MSNBC's Steve Rattner: Trump has made America the “loser” in his global trade war
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From the April 4, 2025, edition of MSNBC's Morning Joe
STEVE RATTNER (ECONOMIC ANALYST): You can't put the genie back in the bottle. We can spend a lot of time, kind of like "who lost Vietnam?" We can spend a lot of time debating what happened in the 90s and the early 2000s, and how we ended up with a much larger trade deficit, and many fewer manufacturing jobs. But what's done is done, and now we are where we are. And the question is where do we go from here? And the market's answer very clearly is, we don't go in this direction, that this is not going to be productive, it is simply going to hurt our economy. So, let's take a look at a couple of those numbers. Let's start with the stock market yesterday. We talked about the almost 5% drop. This is actually $5 trillion of wealth lost since the inauguration. The stock market had already been starting to go down as people got more and more nervous about what Trump was or wasn't going to do. So, a huge drop.
But here's what's actually quite interesting. The stock market drop here was actually larger than the stock market drop in every other major index, every other major country. In Japan, it was down 2.8%. In Europe it was down 2.6%. In the UK just 1.6. And in China just 0.6%. So, why is that? Trump thinks he's hurting all these people. He thinks everything is, you know, a negotiation where somebody wins and somebody loses. And he thought he was the winner and we turned out to be the loser.
And the answer is because, based on a set of projections from The Budget Lab up in New Haven, we are the loser. The impact of this, the long run impact on GDP of this, is actually going to be — projected anyway — to be worse on the U.S. of any other major country that we trade with, except for Canada. Canada has a special problem, they export a lot of oil to us. We are net export — we are net oil exporters, but we do bring in some Canadian oil for complicated reasons, I'll spare you. But essentially, they believe that we will have the worst economic impact. That actually could be positive in the UK. Trump's tariffs on the UK are only 10%, among the lowest. The EU, a tenth of a percent, Mexico a tenth, and so on. And China only -0.2. Because these countries have other things there, other things they can do there, their consumers are not going to be paying the cost of these tariffs because they're on the other side of it. Therefore, they are actually going to have slightly better economies than they would have had.
So, the irony is we're the worst. And yes, in terms of that JP Morgan projection, I think we are definitely in the 50% or 60% recession odds for this year. This economy is going to soften materially.
WILLIE GEIST (CO-HOST): Yeah, Goldman Sachs bumped up their probability of a recession as well. Had been a long shot about a week ago. Not so much now.