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David Sirota (00:18.826)
Okay. First, let's start Peter with what Donald Trump just did. What do you think the top line takeaways are from his big announcement today?

Peter Goodman (00:34.081)
Well, these tariffs are much bigger than people expected. mean, we've got a 10 % baseline tariff. That means 10 % tariffs on just about everything coming into the United States from everywhere, with the very key exception that that baseline doesn't apply to imports from Mexico and Canada that are compliant with the North American trade deal that Trump negotiated in his first term.

So there's a lot going on there. On the one hand, he is telling us this is not just a negotiating ploy or if it is, it's quite a ploy. He really does believe in tariffs and we can get into the various reasons why and what the justifications are. But he is telling us at least that he thinks tariffs are good for the future of the American economy while he's simultaneously saying that to the extent to which we wean ourselves off of trade, with giant economies like China, it is positive to keep more of it in the region. I mean, we've had a lot of histrionics with Mexico and Canada, a lot of accusations, but at the end of the day, there's a priority given to imports from our neighbors, Mexico and Canada. I think that's pretty interesting too.

David Sirota (01:49.142)
Okay, so I want to take the historical view here for a second because this seems to me that this whole issue does not cut cleanly along Ideological lines the old descriptions don't really necessarily Apply here liberal conservative, etc. Etc. Republican Democrat. I remember 25 years ago working on Capitol Hill for Bernie Sanders as an example, when the PNTR with China deal, free trade with China deal, no tariffs for trade with China went through.

Peter Goodman (02:30.443)
This is 2001. This is what gets China into the World Trade Organization.

David Sirota (02:33.62)
Exactly, and there was a coalition on Capitol Hill at the time of Lefty members and conservative members together decrying What the Clinton administration was doing in getting rid of these tariffs? My point in bringing this up is that the criticism back then 25 years ago was that to reduce tariffs across the board with a country like China and reducing tariffs across the board with all sorts of other countries would essentially hollow out America's manufacturing base. And there seemed to be, there was a bipartisan consensus, enough votes in Congress to get rid of the tariffs, but there was a bipartisan coalition that was saying tariffs, getting rid of these tariffs like this are going to destroy the American economy. So now fast forward 25 years later, and I guess the question would be where does Trump's move today come down? through that prism, how do we see what Trump is doing through the prism of the criticisms from 25 years ago that said Getting rid of these tariffs is what has helped companies make it cheap to offshore their factories destroy the environment, exploit Bad wage and labor standards in other countries Like how do we understand what trump is doing through the prism of those? Criticisms from 25 years ago, which by the way have kept up as a drumbeat You know in the interim

Peter Goodman (04:17.557)
Well, to answer your question directly, though there's a lot more to unpack than just the direct response, Trump is clearly siding with the critics of traditional trade deals. He is saying that working people, industrial communities have been devastated by the mode of trade that we've lived through for most of our adult lives.

And he's arguing that protectionism is the way to revive their fortunes. And, you know, this was underscored by the fact that he actually called up to the podium as he makes this announcement in the Rose Garden this afternoon in Washington, a guy who represents UAW workers for Trump. Now, think about this. The UAW famously endorsed Joe Biden and then Kamala Harris after Biden left the race. So this is the leadership in Washington.

Big important union gets the votes out. They went very heavily for the Democratic side of the column. Meanwhile, a significant number of rank and file workers, and I saw this up close. I did some reporting about a year ago in Michigan, talking actually to the very worker who was up there at the podium with Trump this afternoon. They broke sharply with their own leadership.

and campaigned openly for Trump. And they did that for a bunch of reasons. One of them was they liked the idea of tariffs. They liked the idea that a presidential candidate was taking a stand against, as they saw it, the technocratic Washington elite that had been helping giant companies send production overseas for a long time. They also liked that Trump was opposed to

It was a mischaracterization, but they called it the EV mandate, Biden's EV mandate, Biden's policies that were designed to promote the making of and selling of and driving of electric vehicles in the United States for a combination of attempting to generate jobs in a fast growing industry while dealing with climate change. And they saw this as a direct threat to their livelihoods. Now, I got to pause, though, and say that while there's much to criticize in, let's look directly at the Clinton administration, which very cynically sold a China WTO entry deal as it's not just about money, this is about democratizing China to the extent to which we integrate the United States with China. Once Chinese consumers get a taste of Kentucky Fried Chicken, they'll demand the ballot box, this sort of thing.

This was nonsense. Walmart wanted a crack at China because this was the way that you could get out from under unions, environmental standards, and workplace safety rules in the United States. You could save money. You could do better for the shareholder by cutting costs. That was all true. I think it's also pretty clear if you look at the literature that trade in the aggregate has been a positive force for not just American consumers.

but for American workers as well. The problem is that we did a miserable job and blame falls on both sides of the aisle, helping out the people who got left behind. mean, people, this is a big cliche, happens to be true. Trade deals have winners and there are losers. And the winners are always spread broadly. Anybody who's ever bought a pair of underwear on amazon.com, it's cheaper.

And the losers are easy to find because they're in communities that are effectively bombed out. Everybody loses a job at once, houses are underwater. There's a lot of Washington-based economists will say, just train to become a solar employer and move to Arizona. Well, my family's in Michigan, my kids in school in Michigan, my house is underwater with everybody else in Michigan, not so easy. But it's worth meditating on the fact

that there are plenty of other countries that are much more exposed to global trade than the United States that are not seething with anti-trade populism. And for the moment, putting aside the fact that there's a lot to critique in terms of whether Trump is really following through with policies designed to help the people he's speaking for, but put that aside for a minute. You know, look at Sweden. Sweden's much more exposed to global trade than the United States, and people are not out in the streets protesting or demanding

Peter Goodman (08:50.135)
a sabotaging of the global trade system because if you lose your job in Sweden, you still have national health care. You still have housing support. You can still send your kid to college. It's not a calamity. So oftentimes in the States, when we're talking about trade, we're really talking about much broader things. But to come back to your original question, yes, Donald Trump is saying, you got it right, angry.

David Sirota (08:55.512)
That's right.

Peter Goodman (09:15.447)
Residents of deindustrialized communities, we're gonna put a stop to trade. And there's a lot to talk about in terms of whether that will actually work and help anybody out.

David Sirota (09:24.45)
Yeah, I mean, I trace a direct line, and we've written about this in the Levers newsletter, a direct line between Ross Perot and Donald Trump. I mean, Donald Trump flirted with running under Ross Perot's party. Ross Perot made a huge deal out of opposing NAFTA, the giant sucking sound, really a critique of globalization and the like. And again, fast forward 25 years and to pick up your point about the UAW,

This is on the UAW's website right now. In a victory for auto workers, auto tariffs marked the beginning of the end of NAFTA and the free trade disaster. And I want to read the quote from UAW president, Sean Fain. Here's what he says, quote, we applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities for decades, ending the race to the bottom in the auto industry.

starts with fixing our broken trade deals and the trump administration has made history With today's actions now. He's talking about the auto tariffs in in particular that were announced a little while ago, but sean fain Is is not a conservative, know anti democratic party guy and I bring all of this up because obviously

I think a lot of podcasts this week, a lot of cable TV commentary, a lot of op-eds are going to try to ramrod this issue into the red versus blue frame. Like Donald Trump is bad. know, anything he does is bad. And I want to be clear. I'm not saying that the tariffs that he's putting in place are good. What I'm saying is, is that this doesn't necessarily neatly break down along those lines.

But then the question becomes, okay, looking ahead beyond just what are the political implications of this? And we'll get back to that in a sec about whether this is another trap for Democrats, right? Maybe is this baiting Democrats into opposing, coming out and opposing all of this and further moving the working class to Trump's coalition. But before we get to that, let's just talk about, again, the real world implications of this for people going to the story. If, if, if.

David Sirota (11:45.036)
You're listening to this right now and you know nothing about tariffs, nothing about what this means. I guess I would ask you, Peter, what do you say to that listener right now? What is this going to mean in their lives tomorrow, next week, next month, next year?

Peter Goodman (12:02.069)
Get ready to pay more for all kinds of stuff. Get ready potentially for shortages because there's a lot of confusion out there in the global supply chain. There hasn't been clarity on where you can pay what. Trump keeps saying, hey, you're worried about tariffs? Just make everything in the US. Well, that's easier said than done. That will take billions of dollars and years and years because the simple fact of it is that if you want to make a car,

today, it requires something like 30,000 parts and those parts require parts and raw materials themselves that are drawn from all over the world. By the way, worth noting, one of the things exempted in the executive order that calls bilateral trade deficits a national emergency, justifying these unilaterally imposed tariffs without any, you know, say so from Congress. Well, there's an exemption for minerals used for cars. Guess who wanted that?

guy named Elon Musk.

David Sirota (13:04.142)
Of course, course, so and I want to talk I want to talk a little bit more about about exemptions This whole issue of what gets exempted I think This sort of flies under the radar but really is important because I think this does potentially link up with corruption there was a study that we reported on about the link between campaign cash to

Republican politicians Trump adjacent politicians and which industries got exemptions the last time Donald Trump in his first presidential term and we put imposed some tariffs on Chinese imports and there is a direct link between Who essentially pays and lobbies and which industries which companies got exempted now? Before I I ask you a question. It's worth noting. These are at least as far as I can tell

Across the board tariffs. That's what they're being billed as which seems to me to be at least on the surface less Less structured to be sort of incredibly corrupt where the president is choosing winners and losers who gets tariffs who doesn't get tariffs But I wonder how much you think moving forward based on what we know about what's being put in place

Whether there's now going to be a whole new essentially corruption bidding war in Washington where everyone's trying to kiss the ring of the Trump folks using campaign cash to get exemptions. Is this this I guess what I'm asking is this the same kind of replay that we saw in the first term or is this something different?

Peter Goodman (14:48.727)
It's different with similarities. So it's different in that in the first term, I think it was fair to say the overwhelming policy objective was to separate the United States from China, to diminish our industrial dependence upon finished products and parts and components for our own products from China, so-called decoupling, call it what you want. And in that scenario,

the rest of the world was potentially an instrument of that policy, and especially Mexico, right? So if you're looking to shorten the distance from your factory to your customer, and you're selling it to North America, you're worried about, you you've discovered that international shipping is an international cartel that will rip your face off every time there's some disruption, and the price of a shipping container can go through the roof, and then you have shortages like we had during the pandemic.

Okay, better not rely on a country that's across the Pacific Ocean for most of your stuff. Mexico fits the bill. We had a lot of shifting of production to Mexico. Well, that's different now that we've got tariffs, at least on stuff not compliant with this trade deal that Trump forged in his first term, the USMCA, the new NAFTA. And it's much broader, right? I think it's fair to say that

At least somebody Trump's listening to really believes that muscular across-the-board tariffs are a way to revive manufacturing in the US and to force multinational companies. mean, ironically, this whole thing starts with a critique of Chinese policy where, you know, rule of law doesn't apply and regulations don't matter and you don't care about the environment, you don't care about workplace safety. All you care about is making stuff and then using your giant market power.

as one of the world's most populous countries to dictate the terms of trade to everybody else, which was supposedly really bad in contrast to the US where we've got rules of law and we're long standing members. We created the World Trade Organization. Well, now we effectively are China in that critique, right? The new terms are we're the biggest consumer market on earth. So what we say goes and what we say now is if you want to sell to us, you make your stuff in the United States or we're going to stick you with tariffs.

Peter Goodman (17:15.029)
That's different than the emphasis in the first term, which was more about using tariffs as, again, a way to separate us from China and then strike deals with the rest of the world. The similarity, though, is the scattershot way in which these tariffs have been floated, imposed, in some cases set aside, reinstated, such that most companies now

are so confused about the terms of trade going forward that the only thing they really get for sure is that Trump believes in kind of imperial presidency. He's the decision maker. If you wanna be sure that you're protected from tariffs, from an executive order if you're a law firm and you've done some business with people Trump doesn't like, if you're a politician in another state whose policies don't align with the

current federal vision. You you better ingratiate yourself with the man in Mar-a-Lago, which puts executives in the mood to shell out whatever the going rate is, you know, a million dollars through these MAGA affiliated political action committees to get a seat at the exclusive dinner in Mar-a-Lago so you can plead your case that you deserve the exemption or your enemy should be hit with tariffs or regulations or whatever.

That part is a similar feature. In fact, it's much stronger in this term than it was in the first one. And we're to have to see going forward how this plays. But let's just take note again, the fact that Elon Musk has gotten an auto tariff policy that makes Tesla the single largest beneficiary of these tariffs that are going to hit just a few hours after we're having this conversation because Tesla makes their cars in

in the United States, at least the ones that it sells in United States. And now we've got this exemption for critical minerals on the across the board tariffs, which is a clear nod at lithium. You need lithium to make those batteries that Tesla likes to sell. Trump is no fan of electric vehicles. He's told us that, but he seems to be a fan of what Tesla needs. It's also no accident that Mark Zuckerberg has taken advantage of his improved relationship with Trump to seek

Peter Goodman (19:38.229)
Trump's help with the Europeans on these privacy rules, where the Europeans are going after Facebook for serving up tailored ads to customers without their say so. It seems to be an indication that they're using data in ways that at minimum are not transparent and at worst are malevolent and intrusive to some people. the deal making and the relationships as important as ever,

And I think you have to view tariffs as another lever that this president will use to centralize power and then potentially monetize the use of them.

David Sirota (20:18.028)
Yeah, that's a really that's a really really good point. I I I hadn't thought of it inside of the larger unitary executive power grab, but that certainly is what it seems to be. But let's let's like take their argument on its merits for a sec. Let's just really like sit with it because because I mentioned that I do feel like that the political

Method in the madness is to constantly bait Democrats into taking positions that humiliate them them in front of working-class voters and so the Part of what I see even in the initial response in Democrats saying these tariffs are terrible and they're they're gonna increase prices and and look I do think there's a strong Inflation argument here the Democrats can make this is going to be painful but

If you take the Trump administration's arguments, hey, we have to make it cheaper for companies to make stuff here and punitively more expensive for companies to make stuff over there in order to re-industrialize the country, in order to build a production infrastructure here at home that supports good paying jobs, I feel like the Democrats being baited into

Criticizing that it's a tough Political argument or put another way. I feel like the question then becomes well, what is wrong? With Trump's argument, right? What is wrong with a president who gets elected by the voters in this country saying listen Corporations and their lobbyists rig trade deals to sell out the entire country. They don't care about you

And we need a trade policy that actually provides economic incentives, strong economic incentives to build here, to support here, and strong economic punishment if you're going out and you're treating this country just like an auction room where you just sell stuff but you don't actually support our actual economy. What is actually wrong with that argument?

Peter Goodman (22:39.479)
It depends how you go about it. So there's nothing wrong with looking at the experience of the last few decades and saying, the way we've been doing it has been very, very bad for working people, especially in concentrated areas where we've left people. We've abandoned people. We've given them no help with job training. We've traded adjustment assistance. So it was woefully underfunded that we always have money for tax cuts for billionaires, but we don't have money to retrain people who

who got hit by cheap imports from China, Mexico, you

David Sirota (23:14.83)
And I want to point out there is empirical data that in the most trade exposed Congressional districts in the United States If you look at what happened they went from some of the most democratic districts in the country Quickly to some of the most Republican districts in the country After NAFTA in that transit people were let felt like they were abandoned. They felt like they were culture They were already having sort of culturally conservative critiques

Peter Goodman (23:34.935)
Right.

David Sirota (23:43.966)
of the Democratic Party's positions on various social issues. They were sticking with Democrats up until NAFTA, and then NAFTA broke that bond, and those districts are now some of the most Republican in the country. So they were sort of left to wither.

Peter Goodman (23:57.643)
And those people are not wrong and they're not crazy to say the people running the country have not been thinking about me or my ability to support my family. They're not wrong. And the social contract has not been delivered. mean, people have gotten screwed. Like, let's just say it, right? But it's also fair to ask, and what's going to happen now?

David Sirota (24:26.167)
Right.

Peter Goodman (24:26.931)
If you're going to put tariffs on steel, as we've done, and you're going to mug for the cameras at a steel mail where there's a new shift and it's a great photo, Trump's real good at putting on the hard hat and smiling for the cameras, but you're not going to mention that there are something like 80 times as many jobs at companies that buy steel.

as there are at factories that make steel. So 80 times as many people just had their own jobs rendered less competitive. Now, even there, let's give the Trump people their due. Okay, so, well, it's going to take a long time. All that does is reflect the result of decades of bad policies that haven't set up the economy structurally in such a way that more people can benefit. There's a lot to poke at there, but let's just say that that's how it is for a minute. Well, okay.

You're simultaneously saying we need to build ships in the United States. There was a rulemaking that came out of the US Trade Representative a few weeks ago. There have been hearings recently in Washington where Trump administration proposes to charge every container shipping company, and it's not just container ships, it's break bulk ships, every ship landing at every port, a million dollars per port visit if they have a Chinese made ship in their fleet.

And then that's supposed to catalyze this process of American shipyards, which really haven't made ships in numbers for 50 years, to get back to it. But we just jacked up the cost of steel. I mean, how's that gonna work? I mean.

David Sirota (26:08.418)
Right, right. Well, so I guess I would ask, is the right metaphor here, is one metaphor here maybe there's some medicine that needs to be taken for a sick patient, the sick deindustrialized economy of the United States, and that instead of creating kind of a glide path, like some low doses, you taper up the doses, we're going to

start slowly raising tariffs. We're going to set time, know, five years from now there's going to be tariffs. So you better start investing in factories now. You better start adjusting now that Trump is moving so fast that he's given so much again, using the metaphor here, using so much medicine that the medicine's actually poison, right? Like if you were serious about

Peter Goodman (26:54.103)
Well, and simultaneously cutting funding for applied research, which in your metaphor is like stabbing yourself in the head with a fork.

David Sirota (27:01.166)
Right, but but but I what I'm getting at here is that Is is the essentially the the best critique of this to say listen if you want to bring factories back to the United States There are ways to start using tariffs in a scalable graduated way with time deadlines, etc, etc to exactly right like it

Peter Goodman (27:25.483)
Biden did that. I mean, it's not anybody who's take away. I to come back to your original point, if you want to find some simple binary that's like tariffs are evil and you know, or all these tariffs are great, you know, it's one or the other, like that's completely insane. I mean, it's a it's a it's a false binary. Tariffs are a tool in the toolbox. Now, the story of of tit for tat global trade wars is one that

does not end well. And the idea that we're just going to tear up our alliances around the globe and destroy American soft power and invite retaliatory waves of tariffs, which are going to hit everything from, you know, Kentucky, bourbon to agribusiness across the industrial Midwest and a million other things that we can't immediately think of to say nothing of, you know, the trade war now extending into digital services as the Europeans go after Facebook and Google.

You know, there are reasons to be very concerned. But yes, to come back to your original point, anybody out there who's teeing this up as we can either have this insane tariff driven global trade war, or we can have the wonderful comfort of the status quo needs to take a look at what's happened in the last half a century.

David Sirota (28:44.462)
That's right. And and and that's what I think is so difficult About this which is that it doesn't cut cleanly necessarily along, you know, perfect partisan And party lines now I want to get to this inflation question because this to me really does seem to be the thing that is most in in political conflict with what Trump has promised let's be clear

Peter Goodman (29:01.9)
Yeah.

Peter Goodman (29:12.311)
100%.

David Sirota (29:13.954)
This guy, you know, there's a lot of stuff that Trump has done where it's like, he didn't campaign on this. Nobody wanted this. Nobody voted for this, right? You know, getting rid of the CFPB, the financial regulator, like no, no person in America voted for that. nobody, there's no mandate to do that. Right. Like there's right. There's none of that, but I think there's a strong case that people knew they were voting for Trump, knew they knew that they might get tariffs in general.

Peter Goodman (29:29.121)
kill Ebola preparedness. I don't remember the signs.

David Sirota (29:41.83)
Voting for Trump's he made that clear. I I think they also thought they were voting for combating inflation now raising tariffs is certainly in the short term if not also in the medium term and long term is the opposite of Combating inflation. I mean, I don't consider myself and I have been a critic of frankly in of sort of

Peter Goodman (30:04.951)
100%.

David Sirota (30:10.91)
Ideological free traders the ideological free traders who deindustrialize this country who pushed NAFTA etc. Etc their their argument has always been well Listen prices at Walmart or lower, you know, everyone's benefiting because you can get as you said cheap underwear at Walmart is essentially an anti inflation argument, right? Like we have kept the price of goods low, right?

Peter Goodman (30:31.639)
Right, that's right. That's how it was sold. That's how the retailers persuaded. mean, look, Bill Clinton came from Arkansas, not incidentally Walmart's home state. It was about retailers getting a crack at China to deliver lower cost goods. That was their end of the bargain.

David Sirota (30:41.313)
Exactly.

David Sirota (30:46.67)
But the problem is, is that with Trump, he's saying two things that are directly at odds with each other. He's Mr.

Peter Goodman (30:53.623)
Directly, he's saying three things actually, because the third is, oh, tariffs are gonna raise $6 trillion, and so we're gonna get rid of the income tax, and we're just gonna live off tariffs. Well, that's only possible if we keep buying all this stuff, of these inflated tariff rates. So these are three things in direct conflict.

David Sirota (31:05.464)
That's right.

David Sirota (31:10.49)
Right, they're in direct conflict, I guess the question is, which is the priority? Like, is there a priority? Is there a method to the madness? Like, I've started by saying I think there's method to the madness, but now when I think, you campaign on lowering the price of groceries and goods, and now you're touting tariffs, like, what's the theory here? Is there a theory?

Peter Goodman (31:40.509)
Yeah, I don't think there's a unifying grand coherent strategy here. I think there are pieces of overlapping strategy. I think one we've already talked about centralized presidential authority and use it for your own ends. It's another. You're it. Look, why do trolls guard bridges? Right. Why? Why do presidents who like tariffs like tariffs? Because you got to deal with me if you want to get your stuff through.

David Sirota (31:43.16)
Ha ha ha!

David Sirota (32:08.558)
That's right.

Peter Goodman (32:09.111)
And you can get all sorts of things that way. I do think that Trump, I can't say this with conviction. I don't know the man. I'm not inside his head. I'm willing to believe that he really believes that tariffs are a way to bring production back to the United States. And I don't think he spends a lot of time sort of contemplating the niceties of supply chains. And to the extent to which he does, I think he's drawing on the counsel of people like Peter Navarro, his chief trade advisor, who wrote famously, you know, wrote a book called Death by China.

who has argued, you know, very directly, yes, this is going to hurt. It's true that the people who work at factories that buy steel, their jobs will be imperiled. But everybody understands things have been so bad for so long that we'll suffer through it. This is the only way to get the supply chains back to the United States. That seems impossible. It seems like more of a talking point than an achievable goal for the

For the simple reason that like, why do we have trade anyway? Right? I mean, we have trade because no country, not even a country as giant and endowed with natural resources in the United States has everything. So we do want EVs. Some people do even. mean, tax cuts or no tax cuts. People want electric vehicles. You can see them. If you drive one, you know, they're actually pretty great. And we need lithium. We have some lithium, but not that much. We don't have any nickel. Nickel's in other places. You want it? Well, what do we have? We have to trade. You could trade.

You can trade money, you can trade services. Why do we have blueberries on the store shelves in the middle of winter? Because we figured out, when it's winter here, it's spring somewhere else. We go buy it.

David Sirota (33:47.33)
Sure. think that the fun, I remember reading a book by Senator Byron Dorgan, Democratic Senator, critic of NAFTA, et cetera, et cetera. And the way I remember him putting it in that book was that there are always going to be comparative advantages in certain inherent commodities and goods. It's the old thing about tulips, right? The old, right? Okay.

They can grow coffee in this country because the the soil is better for coffee So you're going to want your coffee production in that country. It makes more sense to have it there than a country where you have to irrigate Exactly exactly The fundamental problem became when countries in for instance, China started having a comparative advantage in

Peter Goodman (34:26.263)
in Portugal, fabric in England, post-industrial revolution, the classic case,

David Sirota (34:44.692)
In how you can exploit workers a comparative advantage in how you can dump the chemical in the river Because that's not an inherent advantage. That's an advantage created by know an authoritarian regime It's created by by you. You don't want your trade system to essentially reward comparative advantages in human suffering your trade

Peter Goodman (34:47.093)
That is a problem.

Peter Goodman (34:58.465)
That's true.

Peter Goodman (35:07.423)
No, that's right. And in partnership with Western companies, like that's the part that always gets left out, It's like, the Chinese, the evil Chinese, they organized and they're exploiting their people and they're shoving all this stuff down our throats. We are making stuff in China because, again, companies like Walmart lobbied the American government for a crack at China. We did this. And then we decided to not tax the uh, plutocrats who were benefiting from this trade to not invest in infrastructure, to not give people job training, to not have national healthcare, to not have any of the other. So again, I come back to this point because I think it's a really important point. There's a lot to critique with trade policy. Fair enough. But we go too far when we blame trade with China or Mexico or anywhere for, why do we have so many people sleeping under bridges in America?

David Sirota (35:45.198)
That's right.

Peter Goodman (36:04.181)
Why is there so much hunger in the wealthiest country in the world? That's home cooking. Those are decisions made in Washington, in boardrooms, in Seattle, in New York. China didn't do that to us. We did that to us.

David Sirota (36:16.162)
Yeah, that's a really, really excellent point. Okay, so my last question then is I want you to like grab your magic wand.

What is a if if not you were advising trump, you're a journalist i'm not asking you to be like a political advisor, but I guess the question is What do you see? thematically as a more rational trade policy Or are there examples of a more rational trade policy you mentioned sweden for instance Where it's not just we have no barriers at all, you know

We offshore to places that have slavery and no environmental laws, cetera, et cetera. That's one side. And we have all these huge barriers that create inflation and sort of a different kind of suffering at home. Like, what are the tent poles of something that is a rational policy between those two extremes?

Peter Goodman (37:19.509)
I think we can engage in coherent industrial policy. I think the government investing in a strategic way in industries that are important, either from a national security standpoint, from a resiliency standpoint. Yeah, industries where there's just too much risk for the markets to take it on. Vaccines, right?

David Sirota (37:25.122)
What does that mean for people who don't know what industrial policy is?

David Sirota (37:40.012)
microchips, cetera, et

Peter Goodman (37:49.367)
Why did we have I mean, look, if you want to give Trump is due, look at Operation Warp Speed, where we do get vaccines that bring the death rates down from COVID-19 dramatically. you know, Trump didn't do the research. He inherited it, which is why it's so ironic that he's now gutting spending in all sorts of research, because his real triumph, Operation Warp Speed, was moving quickly in the way in which

David Sirota (37:49.484)
Another one. Yep.

Peter Goodman (38:18.775)
and marshaling resources in a way in which only the government can in an emergency to get lots of trials going at once, to build up the capacity. We needed beakers and vials and we needed scientists working together. But we had a body of research that we need the research and we need the government able to take chances. I often think about

I assume a lot of listeners will remember, Solyndra, which became this argument, Obama era investment in green energy, it was a solar cell factory that failed. Whatever, we need failures. Failures are part of success. In the stuff that counts, like biotech, like green tech,

David Sirota (38:53.366)
Obama, you're a bogeyman for sure.

Peter Goodman (39:10.933)
The failures are going to outnumber the successes. So if you leave it to the markets, the markets are going to be conservative because no individual entity wants to lose money. If the government can say, we get it in order to get the stuff we actually need. Some losses are going to have to happen and we can take the losses because we're operating at societal scale. If you do that and then you're targeted with your tariffs and you're giving industry certainty and time to adjust, that's rational. But to say like,

Well, we've built this auto infrastructure over decades in the context of NAFTA and then the USMCA, which was Trump's own branded trade deal that he himself called the first, the greatest trade deal ever. And then suddenly say, no, actually we're giving you a couple of weeks notice and that's all null and void. Nevermind that the auto industry has built up plants in Mexico, Canada, the US, they're all integrated. And suddenly,

Oh, you might be looking at a 25 % tariff every time something crosses the border. That is chaos. And that is certainly an invitation to abuse of authority in determining who gets the exemptions. And it's an open invitation to say, you know what? If you're big company, to hell with it. I'll just make my stuff the cheapest possible place, which is still probably China. And I'll just pay whatever tariff applies, coming over, because I can give myself the certainty. And so this is not a coherent policy.

David Sirota (40:34.798)
That's right.

David Sirota (40:39.298)
Peter Goodman is the global economics correspondent at the New York Times. He's also the author of How the World Ran Out of Everything Inside the Global Supply Chain and the author of Davos Man, How the Billionaires Devoured the World. So two books that actually cover this set of topics from both the people who created the total free trade dystopia and then also the

the effects of all of these supply chain issues. Peter, thanks so much for your time today.

Peter Goodman (41:14.571)
Thanks so much David, this was great.

David Sirota (41:17.539)
Okay.