Visit our website:
http://www.france24.com
Like us on Facebook:
https://www.facebook.com/FRANCE24.English
Follow us on Twitter:
https://twitter.com/France24_en
Category
🗞
NewsTranscript
00:00Let's stay with the issue of those tariffs.
00:02Marcus Nolan joins us, he's Executive Vice President
00:05of the Peterson Institute for International Economics.
00:07Thank you, sir, for being with us here.
00:09We appreciate your time.
00:11This whole issue of the tariffs,
00:14can you give us a sense of what it all means?
00:17Because some people understand what's going on,
00:20others people have a more vague idea.
00:22The way I see it, it's basically something
00:25that's decided by leaders of a country,
00:28but it's always the consumers who get hurt most.
00:32That's about right.
00:34And if you don't understand what's going on
00:36here in Washington, you are not alone.
00:38This is the rollout of this policy, if there is a policy,
00:43has been absolutely chaotic with announcements of tariffs
00:46and then tariffs delayed or tariffs not applied.
00:50So there's a tremendous amount of confusion.
00:54Tariffs themselves will damage the economy,
00:56both the United States economy and the economies
00:59of the targets of those tariffs,
01:01whether it's Canada, Mexico, Europe, or any place else.
01:04But the sheer confusion about what's going on
01:07is having a very damaging effect on the US economy,
01:10depressing investment and undermining consumer confidence.
01:15So hang on a minute.
01:16If I understand it then, the man who pledged
01:18to start a golden age for the United States
01:21and said that the economy is something that he will master
01:23and steer with great adeptness,
01:26is actually with his policies behind what is basically
01:30pushing the US economy towards recession.
01:33That is correct.
01:35And in terms of, well, it seems nonsensical
01:38as a policy to advance with that,
01:40what do you think Trump is trying to achieve?
01:43Trump is trying to reindustrialize the United States.
01:47He's trying to restore an imagined golden age
01:50where there are plenty of blue-collar factory jobs.
01:54The problem is the imposition of tariffs
01:57actually makes the United States
01:59a high-cost producer around the world.
02:01So for example, if you impose 25% tariffs
02:05on steel and aluminum, you are going to make
02:08the production of automobiles in the United States
02:10completely uncompetitive.
02:12They'll have to raise their prices.
02:14Consumers will purchase cars from Europe or Asia,
02:17which means that he's then gotta put a tariff on automobiles
02:21and it will proceed in a kind of piecemeal way
02:24of putting tariffs on different products
02:26to try to compensate for the impact
02:28of previously applied tariffs.
02:31So when Donald Trump, 24 hours ago,
02:33was stood at the White House trying to do a sales pitch
02:36for Tesla cars and bigging up his,
02:40for want of a better word, sidekick Elon Musk,
02:43in a sense he's trying to create some sort of illusion
02:45that there is this kind of commerce, this business
02:49that all Americans can tap into,
02:51but in fact what he's doing is pricing Americans
02:53out of their own market.
02:56Absolutely right.
02:57So again, I'm going back to that same question.
03:00What on earth is he playing at?
03:03He thinks that he will put the economy
03:07through temporary pain or long-term gain.
03:10There will be temporary pains of adjustment,
03:13but eventually all those industries
03:15will move back to the United States
03:18and provide lots of high-paying, high-benefit,
03:22blue-collar factory jobs for the American public.
03:25So he thinks he's gonna eventually get
03:27to a greater golden age, as you put it.
03:30The problem is there's no evidence that's going to happen.
03:33All he's doing is making the U.S. economy inefficient
03:37and in doing so in such an arbitrary and confusing way,
03:41he's depressing business investment
03:43and he's scaring consumers.
03:45So the U.S. economy is slowing
03:46and now half the big models show it going into recession.
03:50My next question to you was going to be,
03:52is this going to work?
03:53You've already answered that very, very clearly.
03:56This is something that really is setting
03:58the U.S. economy towards that recession situation.
04:02And when that happens, of course,
04:04all the people who voted for Trump,
04:05and we're getting political here,
04:06so perhaps you don't want to go there,
04:07but I'm gonna ask you anyway.
04:09All those people who voted for Trump,
04:11surely they're gonna actually say to themselves,
04:12well, hang on a minute, this isn't what we wanted.
04:17I am not a political scientist
04:19and I can't predict how people react,
04:21but I have to believe that there are millions of Americans
04:24who are now getting something
04:26that they didn't think they were voting for in November.
04:29So in terms of what happens next for Donald Trump
04:32and for his grand plan for the U.S.,
04:35short-term pain for long-term gain isn't going to work.
04:40He's backtracked on some of the things he said already,
04:43which again, makes people doubt his credibility.
04:46Is that gonna be the pattern we see?
04:48He will shout, he will make noise,
04:50he will try to push towards some kind of deal that he wants
04:53and then pull back at the last moment.
04:55I'm afraid not.
04:57During the first term, he was surrounded by people
05:00who had more conventional thinking
05:02and they acted as a constraint on these impulses.
05:06Now he's surrounded by people who either share his thinking
05:09or are simply ambitious and will go along.
05:11So I think there'll be less constraint on him.
05:13I think he actually is going to impose
05:15a lot of these tariffs.
05:17And the U.S. will then be subject to retaliation
05:20by other countries.
05:21We've already been subject to some retaliation by Canada
05:25and the EU is promising to retaliate as well.
05:29And the net result is everyone's worse off.
05:32Indeed, we've already heard about Europe
05:34looking to tax things such as bourbons,
05:36such as motorcycles, such as blue jeans,
05:38the kind of things that one might associate
05:40with American soft power
05:42in terms of creating a really positive image
05:44of the United States.
05:45All that's set to be in some way halted.
05:48And surely one can't accept that this is gonna reverse
05:51decades and decades of goodwill and good culture
05:53and good cultural exchange.
05:54However, we're at a point now where things
05:56are becoming very different on all levels.
06:01Well, you have to be very careful.
06:02Once tariffs go on, it's very hard to get them off.
06:06So if you retaliate against the United States
06:08with the strategic objective
06:10of getting Trump to back off and he doesn't,
06:14then you're really stuck.
06:15In the United States, we make all our own light trucks
06:19because the light truck tariff is 25%.
06:22That is the result of a dispute with the EU
06:25about frozen chicken parts back in the 1960s.
06:28Once these things get put in place,
06:30they're hard to take apart.
06:33Marcus, you've scared me with that last remark.
06:35Marcus Noland, Executive Vice President
06:37of the Peterson Institute for International Economics.
06:40Thank you for joining us, sir.
06:41And thank you for your very frank response
06:45to the questions, which I hope have given our viewers
06:47some insight into what to expect coming next.
06:50Marcus Noland from the Peterson Institute.
06:52Thank you for joining us, sir.
06:53Very much indeed.
06:55Honor.