--:-- Shumita Basu: Hey there, it's Shamita. I've got a quick request for you. If Apple News Today is an essential part of your morning routine, follow the show in Apple Podcasts. And if you have another 30 seconds, leave us a rating and a review too. It helps other people find our show and it helps us know what you like about it. Thanks.
--:-- Shumita Basu: Good morning. It's Friday, April 11th. I'm Shemitah Basu. This is Apple News Today.
--:-- Shumita Basu: On today's show, a look back at this week in tariffs. The Supreme Court says the Trump administration must help bring back a man who was wrongly deported to El Salvador, and why some foreign musicians are thinking twice before coming to play shows in the U.S. Let's start with the biggest story all week, President Trump's tariff policy.
--:-- Shumita Basu: Today, China announced it will raise tariffs on the United States to 125 percent. That comes after the Trump administration imposed tariffs of 145 percent on China. The tit-for-tat retaliatory measures are just the latest in an unnerving week that started with widespread tariffs against dozens of countries, sending markets nosediving, only to be pulled back a few days later on all countries except China.
--:-- Shumita Basu: To understand the impact of all of this and what comes next, I called up Sean Donnan, a senior writer for economics at Bloomberg News.
--:-- Sean Donnan: So look, I think the most important thing to remember is that at the end of this week, we have much higher tariffs in place here in the United States than we did before this week. The Yale Budget Lab was out this week with a new analysis that says the average tariff rate on goods coming into the United States is now at its highest level since 1909.
--:-- Sean Donnan: And we're starting to see in the global economy the impact of that. We're starting to see global trade start to slow down. We're seeing companies cancel shipments, orders from suppliers in China. While President Trump scaled back his tariffs on 60 or so countries, he's only scaled them back to a 10 percent baseline that, again, did not exist there a week ago.
--:-- Sean Donnan: There's also a 25 percent tariff on imported cars that's still in place. There's more sectoral tariffs to come. And over the week leading up to the scaling back, we really had an incredible reaction in global financial markets. Something like $19 or $20 trillion in value was wiped out of global financial markets.
--:-- Sean Donnan: Just to give you an idea, you know, the U.S. economy is about a $30 trillion a year economy. I mean, that's wiping out two-thirds of the U.S. economy from global financial markets. It's enormous.
--:-- Sean Donnan: And then the night before scale back, just in the kind of last day, the market reaction turned into the bond markets. And what we saw was the yields on U.S. treasuries go up very, very fast. And that immediately started ringing a different kind of alarm bells. And that seems to have been what caused President Trump to back down.
--:-- Sean Donnan: Now, come to the end of this week and I say, look, the story in the financial markets is not over. It's going to drag on for some time. And the tariffs are still there.
--:-- Shumita Basu: Yeah. Well, that moment that you're describing on Wednesday, it sounds like that was a turning point for a lot of people watching closely this tariff policy. I mean we heard Fox Business senior correspondent Charlie Gasparino who been a big supporter of President Trump basically say this is not sustainable.
--:-- Sean Donnan: I want to tell you right now that Donald Trump outsmarted the world. Trust me, I'm an American. I support my president. But that's not really what happened here, from what I understand.
--:-- Sean Donnan: People focus on the stock market all the time. It's the bond market and the sort of lending markets that's the plumbing of the economy. And those markets were imploding last night.
--:-- Shumita Basu: So was this actually a strategy of Trump's? Are we seeing something that suggests this is a strategy that unfolded in the way he had planned? Or is this really Trump conceding and walking something back because it clearly was too unpopular and unsustainable?
--:-- Sean Donnan: Look, I mean, it depends who you listen to, right? I mean, the White House very quickly started to focus on the number of countries who have come to them, you know, wanting to negotiate new deals. And therefore, this was the art of the deal. And President Trump got the leverage he wanted. He's getting the result that he wants. This is all the plan.
--:-- Sean Donnan: A lot of reporting at the same time indicated that even some senior economic aides did not know this was happening, that the scaling back was happening. In fact, Jameson Greer, the U.S. trade representative, was up on Capitol Hill, and there's pictures of him kind of in the middle of testimony kind of looking at his phone and going, oh, okay, things have changed.
--:-- Sean Donnan: In theory, he should be the person driving U.S. trade policy or certainly one of the people, you know, in the meetings and at the forefront of that. So, you know. I mean, he was even admonished in that hearing, it sounds like.
--:-- Sean Donnan: You're sitting here in front of us. Why is there a big movement on trade policy? Absolutely. It's almost like he learns from the rest of the world, you know, what someone has done on his portfolio. And that's been a feature of Donald Trump and how he manages the economy and trade policy going back to his first term.
--:-- Sean Donnan: Now, the risk of this, of course, is that Donald Trump somehow gets emboldened by one day's gains, right? What we saw on Wednesday after he made the announcement was the biggest increase in the Dow Jones and the S&P 500 that we had seen since 2008, right? You know, this is an enormous movement.
--:-- Sean Donnan: Now, there's a lot of people who also tell you that that's not a sign of a healthy market, right? Markets should not be swinging around like this. And, you know, the United States is supposed to be and its financial markets are supposed to be a kind of beacon of stability, a safe haven in the storm. And over the last week, they've been anything but.
--:-- Shumita Basu: Let's go back to this idea of concessions for a moment, because we're hearing President Trump say this. Some of his team is saying this, that they have managed to get dozens of countries to engage with them since the tariffs, new tariffs were introduced. And that they're hopeful that this will now lead to serious concessions.
--:-- Sean Donnan: Look, that's a very good question, but we're only going to be able to see the answer to that when we actually see these deals and how meaningful they are and so on.
--:-- Sean Donnan: Donald Trump has a history in the past of kind of proclaiming victory and claiming that he has just secured a magnificent deal. When you scratch under the surface, it's less than that.
--:-- Sean Donnan: Some of the issues that Donald Trump wants to solve in a matter of days with these tariffs are issues that have been there for decades and have been pretty intractable. Now if he able to solve those issues I think a lot of people in the United States will say that great
--:-- Sean Donnan: The administration stated goal end goal at least is to bring American manufacturing back to the United States Can I ask you to just evaluate that vision for a moment? I mean, how realistic is that? What would it look like? How long might it take?
--:-- Sean Donnan: I think a lot of people in the United States feel like one of the consequences of globalization has been the loss of good-paying factory jobs. That's a completely legitimate complaint. There are communities around the United States that have been decimated by deindustrialization. There's a lot of those communities, in fact, and Donald Trump has built his political support in part on votes in those places.
--:-- Sean Donnan: The question is how you do it. During the Biden administration, the idea was industrial policy. We're going to give subsidies to companies to kind of end tax breaks, and we're going to find other ways to encourage them to make stuff here in the United States, whether it's semiconductors, electric vehicles, other green energy kind of products. They kind of focused on targeted industries.
--:-- Sean Donnan: Donald Trump's idea is to instead throw up this kind of defensive wall. And there's a lot of people, you know, at companies, and I hear from manufacturing companies and also economists who say, well, that's okay, we get it. But a lot of the things that we need to build here in the United States are components that come from overseas.
--:-- Sean Donnan: And if you put up tariffs on steel, well, then what ends up happening is domestic steel prices also go up because they no longer have that competition from overseas. And that makes building a factory here more expensive.
--:-- Sean Donnan: We know that there are fewer young people coming into the workforce every year just as a result of demographics. We also know that there's a huge amount of baby boomers who are exiting the workforce just as a result of demographics. We know that Donald Trump is cracking down on immigration as well.
--:-- Sean Donnan: So who's going to work in these factories is another issue. And then there's other issues like permitting and so on. So we're not going to know for two, three years how successful Donald Trump's strategy is. But we do know now that there are all these barriers that are there and that those aren't necessarily being addressed.
--:-- Sean Donnan: And in some cases, they're being made worse by Donald Trump's policies.
--:-- Shumita Basu: Just to bring us to an end here, to an end point of reflection, I mean, we've talked about there being these two competing narratives of what happened this week. I think we're going to be hearing about this for a long time. The Trump administration is touting this week as a victory, as this was our plan all along. Others are calling it a capitulation, a real walk back after so much backlash.
--:-- Sean Donnan: Look, I think the kind of victory of capitulation narrative is I would just kind of set that aside. They're just blips on a policy trajectory that is taking the United States towards high tariffs, towards a new era of protectionism that Donald Trump is deliberately pursuing.
--:-- Sean Donnan: And the real story in the weeks and months, possibly even years to come, is going to be how the United States manages that shock, whether we go into a recession here in the United States, whether the world goes into a recession as a result of these things, or whether it finds a way through.
--:-- Shumita Basu: Now hopefully some of these negotiations that are going to come whether as a result of victory or capitulation you know maybe take you away from some of the worst case scenarios
--:-- Sean Donnan: But the U.S. is still going to be a more closed economy than it was a week, 10 days, two months ago.
--:-- Shumita Basu: John Donnan with Bloomberg, thank you so much for your time.
--:-- Sean Donnan: Hey, thank you so much for having me.
--:-- Shumita Basu: Before we let you go, a few other stories we're following. The Supreme Court ruled Thursday the Trump administration must facilitate the return of a Maryland man mistakenly deported to El Salvador back to the United States.
--:-- Shumita Basu: A lower court judge ordered the administration to return Kilmar Abrego-Garcia by Monday night, but Chief Justice John Roberts paused that order so the court could have time to review the case.
--:-- Shumita Basu: The administration accused Abrego Garcia of being a gang member, but so far has not publicly provided any evidence of that. They admitted he was erroneously deported, but said there was nothing they could do to return him, and they argued the judge who ordered his return had no power to do so.
--:-- Shumita Basu: In addition to saying the government should help him return, The justices also ordered his case to be handled, as it would have if he had not been deported.
--:-- Shumita Basu: There were two aviation incidents on Thursday. First, in New York, a helicopter carrying six people went down into the Hudson River. ABC News reports all six people on board, including a pilot, two adults, and three children, were killed.
--:-- Shumita Basu: Meanwhile, in Washington, a plane carrying a number of members of the House from New York and New Jersey was clipped by another plane while on the ground at Reagan National Airport.
--:-- Shumita Basu: Both were American Airlines aircraft. Reagan Airport has been in the public eye ever since an American Airlines jet collided with an Army helicopter in January, killing 67 people.
--:-- Shumita Basu: And finally, the first of two weekends of the Coachella Music Festival kicks off today. The LA Times reports recent high-profile incidents at the U.S. border where people were denied entry has some foreign artists worried about traveling to the United States, especially if they've been critical of President Trump.
--:-- Shumita Basu: The U.S. is the biggest touring market, and festivals like Coachella attract music acts from all over the world. According to the Times, this general feeling of unease, plus recently increased visa costs and longer wait times, are making some artists call their lawyers or even think twice before coming to perform in the U.S.
--:-- Shumita Basu: You can find all these stories and more in the Apple News app. And check out our interview show In Conversation.
--:-- Shumita Basu: This week, I talked to New Yorker staff writer Jonathan Blitzer about the recent deportation of more than 200 Venezuelan migrants to a maximum security prison in El Salvador.
--:-- Shumita Basu: Blitzer spoke about what he sees as the near silent democratic response to the Trump administration's immigration agenda.
--:-- Shumita Basu: I think the agenda they have is more radical than it's ever been. I think the political resistance to that agenda is as muted as I've ever seen it. Which is also a source of real alarm for me.
--:-- Shumita Basu: And I think actually this is the real laboratory where you see, to my mind, the most anti-democratic behavior from the administration actually beginning to take shape.
--:-- Shumita Basu: If you're listening in the Apple News app right now, that episode is queued up to play for you next.
--:-- Shumita Basu: Enjoy the weekend, and I'll be back with the news on Monday.
