Episode summary
'The Chinese Won': Steven Rattner on Lessons From Trump's Trade War
Wall Street Week
· · 9 min · Guests: Steven Rattner
Summary
Steven Rattner argues that Trump’s revived tariff strategy is less coherent than advertised and has produced little durable economic change. After the Supreme Court struck down the broad IEEPA tariffs, he says the administration has shifted to narrower legal tools, creating a stop-start pattern of threats, delays and reversals that markets have mostly learned to ignore.
On manufacturing, Rattner says the evidence does not support the claim that tariffs are driving a new industrial boom. He notes that factory construction actually peaked under Biden with the CHIPS Act and Inflation Reduction Act, while annualized factory construction has fallen since Trump returned to office. He says supply-chain reshoring has happened modestly since COVID, but manufacturing remains on a long decline and the U.S. has still lost 75,000 manufacturing jobs.
On the deficit, he says tariff revenue has been negligible relative to the scale of the fiscal problem and is now partly reversed by refunds on illegal tariffs. He also argues that the trade conflict with China has exposed America’s weaker leverage: China has more substitutes for U.S. exports than the U.S. has for Chinese inputs, so “the Chinese won.”
Key takeaways
- Rattner says Trump’s tariff policy is now a legal patchwork after the Supreme Court struck down the broad IEEPA tariffs.
- He says factory construction peaked under Biden and has declined under Trump, despite reindustrialization claims.
- Rattner says the U.S. has lost 75,000 manufacturing jobs since Trump returned to office.
- He argues tariff revenue is far too small to matter for the federal deficit, and refunds are now reducing it further.
- On China, Rattner says the trade war showed Beijing has more leverage because the U.S. depends on Chinese inputs like rare-earth minerals.
Notable quotes
“the Supreme Court struck down his broad-based, what I call the IEEPA tariffs. And so he had to kind of go back”
“the market kind of has a little bit of an attitude of, you know, boys will be boys and let Trump go off and flap his wings”
“factory construction actually peaked in the last part of the Biden administration when we had the CHIPS Act and also the Inflation Reduction Act”
“fundamentally, we've also lost 75,000 manufacturing jobs since Trump came back into office”
“the lesson of the trade war with China of the last two and a half years is that the Chinese won”
How the episode opens
President Trump has made no secret of his love of tariffs as an instrument of economic policy. He laid out a sweeping program for imposing them on virtually every country around the world in April of 2025, only to have the Supreme Court strike them down less than a year later. He has claimed that tariffs will both help rebuild American manufacturing and address the growing U.S.
deficit. Steven Rattner has been keeping score on what they have done so far. So, Steve, tariffs are back on the agenda.
I'm not sure they were ever off the agenda, but we had, you know, the so-called Liberation Day sort of applied to the world, got struck down. Now, President Trump and his ministers have come back, particularly with Canada this week with more countries maybe waiting in the wings. What do you make of the tariff situation right now?
-Well, as you obviously well know, and I'm sure everybody knows, the Supreme Court struck down his broad-based, what I call the IEEPA tariffs. And so he had to kind of go back to the drawing board. And there are a bunch of other laws.
And again, I'm not a trade nerd, so I can't get into the weeds on that too far. But there are a lot of other provisions in the trade laws that allow for tariffs with more of a process than what he tried to do under the IEEPA tariffs. And so he's now going back in and trying to use whatever bits of the trade laws he can use to put tariffs wherever he feels like he should put them or wherever he's antagonizing that day or said something he doesn't like or done something he doesn't like.
And so you're going to see a lot of this.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- trump trade war
- tariffs
- china trade
- u.s. manufacturing
- investor impact
Companies and tickers mentioned
- Willett Advisors
Watch the episode
Watch “'The Chinese Won': Steven Rattner on Lessons From Trump's Trade War” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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