it was $15000.00. you have lost both parents, these children of the strongest of survivors. we see them with the resilience. they carry bright possibilities they deserve. just like every child in the world spun, son, ocean, which human appeals and create a brighter future. because as children give mercy, now the terrorist central to us economic and foreign policy and the new trump administration, the reservations of his support, his chairs are matched only by the shutters of apprehension globally. so what's in store for the us and the world? this is inside story, the

hello. welcome to the program. i'm told mccrae, one of the best selling books of all time is a business guide called how to win friends and influence people. how to lose friends and influence people might perhaps describe you as president. don't. trump's current approach to international trade to speech, to both houses of congress to sit out his plans with tariffs central to his policies was meant with rules of approval, like those at a rally. there was very different response, however, from stock markets and world leaders from europe to china that reacted with a mix of despair and to find some responding with their own tried taxes. so what did trumps economic plans mean for the us and this trading pond? this both net and far and what might the impact pay for the rest of us around the world for las gal pedal so they have use in just a few minutes. but 1st, this report from wilson does that president donald, from speech to congress, brought the house down. and by the way, we're gonna have grow good critics at home and abroad fear the us in global economy

. you could go in the same direction if he goes all in on his campaign promise to raise tariffs with major trading partners. we have been ripped off for decades by nearly every country on earth. and we will not let that happen any longer. what trump costs is america 1st policy and visions forcing companies to base manufacturing in the us. creating more, the democrats say his plans are disastrous and will both hurt americans and kill economic growth. his tariffs on allies like canada will raise prices on energy, lumber, and cars, and start a trade war that will hurt manufacturing and farmers. and if he's not careful, he could walk us right into a recession. just a day after his speech, president trump again reversing some of his trade levies, giving major car manufacturers a one month reprieve. the us auto industry is reliant on parts from factories and mexico and canada. reports suggest

a recent gone terrace on some agricultural products could also be in the pipeline. but the diplomatic damage was already done. europe and china said they were preparing retaliatory measures. you told me that he's going to meet the 1st 10 or so being imposed on a large scale, not only against europe on ella, minium and steel. if these that can fund europeans will respond and they will be reciprocal tower. because we need to protect and to defend ourselves. china is also preparing for a trade war with a stimulus plan for effected industries. good internationally, the external environment is becoming more complex and challenging, which may have a greater impact on china's trade technology and other sectors. the rise of unilateralism and protectionism is further disrupting global economic circulation. mexico said it would expand its trade relationship with other countries, say levels kind of see as much as i know to if needed with looks the commercial

partners anything to protect mexico and mexicans within the framework of suffering t dignity. although most economists say terrace will raise prices. president trump is betting they want, but it's a big gamble with high stakes, not just in the us, but around the world. wilson guys are al jazeera for inside story. so let's take a closer look at the tariffs and why president trump wants than the us buys move and it sounds from its tried partners last year. if it was a tried deficit of one trillion dollars, the u. s. and pull him goods with 4 trillion dollars while exports amounts of to just of a 3 trillion dollars. trump wants to reverse that by imposing a 25 percent tax on goods from mexico and canada, and 20 percent on goods from china. some of those measures took effect on tuesday. the companies in the us that rely on products from the broad will have to raise prices, which will affect american consume, is trump. and as for the say,

the high prices will be temporary because more foreign businesses will relocate to the united states. the. let's bring in now guess now from washington dc, we're joined by it and i'll extend it to a white house called them this for the who newspaper and your, your cuz demetrius of allots us the chief economist and founding panda of aurora, macro strategies and advisory firm that focuses on the politics and macro economies and, and henderson, nevada is william leave, chief economist at the american non profit, think tank, the mil can institute. thank you very much for joining us. whole here on inside story. know, it looks like it begin with you straight away. i mean, apart from being an extremely long speech, what did you make of of donald trump? and what do you think the main message was that he was trying to get across? how effective do you think he was? so in terms of this page, this is flaw donald trump dollars,

which is gives features the cantrell paled street, his base. she tends to not really bother with such an appeal to the center. i'm and we saw all the concentration on immigration for example, i'm show call culture more issues on issues around diversity, diversity, equity, and inclusion initiatives to which he is extremely opposed. now i think the 2 big some stuff to talk to the speech where you pray, you know, one of the titles on the other and we didn't get an enormous amount of clarity on either by, you know, some of his facility toward a lot of mirrors. the landscape but still being on the theorist of the path forward and when it comes to tired of talking about the idea that there would be some level of interruption. but oh, well, we can level we're going to focus today. uh no, so much on you trying to, uh, put on obviously the economic parts of his speech. demetrius from an economic point of view then can you just explain his plan? like, what does he actually trying to do with these tariffs with,

with this tribal that he's seemingly is intent on, on carrying out? well tom, i'm not sure anyone in the ministration is able to explain the total cost overall economic plan. there are different types of it in the speech, as he mentioned was addressed to congress. and there are some things that absolutely need to go to congress. i don't think i would change our outlook on fiscal policy. following the speech, we saw a lot of what was on the contain trail and promised not to tax to workers, a promise not to tax overtime promise not to tax, social security payments. and not all these things need to go through congress and the republicans have a very slim majority there. so it's a difficult task. um, i wouldn't really buy. you don't want to pay more attention to. it isn't going to make it more likely that congress will be able to pass out water. i feel very expensive measures. so, you know,

in regard to the setting and i will pay attention to the physical done on trade to see how he mentioned, you know, the president is not really going to congress to ask for the reservation to those times. he's doing it by executive authority. he's created a lot of uncertainty and some of the goals, not just bringing manufacturing back to the united states, are actually hamper by the administration to other policies such as on immigration, which will be a worker shortage. so it's very hard to find a coherent narrative to say this is what the administration is driving to work, and i think that's what the warren markets as well. what do you might say? use your shaking your head that what, what were you disagreeing with that demetrius was saying, and i'm very surprised to hear what some interest says because the one thing that present trump has been very clear about us all through his campaign and even from his 1st administration. is that he likes the use of carriers because tires are one of many policy tools to achieve a set of economic and not a drama objectives. and i think it's been

a crystal clear. the terrorists are used to try to encourage the development of a strategic industries united states and their superior to subsidies that many countries use infected superior to the subsidies that the bike and ministration use like chip side. because a subsidies costs the but the budget money a cost revenues towers, brand revenues and provide the same amount of protection. and as far as the global engagements concerned, present trump the 1st speak she made especially to the executives at davos, was to say the united states is open to investment from the rest of the world. you come and be a partner with us and you benefit from reduced taxes and a task barrier that protects the production that you set up united states. but if you choose to be a competitor, then you will face a tariff barrier because you choose not to invest the united states. so this really is a very clear corollary to the make america great agenda,

which is to maximize domestic employment and domestic incomes. so, so the, the fact that there's uncertainty talked about, i, i can't imagine any c, e o that has put in contingencies the minute donald trump was elected. the terrorists are going to be part of the landscape. and what do we do to re optimize our production? that's the discussion that every board room that i have ever taught, talk with and, and in any executive that was surprised by charles. they should have the bonus withheld here. uh no uh i guess uh would even touch on this a little bit. uh with what he was saying the, i mean he can trumps crimes that he is. uh, he has popular opinion at his back saying that americans have given us a man dikes a bolden. profound change. he's a but he's basically promised to do these things when he was running, know he's following through on those promises. so should, if you want to pain aware of that, this is exactly what trump and how he was going to act. no. i think there are 2

separate strands to that question. why is shouldn't people be aware that this as well on top legs? yes, certainly, these are things that he said on the account paying trails. no you them for the thing to buy from having the broad mandate, it is true that he want them to go back and we'll college in november and by a mostly comfortable margin. it's also true that he won the popular vote by $1.00 percentage points does not qualify as a mandate for the enormous kind of changes that he is proposing across the board. there's pretty considerable difference in public opinion in terms of say, emigration of re dalso widespread support from much more restriction is almost like another complex, like tar us. we're open use much more split the rule. the law must, for opinion, is extremely split. sure thing need to be cautious or by saying he has this blog sweeping monday forever. okay. demetrius, i mean, trump said it is much better to deal with the us as a partner rather than

a competitor, but as a basically burning all of this close, those ponds isn't allies in the 1st month. we'll start with of as a 2nd to i think that's why i'm a little baffled by the use of doris. not because they were, you know, we weren't, weren't, of course, we weren't, weren't proud. his entire career hispanic desk, you know, talking about tires and thinking about tar says, tools to achieve very subjective, but i'm not entirely sure i understand of williams how national security will be held by imposing types of canada by stoking anti american sentiment. and you know, our closest allies, i'm not sure it's not how we'll income's are going to be helped by making products abroad and more expensive. this is what parents do. and i'm not really sure how the current account this is gonna be helped by importing more at the eye, which counts as negative on the current account. so, you know, all these things we've been warned about. they're being implemented in a completely haphazard fashion. we saw

a tar speaking photos and kind of the delay been bought as might be. then then today we're here and maybe food might be exams and maybe these companies will be exempt or not. and this is not a stable environment. what we're hearing from what perhaps is not only now is a great time to go invest. a lot of money in the united states is how do we supply canada out of the non us producing facilities to avoid the congress? i think this is the kind of rearrangement you are likely to see. so long terrorists are not say implemented by congress with a degree of certainty that they're going to be there for the long run, but rather implemented by executive authority on today off tomorrow. okay. what do you want? i want you to respond to this. as we hear, the tariffs could probably rental supply chains strong. and some of the us is most important diplomatic relationships with, trusting already, and could very likely add significant costs. but american consumers as well as manufacturers, so can you explain what is the upside here?

what is the upside that donald trump is going to have to sell to the american people? let's remember what terms are. they raised the price of imports relative to domestically produce products. so it's a relative price shift and it encourages people to spend their money on domestically produce products rather than important products. so that's the purpose of a terrified is a switch to expenditures and, and the, the fact that we placed harris on our, our big trading partners, canada, and mexico. trump was very clear and explaining. it's to shut off the evasion from the south of illegal immigrants and illegal illicit drugs. and so the purpose of the, of the terrace on canada was really to, to achieve a non economic goal, which is the shut down illegal immigration. and it was the drug and the importation . so as far as a r, r, encouragement of investments are concerned of, that's the one thing that is very good for the united states is very good for the

world because the united states has been the place for the highest rates of return on investment. there's something economy is called the lucas, the fact the lucas paradox. and, and robert lucas, the, the know, the laureate, from the rest, you probably go up quite a while ago discovered that capital actually flowed from emerging markets into developed markets like united states. because that's where returns on the highest. and the, the one thing that present trump was trying to encourage is to remind everybody that your investment in united states producing in the united states will be a source of high returns. and will not only benefit americans, but will also benefit the rest of the world because we then create a marketplace where your product, your, your, your investment dollars can be the most productive. so, so i think the, the, the fact that our, our partners are, are right now reacting to the carriers just because of we're trying to level the playing field. we're trying to take away the unfairness of specific taxes on

american products like automobiles and cars. and yes, the average terra between is that all the sentries is pretty low. but when i talked about average stars prison trumpets really trying to target terrace to achieve very specific shifts in strategic industries that will benefit the rest of the world by reallocating resources to better a strategic partners. and in terms of our supply chain is a concern. the one thing we learned from a cobit was we cannot have one single source for important products like pharmaceuticals. and so we, we, shifting relative prices is a way of re shifted and, and, and, and duplicating supply chain so that we have security in our supply. going forward . okay, a bit on, on the for, for, for one moment here, but i'm really curious. so hopefully alterations made by our friend from the milk and institute there. he's arguing the title should be used for policy goals. and he said the example, canada with illegal immigration and give us

a drug is 911 percent of the united states is attributable to move on to charleston northern border. it is also a, a much more minor component part, immigration is concerned to she was on a call believe the 25 percent tire ups on canada, or a portion of response to one percent of fentanyl coming across the border within the amount of time, the amount of sentinel, that comes across the return that people say is like, you know, about 50 pounds or so that's enough to chill. several 1000000 people fed. it was a very potent drawing. and, and actually this is really to get our, one of the 12 percent of the total we're talking about that's of american citizens and present trumpets, try the free market. you're representing a free market organization. as i understand, proponent or proposing protectionist. also the impede

a considerable amount of cross border trade for a very minor effect on the overall problem that you're proposing to address. the fact that you focus on china the shows that you're really are missing the point here. the, the, the truck driven is trans policies is to try to effect changes in the system that has not been able to be done before. because of too many invested interest and, and if you look at the overall package, we focus on tears. but remember, for his insurance package is to reduce the size of government, deregulate the economy, and encourage foreign investments united states and the different bank on a list of drugs and immigration. neither of which are a major issue in relation to the board or the jewish focusing on tire. also that from your call doctor trying to divert into other areas or can we focus on the rest of the tariff package and rather than just looking at canada, that's yes canada and, and the us have got other issues to work out. and i agree with you, there's

a lot of political stuff behind that. the truth of government is in big trouble right now. and, and, and right now they're trying their best to have national so kind of national agenda against the united states to try to rub up his political position. the canada is also the, the, the largest uh, the strongest ally of america. so it is obviously very putting into this conversation that trump would single louse the closest ally to the us. demetrius i want to come to your other comments. secretary, how would let next it? the tariffs will lead to high prices on certain products for a short period of time. i mean, how long can that be sustained before there is a significant pushback from the american people? i think, i think that's a political question and you know, it is up to the american people of course, to if they want to vote for tyrants and higher prizes been and they'll do that. but i'm not entirely sure that's what they were after. it would be very dangerous for any kind of historical addition coming out the inflation cycle we've just seen all

around the world. i'll remind you where we're heading 7 percent inflation. only 3 years ago, the people were dismissing as trying to trade. and if this one off shock and it's just totally the don't worry about it, i think it would be very dangerous for an economist. the qualifications to say, well, this is just a one off. in fact, if we look at consumer surveys that have come this year, what consumers are worried about are considerably higher inflation expectations. and this is a big problem for monetary policy. and this is a big problem for all the laudable things that the trumpet ministrations trying to achieve. they're not going to be able to achieve then, if they cause significant concern of all consumers straight out of the gate and by implementing types that i think we can all agree our target a pretty much any random policy objective that comes out on the president's agenda and william obviously, uh, another big part of this is the stock market and there was a concern there just around the amount of uncertainty that has already shrouded

trumps of this month. also in power. uh, i mean, he sees the stock market as a barometer of his success really so. so what happens if it does keep bullying and how far will he allow that to happen before he has to act? let's remember the volatility in stock market has been going on for just about the last month or so. but the stock market itself is really edits it's historic holidays. and as far as the uncertainty is concerned, and inflation was mentioned, and let me put that to rest again, relative price changes. that's what terse that with the change relative prices, not absolute price. when things become more expensive, you spend less money on those things. and more money on other things, the overall spending still stays the same because that's constrained by your domestic income, your family income. so, so in terms of is the taxes, the tax being slow? sorry. okay, that's what it is though, but i think the prices are higher, all the places become lower when you cut back on expenditures. those prices cannot be sustained in any business man worth. the salt will lower the price,

the cheapest market share. so, so let's, let's do basic economics one a, one parents or not inflation, or they raise some prices, they lower other prices so, so again, it's a relative price change, not in inflation issue. demetrius i, i just think that the flat out wrong. i mean, we're about to impose this 10 percent tax on canadian oil that's going to show up at the bottom. can you explain to me how the sales tax on gasoline profit is going to raise american williams? and what are people gonna spend their money on? that's going to be cheaper when gas prices are more expensive. with gas prices more expensive, people will consume less gasoline for producers will produce more gasoline based on americans, oil and, and in terms of, again, in terms of the, the overall expenditures, the prices that become relatively cheaper are the ones that are a, produce the united states the united states is relatively close economy. freight itself is spelled out, exports are in ports about 50 percent,

each of total g d p. so in terms of the overall impact on prices, when we saw president trump's 1st administration, then the tax that within their, the cpr, it went up quite a port percentage point over 2 years, hardly noticeable. so we have not seen any experience at all, anywhere around the world where terrorists themselves, costs inflation. monford can see going, desert causes inflation and, and, and, and the fiscal spending going bizarre as biting did, causes inflation. okay, what is my patient went up and cause administer prices, insurance prices, car mechanics, a lot of things that are not anything to do with imports at all. yeah. okay, well we need to building this out a little bit more because obviously all of this impacts the rest of the world. no, the chinese embassy tweeted out of the us and basically said that if war is what the us wants be at a tara, for tribal or any other type of war, we're ready to fight to begins. i mean,

one can be made of that from the political point of view when a power such as china uh, basically comes out uh by saying with binding words like that it is, i guess all of us, i don't think that necessarily means that china, the united states are about to fight a shooting war and things like that, but it is obviously all of a sudden all beasley speaks to a rod shooting all international tensions. now president trump would argue that his tire of the top of all occasions being used to tractor a list of policy games from other countries. i don't dispute that at all. but if you change the view that the freest possible trinity is overall over a net good thing for the united states, that obviously this is not a good thing. the possibility of a trade war is one of the things that is for getting the markets at the moment that you know, if that continues about, it certainly continues. if those tensions continue to shut off the,

obviously that's a problem. demetrius, what can a lot of these other countries actually do from here? is there any way for them to unify and actually maybe increase, try between one another and, and kept the united states out as possible. i mean, i agree with what william said, the united states is a large, close the car, me trade as a percent r t p here is actually not that high. other countries have much higher trade flows . and of course, in economic modeling, we expect them to trade more with each other and less with the united states as a consequence of raising category, as between the us and the rest of the world. so my expectation would be, and we saw a little bit of that, you know, you're being manufacturer is your be a multi national saying we're, we're switching production for canadian consumption from the us to the you where it's not gonna face power. so i think you can confidently expect, you know,

some compensating effects. of course, it's not going to completely make out for the loss of consumer surplus that we're going to see by opposing those tires and the counter charges that all the other countries will impose on the united states as a consequence. but it will be a mitigating effect for and that exporters light b e u, or china is william is also obviously, as well as any economic impact is going to be a diplomatic full out as well as we have seen with some of america's closest allies . how do you factor that into what could potentially happen in the next 3 to 6 months? it's what i anticipate that the political reaction is going to be is that they will come to the bargaining table probably in groups, small groups or by laterally, an arrange free trade agreements with united states and say, look, let it, let us together level the playing field between a one or 2 countries or, or a set of countries. the one thing that present trump the ones to avoid all these large multi level trade agreements that take a long time to put together, take a long time to change and,

and adapt to circumstances as they do change. and so free trade agreements and more by level agreements with united states, i r r a certainly in the future and especially investment deals. so to get around the terra ferry, the present trumpets putting up. he's going to say, bring your money here and let's talk deals. and i think you gotta see much more in the way of bi lateral and visual engagement with the united states with the rest of the world. and that will be the benefit to everybody. know, i wanna finish with you a lot of his donald trump supposed to say that his behavior is intended to be unpredictable. that is the sort of chaos is deliberate kyle's around to put people off balance. do you think that he is playing 3 d chairs while everyone else is playing chickens or, or do you think if he's making it off as he goes along on this type of century? i think she's making it up as it goes along because i am not convinced she really understands the fundamentals of how a tire of work. and i think she also longer estimates the time it will take

for manufacturing to move in a significant way for enter the united states in a, in a revitalized way. if that's his actual goal, there will be enormous turbulence before the point is arrived. uh, yeah, some companies or something companies extrusion are making plans to have a plan for to move here. but the kind of wide spread revitalization of american manufacturing is extremely difficult to accomplish. and if you're trying to accomplish up to 3 times, you're going to risk serious inflation in factors just widespread disruption. okay, well, have to leave it there, but no doubt, what do what happens next is going to be unpredictable. i'm pretty sure of that. no, i'll demetrius and william, thank you so much for joining us here on inside story. we really do appreciate it. well, thank you for watching. you can see the program again any time by visiting our website . that's l just there adults. com to further discussion. good about facebook page. that's facebook dot com, forward slash

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how supposed 5 is us and what direction will it take to manage the world foster agent fucking this special coverage of trying to send to a specialist on this one out of the, the the, the on sort of hide us on this and use our life from the coming up in the next 60 minutes us present, donald trump suspends terraced on most mexican imports until april signed thing. his positive relationship with the mexican leader. he usually does, holds emergency folks in brussels to bolster the defenses and continues to help you crane. and it's more against russia and we meet the palestinians in golf.