Trade tariffs: discussing economic policies and their impact

B2
90 min
Premium
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Think about these questions before watching. Share your ideas with a partner.

  1. Have you ever noticed the price of an imported product, like electronics or a particular food, change significantly? What reasons could be behind such a price shift?
  2. In your opinion, what are the main advantages and disadvantages for a country that tries to protect its own industries from foreign competition?
  3. If your government placed a high tax on popular imported goods to encourage buying local products, how might this impact your daily life and purchasing decisions?
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Watch the video carefully. Pay attention to the main ideas and key details.

Video script141 segments · click a timestamp to jump

stock down about 7% right now.

We have the analyst behind that

call here to explain. But let's

begin in Washington with the

latest news on the tariff front.

And Meghan Costello has the

details. Meghan, we had heard

things were a little contentious

with the Japanese, which was

supposed to be one of the first

deals announced and now this.

>> Yes. Now this. Kelly, the

president did post overnight on

Truth Social that he would start

sending these letters at noon

today, telling countries what

their exports would face to send

them into the U.S. And now, just

in the last hour, we got the

first of those the president

posted on Truth Social that he

says he sent to the leaders of

Japan and South Korea. Very long

letters here, but some top line

details to get into these would

be 25% tariffs on all Japanese

and South Korean exports into

the U.S, effective on August

1st, on top of any tariffs that

are on that are already in place

or that are forthcoming in terms

of the tariffs. He also said any

retaliation would lead to a

commensurate increase in the

tariff rate, meaning if they

retaliate, he's going to lift

this tariff rate even further.

Trump also said that he would

consider an adjustment if

countries do open their markets.

And that's the key, Kelly, is

that there is no certainty here,

he goes on to say, hinting

further, hinting at further

changes, saying, quote, these

tariffs may be modified upwards

or downwards depending on our

relationship with your country.

So interesting there that while

the markets and investors have

been craving certainty, they're

not exactly getting it with this

letter. And Kelly, the way I

would sort of characterize this,

even though we are seeing market

reaction here, is just to

remember that what this is

essentially doing is kicking

back in the reciprocal rates for

these two countries that were

announced on April 2nd, South

Korea was already seeing 25%.

Japan was at 24%. The white

House has been threatening for

weeks. If they didn't strike a

deal with these countries. We'd

see those rates kick back in on

July 9th. Now, that date changes

to August 1st, but otherwise

everything else pretty much

holds the same. So despite all

the bluster in these letters, we

are seeing them follow through

on that threat just delaying

down the road a little bit

further. Kelly.

>> It was interesting to hear

the Treasury Secretary, Megan,

who also talked about

effectively how with 100

countries that are too small to

really affect the trade deficit

that much, we may not have the

capacity to even do any deals.

And I wonder what that means.

>> Yes, that's going to be

interesting. That's where I

think you'll just see these

blanket tariffs have to take

effect because they there isn't

enough there. There isn't enough

bandwidth to sort of negotiate

deals. And they have said from

the beginning that they're

focused on something like the

top 15 to 18 largest trading

partners. It would be

significant if we suddenly see

huge tariffs imposed on on very

small countries. It's headline

worthy and it doesn't bode well

for certainty and for the path

forward. But I would also say

that outside of the top 15 or 18

markets, we're not getting a ton

coming in from those countries.

But we would still see, you

know, importers having to pay

those tariffs when they do

import goods from whatever the

country might be.

>> Yeah. I mean, you add it all

up. We do seem to be tiptoeing

back to the landscape that was

initially set out for us on

April 2nd. But Megan the

market's up like 15% since then.

>> Yes. That's really

interesting I think is that so

far there's been a lot of

shrugging off of everything that

we've seen so far. And I would

say that's because things aren't

in place yet. We continue to see

these tariffs. And even though

this looks a little bit like an

escalation, that he really means

business, he has set these

letters. They're doing it in

conjunction with delaying the

deadline from July 9th to August

1st. By doing that, they say

it's not kicking the can down

the road any further. Officials

get defensive when you try to

talk to them about that, but it

does allow for more

negotiations. So it means that

even while the market is

reacting today, they probably

have one eye on that

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Answer these questions in your own words. Support your answers with evidence from the video.

01According to the video, what are the main conditions of the new tariffs being imposed on Japan and South Korea?
Sample answerThe video says there will be a 25% tariff on all exports from Japan and South Korea to the U.S., starting on August 1st. It also mentioned that this is an additional tariff and that if those countries retaliate, the tariff rate could increase even more.
02In what way does the president's announcement create uncertainty for investors and the market?
Sample answerIt creates uncertainty because the president hinted that the tariffs aren't final. He said they could be 'modified upwards or downwards' depending on the relationship with the country or if they open their markets. This means investors don't know what to expect in the long term.
03What is the likely approach towards trade deals with smaller countries, and why?
Sample answerThe video explains that there isn't enough 'bandwidth' to negotiate individual deals with the 100 or so smaller countries. So, they will probably just have to face blanket tariffs. The government is focusing its efforts on the top 15 to 18 largest trading partners instead.
04Despite the tough announcement, why does the reporter suggest the market hasn't reacted more negatively in the long run?
Sample answerThe reporter suggests the market isn't panicking because these tariffs aren't active yet. The deadline has been delayed to August 1st, which allows more time for negotiations. So, while the announcement sounds serious, the delay signals that a deal might still be possible before the tariffs take effect.
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Key vocabulary for discussing trade

Vocabulary
These expressions will help you discuss economic policies and their impact with more precision.
Examples
level the playing field — to create a situation where everyone has a fair and equal chance of succeeding
Usage note: This idiom is common in business and politics. It's often used to justify actions like tariffs, which are claimed to make competition fairer for domestic companies.
retaliatory measures — actions taken by one country against another that has harmed it, especially in trade
Usage note: This is a formal phrase used in news and political discussions. A common collocation is 'to take retaliatory measures'. It's a more formal way of saying 'to retaliate', which was mentioned in the video.
ripple effect — a situation where one event causes a series of other, often indirect, events to happen
Usage note: Use this metaphor to describe the wider, unforeseen consequences of an economic policy. For example, 'The new tariffs had a ripple effect on the entire supply chain.'
trade barrier — a government-imposed restriction on the free international exchange of goods or services
Usage note: This is a key term in economics. Tariffs and quotas are types of trade barriers. You can talk about 'imposing' or 'removing' trade barriers to encourage or discourage international trade.
on top of that — in addition to something else
Usage note: This is a useful discourse marker for adding another point, especially a negative one. It's common in both spoken and written English. 'First our costs went up, and on top of that, the new tariffs were introduced.'
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Decide if each statement is true or false. Correct the false ones.

01The new tariff rates are not fixed and could be changed based on future trade relationships and market access.
02The deadline for the new tariffs was moved up from August 1st to July 9th to increase pressure on the other countries.
03The US government is prioritizing trade negotiations with its 15 to 18 largest trading partners.
04According to the video, Japan and South Korea previously had identical tariff rates of 25%.
05The president first announced the new tariffs in a post on Twitter.
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Complete the sentences with words from the box. One word is extra.

Word bank
01Governments often tariffs to protect domestic industries from foreign competition.
02In response to the new tariffs, several countries announced measures against imported goods.
03The removal of this significant is expected to boost exports by over 20%.
04A sudden increase in fuel prices can have a on the cost of goods and services across the economy.
05The new regulations aim to the playing field, ensuring that both large and small businesses can compete fairly.
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Choose the best answer based on what you heard in the video.

01According to the video, what is the stated consequence if Japan or South Korea retaliates against the new tariffs?
02What reason does the Treasury Secretary suggest for the likely approach to trade with smaller countries?
03What is one interpretation the reporter gives for the delay of the tariff deadline to August 1st?
04Which of the following details is NOT mentioned in the video as part of the tariff announcement?
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Economic policies in action

Complete the sentences to understand the impact of trade policies.

Match each item on the left with the correct item on the right.

Drag or click to match
Definitions
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Discuss these questions with a partner. Try to use vocabulary from the lesson.

  1. The video mentions that tariffs 'may be modified upwards or downwards depending on our relationship with your country.' Do you think this uncertainty is an effective negotiation tactic to level the playing field, or does it create a negative ripple effect on the global economy?
  2. Think about a major industry in your country. If a foreign government imposed a significant trade barrier, like a 25% tariff, on its main export, what kind of impact might this have on local businesses and jobs? What retaliatory measures, if any, do you think your government should consider?
  3. The video focuses on a direct trade dispute. However, many countries are part of complex global supply chains. How might a country be affected if its main trading partners start imposing tariffs on each other? On top of that, what role should international organizations play in mediating these disputes?