Chuck Todd is joined by Mark Zandi, chief economist at Moody’s Analytics, to discuss the damaging effects of President Donald Trump’s tariffs and trade war on the U.S. economy.

Chuck opens the episode by framing the nation’s economic struggles as entirely self-inflicted, warning against political pressure on the Federal Reserve, and explaining why the consequences of current policy decisions could take years to reverse.

Mark Zandi then joins to share his economic risk assessment, explore why markets failed to anticipate the trade war, and project the level of fallout the U.S. economy could face in the coming months and years.

They break down why Trump’s push to reshore American manufacturing is unlikely to succeed, how China could emerge as the real winner of the trade war, and why troubling signals from the bond market spell concern for the broader economy.

Zandi also outlines the risks of firing Fed Chair Jay Powell, explains why the trade war is a lose-lose scenario, and discusses why government intervention may be far less effective in responding to a self-inflicted economic crisis.

Finally, Chuck wraps up with listener questions in the Ask Chuck segment.

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Timeline:

0:00 Introduction

0:30 Why Chuck wanted to have Mark Zandi on the show

1:30 We could have a man made economic disaster on our hands

3:00 Pressuring the fed to lower interest rates is a bad idea

5:15 Immigration has been a boon, not a negative for America

7:00 Trade has helped America have a higher standard of living than anywhere else

8:00 Rebuilding will take years

8:45 Trump administration has been a mess

11:55 Mark Zandi joins the show

12:55 What is Moody's Analytics?

15:55 How is a country's political system factored into economic risk assessments?

17:15 War gaming the trade war

19:10 Why didn't markets price in the trade war?

21:10 Tariffs in Trump 1.0 were more damaging than people realize due to pandemic.

22:55 When will the tariff impacts show up?

24:25 Are any companies reshoring manufacturing due to tariffs?

26:10 How many companies are going to do whatever it takes to get an exemption?

27:25 Consumers and corporations are already changing their spending decisions

28:25 Government cuts are self defeating

29:55 How will this affect China's economy?

32:55 Will the EU spurn the US in favor of China?

34:25 Nixing the TPP was a mistake

35:40 What does the health of the bond market tell us?

37:10 We're in a crisis

38:10 How does this affect financing our debt?

39:10 What would stabilize the market?

39:55 What would happen if he fired fed chair Jay Powell?

42:40 How similar is the current situation to the 1920's-30's?

45:25 US received more pushback from other countries in the 20's-30's

46:40 Which countries are most vulnerable to the trade war?

48:55 This is a lose-lose for everyone

49:55 In an emergency are the only choices inflation or recession? Which is preferable?

52:25 Government intervention will be less viable because government caused the crisis

53:25 Chuck’s thoughts on conversation with Mark Zandi

54:20 Ask Chuck - Will Trump’s trade war become the new normal or just a phase?

55:55 Tariffs are a tool, and shouldn’t be used for everything

57:30Trump’s goal is to replace income taxes with tariff revenue

59:55 How can citizens not be part of the problem when it comes to hyperpartisan media?

1:00:30 Diversifying your media diet is important

1:04:45 If tariffs cause a severe recession, could Trump issue an EO to postpone the midterm elections?

1:07:00 Trump can’t waive a magic wand and postpone elections

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Will Donald Trump’s Trade War Tank The U.S. Economy?

The Chuck ToddCast