MICHEL MARTIN, HOST:
The next round of trade negotiations could decide whether some U.S. tariffs remain on pause or whether some higher ones get imposed. The administration says the pauses are meant to give space for negotiations, but our next guest is one of the people who says all of this back and forth just raises more questions about the U.S.' reliability as a trading partner and ally, and that's just one reason he argues that these tariffs are doing more harm than good. That guest is Richard Haass. He's president emeritus of the Council on Foreign Relations. He's been writing about this in his Substack newsletter, Home & Away, and he's here now. Good morning, Mr. Haass.
RICHARD HAASS: Good morning.
MARTIN: So, just to recap, after imposing large tariffs on most countries, the administration announced a 90-day hold on much higher tariffs for most U.S. allies, and then they announced a pause on import duties for electronics like phones, computers and semiconductors. Now, the administration is insisting that this is just part of President Trump's negotiations. How do you read this?
HAASS: (Laughter) If it's a plan, it's not obvious to me or anyone else, either if you're a CEO or if you're the head of another government. It really looks incoherent. We don't have a clear sense of what's the rationale for the tariffs. It's not clear whether they're means to an end or ends in themselves. The exemptions now look arbitrary. They're a field day for lobbyists and potentially corruption. But, again, it's just impossible to plan, and I think it's going to drive other governments away from trading with the United States to look for other, more dependable trading partners.
MARTIN: I'm thinking about that walk back on electronics. One point you made on your Substack is that many leaders will just judge that President Trump has a low tolerance for pain. So what impact could that have?
HAASS: Yes, it's interesting. You can - you know, he's famous for, quote-unquote, the art of the deal, but you can always get a deal if you're prepared to compromise. And the fact that these tariffs have been put on and already there's lots of walking back creates the impression that if the United States is forced to pay a price for its policy, it will back off. This could have implications not simply for these 90-day negotiations you mentioned on tariff levels but also could have implications, say, for the Iran talks that just got underway Saturday or for the United States and Russia, where so far, at least, Russia has been totally unmoved by American entreaties or U.S. talking to Israel about Gaza or anything else. It suggests that if you stand up to the United States, we're either so anxious for a deal that we'll back off or what we say, essentially, is our first word rather than our last word.
MARTIN: So, you know, the White House says President Trump is optimistic, and he says that he and China's President Xi have a good relationship, and he's waiting for him to call. But you cannot help but notice that President Xi is traveling to Vietnam and other Asian countries, you know, as we speak. Now, that trip might have already been in the works, but how do you read that?
HAASS: Well, in many ways, what the United States is doing is providing opportunities for China to step in, whether it was the cut-off of the Agency for International Development, which creates all sorts of opportunities around the world for China, or now the tariffs. And China is going to represent itself as a more dependable place to do business with. They won't introduce tariffs or sanctions. And my guess is, at a minimum, a lot of traditional American economic partners are going to look to diversify their portfolio and get closer to China.
MARTIN: Can they really do that that quickly, though? I mean, that seems like a hard pivot and a hard thing to do on short term. I mean, I think, you know, the administration's argument then is that, you know, short-term pain, long-term gain, and that they cannot sort of pivot that quickly to lose all these markets, what do you - you just don't buy that?
HAASS: Well, no, I mean, you're right. You can't turn on a dime, but you can pivot. You can decide that in the future, you're going to sign new contracts or make substitute arrangements. Also in the case of China, if these high-level tariffs remain on for any time, they have got to find alternative markets very quickly 'cause they have all these goods they've produced that will no longer be economically competitive here. So my hunch is they are going to be scouring the world for people to buy things so they can offload their inventory.
MARTIN: One concern you've certainly - you've shared here, and you've shared here today, and you've certainly shared in your Substack is that you're concerned that the U.S. has positioned itself as an unreliable trading partner. Let's pivot - let us pivot to the United States. This back and forth on tariffs has sent stocks and consumer confidence into some turmoil. What's your biggest concern for the health of the U.S. economy?
HAASS: At a minimum, we're heading towards stagflation, lower economic growth, potentially much higher inflation because of the tariffs, quite possibly recession. And that would mean higher unemployment. It would make it very difficult for business leaders to make any long-term commitments.
MARTIN: Richard Haass is president emeritus of the Council on Foreign Relations. Mr. Haass, thanks so much for joining us once again.
HAASS: Thanks so much for having me.
MARTIN: I do want to mention that NPR has invited President Trump's economic team, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick for a conversation about trade policy. The invitation was declined, but it remains open. Transcript provided by NPR, Copyright NPR.
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