• If Wednesday was ‘Liberation Day’ in America, then Thursday was its day of reckoning, as the reality of President Donald Trump’s decision to levy steep tariffs on dozens of countries set in. Financial markets around the world cratered. In the U.S., stocks lost more than $3 trillion in market value, registering their largest one-day drop since the start of the pandemic. But none of it seemed to bother Trump, who said of the fallout from his tariff announcement, ‘I think it’s going very well.’ Scott Lincicome, vice president of general economics and trade policy at the Cato Institute, tells us everything we need to know about Trump’s tariffs.
• And in headlines: The Pentagon’s acting inspector general said he’ll review Defense Secretary Pete Hegseth’s use of the Signal app to discuss military plans, the White House threatened to withhold funding from public schools over DEI programs, and lawyers for a Tufts University student detained by immigration officials asked a judge to keep her case in New England.

• Check out more from Scott – www.cato.org/people/scott-lincicome
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TRANSCRIPT

Jane Coaston: It’s Friday, April 4th, I’m Jane Coaston, and this is What a Day, the show that, unlike Health and Human Services Secretary Robert F. Kennedy Jr., has never had to rehire hundreds of people working on juvenile lead exposure because this show would never fire hundreds of people working on juvenile lead exposure. [music break] On today’s show, the Pentagon’s acting inspector general is looking into Signalgate and President Donald Trump reveals his very on-brand gold card. But let’s start with the day after Liberation Day. Call it, wait, what the hell day? The day after Donald Trump leveled tariffs on every other country with bigger tariffs on China, the EU and uh Madagascar for some reason, stocks plummeted in their worst day since 2020, the height of the COVID-19 pandemic. Here’s CNN. 

[clip of unnamed CNN reporter] All three U.S. stock indexes hemorrhaging at the closing bell just moments ago. The Dow losing nearly four percent of its total value, down more than 1600 points. The Nasdaq down nearly six percent. The S&P plunging nearly five percent. 

Jane Coaston: Even Fox News had to recognize that the stock market was having a bad time, though Fox News host Will Cain felt it necessary to ask a larger question. 

[cli of Fox News reporter Will Cain] Tech stocks absolutely hammered down 10% on the Nasdaq. It does deserve some context. What do we mean by down? 

Jane Coaston: What do mean by down, indeed. There have been some admittedly hilarious defenses of Trump’s tariffs online on Thursday. Personally, I have been very amused by right-wing Twitter suddenly sounding like someone’s liberal mom in 1994 saying things like do you really need that video game console and railing against consumerism? But even Republicans on the hill are worried about the impact of Trump’s completely reckless tariffs. Because yeah, it turns out that arbitrarily leveling tariffs on some of our closest economic partners and an island mostly inhabited by penguins, while alternatively deciding that tariffs are either a beautiful word or a useful cudgel, is very confusing for the stock market, businesses, and everyday Americans. Here’s Texas Republican Senator Ted Cruz on Fox News. 

[clip of Senator Ted Cruz] Tariffs are a tax on consumers, and I’m not a fan of jacking up taxes on American consumers, so my hope is these tariffs are short-lived. 

Jane Coaston: Of course, Donald Trump himself thinks this is all great, because to him, it’s like surgery. 

[clip of President Donald Trump] I think it’s going very well. It was an operation. I like when a patient gets operated on and uh it’s a big thing. I said this would exactly be the way it is. 

Jane Coaston: And Howard Lutnick, the Secretary of Commerce and apparently a real person with real ideas, begged Americans on CNN to just let Trump cook. Just let him run things. You know, definitely not like a dictator. 

[clip of Howard Lutnick] Let Donald Trump run the global economy. He knows what he’s doing. He’s been talking about it for 35 years. You gotta trust Donald Trump in the White House. That’s why they put him there. Let him fix it. 

[clip of unnamed CNN reporter 2] Right. I understand. 

[clip of Howard Lutnick] Okay. It’s broken. Let him fix it. 

Jane Coaston: I mean, I’ve been talking about how much I hate bell peppers for 35 years. Give me power. But to find out what is actually going on with tariffs, I had to talk to Scott Lincicome. He’s the vice president of general economics at the Cato Institute. Scott, welcome back to What a Day. 

Scott Lincicome: Thanks for having me back. 

Jane Coaston: Scott. What the hell is going on? 

Scott Lincicome: Well, Jane, on Wednesday, President Trump announced a reciprocal tariff regime that effectively applies a tariff on imports from every country in the world, supposedly based on their unfair treatment of American exports over the last several decades, all based on the motion that there is a national emergency, as declared by the president due to our trade deficit. 

Jane Coaston: We talked to you back in February about Trump’s proposed tariffs on Mexico and Canada. That was thousands of years ago. We also asked you which countries you think Trump would target next with tariffs. You predicted China and the EU and you were right, but you did not know how right you would be. Now we have a full list of tariffs the president has waged on pretty much every country ever, including one that’s just penguins. And my question is, why? How did the administration come to these specific figures? What was the equation they used because it seems weird? 

Scott Lincicome: Yeah, so believe it or not some dude at a grocery store figured out the tariff calculation almost instantly after it was released. It was effectively a nation’s trade deficit with the United States or trade surplus with the united states divided by its import volume and that was what they assumed to be the effective tariff rate, or as some White House official put it, the amount of trade cheating that’s going on because in their view, trade should be perfectly balanced, but then of course, they cut it in half because Trump is a benevolent dictator in this regard. He wanted to be nice about it. It frankly makes no economic sense. There’s no support for it in economics literature. And in fact, it’s even contradicted by one of the papers that the Trump administration itself cited to justify its approach. 

Jane Coaston: Some countries on Trump’s list, like Canada and EU, you know, our longtime enemies, have already said they plan to implement retaliatory tariffs, but are willing to engage in trade talks with the U.S. first. What taxes are countries proposing and how will they impact Americans? 

Scott Lincicome: So the first way the retaliation will occur is very straightforward. They are simply going to apply tariffs of their own on US exports, typically politically sensitive stuff. So in the first trade war back during the first Trump term, whiskey from Kentucky was targeted because Mitch McConnell at the time was Senate Majority Leader, and whiskey is a big export industry for the state of Kentucky. Soybeans are always targeted because the good old American farmers in the Midwest and in Iowa export a lot, particularly to places like China. But this is where I think things are going to get really interesting is both the Europeans, the Chinese and the Canadians too, by the way, are deploying what we call asymmetric retaliation, which is not tit for tat, tariff for tariff. And they do that because the United States imports a lot more than we export. So we have have fewer export targets for other countries to tariff. So what they do instead is they look at U S investments, business licenses. So maybe all of a sudden Apple stores in China are no longer allowed to operate. Right. They target intellectual property, maybe? Trying to twist the economic knife in ways that impose pain and maybe in the case of like intellectual property actually do their citizens some good, right? If you’re getting cheap drugs or whatever. That’s a win for your consumers, whereas retaliatory tariffs, of course, hurt them. 

Jane Coaston: One of the countries noticably missing from the trade war is Russia. 

Scott Lincicome: Yeah. 

Jane Coaston: Why is Trump playing favorites yet declaring war on our allies and countries we rely on for goods? 

Scott Lincicome: I’m always hesitant to speculate. The polite version is that Russia is already subject to a massive amount of U.S. sanctions, and thus, what’s the point, right? The other less polite version, is that Trump’s desperate to get Russia to make a deal with Ukraine. He’s staking his reputation on stopping the war in Ukraine, and thus is just really you know playing footsie with his buddy, Vlad. The third option, which we should not underestimate, is just incompetence, right? If places with penguins are getting tariffed, if an island that is nothing but a U.S. military base is getting tariffed, we can’t assume there are intentionally nefarious ends with this Russia omission. 

Jane Coaston: Now, yesterday on Fox News the Trump administration basically argued that other countries should just sit back and take it, which no country is going to do because that’s not how nations work. Is there incentive for countries to fight back in this trade war? I think there would be but I am not you. 

Scott Lincicome: Yeah, there’s immense incentive for them to retaliate. Now, economically, the best thing they can do is not retaliate and instead just try to move on without the United States, you know, launch more freer trade with other countries. The other big thing though here is strategy and game theory. Standard game theory says that when somebody imposes tariffs, you retaliate, even though you know it’s bad, even though, you know, it’s going to hurt you, retaliate to try to discourage additional bad behavior, right? You know, we got pretty lucky last time around that the retaliation implemented by Canada and Europe and India and others was not matched by U.S. additional retaliation. And even the U. S. China stuff did eventually stop, right. It kind of escalated and markets freaked out and then Trump freaked out because markets freaked out, and things settled down. But I think the bigger fear is trying to figure out what’s the next shoe to drop. I mean, how do currencies respond? You know, and this stuff can get pretty bad pretty quick. 

Jane Coaston: Right. I mean, we saw that the global stock market had its worst single day since 2020 when–

Scott Lincicome: Yeah. 

Jane Coaston: You know, the pandemic was happening. Now, when Trump first came into office, the market surged on optimism that he was going to reduce regulations and spur economic growth and that the tariff thing was just this thing that he’d been talking about for 40 years, but wouldn’t actually do, which is weird. But obviously that surge has faltered and reversed once he started making it very clear, he really meant the tarif thing. What does Thursday tell us about where the markets are heading? 

Scott Lincicome: Well, I think the markets are worried. This is beyond both in terms of the size of the tariffs and the country is getting hit far beyond what most big investors thought. Tariffs are a drag on growth. They hit corporate earnings and all of those things that investors care about means, you know, that’s bad for their investments and for them being eager to stay in the U S market. The second big thing though, is the uncertainty, uncertainty with respect to U.S. trade policy. But also uncertainty with respect to what other loony things does Donald Trump have up his sleeve. I think we’re in for what traders call chop for the foreseeable future. 

Jane Coaston: Yeah, and companies don’t like chop. Automaker Stellantis temporarily laid off 900 employees at its US factories on Tuesday, paused production at others in Mexico and Canada as it tries to figure out how to move forward with these new tariffs, which as you keep saying, like, we’re not really sure what’s going on, that he keeps turning them on and off and on and off because sometimes tariffs are amazing and sometimes tariffs are a cudgel and who knows which. This has had an immediate impact on the workforce. What else can we expect? 

Scott Lincicome: Well, I think we can further expect consumer angst. A lot of our economy is consumption, and Americans seeing what the stock market is doing, hearing what Trump’s saying, listening to smart economists on television about how tariffs raise prices, all of this stuff can decrease consumer sentiment, can increase our expectations for more inflation. That can reverberate into the real economy. Maybe people start hoarding goods like we did during the pandemic or start buying early because they think prices are going to go up. Well, that can actually be a self-fulfilling prophecy, right? You actually, that’ll cause prices to go up even faster. And so if you’re making cars or whatever and expecting a robust sales throughout the fall, maybe you trim back your output a bit because you’re not so sure that they’re going to be as many people in the market. 

Jane Coaston: Scott, as always, thank you so much for joining me. 

Scott Lincicome: My pleasure. 

Jane Coaston: That was my conversation with Scott Lincicome, Vice President of General Economics at the Cato Institute. We’ll get to more of the news in a moment, but if you like the show, make sure to subscribe, leave a five-star review on Apple Podcasts, watch us on YouTube, and share with your friends. More to come after some ads. [music break]

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Jane Coaston: Here’s what else we’re following today. 

[sung] Headlines.

[clip of President Donald Trump] For $5 million, this could be yours. That was the first of the cards. See that? You know what that card is? [clip of people chiming in] It’s the Gold card, the trump card, gold card. 

[clip of unknown news reporter] Who’s the first buyer? 

[clip of President Donald Trump] Me, I’m the first. 

[clip of unknown news reporter] Who’s the second?

[clip of President Donald Trump] I don’t know, but I’m the first buyer. 

Jane Coaston: President Donald Trump Thursday unveiled what he said was the first gold card for rich foreigners to buy legal status in America, all for the very reasonable price of $5 million. For those of you who are listening to this podcast, you should head to our YouTube channel to actually see the thing, because the card looks exactly like you think it does. It’s gold. It has his face on it. The Statue of Liberty is in the background. And in big bold letters surrounded by stars it says the Trump card with his big gaudy signature just below and because anyone buying this thing would clearly want to flaunt how much money they were able to throw around to get it, it also has the five million dollar price tag on it. Very sophisticated. Trump said the new gold cards will be released publicly quote, “within two weeks,” but no other details were revealed. Trump first announced plans for the gold card which he described as green card privileges plus in February. Commerce Secretary Howard Lutnick claimed last month more than a thousand had already been sold. Thursday’s show and tell was a real class move, as lots of Americans worried about their costs going up, or their retirement plans fizzling, amid Trump’s big tariff announcement the day before. Oh, and green card recipients are being removed from the country for having opinions the state doesn’t like. This guy, he definitely cares about the people. A Signalgate update! The Pentagon’s Acting Inspector General announced that he would review Defense Secretary Pete Hegseth’s reported use of an unclassified messaging app to discuss military actions. In a letter to Hegseth Thursday, acting Inspector-General Stephen Stebbins said the evaluation is in response to the Republican chairman and top Democrat of the Senate Armed Services Committee’s request for an inquiry into the scandal. The story first broke last month when Atlantic editor-in-chief Jeffrey Goldberg reported that he was accidentally added to a Signal group chat, that included many of the nation’s top security officials discussing imminent strikes on Houthi targets in Yemen. National Security Advisor Michael Walz and Vice President JD Vance were among those in the chat. Screenshots showed the user labeled Hegseth shared timings of warplane launches and when bombs would drop. While the Trump administration has admitted a mistake was made in adding Goldberg to the chat. It maintains no classified information was shared. Lawyers for both the government and a Tufts University student detained by immigration officials were in federal court Thursday to debate whether her case should play out in Massachusetts. Rumeysa Ozturk, a Turkish PhD student and Fulbright scholar, was detained by ICE agents late last month outside Boston. She’s one of a handful of international students the Trump administration has sought to deport over allegations they were, quote, “engaged in activities in support of Hamas.” In Ozturk’s case, she co-wrote an op-ed in her student newspaper criticizing Tuft’s stance on the war in Gaza. Ozturk was arrested by a group of plainclothes officers, restrained, and put into a Black SUV. Court documents filed by the government show Ozturk was then moved to New Hampshire, then Vermont, before ICE ultimately transferred her to a detention center in Louisiana. In court Thursday, government lawyers argued Ozturk’s case should be dismissed and handled by immigration courts. But her lawyers asked U.S. District Judge Denise Casper to return the case and Ozturk to Massachusetts from Louisiana and that she be released from custody. At the very least, they asked for the case to be transferred to Vermont. Speaking outside of the courtroom, Ozturk’s lawyer, Masa Kambabi, wrote a statement from her client. 

[clip of Masa Kambabi] Efforts to target me because of my op-ed in the Tufts Daily calling for the equal dignity and humanity of all people will not deter me from my commitment to advocate for the rights of youth and children. 

Jane Coaston: Tufts University also declared its support for Ozturk in court filings Wednesday night. University President Sunil Kumar asked for her immediate release and said Tuft’s had quote, “no information to support the allegations justifying her arrest.” The Trump administration is continuing its attack on diversity, equity, and inclusion by targeting public schools across the country. In a letter sent out Thursday, the education department said schools risk having federal funding witheld unless they certify that programs promoting diversity, equity, and inclusion have been eliminated. The Department of Education is following the Trump administration’s interpretation of civil rights laws and framing it as compliance with, quote, “anti-discrimination obligations.” Huh? The notice specifically threatens Title I funding, which supports schools with high rates of low-income students. As Acting Assistant Secretary for Civil Rights Craig Traynor put it, federal financial assistance is a privilege not a right. The department gave state and local school officials 10 days to sign and return the certification acknowledging that the federal funds are conditional. And that’s the news. [music break] One more thing, Laura Loomer. She’s a far right internet personality who once chained herself to the doors of Twitter HQ because she got banned from the platform for being insanely Islamophobic. She’s a 9/11 truther who believes the attacks were a quote, “inside job.” She once claimed that a winter storm in Iowa was created by the deep state to help Nikki Haley last year when she was running against Trump to be the Republican nominee for president. She ran for Congress and lost as a quote, “white advocate.” Laura Loomer is, in a word, bonkers. Bonk city. Which wouldn’t be a big problem for me if she was just a bonkers lady on the internet. Yelling about whatever it is bonkers ladies on the Internet like to yell about. But unfortunately, I do have a big problem. Because not only was she a key part of Donald Trump’s entourage during the presidential campaign, she is now allegedly involved in hiring decisions for the National Security Council. 

[clip of ABC news reporter] And we have more breaking news. Sources tell ABC News the White House has fired a handful of National Security Council staffers. Sources say the decision came after President Trump met with far-right activist Laura Loomer, who made the recommendations on who to fire. 

Jane Coaston: According to multiple sources, Loomer met with President Trump and gave him a list of NSC employees she believed, based on her research, were inadequately loyal to the president and not America first enough for her. Among those fired were the Senior Director for Intelligence, the Senior director for International Organizations, and the Senior Directors for Legislative Affairs. Here’s Donald Trump on Air Force One Thursday explaining that Laura Loomer is a person he listens to for reasons only the Lord could explain to me, though he did deny her involvement in the NSC aid firings. 

[clip of President Donald Trump] Laura Loomer is a very good patron. She’s a very strong person. And I saw her yesterday for a little while. She has she makes recommendations of things and people. And sometimes I listen to those recommendations, like I do with everybody. 

Jane Coaston: Again, I want you to understand exactly who we are discussing when we talk about Laura Loomer. And regrettably, that means I need to play you her discussion of Texas Democratic Representative Jasmine Crockett. 

[clip of Laura Loomer] All I wanna see, oh, I’m a finna bust a cap in his ass. I’m so sick of all these billionaires. My name is Jasmine Crockett, and I went to a rich-ass little prep school, a Catholic prep school. Because, you know, despite my little Section 8 hood rat ghetto bitch attitude, I actually grew up in a pretty wealthy household growing up. 

Jane Coaston: Believe it or not, it got worse after that. Loomer seems to want a bunch of people fired for various reasons that are all, as you might guess, bonkers. Remember Signalgate, which we discussed earlier? Well, Laura Loomer has decided that rather than the simple answer of Mike Waltz’s big stupid thumbs accidentally added the editor-in-chief of the Atlantic to a Signal group chat about bombing Houthi rebels, there’s a conspiracy afoot. She did fail to oust one of her top targets. deputy national security advisor Alex Wong. Loomer is convinced his wife is a Chinese security asset. She’s of Taiwanese descent, but let’s not let facts get into this. And so Alex Wong, in Loomer’s view, added the editor-in-chief of the Atlantic to the chat, quote, “on purpose as part of a foreign op to embarrass the Trump administration on behalf of China.” Boom, Loomer-ed. That’s the name of her new research and vetting firm, by the way. Loomered strategies where she will go after people she decides aren’t pro-Trump enough. I guess. Hi Laura. I’m right here. Now again, I firmly believe in the right of every American to be bonkers. You’re allowed. But Laura Loomer is a complete nutcase who now appears to have influence over the hiring decisions of the President of the United States So I guess we’re all Loomered. [music break]

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Jane Coaston: That’s all for today. If you like the show, make sure you subscribe, leave a review, learn about the Heard Island and McDonald Islands, which we are apparently tariffing, and tell your friends to listen. And if you’re into reading, and not just about how the Heerd Island and McDonald Islands have no people, but do have penguins, seagulls, and seals, like me, What a Day is also a nightly newsletter. Check it out and subscribe at Crooked.com/subscribe. I’m Jane Coaston, and I am suddenly very interested in what the Heard Island and MacDonald Islands are selling. [music break] What a Day is a production of Crooked Media. It’s recorded and mixed by Desmond Taylor. Our associate producers are Raven Yamamoto and Emily Fohr. Our producer is Michell Eloy. We had production help today from Johanna Case, Joseph Dutra, Greg Walters, and Julia Claire. Our senior producer is Erica Morrison, and our executive producer is Adriene Hill. Our theme music is by Colin Gilliard and Kashaka. Our production staff is proudly unionized with the Writers Guild of America East. [music break]

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