Anne Villamil: University of Iowa Economics Professor on the looming Trump tariffs

Uncertainty is the word of the day in the US as Donald Trump gears up for his so called "Liberation Day".  

The President will reveal his latest round of tariffs at 9am New Zealand time.  

It's expected to throw away decades of norms around global trade and hit people in their back pockets.  

University of Iowa Economics Professor Anne Villamil told Andrew Dickens there's particular concern around further tariffs on Canada.  

She says 80% of US aluminium imports come from Canada, which is a key manufacturing component.  

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Episode Transcript

Speaker 1 (00:00):
All eyes on America today. It's Liberation Day. I think
it's going to be something that's going to bring a
lot of wealth back to our country, tremendous wealth back
to our country.

Speaker 2 (00:09):
Actually, the President has a brilliant team of advisors who
have been studying these issues for decades, and we are
focused on restoring the golden age of America.

Speaker 1 (00:20):
All right. President Trump has set to start dishing out
a number of tariffs about nine o'clock our time to
address what he calls unfair trade with other countries. US
retailers say that nervous the European Union threatens a robust
and calibrated response. So let's go to America. We're going
to the University of Iowa, and there there is an
economics professor by the name of Anne Villamil who joins me. Now,

(00:41):
good morning to you. Anne.

Speaker 2 (00:43):
Good morning.

Speaker 1 (00:45):
So what's the vibe like over there?

Speaker 2 (00:49):
I think there is. I think lots of us don't
know what to expect. There's obviously lots of concern about
a trade war, but it's been on and off and
on again. So we're going to see what the announcements
are today. I think there have been reports that they're
still fine tuning.

Speaker 1 (01:08):
Is there a realization makes the American public that an
awful lot of stuff is suddenly going to cost an
awful lot more.

Speaker 2 (01:15):
I think that that is starting to hit, particularly in Iowa.
In Iowa there is it's a very small state, but
it does a lot of agricultural exports and also John
Deere manufacturing exports, and people are I think very concerned
because if you export, you care about other people's markets.

(01:37):
So it's going to be higher prices for us, but
also some tough times for our firms who export.

Speaker 1 (01:46):
Prison. Trump says he's doing this for the American workers.
So what has been the representatives of the American workers reactions,
say the unions?

Speaker 2 (01:57):
It is interesting that I think that there's so much
on certainty that you know, economists are sort of uniformly
concerned about trade wars because we know how damaging they are.
But I think there is a lot of wait and see.
Right now. There are trade problems, There's no question about that.

(02:18):
The question is what's the most effective way to resolve
those problems. And so it's been surprising and concerning, particularly
in the United States with Canada. Canada is a strong
ally and neighbor and so there are concerns about things

(02:39):
like we get eighty percent of our aluminum from Canada,
and to raise those prices. That's an intermediate good that
our firms used to produce, and I think many of
our firms are concerned about that. But there's been so
much back and forth. Yet we're going to do something,
We're going to wait a month, We're going to do

(03:00):
something else, We're going to wait a month that not
that much has happened yet.

Speaker 1 (03:05):
Yeah, sures, we're all wanting some Suresey and we'll find
that out at nine o'clock this morning. Of course, the
rest of the world is still embracing globalism, but America
is now an outlier as it looks inward. Is your
American economy strong enough to stand alone?

Speaker 2 (03:19):
Well, I certainly hope that we will continue being a
part of the trading community. The US economy has been strong,
it probably could endure a lot of this pain. The
problem is this is just going to be pure pain,
and the President has not yet made a case for
why this is the most effective way to do this.

(03:42):
There are certainly bilateral issues with China. There are certainly
issues about defense sharing with Europe. Those issues are real,
but starting a trade war as a way to solve
them is certainly something that concerns most economists.

Speaker 1 (04:02):
And Villmel who is an economics professor at the University
of Iowa, and I thank you so much for your time.

Speaker 2 (04:08):
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