Tangle - The latest on tariffs and the economy.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Thoughts on being a dad.

Hey — Isaac here. I’m six weeks into fatherhood and I’ve been writing a lot through the entire experience, so I figured tomorrow I’d share some of what I’ve learned and experienced with the Tangle audience. I’ve put together a personal narrative and, of course, put on my Tangle hat for some reflections on how the last year has impacted my view on some big political issues. So keep an eye out for that tomorrow.

Quick hits.

1. President Donald Trump issued a “last warning” to Hamas, demanding the group release all remaining hostages immediately. Trump said he is “sending Israel everything it needs to finish the job” if Hamas does not comply. (The warning) Separately, the Trump administration has reportedly held direct talks with Hamas about the release of U.S. hostages held in Gaza and a broader deal to end the Israel-Hamas war. (The report)
2. A federal judge temporarily blocked the Trump administration from imposing a 15% cap on research funding from the National Institutes of Health while lawsuits against the administration’s directive proceed. (The ruling) Separately, the Department of Veterans Affairs reportedly plans to cut over 80,000 jobs in an effort to return to 2019 staffing levels. (The cuts)
3. The Justice Department announced charges against 12 Chinese citizens in an alleged cyberespionage scheme that targeted United States contractors, journalists, critics and government agencies, including the Treasury Department. (The charges)
4. The Senate voted 52-46 to confirm Todd Blanche as deputy attorney general. Blanche is President Trump's former defense attorney. (The confirmation)
5. Rep. Sylvester Turner (D-TX) passed away at age 70 from “enduring health complications.” Turner, a longtime Texas state representative, was two months into his first term in the House. (The death)

Today's topic.

Tariffs and the latest economic news. Just after midnight on Tuesday, President Donald Trump imposed 25% tariffs on all Mexican and Canadian imports — with a lower 10% tariff on Canadian energy imports — and doubled the existing tariff on Chinese products to 20%. Shortly thereafter, China imposed up to 15% tariffs on some U.S. imports, and Canada issued a 25% levy. Mexican President Claudia Sheinbaum said that Mexico would issue tariffs on U.S. goods by this Sunday but did not offer specifics. 

BREAKING: Minutes before publication, President Trump announced he would be pausing tariffs on all Mexican imports that fall under the United States–Mexico–Canada agreement until April 2. You can read the announcement here.

Backup: Tariffs (or duties) are levies placed on foreign goods paid by domestic importers to Customs and Border Patrol at ports of entry. In his first term, President Trump issued tariffs on select goods from China, which President Joe Biden left in place, as well as steel and aluminum imports from most countries. In February, President Trump instituted 10% tariffs on Chinese imports and 25% duties on Mexican and Canadian products (except oil, which was taxed at 10%). However, the tariffs on Canada and Mexico were paused for one month after the countries recommitted to existing promises to station troops at their respective borders with the U.S. 

President Trump justified the recent duties by saying that tariffs are necessary to correct the U.S. trade deficit with the countries and to staunch the flow of fentanyl from China, Canada, and Mexico into the U.S. “It may be a little bit of an adjustment period,” Trump told Congress on Tuesday. “You have to bear with me again and this will be even better.”

"If war is what the US wants, be it a tariff war, a trade war or any other type of war, we're ready to fight till the end," China's embassy said on X. Canadian Prime Minister Justin Trudeau called the U.S. tariffs “a very dumb thing to do,” adding that “tariffs will disrupt an incredibly successful trading relationship.”

On Tuesday, Commerce Secretary Howard Lutnick said that the administration was in talks with Canada and Mexico and was willing to “meet in the middle,” suggesting further adjustments were upcoming. On Wednesday, after a conversation with the “big three” U.S. automakers Ford, General Motors and Stellantis, President Trump granted a one-month exemption on the tariffs for vehicle manufacturers. Furthermore, Agriculture Secretary Brooke Rollings suggested that the administration is considering agricultural exemptions.

The ongoing tariff decision comes amid mixed signals on the economy, stoking discussion about a possible recession. Two weeks ago, jobless claims jumped to a seasonally adjusted 242,000 and pending home sales dropped by 4.6% to their lowest level since the metric began in 2001. However, both GDP growth from the fourth quarter of fiscal year 2024 and year-over-year inflation in January matched economists’ expectations.

Markets reacted negatively to the initial tariff announcement on Tuesday, with Canada’s main stock index dropping 1.7%, the S&P 500 by 1.2%, and the Dow Jones by 1.6%. However, the markets regained much of that ground when the exemption for automakers was announced.

Below, we’ll get into what the left and right are saying about the tariffs and latest economic signals. Then, my take.

What the left is saying.

• The left worries that Trump’s policies are leading the U.S. toward a recession.
• Some say the president’s tariffs plan will reignite inflation across the economy.
• Others say the tariffs could be effective if applied differently. 

In Bloomberg, Mohamed A. El-Erian said “US recession odds are becoming unsettlingly high.”

“Several key financial indicators are already flashing yellow. The yield on 10-year Treasury bonds has fallen about 70 basis points in recent weeks, while oil prices have slipped below $70 a barrel. These moves coincide with a string of disappointing economic data releases, reflecting growing apprehension about the immediate consequences of President Donald Trump’s trade policies and public sector reforms,” El-Erian wrote. “Adding to the unease, inflation, which had shown signs of abating, is proving more stubborn than anticipated. This whiff of stagflation — that troublesome combination of stagnant growth and rapidly rising prices — raises the specter of another policy misstep by the Federal Reserve.”

“Yet, it is important to remember that recession is, at this stage, far from a foregone conclusion. Several factors offer a counterweight to these negative forces,” El-Erian said. “Lower energy prices boost the purchasing power of consumers and reduce input costs for businesses. The administration’s deregulation agenda could unleash a wave of corporate investment. And, while the short-term disruptions caused by Trump’s trade policies are undeniable, the potential for long-term productivity gains through innovation in areas such as artificial intelligence, robotics and life sciences should not be discounted.”

In MSNBC, Zeeshan Aleem wrote “Trump won the White House due to inflation. Now he's turbocharging it.”

“The biggest reason President Donald Trump won the White House again was dissatisfaction with the economy under Joe Biden. Specifically, the public’s frustration over a spike in inflation, which, even after it cooled, appeared to leave widespread, lingering resentment over the cost of everyday items at the grocery store and elsewhere. Trump has now enacted an extraordinary tariffs regime that will, by design, cause a spike in many of those items,” Aleem said. “Beyond grocery store items, tariffs could exacerbate the affordable housing crisis by making the lumber imported from Canada more expensive.”

“Trump’s use of tariffs is not only far more sweeping than anything he did during his first term; it’s the most sweeping use of tariffs by the U.S. government in about a century. The coming economic pain raises political questions: What will happen to Trump’s reputation as an effective steward of the economy as tariffs cause prices to soar and possibly induce a recession,” Aleem wrote. Trump “occasionally warned us of the hardship to come alongside his tirades against migrants and nonsense about bringing down prices. But the pain is due to arrive now.”

In The Guardian, Dustin Guastella suggested “tariffs can help US workers. But Trump’s doing them all wrong.”

Trump’s “proposed tariffs seem unlikely to improve what ails the US economy. Worse, applying tariffs as broadly as he’s proposed, and without any supplementary industrial strategy, does risk needlessly raising prices while acting like a big corporate giveaway,” Guastella said. “Yet, despite what elite economists say, tariffs can be sound, and progressive, economic policy. In fact, liberals might be surprised to learn that during his administration Joe Biden actually raised the highest tariffs in recent American history: a 100% tariff on Chinese electric vehicles. Why? Because tariffs work.”

“Trump has, for the most part, not focused on raising tariffs on particular imported goods but instead on all goods coming from certain countries… A 20% tariff on all Chinese goods might make it more expensive for Americans to continue to buy certain things from China. But nothing in that policy encourages Americans to buy American-made products,” Guastella wrote. “Trump’s steel and aluminum tariffs are closer to the mark. By making all steel imports (regardless of national origin) subject to the same tariff, the policy could succeed in making US steel comparatively cheaper for domestic buyers.”

What the right is saying.

• The right is mixed on the economic outlook, though many say the risk of a recession is far off. 
• Some argue the short-term pain of tariffs will be worth the long-term benefits.
• Others say Trump is unwisely alienating economic allies.

In The Washington Examiner, James Rogan argued “recession fears are overblown.”

“The Federal Reserve Bank of Atlanta lowered its GDPNow model of economic growth for the first quarter to a negative 1.5% annually. The Atlanta Fed’s forecast model stirred up talk of recession. One prominent economist said the economy is slowing at an alarming rate. But is it really falling into recession?” Rogan wrote. “Very importantly, on Monday, the Institute for Supply Management survey of February’s manufacturing activity said the United States economy continues to expand. The survey also found only a modest increase in imports.”

“Economists expect that the U.S. economy created about 160,000 new jobs over the last month. Economists also believe that hourly wage growth will show a healthy increase of around 0.3%, which on an annualized basis would show wage gains of around 4%, well above the inflation rate. If these estimates are met, talk of a recession will evaporate,” Rogan said. “Yes, over the longer term, tariffs, lower immigration, and uncertainty caused by Trump’s policies will prove to be a drag on economic growth. But over the next year, as long as the labor market remains resilient and healthy and households enjoy real income gains, the U.S. economy will almost certainly expand.”

In American Greatness, Spencer P. Morrison said “Trump’s tariffs will create millions of jobs.”

“At its core, this issue is all about time horizons. That is, are we looking at the impact of tariffs here and now, or next year, or ten years down the road? The impact of just about any policy will be different at different times and across different industries,” Morrison wrote. “The media hates tariffs. Therefore, they only consider the impact of tariffs on a short time horizon and in particular industries. As a result, pundits can claim—and accurately claim—that tariffs will destroy jobs.

“But this is not true in the long run. Economic logic and historical evidence prove that tariffs will increase GDP and create jobs. However, we need to be patient and remember that America does not belong to us; it belongs to our children, our grandchildren, and every generation that has come before or after us,” Morrison said. “The trade deficit displaces America’s potential GDP: rather than build it, we buy it. Therefore, running a trade deficit must reduce GDP. President Trump’s tariffs will reduce the trade deficit. In doing so, they will increase GDP by a corresponding amount, and reshore the jobs that have been lost to China and Friends.”

The Wall Street Journal editorial board wrote “Trump takes the dumbest tariff plunge.” 

“Mr. Trump said at the White House there was ‘no room left’ to negotiate with the two American trade treaty partners. Some of his smarter advisers have been hoping he’d start renegotiating the [United States—Mexico–Canada Agreement] and delay the tariffs. But Mr. Trump wants tariffs for their own sake, which he says will usher in a new golden age,” the board said. “Mr. Trump is whacking friends, not adversaries. His taxes will hit every cross-border transaction, and the North American vehicle market is so interconnected that some cars cross a border as many as eight times as they’re assembled.”

“Mr. Trump is volatile, and who knows how long he’ll keep the tariffs in place. Retaliation that hits certain states and businesses may also cause him to reconsider sooner than he imagines. Investors are trying to read this uncertainty as they also watch growing evidence of a slowing U.S. economy. Unbridled Tariff Man was always going to be a big economic risk in a second term, and here we are.”

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

• I’m genuinely unsure what Trump’s plan is, or what he wants tariffs to achieve.
• Are tariffs a tactic to secure the border, or a means to bring back jobs? Are they part of a broader strategy? Does Trump actually want a recession?
• All I know for sure is that voters will punish Republicans for a poor economy.

Before getting into any debate over tariffs or whether a recession is imminent, I have one fundamental question: What is the actual plan? 

I understand that Trump believes our current trade dynamics are unfair. But is the idea to raise tariffs against our biggest trading partners to negotiate better trade deals for us, thus leading to an era of growth and prosperity? Or, alternatively, are the tariffs supposed to raise money for us to pay down our national debt? If so, I have some immediate questions — like, what result does Trump want that’s different from the last time he negotiated trade deals? This isn’t a “gotcha,” it is a genuine gap in my understanding. Trump called the United States–Mexico–Canada Agreement (USMCA) the “best agreement we’ve ever made” when he signed it in 2020, and now says he can’t believe the deals we signed. 

Also, what is the timeline? Trump was reelected primarily because of the affordability crisis Americans just lived through. Trump and his team are now preparing the same people who voted for him for some “pain” (i.e. increased costs and economic instability) on the promise of long-term gain. I don’t think that was the future voters signed up for, but if that’s what he’s selling — how long will it take? Six months? Two years? 10 years? We don’t know. He doesn’t say.

I tend to fall into the camp that presidents have limited influence over the economy, and that most presidents will only see the economic trees they plant bear fruit after they leave office (for example, yesterday I mentioned the Taiwan Semiconductor Manufacturing Company plant being built in the U.S. that Biden made possible and Trump is now taking credit for). But tariffs don’t fit this rule, in that they have nearly immediate impacts.

The benchmark price of steel shot up in February on the threat of tariffs alone — not just imported steel, but American steel, too. Target’s CEO said they would raise their prices. Gas, groceries, cars, laptops, and children's toys will all be hit with price hikes in the coming weeks and months. Trump’s tariffs will directly and negatively impact his own voters; he’s already asking farmers to “bear with me.” Car prices have shot up, most notably in the Midwestern swing states that delivered Trump the election. Again: I don’t have some fundamental opposition to the idea that short-term pain could be worth it for long-term gain, but what is the long-term gain we are after? And how long will it take? What’s the metric of success? The administration has offered some ideas — like lower 10-year treasury yields — but we really don’t know.

Without answers to these questions, Trump’s actions become both inexplicable and explainable by anything he wants —that’s what bothers me most. He flips tariffs on and says it will bring jobs home to America. He turns them off and says we got concessions on border security. Ok, well, if you turned them on to bring back manufacturing jobs, why’d you turn them off when you got border security? Just last night, Trump’s secretary of commerce said tariffs will “drive America better,” and that we could “stop paying taxes to the internal revenue service” and replace them with the “external revenue service.” I’m sorry, what? Is that the plan? No taxes for Americans because we have so much money from tariffs — which are paid by American importers?  

It all makes sense if you don’t understand how anything works, which is exactly my issue: The administration can say whatever it wants right now because the plan hasn’t been clearly articulated, at least not as far as I can tell.

I can’t find any definitive answers to my questions, but I have a theory — Trump actually could want a recession. I know that might sound like a radical view, but I’ve heard from people in his orbit that the administration wouldn’t necessarily view it as a bad thing. At the same time, more and more of his boosters are publicly saying that this would be a good thing. The theory goes like this: A good way to wash out inflation, the oversupply of money in the system and reduce the deficit is to incite negative growth, cut government spending, and clear out bad companies propped up by government money. The stock market will tank and unemployment will rise, or as Trump has put it, there will be some “pain.” But Trump could just blame it on Biden, then the door is open for him to lower interest rates, implement expansionary monetary policy, and rebuild the economy under new trade deals with American-made products and American-paid workers.

At least there is some throughline here but, again, I don’t really get it. Quantitative easing and decades of near-zero interest rates is exactly what got us here in the first place — so, are we just going to destroy what we have now to rebuild the same thing in two years? 

If it sounds like I’m grasping at straws here, it’s because I am — the combination of the administration’s actions and its stated goals just don’t add up to a coherent economic plan. “My take” today isn’t really a take at all — it’s just a litany of questions I have about what the administration’s goals are and where the economy is headed.

As for the politics of Trump’s tariffs, I’ll state this for the record: If Trump genuinely thinks he can oversee a continued rise in prices or a recession without hurting Republicans, I think he is very much misreading the room. His election victory was decisive but not nearly sweeping enough to allow elected Republicans to survive more economic turbulence. Criticizing trans people or DEI won’t be enough to prop up Republican popularity for the long term; he needs to succeed on the economy and immigration. He’s delivering on his promises on immigration, but economic woes seem to be continuing — if not worsening. If that keeps up, Democrats are going to take back the House in two years, win the White House in four, and potentially pick up some surprise seats in the Senate. Electoral defeat is always the political future economic instability delivers for incumbent parties.

To that end, Trump will need a clearly stated plan — and some results — sooner rather than later. Because the path he’s putting us on won’t lead to economic success or lasting political power. 

Take the survey: Do you think the economy is headed towards a recession? Let us know!

Disagree? That's okay. My opinion is just one of many. Write in and let us know why, and we'll consider publishing your feedback.

Your questions, answered.

Q: I've seen a few posts over social media on the national debt, and one of them framed it as equal “$104k per person and $266k per household." I was wondering, what is the prevailing wisdom about what an appropriate level of national debt would be? Maybe it was an irrelevant comparison or red herring, but framed that way, the government owes way less per household than I'm sure a lot of households carry themselves. I know for my household, between mortgage, student loans and cars, the government is ahead of me, ha! So what is the target per capita national debt?

— Dallas from Pittsburgh, PA

Tangle: First, let’s acknowledge those statistics and the context. The debt’s gone up a bit since you asked this question and is now over $36 trillion, or about $106,000 per person and roughly $274,000 per household. That’s a bit more than double the amount of average consumer debt, which is about $105,000 per household (two thirds of which is held in mortgages). 

Both those figures are record highs, which provides some clues about whether or not those levels are appropriate. And there is no shortage of arguments that housing affordability and the national debt are huge problems.

Here is some global and historical context for those figures. The annual federal deficit, the basic building block of the national debt, has averaged around 3% of annual GDP over the last 50 years. In the last three years, however, it’s averaged around 6% — and that doesn’t even include pandemic years, which pushed deficits to over 10% of GDP. As for the national debt itself, it currently sits at 122% of GDP. That’s one of the highest in the world, and the countries where it’s higher — Italy, Argentina, Lebanon, Japan — aren’t exactly models of where we want our economy to go.

That’s all for the context; is it a problem? Economists aren’t sure. The debt has never been higher, but it comes at a time of relatively low interest rates. Existing debt could hurt the government’s ability to borrow more if they need to, but that was obviously untrue during the pandemic. U.S. government spending relative to GDP is globally quite low, implying that the government has plenty of room to raise revenues to address annual deficits. The national debt has topped 100% of GDP, but the government owes $6.8 trillion to itself — debt owed to the public is under 100%, and economists differ on whether 90%,100%, or even 200% is the red-line threshold the government can’t pass. 

However, economists overwhelmingly agree that the pattern of increasing debt has become unsustainable, and that the government needs to turn its deficit-spending habits around.

Want to have a question answered in the newsletter? You can reply to this email (it goes straight to our inbox) or fill out this form.

Under the radar.

The Supreme Court heard arguments on Tuesday in a case brought by the Mexican government against American gunmakers alleging that these manufacturers should be legally liable for their weapons being smuggled across the border and used by drug cartels. Mexico has only one gun store, which is managed by the military, and a report by the Giffords Center for Violence Intervention found that over 70% of illegal guns seized in Mexico between 2013 and 2018 were sold in the U.S. However, the court appeared skeptical of the Mexican government’s claims during oral arguments, questioning whether weapons production, rather than illegal trafficking of those weapons, constitutes a “proximate cause” of gun violence in Mexico. Fox News has the story.

Numbers.

• 42%. The percentage of U.S. imports in 2024 accounted for by China, Canada, and Mexico. 
• $1.36 trillion. The total value of U.S. imports from China, Canada, and Mexico in 2024.
• 63%. The percentage of U.S. adults who say inflation is a “very big problem” for the United States today, according to a February 2025 Pew Research poll.
• 37% and 44%. The percentage of U.S. adults who say “the affordability of food and consumer goods” will be better and worse, respectively, one year from now. 
• 41.8% and 15.0%. The percentage of U.S. adults who said they expected their household's financial situation in the next 12 months to be better and worse, respectively, according to an October 2024 YouGov poll.
• 45.8% and 15.9%. The percentage of U.S. adults who said they expected their household's financial situation in the next 12 months to be better and worse, respectively, in February 2025.
• 48%, 36%, and 40%. The percentage of Americans who support new tariffs on imported goods from China, Canada and Mexico, respectively, according to a February 2025 Reuters/Ipsos poll.
• 19%. The percentage of Americans who think it benefits them personally when the United States levies tariffs on imported goods. 

You can see the total value of imports for the U.S., Canada, Mexico, and China in an interactive chart here.

The extras.

• One year ago today we covered the Super Tuesday results.
• The most clicked link in yesterday’s newsletter was the Supreme Court denying President Trump’s request to cancel payment to USAID for completed work.
• Nothing to do with politics: Hotel guests in the Netherlands had their room taken over by a grumpy seal.
• Yesterday’s survey: 3,965 readers answered our survey on Trump’s address to Congress with 66% opposed. “I agreed with most of ‘your take,’ especially the middle school mentality of the Dems. I would have also appreciated less rhetoric in regards to ‘Biden’s term, Biden this and Biden that.’ It’s in the past, move on,” one respondent said.

Have a nice day.

Acid attacks are typically committed by men seeking retribution for a rejected marriage proposal or sexual advance, and often leave the victim with significant scarring and disfiguration. A cafe in India has focused on this cause by employing women who have survived acid attacks, dedicating its mission to supporting victims of this particular form of violence. The cafe, called “Sheroes,” a portmanteau of “she” and “heroes,” displays posters of survivors and their related stories. The profits from the cafe are used to fund the treatment and rehabilitation of acid attack survivors. South China Morning Post has the story.

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