Transcript

4.14.25 · Washington Post

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Speaker 1: Good morning, everybody, and welcome to the reading of the
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Washington Post for this Monday, April fourteenth. As a reminder,
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radioIO is a reading service intended for people who are
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blind or have other disabilities that make it difficult to
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read printed material. Your reader for today is Rod Brotherton.
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And usually we start Mondays with the reading of Paul
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Preather's weekly column from the Lexington Hair Leader. But Paul
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must be on vacation because he had no column yesterday,
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So let's turn to the news. Manufacturers struggle with uncertainty, chaos,
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and Trump's tariffs. President Trump's sweeping tariff driven reversal of
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decades of free trade is creating financial chaos for the
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very sector it's meant to rebuild American manufacturing, although the
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full extent of economic damage is still unclear. Volatile tariff
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policies are making it tougher for American companies to make
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con seal goods, whether they're producing medical devices in Florida,
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toys in Ohio, or bicycles in California. Even though the
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Trump administration put many of its sharpest levees on hold
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last week while boosting tariffs on China, companies around the
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country say the recent messiness of announcements and uncertainty is
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hurting business their costs arising and demand is slowing as
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spooked customers in the United States and abroad slam on
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the breaks of spending. The economic picture, both in the.
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Speaker 2: United States and globally is.
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Speaker 1: Quickly souring as the u turn in American policy upends
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the global trading system and Royal's financial markets. The odds
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of a recession have spiked in recent weeks.
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Speaker 2: The value of the.
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Speaker 1: Dollars tumbled and treasury yields have climbed as investors abandoned
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both worried about the reliability of the United States government.
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The fallout has been most pronounced for companies that buy
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or sell from China, which last week got hit with
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a one hundred and forty five percent tariff, but even
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those that do business with other countries say international buyers
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are treading carefully, sometimes pausing orders or canceling shipments altogether
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while they wait to see how the White House's policies
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shake out. This whole uncertainty over tariffs are here, tariffs
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are gone, has been damaging on its own, said Paul
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sat Off, owner of rock Lobster Cycles, a custom bike
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maker in Santa Cruz, California that ships worldwide. My orders
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have certainly slowed. Why would someone in Japan, or Australia
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or Canada order an American bike if things could change
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dramatically again next week. It's like everything is frozen. The
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Trump administration has for months said new tariffs, including a
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ten percent Blanke attacks on all imports, are aimed at
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boosting US manufacturing as a part of America's first trade Plan.
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White House officials have said they must take decisive steps
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to reshape the economy by closing the federal deficit and
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bringing back some of the four and a half million
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dollar factory jobs that have disappeared since the year two thousand,
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But Trump and others have acknowledged such a massive shakeup
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could lead to short term economic pain. Shoring up US manufacturing,
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the President said last week, is an opportunity to change
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the fabric of our country. Many US manufacturers say their
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optimism for prosperity has been eclipsed by growing concerns about
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economic turmoil. The industry was already showing signs of weakness
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in March after a brief expansion earlier in the year.
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As companies try to get a head of tariffs now,
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Manufacturing trade groups say they're being inundated with calls from
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members who are fretting about canceled orders and slowing growth.
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In interviews with more than a dozen manufacturers from America,
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most said they were struggling to smooth over alliances with
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overseas suppliers and buyers. Nearly all we're facing higher costs
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on key materials, on machinery, and several said they've already
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seen demand dry up because of tariff related uncertainty. When
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you lay out tariffs and yank them back over and over,
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the threat of it wears off and turns into an
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unwillingness to work with American companies, said Suzanne Shiner, president
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of Lion Gates Farms, who sells its Hawaiian grown ConA
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coffee throughout Asia and Europe. We've been exporting internationally for
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twenty years, and all of a sudden, our markets are
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closing up. Customers in Canada, which last month imposed twenty
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five percent tariffs on some US imports, and Japan are
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rethinking their purchases, she said, because they're worried about the
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unpredictability surrounding future costs and this moment isn't without precedent.
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Shriner's company lost nearly all of its business in China
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during the first Trump administration when the country hit back
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with duties on American agricultural goods. This time around, though,
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economists say the Trump administration's protracted threats have upended relationships
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with just about every US trading partner, especially after the
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last minute pullback on tariffs on dozens of nations. Treasury
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Secretary Scott Pssent said last week that more than seventy
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five countries have contacted the White House to talk through
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trade policies. Each one of these solutions is going to
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be bespoke. It's going to take some time, he said.
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In the meantime, business owners say they're in limbo. Economists
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are increasingly warning that a recession is on the horizon,
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with JP Morgan saying last week that it still expects
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the downturn despite Wednesday's pause on some tariffs. Consumers are skittish, too,
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saying they expect unemployment and inflation to get significantly worse
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in the coming year. American's economic confidence, which has fallen
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for four straight months, is near an all time low,
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according to a University of Michigan survey released Friday. It's
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become extremely difficult for US manufacturers to keep doing business,
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which is ironic because that's the very group these tariffs
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are supposed to protect, said Elizabeth Levinson, an international trade attorney.
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Rothschild businesses are putting everything on hold. They literally can't
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plan from one day to the next. International orders for
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Little Tyke's brightly colored Cozy coop have stalled in recent
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months and have yet to pick up, even as Trump
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temporarily paused to tariffs on most countries last week. The
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company manufactures its ride on vehicles in Hudson, Ohio, and
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typically ships about two hundred thousand overseas to Asia, Europe.
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Speaker 2: And Latin America.
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Speaker 1: But now with trade policies and flux and China striking
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back with a one hundred and twenty five percent duty
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on American goods, distributors are wondering whether it's worth stocking
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the sixty five dollars toy at all. Basically every country
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in the world is saying hold on, let's us find
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out what's going on. They're pausing or their canceling, said
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Isaac Larian, chief ex executive of Little Tyke's parents' company
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MGA Entertainment. All of Asia is shut down for now.
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If I ship a Cozy Coop from Ohio to China
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and it gets slapped with one hundred and twenty five
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percent duty, nobody's going to buy it anymore. The instability,
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he said, has put a chill on holiday toy orders.
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Retailers do most of their Christmas buying in the spring,
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but this year they're holding off, not knowing whether the
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toys they'll buy now now will cost more by the
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time they arrive in the fall. Larian says his own
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expenses are likely to go up in the coming weeks.
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Although the Cozy Coop is made in the United States,
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a number of components, including screws, axles, hand rope, come
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from China. Back and forth has been enough to hurt
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international prospects for some companies. Bro Brothers Dicillery, which makes
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burd Gin run and vodka, and Louisville was about to
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close a deal to sell liquor in New Brunswick, Canada
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when Trump first floated twenty five percent tariffs on the
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country just hours into his presidency. Although many of those
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measures were eventually paused or watered down, the damage was
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done CEO, Victor Yarborough said, we're about to finalize things.
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When they said we unfortunately can't do this, he recalled,
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they're taking American whiskies, spirits and wines off the shelves.
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It's beyond tariffs at this stage. It's about whether or
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not we can build back these relationships. Now, Yarborough is
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wondering what to do long term. Should he expand into
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the United Kingdom and South Africa as he planned, or
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focused and set on selling to more bars and restaurants
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in the United States. He's also considering open an distillery
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in Canada to serve the market there. How do we
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grow and expand, But it's not clear where these tariffs
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are headed. That's our big.
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Speaker 2: Challenge now, he said.
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Speaker 1: Still some US manufacturers, especially those that don't do much
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business abroad, are encouraged by the Trump administration's broad overhaul.
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Trump campaigned heavily on the promise of creating new jobs
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in the factory, arguing the tariffs will encourage companies to
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move operations to the US. Red Land Cotton, a textile
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company in Molton, Alabama, is firmly rooted in the United States.
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The company grows cotton at its own farms as it's
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sewn into bed sheets, t shirts, and quilts and plants
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throughout the South and sells almost exclusively US customers. Although
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the company relies on foreign made sewing machines that could
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soon become costlier, the fallout of the trade war has
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so far been minimal. CEO and A break Field is
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hope that the new tariffs will encourage your resurgence in
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manufacturing that would help her expand her own business. In
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the past year alone, for partner plants, including two that
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manufacture bath tiels for the company, have closed because of
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a lack of domestic demand. Break Field is down to
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one fabric finisher to process and bleacher textiles, which means
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it's taking months longer to get products made and on
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the shelf than in the past. She said, maybe if
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there were more companies that needed these services, we'd start
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to see more of a domestic supply chain. She said,
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It's been a crazy week and a day, but that's
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the kind of opportunity I'm hopeful about. Chris Kristenberry, who
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runs a medical device company in Tampa, isn't quite as optimistic.
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He sells scar management kits and skin health products to
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Burn units, cancer centers, and stick surgeons in eighty countries,
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and said recently that the uncertainty has been debilitating for business.
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Among his biggest worries is that Chinese customers are willing
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to shoulder new tariffs for American made goods will find
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ways to copy his products instead. For now, he's holding
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off on expansion plans by scrapping two job openings, including
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an international sales position, and pausing investments. I'm just a
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small US business trying to do what we're supposed to,
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make products at home and sell them around the world,
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said Kristen Berry, CEO of Atlantic Medical Products. But because
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of this man made economic crisis, we're ruining trust with
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other countries. Our international distributors are saying, our clientele is
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so mad at the Americans. We don't know if they're
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going to keep buying our next story. College financial aid
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hit with glitches and delays due to federal staffing cuts.
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Calls are going unanswered, email responses are sporadic, and systems
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that help process and disperse student loans and grants are
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plagued with outages that are taking longer than usual to fix.
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Cracks are starting to appear in the federal financial aid apparatus.
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After the Trump administration imposed sweeping staff cuts at the
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Education Department a month ago, College and university aid officers
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or reporting disruptions that are slowing down their ability to
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calculate financial aid offers. They get timely answers about everything
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from adding academic programs to remaining eligible to receive federal aid.
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Some fear that a continued deterioration that make it harder
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for students to get the money they need for college.
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Technical glitches are not unusual for the various platforms the
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government uses to manage federal financial aid dollars, but the
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frequency and duration are concerning, said Charles R. Mayfield, director
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of financial assistance at Northwest Missouri State University. Earlier this month,
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it took his team members almost a day to log
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into the Student Aid Internet Gateway, a portal the Education
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Department uses to send colleges electronic files, including processed free
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application for federal student aid forms needed to make financial
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aid offers. They learned they were not alone after posing
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questions about the outage on an e mail group run
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by the Federal Student Aid Office. There, colleges nationwide complained
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about having a similar problem. Assessing student records, and of
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getting a boilerplate message from the help desk confirming the
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problems but providing no other information. Days later, it happened again.
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Mayfield said the team members spent a few hours trying
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before they were able to access the portal. Other systems,
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he said, have also become increasingly difficult to access, including
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a database that houses student loan information and another that
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handles the origination and disbursement of loans.
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Speaker 2: And the PELL grants for undergraduates with.
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Speaker 1: Exceptional financial need. The consistency and stability of these systems
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are a growing concern. Mayfield said, it's not a major
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delay by itself, but it still means it will take
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us longer for us to process the student's FSA record,
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loan record, or PELL award. The Education Department oversees the
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one point six trillion dollars student loan program, its single
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biggest financial responsibility, and it runs the PEL grant program
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for low income college students. Education Department spokesperson Maddie Biederman
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said there have been no prolonged outages for the past
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sixty days, but didn't clarify what is considered prolonged when
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significant issues arise. Within federal student aid systems that affect
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multiple users, the Department acts swiftly to resolve them, communicates
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promptly with financial aid partners, and implements systems and adjustments
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that are needed.
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Speaker 2: She said.
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Speaker 1: The Trump administration laid off more than thirteen hundred employees
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at the Education Department in early March, including tech staffers
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who routinely identified and fixed glitches and outages. The department
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of those workers has slowed the response time and coordination
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needed to resolve problems, according to three people familiar with
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the matter, who.
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Speaker 2: Spoke on the condition of anonymity because they were not
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authorized to speak publicly.
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Speaker 1: Even though some of the tech staffers have been reinstated,
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these people said they are are enough workers to mitigate
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problems and manage the department's sprawling infrastructure. Current and former
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Education Department employees say the disruptions are only the beginning
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and are likely to get worse for colleges, students, and borrowers.
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Speaker 2: We will see issues wherein.
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Speaker 1: These complex, intertwined technology systems cannot be adequately managed because
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so many of the people experiencing that are experienced in
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identifying and resolving incidents will have left. Colleen Campbell, who
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resigned as executive director of the Office of Loan Portfolio Management,
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set in testimony for a lawsuit seeking to block the
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department layoffs. This puts critical functions like FAFTSU aid disbursement
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and loan repayment at risk. Because of the troubled rollout
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of the twenty four to twenty five FAFSA, which was
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riddled with technical errors and delays. The financial aid officers
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at college just worrying the staff cuts could throw the
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application process back into chaos. When online access to the
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forum went in and out for hours four hours after
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the delays after the layoffs, some took it as a
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harbager of things to come. But since that incident there
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haven't been any major FAFSA disruptions. There is a little trepidation,
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said Paula Carpenter, director of financial aid at Jefferson College
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in Missouri. We have this new era of change and
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uncertainty that's kind of putting us back in flux as
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we were over the last couple of years.
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Speaker 2: With layoffs and resignations.
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Speaker 1: The office that oversees federal student aid lost nearly half
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its staff.
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Speaker 2: People who made sure.
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Speaker 1: Schools complyed with the rules to receive aid, people who
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kept an eye on college finances, and people who monitored
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the contractors managing the government's one point six trillion dollar
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loan student portfolio. In their absence, some college aid officers
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say it's been harder to get hold of any one
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to answer questions or offer guidance. Michelle Brown at the
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Fingerlakes Health College of Nursing and Health Sciences in upstate
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New York, has been waiting five weeks for confirmation that
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the FSA School's Eligibility and Oversight Group received her response
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to an audit finding. She worries that missing the deadline
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could put her school at risk of losing eligibility for
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financial aid, which would be devastating to students who need
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federal dollars.
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Speaker 2: To afford college. The number of federal.
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Speaker 1: Workers in the Oversight Group, which monitors colleges participating in
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the student aid programs, dropped from one hundred and forty
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two unionized employees to thirty five, with all but two
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of its eight regional offices closed. Brown's case managers was
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among those in the shuttered New York office who were
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laid off, according to union records, but she had no
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idea and kept sending emails that never bounced back. She
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tried the email address the department set up to feel
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questions and got an automated message saying her case would
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be reviewed by the next available person and.
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Speaker 2: Warning to expect delays.
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Speaker 1: We beat the deadline for submitting our response by several
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weeks because we wanted to be in compliance, but our
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case manager is gone and no one is helping, Brown said,
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I don't want this to jeopardize our student's' access to
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financial aid to Former employees said that before the staffing cuts,
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the oversight group had a backlog of sixteen hundred applications
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from colleges trying to become or remain eligible to participate
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in the aid program.
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Speaker 2: Colleges are not approved to.
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Speaker 1: Receive federal financial aid, their students cannot use federal loans
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and grants to cover their costs. Another arm of the group,
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which analysis schools finances, had a backlog of eight hundred cases,
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according to the testimony of Chris Miller, who ran the
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Atlanta division that closed. The Education Department did not respond
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to questions about how it will address the backlog with
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a diminished staff. In a letter to education groups on
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March fourteenth. James Berganon, acting under Secretary for the Education Department,
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said program reviews, participation agreements, and other important functions handled
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by the regional offices and staff are being transferred to
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other offices and experts. Karen McCarthy, vice president of public
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Policy and federal Relations at the National Association of Student
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Financial Aid Administrators, said there were long standing concerns about
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inadequate staffing and the oversight group that have been compounded
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by the spate of cuts even before all of this happened,
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going back years, decisions and approvals we're taking longer than
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ideal for schools and were kind of unpredictable. McCarthy said,
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I don't expect that at least in the near term,
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will get any better and may get possibly worse. And
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the next story. Home prices are dropping in some cities.
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See what it's like in your neighborhood. Home prizes are
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cooling off in many parts of the country, even falling
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in some regions as more homes are listed for sale,
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slightly easing the long standing inventory crunch. Prices for single
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family homes grew only two point seven percent nationally in
22:39
the last year, compared to more than six percent the
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year prior. According to The Washington Post analysts of home
22:46
value data from the Mortgage Technology division of Intercontinental Exchange,
22:52
the market is leveling as demand from buyers remains constrained.
22:56
More homes are coming up for sale, but costs still
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remain highly elevated from the pre pandemic years. Since twenty nineteen,
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prices are up nearly sixty percent. Price swings very widely
23:10
in different regions of the country. It's really supply side story,
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said Andy Walden, head of mortgage and Housing market research
23:19
for IC. Over the last six years, home prices and
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mortgage rates grew rapidly, meaning many households were unable to
23:27
afford homes and started setting out of the market, said
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Hannah Jones economics senior research analyst at realtor dot Com.
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The number of homes on the market remained low and
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buying a home became out of reach for many. Buyers
23:44
were just simply hit with the housing affordability challenges, said
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Lawrence Yun, chief economist of the National Association of Realtors.
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The buying aspiration is there, it's just that the capacity
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is not. Now mortgage rates have ticked down and home
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prizes aren't rising so rapidly, which has attracted slightly more buyers.
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Speaker 2: Walden said the increase in.
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Speaker 1: Inventory has also changed the dynamics of buying a home,
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especially in the Sun Belt. The prices have actually fallen
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in several major cities as new homes are built and
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fewer people flood into the region compared to the early
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pandemic years. Several of the biggest drops in homes values
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were in Florida, especially around the Gulf Coast, which has
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been hit with several major hurricanes in the past two years,
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and that's led to higher interest rates, a heightened awareness
24:40
a flood risk, and an increase in inventory as people moved.
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Florida was one of the most popular places people migrated
24:49
to in the past five years, leading to a huge
24:52
influx of new residents and a packed real estate market,
24:56
But now Rick Harrison, a real estate advisor Fort Myers,
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said demand has started to slow.
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Speaker 2: A lot of them are very leary of buying anything
25:06
along the coast, he said, adding.
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Speaker 1: That he now brings insurance quotes to house showings for
25:12
clients to factor into the cost. The average single family
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home in Lee County, where Fort Myers is located, is
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now four hundred and twelve thousand dollars, down six percent
25:23
from last year. Prices are also falling in many parts
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of Texas, especially around the major cities of Austin, Dallas,
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and Houston. Texas City's experienced big population increases in the
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past five years as remote workers and others moved to
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the relatively less expensive areas. Now that buyer demand has softened,
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said Jones, who is based in Austin. At the same time,
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newly built homes that were part of the construction boom
25:50
are being listed, together, driving down prices and the Dallas
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Fort Worth area real estate agent Todd Leong said he
26:00
seen an increase of more than thirty percent and the
26:03
number of homes listed compared to a year ago, a
26:06
huge inventory increase, even as prices remain relatively high. Dallas
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is not as affordable as it used to be, he said.
26:15
Our prices are kind of catching up with the rest
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of the country.
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Speaker 2: The increase in number.
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Speaker 1: Of homes may be easing prices in many regions, but
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some areas of the country are still in a tight
26:26
inventory crunch with rising prices. In parts of the Midwest
26:30
and Northeast, especially, there's pent up demand for homes. The
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Northeast is still highly highly, highly competitive, Jones said. In
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upstate New York, the lack of inventory continues to be
26:45
a big challenge for buyers, said Katrina Ruberti, a licensed
26:49
associate real estate broker and Howard Hannah. In the region
26:53
surrounding the state capitol of Albany, she'll see a four
26:56
hundred and fifty thousand dollars house house sell for six
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sixty thousand dollars over the asking price after receiving multiple offers,
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she said. Nationally, the cooling home prices and interest rates
27:11
are starting to even things out in the market, making
27:14
things slightly more affordable for buyers. Walden said, we're moving
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in the right path, but we're still aways from our
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destination and returning to our more normal levels of affordability,
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he said. Over year home prices comparisons are based on
27:34
data from the February twenty twenty four In February twenty
27:37
twenty five analysis based on Home Price Index data provided
27:41
by the Mortgage Technology division of IC. The IC HPI
27:46
represents the properly weighted average price levels derived from a
27:51
repeat sales index that measures housing market trends by tracking
27:56
price changes of the same property for time.
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Speaker 2: And our next story.
28:04
Speaker 1: Tariffs on chips, phones, laptops still coming. Commerce Secretary warns
28:11
US levies on semiconductor chips, smartphones, and laptops, which the
28:15
White House exempted late Friday from a slew of reciprocal tariffs,
28:21
are in fact still in the works and will be
28:23
determined in a month or two. Commerce Secretary Howard Lutnik
28:28
and other top Trump administration officials asserted Sunday. Lutnik said
28:33
tariffs on those electronic goods will ultimately be decided through
28:37
an industry specific tariff model focused on the semiconductor supply chain,
28:42
and imposed via Section two thirty two, which governs national
28:47
security related tariffs and requires a lengthy process for study
28:51
and comment. The Trump administration has previously cited two thirty
28:56
two as a potential avenue for semiconductor tariffs, and President
29:02
Trump issued his own clarification Sunday stating that no such
29:06
exemptions to tariffs had been made Friday. These products are
29:12
subject to the existing twenty percent fentanyl tariffs, and they
29:16
are just moving to a different tariff bucket. The fake
29:20
news known this but refuses to report it.
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Speaker 2: Trump posted on.
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Speaker 1: Truth social adding we are taking a look at semiconductors
29:28
and the whole electronics supply chain in the upcoming national
29:34
security tariff investigations.
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Speaker 2: What has been exposed.
29:39
Speaker 1: Is that we need to make products in the United
29:42
States and that we will not be held hostage by
29:46
other countries, especially hostile trading nations like China. But the
29:52
latest messaging twist has prompted further confusion for the tech sector,
29:57
which needs access to advanced chips to support the artificial
30:01
intelligence boom and had breathed sigh of relief after the
30:06
tech exemption was announced. This is really mind boggling. If
30:11
this was serious industrial policy, the main thing you wanted
30:14
certainty here the tariff. It will be in place for
30:18
the indefinite future, and you should plan accordingly, said Dean Baker,
30:22
an economist at the Center for Economic and Policy Research,
30:26
a left leaning think tank. Here it's basically come back
30:31
next week, we'll see what we got.
30:34
Speaker 2: That's no way to run an economy.
30:37
Speaker 1: Speaking on ABC News this week, Lutnik said that while
30:40
the electronics were exempt from reciprocal tariffs, they would be
30:45
subject to an industry specific tariff model to encourage companies
30:50
to reshore manufacturing for products related to national security, such
30:54
as pharmaceuticals. He explained, Trump called them sector two paroffs,
31:00
and those are.
31:01
Speaker 2: Not available for negotiation.
31:03
Speaker 1: Leni said, they are just going to be part of
31:06
making sure we reassure the core national security items that
31:11
need to be made in this country, whereas virtually all
31:15
semiconductors are now made in Taiwan and they're finished in China. Meanwhile,
31:22
other officials pushed back on the idea that the White
31:25
House has been inconsistence and its messaging around trade. On
31:30
CBS News Face the Nation, US trade representative Jamison Greer
31:36
argued that the White House has to take more deliberate
31:39
approach to semiconductors than reciprocal tariffs, which are meant to
31:44
only address trade deficits, because the administration's goals covered the
31:49
entire supply chain. We don't even import semiconductors as such
31:55
that much, Greer said. They go into downstream products, so
32:00
we have to be very careful. We want the whole
32:02
supply chain here, not just one product. National Economic Council
32:08
Director Kevin Hassett, speaking on CNN's State of the Union,
32:13
said the tariff investigation in the semiconductors has to do
32:17
with broader concerns about whether US dependence on Chinese made
32:20
imporints could become a problem in a war between the
32:24
two nations.
32:26
Speaker 2: The influence of.
32:27
Speaker 1: China into every little corner of our country has just
32:31
gotten bigger and bigger and bigger, he said. It actually
32:35
is the case that there is a very uncomfortable amount
32:38
of Chinese input and our actual weapons systems. But compared
32:45
with typical Section two thirty two investigations into critical materials,
32:49
the process on China is very very nascent, if at
32:53
all hast said White House Trade advisor Peter Navarro echoed
32:59
the idea that tariffs on semiconductors call for a more
33:02
strategic approach, citing the role than high end chips play
33:06
in the future of AI, where the US is racing
33:10
against China. We don't buy a lot of chips like
33:14
in bags. We buy them in products. So what Lutnik
33:18
is doing as we speak is an investigation of the
33:22
chip supply chain, Devorrow said on NBC News Meet the Press,
33:27
We've got to get control of that. But some tech
33:31
industry insiders argued that contradictory comments from the administration or
33:37
hurting American companies the chaotically mixed messages are terrible for
33:43
the market and the economy. Apocalyptically so maximum uncertainty. Gavin Baker,
33:51
managing partner and the chief investment officer at Rita Dies Management,
33:55
posted on x for the tech sector, and he's clarification
34:01
marked a return to the uncertainty that is Royal markets
34:05
just one day after it's celebrated the White House announcement
34:09
that the chip sector would be spared. The mass confusion
34:13
created by this constant news flow out of the White
34:16
House is dizzying for the industry and investors, and creating
34:20
massive uncertainty and chaos for companies trying to plan their
34:24
supply chain, inventory, and demand. Dan Ives, a senior analyst
34:30
for Webbush, wrote in a note to investors and in
34:35
a related story, Trump's trade war cast a shadow on
34:38
America's AI boom. President Trump has pledged to make the
34:43
United States the world capital of artificial intelligence, but his
34:47
aggressive trade and tariff moves threatened to undermine Silicon Valley's
34:51
work on crucial technology and weaken its competition with China.
34:57
Trump trade levies will drive up the cost of constructing, equipping,
35:00
and operating the data centers the companies such as OpenAI,
35:05
Google and Microsoft are racing to build to power AI development,
35:10
according to executives and experts in AI and data center construction.
35:16
Late on Friday, Trump unexpectedly exempted computers, smartphones, and the
35:21
powerful semiconductors known as GPUs crucial to AI projects from
35:26
his tariffs. He had previously said there would be no exemptions.
35:31
The move initially appears to provide major relief for the
35:34
tech industry, but many ingredients of AI data centers, such
35:38
as construction materials, cooling equipment, and backup generators, are still
35:44
subject to import taxes, and the exemptions do not appear
35:48
to neutralize a twenty percent tariff that Trump levied on
35:51
Chinese imports earlier this year. Further complicating matters, Commerce Secretary
35:57
Howard Lutnik set on Sunday that levies on semiconductors are
36:02
still in the works.
36:03
Speaker 2: It will be imposed.
36:04
Speaker 1: Via Section two thirty two, a provision that governs tariffs
36:08
related to national security. It requires a lengthy process for
36:12
study and comment. Open Ai CEO Sam Altman, speaking in
36:19
an interview on Thursday before Trump's new exemptions were announced,
36:23
said the company was urgently trying to figure out how
36:26
the tariffs would affect the cost of running its AI models.
36:30
We're working around the clock on this, he said. Trump
36:34
and tech industry leaders see China is America's primary rival
36:39
and AI, and the president has said that the US
36:42
must stay ahead to preserve its economic and national security.
36:48
After taking office, he quickly moved to cut AI rules
36:51
introduced under the Biden administration to make it easier to
36:55
build and power AI data centers. But Trump's aggressive tariffs
37:00
on China, now in eye watering one hundred and forty
37:04
five percent, may end up helping it compete with the
37:08
US and artificial intelligence. The country is a key supplier
37:12
of data center components, including those not newly exempted from
37:17
some of Trump's import taxes. As the administration continues to
37:21
consider tariff policies, we strongly encourage efforts to provide certainty
37:27
and continued evaluation of impacts on critical data center equipment
37:31
and components at this pivotal moment in the AI race.
37:35
Josh Levy, the president of the Data Center Coalition, a
37:39
trade group representing companies that operate data centers, said in
37:43
a statement released before the exemptions were announced, the AI
37:48
industry and data center construction are core to America's global
37:54
competitiveness and national security. Levy said it sounds good lud
38:00
that chips are exempted, but on the other hand, there
38:02
are so many other parts to the cost of the
38:04
data center, said Altman, who spoken in an interview Thursday
38:08
after giving remarks at the Vanderbilt Summer on modern conflict
38:12
and emerging threats. The potentially steep cost increases caused by
38:19
Trump's tariffs, plus the end predictable and fast changing trade
38:23
policy have sent a wave of uncertainty through an industry
38:27
that generally sees itself as confidently forging the future. The
38:31
overarching observation is one of uncertainty and confusion and inability
38:37
to really plan, said Jay Biggins, executive managing director at
38:41
BLS and Company, a real estate consulting firm that helps
38:45
AI data center developers find sites and plan their supply chains.
38:50
He spoke before the exemptions were announced on Friday. Artificial
38:55
intelligence has been an obsession for the tech industry for decades,
39:00
but Open AI's launch of chat GPT in twenty twenty
39:03
two triggered an intense race to develop AI and find
39:09
ways to profit from providing it to consumers and businesses.
39:13
The AI boom has not produced major profits, but big
39:18
tech companies and venture capitalists have poured billions of dollars
39:23
into developing and running AI models. They have set off
39:27
a rush of data center construction across the United States.
39:31
The facility's huge power consumption has stressed power utilities and
39:36
triggered plans to reboot mothball coal and nuclear plants. Google
39:42
has said it plans to spend seventy five billion dollars
39:45
this year on data centers for AI, while Microsoft is
39:49
aiming to spend eighty billion dollars. On the first full
39:53
day of a second term, Trump hosted a public announcement
39:57
in the Oval office from Open AI's Altmann and leaders
40:01
from business software giant Oracle and Japanese mega investor SoftBank,
40:06
who said they would spend as much as five hundred
40:10
billion dollars on AI data center construction during his term
40:15
and a.
40:15
Speaker 2: Project called Stargate.
40:18
Speaker 1: The AI data center market is probably the largest market
40:23
I've ever seen in my career when it comes to construction,
40:27
said Don Clark, co CEO of Clark Pacific, Sacramento based
40:32
prefabricated building company that is a growing line of business construction.
40:37
Data centers. Some industry insiders worry that Trump's aggressive tariff
40:41
policy could constrain that boom. I'm very worried, said Andro
40:48
ng A, former head of Google's AI lab and the
40:51
co founder of AI education startup Deep Learning AI. The
40:57
US has a lot of current and plant energy in
40:59
for structure and data center buildouts. Tariffs will definitely increase
41:04
the cost. Companies at the center of the AI boom
41:09
had their stock praises smashed by Trump's initial tariff announcement
41:13
have largely recovered in recent days. Spokespeople for Microsoft, Nvidia,
41:19
and Google declined to comment. The intense demand for data
41:24
center components, like a long backlog of orders, could make
41:28
it challenging for US companies to rework their plans for
41:31
the Trump tariff era. Even if companies can source generators, switches,
41:38
transformers from American suppliers, demand is already so intense that
41:44
prices will have.
41:45
Speaker 2: To increase, said Biggins, the real estate consultant.
41:49
Speaker 1: All of the essential hardware was already on twenty four
41:53
and thirty six month backlogs. Biggin said data cost centers
41:58
could rise by fifteen, teen or twenty percent. He said
42:03
some USAI companies may instead decide to build data centers
42:08
outside America big and said Ng, the former Google AI
42:13
Lab leader who has urged the US to invest in
42:17
AI and avoid regulations that could limit the technologies development, agreed.
42:24
Tech companies generally prefer to build data centers close to
42:28
their customers so they can access apps, data and emails
42:32
with minimal lag, Ing said, but that constraint is less
42:36
pressing for AI applications, which often require more processing time
42:40
to respond to user queries. When a service like chat
42:44
GPT takes ten seconds or more to generate an AI image,
42:49
adding a few milliseconds needed to send it from a
42:51
distant data center is no big deal, he said. Tech
42:55
companies already have data centers all over the world and
42:58
are placing new ones locations, including Malaysia and Singapore. When
43:04
the regulation changes overnight by tweet, it's difficult to plan,
43:09
Ing said. Unfortunately, this makes other geographies with more stable
43:15
structures more attractive. And now moving to worldwide news, China's
43:21
z promises Vietnam the stability of neighborhood diplomacy. Chinese leader
43:29
Xi Jinping called on Southeast Asian country's Monday to join
43:34
him in resisting President Trump's unilateralism and protectionism part of
43:39
his effort to present Beijing as a more reliable ally
43:42
and trading partner. Z's arrival Monday in Vietnam, a country
43:47
Trump hit with a whopping forty six percent tariff until
43:51
he issued a temporary reprieve last week, marks a new
43:54
stage in Beijing's neighborhood diplomacy. The strategy aims to expand
44:00
China's friends and trading partners in the region to better
44:05
insulate itself against Trump's tariffs and what Beijing sees as
44:09
Washington's efforts to suppress Chinese development. It is also part
44:14
of China's efforts to unseat the United States as the
44:17
pre eminent superpower in the region and established a world
44:22
order more in line with Beijing's interests. ASA faces both
44:28
unprecedented opportunities challenges China will ensure continuity and stability of
44:34
its neighborhood diplomacy. Z wrote and an editorial for Non DG,
44:39
the official newspaper of Vietnam's Communist Party, calling on Asian
44:45
countries to help inject more stability and positive energy into
44:49
a chaotic and intertwined world. Z touchdown in Honoi on Monday,
44:55
afternoon for a two day state visit, and will travel
44:58
to Malaysia and Boda later this week. Those three countries
45:04
got a temporary reprieve last week from the worst of
45:07
Trump's tariffs while negotiations take place, leaving China as the
45:12
primary target of Trump's efforts to remake the global trading system.
45:17
The impact is already becoming evident. The world's largest exporter
45:22
reported its largest surplus and trade ever during the first
45:28
quarter of two hundred and seventy three billion dollars.
45:32
Speaker 2: It's China.
45:33
Speaker 1: It's exporters rushed to send orders out before Trump's tariffs
45:37
took effect last week. Beijiang reiterated Monday that it is
45:42
prepared for a long fight at present. My country's exports
45:48
are indeed facing a complex and severe external situation, but
45:53
the sky will not fall, said Lu Dai Lang, spokeswoman
45:57
for China's Central Administration of Customs.
46:01
Speaker 2: The world's two.
46:02
Speaker 1: Largest economies are locked in a trade war that threatens
46:06
to undue decades of globalization and divide the world into
46:09
trade blocks. China's outreached to other Asian countries. If successful,
46:15
could Haitian could hasten that division. China counted Washington's latest
46:21
levees Friday by raising tariffs on all US goods to
46:26
one hundred and twenty five percent, while it dismissed US
46:30
measures as economically meaningless. Trump had earlier hiked tariffs on
46:36
all Chinese imports to a minimum of one hundred and
46:39
forty five percent. The Trump administration said late Friday that
46:44
it would exempt semiconductor chips, smartphones, and laptops.
46:48
Speaker 2: From tariffs, but later said such.
46:50
Speaker 1: Levees were still in the works and would be determined
46:53
in a month. These should find ready listeners on his trip.
46:59
Vietnam is still from Trump's threat to impose a forty
47:03
six percent tax on its exports to the United States.
47:07
Vietnam rate ran a one hundred and twenty three billion
47:10
dollar trade surplus with the United States last year, up
47:14
almost twenty percent from the year before, in part because
47:17
manufacturers relocated from China to its southern neighbor to avoid
47:22
the tariffs imposed on China in its first term. Cambodia
47:28
was hit even harder with over over its twelve billion
47:31
dollar trade surplus, with Trump threatening a forty nine percent tariff.
47:37
They are among the seventy five countries to win a
47:40
ninety day delay for negotiations, but there are limits to
47:45
how much support China can expect to gain in a
47:48
region where it is embroiled in territorial disputes as well
47:52
as security and trade tensions with almost all of its neighbors.
47:57
Analysts say Southeast Asian countries have long been worried about
48:02
cheap Chinese goods flooding their markets.
48:06
Speaker 2: Zi gave a high.
48:07
Speaker 1: Level speech last week on the importance of China's relations
48:11
with neighboring countries, a sign that the region is now
48:14
as diplomatically important to Beijing as its relations with the
48:18
United States and other major countries, said Rick Waters, director
48:23
of the Carnegie China, a think tank based in Singapore.
48:28
But they're going to face headwinds, Water said of Beijing's
48:32
efforts in the security realm. Most countries in the region
48:36
are afraid of China and of the economic realm.
48:41
Speaker 2: It's not so simple.
48:43
Speaker 1: Southeast Asia is a particular target for Chinese goods. The
48:48
Association of Southeast Asian Nations, a group of ten states,
48:52
is China's largest trading partner, accounting for seventeen percent of
48:57
the country's total exports. On Monday, show exports to aseean
49:03
That group of countries grew eight percent over the year
49:07
to reach one hundred and forty six billion dollars during
49:10
the first quarter.
49:13
Speaker 2: The increase is assigned.
49:14
Speaker 1: Chinese exporters may already be routing their goods to the
49:18
US through third countries, a strategy called transshipment that has
49:24
been used since Trump's first trade war with China to
49:27
get around tariffs. Analysts say it's likely that these routes
49:32
are the Trump administration's next target and negotiates tariffs with
49:37
the Southeast Asian and other countries that China exports exporters
49:43
have used for trans shipping. The surplus is likely to
49:47
remain large and a source of ongoing tensions with many
49:50
of China's trade partners. Julius Evans Pritchard, a China expert
49:54
at Capital Economics has A consultancy, has set on a
49:58
note on Monday, the trade war is a threat disease
50:02
efforts to transform his country from the world's factory and
50:06
into an advanced manufacturing and technology superpower. China's slowing economy
50:13
has been struggling with a prolonged property slump, high youth unemployment,
50:19
and stubborn deflation. It relies on its exports to maintain growth,
50:24
especially this year as officials work to meet the government's
50:27
politically important GDP target of around five percent. But Zi
50:33
is likely to gain little more than rhetoric plus ambiguous
50:36
agreements on this trip, said Shin Yiahong, professor at the
50:40
School of International Studies at Unimin University in Beijing. China,
50:46
of course desires this sortive cooperation and coordination, but its
50:51
kind parts in asee An and Mongolia, let alone, Japan
50:56
and South Korea, are more concerned with avoiding damage to
50:59
their respective negotiations with the US about tariffs, he said.
51:05
In his article on Monday, Zi said that his country
51:08
would encourage more Chinese companies to invest in do business
51:12
in Vietnam, and that China would welcome a more high
51:15
quality Vietnamese products into its market. He called for stronger
51:20
industrial and supply chain cooperation through various regional initiatives. The
51:26
ASA outreach is part of Beijing's broader strategy to deal
51:29
with Trump. It has imposed export controls, blacklisted US companies,
51:35
and investigated American firms operating in China. In addition to
51:39
matching what Trump calls reciprocal tariffs, Beijing has also tried
51:45
to court other US partners hit by the tariffs. Juan
51:48
Ning Jhun, vice Minister of the General Administration of Customs,
51:53
called on the European Union on Monday to cooperate with
51:58
China to jointly safeguard free and open trade. He made
52:03
a similar appeal Friday to Spain's Prime Minister Pedro Sanchez,
52:08
saying China and European countries should oppose unilateral AXO bullying
52:14
in a clear swipe at Trump and our last story
52:19
for today. Russian missal attack kills thirty four in Ukraine
52:22
on Palm Sunday, officials say a Russian missile strike on
52:27
the center of the northeastern Ukrainian city of Sumi killed
52:31
at least thirty four people, including two children, Ukrainian official said,
52:35
fueling further skepticism over any Russian intent in the war
52:40
as President Trump pushes for a ceasefire. The attack on
52:45
the city's downtown area occurred on Palm Sunday, his families
52:49
flocked to church to mark the beginning of Holy Week
52:53
ahead of Eastern Vladimir Atyuk, head of the Sumi Regional
52:58
Military Administration, said Russia launched two ballistic missiles at the city. Trump,
53:04
who has increasingly expressed anger at the war's continuing pace
53:08
despite his peace efforts, called the attack terrible on Sunday night.
53:13
I told them they made a mistake. I think it's
53:15
a horrible thing. I think the whole war is a
53:17
horrible thing. I think for that war to have started
53:20
as an abusive power, he said, without elaborating on what
53:24
he meant by mistake. One vessil hit an ordinary city
53:29
street Insumi, which since just eighteen miles from the Russian border.
53:33
Ukrainian President Vladimir Zlynsky wrote on telegram it's all eighty,
53:38
the second month that Russian President Putin has ignored America's
53:42
proposal for a complete and unconditional cease fires. Lensky said, Unfortunately,
53:48
they there in Moscow are sure they can afford to
53:51
continue killing. We need to act to change the situation.
53:55
At least eighty people, including ten children or among the
53:59
injured Zelynsk, he said. Russian Defense Ministry did not immediately
54:03
respond for a request for comment. French President Emmanuel Macron,
54:08
who has emerged as one of Zelensky's staunchest allies of
54:11
mid Us, pressure for a fast resolution to the war,
54:15
echoed his remarks on X on Sunday. Everyone knows that
54:20
Russia alone went to this war. Today it is clear
54:24
that Russia alone is choosing to continue it in defiance
54:28
of human lives, international law, and President Trump's diplomatic offers.
54:32
Speaker 2: He wrote, strong.
54:34
Speaker 1: Measures are needed to impose he cease fire on Russia.
54:38
France is working tirelessly towards this end alongside its partners.
54:43
Germany's Frederic Mertz, who was set to lead the country
54:46
next month, also denounced the attack as a serious of
54:50
all crime, and he said he was ready to supply
54:52
Ukraine with Taurus cruise missiles, a step his predecessor refused
54:57
to take.
54:58
Speaker 2: The missiles have a.
54:59
Speaker 1: Longer reign three hundred miles than the British storm Shadow
55:03
cruise missiles Ukraine has already received. But he o captured
55:07
the moment the missiles struck the city Sunday, sending people
55:10
running into the streets. Many buildings were damaged, including a
55:14
large community center. Cars were set ablaze and bodies lie
55:18
scattered on the ground. The attack has already drawn comparisons
55:23
to a strike on Zelenski's hometown of riv Ring on
55:27
April fourth, when a ballistic missile struck a playground, killing
55:31
nineteen people, including nine children. In the Sumi region, Thousands
55:38
of civilians have fled the border areas in recent weeks
55:41
as Ukrainian troops, facing intense battles with Russian and North
55:45
Korean soldiers, retreated from Russia's Kursk region, where they have
55:49
occupied a strip of land since August.
55:51
Speaker 2: Those who fled.
55:52
Speaker 1: Said Russia now systematically destroying the border area inside Ukraine
55:56
with powerful glide bombs. Many of those civilians have ended
56:00
up in the city of Sumi, where Russia has also
56:04
ramped up its drone.
56:05
Speaker 2: And missile strikes.
56:08
Speaker 1: And this concludes the reading of the Washington Post for
56:11
this Monday, April fourteenth. Your reader for today has been
56:14
Rod Brotherton. If you have any questions, comments, or suggestions
56:18
concerning the program, please feel free to call us at
56:22
eight five nine four two two sixty three ninety. Thank
56:25
you for listening, and now please stay tuned for continuing
56:30
programming right here on Radio I