The video addresses a major economic decision made by US President Donald Trump, which involves a substantial new package of import taxes affecting the global trade system. The discussion focuses on the countries most impacted by these tariffs and what the broader consequences for global trade might be. The conversation aims to clarify what Trump intends to achieve with this reordering of global economics, suggesting a declaration of economic independence for America.

This episode is crucial for understanding the sweeping changes being proposed to international trade by the United States and the pivotal role tariffs play in this transformation. The experts delve into the human narratives and policy implications behind these tariffs, discussing potential winners and losers on the global stage. They also examine how these tariffs might reshape economic relationships and introduce long-term changes in world trade dynamics.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. unilaterally [ˌjuːnəˈlætərəli] - (adverb) - In a manner that is performed by only one side or party. - Synonyms: (independently, single-handedly, one-sidedly)

It was indeed extremely lively. And we're still filtering through some of the detail of what is an extraordinary change proposed by the Americans unilaterally to the entire world economy.

2. tariff [ˈtærɪf] - (noun) - A tax or duty to be paid on a particular class of imports or exports. - Synonyms: (duty, levy, tax)

Then he said, he, yeah, then he said that there's going to be this baseline 10% tariff, so a 10% tax on all imports from every country.

3. rip-off [ˈrɪpˌɔf] - (noun) - An instance of something being overcharged or inadequate; a swindle. - Synonyms: (cheat, scam, con)

But then he went further and said countries where the US feels that they're being, in his words, ripped off, but by either high tariffs on the other side or just kind of restrictions on trade like regulations, they would get a higher tariff rate.

4. reciprocal [rɪˈsɪprəkl] - (adjective) - Given, felt, or done in return; mutual. - Synonyms: (mutual, corresponding, exchanged)

These tariffs will remain in effect until such time as President Trump determines the threat posed by the trade deficit and underlying non reciprocal treatment is satisfied, resolved or mitigated.

5. deficit [ˈdɛfɪsɪt] - (noun) - The amount by which something, especially a sum of money, is too small. - Synonyms: (shortfall, deficiency, shortage)

The aim of this policy is to 0, I. E. Bring down to naught all of the deficits around the world.

6. inured [ɪˈnjʊrd] - (adjective) - Accustomed to something, especially something unpleasant. - Synonyms: (accustomed, hardened, desensitized)

Sometimes, you know, become slightly inured to this.

7. retaliate [rɪˈtælɪˌeɪt] - (verb) - Make an attack or assault in return for a similar attack. - Synonyms: (respond, counterattack, revenge)

Trump can increase the tariff if trading partners retaliate or decrease the tariff if trading partners take significant steps to remedy.

8. exempted [ɪgˈzɛmptɪd] - (verb) - Freed from an obligation or liability imposed on others. - Synonyms: (excused, spared, released)

So some things are exempted. Things like copper, pharmaceuticals, semiconductors and lumber and things that the US just can't make for itself.

9. mitigated [ˈmɪtɪˌgeɪtɪd] - (verb) - Made less severe, serious, or painful. - Synonyms: (alleviated, reduced, diminished)

These tariffs will remain in effect until such time as President Trump determines the threat posed by the trade deficit and underlying non reciprocal treatment is satisfied, resolved or mitigated.

10. complexities [kəmˈplɛksɪtiz] - (noun) - The state or quality of being intricate or complicated. - Synonyms: (complications, intricacies, difficulties)

So there are some complexities here.

President Trump reveals global tariffs but what does it mean for the world? - BBC Newscast

This is one of the most important days, in my opinion, in American history. It's our declaration of economic independence. US President Donald Trump has announced his huge package of import taxes on basically the whole world. But some people are going to be hit harder than others. We'll explain which countries they are, what the consequences could be, and what Donald Trump is actually trying to achieve here by reordering the entire global trade system. All of that on this episode of the BBC's Daily News podcast.

Newscast. Hello. Slightly later newscast than normal. I'm sitting in Broadcasting House in the newscast studio on Wednesday evening, the 2nd of April, and it's 10:37 and Faisal's here after a very lively 10:00 news and a very lively 9:00 to 10:00. It was indeed. It was indeed extremely lively. And we're still filtering through some of the detail of what is an extraordinary change proposed by the Americans unilaterally to the entire world economy.

And we will dive into the details in the body of the episode, but just before we start, just the theatrics of what we saw. So Trump was at a very big event in the garden of the White House. There was senators there, the whole cabinet was there. Lots of people who work in the American car industry was there, as will become clear why. And he did a big, quite classic Trump speech, weaving in all sorts of different directions about trade. And then he got to the meat and drink of it, which was a huge increase in the tariffs that. That the import taxes that America will charge its trading partners, which he illustrated with this big cardboard chart where he listed all the countries.

It was like the bookies. It was like the 330 at Aintrew. So Chris Mason went for the bookies on the 10 o'clock news. I've seen other people saying it's like the star and the reasonably priced car league table on Top Gear. The old Top Gear, it was sort of a bit like sometimes, like when you. When someone brings a big cardboard menu to your table in a restaurant. Yeah. And, yeah, you just got. Each country was sort of being treated differently. It was designed in two directions, designed to communicate to American people. I am changing the way your economy works. The way that it's been wired has been wrong, it's cost you your job and I'm going to transform it.

But it was also just trying to communicate to the world. I could have been a lot worse. I've discount. Given you a generous discount. Oh, yeah. At one point he said he was being kind. Faisal, there's kind of three main things that he announced. We got the confirmation that the, the tariffs, all imports of cars into America of 25%, which he announced a few weeks ago, are definitely going to kick in kind of any minute now.

So that, that's one of the basic things. Then he said, he, yeah, then he said that there's going to be this baseline 10% tariff, so a 10% tax on all imports from every country. But then he went further and said countries where the US feels that they're being, in his words, ripped off, but by either high tariffs on the other side or just kind of restrictions on trade like regulations, they would get a higher tariff rate. And he then went through a list of the, all the countries that he's targeting and, and the rates that they're going to get.

And so kind of the headline for the UK is the UK is getting the 10% increase which will kick in on Saturday morning. Yes, on everything apart from cars, which were 25% and metals. 10% is significant. 6 billion alone on everything. And then, because we said 60 billion. Exactly. Now, whether that is the actual cash that gets handed over is another question. Because actually what will happen is fewer UK goods will end up going to the US although because they've charged more to other countries and other jurisdiction, in particular the European Union, you could get more, more trade. That's what some of the statisticians might argue, but base the baseline here is that this is a universal tariff of 10 for the whole world.

That's an astonishing thing for America to do. Sometimes, you know, become slightly inured to this. We just step back and say, that is massive, that is huge. That is meant to transform the sort of global motorways of trade. The things we, the things we think are normal, like German selling cars to America, Britain selling cars to America, Scott selling whiskey to the States, the French selling champagne to the United States, people in East Asia selling clothes, China selling electronics and all these things, they want to change it. The aim of this policy is to 0, I. E. Bring down to naught all of the deficits around the world.

And so that is why the trade deficits, in other words, the amount other countries sell more to the US than the US Sells to them, that is the key way they decided who would get the extra bonus tariff. And some of those numbers are really high. We'll go into that in a minute. In terms of the UK I, I think, you know, you may hear an argument that there's a, there's a win compared to the European Union as it Was explained to us by the EU. Got 20%. Yes. And you know, Republic of Ireland, phase 20. Directly comparable now in terms of pharmaceutical industry, for example.

However, certainly from how it's explained to us in a briefing call from the White House, they said it was a mathematical formula. You added up the tariff, you added up the non tariff barriers, including currency manipulation and a whole load of other relations. Whether you need a license for a product that, whether there's special genetically engineered restrictions on beef and things like that. Sales tax like vat. Yeah, they included VAT as well. You add that all up and then they halved it. But then subject to a, a baseline, a lower bound of 10. So a minimum of 10.

Yeah. So there's two questions that arise. The UK which is it's, it's not apparent or abundantly clear that negotiations have made a huge difference. Do you know what, I wonder if we should save the, the rest of the UK stuff for when Chris gets here. Yeah, but just before we, we dive into and also hear from President Trump. Don't worry, he's not a guest on newscast, a clip of him from the Rose Garden. He's very welcome. We should just do the basics of how tariffs work.

It's not paid by the exporter, is it? It's paid by the importer in America who has to give this 10% or 24% or 47% in some cases to the American government as revenue. And then it's up to that company whether they pass that 10, 24, 47% onto their customers or take hit to their profits or just do business differently to get their costs down. It's inevitably going to hike up prices in America. There's just no, no way around it.

Now not all of it might get passed on. In some cases it will be all of it that gets passed on. But when you think about some of these 30 and 40% tariffs explained that have been targeted at some of the biggest exporters of things like clothes and toys and electronics, not just China, which is on a slightly lower tariff in 34%. I think I haven't memorized them all yet, but you know, Vietnam's 46, Cambodia, Bangladesh, these countries have been significant exporters. In fact, it's helped their development. I think this is going to decimate those industries in that entire model.

And also Americans will just have to get there, have to get, have to source these from elsewhere or domestically. The stock markets are going to open in Asia in the next few hours and I would suggest that this is going to be extremely painful. And they're already some of the future stock markets. So they're sort of bets on where stock markets are going to happen are already down pretty sharply. Right. Let's hear from Donald Trump where he just set out in his big, quite long speech about what he was actually trying to do here.

Liberation Day, waiting for a long time. April 2, 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. Gonna make it wealthy, good and wealthy. And the cheers you're hearing are members of his cabinet, senators from the Republican Party and those, those workers from the car factory, some of whom came up and sort of started speaking at the podium while wearing their high vis.

Right, Chris is here. Hello. Hi. Right, what's the hot take from the center of government? I saw you were outside Downing street this evening. Yeah. So I think alongside the extraordinary spectacle of the President there with his rectangular piece of laminated cardboard or whatever it was with all of those tariff rates on it, and then him. I don't think it was laminated because that would make it shiny. Oh, is that right? Okay. Anyway, sorry, I digress. Happy to be fact checked on that particular detail anyway, you know, and then.

And reeling off the numbers like he was giving odds to a horse race. What I can tell you is that the business secretary, Jonathan Reynolds, and his team were in their department television on, watching it like so many others, as were folk in Downing Street. Yes, they might have had an indication of the, the mood music coming out of Washington, but they couldn't be absolutely certain what it was going to be and the, and the tone in the tenor with which it would be wrapped up alongside his commentary on lots of other countries until they saw it on the telly like the rest of the, like the rest of the world.

Now, what we've heard since is the business secretary, Jonathan Reynolds, who had been watching it on said telly, saying that the government will remain calm and committed to doing a deal, that these negotiations continue with the U.S. around this, this limited trade deal. There's four negotiators, I'm told, on the U.K. side in the U.K. at the moment, they'd head over to the U.S. if they felt that it was very imminent in terms of its signing. I think in terms of that Adam, of 10%, there is relief in government, not cock a hoop, because Obviously, you know, 10% is still significant.

It'll have significant implications, as will those larger tariffs on others because of the consequences it will have for world trade flows. Those in government feel vindicated in terms of their strategy of not shouting their mouth off in the direction of the Trump administration. The other observation I'm picking up at Westminster tonight from Conservatives particularly, but not just from Conservatives, is that comparison between the UK and the European Union and people pointing out that things might have been rather different if the UK was still a member of the European Union, given that differential of 10% versus 20%.

Now, Faisal, let's pick up on your theory from earlier that actually maybe there wasn't a lot of scope for these British negotiators to have got a special deal for the uk and these negotiations with the US over the last couple of weeks because nobody was getting a special deal here. Yeah. They clearly explained to us, a senior White House official, two senior White House officials, that the, that the formula was the tariff levied by the, the other country, plus accounting for what we call non tariff barriers. So things like genetically engineered beef is having a certain set of restrictions, currency manipulation, all this stuff, you add it into a sort of general mix and you come up with a number and he halved it, except at the lower bound of 10. So the UK's number was 10. They didn't have that because lower bound was 10.

So that was their formula and they said that they applied it. And so it is tricky to see how that was affected by any negotiations. And then I think the relevance of this is what is the negotiation going forward for what we were told on that briefing call was the following, this is not a negotiation, this is an emergency. So I, I would say the bar would be very high. You know, remember, they've levied tariffs on their free trade partners. So what, what does it actually mean right now to do a free trade agreement or to do any sort of agreement if you can never. Well, if you never get below 10, but even if you got to zero, they've just, you know, they've just whacked on 20 or 30 for some.

Yeah. So your future trade deal isn't worth the paper it's written on. Now, you, you may have different views in different parts of the administration thinking you can negotiate these down, but I think it''s a question of judgment now about how much time and effort to devote to something from the UK perspective that may not yield much soon. You know, so, so it's a real, it's a real judgment call. I'm surprised that there's a claim that the 10 was down to some grand negotiating wizardry. Clearly there's a difference with the EU but now it gets very, very interesting, the 4D chess, because they're going to be going to Brussels for a summit in the middle of May.

Yeah. And maybe they don't want to talk about that too much. And also just with my love of documents, I remember from my time in Brussels in Brexit land, every year the US Trade representative produced this big doorstep of a report which was basically a kind of global atlas of all the trade barriers that the US perceived around the world. And it was made interesting reading because you could see what was getting the Americans goats and what they would try and push for in international negotiations. And actually again, Donald Trump brandished this document when he was doing his statement today because they just published the updated version a couple of days ago.

And if you look at it though, and you go to page 363 for the UK, it says the UK's average applied tariff rate was 3.8% in 2023. So actually they're adding on quite a lot non tariff barriers to say that we are tariffing them 10%. It's VAT. Yeah, it's VAT. And, and so the question, even though VAT is applied on British made products sold in Britain. Yeah. I mean, if you're trying to have a rational argument here, what would be considered to be an economic rational argument, it's probably not the space for it, but yeah, and that's another thing.

You know, we're sort of accepting the premise of what the White House is saying, which is that to have a deficit, to have a surplus with America is somehow ripping it off. This is how the global economic system has evolved, largely under US guidance and it's made things cheaper for American consumers. It has meant that they've lost some factories and now they want to turn it around. And here's another really interesting point, which is that what we're seeing today, we saw, we saw Tesla sales fall in the first quarter, not entirely down to consumer actions, but that's got to be a factor in this.

This is the first trade war of the social media era. You know, one wonders that whatever governments do to retaliate, and believe me, if not the uk, many other jurisdictions will from tomorrow. What consumers do when they feel like they're being mistreated, you know, set against a backdrop. Well, because Canadians went in and turned all the American products upside down and back to front in the shops, this may be a factor in terms of. Exactly, you know, America's built itself on selling amazing brands that people buy into all around the world. If I was Running one of those brands right now I'd be thinking, you know, hang on, how's this going to affect me?

Also I kind of, my supply chain is in Cambodia or Bangladesh. This is an absolute bowling ball right into the middle of exactly how kind of US led capitalism has developed. Well, also, the businesses don't work this fast. Well, exactly. Saturday morning early hours for the 10% it comes in and then the 9th of April, which I think is Tuesday or Wednesday. Tuesday. I look at my phone calendar that, that's for the, that's for the, the wider tariffs. But what's Wednesday? What's. Watch the stock markets now and watch the unintended consequences. But yeah, Chris, one of the consequences could be actually for the UK is that all those products destined to go to the US from China, Vietnam, Cambodia come to the uk, prices go down, which is bad news for British producers of those products.

Yeah, and it's that 4D chess thing again, isn't it? The complexity of global trade flows that are then buff these various tariffs in various directions where goods that were destined for America are then looking for an alternative home and a seller that wants to kind of get rid of them. And yeah, what implications that has. And then there's the political 4D chess, which is how does the UK's strategy right now compare with that of trading partners and allies and how they respond in the coming days? That then has another knock on in terms of the four dimensional chess on businesses, but then it plays into the political argument as well.

So, you know, this is just the beginning, isn't it, of all of this, of the, the knock ons, the consequences, the. And then the economic and political. I was going to say ripples. It's more than that, it's waves, isn't it? I saw that Rachel Reeves, the Chancellor, was at a select committee today and actually she, she had been quite vague up until now about what the economic effects could be on the uk, even though the Office for Budget Responsibility was quite clear, if quite theore when they published their, their big report about the, the fiscal forecast last week.

She sounded a little bit more negative about it today than she had done in the last few days. Yeah, she did. And it was on. Just that, on it, it was just that point and maybe doing a little bit of expectation management, but doing it because clearly with this, this 4D chess, the implications are huge and actually she was making the point, broadly speaking, that yes, of course there is an initial focus, or there was about to be an initial focus on the number attached to the uk but, but she was making an argument that said, don't underestimate the impact on the numbers on everybody else for just the reasons that we were discussing.

But then also the whole business of where it leaves the state of the economies of those that we are selling to. In other words, trade between the UK and other countries, not just trade between the UK and America. And it does put into some context, doesn't it, the conversations that the three of us were having a week ago on newscast and the after the spring statement that along comes these sort of meteor, economic meteorites from the, from the White House that have the potential, I mean, let's see how things pan out, but have the potential to kind of blow the, those spring statement spreadsheet projections out of the water.

Faisal, in terms of how other countries are reacting. So sounds like the British government is. Well, their position tonight is the same as their position has always been, by the sound of things, which is to keep calm and negotiate, which is what Michel Barnier used to have like on a mug in his office. What we're hearing from other people. It's weirdly quiet at the moment. Well, and I, I think it's early days right now and I suppose if like finance ministers and trade ministers around the world were watching the BBC news channel like we were trying to see where they were on the chart, then.

Yeah, it's going to take them a little while. It will take a little while to unpack. And I think, you know, thinking about it, you know, there is a, there is a sort of pathway through this for us in the UK where even at the 10 tariff, which is, which is not great, you know, could have been worse, but it's not great. You can start to just make a, make a call that we're minimally affected, that we can still try and, you know, warm up our relationship with Europe in terms of the goods barriers, keep going with China. And then crucially, and I think this is a critical decision now, it's not necessarily a problem, this cheap stuff coming from around the world, this could be a kind of massive deflationary bonus for consumers.

A positive would be used to what we call negative shocks. It'd be a positive shock that a lot of the cheap stuff that was going to head to America might come. Oh, you mean, so we could end up temporarily better off because things are cheaper. We'll lower, inflate. It will materially lower inflation big time. Big time. Right. So. But this is where you get the tradition. You, we should be, this is, I'm quite surprised I'm very interested to hear from Chris on this. These are massive decisions of judgment rather than ideology, from a completely on, you know, surprising, actually extraordinary meteor like event.

And you should be getting vigorous debates in Cabinet about whether what's a good and what's a bad idea, are we going to move in a nimble manner? You know, it's obvious that you try and get rid of the other 10, but what about the rest of the world that is being affected by all of this? You know, are we going to pick up the wins that are now capable in this massive. Well, yeah. Chris, can you, can you get a sense wandering around Parliament that actually this position of keep calm and negotiate is unsustainable and actually there's going to be genuine politics around this that will push Starmer in one direction or another, whether that's within the Cabinet, within Labor, within just Parliament overall.

Well, I think in the short term both of those things are possible. The idea that they keep calm and negotiate with the United States. I think it's a good point, Faisal, that you make around the kind of, the opportunity cost around that just bluntly, kind of is it worth it? I think the bigger challenge, again, as Pfizer, you were saying, is the multi dimensional implications of all of this. Negative shocks, positive shocks that reset, quote unquote, going on with the European Union. At the same time the Prime Minister trying to straddle the Channel and the Atlantic with sort of equal proportion where the tensions might come there, given that the UK and the EU are in a different place as far as these tariffs are concerned.

Massive scope, I think, for really, really big and principled and detailed discussions around precisely how the UK acts in the coming, in the coming months. And it's going to be, it's going to be fascinating to see how that, how that plays out. Chris, I'm going to let you head off because you've got loads of other work to do and it's nearly midnight, so take care. See you later. Cheers, bro. Cheers.

And Faisal, just before we finish, I'm just going back to this, this fact sheet that the White House put out and there's three bits in it that are making me think this is not as like nailed on as, as it might feel in kind of like the kind of shock, the. After the shock and awe point 1. These tariffs will remain in effect until such time as President Trump determines the threat posed by the trade deficit and underlying non reciprocal treatment is satisfied, resolved or mitigated.

He's giving himself a big lever to reverse all of this if either things go really well or things go really badly. So this isn't potentially forever. I mean, pretty obvious, though, second thing, Trump can increase the tariff if trading partners retaliate or decrease the tariff if trading partners take significant steps to remedy. So it's this whole thing of, like, this is not a negotiation. That's not true. There is a scope for negotiation here.

There are different views in the administration. Right. So we'll see. We'll see who wins. But if they, as they did, they're banking $600 billion a year in revenue from this. Making money from trillions. Yeah. Then. And they see this as a replacement for that, then I. I don't know how much scope there really is up front. This is a good reality check, though. Yeah.

And then the third thing is there's this paragraph here about exemptions. So some things are exempted. Things like copper, pharmaceuticals, semiconductors and lumber and things that the US just can't make for itself. Right. I think they're only exempted because they're going to come under a different headline. Right. Of potentially higher tariffs. Right. So there are some complexities here. And the Canadians and the Mexicans, they're exempted anyway because they're in a different regime. They're on the fentanyl regime and will then be sort of transited onto this.

So there are a number of, like, detailed complexities here. As I said, this is for D Chess, but I think we should just say it's extraordinary shock to the world system. It's ripping it up. There is a pathway through to the UK if, If the government can be sufficiently imaginative to grasp some of the opportunities, because we haven't been hit as hard as others. I'm not sure how much that was. That was down to genius of negotiation. And it might be that actually looking not at America, but what America has done elsewhere in the world, is where the opportunity lies.

My final thought is, I'm just thinking of a conversation I had with a very seasoned international negotiator about a year ago, and we were talking about, do you remember the fallout from Liz Truss's mini budget? And the big thing ended up being the liability strategies of British pension firms, and they had to be kind of temporarily bailed out by the bank of England. And this person who was very experienced and said, that's the thing, when the pressure builds in the, in the, in the reactor, you're never sure exactly which rivet is going to pop off first or unexpectedly pop off somewhere. And I just think this is a big pressure moment and there's loads of rivets are going to be popping off in all sorts of different directions.

Tens of billions of pounds and dollars went into investments in East Asian countries based on on low tariff access to Gap and to Walmart. That is now I kind of I think priced out now how much of those factories worth could that pop up in the financial system of the banking system? You know, we're only at the start of this and again, the transformation to the way that the economy works is mind blowing. Isn't just about 10 on the UK let's watch those markets in the early hours. Yes, I'll be setting my phone alarms get to get up super early to check my the Vietnamese to see what the for the Vietnamese. What's the name of the Vietnamese stock market? I did know that but I can't remember at the top of my head. Email in with your favorite international stock market name.

Faisal, thank you very much for talking to us at this late hour and thanks very much to you too for listening. And sorry if the wait for this episode of newscast was so long, but we thought it was worth waiting for what Donald Trump was going to say. Bye.

ECONOMICS, POLITICS, GLOBAL, TARIFFS, TRADE POLICY, DONALD TRUMP, BBC NEWS