Richard Quest: Quest Means Business host on the first 100 days of Donald Trump's presidency, global impacts of the tariffs

It’s been 100 days since Donald Trump was sworn in as US President. 

His campaign was filled with promises of dramatic change, and he’s certainly followed through, with a record-breaking number of orders filed in the first three months. 

The most dramatic of which is his sweeping global tariffs. 

Quest Means Business host Richard Quest told Mike Hosking it goes against the orthodoxy of economics that has always been taught – that tariffs can be a benefit if targeted and used for a specific purpose. 

He says using widespread tariffs to reshape global trading structures has not been done before, but it’s something Trump has always wanted to do. 

Quest believes with the tariff headwinds pushing against the global economy, major economies are facing recessions, and the slowdown in economic growth will feel pretty awful for people as the year continues.  

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Episode Transcript

Speaker 1 (00:00):
If there is one talking point out of the Trump
first one hundred days, it is the tariffs. You can
argue broadly in other areas he's done. I guess I've
said earlier on the program what he said he would do,
or at least he hasn't intend to do so. But
in tariffs, though, it was more than anyone ever really dreamed,
wasn't a ten percent for everyone? A full on war
with China and asseeming make it up as you go
along set of deals that have yet to eventuate. Meantime,

(00:22):
the world is slowing, ships are anchored, the jobs are
being lost to the markets have tanked, and we're all
waiting for I don't know, someone to blink. I guess
cee an End's business guru, Richard Quest is back with us.
A very good morning, Good morning, Ja, make how are you?
I'm very well. Indeed, you've been around a while. Have
you seen anything like these one hundred days, as specifically
regards tariffs?

Speaker 2 (00:42):
You know something, Mike, I could ask you the same question.
We've both been around long enough to know that what
we are seeing at the moment is unextraordinary, not only
for the sheer brazenness of what's been done. But the
way in which it goes against everything of the orthodoxy

(01:04):
of economics that you and I have always been taught
to believe in. That tariffs are when targeted and with
a specific purpose, it can be of a benefit if
you like. But this wide spread general tariffing across the
globe in some effort to reshape the global trading structures. No,

(01:27):
we've never seen anything like this before. But it's something
Donald Trump has always wanted since he was a young man.
He's always believed that the terms of trade for America
are unfair and that he single handedly wanted to use
tariffs to change them.

Speaker 1 (01:41):
Can we say that to a point? He has a point.
So you matched tariffs, You tariff me at twenty percent.
I'll see you twenty percent. But this whole on shoring
ten percent for everybody, one hundred and forty five percent
for China makes no sense.

Speaker 2 (01:57):
I think clearly several factors are at play. The first,
the traditional view of tit for tat the smooth horly
nineteen twenties tariffs will is a race to the economic
bottom that is certainly turning out to be true. You
tariff me, I'll tariff you. Bish bash bosh, and we

(02:19):
know where it will end up. He's always wanted to
have a to use tariffs. I don't think he ever
ever really wanted to or intended to go up to
one hundred and forty five percent, and even his recent
statement suggesting that's unsustainable, that it's clearly not the long
term goal. What I think is absolutely in his aim

(02:42):
is this ten percent general new tariff across the world.
And whilst ten percent sounds on the low side, you
have to remember A that is counter to everything we've
previously heard towards free trade, and b ten percent is
three times more than the two and a half percent

(03:03):
average tariff the US had. So this is part of
a deeply held philosophy that the US President has always
held on to, and now it's getting a chance to
put his economic experiment into practice.

Speaker 1 (03:17):
You speak to us from a spring like London this morning,
where Rachel Reeves and Kyostamer will tell you a deal
is to be done. Is that true or not?

Speaker 2 (03:27):
Well, yes, yes, there is a deal to be done.
It could depends on the price upon which it is done,
and it depends on whether or not the British government
wishes to shaft the European Union on the way. Two
things to bear in mind. Donald Trump has always believed
and continues to say, that the EU is some con

(03:50):
some scheme, some scam designed originally in the nineteen fifties
to harm the United States. If that's your view, then
yes he will want to do a deal with the
United Kingdom. But Sekre Starmer is also trying to use

(04:11):
this current tariff battle to use the NATO issues to
remind EU partners of how valuable the United Kingdom is
in the wider sense. And there's a sort of general
acceptance that, yep, the deal for Europe and the deal

(04:33):
for the UK. Now is the time to potentially do
the deal that should always have been done back in
twenty seventeen, twenty eighteen when Brexit came along.

Speaker 1 (04:43):
Now, listen Richard more broadly, I mean, do you what
are you reackon about a realignment of global trade? I mean,
for places like New Zealand Australia, focus more on the EU,
more on the UK, more on China as they do
as opposed to the US, or do you reckon This
thing gets sorted out in some way and we all
move on.

Speaker 2 (05:00):
I don't know the law is the really short answer,
because I think in the immediate term it gets sort
of sorted out and we live to adapt to these
new tariff regimes in the longer run, and that I
think is what you're really asking in the longer run, Mike, Yeah,

(05:23):
I think there are some fundamental shifts. Why Because the
United States, and the view of many, and it's a
valid view in some cases, is no longer a reliable ally.
If the United States can do economic harm to key
strategic and important allies like Australia, the UK, New Zealand,

(05:46):
the Orcus, the Orcus, the Five Eyes, if the US
can turn its back on its both historic and current
friends and allies, then people will say, yeah, you know,
we do need to have a Plan B, Plan C,
Plan D, and that means not being as reliant as

(06:08):
we have been on the United States. And who can
blame anyone If you are sitting in the behive, if
you are sitting in Canberra, if you are sitting in
Number ten or in Brussels, you are going to say,
we were promised that Donald Trump couldn't come back. We
were promised that it would never happen again. America was back. Well,

(06:30):
how did that go. I think absolutely things are going
to change on a longer term basis.

Speaker 1 (06:35):
But let me counter that with us. What if you
just hold your nose for three and a half years,
he's gone in America resumes to some form of normality.
Is that possible or not.

Speaker 2 (06:45):
It's possible, It's probable at one level. But Mike, look
at the current situation as you and I are speaking
right now. These are the economic headwinds that the global
economy is barreling through. The twenty percent steel and aluminium,

(07:07):
the twenty five percent auto automobiles, foreign autobiles and auto paths,
the ten percent general tariff now around the world, the
perspective of twenty percent or more on semiconductors, one hundred
and forty five percent on China. These are not with
exception of semis. These are happening now. This is the

(07:30):
economy right as we are speaking. So you say, you
know what, does everything go back to normal right now?
The economy is battling these headwinds. We are heading towards
recessions in many countries at stake Canada and Mexico, traditional
alliances have been ripped up, torn up and thrown in

(07:53):
the toilet. With Canada with NATO on the you know,
in the way it's been treated with den Over Greenland.
People won't forget. And the reason they won't forget is
because they are damn certain they don't want to be
on the wrong side of history in the future.

Speaker 1 (08:10):
If you're a central bank governor, how do you manage this?

Speaker 2 (08:13):
Very difficult because the inflationary battle that you thought you
were winning has now become much more difficult. Yes, tariffs
could be a one hit wonder, prices go up, but
if they create an inflationary spiral because prices go up,
there for workers demand more, therefore cost of production, etc. Etc.
And you start to see a slow down in the economies.

(08:36):
Can central bankers afford the cut rates to keep economies
growing whilst they are battling against inflation. The FED chair
Jerome Powell that made it very He basically said, this
is a very challenging time. Any central bank governor is
going to have to do the dance with the inflationary

(09:00):
devil or risk recession. Unless Here's where I think we
are right now, with the tariff headwinds pushing against the economy.
We are looking at recessions in major economies, not deep,
not long but certainly, and by the way, let's not
hang our nic or elastic on whether or not it's

(09:21):
a technical recession of two quarters of negative GDP. We
are looking at slowdowns in economic growth that's going to
feel pretty awful for people as the year moves on.

Speaker 1 (09:32):
Well, it's good to have you on the program. I
appreciate it very much. Richard Quest means business out of
seeing in. He's in London for us this morning. For
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