'A lot of rosy rhetoric, but the jobs numbers are just not there for Trump'

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00:00Thank you. Let's bring in Gavin Bade. Gavin is a reporter on trade and economic policy at the

00:05Wall Street Journal to talk more about this issue of tariffs. Gavin, great to have you with us here

00:09on France 34. We always appreciate your time. I'm wondering, 12 months ago, did you or any of your

00:14colleagues see this coming, the extent of Trump's will to impose trade tariffs with, it seems to

00:21many people, arbitrary penalties fixed to certain products in certain countries?

00:25I think we expected a big tariff push from the Trump administration. I don't think anyone

00:31expected it to go quite this broad, and I don't think we expected it to happen quite so quickly.

00:37I think your guest, Monty, really had it right that this is a power play from the Trump administration.

00:42As much as it is about rebuilding American manufacturing or lowering the trade deficit,

00:47it's also demonstrating that he ultimately has power over the global economy. That's what he

00:52wants to assert in this, whether it's this dispute with Europe over Greenland or in any of these

00:58other tariff disputes. So I think this is a power play from the U.S. president, and that's why you

01:02see him going so hard and so fast. A power play? Some might say an ego play. Let's not get into

01:07personal remarks like that, although I started it. I'll stop it there. Gavin, one thing I can ask,

01:12I think, is in your assessment, is it true that countries that are heavy on tariffs,

01:18actually, it can come back and bite them? I think some people would say that it's already

01:24coming back to bite the U.S. I mean, consumer goods prices have stayed relatively stable. They've

01:29been up a little bit. But let's look at the manufacturing sector, where Trump has really

01:33located. That's his goal, is to rebuild domestic manufacturing. We've lost over 70,000 jobs since

01:40his Liberation Day tariff announcement last April. And that's happened even as manufacturing

01:46productivity is up in the United States. And if you talk to businesses here, a lot of them say

01:52it's because of these tariffs, especially tariffs on what we call intermediate goods, things that U.S.

01:57factories will import from abroad and use them to make goods in the U.S. Those costs have really

02:03gone up for intermediate goods. And we've seen a lot of manufacturers shed jobs because of it. So

02:09there's a lot of rosy rhetoric coming out of the Trump administration, especially when he

02:13visits plants like the Ford plant you're showing right now. The jobs numbers are just not there for

02:19him. And consumer sentiment is down. People feel bad about the economy in the United States and

02:24they're blaming him. So you can say that it's already coming back to bite. Eagle eyes, Gavin,

02:29you spotted the Ford plant there. Well done. Because we're going to use the example of the iconic truck,

02:36the Ford F-150, which I wish I could afford one. They're actually lovely vehicles, aren't they?

02:41We can take a look at how it breaks down the actual construction of one of these cars, because

02:45as I understand it from research I did before the program, 45% of that truck would be U.S.-Canada

02:54construction and some 55% of it would be parts from Mexico, China and Japan. Now, that figure came out

03:01before Trump got into his second term and decided that he would slap tariffs on Canada. So that would,

03:07again, sort of create even more costs in creating this iconic vehicle inside the United States,

03:13would it not? I mean, that's where the logic would lead you, right? And I think we've seen some of these

03:20auto companies say they're going to restart some production in factories like the one Trump has

03:25visited. But we've also seen that auto prices in the U.S. are quite high right now. Those Ford F-150s are

03:31very expensive vehicles. And I think this is one of the sectors where you could maybe make it out to

03:37be a success story for some of the jobs in the sector. If you talk to, you know, unionized auto

03:43workers in Michigan, where I'm from, a lot of them are very happy about this tariff regime. But let's

03:48remember that final vehicle assembly is just one part of one industry. And there are other places that

03:54are not doing quite as well. So this is going to be one place that I think we see the Trump

03:58administration really focus on in the year to come, especially as we renegotiate the U.S.-Mexico-Canada

04:05free trade agreement that Trump has already undermined. But it comes up for review this

04:10year. And the automotive parts and where they are made are going to be a very key part of that

04:15renegotiation. So that's something to watch in the months to come here. Does that smell like a U-turn

04:21to you on Trump's part?

04:26I think that, you know, the administration is going to push for more manufacturing of trucks

04:31and components here in the United States and cars as well. I think where we see a U-turn is on some

04:37of the other tariffs that he's put on, especially foodstuffs. You know, we saw things like beef and

04:42coffee really rising in price throughout the summer and fall last year. And he very quietly did a U-turn

04:48on a lot of those. Beef can now come into the United States tariff-free, so can coffee.

04:53There are a number of other food goods. And it was kind of a tacit admission from the

04:57administration, although they would never say it publicly that, OK, the grocery prices went up for

05:02consumers. People are not happy about that. And they are very worried internally that they are

05:06losing this debate over affordability. It really scared them when they saw Zoran Mondami win in New

05:13York on that affordability message. We saw Democratic governors in two other states went

05:18on a message like that. That's why you're seeing him kind of go so hard on some of these state

05:22interventions in the economy, whether it's credit card rates or banning institutional investors from

05:28buying single-family homes. At least that's something he wants to do. These are all things

05:32aimed at trying to win that affordability argument that, so far, he's losing.

05:37Indeed. We appreciate the generosity of your analysis, Gavin. It really is giving us a really

05:42roundly shaped view of things that are preoccupying not just Americans, but the political classes too.

05:48Can I ask you about the issue of Greenland, the issue of the tariffs that Trump is threatening

05:53us with over here in Europe? 10% by February the 1st, 25% by June the 1st. Even, I think,

06:02he shouted at Emmanuel Macron from afar that he'd tax French wines and champagne by 200%.

06:08This all seems rather scatological, but I'm sure there is a game plan behind all of this for Trump.

06:16Perhaps and perhaps not. I mean, we've seen Trump many times before in this first year

06:21threaten eye-watering tariffs and then walk back from the brink. Remember, at one point,

06:26we had tariffs of 145% on China. Those came down very quickly as the stock market and the bond

06:32market responded. The markets were not doing well today in the United States. The stock market is

06:37down. The bond market is not doing well. That will be a constraint on his ability to act here,

06:43as is the coming Supreme Court decision, as you mentioned, on these tariffs. We expect that he

06:49would try to use the same emergency authority for these tariffs as he has used in the past. That is

06:55very much at risk in the Supreme Court right now. And other tariff authorities that he might put in

07:01place don't have the same sort of flexibility. So, I mean, we want to take him seriously when he makes

07:07these tariff threats, because, of course, it can be very economically damaging. But we also should

07:12note that, you know, he has so-called chickened out many times before on a number of these tariff

07:17threats. And I think it's, you know, there are some big questions about how he would even institute

07:22these. He's talking about only hitting some EU member nations and not others. It's unclear how you could

07:27even make that work. It's unclear which law he would use. So I think we're very much a wait and see

07:33moment on these tariffs. It's more likely that he's just trying to drive European powers to the

07:39table to negotiate over Greenland. Whether that's going to work or not, I'm not sure. But that's

07:44what his trade representative was saying in Davos today.

07:48Gavin Bade, always a pleasure to have you on board. Thank you very much indeed for the insight you bring

07:51every time you join us here at Frankfurt Hall. We always appreciate it. Gavin Bade,

07:54reporter on trade and economic policy at The Wall Street Journal. Gavin, thank you very much indeed, sir.

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