What did Trump just do to the economy?

This episode explores the implications of President Trump's tariff pause and the ongoing trade war with China. Against the backdrop of significant market reactions to the pause, economist Justin Wolfers analyzes the situation, noting that while the pause was celebrated, many substantial tariffs remain in place. More significantly, he highlights the unusually high average tariff rate imposed by the U.S. compared to other industrialized nations, a situation he likens to the Smoot-Hawley tariffs of the Great Depression. The discussion pivots to the role of the bond market, with Wolfers explaining how rising interest rates on U.S. Treasuries reflect a lack of confidence in the administration's economic policies. For instance, he details how the rising interest rates on U.S. government debt mirror the increased cost of mortgages when interest rates rise. In contrast to the U.S.'s widespread trade war, China's conflict is primarily with the U.S., giving China an advantage in finding alternative trading partners. The conversation concludes with Wolfers' prediction that the U.S. will likely renegotiate similar free trade agreements with other countries, resulting in minimal changes to trade barriers, although the situation with China remains more complex and potentially more damaging to the U.S. economy.