This is the Cato Daily podcast for Monday, March 17, 2025. I'm Caleb Brown. The positive regulatory and tax reform policies championed by the Trump administration have basically been offset, not just by punitive tariffs, but by the dramatic swings in White House tariff policy.

Scott Linscom details why record uncertainty might be every bit as damaging as the tariffs

themselves.

There's a lot of striking and grim data out there in the, particularly the like S&P 500, the U.S. stock market versus international

markets, which have sort of decoupled in terms of performance.

Economic uncertainty is higher or was recently much higher than it was during the depths of COVID-19.

And a lot of this, I think it's pretty easy to dispense with the notion that this had anything to do with the previous administration and has almost everything to do with

not just tariff policy, but the dramatic uncertainty that firms face in trying to make future

economic decisions?

I think you need to talk about two different channels through which this stuff affects the

economy. First is the direct channel. This is, I think, what we hear most about. Tariffs are a tax,

and they are an inefficient tax and particularly the type of tariffs that we're

talking about in terms of tariffs on steel and aluminum, tariffs on imports from Canada and Mexico,

they have particular harms for American manufacturers because they involve a lot of manufacturing input.

Steel and aluminum are obvious.

But then the NAFTA supply chain, North American supply chain, is just tons of parts for multinational manufacturers that make stuff in all three countries.

So that is going to impose a direct cost on the U.S. economy.

And that's why you see like Boeing stock has dropped over the last month or two,

because Boeing is one of the most globalized manufacturers on the planet,

a huge manufacturer in the United States.

And so Boeing's going to take a hit.

It's other issues notwithstanding, right?

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