How much are you willing to pay to "buy American"? Just asking questions.

In April, President Donald Trump unilaterally unleashed a series of so-called reciprocal tariffs, using emergency powers to punish countries with a trade imbalance, meaning they export more to the U.S. than they import from the U.S.

Markets panicked, and Trump pulled back, setting a new deadline that he's now pushed back multiple times. It's now set to expire on August 1.

But those aren't the only tariffs Trump has implemented, and there are some signs they may be already driving up prices. The administration says the stock market is strong, tariffs are bringing in billions in revenue, and American manufacturing is back, baby. 

To help us figure out what tariffs might do to the U.S. economy, analyze how Trump is using trade as a foreign policy tool, and discuss the ultimate political aims of economic nationalism is Scott Lincicome. He's vice president of general economics at the Cato Institute and writes the Capitolism newsletter at The Dispatch.

Chapters:

00:00 —What are the current tariff levels?

02:21 —Examples of tariff carve-outs

14:20 —Political dynamics of tariffs

19:01 —Tariff impacts on consumers

33:32 —Tariffs as a foreign policy tool

34:00 —Can tariffs lead to freer trade?

36:24 —How tariffs affect foreign exporters

37:21 —Global trade agreements excluding the U.S.

38:27 —Trump's Brazil tariff threats

40:34 —Consumer goods and tariff costs

52:30 —Tariffs and price increase

57:06 —Treasury revenue from tariffs

59:58 —Tax cuts vs. tariff hikes

01:01:14 —Tariffs as a regressive tax

01:05:19 —Are tariffs less harmful than feared?

01:16:03 —Manufacturing and tariff challenges

01:19:45 —Economic growth and tariff effects

Mentioned in the podcast:

Bureau of Labor Statistics Consumer Price Index for June 2025

Trading Economics: United States Core Inflation Rate

"Wholesale prices are flat in June, PPI shows, and point to muted effect of tariffs on inflation," by Jeffry Bartash at MarketWatch

"US customs duties top $100 billion for first time in a fiscal year," by David Lawder

Transcript:

This is an AI-generated transcript. Check against the original before quoting.

Zach Weissmueller: How much are you willing to pay to buy American? Just Asking Questions. 

In April, Donald Trump unilaterally unleashed a series of so-called reciprocal tariffs using emergency powers to punish countries with a trade imbalance, meaning they export more to the U.S. than they import from the U.S. And markets panicked. Trump pulled back, set a new deadline that he's now pushed multiple times. It's now set to expire August 1st.

But those aren't the only tariffs Trump has implemented, and there are some signs they may already be driving up some prices. The administration, on the other hand, says the stock market's pretty strong and tariffs are bringing in billions of revenue. 

American manufacturing is coming back, baby.

So, to help us figure out what tariffs might actually do to the U.S. economy, analyze how Trump is using trade as a foreign policy tool, and discuss the ultimate political aims of economic nationalism is Scott Lincicome, VP of Economics and Trade at the Cato Institute and writer of the Capitolism Newsletter at The Dispatch.

Scott, thank you for coming on the show.

Scott Lincicome: My pleasure, thanks for having me.

Liz Wolfe: So what are the actual current tariff levels that we have with our major trading partners?

Scott Lincicome: Nobody knows.

Liz Wolfe: Least of all us.

Scott Lincicome: Well, in all seriousness, the reality is that I think you would be really hard-pressed to get a consensus from people who study this every day on the exact tariff levels that we have. And in fact, if you look at the various experts, whether it is the Tax Foundation or Yale Budget Lab, or the guys at Goldman Sachs and J.P. Morgan, they all have slightly different tariff rates for the average tariff that's in effect.

First of all, it changes constantly. Second, there are all sorts of carve-outs and exclusions and special rules. There's also—

Liz Wolfe: Hold on. Really fast, can you give us a few examples of what those might be?

Scott Lincicome: Of the carve-outs? Sure. So the big reciprocal tariffs had a huge carve-out for consumer electronics. They also have carve-outs for semiconductors and pharmaceuticals. The theory of the case there is the Trump administration has initiated separate investigations of those products under national security under a different law, Section 232, and so they're going to apply the 232 tariffs eventually to those things.

Trump has threatened 200 percent pharmaceutical tariffs and those things. So you have a lot of these carve-outs, but you also have additions. The steel and aluminum tariffs have what's called a derivatives rider. Which means that products that are made with a lot of steel and aluminum can also face tariffs based on the amount of steel and aluminum they have in them. You can petition the government to have your product included on this list of derivatives. Just recently, home appliances were included on the list. Suddenly, those appliances are getting hit with tariffs based on their steel and aluminum content.

If you combine that with some of the rules for automotive goods—what qualifies as a USMCA product and what doesn't—because Trump has these tariffs on fentanyl-related goods from Canada, Mexico, and China, but there's a carve-out for Canada and Mexico related to goods that comply with the trade agreement that Trump himself signed, the USMCA. Demonstrating that compliance—I had two customs lawyers giving me two different opinions on what's covered, how easy it is to cover. I get somewhat hilarious—I mean, morbidly hilarious—emails from customs law firms talking to clients, trying to get all of this paperwork straight. It's halcyon days—that means boom days—for the lawyers and accountants out there.

But it's really hard to nail all this down. This is frustrating for guys like me, but it's also economically important. The reality is that if you are in business—importing, exporting, whatever—if you're involved with this stuff and