Trump's tariff chaos rattles world economies
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So, uh, what is going on with tariffs? This episode is your up to the minute guide.

Hi there, everyone. It's Jeff and this is Plain English for Monday, April 14th, 2025. Plain English is the best podcast for you to learn English with stories about current events and trending topics. And today's story is quite current. We'll be talking about the tariff whiplash of the last two weeks. Now listen, I'm taking a risk here.

I'm recording this on Friday, April 11th. It comes out on Monday, April 14th. Anything can happen. That means there are almost three whole days between now and when this episode comes out. Who knows how outdated the content will be by then.

but we will press on. We have important work to do here, and that is to get you some real-world English practice.

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The last two weeks have been a wild ride for the world economy. On April 2nd, Donald Trump gave a speech in the Rose Garden outside the White House.

In that speech, he held up a chart showing the tariffs that he would impose on America's trading partners. Pretty much every country in the world except Russia and North Korea. A tariff is a tax on imports. So the new tariffs would immediately make goods imported to the United States more expensive.

and it would cause a dramatic scrambling of global trade in physical goods. Tariffs were imposed on imports from 200 economies. Most got a flat 10% rate, but some got much higher tariffs. In his speech, Trump called the tariffs reciprocal

The implication was that other countries were cheating America and that tariffs were needed to level the playing field. He said that for too long, other countries have looted, pillaged, and plundered the United States and that now, finally, it was America's turn to prosper.

I'll pause for a moment to let you stop laughing.

The U.S. has a per capita income of about $82,000. It imposed reciprocal tariffs on Bangladesh, per capita income $9,000, and on Madagascar, with a per capita income of $1,800.

In fact, observers quickly concluded that Trump's tariff rates were not based on unfair trade practices, but on individual countries' trade deficits with the United States. The U.S. has a trade deficit when American companies buy more from one country than they sell into that country.

Take a simple example. American companies and consumers buy a lot of products from Vietnam. Clothing and shoes, for example. But Vietnamese companies don't buy a lot from the United States. That means the U.S. has a trade deficit with Vietnam.

This makes sense. Americans buy a lot of t-shirts from Vietnam, but Vietnamese understandably don't buy a lot of Teslas from America. There's nothing nefarious about it. It doesn't mean Vietnam is taking advantage of the U.S.,

On the contrary, Americans would much prefer cheaper clothing from Vietnam than expensive clothing made at home. Nevertheless, Trump put a 46% tariff on goods coming in from Vietnam.

Although Trump had been transparent about his desire to raise tariffs, the specific levels took almost everyone by surprise, as did their arbitrariness. The reaction was immediate and swift.

Global stock markets fell sharply. Most main indices lost about 15% of value in just a few days. This was the biggest drop since the COVID-19 pandemic. Large companies, investors, and consumers were not happy.

They recognized that these new tariffs are really just a large tax increase on trade in physical goods. They feared that if trade slows down, then all the benefits of specialization and supply chains that have accumulated over many decades might be at risk.

Economists and business leaders openly speculated that a global recession or even a depression could result from this new American policy. One reason is that other countries would respond with their own tariffs on American exports.

American companies have a lot to lose if other countries impose tariffs on them in retaliation. American companies sell food, medicine, medical devices, electronics, cars and car parts, oil, gas, and more.

They would be hurt by an ever-escalating trade war between the U.S. and the rest of the world. Consumers in America rushed to buy imported goods like electronics and clothing, hoping to grab them before the tariffs made everything more expensive.

Just when global inflation seemed to be settling down, Trump came out with a sweeping policy that was sure to raise prices everywhere. Trump held firm for several days, saying he wouldn't back down. These new tariffs were for real, he insisted, and were not up for negotiation.

But there were cracks in the system. Fellow Republicans in Congress started to publicly doubt the wisdom of these tariffs. Elon Musk, one of Trump's biggest and most public supporters, said the tariffs were a bad idea. Influential business leaders went on cable television to express their concerns.

And then, without warning, Trump walked his tariffs back. On April 10th, the same day the new tariffs took effect, he paused the highest rates for 90 days. Businesses and investors were relieved to a certain extent. Stock markets bounced back a bit.

The most self-destructive features of Trump's new tariff policy were paused. But most investors, businesses, consumers, and political leaders remain in shock. Trump didn't pause tariffs against China, so the world's two largest economies appear to be fighting each other with taxes.

That's not going to be good for anyone. Even after the pause, American tariffs are higher than they have been in over a century. Trump's impulsive and erratic policymaking has shaken the world's confidence.

Since the Second World War, the United States has worked painstakingly and in detail with other countries to lower tariffs and stabilize global trade. This has led to unprecedented benefits.

But now the world knows the whole thing can be undone by an impulsive and erratic speech by one person.

The chart Trump held up in his Rose Garden speech is, if nothing else, a good geography lesson. For example, the chart made sure to call out new tariffs on the territory of Heard Island and the McDonald Islands.

Now, I am pretty good at finding things on a map, but even I didn't know about the territory of Heard Island and the McDonald Islands. It turns out that these islands are a territory of Australia, about 4,000 kilometers away from the nearest city, Perth. They are almost in Antarctica.

Now, I was worried about the poor people in the territory of Heard Island and the McDonald Islands. I mean, it's bad enough to live a two-week boat ride from the nearest city. Now they have to pay a 10% tariff? It's right there on the chart Trump held up in the Rose Garden.

But then, to my relief, I learned that these islands are uninhabited. That's right, nobody lives there. Trump made a special point to impose tariffs on an island full of penguins and seals. In case you're counting, we are not yet three months into Trump's second term, less than three months out of 48.

That's all for this episode of Plain English. We try not to dwell on the day-to-day here, but this was the biggest global story since probably the pandemic. So I figured we should talk about it, get you the vocabulary you need to think about the issue and talk about it in English.

This was episode number 766, so the full episode is at plainenglish.com slash 766. We'll be back on Thursday with, I promise, a lighthearted and delicious episode. See you then. You've reached the end of the audio version of today's episode, but the fun doesn't have to stop here.

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