Exclusive: Trade partners have realized America is ‘simply not reliable’ after Trump’s tariff regime, says Elizabeth Warren—believing impact will be felt for generations to come

Authors: Eleanor Pringle

Publisher:

Fortune

Published: 7/19/2025

Language:English

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David

Good morning norristong_x, I'm David, and this is Goose Pod for you. Today is Tuesday, July 22nd.

Ema

And I'm Ema. Today, we're diving into a stark warning from Senator Elizabeth Warren: trade partners now see America as ‘simply not reliable,’ with an impact that could last for generations.

David

Let's get started. Ema, the core of this issue is a powerful statement from Senator Warren. She said, "The impact of six months of Donald Trump will be felt for two generations." That’s a heavy claim. It suggests a fundamental shift in America's global standing.

Ema

Exactly. It’s not just about economic data for the next quarter. It’s about trust. Warren’s point is that the unpredictable nature of the tariff regime—this "on, off, on, off" game, as she calls it—has made other countries question if America is a stable partner to build a future with.

David

And this uncertainty has tangible costs. Warren highlights three key areas. First, higher costs on consumer debt like credit cards and car loans. Second, a decline in business investment, particularly in manufacturing. And third, rising prices for consumers on everyday goods.

Ema

Let's break that down. The investment piece is critical. Why would a company build a new factory if they have no idea what their imported parts will cost or if their exports will be hit with a surprise tariff? It creates a paralysis that can slow down the whole economy.

David

The data seems to back this up. The St. Louis Fed noted a 5.2% drop in private fixed investment in the manufacturing sector in the first quarter of 2025. That’s a significant decline, showing businesses are hesitant to commit to large-scale projects amid this volatility.

Ema

And we see the impact on shelves, too. The Producer Price Index, which tracks wholesale prices, showed noticeable jumps for things like computer electronics and furniture. When producers pay more, it’s only a matter of time before we, as consumers, see those higher prices.

David

That’s a point Warren emphasized, linking these tariff-vulnerable areas to the 3% recent spike in grocery prices. It’s a direct line from trade policy to the cost of your weekly shopping trip. This isn't just abstract economics; it's hitting household budgets directly.

Ema

It's interesting because, initially, markets were very reactive to every tweet about tariffs. Now, it seems they’ve somewhat priced in the chaos. Goldman Sachs even suggested a 15% universal tariff would only result in a 1.3 percentage point increase to the effective rate. They're looking through it.

David

But that’s the danger, isn't it? The market might adapt to the "new normal" of instability, but Warren's argument is that the underlying damage to international relationships is far more severe and long-lasting than what market fluctuations show. The real story isn't the daily noise, but the slow erosion of trust.

Ema

Right. It's like a friendship where one person is constantly dramatic. At first, you react to everything. After a while, you just expect it, but you also stop relying on them for anything important. That’s the "unreliable partner" problem on a global scale.

David

To really understand this, we need to rewind. This policy shift didn't just appear out of thin air. It began systematically. Back in 2017, the U.S. started an investigation into China's trade practices, which laid the groundwork for what was to come.

Ema

And then came 2018. It was a whirlwind year for trade policy. In March, the Trump administration announced a 25% tariff on imported steel and a 10% tariff on aluminum. Suddenly, the materials that form the backbone of so much of our industry became more expensive.

David

That was just the opening salvo. A few months later, the focus turned squarely to China. The administration imposed 25% tariffs on $50 billion worth of Chinese imports, citing unfair trade practices. This was the formal start of the "trade war" that dominated headlines for years.

Ema

And it just kept escalating! In September 2018, another 10% tariff was slapped on an additional $200 billion of Chinese goods. Think about that scale. We're talking about hundreds of billions of dollars of trade being hit with new taxes, affecting everything from electronics to clothing.

David

What’s crucial to remember is that these tariffs weren't just a one-way street. Other countries didn’t just accept them. They retaliated with their own tariffs on U.S. goods, particularly targeting agricultural products. This created a cycle of back-and-forth that hurt American exporters as well.

Ema

It was a classic trade war scenario. For example, when the U.S. hit China, China hit back on American soybeans, which had a devastating effect on farmers in the Midwest. It shows how interconnected everything is. You can't just build a wall around your economy without consequences.

David

And while there were some negotiations and deals along the way, like the "Phase One" agreement with China in late 2019 which paused further escalations, the core structure of these tariffs remained. In fact, many are still in place today, creating a new baseline for global trade.

Ema

That's a really important point. This isn't ancient history. The Biden administration has kept most of these tariffs and has even added new, targeted ones on things like Chinese electric vehicles and semiconductors in May 2024. What started as a disruptive policy has now become somewhat entrenched.

David

So, we’ve moved from a decades-long consensus on lowering trade barriers to a new era where tariffs are a primary tool of economic policy. The economic consensus is that this raises prices and reduces economic output, yet here we are. It represents a fundamental break from the past.

Ema

It's a huge departure. For most of the last century, America was the champion of free trade, leading the charge for global economic integration. This reversal has sent shockwaves through the system and forced every other country to re-evaluate their relationship with the U.S. economy.

David

The scale of it is staggering. Between 2018 and 2019, these policies affected over $380 billion worth of trade, amounting to a tax increase of nearly $80 billion. It's one of the most significant shifts in U.S. economic policy in modern history.

Ema

And it has led directly to the situation Senator Warren is describing. When you make such a dramatic and unpredictable change, it forces your partners to ask a tough question: Can we count on you? The answer, for many, appears to be no. And that has consequences.

David

This brings us to the central conflict of this entire debate. The White House, both then and now, argues these tariffs are a necessary tool to protect American workers and industries. Spokesman Kush Desai stated that tariffs have delivered "trillions in historic investment commitments" and leveled the playing field.

Ema

That's the official line, for sure. They point to big announcements, like Apple's plan to invest $500 billion domestically or the massive Stargate AI project, as proof that their strategy is working. The argument is that this tough stance forces companies to bring jobs and money back home.

David

But this creates a direct conflict with other parts of the government, most notably the Federal Reserve. Fed Chair Jerome Powell has essentially said that if it weren't for the administration's own tariff policies, the base interest rate would already be lower. That's a remarkable statement.

Ema

It's a classic case of one foot on the gas, the other on the brake! The White House wants to stimulate the economy with tariffs, but the Fed sees the tariffs themselves as a source of inflation and instability, which forces them to keep interest rates higher. The two policies are working against each other.

David

This tension was very public. President Trump frequently criticized Powell and the Fed for not cutting rates, believing they were undermining his economic agenda. But from the Fed's perspective, they were simply responding to the economic conditions created by the tariffs. It raises serious questions about central bank independence.

Ema

Absolutely. And then you have the broader economic viewpoint, which suggests the entire premise of using tariffs to fix a trade deficit is flawed. Some economists argue it misunderstands America's unique role in the global financial system. The U.S. has to run a trade deficit to supply the world with dollars.

David

That’s the Triffin Dilemma in a nutshell. As the issuer of the world's reserve currency, we essentially export dollars to the rest of the world. The flip side of that is that we must import more goods and services than we export. Trying to eliminate that trade deficit with tariffs is, paradoxically, fighting against our own currency's global status.

Ema

So the conflict isn't just between political parties or government branches. It's a conflict of ideas. One side sees tariffs as a tool for national revival and bringing back manufacturing. The other sees them as a blunt, outdated instrument that creates inflation and instability, and works against the very structure of the global economy.

David

Exactly. And businesses are caught in the middle of this ideological crossfire. The administration says it's boosting U.S. manufacturing, but as we saw, the data on manufacturing investment is shaky at best. The uncertainty principle is a powerful deterrent to long-term business planning.

Ema

So, what has been the real-world impact of all this? For starters, the U.S. economy actually contracted in the first quarter of 2025. GDP shrank at a 0.5% annualized rate, the first decline in three years. That’s a pretty significant reversal of fortune.

David

And a key reason for that contraction was the ballooning trade deficit. But it wasn't because of a lack of exports. It was because businesses were rushing to import goods to stockpile them before new tariffs took effect. This surge in imports, growing at a staggering 41.3% rate, technically subtracted from GDP.

Ema

That's such a wild paradox. The very policy designed to reduce imports caused a massive, temporary spike in them, which in turn hurt the GDP numbers. It really shows how unpredictable the consequences of these actions can be. You push the system in one place, and it bulges out in another.

David

Meanwhile, the impact on prices has been undeniable. We’ve seen inflation rise to 2.7%, with core inflation hitting 2.9%. Goldman Sachs even projected that the tariffs could raise consumer prices by as much as 0.7% by the end of the year. That's not just a statistic; it's a real cost passed on to families.

Ema

And this has, understandably, shaken consumer confidence. People started getting nervous, not just about rising prices for everyday items, but also about the possibility of job losses if their employers' costs went up too much. This pessimism started to spread, creating a drag on consumer spending.

David

Economists have tried to quantify the cost. One analysis estimated that the 2018-2019 tariffs alone reduced U.S. GDP by 0.2% in the long run, reduced the capital stock, and eliminated roughly 142,000 full-time jobs. So while some sectors may have been protected, the broader economy took a hit.

Ema

And the consensus among researchers is that the cost of the tariffs was almost completely passed through to U.S. importers and, ultimately, consumers. The idea that foreign countries would just absorb the cost didn't really pan out. American households ended up footing the bill.

David

This brings us to the future. If this unreliability becomes the new status quo, what happens next? The most significant consequence is that countries are actively starting to hedge their bets. They are creating new trade alliances and supply chains that are less dependent on the United States.

Ema

Exactly. We're seeing companies and countries alike diversifying their supply chains, looking to places like Vietnam, Mexico, and India as alternatives. It's a massive, costly undertaking, but it's seen as a necessary insurance policy against American unpredictability. It’s a move from 'just-in-time' to 'just-in-case'.

David

And this has geopolitical implications. If the U.S. is seen as an unreliable partner, it could push even allies to strengthen their trade relationships with other nations, including China. It risks eroding the very alliances that have been the bedrock of global stability for decades.

Ema

This is the generational impact Senator Warren was talking about. It’s not just about losing a trade deal here or there. It's about a potential long-term shift where the U.S. is no longer at the center of the global economic map. And once that trust is gone, it is incredibly difficult to win back.

David

Ultimately, the legacy of this tariff regime may not be about manufacturing jobs or trade deficits, but about trust. It has fundamentally altered how the world views the United States, posing a long-term challenge to its economic leadership.

Ema

That's the end of today's discussion. Thank you for listening to Goose Pod. See you tomorrow.

## Summary of Fortune Article: Warren Criticizes Trump's Tariff Policy, Citing Long-Term Economic Damage This Fortune article, published on July 19, 2025, by Eleanor Pringle, details Senator Elizabeth Warren's strong criticism of former President Trump's tariff policies and their perceived negative impact on the U.S. economy. The article contrasts Warren's views with the White House's defense of the tariffs as beneficial to American voters. ### Key Findings and Conclusions: * **Long-Term Damage to Global Partnerships:** Senator Warren argues that Trump's "see-sawing agenda" and tariff policies have severely damaged America's relationships with its trade partners, leading them to view the U.S. as an unreliable trading partner. She believes this damage will be felt for generations. * **Increased Costs for American Consumers:** Warren asserts that the fluctuating tariff policies have directly led to higher costs for American families on credit cards, car loans, and other forms of consumer debt. * **Dampened Investment in Manufacturing:** The uncertainty surrounding import and export costs due to tariffs has discouraged investment in sectors like manufacturing. Data from the St. Louis Fed shows private fixed investment in the manufacturing sector **down 5.2% in Q1 2025** compared to the previous quarter. * **Federal Reserve's Stance on Interest Rates:** Warren contends that the Federal Reserve, under Chairman Jerome Powell, has been prevented from lowering interest rates due to concerns stemming from the White House's tariff policies. * **White House Counter-Argument:** The White House, through spokesman Kush Desai, argues that tariffs benefit working-class Americans by addressing "lopsided 'free' trade arrangements" and "unfair trade practices." They claim tariffs have already secured "trillions in historic investment commitments" and created "tens of thousands of quality jobs," along with new trade deals. ### Key Statistics and Metrics: * **Potential Tariff Impact:** Goldman Sachs estimates that even a **15% universal tariff rate** would only result in a **1.3 percentage point (pp) increase** to the effective tariff rate overall. * **Inflation Data:** June inflation data showed a **0.3% increase** month-over-month, bringing the 12-month unadjusted rate to **2.7%**. * **Manufacturing Investment Decline:** Private fixed investment in the manufacturing sector was **down 5.2% in Q1 2025** compared to the prior quarter (St. Louis Fed data). * **Overall Private Investment Growth:** Gross private investment in Q1 **ticked up**, with fixed investments up **7.6pp** (Bureau of Economic Analysis data). * **Headline Business Investment Wins:** Apple announced **$500 billion in domestic investment**, and the Stargate AI project is projected to generate **$500 billion in infrastructure investment** over the next four years. * **Producer Price Index (PPI) Upticks:** * Computer electronics: up **2.6% year-over-year (YoY)** at a wholesale level. * Furniture: up **3.4% YoY** at a wholesale level. * **Consumer Price Index (CPI) Data:** Groceries showed a **3% increase** in the most recent CPI data. ### Notable Risks and Concerns: * **Unreliable Trading Partner Perception:** The primary concern highlighted by Senator Warren is the long-term damage to the U.S.'s reputation as a reliable trading partner. * **Economic Uncertainty:** The unpredictable nature of tariff implementation creates an environment of uncertainty that hinders business investment and planning. * **Inflationary Pressures:** Tariffs are seen as contributing to rising prices, particularly for imported goods that the U.S. cannot easily substitute domestically. ### Important Recommendations: The article does not explicitly state recommendations but implies a need for a more stable and predictable trade policy to foster investment and maintain international economic relationships. ### Significant Trends or Changes: * Markets are reportedly "looking through" tariff volatility, showing less concern than earlier in the Trump administration. * The Federal Reserve is facing pressure to lower interest rates, but concerns about tariffs are a stated reason for maintaining current rates. * There's a noted divergence between overall private investment growth and specific sector declines like manufacturing. ### Material Financial Data: The article highlights significant figures related to investment commitments (Apple, Stargate AI), tariff rate impacts (Goldman Sachs estimate), and inflation data (CPI, PPI), all of which are crucial for understanding the economic arguments presented. ### News Metadata: * **Title:** Exclusive: Trade partners have realized America is ‘simply not reliable’ after Trump’s tariff regime, says Elizabeth Warren—believing impact will be felt for generations to come * **Topic:** Business / Economy * **Publisher:** Fortune * **Author:** Eleanor Pringle * **Publication Date:** July 19, 2025

Read original at Fortune →

Indeed, markets have now generally begun to look through the tariff back and forth, and are less concerned by the ultimate fallout than earlier in the Trump 2.0 administration. Goldman Sachs, for example, wrote this week that even a 15% universal tariff rate would result in only a 1.3pp increase to the effective tariff rate overall.

Jerome Powell and the Federal Open Market Committee have been criticized by Trump for not cutting the base rate because of their concerns about tariffs. Critics argue that June inflation data, for example, only showed a 0.3% increase compared to the month prior, bringing the 12-month unadjusted rate to 2.

7%.But on top of that, concern from some spectators is the longterm damage the president’s see-sawing agenda is doing to the perception of the world’s largest economy.Trade partners reacted to Trump’s “Liberation Day” tariffs with promises to negotiate, but also disbelief. Since April, these partners have also been subject to changing deadlines and shifting sands on the rate of the economic sanctions they may face if they don’t pen a deal with the White House.

The lasting damage of the Trump presidency on these relationships is a concern for Democrat Senator Elizabeth Warren (Massachussetts). She told Fortune in an exclusive interview: “Donald Trump has done enormous damage to America’s partnerships around the world.” “The impact of six months of Donald Trump will be felt for two generations, as more nations blink hard at what’s happening in the U.

S. and conclude that we are simply not a reliable trading partner. That hurts us now and it will hurt our children and our grandchildren.” The White House argued tariff action is for the benefit of voters. Spokesman Kush Desai told Fortune: “No one has suffered more from America’s lopsided ‘free’ trade arrangements and foreign countries’ unfair trade practices than the working class Americans who Elizabeth Warren has always pretended to be a champion for.

”“President Trump’s tariffs have already delivered trillions in historic investment commitments that will create tens of thousands of quality jobs, along with new trade deals with the U.K., Vietnam, Indonesia, and more countries to come that level the playing field and create billions in new export opportunities.

”Desai finished that Warren “talks” but Trump “delivers.” The data questionDespite the continued pressure from Trump and his administration on the Fed to lower the base rate, chairman Jerome Powell has confirmed that if it weren’t for the Oval Office’s policies themselves, the base rate would already be lower.

This is one of three costs Sen. Warren says is already trickling through the economy because of White House policy, explaining: “Families across America have been paying more on credit cards and car loans and other forms of consumer debt because Donald Trump has played a game of on, off, on, off, on, off, on tariffs.

” The other costs, she continued, is that investment particularly in sectors like manufacturing has declined.She said: “No one wants to build a new factory, buy a lot of expensive equipment or train a workforce if they don’t have a sense of what their imports will cost and what their exports may get tagged with in the tariff world.

” Indeed, data from the St Louis Fed shows private fixed investment in the manufacturing sector was down 5.2% in Q1 2025 compared with the quarter prior. That said, gross private investment in Q1—spending by individuals and businesses on production processes et al—did tick up in the first quarter, with fixed investments up 7.

6pp according to the Bureau of Economic Analysis. The Trump administration has also scored some headline wins on business investment, with Apple announcing $500 billion in domestic investment and the Stargate AI project which will reportedly to generate a further $500 billion investment in infrastructure over the next four years.

Sen. Warren also highlighted prices are starting to inch up in commodities which are heavily imported. The most recent producer price index (PPI), for example, showed upticks in computer electronics and furniture at a wholesale level (up YoY 2.6% and 3.4% respectively)—data which the Federal Open Market Committee will be well aware of when making their decisions about the base rate.

“Under the headline number in areas that are more tariff-vulnerable … inflation has gone up faster and in areas where the United States … can’t produce a good substitute at home,” Sen. Warren added, adding this may be the reason areas like groceries shot up 3% in the most recent CPI data.Introducing the 2025 Fortune 500, the definitive ranking of the biggest companies in America.

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