This week, Noah Smith and Erik Torenberg analyze the global repercussions of Trump’s broad tariff policies, critique misconceptions about trade deficits, and explore the economic fallout and potential policy responses. RECOMMENDED PODCAST:  Tools and Weapons with Brad Smith Join Microsoft Vice Chair Brad Smith as he explores tech's impact on society with Bill Gates and Satya Nadella sharing untold stories and insights on Microsoft's AI-fueled future. Spotify: https://open.spotify.com/show/4bYASdhkHwovdSmU4YAjYg Apple: https://podcasts.apple.com/us/podcast/tools-and-weapons-with-brad-smith/id1632459165 – SPONSORS: Carta Carta is offering up to 40% off a new Carta plan, including cap table management, QSBS Attestation, and Carta Total Compensation. This limited-time offer runs through the end of July at ⁠z.carta.com/econ102⁠. NetSuite More than 41,000 businesses have already upgraded to NetSuite by Oracle, the #1 cloud financial system bringing accounting, financial management, inventory, HR, into ONE proven platform. Download the CFO's Guide to AI and Machine learning: https://netsuite.com/102 AdQuick The easiest way to book out-of-home ads (like billboards, vehicle wraps, and airport displays) the same way you would order an Uber. Ready to get your brand the attention it deserves? Visit https://adquick.com/ today to start reaching your customers in the real world. – SEND US YOUR Q's FOR NOAH TO ANSWER ON AIR: Econ102@Turpentine.co – FOLLOW ON X: @noahpinion @eriktorenberg @turpentinemedia – RECOMMENDED IN THIS EPISODE: Noahpinion: https://www.noahpinion.blog/  All the arguments for Trumps Tariffs are wrong and bad: https://www.noahpinion.blog/p/all-the-arguments-for-tariffs-are This is called Capital Flight: https://www.noahpinion.blog/p/this-is-called-capital-flight – TAKEAWAYS: Tariff Policy Analysis: They discuss the implementation of widespread tariffs, particularly focusing on how the administration set tariff rates without sound economic methodology, possibly using AI to generate justifications. Trade Deficit Misconception: Noah explains that trade deficits are often misunderstood - they're essentially loans where a country buys goods and provides IOUs (bonds) in return, not necessarily harmful to an economy. Manufacturing Impact: They argue that tariffs may actually harm domestic manufacturing by making imported components, machinery, and raw materials more expensive, potentially leading to de-industrialization rather than re-industrialization. International Relations: The discussion covers how trading partners are responding, with China imposing reciprocal high tariffs, while noting that many countries will likely seek alternative export markets rather than capitulate to demands. Long-term Economic Outlook: The discussion paints a concerning picture of potential rising unemployment, continued market volatility, and possible inflation depending on which economic forces (panic or inefficiency) prove stronger.