for a new syria to emerge, there's no way we could live in the country again where i see it is for this basement is part of our presence. opening up the conversation representation methods. we haven't had the best representation of african. so for us, it's about solving that putting to representation for our kids with fresh perspectives from lesser heard voices. the stream explores the key issues of our time on algebra, as the apollo i'm, adrian said again, this is counting the cost on al jazeera. you'll, we can look at the world of business of economics this week. donald trump's terrace policies are starting to take shape. the president says will help make america prosperous again foster critics. one dimensions could push off prices and cost

americans that jobs us inflation has increased unexpectedly raising the stakes of trumps charge. could that tie the us president terms and how will the federal reserve reactive prices continue to rise? trump says the measures i am, the leveling the playing field, the blue shots of the rules of the global trading system, uncomfortable trade organization. take any action to prevent the, an eye for an eye, a terrace for terrorist, same exact amount. that's how donald trump build reciprocal thomas on other countries during his election campaign. and he's moved to implement them, potentially as soon as april. the measures come on top of the types imposed on china, canada, and mexico. i don't metal inputs and more likely to come, including on cause and semi conduct as the president says, the duties will price out imports in favor of domestic production and collect a lot of money to help reduce debt. but he's of knowledge. the prices will rise,

at least in the short term. now that could turn into a headache for trump off the inflation rows unexpectedly last month and for the federal reserve as it navigates the tricky part forward for interest rates. laura com reports. if they charge us, we charge them the words of us president donald trump. he said a team led by his normandy tacoma set khatri. so calculate was because tara, of some countries worldwide. this means charging countries the same import taxes as they charge the us. the details of which will be delivered to the precedent by april. this is going to be the thing that makes it our country really prosperous again. and this is going to want to be with pace down to $36.00 trillion dollars, and this is all in addition to the tab already imposed on canada and mexico and china and steel, alabama input. but it has thoughts, condemnation, across the globe with exits,

warnings that it's us citizens that will bad the cost. i mean board by the fees in directly at facts on the exports. why? because when in the media to good sap coming from other countries and you'll pay higher dieties for a modern intermediate towards the cost of producing products and all will go up. so it is in directly through lactose, it acts on that export. so export declined due to illness will go down. trump says a tower system as it stands is unfair. as the us import taxes a low a, them, it's trading partners. in 2023, it's have an average external terrace of 3.3 percent. the case was 3.8 percent. the european union, 5 percent mexico, 6.8 percent was trying to charge more than twice of that of the us at 7.5 percent. the number of shoots up with india,

it's 17 percent from says the test will create more american jobs. and the us can see the prices would change. he says he'll mitigate any initial impact with that, just like tax cuts, the regulation and putting down can see the costs. but in january us inflation hit a 7 month hi and with prices continuing to rise. experts say it is unlikely, the federal reserve will love the interest rates any time soon despite president trump wanting it to do so. i would tend to say that also the consumer confidence data implied that investors and consumers are getting a little bit nervous about just how bad inflation will be. how sticky will it be and how the fed will be slower to lower interest rates, which overall, i think puts a damper on things. there may be also cases where the us has to lower its charges

on individual goods. these even charges less on milk, for example, while the charges less crude ported trucks, the one it says in the process of changing old tower space of reciprocal challenges will be complex. economists degree this on certain how this will affect the average american laura cons accounting. the costs out to 0, but all terrorists really inflation rate. let's take a look at what some economist, a thing. typically charnessa viewed as measures that lead to a one off increase in prices. but remember, it's american companies the pay the tax on imports. and they tend to pass along higher costs to consumers if they do so. inflation goes up. economists deutscher bank say that the most likely scenario is the businesses could pass along many huff of the extra cost and higher consumer prices. on average. the federal reserve bank of boston estimates the core inflation could rise by 2.2 percentage points. if

a 10 percent levies imposed on imports from the rest of the world and towers on chinese imports rose to as high as 60 percent. while the us based non partisan tax foundation says that trump determined from mexico, canada and china implemented what amount to an average tax increase of moving to $800.00 per household in 2025. now, industries and consumers in different countries based on certainty, over trucks terrace to protect the citizens, nations could challenge the measures of the world trade organization among other steps. but do trump's reciprocal types as a general principle, violate w t o rules. but according to the trade body, member nations are allowed to impose tactics on impulse which can differ depending on the item being port. so for example, a nation can impose a 10 percent levy on rice imports out of 25 percent target on car imports, but they have to extend the same basic rate to old members. egypt, for example,

wouldn't be allowed to impose a 2 percent duty on wheat coming from russia, but a 50 percent one on wheat coming from ukraine. this is known as most favored nation principles, but when 2 nations sign a free trade agreement, they don't charge tariffs on goods passing between them, but do maintain charge of those coming from elsewhere. so let's bring it off panel of experts from los angeles, which one by william lee chief economist of the milk and institute from washington dc, but joined by will mcbride, also chief economist of the tax foundation, added oxford in the united kingdom in golden, professor of globalization at oxford university general, welcome to you. we'll. let's start with you. william lee. uh president trump terrace inflation rate. all the ultimately going to push inflation higher. you know, i think there's a lot of confusion between the definition of inflation and the rise of the price level price. the definition of a town is by definition, a rise in the price of imports because of any kind of tax that's being put on. now

a one time increase, the price level will raise prices by whatever the amount as it goes up, but inflation is a continuous rising price level. so. so by definition i tariff a one time application, a term will not raise inflation for that year for that moment. when the prices go up, yes, prices go up. but, but we see from the 1st in position of the trump tower, so the rise in the actual inflation rate over 3 years is less than a quarter of a percentage point to the power. so. so no, it does not raise inflation. well, what do you make up that inflation ultimately helped president trump get elected. he promised to cut the cost of living for americans could inflation do you think become something of a headache for president trump? to what extent could inflation end up overshadowing trumps 2nd tom? but i agree fundamentally with the assessment from william there that the inflation is really a monetary phenomenon. we learned this from milton friedman years ago,

and we can look at the recent history again, what happened with the, the inflation surgeon, during the pandemic had nothing to do with tariffs. right. and had everything to do with the over spending by several trillion dollars from the federal government. and that was explicitly and backed by any proposed tax increases, but rather invested financed and supported by federal reserve purchases of the debt . so that's, that's the, that's where the inflation came from. but i do agree that there is a temporary adjustment in prices and some fluctuations that do can occur as of the tariffs are passed through to consumers and businesses that rely on those imports. yeah, but it see if nonetheless, there are certainly the there is deficit. pressure is ongoing in the u. s. for sure

. and there's a lot of uncertainty relating to policy dealing with deficits. a lot of uncertainty across the board on policies um coming out of the trumpet ministration. the uncertainty, i think it could contribute to inflation over time. there's uncertainty about how the federal government will will rain in its budgetary gaps. and if there's not a concrete plan put in place very soon, i think that does contribute to inflation. so yes, net. net would be laid out the uh, the, the feet of, uh, president trump. and certainly there would be a come back to how to lift these doesn't deal with it properly and bear with me. okay. okay. get to you in just a moment. but i just want to go back to what, when he laid los angeles to, to, to get some reaction to what we just had. the, a lot of details brought up a whole bunch of topics which i hope we will explore in our, in our conversation. but getting back to inflation a rise in the price of imported peanuts or, or whatever it is that what we're importing,

that will raise that price of peanuts and, or if it's aluminum and steel as use the manufacture cars that will be put into the prices of all the subsequent manufacturing, but let's not forget a rise, a rise in a tower afraid. it doesn't necessarily mean that the consumer pays all of it. the incidence of the tariff can also fall back on the export. because if a country wants to export and participate in selling into the united states marketplace, they may be willing to lower their price is just for the privilege of being able to sell a large share of their output into the us market. so there are 2 places where price can change both of the exported side and on the importer side. and there's a lot of room and besides, people can also substitute if you, if any factors find that the price of aluminum is, is, is become extraordinary high. those try to find other products of your plastics and call it and or the or of the material to substitute for aluminum. so it's not necessarily the case that we find all these prices going up. i think most of the

economists, we've talked about these price increases have make clear assumptions about how people don't really substitute the use of these products. and i think of, you know, the full analysis is very complex. one is very hard is i think people under emphasize the, the, a huge amount of uncertainty, the rise of prices, those estimated by various economists and trade foundations in where they are spent on this issue of a tire. so they good idea or, or math idea. well i, i think a very bad idea and i was so back to this uh with william and, well, who's on role the sanguine about the impact on us consumers and price is. that is the case that over time, people might find substitutes. they might be manufacturing substitutes, but the as things take a long time to work through the system, you don't suddenly start manufacturing your car or your peanut butter in a different way. it takes time. and so i think for at least the 1st few years off

to these types of implemented, we will see inflation rate increases. we will see the 2 higher prices that's i think, going to happen at least half of the time if he's likely to go into a higher prices. and over that time they will not be much substitution. it's not only a monetary phenomena that obviously contributes. but it's also about the supply side, and so it didn't co, but it was also about the supply side, the closing of many factories and the difficulties of getting a p, p, and other equipment that was needed. so, and this, the shipping back drugs, the risk of closing tariffs, is that it leads to tire of escalation. so you don't just get a one off increasing terrace as i'm william, is assuming. but you get, the more you get it ratcheting up others engage. and times increases, and then you enter

a tit for tat escalation in taps and that certainly would be in flushing the it would slow growth, it would lead to interest rates coming down much slower. and not only in the us would consume is off by with the us economy sofa. but of course, globally, this would have a very negative impact on global growth. and it would affect jobs and livelihoods around the world. william, i'll come back to give you a run of a plot, reply to that in just a moment, the 1st of the to be a, find out what will made of that. i fully agree and the great risk of this terrorist approach to resolving this or that issue that's the term for ministration has, has tried to address trade deficits or the value of the dollar, etc. and there's, there's a whole series of rationality kind of rotating. but at the end of the day, it's clear, trump himself just really likes the terrace of, but the great risk is a world wide tre more. and there's certainly a, there's certainly

a lot of historical precedent for that. that's what happened a 100 years ago in the us and worldwide with the great depression. that was a, that was exacerbated by all accounts by a increasing tear upset in the us and the retaliatory trade war. the very beginning of that, that bad episode in history. so we learned our less than after that and we, we began a long period of decades of reducing the tariffs around the globe and really embracing free trade and the benefits of trade. and so i fully agree uh, going back to that uh for getting that history, repeating the mistakes of the past. um and engaging in i, in another trade war is very, very disruptive and dangerous. and we don't know where it is and, but as for the impact on price is that, i mean, yes,

that can if to the extent that tariffs continue to ratchet up in a back and forth retaliatory series of events. and yes, the, the prices step up with each with each retaliation. i agree with that, but there is, of course and into it. it's an unfortunate that it end of reduced economic growth, reduce trade were reduced to standards of living. but i would not call it inflationary phenomena and that's just a terminology distinction there. okay. when i see you shaking your head, it's mining the. what did you disagree with as well? i think it's salt use. you've just see a demonstration of the case where you scratch any a comments and mentioned terrace. and the 1st thing they all to resort to is the smooth, holly car of something that 2 thirties where reciprocal terms are put on and rather be territory tires are put on. and we had a, a massive drop in the amount of international trade and re edit exacerbated but the cause, the global recession of the 1930. what's remember,

president trump is using carlos as a policy tool for economic and all you can only policy goals. what present drop is done with charles's to say, look, we want to talk about ways of improving the trade framework for the world w t o. in the multi level trade agreements that have been put in place since the 30s have really not burtwell in 21st century where we haven't to, which will property and differences in, in scale economies around the world. so let's talk and bring us or bring everybody to the table and talk about the types of issues that we need to level the playing field for trade. what we see instead is discussions of all we're gonna have your towards are tell us and, and, and, and, and, and have trade wars and have the ends of the world as an almost certain outcome. i think we should, we recognize the present from is using tears as a way of bringing people to negotiate and negotiate seriously. and because it is

such a powerful tool, it's used very traditionally. and i think the discussion was this time which differs from the trump 1.0, where his focus is on by level deficit said and, and trying to, to, to reduce those. he's really has a wider agenda for using cars, which is to bring people to the bargaining table and say, look, let's settle things in a couple way for both sides. and by definition, would you have negotiations? both sides will reach an agreement that makes both sides better off so, so i think on where, where we're, we're reaching for historical analogies that really are not people in this situation. and what do you make of, of that is from using reciprocal types as a negotiated him to all his reciprocal types. a breach of w t o rules is the w t o even fit for purpose in 2025. i think he's taking its lead time a uh to the system. it's not on the on congress of course is in different domains

as well. um and i think that's predicting that that is simply going to be in negotiations and everyone's going to be better off. i think is like aerobic assumption to say the least not through us consumers will be better off and i don't think people will be better off around the world. so. so if this substance in what is threatening and base seems to be a very high levels of task, it will be extremely detrimental. i don't think others are going to simply back down a few tractions it. i think we already seeing from a number of countries reciprocal trial types being introduced. the w t a has been absolutely have a strong by the us, principally in recent years because it refused to, for example, of point, judges to the appellate quote of the w t o w, to call it the built out of by the us of the general agreement on trade and titles off the 2nd level, transform meetings with

w t. i very much and most of the line tech project too, because people sold the benefits of trade in the post 2nd global era. on the 1st the undermining of it. i run, i agree, has also been done by with us. it's not a good organization that has many say it is, but it's the best we have. and i think the onset to the problem is that very 1st is not to close it down or to break all the rules or to not to the point, judges to it, but to make it work. and of course that will happen through negotiation. that will happen through the key shareholders, members of the w 2 coming together principally in the us, your china, and a couple of others and making it work. but that's a very different approach to what we seeing, which is not within the w t of framework, which is often in breach of the w t of framework. so the w here is the best we have . i think it and goes in country while at the director general of the the w to is

doing a fantastic job, but on the impossible circumstances. and that's not her fault. that's because the members of the w to, i don't wanted to work well, i'll get to you in just a 2nd but, but, but what am i can say disagrees with what in was say, what, what do you disagree with? well, i think the one thing that we should remember is that the difference between the present from approaching present by this approach, which really has favor this multi lateral approach of getting trained groups together. is that getting everyone to the bargaining table and negotiating together in one large group is always difficult because there's always the journey of the minority, right? there's always that one or 2 countries, especially emerging markets, like china who hold out and, and prevent people from being settled. and essentially you 1st things out until you reach this small little cord that everyone agrees with what kinds of troubles folks on the 1st semester. it 1st im impressions was now is the use of bi level and regional agreements to try to reach by that'll deals. and by definition

a deal makes everybody better off because you can always, you know, not make a deal. right. so, so of course you going to settle for something and by the use of the diag bilateral agreements, you can reach agreements much more swiftly and target the agreement to the needs of the 2 trading partners or, or, or smaller group trading partners with his original agreement or not the failure of the w t o, it really shows up in the huge number of free trade agreements that have popped up because the btr doesn't handle the trait issues adequately for very many, many trade partners or more than we have regional agreements. we have by level trade agreements, we have a world of distortions, and we should always remember that where we're talking about adjusting things in a world where we already have distortions. economy is called is the theory. the 2nd best is not necessarily the case that when you add a tire for reduced her, you make things worse off or better off. one of the things that you have to remember is things are done in a, in a complex fashion. and by that only goes here just by definition or faster and are tailored to the needs of the trading partners. and that approaches is i think,

has helped present from the beach a lot of agreements and, and really has forwarded the agenda of make not just america. great, but make the world great again because we are able to tailor supply chains, diversify supply chains and, and reduce the kind of single sourcing vulnerabilities that was shown to be sold, devastated during coven. so, so i think the, the, the notion of having this see, i know this is the imaginative world of, of you know, everyone in the negotiating together a large, large groups and harmony. something has never happened. and, and, and i think in the real world, the view, the fast business approach at present from has been much more effective. but, well, i want, i want to come back to, to inflation for just a moment even if inflation rises. as president trump says it will only in the short term that could complicate passes for the federal was a trump once interest rates low, how will the fed respond?

do you think going forward and it's january. amazing, that is it said the trump's policies may hinder the distant relation process and it indicated it's worth enough to hold rates study. well, president trump continue to respect the feds independent. and so if he doesn't get his weight on low interest rates, well, there's a, there's no, uh, predicting uh, president trump behavior uh, relating to the federal reserve of exactly it. i mean, he's prone to surprises and in this domain for sure. but we've seen these uh, these 2 primary care characters, uh, uh, german powell and uh, president trump interact years ago and present transfers term. and what we saw there was the, um, the powell was very much um, uh, in support of defending the independence. because to sion, the federal reserve against any sort of a, in

a job owning from president trump. and including, by raising rates in 2018, 2019 very much against president trump's public. uh you know, admissions and then so i think there's every, every indication that you know, these 2 characters of their history indicates that they are when they disagree. the federal reserve will maintainance independence. the prisoner will have to respect that. i think that given, given our institutional framework in the us. all right. and of course to empower is up for a re appointment next year. and so that, that, that's another story. but until then, i believe the power will continue defending the institution. i'm, i'm sort of, i'm sorry to interrupt you what we've, we've got about a minute and a half left. i just want to get on the answer from you and how, how dangerous a moment is this for the global economy,

if you like. can you see any path through which trump's policies could actually promote better trade and, and global trade harmony, you know, i think this is extremely dangerous. we moved from a world where we, i think so when, when we saw a tremendous growth in the world since the building will came down in the 1990s to early 2, thousands. we so great success. countries that were pro, becoming rich. we saw the us economy doing very well out of it and out of cheaper consumer goods out of investment out of trade. and now we moving into a world where the presence of the united states seems to think we're not in a win win world. but in the 0 sun world, now goods, if someone else is doing well, the us is going to do badly and i think it's very misguided. i think the us depends on a healthy world and a vibrant global economy. and then the global trading system, that's fine, brent. so i think there is a danger that we get into

a very negative scenario that hasn't happened yet. and that's why i think it's very important, those counseling the presidential, the united states council in to try and preserve what has been a fantastically effective system not only for the us, but for countries developing. else we have caused in many things that need to be fixed. the institutions, ovarian, perfect. but they better than being destroyed. we could continue this discussion on show for, for a, at least an hour or so. gentlemen, i'd, i'd love to give william and we'll try to reply, but we're out of time. many thanks. indeed for, for being with us. all 3 of you, we really will mcbride and in golden. pleasure. thank you. a i'm, that's a show. so this week, if there's like to comments on anything that you heard in that discussion about a finnegan on x trying to remember to use the hash tag a j, c t c. or you can drop us a line, comes in the cost of the elder 0. don't bet is our email address. as always,

most plans email for you online at elder 0. don't. com slash ctc. that takes you straight to a page that you'll find individual reports, links, even at the top episodes, these account shopping. that's it. so this additional comes from the cost on entering instead of going from the team here. and uh huh. thanks for being with us . the news on al jazeera is next to the, the foxes in europe's largest economy are heading to the poles with the far right expected to make its biggest gain since the 19 thirty's, the german election. could restrain your fate without a 0 for the latest updates on that finality of the german federal election. as the kosovo celebrates the 25th anniversary of nato's intervention that ended the fighting between the serbian and because of albany and force, we were meant to be completely ethnically. cleanse people are power examines the

postwar landscape and present the challenges for the regions. youngest country. this is a vibrant nation state that is alive today because we took no attraction that's not possible the making of a states on that. just the utah phrase has cracked pounds in force disappearances and corruption the past the most special about the cost of living. unfortunately, the lights have to be lost, but those bumps up here where you have to live. it has to be lost lives. what take, right. people were shot in the head maybe has and goes head to head with canyon politician. kimani ition was canyon to furious. you know this, i have never had performed anything without nothing, but the new apologies there was about $7000000.00 to head on alex's era. viewing the facts as the cool winter weather continues, people in gaza have no choice but to find what middle shoulder, the account, understanding the reality we are a life of frequent art is a live reporting from the facts. everybody we've spoken to wants peace with many of

the wi fi. so any cost, i'll just say with teams across the world. when you closer to the hosp to the store, the the mazda is releasing 6 society captains and exchange for $602.00 palestinians. taskos's fine. the hello on elizabeth put ottoman this is i'll just say are live from the also coming off. so you as president backtracks on has to propose and defensively, expound palestinians from gaza saying it was only a recommendation. the 10s.