Is This the End of Globalization and Free Trade?

Money For the Rest of Us

J. David Stein

Economy, Economics, Investing Podcast, Business, Investing

4.3 • 1.3K Ratings

🗓️ 9 April 2025

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

What will the impact be now that the U.S. has one of the highest tariff rates in the world?

Topics covered include:

Why the Trump administration raised tariffs
How the last round of U.S. tariffs led to higher prices and lower economic growth
Four ways the world remains close to record connectivity
Who have been the winners and losers from global trade
What will be the impact of this trade war

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Show Notes

The economic consequences of Mr Trump – looking for clarity in the tariffs chaos by Neil Shearing—Capital Economics

Tariff rate, most favored nation, simple mean, all products (%)—World Bank Group

Donald Trump’s tariffs will fix a broken system by Peter Navarro—The Financial Times

DHL Global Connectedness Tracker—DHL

Objective Knowledge: An Evolutionary Approach by Karl R. Popper—Oxford University Press

GDP per capita (constant 2015 US$)—World Bank Group

JOSEPH E. STIGLITZ, GLOBALIZATION AND ITS DISCONTENTS REVISITED: ANTI-GLOBALIZATION IN THE ERA OF TRUMP, NEW YORK: W.W. NORTON & COMPANY, 2018 by Lino Sau—Annals of the Fondazione Luigi Einaudi

FIFTY YEARS OF GROWTH IN AMERICAN CONSUMPTION, INCOME, AND

WAGES by Bruce Sacerdote—National Bureau of Economic Research

Real Median Household Income in the United States—FRED

Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over—FRED

Consumer Price Index for All Urban Consumers: Food in U.S. City Average/Median Household Income in the United States—FRED

Trump’s Love for Tariffs Began in Japan’s ’80s Boom By Jim Tankersley and Mark Landler—The New York Times

Related Episodes

515: Tariffs and the Mar-a-Lago Accord: What Trump Really Wants

516: What Trump Wants Part 2 – How Trade Deficits and Capital Flows Can Harm or Help Countries

427: Did the Tariffs Work? The Trade War Five Years Later

212: Trade Wars Increase Prices and Poverty

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Transcript

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0:00.0	Welcome to Money for the rest of us. This is a personal finance show on money, how it works,
0:05.4	how to invest it, and how to live without worrying about it. I'm your host, David Stein. Today is episode
0:11.5	519. It's titled, Is this the end of globalization and free trade? Last week, the Trump
0:19.3	administration announced a massive expansion of tariffs on imports
0:25.1	to the U.S. The scope of these tariffs was much greater than financial markets anticipated.
0:31.0	U.S. stock market dropped over 10% in two days. The VIX Volatility Index, the implied volatility priced into the S&P 500,
0:41.9	soared to over 45. Back in late January, it was at 15. When markets fall, crash, in some extent,
0:52.9	10% drop, volatility spikes. That causes hedge funds and other
0:59.5	investors, algorithms to start selling because there are margin calls. So they're reducing risk,
1:05.7	reducing leverage, and even safe assets can get hurt. Last Friday, the 10-year treasury yield jumped 0.19 percentage
1:15.1	points. The biggest daily increase. The yield goes up. The value bonds fall. The biggest since September
1:21.6	2022. 30-year treasury yields jumped 0.21 percentage points. That's the biggest move since March 2020.
1:30.3	In episode 515 and 516 of the podcast, we described what the Trump administration wants with these tariffs.
1:40.8	Why are they doing it?
1:41.7	We quoted U.S. Treasury Secretary Scott Besson and
1:46.1	Stephen Moran, the chairman of the Council of Economic Advisers. They want a narrower trade deficit,
1:52.7	more exports, fewer imports, they want a lower capital account surplus, a drop in the amount
1:59.8	of investment flows coming into the U.S.
2:02.7	They would prefer a weakened dollar so that U.S. exports are more competitively priced.
2:09.4	They want more manufacturing in the U.S.
2:13.3	President Trump's senior counselor for trade and manufacturing, Peter Navarro,
2:19.0	reinforced those points in a Financial Times editorial this week. He pointed out that the U.S.
	...

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