Why Trump’s Tariffs Won’t Work

The Ezra Klein Show

New York Times Opinion

Society & Culture, Government, News

4.6 • 11K Ratings

🗓️ 12 March 2025

⏱️ 61 minutes

🔗️ Recording | iTunes | RSS

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Summary

Wall Street thought Donald Trump was bluffing about his tariff plans. The stock market rallied after his election. But the reality has started setting in. Trump is doubling down on tariffs, even as he warned Americans that the economy may experience a “period of transition,” insisting this is just short-term pain. So what exactly is Trump’s theory here? And how much pain should we expect? Answering those questions requires a bit of a tariffs primer. And the economist Kimberly Clausing kindly agreed to come on the show, walk through the basics, and help me make sense of what Trump is doing here. Clausing has modeled the possible costs and consequences of the tariffs Trump has proposed, and she breaks down how much you and I might end up paying. Clausing is a senior fellow at the Peterson Institute for International Economics, a professor at U.C.L.A. and the author of “Open: The Progressive Case for Free Trade, Immigration, and Global Capital.” This conversation contains strong language. Note: This conversation was recorded on Wednesday, March 5. Mentioned: We’re taping an “Ask Me Anything” episode soon. You can email me at [email protected] with a question. Please use the subject like “AMA.” We’ll consider any questions that are shared by the end of the day on Tuesday March 18. “The Real Reason President Trump Pushes Tariffs” by Kimberly Clausing Abundance by Ezra Klein and Derek Thompson Abundance book tour Book Recommendations: The Undoing Project by Michael Lewis Mountains Beyond Mountains by Tracy Kidder The Worldly Philosophers by Robert L. Heilbroner 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 Rollin Hu. Fact-checking by Michelle Harris. Mixing by Isaac Jones, with Efim Shapiro and Aman Sahota. Our supervising editor is Claire Gordon. The show’s production team also includes Elias Isquith, Kristin Lin and Jack McCordick. Original music by Pat McCusker. Audience strategy by Kristina Samulewski and Shannon Busta. The executive producer of New York Times Opinion Audio is Annie-Rose Strasser. Special thanks to Pat McCusker.

Transcript

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0:00.0	Before we begin today, we're going to do another Ask Me Anything episode for subscribers quite soon.
0:05.9	So you can write me at Ezra Klein Show at at mytimes.com with your question.
0:10.3	Please use the subject line AMA so we know to pull it into the big spreadsheet we choose from.
0:15.3	There will be a cutoff here so we can actually record.
0:17.8	We will consider any questions that are sent by the end of the day on Tuesday,
0:21.6	March 18th.
0:28.1	From New York Times opinion, this is the Ezra Klein Show.
0:31.6	Thank you. Wall Street was thrilled when Donald Trump won the 2024 election.
0:59.7	And it was thrilled in part for a simple reason.
1:02.9	It thought he was lying.
1:05.0	Business leader after business leader said that President Trump wouldn't actually lay down his tariffs.
1:10.6	And they had a reasonable case.
1:14.2	Trump in his first term was exquisitely sensitive to the stock market. He loved bragging about
1:19.3	how high it was on his watch. And so the belief was that the market would be a check on Trump's
1:25.2	behavior. He wasn't going to do anything that would actually harm it.
1:28.9	He certainly wasn't going to do anything that would harm the real economy or drive up prices.
1:34.7	Say this about Donald Trump.
1:36.4	He knew why he had won the election.
1:38.4	Groceries.
1:39.2	It's a very simple word, groceries.
1:41.5	Like almost, you know, who uses the word? I started using the word, the groceries,
1:47.1	when you buy apples, when you buy bacon, when you buy eggs, they would double and triple
	...

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