ultimately the system will
resolve itself and kind of and all these wrinkles will
be ironed out over the long term, and the net
benefit will be that there will be more jobs in
the US and more more industrial production at that that
(06:38):
comes home from overseas.
Speaker 1 (06:41):
Given the changes that we have seen then and these
movements we've been discussing since the April second announcement, can
we say that Trump is delivering on his goals with
these tariffs.
Speaker 4 (06:52):
Well, he's delivering press releases, fact sheets, and announcements, but
in terms of the economic number, we don't see it yet.
Manufacturing employment over the past two months has gone down
by seven thousand each month. We are seeing some signs
in surveys that the Federal Reserve does. I'll read you
(07:14):
a couple of lines from the most recent Dallas Fed survey.
This is a furniture manufacturer who says tariff changes require
a sit back and wait attitude. There is no way
to forecast. Here's a mineral product manufacturer tariffs tariffs, tariffs?
Did I mention tariffs? And here's a textile product mill.
(07:35):
We are starting to see vendors and suppliers pass on
more price increases with tariffs being the explanation. So those
comments are just comments, they're not behavior yet, but you
can tell that the pressure from tariffs is affecting businesses
in a way that's not good for the overall economy.
Speaker 1 (07:55):
So where should we be looking to see the downsides
of this? For the US, the.
Speaker 4 (08:02):
First place to look will be business investment. These are
long term, high ticket investments that companies make in either
machinery or new facilities to grow their operations, to increase
their productivity. A lot of the uncertainty hovering over the
global economy and the US economy especially revolves around what
(08:23):
these tariff rates are going to be. Like, this is
a big cost that importers have to pay for. And
if you don't know what those costs are, or you
think they might go up or down indiscriminately depending on
the mood in the White House, then it's very difficult
to make these long term investments. So investments are sort
of the kind of the core driver of longer term
(08:46):
economic growth. And when it comes to what we're seeing
an investment now, there seems to be a pullback in
company's willingness to spend a lot of money right now.
Until they figure out how this tariff situation was itself.
Speaker 1 (09:01):
Christ Donald Trump's promises are made with the US in mind,
But what about the rest of the world and all
of this.
Speaker 4 (09:06):
Well, so far we haven't seen any retaliation. Is what
you would normally see. If a country puts fifteen percent
or higher tariff on your goods, you hit them right
back with fifteen percent, and you know, there you have
a trade war, and you know, whoever has the highest
threshold for pain over the longer term wins. And what
(09:27):
we haven't seen, with if the exception of China, is
very little retaliation. The world seems to be accepting the
fact that President Trump is unhappy with these global trade
imbalances and is doing something to address them, and they're
dealing with it, and they're taking the hit and perhaps
hoping that in a couple of years, you know, a
(09:49):
new president will come into the US White House and
may think differently about how trade should be conducted. So
at the moment, no one's really willing to stand up
and go toe to toe with the US, which is
what President Trump had assumed all along, that he would
be able to throw his weight around and the weight
of the US consumer and get the deals that he
(10:10):
wants and so far, although the deals don't have a
whole lot of substance or follow through in them yet,
that's the way it's playing out from their perspective.
Speaker 1 (10:19):
Okay, Brandon Murray, Blimberg's trades are Thank you very much.
For more explanations like this from our team of three
thousand journalists and analysts around the world, go to bloomberg
dot com slash explainers. I'm Stephen Carroll. This is here's why.
I'll be back next week with more. Thanks for listening.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
New Heights with Jason & Travis Kelce
Football’s funniest family duo — Jason Kelce of the Philadelphia Eagles and Travis Kelce of the Kansas City Chiefs — team up to provide next-level access to life in the league as it unfolds. The two brothers and Super Bowl champions drop weekly insights about the weekly slate of games and share their INSIDE perspectives on trending NFL news and sports headlines. They also endlessly rag on each other as brothers do, chat the latest in pop culture and welcome some very popular and well-known friends to chat with them. Check out new episodes every Wednesday. Follow New Heights on the Wondery App, YouTube or wherever you get your podcasts. You can listen to new episodes early and ad-free, and get exclusive content on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. And join our new membership for a unique fan experience by going to the New Heights YouTube channel now!