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Matt Katz: It's The Brian Lehrer Show on WNYC. I'm Matt Katz, former reporter here at WNYC. I'm now running a news and culture podcast in Philadelphia, called City Cast Philly, and I'm filling in for Brian today. Coming up on today's show, for the first hour or so, we're going to talk about President Trump's tariffs and their effect on the economy so far both nationally and locally. For the local angle, WNYC and Gothamist reporter, Arun Venugopal, will share his reporting on how a drop in tourists visiting the city is affecting businesses. The experts he talked to blame tariffs, but also President Trump's insults to Canada and the ramped up deportation operation. We'll get into that, and we'll want to hear from any of you listening, who work in the tourism industry here. Plus, we'll talk about the quest for immortality. This has become a growing obsession for a certain class of extremely wealthy people. The New Yorker writer, Tad Friend, looks into it and the industry forming around the longevity obsession. We'll wrap up today's show with the wordsmith Martha Barnette, who co-hosts The Public Radio show, A Way with Words. She'll talk to us about the regional roots of words and where some of her favorite words come from.

First, we turn to President Donald Trump's tariffs. After many delays, many negotiations, most of Trump's reciprocal tariffs, "reciprocal tariffs," went to effect last Thursday, August 7th. The tariffs set a 15% rate on most countries, though countries like Brazil, Myanmar, and India are subject to higher rates. According to The Budget Lab at Yale, the tariffs are at their highest level since 1933. So far, the US government has collected over $150 billion, billion with a B, in revenue on those foreign imports, but the broader economic picture is more mixed.

The Labor Department reported a disappointing 73,000 jobs in July, which prompted the president to fire his commissioner of labor statistics. That happened on August 1st. Also in the news, inflationary pressures are creeping upwards and home values are starting to decline. Joining us to break down the latest with Trump's tariffs and what the effect might be on Americans' pocketbooks, we're going to talk to Eric Levitz, senior correspondent at Vox. Eric, welcome back to WNYC.

Eric Levitz: Yes, thanks for having me.

Matt Katz: For listeners, might be scratching their heads, we've been hearing about tariffs since April. What happened on Thursday? What was the news related to tariffs on Thursday?

Eric Levitz: Yes. I think the short of it is that Trump went through with a really large portion, but not all of the really ambitious, sweeping tariffs on pretty much every foreign country that he had announced on April 1st, and which had initially triggered a market panic because it was so outside the bounds of what Wall Street's bear case on what Trump was going to do on trade was. What kind of kept it from being quite so disturbing to markets now is that the rates on major US trade partners are biggest ones, including China, which had previously been set at a level that would basically choke off all trade between the world's two largest economies.

Those were much more moderate, and I think the China situation is still indeterminate. Nonetheless, we have at least 15% tariffs on pretty much every country. As you said, some countries, including nations that really-- we have a 40% tariff on Myanmar, which is motivated by the fact that Myanmar has a large trade surplus with the United States. Trump views this as inherently unfair, but it really doesn't make much sense because the people of that country are quite poor and they simply cannot afford to buy lots of US goods. Anyway, we have a pretty irrational policy in place.

Also, one that is, again, there was a time during the campaign last year when Trump was talking about a 10% across the board tariff where his current Treasury Secretary, Scott Bessent, kind of assured investors and the public that this was obviously a negotiating tactic and a 10% across the board tariff would never happen. Here we are with 15%.

Matt Katz: Wow. Then you said China's tariff rate is indeterminate at the moment?

Eric Levitz: I believe that-- I mean, we definitely still have tariffs in place on them, but I think that there are ongoing negotiations. I don't think we're at a total equilibrium with them yet.

Matt Katz: You reported back in April that when a business costs rise, it typically tries to compensate by raising prices. I mentioned in the open, $152 billion. Is that coming out of the pockets of American consumers? Who's ultimately paying for this?

Eric Levitz: Yes, in most cases, tariffs are passed on to consumers in the form of higher prices. There can be exceptional situations in which a company and a foreign exporter is so concerned with maintaining their current market share in the United States that they decide to swallow the loss from the tariffs, keep prices the same, and accept lower profits. Then in that case, the foreign company is kind of bearing the burden of it, but that's just based on all the studies that we have, that's just not the case in the vast majority. The vast majority of the time that price is going to be put on consumers and essentially function as a national sales tax restricted to foreign goods.

Matt Katz: When, maybe already, will consumers feel that if there are indeed going to be de facto taxed here?

Eric Levitz: Yes. That's one of the interesting aspects of the current situation, is that already the public has kind of turned against the tariffs. Trump's approval rating on trade is quite bad, as well as his approval rating on inflation. At the same time, to this point, consumers have been fairly largely sheltered from the full brunt of the tariffs. We did see that prices increased in July, and so core inflation, which is prices except for energy and food, which tend to vary randomly depending on world market conditions. Those prices were up 2.8% over the past 12 months, which is higher than in June when it was 2.6.

Anyway, we've seen a creep up in prices, but before Trump's tariffs went into place, major US retailers just went on a buying spree and stocked up on pre-tariff rate goods and filled their warehouses with those so that they would have this to go on. That basically has kept prices restricted and tamed a bit for consumers because the goods they've currently been buying were purchased by the businesses at the lower tariff rates or no tariff rates that preceded Trump's policy. In addition to that, as you mentioned, Thursday, we had a whole bunch of new tariffs go into effect and he's planning subsequent tariffs on various goods such as pharmaceuticals.

The effect of Trump's tariffs, really, it hasn't actually been felt that much yet, even as it is generating revenue. So I think that we could see this become a much more salient political issue than even it currently is in the coming months if Trump stays this course.

Matt Katz: Listeners, we can take your questions or comments on the tariffs that went into effect last Thursday. Maybe you work for a business that, like Eric said, stockpiled consumer goods ahead of the Trump presidency, anticipation of the tariffs. If so, how's that going? Maybe your business has been eating the cost so far. How much longer do you anticipate that happening? Maybe you're a consumer and you've already noticed the price of certain products going up already. Might that have something to do with the tariffs? Are you therefore strategizing in any way in terms of your consumer habits?

Any other questions you may have for our guest, give us a call, 212-433-WNYC, 212-433-9692. You can also shoot us a text. Eric, you wrote that future presidents may largely preserve Trump's tariffs, because they're generating a lot of revenue for the US government. You already kind of referenced it as something of a tax. Why do you think that's the case? It's just going to be too hard to go away from? Future presidents might appreciate the revenue?

Eric Levitz: Yes. I'm not saying that that is definitely going to happen. I think my view is that for a policy that is, I think, objectively this dysfunctional at every other aim that it has, we've seen a decline so far in manufacturing employment since Trump put the tariffs in place, likely because his tariffs increase the costs of making goods in the United States, because you need to pay this large tax on any steel, aluminum, copper, these various inputs to industrial production if you buy them outside the United States. The US doesn't produce enough of this stuff, so you fundamentally need to. So that actually gives you incentive to locate your production in Canada.

Anyhow, so it's not really working on the manufacturing front. It's pushing up consumer prices. It appears to be implicated in the slowdown in growth and job growth, but what it is doing very well is generating revenue for the US government. The Yale Budget Lab thinks that it's on pace to raise over $2 trillion over the coming decade. This is in a context where the US Congress really has lost its will to ever raise taxes in a broad way. Since the turn of the millennium, we've had the George W. Bush tax cuts, which Barack Obama preserved the bulk of that. He allowed those tax cuts to expire for the wealthy, the very wealthy, but everyone under $400,000 stuck with the lower rates.

Trump comes in, he cuts taxes again. Once again, Democrats adopt the position that the tax cuts for people earning less than $400,000 should remain in place. The bar for what qualifies as a normal rate of taxation in bipartisan opinion keeps on falling lower. Now, we have both parties agreeing that there should be no tax on tips. This is a situation in which Congress is really averse to ever voting to raise taxes on anyone but the super rich. Even then, that's only on the table if Democrats control the entire government, and the moderates in the party will put a little bit of a cap on how much they can raise taxes on corporations and the wealthy.

We're in the situation where there's been this decades long struggle to figure out how to find the political will to raise taxes, given that the cost of Medicare and Social Security are rapidly increasing as the baby boom generation ages and healthcare costs go up. Now, Trump has suddenly revealed, potentially, we need to wait to see what the Supreme Court says, but he has apparently revealed that actually, our system has this loophole where you can do massive broad-based taxes on the middle class without anyone in Congress having to take a difficult vote, as long as we do it in the form of a sales tax on foreign goods.

There's almost no limit to how much you can raise taxes through this means. The president can do it without anyone else giving their approval. This is an extraordinary assertion of power that would seem to undermine really fundamental constitutional principles. The idea that Congress has the power of the purse is pretty foundational to how we think about how our government works, but Trump has asserted this authority and it's being challenged in the courts right now, and we'll see what happens with that. If it does stay in place, there's a temptation to use that lever because it's the one form of taxation where you don't need Congress.

Matt Katz: Yes, you mentioned it's in the courts. July 31st, a federal appeals court heard oral arguments on whether Trump's tariffs are illegal and should be struck down. That's the case that's being made. That Congress has this power here, right? In that case?

Eric Levitz: Yes. The case concerns the International Emergency Economic Emergency Act, which is the authority under which Trump has done his reciprocal tariffs. This law basically says the president, in extraordinary conditions, in the context of an emergency can, without Congress, impose tariffs. The argument from the Trump administration is that the very existence of the national trade deficit is an emergency, and therefore, basically any tariffs he wants to do are a response to an emergency, and therefore, he has unlimited power in this domain.

A lot of legal analysts are pretty skeptical of that argument. One court has already struck it down. It's being appealed. The one thing I would say is that not all of Trump's tariffs fall under this authority. Some fall under what's called, I think, Section 232, and some other trade authorities that he would still have even if the courts ruled against him. The question is how much he could redo, reclassify under those other authorities, because there's a reason he reached for the emergency one.

It requires less process, less bureaucratic red tape. You're supposed to do an investigation with a lot of these other authorities and uncover unfair trade practices and then respond, et cetera. The emergency one just lets him do whatever he wants at will. That's what's really under challenge.

Matt Katz: I believe we have someone involved in that case calling in. Chloe in Manhattan. Hi, Chloe, thanks for calling into The Brian Lehrer Show.

Chloe: Hi, there. Yes, we are the lead plaintiff in this case. V.O.S. Selections v. Trump. It's a family company. It's my dad and me. We are V.O.S. Selections.

Matt Katz: Wow. Tell me about your company.

Chloe: We are a wine and spirits and non-alcoholic importer based in Manhattan. We are going into our 40th year of business. We work with small family producers from all over the world. We are importing products from something like 16 countries now. We're a small business, so we don't have the cash flow needed to pay for these tariffs at the port. In New York state, we have to post our prices a month in advance. I have been sitting down and repricing things with all of these changes, because we simply cannot absorb everything. All of the costs involved with the tariffs.

Matt Katz: Can you give me an example of how costs have changed? Do you have a specific example of what maybe a bottle of liquor then and now might cost? Maybe [crosstalk]-

Chloe: Yes, I mean, you're talking about-- sure. Because the other thing that's going on is that the value of the dollar has gone down. When you have a worse exchange rate with the euro, and on top of that you have these new 15% tariffs, you are looking at an increase of about 30%. That all simply cannot be swallowed. It needs to be taken into account. It's really on a case by case basis. We have really wonderful partners who will say, "If you can swallow half the cost, we'll swallow half the cost and we'll try to make this work." That can only hold on for so long. Yes, something like a $15 bottle does become over $20 on the shelf.

Matt Katz: The partners you're talking about sharing the cost, that's the retailers?

Chloe: No, that is our wonderful partners in Europe. For example, winemakers who say, "We still want to get our Chianti to be on the shelf at the price point that it was before, and so we will work with you to see how we can make that happen. Even though we're not at fault here in any way and we're just trying to make it work." We're a network of small businesses trying to survive.

Matt Katz: From your perspective, the impact of this will be felt by the consumers, the people purchasing the bottle of wine, yourself, the people importing the wine, and then the makers as well. So it's kind of spread around.

Chloe: Absolutely. It's also impacting restaurants and stores. Restaurants are having their margins squeezed every which way, and those are our customers. So, when you are looking at a wide choice of Pinot Grigios, you will try to keep finding something cheaper and cheaper and cheaper, because your margins are getting squeezed, but at a certain point, you can't swallow that anymore either. So everyone is hurting here.

Matt Katz: Are you making the argument in court that this is illegal? That the president does not have the unilateral power to do this without Congressional approval?

Chloe: Correct. Yes, I clearly am not a fan of tariffs, but I think that if tariffs are applied in very specific, smart ways, they can be a very useful tool. Let's not forget that the American Revolution was fought because the colonists felt that King George was imposing illegal tariffs, unfair taxation. That led to the Boston Tea Party. That led to the American Revolution. We want fair taxation. We want tariffs that have been levied by Congress, that are clearly outlined, explained, and say, "This is why we are doing this." Which is what all of the other tariff rules that are in place do say.

Congress can give the president the right to enact tariffs under specific guidelines, but clearly, the president wants to do his own thing, and so he is using IEEPA to enact these tariffs. That's the part where we disagree.

Matt Katz: Chloe, before I let you go, I just wanted to see if our guest, Eric Levitz, from Vox, do you have any questions for Chloe, who's involved in this case, who owns a business that is gravely affected by these tariffs?

Eric Levitz: Yes, I don't know. I'm curious, were you at the oral arguments? How did they go, from your perspective?

Chloe: I mean, it's hard to say. I'm no legal expert at all, but it's certainly fascinating to hear what the judges point to, what they want to pick on and ask questions about. I'm not here to speculate, I'm very-- I'm curious, just as everybody else is, to see what happens, but I felt that the questions were very good, and I'm really proud of our legal team.

Matt Katz: Thank you very much for calling in, Chloe. Thanks for sharing your perspective. Best of luck with wherever this goes. Let's stay in the phone lines for a minute. Rick, in Astoria, I understand you're also a small business owner.

Rick: Yes. Hi, I'm a retailer. I feel Chloe's pain, because that pain is going to get ended up passed down to me. My business is specialty groceries. I sell cheese and charcuterie, beer, we serve food. We've been trying to hold back from raising prices as long as we possibly could. The earlier tariffs that were put into place this year, we swallowed that, but we're at a point right now where we can't do it anymore. Our margins are already thin to begin with. Costs are up across the board. Doesn't matter what we're talking about. Labor, cost of goods, power from ConEd, but now I'm looking at 39% increase in goods coming in from Switzerland.

As you can imagine, a cheese retailer, a big chunk of our cheese case is products coming in from Switzerland, but there's a lot of other products too that I could point to. The biggest issue is that these tariffs are being applied indiscriminately. There's no rhyme or reason. Anyone that thinks that a tariff is going to be swallowed by the producer or the country that it's being exported from is deluding themselves, or they're part of the MAGA base and they're listening to everything that's being fed down their throats. Our Congress is feckless. They do absolutely nothing, for fear of our dear leader.

It's going to create a real economic problem down the road. I think it'll be interesting to see, now that the data collection, that they fired the person who's in charge of collecting data-

Matt Katz: Yes, we're going to get into that. Yes, for sure.

Rick: -where the CPI ends up without having accurate data. I'm sure those numbers are going to be glossed over to the point where no one's going to have any faith in it at all. It's a bad situation.

Matt Katz: Rick, let me ask you a question. Let me ask you a question. Have you passed along these costs yet to the people shopping at your store?

Rick: We've had to pass some of those costs on, yes. Some of the additional costs on, yes.

Matt Katz: Do you have a specific item that comes to mind that maybe raised by a buck or two or more?

Rick: Well, I wouldn't say it's a buck or two. It's really more by percentages. Anything coming in from the EU, for instance, when those EU tariffs kicked in. We have to cherry pick where we're raising our prices. We try to offer products from the United States as much as we can, but you know what? Cheese producing, as great as it is in the United States right now, we can't replace every single cheese with a like product from something that we get from overseas. It just doesn't work that way. The argument that we're going to bring manufacturing back, and we're going to replace all of that here in the United States is just not realistic. That's the biggest issue right now.

Matt Katz: Thank you, Rick. Appreciate you calling in. Wish you the best. We need to take a short break. When we're back, more of your calls on tariffs and the economy. Stay with us.

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Matt Katz: This is The Brian Lehrer Show, I'm Matt Katz, filling in for Brian today. My guest is Eric Levitz, senior correspondent at Vox. We're taking your comments, your questions on Trump's tariffs newly imposed since last Thursday. You can give us a call or send us a text at 212-433-WNYC. That's 212-433-9692. Eric, we got a text in. "Both parties bow to a neoliberal consensus that prefers regressive taxation over progressive tariffs. Are consumption taxes totally regressive?" Eric, can you give us a little explainer on that? What is the argument that the texter is trying to make? Are tariffs regressive?

Eric Levitz: Sure. Yes. I agree with part of the texter's comment and disagree with part of it. I think that the point specifically about the nature of tariffs and how Trump's policy has altered the distribution of the tax burden is absolutely correct. What we have seen since Trump took office, much belying his populist rhetoric, is that he has enacted tax cuts that they have some benefit for ordinary people, but it's very small. The disproportionate share of the benefits of the Trump tax cuts go to the very wealthy. There are certain tax cuts in there that are exclusively for the wealthy. Raising the threshold at which the estate tax cuts in, et cetera.

Meanwhile, tariffs are what is considered a regressive tax, because the rate on the foreign goods, first of all, is the same for working people, working class people and the rich. It's 15% from the EU no matter what your income is. Whereas an income tax is calibrated to your income level. Then the other aspect is that less affluent people spend a higher share of their incomes on goods. So it is more burdensome from the perspective of the working class taxpayer than the wealthy taxpayer who is devoting a larger share of their income to savings, first of all, but then also often purchasing more services that are less tariff sensitive.

It is more burdensome for someone who is really just buying the necessities, which often consist of these physical objects that are going to be tariffed. So, yes, that's the aspect that I agree with from the texter. I don't think it's the case that there's this bipartisan consensus for more aggressive taxation. Like I said, for better or worse, from my perspective, in an ideal world, we would have a Democratic Party that would both have the will internally and in the political will from the country to impose broad-based taxes to fund, really, a comprehensive welfare state. That's my lefty kind of vision of things.

In our world, the Democratic Party, like I said, has very little appetite for increasing taxes on middle class people. They have consistently made permanent Republican tax cuts for the middle class while seeking to raise taxes on the super rich. Whatever one's complaints about the Democratic Party, and there's lots of legitimate ones, I don't think it's the case that it supports a more regressive distribution of tax burdens.

Matt Katz: How did we get here? That Democrats are as tax averse as you're arguing than the Republicans? That they are willing to, maybe in the future, just go along with these tariffs as sort of a backdoor way of getting that revenue?

Eric Levitz: Yes. I don't think that there's any really simple answer, but it's true that before Ronald Reagan's election and his really large tax cuts, there was actually not a sense among presidents in either party that big unfunded tax cuts were a political winner. There was a sense that people really cared about the deficit and that people understood that a lot of these tax cuts would mainly benefit the rich. So, this wasn't considered a real obvious political winner, but over the past 40 years, there's been a normalization of ever lower tax rates and also a broad-based loss of faith in our institutions in general and the government in particular.

Even as public opinion is very complicated, people think that healthcare is the federal government's responsibility, and have complicated feelings, but generally want everybody covered. They want the government to do a decent amount of things. Nonetheless, they don't trust the government very much. So, the proposition that I am going to take a larger share of your paycheck, but I'm going to do something with that, that is going to benefit you and you're going to like and it's going to be worth it for us all to pay in to get this new thing, that's been a increasingly difficult argument for Democrats to win.

People don't trust the government enough to want to forfeit part of their paycheck to it. Then again, we live in this context of really high income inequality, so there's a sense that, "Well, until the rich are paying everything that they owe, why should it fall on me?" Which in many cases is a legitimate argument. I think that it gets a little more complicated when we're talking about the upper middle class. The fact that Democrats have landed on the middle class ends at $400,000 a year. That seems a little bit extreme. That potentially people in the six figure range could be paying a little bit more so we can sustain these government services and expand them.

Matt Katz: Let's head back to the phone lines. Christian in Keansburg, New Jersey. Hey, there, Christian, thanks for calling in.

Christian: Hi, there. Yes. I have heard for a long time that the moment that there will be a realization about Trump and his agenda, and how bad it is for the country and the world, it would come from the economy. That ultimately, all the civil rights and anti-democracy stuff doesn't sway folks that who are in his cult of personality bubble, but that the economy, if it starts affecting their pocketbook, that they would have no choice but to see the reality. Yet, I recently had the tough conversation with my family after 10 years of tolerating our difference of politics. I had the conversation with them that I kind of feel uncomfortable sitting at a table with them.

It was about immigration. It was specifically about, because of immigration. Their response back, they didn't defend the immigration stuff, the ICE stuff, the masked storm troopers. They didn't defend that. Their defense was, "We voted for him for other reasons. Enjoy the cheap gas." There is this belief that the economy is doing well, that prices are down, that Trump is to thank for that. So I just don't know that there's going to be a moment when these folks see their income or the price of goods affected and they're like, "Son of a gun, it turns out he wasn't great for the economy."

Similarly, they're running ads right now about the Big Beautiful Bill. It's, "We gave everyone a tax cut." Which is true, but as you just explained, it more so benefits people in higher income brackets. The tax cut, and then a third argument I heard, last thing I'll say, a third argument I heard-

Matt Katz: Yes, sure.

Christian: -recently from an Uber driver, just kind of talking about this, is that Trump needs more time. That in six months you can't save, so we got to give him time, we got to give him time. Perhaps more than one term, which we may bring him a third term, so that he can-- because in four years it's not enough to save the economy. I don't know that these economic arguments are penetrating.

Matt Katz: Thank you very much, Christian. Appreciate all that. I wish you best in terms of dealing with your family and trying to come to some political consensus there. Eric, give us some information just about the other economic factor that might be affecting people, and then maybe what that means politically. You wrote that last month inflation ticked up while hiring slowed, and both job losses and price increases were concentrated in trade-sensitive sectors. Can you just take us one step further? What are the numbers showing as it relates to inflation, and are there any signs that these economic indicators, as Christian had talked about, could be affecting, hurting Trump politically?

Eric Levitz: Yes. Like you said, prices have ticked up, especially over the past couple months. I think that-- and we're already seeing, I just pulled up Trump's-- the website RealClearPolitics, aggregates all the polls of Trump's approval specifically on inflation. The spread on that right now is 59.3% disapproved, 39% approved. He is 20 points underwater on inflation. This is much lower than his overall job approval. Already, there's a significant portion of the public that still says they support Trump, but are upset about how he's handling inflation, presumably because he is directly increasing prices by fiat.

I think that in terms of what the political effect of this is going to be, we don't know. I think certainly a significant portion of Trump's base is really firmly with him and is probably going to find other culprits to blame if there were a negative-- if there were a real economic crisis. At the same time, I think we got to be clear-eyed about the fact that so far, Americans have experienced less inflation under Trump than they did under Biden. When, for reasons that I don't fully blame on the administration, but rather on the post-pandemic situation. Nonetheless, they presided over the highest inflation in four decades. I think it hit 9% at one point. I think that is for-

Matt Katz: The Biden administration did. Yes.

Eric Levitz: Yes, yes. I think that, for a lot of people, has reset their understanding, and they look at Trump's first term, remember full employment, relatively full employment and stable prices, and think that Mr. Business, Mr. Deals, who understands the economy would bring that back. I think that was a big sentiment last year. I think that a lot of people have been disillusioned, as that inflation poll suggests, but others having a little more patience. I think it's just a big question where this goes. I think, again, last Thursday was when a lot of the largest tariffs went into effect.

Retailers are just now starting to really pass on the costs, so it depends on where this goes. I mean, I think if we see slowing growth combined with rising prices, a kind of stagflation situation, I think we're going to see a bit of erosion in Trump's political standing. If he can continue this current situation with high stock markets, slow growth, but not a recession, price increases, but not huge ones, maybe he can kind of get by.

Matt Katz: Speaking of consumer prices going up, we do have an anecdotal experience from a texter. "We visited IKEA two days ago, we used to shop there all the time, and were amazed at the low cost of their goods, but on our recent visit, we were amazed to find that everything was so much more expensive. According to an employee, there was a recent repricing a couple of months ago, and they were planning another repricing in a couple of weeks." Again, consumer prices rose 2.7% in July, compared to a year ago. That is a lower rate, as you mentioned, than during the Biden administration, but might be too early to tell the full scope of inflation and price increases.

Before I let you go, Eric, I did want to touch on jobs. Labor Department showed only 73,000 jobs were added to the economy in July. President Trump responded to that by firing his Commissioner of Labor Statistics, saying the data was manipulated. Are we going to get accurate data going forward about jobs and other economic indicators from this administration?

Eric Levitz: I wish I could say this with-

Matt Katz: Are you worried about that?

Eric Levitz: -confidence, but I do think that my understanding-- I don't have perfect insight into these bureaucracies. My understanding is that it would be very difficult to engineer this data, because of the amount-- the number of different civil servants who have chosen to dedicate their lives to the production of accurate statistics. That you would need to corrupt a lot of people, or else have someone at the top that is willing to risk people going to the press, that the boss has just thrown out the numbers.

It's a tricky situation for the agencies and the heads of them now, because obviously, there has been a signal sent that negative information that Trump does not want to see is potentially producing-- that is potentially a fireable offense. At the same time, it's just-- formulating a conspiracy to falsify the numbers is going to be a real undertaking, and I'm not sure that Trump can pull it off.

Matt Katz: You need accurate numbers from the government, I imagine, to do your own reporting.

Eric Levitz: Yes, my reporting is very dependent on it. The behavior of investors, market actors, businesses, take cues from the government data. There are some things where there are private alternatives that people would switch to. ADP does jobs numbers that are less authoritative, but there are private sector equivalents for a lot of these things that people would just turn to if the system completely broke down, but it would be a really costly institutional failure if that were to happen.

Matt Katz: Eric, we're almost out of time, but I did want to get your take on a story that was breaking this morning. Several outlets reported about a very unusual deal that Trump just struck with Nvidia. The New York Times reports Nvidia and Advanced Micro Devices are "expected to pay the United States 15% of the money that they take in from selling artificial intelligence chips to China." This move, according to The Times, essentially makes the federal government a partner in Nvidia's business in China. Did you read up on this this morning? Can you give us any context, just about how unusual this might be?

Eric Levitz: Yes. I mean, it is really bizarre. I think that in the business press that I've read, people are struggling to find any precedent for it. I think that it kind of is funny to me, because I remember back during the Obama administration, in the 2012 campaign, a really top theme among Republicans was the idea that we were getting creeping crony capitalism partly maybe tied to attacks on Obama funding green energy or whatever, but the idea that the president is picking winners and losers and favoring certain industries and businesses for political reasons.

That this was outrageous and antithetical to conservatism, and now what the Nvidia deal represents, along with a lot of other Trump's actions, is this personalist management of the economy where Trump uses the powers of his office to extort individual businesses for officially and, in many cases, for ostensible favors to the US government, but often for favors to Trump personally. I think this has been most disturbing in his administration's posture towards Paramount and CBS News, where there's been a sense that if they want their desired merger to go through, that 60 Minutes needs to be more accommodative of what Trump wants to hear.

This is really a dangerous kind of situation. He's replicated this with Apple, basically allowing them to maintain their access to semiconductors in exchange for a pledge to invest in the United States, but this, with actually, like, kind of a tax imposed on Nvidia sales in China in exchange for the right to export their semiconductors, seems like an escalation of this approach to economic policy. It is a pretty concerning one, particularly with a figure like Trump, who you don't necessarily trust all of his deals to be strictly in the interests of Americans writ large, rather than the administration's political interests, or any other interests that may be relevant.

Matt Katz: We don't know the full scope of the deal just yet. It's just breaking. Thank you for all of that context and for all the other reporting on these issues. Eric Levitz is a senior correspondent at Vox. Really appreciate you coming on the show today and explaining all this stuff to us.

Eric Levitz: Excellent. Yes, thanks for having me.

 

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