off that is what it is a plus international filmmakers. world class journalist. this is an opportunity to consider what a collective values bring programs to inspire you for comes on back him a lot, but themselves. let's use this to retain by the end of $1010.00. for his own ends of the terrace, uh, central to us economic and foreign policy and the new trump administration. the reservations of his supposes chairs and 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 trumps,

current approach to international trade, to speech, to both houses of congress to sit out his plans with tariffs central to his policies was met 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 be for the rest of us around the world, velasco pedals, so they have used 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 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 jobs. 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 the 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 to re think on tariffs, on some agricultural products, could also be in the pipeline. but the diplomatic damage was already done. europe

in china said they were preparing retaliatory measures, usually plenty of time to meet the 1st 10 or so being imposed on a large scale not only against europe on elementary and steel. if these that can fund europeans will respond and they will be reciprocal tower. so because we need to protect and to defend ourselves, china is also preparing for a trade war with a stimulus plan for effected industries. tony, 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 relationships with other countries, say levels kind of see as much as i know if needed. we'll look for commercial partners. anything to protect mexico and mexicans within the framework of suffering t. and it didn't take us over that. 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. 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, ponders last year. if it was a tried deficit, have one trillion dollars the us 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. that 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 extended to a white house columnist for the hill newspaper and new york is demetrius of allots us the chief economist and founding partner 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 new can institute. thank you very much for joining us. whole here on inside story. look like and 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 temperature paled street. his base sheet tends to not really bother with such an appeal to the center drawing. and we saw all the

concentration on immigration, for example, on show called 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 tire of some of the other, other we didn't get an enormous amount of clarity on either. but you know, some of his facility toward a lot of mirrors the landscape but still being on the chairs to 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, not so much on you, crying a bit 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 able to explain the total cost overall

economic plan. there are different parts of it and the speech, as he mentioned was addressed to congress. and there are some things that absolutely need to go through 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 over time. the problem is not tax, social security payments. and all these things need to go to congress and the republicans have a very slim majority there. so it's a difficult task. um, i wouldn't really buy, you know, won't pay more attention to. it isn't going to make it more likely that congress will be able to pass 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

a drive ation to those times. he's doing it by executive authority. he's created a lot of uncertainty. and some of the goals, such as 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 to. it's very hard to find a coherent narrative. uh, to say this is what the administration was 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 is 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 and factory superior to the subsidies of 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 this uncertainty talked about,

i've had imagined any c o o that has been put in contingencies. the minute donald trump was elected, the terrorist is going to be part of the landscape. and what do we do to re optimize our production? that's the discussion that every part room that i have ever taught, talk with and, and in any executive that was surprised by charles. they should have the bonus with him 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 trumps claims that he is uh, he has popular opinion at his back saying that americans have given us a man dikes a bold and profound change. he's a bit, he's perfectly promised to do these things when he was running, know he's following through on those promises. so should everyone to be aware of that, this is exactly what trump and how he was going to west. no. i think there are 2 separate strands to that question. why is shouldn't people be aware that this as well please? yes, certainly these are things that he said on the account paying trails. no,

you them for the thing about him having the broad mandate, it is true that he want them to go back and we'll college in november and by a moderately comfortable margin. it's also true that he won the popular vote by 1.5 percentage points. does not qualify as a mandate for the enormous kind of changes that he is proposing across the board. there's funding considerable difference in public opinion in terms of say, emigration of reading dollars, how widespread support from much more restriction is almost like another complex, like tar us, we're open use much more split rule. the last 4 opinion is extremely split. sure thing need to be cautious with bikes and 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 he basically burning all of his close those ponds as an allies in the 1st month, we'll start with of as a 2nd 10. i think that's why i'm

a little baffled by the use of the tires. not because they were, you know, we weren't, weren't, of course, we weren't, weren't and try these and talk, career inspect 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 terrace do. and i'm not really sure how the current account this is going to be helped by importing more at the i, 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, posing kind of the way that bothers might be then. then today we're hearing 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 it is not now is

a great time to go and 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're 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 or tomorrow. okay, what do i want you to respond to this? as we hear the tariffs could probably rattle and supply chains strong. some of the us is most important diplomatic relationships, which we're seeing 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? so 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 tower. fight is a switch to expenditures and, and the, the fact that we've placed harris on our, our big treatment partners, canada, and mexico truck was very clear and explaining. it's to shut off the evasion from the south of illegal immigrants and illegal it was the drugs. and so the purpose of the, of the terrace, of on canada was really to, to achieve a non economic goal, which is the shutdown, illegal immigration. and it was the drug and the importation as far as a r r. encouragement of investments are concerned. 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 effect, the lucas paradox. and, and proper lucas, the, the know that laureate, from the rest,

you probably go up quite a while. it goes discomfort that capital actually flowed from emerging markets into developed markets like united states, because that's where we terms of the highest. and the one thing that present trump is trying 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 old sentries is pretty low. but when i talked about average tars 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 the cold it 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 are made by our friends from the milk and institute there. he's arguing the title should be used for policy goals, and he said it would be example of canada with illegal immigration and give us a drug is not one percent off in the united states is attributable to move on to trust and northern borders. it is also a, a much more minor component part,

immigration is concerned to see on the cost believe the 25 percent tire ups on canada, or a portion of response to one percent of fentanyl coming across the border with m. v amount. ok. the amount of fentanyl that comes across the channels 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 actually, this is really to get our, one of the 12 percent of the total of what we're talking about, that's of american citizens and at present trumpets try the free market. you're representing a free market organization. as i understand for pointing to propose a protectionist, also the impede a considerable amount of cross border trade for a very minor effect on the overall problem that report and to address the fact that

you focus on china the shows that you're really are missing the point here the, the, the truck drivers, trunk 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 carriers. but remember, 1st, the 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. can we focus on the rest of the tariff package and rather than just looking at canada because 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 trudel 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 deadline of america. so it is obviously very putting into this conversation that trump would think allows the closest ally to the us. demetrius i want to come to your other comments. secretary, how is that 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 significant pushback from the american people? all right, i think i think the political question and you know is up to the american people, of course, to if they want to vote for tyrants and higher price has 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 economist or politician coming out the inflation cycle with just see all around the world. i'll remind you we're heading 7 percent inflation. only 3 years ago the people were dismissing as trying to trade it this one off shock and it's

just cold with a don't worry. but i think it would be very dangerous for an economist. the football additions 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 they trump administrations trying to achieve. they're not going to be able to achieve then if they cost significant concern among consumers, straight out of the gate and by implementing types that i think we can all agree are targeted a pretty much any random policy objective that comes out on the president's agenda . and william, obviously 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 the 1st 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 pulling 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, can started and inflation was mentioned. and let me put that to rest again, relative price changes. that's what terse do 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 taxes being slightly sorry. okay, that's what it is though, but i think that price is a higher all the place to become lower when you clicked on expenditures. those prices cannot be sustained in any business man worth the sold will lower the price, the cheapest market share. so, so let's, let's face it, economics one, a, one parents or not inflation or they raise some prices. they lower all the prices

so, so again, it's a relative price change, not in inflation issue. demetrius i, i just think that that's flat out wrong. i mean, we're about to impose this 10 percent tax on canadian oil that's gonna show up with the problem. can you explain to me how the sales tax on gasoline profit is going to raise american we'll items. and what are people gonna spend their money on? that's going to be cheaper when gas prices are more expensive. a gas prices more expensive people will consume less gasoline or 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 our art enforce about 15 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 cpi went up by the port percentage point over 2

years, hardly noticeable. so we have not seen any experience at all, anywhere around the world where terrorists themselves causes inflation monitoring and see going desert causes inflation and, and, and, and the fiscal spending going bizarre as biting did, causes inflation. okay, what is patricia without cause of administer prices, insurance prices, car mechanics, the a lot of things that are not anything to do with imports at all. yeah. okay, well we need to put in 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 it from the political point of view when a power such as china 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 the china, the united states are about to fight a shooting or anything like that, but it is obviously all of a sudden know beasley speaks to a shooting all international tensions. now president trump would argue that his tire of the top of all occasions being used to treasury a list of policy games from other countries. i don't dispute that at all, but you would change the views 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 categories 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 manufacturers, you're be a multi national saying we're, we're switching production for canadian consumption from the us to the you where it's not going to face terrace. 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 charter said 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 of what i anticipate? so 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 dot wants 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 for 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

to terra barry, 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 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 chick is 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 holly tire 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 this is actual goals, there will be enormous turbulence before the point is arrived. uh, yeah, some companies or some companies excuse me, and are making plans to have a, a plan for taking 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 of just widespread disruption. okay, well, have to leave it there, but no doubt, whatever 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 the inside story. we really do appreciate that. well, thank you for watching. you can see the program again any time by visiting our website. that's l. does there adults. com for further discussion? good about facebook page. that's facebook dot com, forward slash a j inside stored can also join the conversation on x. l handle is at a inside story. to meet some of the crime, the whole team here. good bye for now. the

the

. i'm louisa pill, bayman ha. the top stories on now just a rough us and ukrainian officials, a set to mation soldier ravia next week to discuss a piece of framework for ukraine. it comes to stay is off to washington suspended, military age and intelligent sherry with cave. ukraine has been trying to repair its relationship with the united states officer president, but ultimately lensky and president donald trump class at the white house last week . trump spoke to reporters about the meeting. well, i think what's going to happen is ukraine wants to make a deal because i don't think they have a choice. i also think that russia wants to make a deal because in a certain different way a different way to know.