This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman.
Global stock markets are tumbling after President Trump unveiled the biggest hike in global tariffs in modern U.S. history, including a 10% blanket tariff on all imported goods from about 185 countries. In addition, many U.S. trading partners, including the European Union, China and Japan, will see even higher tariffs. China now faces a total 54% tariff. Trump announced the plan during a speech in the Rose Garden at the White House.
PRESIDENT DONALD TRUMP: My fellow Americans, this is Liberation Day — waiting for a long time. April 2nd, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed and the day that we began to make America wealthy again. We’re going to make it wealthy, good and wealthy.
For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. American steelworkers, auto workers, farmers and skilled craftsmen — we have a lot of them here with us today — they really suffered gravely. They watched in anguish as foreign leaders have stolen our jobs, foreign cheaters have ransacked our factories, and foreign scavengers have torn apart our once-beautiful American dream.
AMY GOODMAN: The impact of Trump’s tariffs are expected to be felt around the world. While Trump claims the tariffs will boost the U.S. economy, many economists fear it could lead to a recession or worse. Trump’s trade war could also shift global alliances as countries seek new trading partners. China, Japan, South Korea have already announced plans to increase trading ties and coordinate their response to Trump’s tariffs.
We begin today’s show with Richard Wolff, professor of economics emeritus, University of Massachusetts Amherst, visiting professor in the Graduate Program in International Affairs at The New School. He’s the founder of Democracy at Work and hosts a weekly national TV/radio program called Economic Update, the author of a number of books, including, most recently, Understanding Capitalism and The Sickness Is the System: When Capitalism Fails to Save Us from Pandemics or Itself.
Professor Wolff, it’s great to have you with us again. Well, start off by responding to, and were you surprised, shocked, or did you guess that, well, about 185 countries were going to see increased tariffs?
RICHARD WOLFF: On the one hand, we knew something like this was coming. On the other hand, the sweep and the scope of it does make you stop. Mr. Trump is right: It is a changing moment in American history and world history. But I think his representation of what’s going on is completely fantastical and has only to do with the self-promotion that he has engaged in most of the time. It was never foreigners who did it to us, this notion of the United States as a victim. We have been one of the greatest beneficiaries in the last 50 years of economic wealth, particularly for people at the top, just like him. It has nothing to do with foreigners taking advantage of us. This attempt to make himself strong and powerful relative to others, to blame the foreigner, these are cheap shots that a real president wouldn’t do.
And there’s the most important point. The American economy is in trouble. The American empire is in decline. We don’t want to discuss it in this country. We engage in denial. And instead, we are striking out at other people — a sad way of handling a decline. The British Empire declined before. So did all the others. We are now at that point. We had a great 20th century. The 21st century is different. You have to face those problems. That’s not being done. What’s being done is to say we have difficulties, but they’re all somebody else’s fault, and we’re going to solve it by punishing them.
I would like to point out, as you suggest, quite rightly, Amy, that the rest of the world is not going to sit by. The United States does not have the power it had in the 20th century. It is not in the position it seems to imagine itself. When the secretary of the Treasury added to Mr. Trump’s comments that he warned the rest of the world not to retaliate, that would imply that if they do, there would be escalation. Yes, he said, there will be escalation. Well, nothing will guarantee more escalation than if they do nothing, because then it’s an invitation for Mr. Trump to keep doing it as each of these efforts doesn’t work.
AMY GOODMAN: Given how dramatic this was yesterday, is it possible he was deciding this to the very last second, as they put this off? And explain exactly — you’re a professor. You’re a teacher. Most people don’t even realize how tariffs work.
RICHARD WOLFF: OK. A tariff is a tax. It’s just a particular tax that got that name. It used to be called import duty. All it means is, when something comes into the United States that was produced outside and is brought in to be sold, it has to pay a tax, literally as it crosses our border into our country. It is paid by the American company that brings it in, which may pass it on to the consumer — usually what happens — and the tax goes to Uncle Sam. It goes to Washington. Mr. Trump loved to suggest that tariffs were paid by the others — a little bit like Mexico would pay for the wall. Never happened. It’s not going to happen here, either. It’s an American tax.
And there’s something remarkable that clues you in to how big a change this is, that the Republican Party, which has branded itself as the anti-tax party for a century, is now imposing the most massive tax imaginable. Why this big change? Because we have big, big problems, and this kind of slapping the rest of the world is an attempt to solve a little bit of them. But it is not going to work, because we don’t have the power to do it anymore.
AMY GOODMAN: I want to go to UAW President Shawn Fain, who supports Trump’s new tariffs, saying last week, “We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working-class communities for decades.” Fain spoke Sunday on CBS’s Face the Nation.
SHAWN FAIN: We’ve seen over 90,000 manufacturing facilities leave the United States. We’ve seen, in the Big Three alone in the last 20-plus years, 65 plants have closed. You know, and so, look, tariffs aren’t the total solution. Tariffs are a tool in the toolbox to get these companies to do the right thing. And the intent behind it is to bring jobs back here and, you know, invest in the American workers. … If they’re going to bring jobs back here, you know, they need to be life-sustaining jobs, where people can make a good wage, a living wage, have adequate healthcare and have retirement security and not have to work seven days a week or multiple jobs just to scrape to get by paycheck to paycheck.
AMY GOODMAN: Well, while UAW President Shawn Fain praised Trump’s tariffs, he also said he had great concerns about President Trump’s move to eliminate contracts for 700,000 federal workers, the firing of workers at the National Institute of Health and other agencies.
RICHARD WOLFF: I was a bit disappointed. I like Shawn Fain, and many of us do, but this was disappointing, to say, basically, “I will support the president because he does something that might help my union,” even though Shawn Fain knows, as most economists do, that if you put a tax on the goods coming in, they will go up in price, because we have to pay that tax now, and that will lead to domestic producers able to raise their prices because their competitors from abroad are stuck with this tax. So we expect a boost to inflation, which is going to hurt the working class of this country in a very serious way, especially if it builds on itself, which often happens when you do tariffs like this.
And I want to remind everyone, including Shawn Fain, that the auto workers also represent workers in places that need export markets, that produce in America and sell abroad. When those countries retaliate, as they likely will, we will lose export markets, and that will mean fewer jobs. And no one — let me stress — no one now knows whether the jobs lost from this trade war will be greater or smaller than any jobs that are gained. It is a big risk being taken by Mr. Trump. And if it doesn’t go well, it will be very bad for the American economy. It will produce the recession folks are worried about, because if the prices go up, people buy less, and that loses jobs.
When you look at all of this, this is an incredibly risky effort to blame the world, punish the world, and then cross his fingers — which is what he’s doing — hoping it comes out all right. Reminds me of the football metaphor: This is a Hail Mary pass. You throw it down the field. You hope it bounces into your team’s hands. But that’s all it is: a long shot. And it’s a sign of how troubled the American economy now is.
AMY GOODMAN: If you can put this in a bigger picture? Talk about the tax cuts and how they fit into the tariffs, the — what is it? — something like $4 trillion in tax cuts, and who benefits. And then talk about the other issues that President Trump keeps saying that they’re not going to touch, even though what many call his co-president, Elon Musk, whether he steps back from being — you know, giving speeches or not, going after Social Security, issues like Medicaid.
RICHARD WOLFF: Let me start with the tax issue. The biggest single thing that Trump did in his first presidency was the tax cut of December 2017. And when that tax cut was written into law, it had a sunset. It expires this year, 2025. If that expiration is allowed to happen, corporations and the rich, who were the big beneficiaries back then, will face a big tax [increase]. He doesn’t want to do that, because that’s his base, that’s his donor support. He doesn’t want to have those taxes go back up.
Well, then, what is he going to have to do? If he keeps on spending and he doesn’t let those taxes go back up, he’s going to have to borrow trillions, as we have been doing. He doesn’t want to be the president who keeps borrowing trillions, in part because the rest of the world is a major creditor of the United States, and they’re not going to continue to do it the way they have. So he’s in a jam. He has to do something.
So his hope is to savage the expenditures in this country. Look what he’s doing. Mr. Musk stands there with a chainsaw to give us the clear implication, “I’m going to solve the problem on the backs of the working class. I’m firing them all. I don’t care what the rest of the working class suffers. I’m going to fire all these people, without notice, without a plan.” Calling this efficient is a silly joke. An efficient process takes time, takes experts. You’re not doing that. You’re just wholesale firing. Calling that efficiency is an attempt to fool people, that shouldn’t make any difference.
Mr. Trump is now in a jam. He can’t get out of this without in some way solving the problem that has been built up. And there is no way other than the one he’s doing, because it’s the last gasp of how to take away from the mass of the people the ability to borrow. I mean, let’s be honest. If you put a tariff, you make everything coming in from abroad more expensive. That means people will buy less of it. They’ll shrink their standard of living. If American companies take advantage of the tariff, which they always do, by raising their prices, that will also hurt the working class. You are immiserating your workers in order to try to solve the problem you haven’t solved before.
But here’s the irony that may in the end come back to haunt us. Europe has been unable to unify under the umbrella of American alliances. The enmity of the United States is bringing Europe together better than the alliance was able to do. And as you pointed out, very important, China, Japan and South Korea, with long histories of animosity and tension, are getting together to cope with this. Wow! We are unifying the whole world.
If you want the big picture in my judgment, after World War II, George Kennan taught us about containment: “We’re going to contain the Soviet Union.” The irony, which the philosopher Hegel would enjoy, we are becoming contained. We are isolating ourselves — the votes in the U.N. of the United States alone or the United States and Israel and two or three other countries, the isolation politically, the isolation now economically. We are the rogue nation for the rest of the world. We may not want it. We may not agree. But it doesn’t really matter, if that’s how they perceive us. And that’s what’s happening.
AMY GOODMAN: You talked about South Korea, Japan and China joining together. One of the biggest announcements of [tariffs] was against Taiwan. It’s just a little more complicated for Taiwan to join that group.
RICHARD WOLFF: And also, another one was Vietnam, which got a very heavy whack. I mean, is there no recognition of what the United States did to that country? Maybe you wouldn’t want to crush them with this kind of a thing after it. As I’m saying, this is a change. This is a sign to the world that as the United States empire declines, this is a nasty place that’s going to, you know, gesture and thrash around, doing damage everywhere, as it copes with its own decline.
AMY GOODMAN: Former Greek Finance Minister Yanis Varoufakis recently wrote a piece headlined “Donald Trump’s economic masterplan.” He wrote, quote, “This is what his critics do not understand. They mistakenly think that he thinks that his tariffs will reduce America’s trade deficit on their own. He knows they will not. Their utility comes from their capacity to shock foreign central bankers into reducing domestic interest rates. Consequently, the euro, the yen and the renminbi will soften relative to the dollar. This will cancel out the price hikes of goods imported into the US, and leave the prices American consumers pay unaffected. The tariffed countries will be in effect paying for Trump’s tariffs.” Do you agree with that, Professor Wolff?
RICHARD WOLFF: No, even though Yanis and I do a lot of work together, so normally I defer to him. He’s wonderful in his analysis. I don’t think this is correct. Is it a possible outcome? Yes.
You know, we’re in a situation — let me put it this way. Tariffs are not new. They’ve been around for hundreds of years. If you teach a course in international economics, which I’ve done, you tell students, “Here are a thousand books. Here are 5,000 articles. We know.” And the answer is, when you impose a tariff, you don’t know what the outcome is, because it depends on everything else going on — interest rates, exchange rates of currencies, rising or falling economies around the world. You can’t know in advance. It’s a very risky thing, which is why for the last 50 years we have had, administered by the U.S., something called free trade or neoliberal or globalization.
All of that is over now. The United States can’t win anymore in that system, so it is reverting to economic nationalism. And that’s a fundamental shift that throws the world. It was the accepted wisdom for 50 years, 50 — the last 50 years, not to do what Mr. Trump is doing now. If you want, you can think that everybody who thought that way for 50 years was wrong, and Mr. Trump, the genius, is correct, but that would be a long shot. Better bet: He’s trying to save his own political life, and he’s trying to cope, to his credit, with a declining economy without having to admit that that’s the case.
This won’t end well. It normally doesn’t. And what we’re going to see is the fighting against one another of the euro bloc, the Asian bloc, the American bloc, at a time when the United States is weaker than it has been economically and politically. Look at the debacle in the Ukraine, as well, the misunderstanding that the Russians could turn to the Chinese and the Indians to cope with the costs of that war in a way that hadn’t been calculated and is turning out to shape the outcome. And it’s not a question of which side you’re on, but just watching how it lines up, that’s the problem.
AMY GOODMAN: Thirty seconds, as you often talk about, are you seeing this as the beginning of the end of American empire?
RICHARD WOLFF: Yes, I think we are already in 10 or 12 years of that decline. It can’t — here’s the single best statistic. If you add up the GDP, you know, the total output of goods and services in a year for a country, of the United States and its major allies, the G7, it’s about 28% of global output. If you do the same thing for China and the BRICS, it’s about 35%. They are already a bigger bloc of economic power than we are. Every country in the world thinking about building a railroad or expanding its health program, they used to send their people to Washington or London to get help. They still do. But when they’re done, they send the same team to Beijing, New Delhi, São Paulo, and they often get a better deal. The world is changing. And the United States could cope. But as with alcoholism, you have to admit you have a problem, before you’re in a position to solve it. We have a nation that does not yet want to face what this all adds up to.
AMY GOODMAN: Richard Wolff, professor emeritus of economics, University of Massachusetts Amherst, visiting professor at the Graduate Program in International Affairs at The New School here in New York, founder of Democracy at Work, hosts a weekly national TV/radio program called Economic Update. Among his books, Understanding Capitalism. Thanks so much for being with us.
RICHARD WOLFF: Thank you, Amy.
AMY GOODMAN: This is Democracy Now! When we come back from break, an update on a story we’ve been following closely. Jewish students at Columbia University chained themselves to the university gates. Stay with us.
