The Boss, Tariffs, and Flying Taxis: How Trump's Policies Are Disrupting World Trade

Bruce Springsteen didn't mince words when he called Trump "corrupt, incompetent, and treasonous" at his Manchester concert this week. As it turns out, The Boss might have a point when it comes to trade policy. 

The chaos unleashed by Trump's tariff regime is sending shockwaves through global supply chains, and American consumers will soon feel the pain in their wallets. Walmart has confirmed what economists feared – prices will jump within a month as the layered tariff structure pushes rates to astronomical levels. We're talking about tariffs of 46.5% on sweaters from China, 55% on swimsuits, and 41.5% on children's clothing. Some everyday items face combined tariffs of 70% when you stack the various charges: Section 301 tariffs, fentanyl-related tariffs, reciprocal tariffs, and more.

The automotive industry is reeling, with Nissan announcing potential cuts of 20,000 jobs and the closure of 7 plants. Technology manufacturers like Foxconn are reconsidering investments, and the pharmaceutical industry faces pressure from executive orders forcing price reductions. While the US government celebrates collecting $16.3 billion in tariff revenue in April (up from $7.1 billion last year), they conveniently ignore who's actually paying – American consumers and businesses.

Meanwhile, Trump's Middle East tour secured $142 billion in deals, mostly for defense equipment, while Middle Eastern countries invest heavily in artificial intelligence infrastructure. Qatar agreed to buy 210 Boeing aircraft, and Saudi Arabia launched a state-backed AI company called "Humane" focused on developing Arabic language models.

As businesses tear up profit forecasts and consumers brace for higher prices, one thing becomes clear: Trump's tariff tyranny creates winners and losers – and everyday Americans are squarely in the latter category. Subscribe to Chain Reaction for weekly insights into how global events impact supply chains and ultimately, your bottom line.

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Chapters

• 0:00 Intro and Springsteen on Trump
• 1:39 Russia-Ukraine Talks and Flying Taxis
• 3:00 Tesla Shares and Energy Market News
• 4:52 Trump's Chaotic Trade Policies Explained
• 7:05 Tariff Impact on Consumer Prices
• 10:58 Trump's Middle East Deals and AI
• 17:44 Closing and Podcast Highlights

Transcript

Tony Hines: 0:00

Hello, tony Hines, here you're listening to Chain Reaction, all about supply chain advantage. Thanks for dropping by. Well, I'm here to tell you about what's on the podcast this week. We have all kinds of things in the news that impact global supply chains this week and some news that doesn't, but is still important enough to make the cut for the podcast Chain Reaction. And one of those is Bruce Springsteen in Manchester, and let's see what he said when he was in Manchester this week about President Trump Corrupt, incompetent and treasonous. That's what he said. Wow, strong words indeed. Of course, he's in the centre of revolution. The Industrial Revolution began in Manchester and he was at the Co-op Arena, which was all about the start of the Labour movement in the United Kingdom. So in good company there.

Tony Hines: 1:00

Russia was supposed to hold talks this week with Ukraine and the presidents were supposed to meet that was Putin and Zelensky but of course Putin never agreed to meet. He sent some underlings, apparently quite low down in the pecking order, to discuss what would happen between the two countries. Of course Ukraine won't accept that. So back to square one. I wonder if Trump is now realising that Putin is an unreliable character. Certainly seems that way, doesn't it?

Tony Hines: 1:39

There was something in the news this week about flying taxis in the United Kingdom by 2028, with the Civil Aviation Authority apparently agreeing for permission to fly. These taxis can hold up to four people, not including the pilot, and they can fly over cities. Is that really a good idea? I don't think it is. It's bad enough. Now we have helicopters flying around ferrying people over cities Really noisy, loud, polluting, not great. And just for a few people to fly around and cause all that external energy and carbon footprint Not a fan. It would be much better, of course, to invest in transport infrastructure for a lot more people, which would be far more effective, and you'd have a system of transport rather than piecemeal, private and unique, I suppose, transport arrangements for the very wealthy Not great.

Tony Hines: 3:00

Another interesting snippet this week is that the chair of Tesla, robin Denham, unloaded hundreds of thousands of shares when Elon Musk endorsed Donald Trump $230 million worth of shares, to be precise, about £173 million and that sent the share price plummeting. Not great, is it? When the chair's selling shares in their own company, any observer would be thinking something not quite right in this company. The International Energy Agency has said that the demand for oil has fallen from 990,000 barrels per day to 650,000 barrels a day, and that, of course, is sending the oil price downwards. Energy, of course, is still a big cost for everybody, and I was reading this week that the National Grid had made big profits. And no surprise, there is there. They've made big profits because, well, they're charging high prices and nobody seems to be too concerned about it because they talk about future investment. That's always a good way to put off charging fair prices, isn't it? By talking up investment. Governments are afraid that investment will dry up if they interfere, and sometimes they should interfere to ensure that fair deals are being made.

Tony Hines: 4:52

Well, trade policy in the United States has been chaos since Trump came to power this year and we've had chaos causing disruption in supply chains and causing disruption to the world trading system. And that's what happens when a tariff tyrant like trump gets in and is like a baby, throwing stuff around in his cart or his pram and just not knowing what's going to happen anywhere. Because in this situation in world trade, that's what trump is he's like a chaotic child that doesn't know what he's meddling with, disturbing all those systems that are in place through the world trade organization and from his chaotic 145 percent worth of tariffs down to this 30 percent worth of tariffs on China, with a 90-day pause. It's a temporary thing. The uncertainty, the disruption, it's just madness. It's like opening Pandora's box and causing pandemonium. And, of course, I have to agree with the boss when he talks about incompetence and corruption. That's what he said at the Manchester event this week, and is he right? Bruce Springsteen and the E Street Boys really know what they're talking about. I'd like to see you in charge of trade, bruce. I think you'd do much better.

Tony Hines: 6:32

The Trump administration have caused higher prices. The bills will go from 40% to 70% All those things coming down the track right now. In retail stores they're already going up in price. That means households, working people paying a lot more for the goods in the united states and, of course, a chaotic world trading system, and this week walmart have confirmed that to be exactly the case. They said the prices will be going up within a month and trade experts also agree it will be a big problem for basic items and it will be a problem for electric goods, clothing, footwear all kinds of goods that are consumed at volume in the United States, which is all made in China, and when we look at the multiple layers of tariffs, they're a big problem for basic items such as backpacks, children's clothing, and you're talking about rates of over 70%, according to Dan Anthony, president at Trade Partnership Worldwide, and this is because tariffs are layered. We've got 17.6% tariffs Section 301 tariffs related to unfair trade practices in addition of 25% 30% in tariffs on Chinese goods not included in the pause, 20% fentanyl-related tariffs and 10% reciprocal tariffs. So you've got all those tariffs laid on top of each other, layer on layer on layer, and he's caused chaos all the way through because he's ramped up and changed the rates on various classes of goods right through the system.

Tony Hines: 8:22

Since what was it called that day? Liberation Day? It was tie everyone down in chains day, disrupt supply chains that's what it was. Tie everyone down in chains day, disrupt supply chains that's what it was. And these retailers are trying to navigate this difficult situation. Walmart's top three countries where shipments come from are china 34 percent, india 26 percent and Hong Kong nearly 11%. Hong Kong, of course, is just China, so you've got 45% coming from Hong Kong. China as well as China, and many importers are now having to deal with a range of tariffs. It's such a complex system with the layer on layer situation.

Tony Hines: 9:11

But looking at 40% of tariffs on imported goods from China, up to 70%, and if we take just a couple of products here, if we look at sweaters coming in from China, they're forty six and a half percent tariffs and that's made up of a sixteen and a half percent most favored nation, plus the fentanyl and reciprocal tariffs. Then you've got swimsuits coming from china a tariff of 55 percent, 25 percent for most favored nation, plus the fentanyl and reciprocal tariffs and children's clothing too, coming, coming in at 41.5%. So you've got all these things disrupting supply chains and adding cost to everyday prices. So when you see the prices go up in the stores near you, it's all down to Trump. Don't let him tell you any different. It's that man. And then we've got footwear shoes coming in. There's 650 million dollars worth of shoes that come from china and even before the 30 tariffs kicked in, some companies were already paying 25.

Tony Hines: 10:25

So they're paying a lot of money to bring these goods into the united states and it's unsustainable For small businesses, for medium-sized businesses, it could kill them. For the big businesses, they'll navigate the waters, but it'll be tricky and it'll be dicey. And this is all caused by the President of the United States acting irresponsibly, states acting irresponsibly. So, tariff, trump, tyranny are they the same word? Well, they might be.

Tony Hines: 11:05

Now, one of the reasons that President Trump is so keen on tariffs, of course, was as a revenue generator. He said they were going to make riches from tariffs. Well, there's some truth in that, in the sense that the American government's receipts from customs duties in April were $16.3 billion, compared to April 24, when the receipts were just $7.1 billion. But remember who's paying the tariffs? It might be making the government rich, but it's making the people of America poorer because they're the ones paying the tariffs. And you might say, well, it's corporate America. Well, it is corporate America in the first instance. So companies are paying the tariffs, and some of those companies may well be international companies and so they're not purely American companies. But, of course, the costs eventually get passed on through prices, and it's you, the general public, who will be paying those costs.

Tony Hines: 12:25

Now, lots of big businesses, global businesses that trade in the United States, will be tearing up their profit forecasts for the year ahead, and I can hear you say why is that the case? Well, it's tariffs. They don't know what's happening. There's great uncertainty in the marketplace, and the tariffs are causing problems, and no more so than in the automobile market, where both Honda and Nissan have basically said they don't know what the year ahead is going to look like. Now that uncertainty isn't good for business and it isn't good for consumers either. They're expecting hits, and the Japanese car makers have factories in America too, and they produce vehicles in Mexico that they sell in the US, which are all hit by Donald Trump's tariff regime. They announced this week that it could affect 20,000 jobs about 15% of its global workforce and they might have to close 7 of 17 plants in total.

Tony Hines: 13:47

So bad news for the car industry, but how many others that haven't come out and said anything yet are in the same perilous terrain? Well, quite a few, I should think. Foxconn, of course, is another company that manufactures iPhones. They contract manufacture and they assemble iPhones in China and of course course, china means tariffs and they were also building a factory in Mexico to produce NVIDIA's GB200, bringing together different units of production to make superchips, the microchips that make our electronics work. But of course, the outlook for them is not good and uncertain because of tariffs, and when you're making major investments. That's definitely not good news. So are they? Another company that's also in difficulty? The pharmaceutical industry is also in the headlights because when Trump signed his executive order to force prices downwards in pharmaceuticals between 59% and 90%, it's forcing them to reduce their profit margins, and that means, perhaps, problems in investing in the pharmaceutical development programs.

Tony Hines: 15:42

Well, president Trump visited the Middle East this week. He was on a whistle-stop tour, and what was he there for? We weren't quite sure were we? But it was to do deals worth 142 billion us dollars, most of them in arms defense equipment, for saudi arabia and qatar agreed to buy 210 boeing aircraft. One of those, of course, is going to Donald Trump, isn't it? Is that a little gift for that order, possibly?

Tony Hines: 16:26

And the United Arab Emirates is already an artificial intelligence hub and they've been striking deals on advanced chips. Saudi Arabia also announced a state-backed company to develop artificial intelligence infrastructure and data centres. It's called Humane Interesting name, isn't it? And they'll own AI assets and they'll invest in them, so it's a kind of holding company for all these investments in artificial intelligence. They're going to focus on large language models. That's all the stuff that runs those chat, gpt technologies that we're all now familiar with Strange to think that we are familiar with them, and they've only been around in general use for about 18 months or so two years most. They're going to develop an Arabic model, so that sounds interesting. And NVIDIA and AMD will be supplying state-of-the-art chips. So that was Trump's visit to the Middle East.

Tony Hines: 17:44

Well, don't forget to come along and subscribe to Chain Reaction. You'll be first to know when new episodes drop, and that's always good, isn't it? You'll be first, first, first. So it'd be great if you could do that. If you're not already subscribed, you may well be. Well, that's it for this week. I hope you've enjoyed Chain Reaction and I hope you've learned something you didn't know before listening. I'll be back with another episode of Chain Reaction next week, and I hope you'll join me then. In the meantime, you can always stop by and listen to previous episodes of Chain Reaction. We've got over 300 episodes. We've got listeners in 95 countries, 1131 cities over 6 continents, and I think it's now over 11,000 listeners that we have. So come and join us then. Oh, and this week I did also learn that we are a top supply chain management podcast in Feedspot. So until next time, I'm Tony Hines. I'm signing off, take care Bye, for now. You've been listening to the chain reaction podcast, written, presented and produced by Tony Hines.