Hey, I'm Tracy Mumford. You can join me every weekday morning for the headlines from The New York Times. Now we're about to see a spectacle that we've never seen before. It's a show that catches you up on the biggest news stories of the day. We'll put you on the ground where news is unfolding. I just got back from a trip.
And bring you the analysis and expertise you can only get from the Times newsroom. I just can't emphasize enough how extraordinary this moment is. Look for The Headlines wherever you get your podcasts. From the New York Times, I'm Rachel Abrams. This is The Daily. In a history-making day of tariffs against dozens of countries, President Trump ended one era of global trade and began a new one. Today, my colleague Anna Swanson on how the world's economy is being upended.
And who will be affected most? It's Thursday, April 3rd. Hi, Anna. Hey, how are you? I'm good. I'm really curious what your day has been like. Well, it's been exciting. Liberation Day. That's right. We're here at 7.52 at night. Been a pretty full day. So, Ana, obviously, today has been incredibly busy, but...
Really, the news on the tariffs over the last few months has been totally head-spinning and, frankly, kind of hard to follow. And we're speaking to you shortly after President Trump has come out to the Rose Garden and announced this expansive new plan. watched it here at The Daily, and there's a lot to get into, but I just want to start off with, can you walk us up to this moment?
Yeah. So President Trump came into office promising to reorder the global trading system for the United States. And in the last few weeks and months, we've really seen him do that. sweeping tariffs on some of the country's biggest trading partners, on Canada, on Mexico, on China. He's targeted different industries like automobiles and steel and aluminum. And then today, he was going to come out with what he has described as his biggest measure yet. Thank you very much. Thank you.
Trump came out to the Rose Garden and he gave a speech. For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. He talked about how America had been cheated for decades. Our country and its taxpayers have been ripped off. for more than 50 years.
But it is not going to happen anymore. It's not going to happen. How now we're finally going to put the American worker first and said that the global trading system hadn't worked for the United States and needed to be changed. In a few moments, I will sign a historic executive order. big types of tariffs. First, a universal tariff that will apply across the board to almost all trading partners, and then bigger reciprocal tariffs that go on top of that for countries that are bad actors.
in his eyes. Reciprocal. That means they do it to us and we do it to them. Very simple. Can't get any simpler than that. And the measures that he's announced were much bigger than many people were expecting. It's going to be liberation day in America, and it's going to be a day that hopefully you're going to look back in years to come and you're going to say, you know, he was right. This has turned out to be one of the most important days in the history of our country.
God bless you and God bless America. Thank you, everybody. Thank you very much. So let's dig into those measures for a second that he announced. Can you just explain them a bit more? Yeah. So first, the president is imposing what he's calling a universal baseline tariff. And so this goes into effect on basically all trading partners except for Canada and Mexico. It's a 10% tariff that applies.
And to be clear, that universal 10% tariff that you mentioned, that's going to be applied to some countries where there is currently no tariff at all, including some of our allies. Is that right? Yeah, that's right. And then on top of that, there are additional tariffs on dozens of other countries in return for what the president is calling their unfair trade and economic practices against the United States.
And by unfair, he means? So by that, he means the tariffs that other countries are charging on American products. but also other barriers that they have to U.S. imports, other regulations that might make it harder for U.S. businesses or farmers to sell their products in those countries. So in other words, he's sort of like, well, you have been unfair to us.
so that this is how we are going to get back at you. Exactly. So during the speech, he held up this poster with kind of a big chart on it that tried to break down some of these numbers because there were a lot of countries, a lot of numbers, and... The chart was supposed to help explain the calculations his administration made and how they came to it. Can you walk us through that a little bit?
So when he held up that chart, we immediately started taking pictures of it and, you know, sharing it around because the numbers were a mystery to everybody up until he walked into the rose garden. And some of the numbers are pretty big. The chart said, for example, that the U.S. would impose an additional 34 percent tariff on Chinese goods that comes on top of a 20 percent tariff that the president has imposed on China in recent months. Just to be clear.
We're talking about a 54% tariff on Chinese goods. It sounds astronomical. That is a very large number. Right. And these big tariffs don't just apply to countries like China. They apply... to some of our allies too. So there's also an additional 20% tariff that'll be charged on imports from the European Union and a 24% tariff that applies to goods from Japan.
Anna, earlier you said that these were much bigger tariffs than anybody had been expecting. Can you just explain the rationale behind some of them and like what Trump was hoping to achieve with some of these more extensive measures? So the president has talked about having a lot of goals that he wants to accomplish with tariffs. He wants to reverse the trade deficit. He wants to bring manufacturing back to the United States.
He wants to raise revenue. So before today, there was a question about what exactly he would do with these tariffs, what he would try to accomplish with them.
In the lead up to this announcement, we had reported that there were two camps in the White House. And so one was interested in this baseline tariff, this broad tariff that would apply to... a lot of imports and essentially as imports came into the country would raise a lot of revenue for the government and that revenue could be used for other purposes like funding tax cuts.
And then there was another camp that favored reciprocal tariffs. So these are tariffs that would be higher or lower based on other countries' trading practices. And which would really be used as a negotiating tactic to try to get those countries to lower the trade barriers that they have on the United States, lower their tariffs with the goal of having...
more trade and having more U.S. exports. And so what Trump ended up announcing today was essentially a version of both. So he decided to do this baseline tariff that... you know, will apply broadly to all imports, will raise revenue for the government. He believes will also help to reverse the trade deficit and then hire reciprocal tariffs that are really more directed at what...
he calls unfair behavior by other countries against the United States. So it sounds like from your description... that the 10% is kind of here to stay, whereas the other one is more of a negotiating tool, and we might see that one kind of fluctuate. Yeah, the White House said in a call today that they weren't in a hurry to negotiate with other countries and that though some countries had dropped their tariff rates in the last 24 hours, they should have done that.
decades ago. But in the executive order, laying out these tariffs that Trump signed today, it does say that if countries either reduce those trade barriers or the U.S. trade deficit with them drops, then those Can we just zoom out for a second? Because I kind of want to understand how the administration went about targeting these specific countries this way to begin with. Some countries are obviously being hit harder than others. So the president said today in the Rose Garden that...
These numbers were calculated based on tariffs and other trade practices that these countries use against the United States. But actually, when you look at the number, it seems like it's a simple calculation. that's based on the size of the trade deficit that the United States runs with each of these countries. So essentially, countries that have bigger trade deficits get hit with bigger tariff numbers.
But it's also notable who was left out of the tariffs today. The tariffs don't apply to Canada and Mexico. Can you just explain that? Like, why were Canada and Mexico left out, especially given the fact that I feel like we've heard so much from the administration just kind of railing against them and threatening tariffs over the past few weeks?
So we don't know why yet, really, but it was a big surprise. And I mean, I think the reason has to be that Canada and Mexico are such major trading partners for the United States. They've already been hit by fairly big tariffs by Trump in the last month that had put pressure on a lot of businesses that are making products in North America. And they also have a trade agreement with the... United States that
President Trump himself negotiated in his first administration. And so goods that have been moving under that trade agreement have been exempted so far from the other tariffs that President Trump already hit Canada and Mexico with. Now, that doesn't mean that Canada and Mexico are getting off easy. President Trump has also announced auto tariffs that will go into effect on Thursday. And those will hit Canada and Mexico quite hard because...
Much of the supply chain for the auto industry is based in those countries and is imported into the United States. And the president has tried to kind of wave away those concerns about those tariffs, saying they're going to benefit workers, they're going to bring auto manufacturing and auto jobs back into the United States and benefit unions.
Right. He even brought one of those UAW guys up on stage today during his speech. Like, he's really trying to emphasize that these policies are helping everyday Americans. And the UIW has been one of the groups that actually has been very vocally in support of the tariffs, saying that they could reverse this disastrous trade policy and benefit workers. But a lot of other companies and unions and trade groups have expressed a lot more skepticism about how these tariffs are going to pan out.
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by subscribing to The New York Times. Ana, every single time that Trump has announced or threatened tariffs since he took office, There has been a chorus of prominent, probably the most prominent economists who say, this will be bad for the economy. This will raise prices. This will be bad for consumers. Here again today, President Trump was saying, no, no, these tariffs will boost jobs and they'll make America wealthy again.
Yeah, so the president has a very different theory of how tariffs work than I think most economists do. The president thinks that tariffs bring factories back to the United States. that increases jobs for American workers, it pushes up wages, and that's good for the economy. I think, you know, economists also think that those things happen, but they see a lot of other side effects happening from tariffs.
that in a lot of cases can offset those positive impacts from tariffs. So you did have today economists just... racing to downgrade their forecasts for the U.S. economy, lifting their expectations for inflation, saying that unemployment would rise as a result of this. S&P Global saying that manufacturers were going to have to pay more for their inputs.
inflationary pressure would build as a result. So economists just see a lot of price increases from this. And then from that flows a slower economic growth, potential unemployment. So it's a very different picture of how tariffs impact the economy. So if the economists are right, who is paying for all of this? Because just to emphasize here, these tariffs are enormous.
So the president likes to say that foreign countries, foreign companies will pay the tariffs. But a lot of times it's the company that is bringing the product into the United States that pays. And then a lot of times they will pass that cost on to the consumer. So we can think about an example. Let's say Walmart is bringing a toaster in from China. When Walmart brings that toaster in... they're now going to have to pay 34% of its price in the form of an additional fee.
to the US government. So does Walmart ask the toaster maker in China to eat that cost and accept less money for the toaster? Or does Walmart reduce its own profits? Or do they just jack up the price of the toaster and have the U.S. consumer pay more for it? A lot of times it is the American consumer because companies tend to pass on the cost of those tariffs so that they can preserve their own profit margins and they don't have to see their own profits decline.
I mean, it really feels like this is unbelievably broad. Like, is this as historic as it feels? Yeah, I think it's definitely historic. It brings tariffs to rates that we haven't seen in nearly a century. And it changes the structure of U.S. trade and, to a certain extent, the U.S. economy. And it's going to be a big shock because the United States does rely on imports. Consumers rely on imports. Manufacturers rely on imports.
The president and his supporters argue that we might go through kind of a transition period, but in the long run, it's going to be worth it because we'll have more manufacturing in the United States and we'll restore that manufacturing. You know, we've talked a lot on the show, Ana, about the reordering of the global world order, how Trump is blowing up longstanding relationships with allies.
Obviously, we know that Trump shatters norms. That's what he did in his first term. And so I just sort of wonder, given the fact that these tariffs are unprecedented and historic in the ways that you've outlined, do these policies fit into that? new reordering in some bigger way. Yeah, I definitely think that is the case. You know, it really seems like this is the first day of, in trade, this new world order that President Trump has been promising.
And he's really throwing out the old system that the United States worked out with other countries after World War II. He seems unafraid to demolish that system because he says it's been unfair to the United States. It hasn't worked for our country. What's the harm in blowing that up, essentially? He has scrapped that old system that was built more on negotiation and cooperation with other countries. He's replacing it with basically a system of his own devising in terms of the...
And this is really a vision of America first. We put up trade barriers, you know, maybe that will hurt our trading partners, but the United States has the biggest. most valuable market. The United States will be, you know, maybe hurt, but will be less hurt than other countries. And we will end up being on top. I mean, to that point, how are these countries responding? I mean, I know
These tariffs just got announced, but do we know anything about their reaction yet? So we're still waiting to see how many other countries will respond, but a lot of them have threatened to retaliate. So we had been expecting Wednesday to be Liberation Day, but Thursday to be Retaliation Day. Other countries have been drawing up lists of American products that they could target, including farm goods.
products from red states where a lot of Trump supporters are located. And that could definitely hurt American exporters quite a lot. So is it fair to say that the era of free trade is over? Yeah, I mean, it's certainly sustained quite a death blow this week. And I think if you were to ask President Trump... that would be his hope. Anna, thank you so much. Thank you.
The reaction to Trump's announcement was both swift and broad, with some of the world's biggest economies warning of retaliation against what they described as a counterproductive move. As markets in Asia dropped sharply, China vowed to take countermeasures to quote, safeguard its own rights and interests. The response from Japan, the largest overseas investor in the United States and a longtime American ally, was more restrained.
The prime minister called the tariffs extremely regrettable, but refrained from talking of retaliation. In Brussels, however, the European Commission president condemned the new tariffs and warned that the EU would be united in its response. you We'll be right back. Here's what else you need to know today. On Wednesday, a federal judge dismissed sweeping corruption charges against New York City Mayor Eric Adams.
a victory for the Trump administration, which had asked that the case be dropped. But the judge refused the government's request to potentially reinstate the case later. A possibility that many Democrats feared would give the White House enormous power over Adams and how he governs the city. And Election Day data from Wisconsin, where Democrats scored a major victory on Tuesday.
showed that Democrats far exceeded their own expectations for turning out voters in the race for a seat on the state's Supreme Court. The outcome has fueled Democratic Party hopes that Trump's agenda is energizing their voters. Today's episode was produced by Nina Feldman, Stella Tan, and Alex Stern with help from Asta Chatterbady. It was edited by Mark George and Chris Haxel. Contains original music by Dan Powell.
Pat McCusker, and Marion Lozano, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsberg of Wonderly. That's it for The Daily. I'm Rachel Abrams. See you tomorrow.