MICHEL MARTIN, HOST:
David Wessel, let me turn back to you now. We just heard Holly Hart of the United Steelworkers say that there have been new hires in the steel industry since these recent tariffs took effect. Can you tell us what you know about that?
DAVID WESSEL: Well, I'm sure there have been. There are about 150,000 people who work in the steel industry and about 6.5 million people who work in industries that consume steel. It won't be hard to find isolated cases of people who are winning from these tariffs, but you have to step back and look at the whole. And on balance, these will be bad for the U.S. economy. More people will pay higher prices. More people will lose jobs because of these tariffs than will be gained.
And I think the thing that makes this so interesting and so different from previous episodes - George Bush, Bill Clinton, Barack Obama - is it's not at all clear what President Trump's exit-ramp strategy is. They were very strategic, those previous presidents. They were trying to get something done and they - you could see how they're using tariffs as a lever. President Trump's strategy seems to be, I'm going to show you I'm tough. And it turns out the Chinese know how to fight back. They're really targeting the farm states where he has strong political base.
MARTIN: Could you talk a little bit more about that? How is China approaching this?
WESSEL: China is very strategic. So they've imposed tariffs on U.S. exports to China, particularly agriculture. So you're hearing lots of complaining from the soybean industry and others because they understand that - the politics of this in the United States. And the other thing the Chinese can do if they want is make life miserable for American companies doing business in China. They must be figuring that if they can get the big companies in America - and we've already seen the Chamber of Commerce weigh in - to feel the pain, that those companies will put pressure on the president to back off.
So the big question now is, will this escalate? Will he do another round of tariffs as he's threatening? Then the Chinese will do another round of tariffs after that. Or will this - will there be some face-saving compromise? The Chinese have indicated, if you want us to buy a little more of your stuff, we're willing to do that. Will you back off?
MARTIN: We have about 45 seconds left, so give us a sense of what we should be looking at as we look at this unfold, say as just consumers, as citizens as we're trying to understand how we fit into all of this.
WESSEL: Well, one way - most of us are - will see higher prices for things that we buy. And that will be slow, it won't be immediate, but we'll see that. And the second thing is to watch - are there grownups in charge here or do we have emotional leaders on the Chinese and the U.S. side that just make things worse and can't come to an agreement?
MARTIN: That's David Wessel, senior fellow in Economic Studies at the Brookings Center and director of the Hutchins Center on Fiscal - that's the Brookings Institution and Center of the Hutchins Center on Fiscal and Monetary Policy. David Wessel, thanks so much for joining us.
WESSEL: You're welcome. Transcript provided by NPR, Copyright NPR.
