Trump’s Tariffs, Market Panic and What Comes Next

The Ezra Klein Show

New York Times Opinion

Society & Culture, Government, News

4.6 • 11K Ratings

🗓️ 11 April 2025

⏱️ 60 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

After a week of market chaos, President Trump pulled back from the brink. But he didn’t pull that far back. He left a 10 percent tariff on most of the world and launched a trade war with China. It’s unclear what he will do after this 90-day pause or what countries need to do to satisfy him. But one thing that is very clear now is that our economy is subject to one man’s whims. How are businesses supposed to adapt to this new reality? What is this new reality? Peter R. Orszag is the chief executive and chairman of Lazard, one of the world’s largest asset management and global financial advisory firms. He also served as the director of the Office of Management and Budget under President Barack Obama, so was a policymaker during a financial crisis. And over the past few months, he’s been talking to lots of C.E.O.s and corporate board members as they try to process these changing policies. I wanted to ask him what he’s been hearing and how he sees the volatility of this moment. Mentioned: “A User’s Guide to Restructuring the Global Trading System” by Stephen Miran “Paul Krugman on the ‘Biggest Trade Shock in History’” by The Ezra Klein Show Trade Wars Are Class Wars by Matthew C. Klein and Michael Pettis Book Recommendations: Underground Empire by Henry Farrell and Abraham Newman Chokepoints by Edward Fishman Smart Money by Brunello Rosa and Casey Larsen The Catalyst by Thomas R. Cech Kaput by Wolfgang Münchau Thoughts? Guest suggestions? Email us at [email protected]. You can find transcripts (posted midday) and more episodes of “The Ezra Klein Show” at nytimes.com/ezra-klein-podcast. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs. This episode of “The Ezra Klein Show” was produced by Jack McCordick. Fact-checking by Michelle Harris, with Mary Marge Locker and Kate Sinclair. Mixing by Isaac Jones, with Aman Sahota and Efim Shapiro. Our executive producer is Claire Gordon. The show’s production team also includes Marie Cascione, Rollin Hu, Elias Isquith, Marina King, Jan Kobal and Kristin Lin. Original music by Pat McCusker. Audience strategy by Kristina Samulewski and Shannon Busta. The director of New York Times Opinion Audio is Annie-Rose Strasser. Special thanks to Matt Klein.

Transcript

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0:00.0	From New York Times opinion, this is the Ezra Klein Show. Here's how the last week or so went.
0:33.9	President Donald Trump unveiled a half-baked package of gigantic tariffs.
0:38.5	So half-baked, one of them was a tariff on a group of islands inhabited by penguins.
0:43.0	Those tariffs threw the markets into chaos.
0:45.9	That chaos, it should be said, was not simply the result of higher expected prices or supply chain disruptions.
0:51.4	What markets hate is uncertainty.
0:56.1	Financial crises are usually the result of some unexpected, uncontrollable shock that overwhelms the policymakers who are trying to maintain
1:00.5	stability. In this case, Trump himself was a shock. He was announcing that he was himself trying
1:06.2	to end this era of stability. He wanted a realignment of the global financial system,
1:12.5	and he can't shift those tectonic plates without creating a few earthquakes. But man, what an earthquake. Trillions of dollars
1:19.4	of wealth wiped out of the stock market by choice. The Trump people said, don't worry about it.
1:25.3	That's Wall Street, not Main Street. All we care about is the American worker. But then the upheaval hit the bond markets. The market for U.S. Treasuries began to shake. A bad sign because U.S. Treasuries are the relentlessly reliable asset at the base of the global financial system. Crack that and the whole house can come down. And that seems to be what pulled Trump back from the brink.
1:45.8	See, the bond markets that persuaded you to reverse course?
1:50.5	I was watching the bond market.
1:51.9	The bond market is very tricky.
1:53.5	I was watching it.
1:54.3	But if you look at it now, it's beautiful.
1:58.1	The bond market right now is beautiful.
2:03.3	But, yeah, I saw last night where people were getting a little queasy. But he didn't pull that far back. He is still tariffing most of the
2:09.0	world at 10%. He's tariffing China at 145%. And as for the tariffs, he paused. Well, that's a pause. It's a 90-day pause. What happens at the end of 90 days? What deal is Malaysia supposed to strike with us in the meantime? Who are they going to make that deal with? Nobody knows, not even, I suspect, Trump himself. But I think what we can say right now are three things with certainty. First, we're entering
2:34.5	an era of higher prices and unknown levels of supply chain upheaval. We're about to see a massive
2:39.7	trade war with China. The global economy is complex. When you put this kind of pressure on that
	...

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