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What you need to know about tariffs
Apr 18, 2024
Episode 1142

What you need to know about tariffs

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Biden is calling for the tripling of tariffs on Chinese steel.

The Biden administration is aiming to triple tariffs on Chinese steel to protect U.S. manufacturers. Sound familiar? We’ll explain who is actually paying the price and what raising tariffs would mean for U.S. workers. We’ll also get into why economic data doesn’t always translate into how voters view the economy, especially in an election year. And, what the buzz over the popular animated series “Bluey” is all about.

Here’s everything we talked about today:

Join us tomorrow for Economics on Tap! The YouTube livestream starts at 3:30 p.m. Pacific time, 6:30 p.m. Eastern. We’ll have news, drinks and play a round of Half Full/Half Empty!

Make Me Smart April 18, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kai Ryssdal 

Drew, save me.

Kimberly Adams 

Hello everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Kai Ryssdal 

I’m Kai Ryssdal. Thank you for joining us on this Thursday. Today, April 18. I’m laughing because the microphone just literally just bounced up and hit me in the face. You’re going to have to watch that one on social. I’m sorry.

Kimberly Adams 

It really did jump up at you. Anyway, today, it’s Thursday. So, we’re going to listen back to some audio clips from some big news stories of the week. We’ve got some newsy stuff, some fun stuff. Let’s hear the first one.

President Joe Biden

“Because Chinese steel company produce a lot more steel than China needs, it ends up dumping extra steel on the global markets at unfairly low prices. And the prices are unfairly low because China’s steel companies don’t need to worry about making a profit because the Chinese government is subsidizing them so heavily. They’re not competing. They’re cheating.”

Kimberly Adams 

Yes, that was President Biden speaking in Pittsburgh yesterday at the headquarters of the United Steelworkers Union about a little something that we’ve called overcapacity, which has been a big topic of discussion. When Yellen was in China recently, she was complaining about overcapacity, mainly in the clean tech area, but it’s in a bunch of different sectors. Biden is basically saying that China is producing too much. It’s lowering prices globally, and they’re going to do things to try to stop it. Also, Biden said he was going to stop US steel from being acquired by a Japanese company. And he called for a tripling of tariffs on Chinese steel and aluminum, which echoes the Trump era tariffs in 2018. All of this getting back to the idea that Biden has, you know, really dug in on, you know, what we’ve talked about here on the show, industrial policy, bringing more and more of these major manufacturing lines of importance back into the United States and trying to protect the domestic industries and Nippon Steel, buying out US Steel raised a lot of alarms in the Biden camp. And now Biden is saying openly that he’s going to do what he can to stop that from happening. Marketplace’s Henry Epp reported on those 2018 tariffs and reported that they actually raise steel prices for US consumers and companies and didn’t actually do that much to boost manufacturing jobs, which Trump promised that they would do. They didn’t. And lot of Chinese steel gets to the US through other countries, not direct exports. So, Biden’s new tariff proposal may not have that much of an impact, and I’d love your take on this, Kai. I think really emphasizes the point that it’s really less about jobs and prices as much as it is about the national security component of this.

Kai Ryssdal 

Well, I agree that. Well, let me back up for a minute. So, two things. And Henry alluded to this in his spot yesterday. Chinese steel that comes directly here is a miniscule percentage of the steel imports to this economy.

Kimberly Adams

It’s like two point something percent.

Kai Ryssdal

Yeah, it’s actually, so I was listening to David yesterday morning as I was driving down to San Diego. It’s six tenths of 1% of US steel imports are directly from China. And maybe the rest of it, as you said something about 2% is indirect imports. So, it’s not a huge chunk at all. Number one. Number two, I said this during the Trump years, I will say it during the Biden years: tariffs are taxes on American consumers. Full stop, right? When we put tariffs on products that come into this country, it is American consumers who pay them. We are not having that discussion anymore. Let me just tell you. We’re done with that. Number three, and to your point. This is not only about national security, which I agree it is. It’s also about the politics of this thing, right? I mean, Biden now is in an economic fight for his political life as it were right? Because he’s challenged on the economy, even though the economy is really good. And I think that is no small part of what’s going on here. You know?

Kimberly Adams 

Yeah. Yeah, absolutely. Although a clip we’re getting to later relates to that. So, I’ll save that. My thoughts on that.

Kai Ryssdal 

Totally. Look and given, what was that? The four story you did the other day? The fourth one?

Kimberly Adams

Yeah.

Kai Ryssdal

I mean, it’s popular to talk about that. Alright, so let’s go to the next one up in order in the rundown, Drew, if you would.

Jerome Powell

“The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence.”

Kai Ryssdal 

Jay Powell, of course, at a policy forum in Washington, DC this week. Powell saying in as clear language as the Fed Chair ever says that we’re going to keep rates higher for longer. A June cut is off the table. July is dicey. September October is maybe. Rates are not coming down anytime soon, right? There is no, look, here’s the deal. There is no reason for the Federal Reserve to cut interest rates. The economy is humming along. And we’re at 5.3 on the federal funds rate, right? Weekly unemployment claims came in today. They’re at like 210, 212,000, which is exactly where they’ve been for like eight weeks in a row. This labor market is like, hey fed, whatever, we’re going to do our thing. And that’s not giving Powell and company any reason to cut rates at all.

Kimberly Adams 

You know, it’s funny. The retail sales numbers came out the other day, and we were talking about how they were so much higher, and we’re like, consumers continue to spend. And I just purchased so much stuff, you know. I had been waiting for a really long time for some Christmas decorations to go on sale, because I didn’t want to buy them during the holidays. And so, I was waiting until they went on clearance. And so, I just bought like 80 feet of garland for my house, artificial garland, and a Christmas tree. And so, I’ve got all these boxes of Christmas decorations piled in my tiny apartment. And I’m like, I am the retail sales numbers. I am the retails sales numbers.

Kai Ryssdal 

What are you going to do with all that stuff? You don’t live in a huge place.

Kimberly Adams 

No, but I have a staircase, and it’s a spiral staircase. And a lot of garlands that you need to give the proper swoop for the holidays. And you know, I love my decoration.

Kai Ryssdal 

Garland swoop is important, you know. I get that.

Kimberly Adams 

You need feet of garland per foot of length that you want to decorate, according to the websites that are selling you garland. So anyway, I am the retail sales numbers.

Kai Ryssdal 

Thank you for supporting our economy.

Kimberly Adams 

You know, 70%?

Kai Ryssdal

Yes, absolutely.

Kimberly Adams

70% of the American people is like me spending money on stuff. And services. And services. Anyway, moving on. So, like we were talking about earlier, I have been doing quite a bit of reporting on sort of what I call economic belief versus reality, and how it relates to the election because there’s this narrative that we’ve had for ages that the economy is the major issue that people rely on when they’re deciding how to vote. And my original premise when I entered this sort of stream of reporting was okay, well, let’s focus on what people believe about the economy versus what the economic reality is because there’s a lot of evidence showing that those two things can be quite different, especially depending on your political party and your affiliation and where you are in the economy. Right? So, I did a bunch of stories on that. But as I was reporting it, I kept hearing from the experts that they weren’t quite sure that the economy matters in how people vote anymore. And I was like, well, that’s interesting because this is our whole vibe when we’re covering elections here at Marketplace. It’s like, oh what’s the economy doing? Because it’s going to impact the election. And several folks said to me, like, you know, there’s less evidence that it matters as much. So, you know, I did a story on that, particularly looking at economic forecasting models because there are all these mathematical models done by political scientists and economists that plug in details about GDP, jobs, numbers, discretionary after tax income is another one that people look at to see, based on how the economy is doing in the lead up to the election, how does that predict the outcome of the election. And a bunch of folks said, those models just aren’t as good anymore because the polarization is so intense. And people are so wedded to party that it really doesn’t matter how the economy is performing. It doesn’t matter how their personal economy is performing. It doesn’t matter how the macro economies performing. They care about the person. If you’re a Trump person, you’re going to be a Trump person. If you’re terrified of Trump, you’re going to vote for Biden, regardless of what the economy is doing. And we’re not going to know for sure, but there’s disagreement about it. I talked to one economist, not economist, political scientist who’s been making these presidential forecasts for decades. And he’s like, yeah, I’m not even bothering with it this year. It doesn’t matter. Whereas another guy, and this gets to the finally to the clip. Michael Lewis-Beck, who’s at the University of Iowa, who has been doing predictions again for decades, says he’s going to keep doing it, and that every single cycle, people predict, oh, the economy’s not going to matter, but in his measure, every single cycle, it does, and we were talking about why this strong economic data doesn’t always translate into how voters view the economy. And he made this this point, which I thought was pretty interesting.

Michael Lewis-Beck

“People like us, like you and me and Kai, we talk about politics and economics and business all the time. But everyday folks, they don’t. I mean, they have things to do. They’ve got to do their job. They got to get their teeth fixed. They got a flat tire on their car. They’re, you know, having a problem with their uncle or whatever. I mean, you know, it’s just in real life, the world we live in. Well, it’s real life for us, but everyday people are not as concerned about these things, but they do become concerned as the campaign unfolds.”

Kai Ryssdal

That’s such an important point. Yeah.

Kimberly Adams 

It is. It really is. And I spoke with somebody at Gallup who said that over time, and Dr. Lewis Beck said this as well, that as you get closer to the election, people tend to pay more attention to the economy tied to political campaigns, and it tends to skew in favor of the incumbent. So right now, people are kind of disaggregating the economy. Most people are not connecting the economy to the election and the candidates, but closer to the election, they will, particularly after Labor Day, and that historically, that skews in favor of the incumbent. And it’s been very interesting, digging into all this stuff, but I will be so fascinated once we get through November, looking back how much, especially when they do that exit polling, how much the economy really mattered versus just political polarization.

Kai Ryssdal 

Right. Right. Right. Yeah. Oh, it’s so interesting. It’s such a good series you’re doing too. It’s totally fascinating.

Kimberly Adams 

Thank you. It’s been fascinating. I’m looking forward to doing more of it once I shift to some other things for a while, but I’ll come back to it.

Kai Ryssdal 

All right, one more. One more. Here we go.

ESPN Coverage

With the first pick in the 2024 WNBA Draft, the Indiana Fever select Caitlin Clark, University of Iowa.”

Kai Ryssdal 

And the crowd went wild. That was of course ESPN coverage of the WNBA draft on Monday night. Caitlin Clark, the number one pick, as we know. Now, a couple of points. Number one, Caitlin Clark gets a first year starting salary of about $76,000, which is a mere pittance microscopic compared to what a rookie player gets in the NBA. Right? So, that is a very important point. Here is an equally and perhaps more important point, and it is not my point. It is a point made by Dawn Staley, the head coach at the National Champion, University of South Carolina Gamecocks women’s basketball team. She made this yesterday to Mary Louise Kelly on All Things Considered. I heard as I was driving back from San Diego. Dawn Staley pointed out that when the NBA was 28 years old, which is how old the WNBA is, those guys were not making a bajillion dollar a year. So, you have to put it in the context of the league still being really, really young, and not, for as popular as it’s gotten in the last couple of years, it’s still not an economic force, okay? It’s not. But as Dawn Staley points out, let’s see where women’s salaries are once the league is matured. So that’s point number one. Point number two, and this is new this morning. Caitlin Clark has signed a $20 million shoe deal with Nike. So, it’s not that she’s not going to be compensated, it’s that the economics of the league don’t let her get the salary she deserves. But she will be compensated for his talents just by private industry actually is where she’s going to get our money from. Anyway.

Kimberly Adams 

Yay, capitalism.

Kai Ryssdal

Yeah, right. I mean, you know.

Kimberly Adams

This story reminded me of one of the favorite political charts I have encountered in, I think, all of my years of covering Washington, which is from a story that I did about political advertisers last summer. And it was a story about how political advertisers are going to reach sports fans as more sports switch to streaming. And I talked to this guy named Ben Angle who’s with a group called National Media Research, Planning & Placement, and it’s like a Republican aligned firm. And they have a chart of the different political leanings of the fan base of various sports, and it’s a glorious chart. And all the way to the far right of Republicans with high voter turnout, you have things like PGA Tour and NASCAR, right? And then all the way to the far left of high voter turnout and Democratic skew is the WNBA. And the WNBA is all by itself in this little corner. And this chart was from you know, from data gathered from June 2020 to October of 2022, right? I am so fascinated to know, after Caitlin Clark and this season, where the WNA sits on this chart. I’m going to call Ben Angle and see if he can give me updated numbers, but that was like my favorite chart ever. It’s so interesting. And the WNBA was like way off by itself. Mexican League Soccer randomly, high democratic skew, low voter turnout. Just in case you’re curious. Monster Jam, high Republican skew, low voter turnout.

Kai Ryssdal 

I don’t even know what Monster Jam is. Is that monster truck?

Kimberly Adams 

Oh, it’s those big trucks where run over other cars. Yeah, yeah.

Kai Ryssdal 

She says it like, I ought to know.

Kimberly Adams 

I mean, it’s like, on advertisements and stuff. Actually, you know, in St. Louis it was like always a big thing. I would see the ads for it all the time growing up because they would do it at like the arenas and things locally. It was a big, big thing growing up. Okay. I do want to get to one more that I came across today. That is very interesting to me.

Bluey Trailer

“This is your sign to celebrate the supersize, biggest ever. This is so much fun. Bluey! This is the best day of all my life.”

Kimberly Adams 

So, that was from a trailer for a recent episode of the Australian kids’ show “Bluey,” which airs on Disney. For people who don’t have children or maybe aren’t paying attention, it’s an animated show about a family of dogs. It’s super popular with kids and parents. Why am I talking about this? Because I have no children. And yet, somehow “Bluey” continuously enters my realm of interactions and existence. And I knew something was going on with “Bluey” because there was like a lot more “Bluey” stuff crossing my timelines. Plural. Lately, and thank goodness for Vulture because Vulture had this article that says yes, something is happening with “Bluey.” Here’s what’s going on. So, “Bluey” episodes are apparently usually like seven to nine minutes long. And they recently did a 28-minute special episode that hinted at a potential ending for the show. Fans are panicking. And “Bluey” is known for sort of having these really, it’s one of the children’s programs that has an appeal for kids, as well as an appeal for parents. They take on really heavy topics like infertility, and they recently had their first same sex couple. This big episode, spoiler alert for the “Bluey” fans has to do with whether or not the family is going to move away and how traumatic that is for the kids. And in 2023, “Bluey” was the second most streamed show in the United States. It’s huge. And I think apparently, it’s great. And I’ve seen clips of it online. But now I feel like I have to go back and watch bluey. Have you ever seen it?

Kai Ryssdal 

I have never seen it. My kids are too old for it. It has only cropped up in my feeds in the last four to six months. It’s kind of amazing. The traction this thing has in the popular mindset. It’s kind of wild.

Kimberly Adams 

Oh Bridget Bodnar, who has small children says, “all aboard the “Bluey” train.”

Kai Ryssdal

Oh. Well, more power to you. Six-minute episodes. Oh man, that sounds fab. I could do that in a heartbeat.

Kimberly Adams 

Yeah, and apparently, they’re still produced out of Australia. They haven’t like, outsourced their production, but it’s burning out the creators a bit, and that is one of the reasons that folks are a bit worried that that may be winding down. But as several the articles about it pointed out, when you have intellectual property that valuable it’s doubtful that Disney and others are going to just let that shut down.

Kai Ryssdal

Totally.

Kimberly Adams

Yeah.

Kai Ryssdal 

All right, and we got out on “Bluey.” We’re done today. Tomorrow’s Economics on Tap. News, drinks, we’ll play a game. The YouTube live stream starts at 3:30 Pacific, 6:30 back east.

Kimberly Adams 

Make Me Smart is produced by Courtney Bergsieker. Audio engineering by Drew Jostad. Ellen Rolfes writes our newsletter. And Thalia Menchaca is our intern.

Kai Ryssdal 

Marissa Cabrera is the senior producer of this podcast. Bridget Bodnar is the director of podcasts. And Francesca Levy is the executive director of Digital and On-Demand. Just because I said so.

Kimberly Adams 

I just realized I was wearing a blue shirt. I didn’t even plan when I picked the “Bluey” story.

Kai Ryssdal

There you go.

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