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NERMEEN SHAIKH: President Trump is facing increasing criticism from corporate America over his decision to launch a global trade war. On Monday, the CEOs of Walmart, Target and Home Depot met with Trump at the White House to warn about the impact of Trump’s trade policies. A day later, Trump signaled he’s open to substantially lowering tariffs on China. Trump is also toning down his attacks on Federal Reserve Chair Jerome Powell, who he had threatened to fire. This all comes as global stock markets remain in turmoil over Trump’s trade policies. The Wall Street Journal reports the Dow Jones Industrial Average is headed for its worst April performance since the Great Depression.
AMY GOODMAN: We’re joined now by Robert Kuttner, co-founder and co-editor of The American Prospect. His most recent piece is headlined “Trump Blinks.” Kuttner’s latest book is Going Big: FDR’s Legacy, Biden’s New Deal, and the Struggle to Save Democracy. Robert Kuttner is also a professor at Brandeis University’s Heller School.
Robert, welcome back to Democracy Now! So, let’s begin with this U-turn, with this reversal of Trump’s. When he started talking about 145% tariffs on China, it was like someone else had proposed them, and he wanted to turn that around. So, you’ve got from China to the possible firing of Jerome Powell and the turnaround on that. Can you talk about the significance of this and what it means that the Dow Jones is plummeting to the point of being compared to the Great Depression?
ROBERT KUTTNER: Well, Amy, I’ve been obsessively concerned with one question: Where are the firewalls? Where are the speed bumps? How might we slow Trump down? And there may be three or four ways that we can do this. One is by activism. One is by the Supreme Court remembering that its job is to protect the rule of law — and that seems to be happening. And one is financial markets.
Now, as someone who’s spent my entire career criticizing the power of Wall Street, it doesn’t give me great pleasure that financial markets can be a source of restraint on Trump. On the other hand, in World War II, you know, we had an alliance with Stalin to beat Hitler. So you take the allies you can take.
And what’s happened in the past few days — and Scott Bessent, the treasury secretary, is the interesting figure here — markets crashed, first of all, when Trump declared “Liberation Day” and tried to impose tariffs on the whole world. They crashed again when he made noises about firing Jerome Powell. They crashed again when he did this lunacy with China. And what Bessent has done — he’s sort of the most conventional Wall Street guy of all of Trump’s advisers, so he kind of speaks for financial markets. And he basically said to Trump, “You really don’t want to do this.” And so Trump walked it back. And if you look at markets, financial markets, the Dow Jones, the S&P 500, in the past few days, you know, they bounced around like a yo-yo. And they bounced around primarily in response to whether Trump is doubling down on this craziness or whether he’s backing off.
NERMEEN SHAIKH: And you’ve said, Robert, that Scott Bessent is the — plays the role of the, quote, “sole grown-up in the room” in the Trump administration.
ROBERT KUTTNER: That’s right.
NERMEEN SHAIKH: So, if you could say a little bit about his background and what kind of influence you think he has on Trump?
ROBERT KUTTNER: It’s very interesting. I mean, he is the most atypical of all of the close Trump advisers. He used to be a Democrat. He worked for George Soros for a long time. He’s the guy who came up with the bet that crashed the pound in the mid-’90s. And then he set up his own hedge fund. He’s gay. He’s married to a man. He’s about as unlike most of MAGA as he could be.
And Trump picked him because he wanted one traditional Wall Street guy to reassure financial markets. And Bessent has not been shy about using this influence to kind of talk Trump off the ledge and get him to back off some of the crazier stuff. Now, we’ll see whether Bessent’s days are numbered — right? — because Trump is paranoid about loyalty. He’s petulant. He could turn on Bessent. But I think, for the moment, he’s following Bessent’s advice.
Now, here’s the complication. It’s sort of easy to say, “OK, I’m not going to fire Jerome Powell.” It’s much harder to do a deal with China. China plays a long game much better than we do, as I wrote. China’s time horizon is measured in centuries, if not millennia. And Trump’s attention span is measured in hours, if not days. And you don’t just do a deal with China. China has an entire economic system based on mercantilism, so-called, industrial policy, using state subsidies to build the world’s second most powerful economy, soon to be the world’s most powerful economy. You don’t just have a staged meeting with Xi Jinping and say, “OK, we’ll cut the tariffs, and you change your whole economic and political system.” That’s not how it works. So, it’s not clear what kind of deal is in the offing. And Trump has basically weakened his own hand by doing this ridiculous 145% tariffs and then, humiliatingly, having to walk it back. So, Xi’s hand is stronger than it was before Trump did this.
NERMEEN SHAIKH: And if you could explain, actually, what do you think happened? Because, I mean, just to clarify, the tariffs that Trump had imposed on China were at 145%. China retaliated by imposing 125% on American goods to China. Then he says earlier this week to reporters in the Oval Office that tariffs on China will, quote, “come down substantially,” saying, he said, “We’re going to be very nice, and they’re going to be very nice, and we’ll see what happens.”
ROBERT KUTTNER: Yeah.
NERMEEN SHAIKH: And then, China today came out and said, actually, there are no negotiations going on between the U.S. and China on that, and much less has there been any agreement.
ROBERT KUTTNER: Well, exactly. So, a lot of what Trump is saying is in the realm of wishful thinking. And the reason he backed off is that so many American consumer goods, American producer goods, like auto parts, are intimately bound up with sources of supply that come from China. Now, think about what 145% tariffs mean. That means that if something costs $100, it suddenly costs $100 plus 145% of $100, so it now costs $245. That’s tantamount to a boycott. It’s like a complete boycott of Chinese exports. And after all these years of neoliberalism, where so much stuff gets outsourced to China, we’re very dependent on China.
The flip side — and this has to do with China’s retaliatory tariffs — our biggest export is, guess what? It’s soybeans. It’s 9% of all of American exports — not farm exports, all exports. And the biggest customer for American soybeans is China. Well, if China’s tariffs are over 100% on American soybeans, China is going to start getting its soybeans from Brazil or from Argentina. So you’ve got farmers very upset, as well. And you’ve got all of industry and all of agriculture telling Trump, “Back off. Don’t do this to us.” So, of course, he has to back off.
And China is in the catbird seat, and China can very well say, “Well, we don’t have any deals pending. We didn’t do this. He did this.” And he’s weaker than it was before — he was before. And this is classic Trump. You create a crisis. Then you say, “Well, actually, I’m going to back off,” and the crisis is over. And you end up with yourself and the country worse than before you started.
AMY GOODMAN: And then, of course, the question is how much he and his friends make when he suddenly does a turnaround and the stock market goes up. Robert Kuttner, 10 seconds to respond to that.
ROBERT KUTTNER: Well, he’s totally corrupt. He doesn’t make any bones about the fact that he’s totally corrupt. You’ve had the item about cryptocurrencies. I mean, he’s the ultimate grifter.
AMY GOODMAN: As in “grifter,” not to be confused with “drifter.” Robert Kuttner, co-founder and co-editor of The American Prospect. We’re going to link to your piece, “Trump Blinks.” But stay with us, because we want to talk about your other piece, “Is the Press Next?” We’ll speak with Robert Kuttner and the Nobel Prize-winning journalist Maria Ressa. She knows something about corruption and pressure on the press, coming from the Philippines. Stay with us.
