In Episode 2 of Tracking Trump, Nidhi Razdan is joined by Shashi Tharoor, Arvind Subramanian, and Allan Lichtman to unpack the global fallout of Trump’s tariff war.

From geopolitical tension to India's export risks, the panel breaks down:

- What Trump’s tariffs mean for the global economy

- Can India turn this crisis into opportunity?

- Why Elon Musk is facing backlash

- How U.S. allies are scrambling to respond

Tracking Trump Ep 2 Transcript:

[Donald Trump]

I'm telling you these countries are calling us up, kissing my ass. They are, they are dying to make a deal. Please, please sir, make a deal.

I'll do anything. I'll do anything, sir.

[Nidhi Razdan]

What a guy, that President Trump. Hello and welcome to Tracking Trump on DeKoder. I'm Nidhi Razdan.

Well, Donald Trump's tariffs have finally come into effect this week. These are the tariffs that were announced on the 2nd of April, above the 10% baseline for all countries. India is hit with 26%.

The move by the Trump administration is causing chaos and uncertainty in the global economy and the global markets and it is only getting worse. Stock markets around the world, including here in India, have been extremely volatile as investors watched stocks crash and their wealth completely depleted. Some countries have already retaliated, particularly China, which is refusing to negotiate its way out, while other countries have been racing to send their representatives to Washington in order to hammer out some kind of a deal that could potentially see their tariffs reduced.

Trump himself has claimed that around 70 countries have reached out to him to negotiate and he has said that the US will be holding talks with Japan and South Korea. Both, in fact, are American allies who've been hit hard by his taxes. And now, with China announcing its own retaliation, Trump further increased their tariffs, which now amounts to about 104%.

China hit back yet again with more than 80% tariffs. The EU is hitting back with its own retaliatory tariffs, though it's also shown a willingness to negotiate. So far, though, Trump isn't biting.

Let's first take a look at the volatility in stock markets around the world, the main markets, ever since this announcement on tariffs was made by President Trump on the 2nd of April. In fact, even since his inauguration in January, we've seen a rather long period of instability in global markets, but it's been particularly bad over the last week or so, as you can see there, whether it's the Sensex, of course, Wall Street, which is heading into what is called Bear Territory, because of the rattling effect of these tariffs and the roll-on effect that it's going to have on the US economy, which now many economists are predicting could very likely go into a recession.

And we'll be talking about that in some detail with our panellists later as well. And so just to give you a flavour of what happens with these tariffs in terms of our daily lives, and American consumers in particular.

So for example, a company like Jaguar Land Rover has stopped its sales to the US because of that 25% tariff on automobiles. It's a huge company, for them to pause sales is a big deal.

Something like an Apple iPhone 16, which currently costs $799, can go up to $1,500 straight off. The Pro Max model, from about $1,599 to $2,300. That's because Apple manufactures in other countries, like China and India, where it's much cheaper to do so.

Nike sneakers, a pair of sneakers from Nike that costs $155 a pair could jump to more than $210 a pair, because of the 46% tariff on Vietnam, where many of these shoes are made. Swiss watches are going to see a 31% increase in their tariff, so a huge surge in prices on that side as well.

Americans love their coffee, remember, but 80% of coffee in America is imported from Latin America, from Brazil, Colombia, and all of these countries are facing 10% tariffs. So you'll see a hike in coffee prices.

Most toys that are sold in the US, in fact 77% of them are imported from China, and we've seen the major escalation now between the US and China, as a result of which toys, something as simple as toys, are going to become much, much more expensive for American consumers.

And joining us now on DeKoder is Shashi Tharoor, Lok Sabha MP from the Congress Party, who's also wearing his hat as a former diplomat on the programme today. Shashi Tharoor, great to talk to you on this important subject. Did you ever think in your wildest dreams that we would be looking at a global trade war on this scale, especially with the US and China at the moment with tariffs and counter tariffs?

[Shashi Tharoor]

Yeah, I mean, it's really looking quite colossally bad. I must say that Mr. Trump's capacity to surprise us, you know, we all thought we had a measure of the gentleman after having seen one term of his. But I think we were all unprepared and America was unprepared, including his own backers were unprepared for the sort of dramatic sort of, what's the word I want, sort of detonation that he unleashed on the world on the 2nd of April.

It's really been quite colossal. There seems to be no clear mathematics behind his figuring out what tariffs to charge whom and on what basis. We are not charging 50 odd percent to the US.

I think the government claims we are charging roughly an average of 17 percent. But now we're getting so-called reciprocal tariffs of 26. The Chinese, of course, are also being punished for their various subsidies and their other things. And they're having to pay much more. But because they impose retaliatory tariffs, there's an American counter retaliation. And that's going to give us or give you, if you're buying any Chinese goods in America, a massive, massive attack on what you're going to be paying.

So it really is quite dramatic to see all of this happening and quite in some ways bizarre because we don't quite know how far it's going to go and where it's going to end.

[Nidhi Razdan]

There is, of course, a geopolitical angle to this as well. The fact is that Trump is also using these tariffs as a negotiating tactic, even with allies like Japan and South Korea. India is also in talks with the US for a trade deal.

But the US-China trade war in particular has huge ramifications, even geopolitically. Now, diplomatically, this must be a nightmare, wouldn't it be at the moment in capitals around the world, how to negotiate this with Washington?

[Shashi Tharoor]

We seem to have got off to a good start in the sense that we were the first country that they actually negotiated with. You remember they sent last week a 180-member trade delegation for five days of talks in Delhi. And though that ended without any concrete news coming out of it, I gather some progress has been made.

We'll probably send our delegation off to Washington now to continue the process. Though when Prime Minister Modi was in Washington, there was an announcement about talks until the fall. I don't think we can afford to wait that long.

I think we really will have to conclude a deal quicker. And especially, what's worrying for us is that they have just announced or Trump has just announced that there might be new and rather swinging tariffs on pharmaceuticals, which, of course, we have a huge chunk of. I think China and India export the bulk of pharmaceuticals to the US.

China is going to be suffering anyway. But for us, we were kind of hoping that we would benefit from this. I'm not quite sure that's going to be the case if there's some very heavy duties on our pharmaceuticals.

I think what Mr. Trump doesn't understand is that the logic, that if you charge massive tariffs, people will come in and manufacture the same items in America. That logic is far from established. And certainly when you look at something like pharmaceuticals, it is so much cheaper to make them in India than anywhere in the world that practically the things we do make, I remember we used to make the generic medications for HIV, AIDS.

We kind of wiped out the rest of the market because we're so much cheaper. The vaccinations we did during COVID had a phenomenal impact around the world. Quad came to us, you remember, to manufacture vaccines, a billion plus vaccines for the Indo-Pacific countries.

So there was always a feeling that that can't be matched. I'm not sure that he is going to, that it makes any sense, first of all, to put tariffs at such a level that it's more economical to pay American labour rates and American factory rates to make them in America. But equally, there is the precedent of what happened during COVID when the Americans, for example, you remember the first three months of COVID, the Chinese had a severe trade lockdown, nothing could go out of China because they were the epicentre of the COVID pandemic.

And at that time, the Americans discovered to their horror that their favourite headache remedy, Advil, Ibuprofen, comes entirely from China. And therefore, suddenly, this medicine, which was widely bought and used in America, disappeared from the American shelves. And their solution was, gosh, we can't afford to be dependent on China for this.

So let's try and find something else. What was something else they decided to go for? Nearshoring, that is, go to other countries that can also manufacture cheaper than America, but which are closer to America and diversify from their dependence on China.

Now, that makes sense. But punishing either China or India to a level that it will be more economical to manufacture in America is a completely unrealistic target.

The same applies to everything else. We're making automobile parts, for example, for American manufacturers. GE and Ford and so on are buying parts from India. Now, those American cars, officially American cars made in America, basically assembled using imported parts from elsewhere, are also going to get more expensive if those parts are taxed and tariffed.

It's quite bizarre.

[Nidhi Razdan]

But under the circumstances, Shashi Tharoor, do you think that the Indian government has adopted a very practical, pragmatic approach in how it handles Donald Trump and these trade talks? And is it actually a very difficult position to be in? Because when you have talks like these, how do you ensure that you protect the interests of your exporters, your industries, on one hand, not be seen to be caving into bullying tactics?

And yet we don't have all the cards. We are not China, right? So, you know, we also have to be realistic about what we can do in terms of negotiating with them.

So do you think the government is doing the best that it can in difficult circumstances?

[Shashi Tharoor]

Well, the honest answer is I don't know, because the government's obviously doing everything, rightly so, confidentially, and they have not been sharing with us. I did say, though, that it would be helpful if they decided to come and take Parliament into confidence while we were still in session about what their negotiating strategy is, at least their broad objectives, and also issued some reassuring statement to the Indian public and the Indian businesses. They didn't do that.

Piyush Goyal told me he was issuing a press release, which did come out. But, you know, press releases are one thing. And the Minister, or ideally the Prime Minister, even speaking to Parliament might have been something else.

Anyway, that opportunity is gone. Parliament is now adjourned. So the next thing is for them to tell us when they're ready to tell us what exactly they've got.

I mean, to my mind, it's extremely important that this negotiation goes well for India. It's important for Indian businesses. It's important for Indian citizens.

It's important for the overall Indian economy. It's important for the Rupee. I mean, in every respect, this is a high stakes negotiation for us.

So I hope the government is negotiating well. I hope that they are taking into account the interests of Indian companies, particularly exporters in major sectors like pharmaceuticals, like the-

[Nidhi Razdan]

Auto-parts.

[Shashi Tharoor]

The automobile spare parts, which is extremely important. And other goods, I mean, that we're selling now, we've got garments.

We actually were looking at the prospect of having an improved situation because poor Bangladesh has got even higher taxes than us. And they had sort of pretty much taken most of India's garment export market to the cleaners. Suddenly, we were looking at reviving that.

And we're looking at a time, Nidhi, when it's not clear that we're going to be necessarily able to revive that. So I just hope the negotiations will be attentive to all of these things and will come out with good results. But until the government is prepared to share with the nation what they're negotiating or what they have successfully negotiated, I'm afraid we can't give them a good character certificate.

All I will say as an Indian is that I hope for India's sake that they're doing a good job and I wish them luck in a good negotiation with the Americans.

[Nidhi Razdan]

Are you sounding a bit skeptical about what some analysts and economists have described as a possible opportunity for India? And you mentioned garment manufacturing, for example, the fact that Vietnam and Cambodia and Bangladesh have been hit with much higher tariffs could be an opportunity for India to come and step in. But you sound a bit skeptical.

Is that because we really haven't prepared those industries to manufacture on that scale?

[Shashi Tharoor]

Well exactly

[Nidhi Razdan]

Right.

[Shashi Tharoor]

You know, Bangladesh, for example, has been our principle, if you like, the one that really took us to the cleaners on garment exports, that people who were invested in Tirupur were going off to invest in Dhaka instead. But when Bangladesh was going through three months of major chaos, student unrest, their manufacturing was down, their cities were paralysed, exports were down. We were not able to ramp up capacity quickly enough to be able to take advantage of that.

Now, Bangladesh is back in the game, but now they've got tariffs. But I'm not sure that Indian businesses have been sprightly enough to be able to immediately pick up the slack and try and compensate. We missed that three month opportunity when Bangladesh was in chaos.

Will we miss this next opportunity when the countries that are getting higher tariffs are reeling from that shock? And we have had a sort of head start on negotiating a better deal for ourselves. I don't know.

I mean, I, look I don't claim to be an expert on what's going on in the garment industry. All I do know is that we didn't actually take up the slack when this happened. We have not been quick on the uptake when it came to China plus one opportunity, that is when companies were leaving China, often for political rather than economic reasons, looking for other places.

The bulk of them went to places like Vietnam, Malaysia and Indonesia and not- didn't come to us. So so, you know, is it partially that our-our businesses aren't quick enough on the uptake? Is it that our regulations and compliances are too onerous?

So investors think of taking their money elsewhere? I don't know. But this is the kind of stuff that our government ought to be looking at very carefully, because this is a crucial year for us.

In fact, it's a crucial few months ahead for us. If we can reorient ourselves rapidly and get cracking, yes, then my skepticism will wear off. But at the moment, I'm sort of reluctant.

And I think you'll forgive me. It's an understandable reluctance to leap up and down, saying we're going to be fine because I need some more indication, some more evidence that we will be fine.

[Nidhi Razdan]

Finally, Shashi Tharoor, I mean, you know, you've been an experienced diplomat for decades. And when you look at, you know, an enigma like Donald Trump, someone who comes out of, you know, left of field, as they say, and throws all kinds of googlies at the world, you know, he's even described countries who are, you know, in talks with the US for trade deals, as those that are, I can't use that word, I'm told, publicly.

[Shashi Tharoor]

Kissing his ass I think is what he said.

[Nidhi Razdan]

Well, you said it, not me.

So I'm saying that, how do diplomats handle, I mean, somebody like Trump? I mean, are you all prepared or trained to deal with something like this?

[Shashi Tharoor]

I think you should ask Mr. Jaishankar that question, because he seems to be doing a good job of handling the Americans to their satisfaction so far. You know, there is a logic to what Trump was doing. America has had very large fiscal deficits, very large high current account deficits, and an ever increasing debt to GDP ratio.

Plus, their manufacturing has been collapsing. What used to be the automobile manufacturing centre of the world is now being described as the rust belt in America, because all the factories are rusting since they're not producing anything. Given all of this, you can understand why Trump felt a course correction was necessary.

But it's not sure that his economic logic has been thought through. I think the problem is who has been advising him? Have they done the calculations?

It doesn't seem they have. And that's the real challenge. You know, you can't go and tell him, Mr. Trump, you know, you really, you don't know what you're doing. And you really have to see sense because that doesn't work with that administration.

[Nidhi Razdan]

He'll just turn around and fire them, so.

[Shashi Tharoor]

I think what we have to go and do is understand there is a certain irrationality to their policies. But it is the policy they're sticking with, at least for now. American stock markets have lost $2 trillion, and Trump is still unmoved.

The backers from Wall Street who were financing his election campaign have gone and begged him to change course, but he has not changed course. I mean, so I think we should just accept that this is the situation and get the best deal for ourselves that we can. And that is being done actually mainly by colleagues from the Commerce Ministry and not from the Foreign Ministries.

Piyush Goyal and his team will have to do this work. But you know, all I can say is that we certainly hope that India will find a way of getting the best deal possible for our country and our people. Because certainly, it would be tragic if the sort of growth story we were relying upon, you know, this whole business of getting India to Viksit Bharat by 2047, will recede into the far horizons if we don't get this business sorted out and put ourselves in a better position.

Don't forget that all the other countries are also scrambling. I mean, you're saying Vietnam, Bangladesh, etc. have higher tariffs here, but they might negotiate lower tariffs for themselves.

China is obviously determined to fight this out, and they may find that tough. But other countries are willing to make concessions quickly. Singapore has already announced they will not increase any tariffs on America.

And they're going to keep things down there in the hope that that will actually mollify the Americans. Other countries will have other reactions. You know, we shouldn't, we're not the only players in the game.

There are lots and lots of countries that are dealing with these issues and are trying to find ways forward. All I can say is that we should do our best. We've got a head start.

We're the first country negotiating with the Americans. We need to clinch a deal sooner rather than later, certainly not wait till the fall, which is September, October, but do it before that. And see if we can get ourselves ready domestically to gear up our capacity to take advantage of the opportunities we might be able to get for ourselves.

And all of this is still in the realms of speculation, Nidhi, and we'll have to see how this goes.

[Nidhi Razdan]

Well, never a dull day in the Trump presidency. And that's why we started this show. Shashi Tharoor, thank you very much for joining us on Tracking Trump on DeKoder.

Great to have you on the programme.

[Shashi Tharoor]

Thank you. All the best, Nidhi. Take care.

Keep tracking.

[Nidhi Razdan]

We're very happy to have with us on DeKoder now, economist and the former Chief Advisor to the Government of India, Arvind Subramaniam, who joins us now from Washington, D.C. Mr. Subramaniam, thank you so much for being with us. You know, we are speaking on a day when the trade wars between the U.S. and China in particular have reached a major, major escalation point. And I wanted to begin by asking you about that and the ramifications of that, because, you know, I think Trump seems to have underestimated the Chinese response to his tariffs.

[Arvind Subramanian]

Yeah, I think a very dramatic and succinct way of putting it might be that, especially with the action, retaliation, and counter retaliation vis-a-vis China and what has happened in bond markets since yesterday. You know, before this equity markets were kind of declining, but since yesterday bond markets have started behaving very funnily and the interest rates are going up again. So the combination of the two, what's happened on the trade side, what's happening on the financial market side, is that we may be kind of certainly on the verge of a massive slowdown, not just in the United States, but globally as well.

So kind of we're on the brink of what one might say is the economic trade financial equivalent of World War III. I mean, that's where we stand. Because not only are these tariffs the highest ever seen for the United States and for China, there's also a lot of uncertainty about what's going to happen next.

Which party is going to blink? Are these here to stay? Are there going to be negotiations?

Europe itself is waiting on the wings. It's announced some mild retaliation, but potentially it could do more as well. So the combination of actual actions and the utter uncertainty and unpredictability of what is to follow makes these very, very, you know, dangerous and dark times for the global economy.

[Nidhi Razdan]

I specifically, of course, asked about China, given that it is the second largest economy in the world. And because the supply chains are the way that they are, anything that happens between these two big powers has a sort of cascading effect on the rest of us, doesn't it?

[Arvind Subramanian]

Yeah, absolutely. These are not just the two largest economies in the world. I mean, China is also the largest trader and as you said, the source of many, many commodities that the rest of the world depends on.

And not just China, but the broader China supply chain, which includes Vietnam, Asia, ASEAN and other countries. So we're looking at a dramatic slowdown in growth, a dramatic shrinking of global trade. And then, of course, this means not just higher unemployment, but also higher costs of all kinds of goods and services across the board.

I mean, we're looking, that's why people are really worried about this stagflation where the economy goes down, but also prices at least one off go up quite a bit because of these massive cost increases stemming from the tariff increases. So we are really in unprecedented territory, you know, something close to a major, not just an economic, but also a financial crisis.

[Nidhi Razdan]

As you said- sorry please go ahead.

[Arvind Subramanian]

The other thing to note, of course, is that we've not seen the full tool of Chinese retaliation because China for the moment has retaliated on goods, you know, raising tariffs vis-a-vis the US. But as we know, China also holds a lot of U.S. treasury bonds. And at some point China could weaponise that as well, because if China were to sell some of its holdings of treasury bonds that it does, you know, the impact on U.S. and global interest rates would be absolutely turbulent and kind of catastrophic. And that's a weapon that they still have in hand.

[Nidhi Razdan]

Forgive me if I ask what might seem like a silly question, but I'll ask it anyway. What happens if the rest of the world decides to do trade agreements with each other and leaves America out of it? Is that even possible?

What would that mean?

[Arvind Subramanian]

I think certainly it's possible. I think that, you know, I think what's important to remember at this stage is that there are two time horizons. In the short run, I think what you're saying maybe is less important because it's just, you know, there's chaos, there's turmoil.

And no matter what you did, and I'll come to your question, no matter what you did, the predominant sentiment is going to be uncertainty and unpredictability. That's what will weigh on investors, on trade, on buying, and everything. So in that sense, you know, that is going to dominate everything else.

But we don't know how long it's going to last. But whenever that does settle down and whenever the unpredictability comes down, then your question becomes relevant. You know, can we have a global trading system that, you know, the US chooses to kind of turn inward and decouple from the world and the rest of the world says, thank you, but we will proceed?

No, in principle, it's possible. It's not impossible at all. And in some ways, one would say that even for India, those are the choices that India has, you know, India could do whatever it has to to accommodate the US, which it might.

But at the same time, it could intensify not only its links with US and Asia, it could also, you know, exactly because your question has two dimensions. One is, the rest of the world starts trading with each other, which I think is possible. But also the rest of the world says, let's try and restore the rules based system that we had before, even if it doesn't include the United States in this instance.

And so the rebuilding, not just of trade, but something like that old trading order, which is based on rules and non-discrimination, and, you know, reciprocity and, you know, and just viewing trade as zeros, not zero sum, but as win-win. I think that I think would be something that can certainly happen in the medium term. But before that, the dust has to settle, and we don't know when that's going to happen.

[Nidhi Razdan]

When we look at India specifically, how much room do you think that India has to be able to negotiate a favourable deal? And I say this because, you know, we don't have, you know, the kind of economy and, you know, the supply chains that say China does. And, you know, we also have to protect our own industries, our own exporters, etc.

So is this a very difficult task, actually, for the government as it heads into these talks with the US; to balance it out?

[Arvind Subramanian]

Yes and no. I think that what the government has to do in its negotiation with the United States is a bit uncertain, because at this stage, we don't know what the United States is seeking, right? I mean, I think it's worth reminding viewers that the United States has imposed massive tariffs on countries with which it has tariff-free trade, zero tariffs, you know.

So, you know, all these partner countries have no tariffs on the US, and yet the US has increased, you know, tariffs on trading partners. So we don't really know whether the US wants to do a deal, what the terms of that deal will be, whether, no, it just wants to show that it can impose tariffs and it really believes that, you know, this is the way to get rid of deficits. So we don't know.

So that part is uncertain. And that's something that India will be trying to explore with the United States. But that's the other part that India can do, which it needs to do for itself.

I mean, as you know, in the last two, three years, India has turned highly protectionist. You know, we have this cancer of a policy called quality control orders, tariffs have gone up. And we should be doing things regardless of what's happening in the rest of the world.

And in fact, we've been doing just the opposite. So we need to reverse some of those things, I think. So that's some room we have.

Some room for manoeuvre we have, we've already seen the RBI has cut interest rates, and I suspect that it will have to cut, it will and will have to cut more over the next few months. So there are things that we need to do in the short run vis-a-vis the US. But there are lots of things we can and should do for our own economy, which we should be doing and just using this US thing as a kind of opportunity to do some of the things we need to do in any case.

[Nidhi Razdan]

Do you see, though, the impact of the meltdown that's happening in the world at the moment impacting India's growth? Because, you know, there seems to be a downward projection ever so slightly of India's projection numbers as well, that's come out in the last day or so.

[Arvind Subramanian]

Absolutely. And the impact will be much greater than what I think the forecasters are predicting. Because, you see, if you get a not just the US, a global recession, global decline in trade, India will be affected as well.

And I have seen some numbers that, you know, all these things will reduce one percentage point in GDP growth. I suspect it will be much greater because it's not just the impact of the trade and the economy, but also the absolute uncertainty and turbulence that's going to have a chilling effect on investment everywhere. You know, why should, and by the way, some of these reductions in investments that are happening globally will also affect India's services trade.

You know, for example, if, you know, let's say Procter and Gamble says, you know, we're not going to invest in a big plant in, say, Switzerland or the US, the back office work that would have come to Infosys as a result of that, that also will stop. So even our global capability centres, which have been so dynamic in the last few years, they will be affected too. So it's not just goods and trade that will be affected, it will be much bigger.

And so the first order effect of this is going to be severe on all countries, and India is not going to escape that.

[Nidhi Razdan]

I had a question for you, you know, when you said that, in a sense, this provides an opportunity for India to reduce its own sort of protectionist tendencies and tariffs that you believe have been unreasonable, etc. But, you know, there's a lot being written about these days about whether, you know, the fact that there are higher tariffs on a Vietnam or a Bangladesh, etc., or gives Indian manufacturing an opportunity to step in. My question, though, is that, do we have the infrastructure to do that, or did we miss the bus on that just a bit?

[Arvind Subramanian]

Well, certainly, we've missed the bus, we missed the bus. But I would say that this creates a new opportunity for us. And let's not forget something I've written about as well is that, you know, Tamil Nadu, for example, has been taking advantage of this China plus one opportunity.

You know, it's attracted investment in electronics, in automotives, in all the suppliers of Nike now, many of them have located. So, if Tamil Nadu can do it, you know, why can't some of the other parts of the country? So, it is true that, you know, we've missed the bus.

But it's like, new and new opportunities are being, you know, opened up for India. And we seem to be, you know, foregoing them and squandering them. This is one more opportunity.

Because I think, remember, there are two effects from what has happened from the Trump tariffs. One is the first order effect on everyone, and on uncertainty, which is going to be adverse. You know, everyone is going to face a downturn, some more serious, some less serious.

And the longer this continues, the more adverse the consequences. But once that dust settles, it is true that if you look at the pattern of tariffs, they're much more severe on some of India's competitor countries, like especially China, but also Vietnam and others. So, that's where, I mean, a fresh opportunity could potentially arise.

But that opportunity will only arise when everything settles. At this stage, it's too early to say it's really an opportunity.

[Nidhi Razdan]

Finally, sir, I just wanted to ask you, and I think this is a little hard to predict, but the general sense seems to be that Trump wants, you know, different countries to come to him to negotiate a deal. He used some rather unparliamentary language about the same. But do you think that that's what countries are hoping for at the moment, that there's some kind of face saver that will enable him to step back from these tariffs?

Because, I mean, you know, he's a man that sort of works on his ego. He's not going to do it on his own. The latest approval ratings show that, you know, his approval ratings are majorly down.

So, is that the only face saver, that he's actually able to get more and more countries to the negotiating table and perhaps back down from there? Is that the only hope we have?

[Arvind Subramanian]

I mean, you know, this is kind of a million dollar question. What will get President Trump to change? You know, there are various, I think, possibilities.

One is that, you know, the economy itself, financial markets itself are having some kind of impact. You know, this continues at some stage. It will, you know, people will have to respond to that.

The other, of course, is that maybe the domestic political actors will start acting up. His donors have started speaking up to some extent. That's another source of change.

Third, of course, you know, if China retaliates and China keeps retaliating, then, you know, it's going to hurt all sides. But then, you know, some say that China can, you know, hold out for longer than the U.S. can, because in some ways, you know, the fact that U.S. imports a lot from the rest of the world is a source of power, but it's also a vulnerability because, you know, all goods go up in price. And, you know, if prices start rising at least one off very highly here, that's going to create adverse political reaction.

And then finally, what you said, you know, maybe countries coming to negotiate as well. But there are many, many sources of potential, you know, influence on the president. And we really don't know which of those is going to be effective, if at all.

[Nidhi Razdan]

Arvind Subramaniam, thank you very much for joining us on DeKoder and giving us a wider perspective on what this means for the world economy, the U.S., China and India as well. Thank you very much, sir.

Well, at the centre of Trump's world, apart from himself, is the world's richest man, Elon Musk, who's facing a backlash for aligning with Trump and could possibly be on his way out sooner rather than later.

Musk's public comments of tariffs have contradicted Trump, and he has just described Trump's trade advisor as a moron and dumber than a sack of bricks. As the head of the so-called Department for Government Efficiency, Elon Musk has been instrumental in firing thousands of government workers across departments in America, which is ironic given that Trump was voted to power to create jobs but has been going out of his way to sack people instead. Now, recently, Musk pumped in a staggering $20 million into the campaign of a conservative judge in the race for the Wisconsin Supreme Court.

The election was widely seen as a kind of referendum on Trump and Musk so far, in what is a battleground state, which Trump narrowly won back in November. The result, however, was a decisive victory for the Democrat-backed judge and a huge loss of face for Musk in particular. And that's not the only place Musk is getting hurt.

If you take a look at the state of his businesses, particularly Tesla, we have seen a major decline in Tesla's profits and its numbers. If you look at global sales of Tesla, in the first quarter of 2025, there was a 13% drop compared to 2024. Annual sales also in 2024 showed a 1.1% decrease compared to the previous year. And this was the first annual drop in Tesla's annual sales in over a decade. In the European market, in 2025 February, Tesla's were down by 44% year over year. The stock price also showing more than a 40% decline since January of this year.

And a lot of this has to do with just the backlash of Musk aligning with Trump. There are people who once were proud owners of Teslas. And the fact is today that they are embarrassed to actually own a Tesla and are, in a way, looking for buyers, looking to sell them, get rid of them, they're embarrassed to be seen in them, photographed in them, etc.

Now, the fact is that top business executives are extremely wary of what Trump has done with these tariffs, but many in America are afraid to speak out. There is one, however, who did. Bill Ackman, a billionaire fund manager who is a Trump supporter, has said the tariffs should be paused because they could cause major global economic disruption. But people like Bill Ackman are few and far in between.

And increasingly, billionaires, fund managers and others in the Republican Party who were big Trump supporters and continue to be so at some level are getting more and more nervous about the political and economic fallout of this on the Republican Party, on the economy in particular. And some are starting to speak out. The question is, will more do so in the coming weeks and months?

And joining us now on DeKoder straight from Washington, DC, is Alan Litchman, Distinguished Professor of History at the American University. Mr. Litchman, Professor Litchman, thank you very much for joining us as we watch the story unfold from the United States to China and beyond. I just wanted to begin by asking you, we're reading reports of increasing discomfort apparently within the Republican Party and amongst Trump's big billionaire supporters and business executives about what he's done with these tariffs.

But are those concerns really being voiced loudly enough?

[Alan Litchman]

You know, you've had remarkably little blowback on these tariffs from the Republican Party. You would think, given the plummeting stock market that's followed the imposition of these tariffs, which is really unprecedented in many, many decades, you really have to go back to the Smoot-Hawley tariff of 1930 that was so disastrous for the world economy that made the depression more prolonged and deeper to really find any precedent. Very little blowback from the Republican Party.

There are a few critics, but for the most part, the Republican Party, the leadership has been unwilling, no matter what Trump does, to criticise him even in the mildest terms. Number one, they're afraid of retribution from this ultimately vindictive president. We have never seen a president as vindictive personally as Donald Trump.

But even more importantly, the Republican Party is now the MAGA party. It is Trump's party. The so-called moderate mainstream Republicans are absolutely gone. They don't- barely exist anymore, two or three in the House or the Senate. That's about it. It's a 90% plus MAGA party.

And as far as his billionaire supporters are concerned, they may be a bit upset about the tariffs. But on the other hand, the rationale behind the tariffs is to bring in revenue so that Trump can enact a deep tax cut that enormously benefits corporations and his billionaire supporters. Plus, they are enormously benefiting from his essential dismantling of the entire federal regulatory structure.

We've talked about Trump maybe going back to the 1980s or 1950s. No, he wants to go back to the 1880s when there was no restraints on business at all.

[Nidhi Razdan]

It is interesting, isn't it, though, that the world's richest man appears to be feeling some blowback and some consequences for aligning with Trump. If you look at the sales of Tesla, which have been hit in the US, in Europe, the fact that Musk has also openly disagreed with Trump about the tariffs. There was also a Washington Post story that he was trying to urge the president not to do this.

And of course, Mr. Trump didn't listen. But I find the Elon Musk’s story particularly interesting. And do you think it's inevitable that this honeymoon between the two will end sooner rather than later?

[Alan Litchman]

Oh, there is no question that ultimately the honeymoon between Elon Musk and Donald Trump is going to end. But I think it's going to be later rather than sooner. Musk serves a critical purpose for Donald Trump.

That is, he can absorb the blame for the dismantling of critical government programmes, for the wholesale firing without cause and cruelly of thousands of federal workers who did nothing wrong except doing their job. Musk's approval rating is down in the dumps. Look, this guy is a private citizen who is laden with conflicts of interest, who has not been appointed to any official position, who has not been vetted, who has not been confirmed by the Senate as a federal officer.

And yet, as you saw him waving that chainsaw, he is running amok through our government. And Trump is perfectly happy to let Musk get the fallout rather than himself.

[Nidhi Razdan]

But Musk is feeling the pinch now with his businesses. As I said, Tesla is being hit. Today, people are embarrassed to own a Tesla.

And at the end of the day, he's a businessman. Surely that must hurt.

[Alan Litchman]

I guess it does hurt. Yeah. I mean, the fallout on Tesla has been quite significant.

But on the other hand, when you're worth 400 billion, what's the loss of a few $10 billion here and there? It's just an indication of how obscene it is that we have someone worth more than most of the countries of the world and can absorb tens of billion dollars in losses. He still seems to be revelling in this unprecedented wielding of power.

He's drunk on power, no question about it. And he wants to exercise this power. You've got to understand this, not just in the United States, but all over the world.

We've seen him intervening in European politics on behalf of the most extreme, far-right parties, who have sympathy for the old fascist past of Germany, which Musk has said, oh you know, let's get past that. Let's forget about it. The Holocaust, let's not dwell on that.

So this is someone who has ambitions, in a sense, to be the maker of rulers all over the world.

[Nidhi Razdan]

Professor Lichman, as far as the American public is concerned, has the impact of these tariffs sunk into ordinary folks about what this could mean for them? Hike in grocery prices and the prices of everyday items, toys, clothes. Is there any sort of buyer's remorse at all amongst Trump voters in particular?

[Alan Litchman]

Well, no question about it. Even before the full implication of Trump's tariff policies were felt, Republicans suffered some major setbacks in off-year elections, particularly in the state of Wisconsin, which is a pivotal state, a presidential-making state. Trump won it when he won in 2016, he lost it when he lost in 2020, and he won it again when he won in 2024.

In all those cases, the margins were razor thin. So this is a true 50-50 swing state, and you had a pivotal election in that state for the state Supreme Court for whether liberals or conservatives would control the court. This was the pivotal seat, and we've never seen anything like it.

An overwhelming record in spending of $100 billion for a state Supreme Court race, more than almost any Senate race in the country. And not only did the progressive Democrat win, it's not specifically partisan, but everyone knew who the Democrat and Republican were. Not only did she win, she won in a near landslide by 10 points.

Then we saw two special elections in Florida, in deep red states that Republicans had won traditionally by more than 30 points. These two special congressional elections, the Democrats lost, but they cut into Republican gains by more than 50%. And now we're seeing the public opinion polls, and they are overwhelmingly opposed to Trump's tariffs, where, as the economy was a very strong issue for Trump in the election, it is now a severe liability with a very strong majority of Americans, very unhappy with how Trump is managing the economy, and very unhappy with these tariffs and the full pain; it's not been felt yet. The tariffs are, you know, the ink is barely dry on the tariff documents.

[Nidhi Razdan]

Finally, you know, Professor Lichman, I mean, what is it like to wake up every morning and have to deal with a president? You just don't know where he's coming from, what he's going to do next. He doesn't clearly seem to listen to people around him.

He may not have the best set of advisors from what one gathers. They're all yes men and yes women, perhaps unlike his first term where there was still some pushback. And so the unpredictability of this White House and of this president, how unsettling is that for you as an American?

[Alan Litchman]

Look, I go back to the Eisenhower administration personally. But of course, I've written, you know, more than a dozen books on American history and politics. I've studied it since the founding, and we've never, ever seen anything like this.

I compiled a list of 10 dangerous, unprecedented actions by the Trump administration. Do you have time to hear it?

[Nidhi Razdan]

Please go ahead. Yes, yes.

[Alan Litchman]

Okay. Here are the 10, and I could have given you more.

Contradicting the birthright provision of the 14th Amendment sustained by a conservative Supreme Court president to deny U.S. citizenship to American-born children of undocumented immigrants.

As I've already mentioned, empowering Elon Musk, a private individual laden with conflicts of interest with no official position, to run amok through our federal government,

Calling for the impeachment of whose ruling simply that he didn't like, provoking a rare rebuke from the conservative chief justice of the U.S. Supreme Court.

Undermining the NATO alliance that has protected Western democracies since the end of World War II. And all of this includes, as we've discussed, a gratuitous tariff war against America's allies.

Declaring himself akin to a king who is unbound by the laws of the land. Including, get this, the 20th Amendment to the Constitution prohibiting a president from being elected to more than two terms.

Engaging in a war on science by erasing climate change from the federal government as if it didn't exist. Cancelling federal grants for vital scientific research. Appointing unqualified persons and purveyors of quack science to key federal health and science positions.

Using executive orders to dismantle congressionally established federal agencies and departments.

Engaging in the deportation of undocumented immigrants without due process, most of whom have no criminal record at all, or committed only minor traffic offences.

Using the power of the presidency to compel private law firms, the Smithsonian Institution, the keeper of our heritage, and colleges and universities to conform to Trump's distorted, politically driven vision of American history and heritage.

And number 10, purging government officials and replacing them with Trump loyalists, regardless of qualifications, to place government departments and agencies under his personal control, including the Department of Justice, the FBI, and the military.

That's just 10 of totally unprecedented actions. We wake up virtually every morning to something new.

[Nidhi Razdan]

I wish you all the best, Professor Litchman, and I think you really summed it up very well for the rest of the world in terms of the unprecedented actions that President Trump is taking. We even started a show for that reason, just to track those decisions and their fallout. Thank you very much for joining us on DeKoder from Washington.

Thank you very much.

And while there are very serious implications as to what Donald Trump is doing, there is also, well frankly, the funny side. And what do you do when you're faced with a serious situation like this?

The internet comes up with memes that can only make you laugh. We leave you with some of the best ones that we found this week. Goodbye.

Tracking Trump Episode 2

Stock Markets crashing. Allies rattled. Billionaires breaking ranks.