A MARTÍNEZ, HOST:
Critics of Trump's tariff agenda warn it could backfire with disruptions to supply chains, higher consumer costs and undermine influence abroad. New York Times foreign affairs opinion columnist Thomas Friedman is also sounding a cautionary note. He's a three-time Pulitzer Prize winner.
So, Tom, you've written that President Trump is betting the farm on these tariffs. What's the gamble as you see it?
THOMAS FRIEDMAN: Well, the gamble is that you come in with this giant blunderbuss of tariffs on China - 50, you know, percent and more, and Vietnam roughly the same - and you do them globally, but you don't have any period of adjustment rather than sort of phasing them in. So just by example, Vietnam's tariff, it goes to almost 50%. We get a lot of our Nike shoes from Vietnam. That means overnight, the prices when you go to buy a pair of Nike sneakers are going to be up probably 10- to 15% for the consumer. So that's one problem. There's no transition. You know, Walmart sources about 60% of its products from China. And that means 60% of its products are likely to go up in price. So that's one challenge.
The second challenge is, you know, A, tariffs are really meant to create a wall - a timeout, basically - space for you to adjust inside. So if you want to, say, make more cars in America and import less, you have to have a plan for making competitive cars. Well, new car factories, they take a long time. So I personally think this tariff policy directionally is right. We needed to make an adjustment. You know, China today basically makes one-third of every manufactured product in the world, and it only consumes about 13%. So there's a real mismatch there. But you need a long-term plan that encloses (ph) not only tariffs but also a plan - what we're going to do at home to improve our productive capacity.
MARTÍNEZ: But you're saying that the direction, the tariff direction, is actually correct. So what would be the clearest indicator, Tom, to you that Trump's gamble is paying off? What would you need to see?
FRIEDMAN: Well, you need to see a couple things. One is obviously a negotiation between the U.S. and China over a long-term plan for China to get off its goal - basically, making everything for everyone everywhere - and take that incredible productive energy and start to direct it inside China to improve health care, to improve services. You know, China has really no national health care program. It has very little pension 'cause all its energy has been going to exporting abroad. That would be on one side.
On the other would be a long-term plan to - which the Biden administration began - of industrial policy to invest in our productive capacity in the United States, as well, and also to work with the Chinese to transfer their technology to America in kind of 50-50 deals with American factories and owners the way we did transfer our technology with 50-50 deals to China back in the '70s.
MARTÍNEZ: I got to admit, Thomas, though, that sounds pretty impossible.
FRIEDMAN: Yeah, it probably is, but the fact is - here's what, you know, people don't realize. China now has key technology that we don't have. We aren't quite who we think we are, and they aren't quite who we think they are. They have made a great leap forward.
MARTÍNEZ: The U.S. and China, Tom, have seemingly danced around the economic boxing ring. I mean, do you feel China feels confident about how this may turn out if indeed this winds up being a trade slugfest?
FRIEDMAN: Well, they do, A, for a couple reasons. One, as I said, you know, between COVID and then post-COVID, about six years, China really did improve its advanced manufacturing capacity. It really took a giant step forward, and a lot of it had to do with the fact that all their cellphone companies - their key cellphone companies like Xiaomi and Huawei and the battery company BYD became car companies, and they became electric vehicle companies. You drive in a Chinese EV now, it's just a seamless connection with your cellphone. One of the great mistakes in America was that Apple didn't become a car company. So, you know, they've made some real progress that we have to acknowledge. It doesn't mean we can't, but you need a plan. One of my concerns about Trump is that he's basically given three explanations for the tariffs. First, it was to fight fentanyl. Then it was to raise money so he could cut taxes. And then it was to basically, you know, curb China's productive capacity.
MARTÍNEZ: Really quick, Tom - it's just about 20 seconds - what's the first thing you'll notice if the Trump gamble miscalculates, if it's not working?
FRIEDMAN: Prices will go up dramatically everywhere. China won't negotiate, and we will feel like we are in a global trade war.
MARTÍNEZ: All right. That's New York Times columnist Tom Friedman. Thanks a lot.
FRIEDMAN: Thank you. Transcript provided by NPR, Copyright NPR.
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