Trump threatens the grim trigger

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 4 February 2025

⏱️ 12 minutes

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Summary

President Donald Trump had promised new tariffs on Canada, Mexico and China. However, after negotiations with both Mexico and Canada on Monday tariffs against those countries are paused for at least a month. He said tariffs are not a negotiating tool, but he's used them as one as recently as January in a dispute with Colombia. Today, we dissect the game theory behind Trump's use of tariffs.

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Transcript

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0:00.0	NPR.
0:02.2	The seismic economic event right now is President Trump's tariffs on Canada, China and Mexico.
0:19.2	Now, Canada and Mexico have been spared these 25% tariffs for now.
0:25.0	They reached a deal yesterday where the U.S. will delay these tariffs for a month. But if put into
0:31.3	effect, these will be part of extraordinary measures that are far more expansive than the trade
0:37.4	war during the first Trump presidency.
0:39.7	A big question people are asking right now is why? What's Trump's end goal here? Are the tariffs really
0:45.5	because Donald Trump wants Mexico, Canada, and China to clamp down on fentanyl? Is it migration at the
0:51.0	borders? U.S. trade deficits with these countries? Are there a way to raise
0:54.8	money for the government? Donald Trump says yes to all of the above. One thing on Friday he said
1:00.8	this is not is a negotiating tool. No, it's not. No, it's a pure economic. We have big deficits
1:07.3	with, as you know, with all three of them. But Donald Trump has used tariffs as a negotiating tool, as recently as late January.
1:16.3	And it worked.
1:17.8	Now, it's a foolish game to try to get into the president's head.
1:21.5	But we thought dissecting a recent showdown can at least reveal some of the tactics
1:27.2	Trump is using as he threatens
1:29.1	America's biggest trade war in generations.
1:33.1	This is The Indicator from Planet Money.
1:35.3	I'm Daryam Woods.
1:36.5	And I'm Waylon Wong.
1:37.6	Today on the show, the game theory of tariffs.
1:41.3	Why Donald Trump is so quick to escalate tariffs against friends and foes,
	...

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