Marketplace - Will tariffs boost U.S. manufacturing?

Episode Date: March 24, 2025

The Donald Trump administration wants to strengthen U.S. manufacturing with tariffs on imported goods. We look at the latest purchasing managers report to see if new trade policies have made an impact. Also in this episode: Homeownership rates stall for Gen Z and millennials, shakeups at Fannie Mae and Freddie Mac, and Baltimore’s new Francis Scott Key Bridge design takes shape.

Hello listeners, our goal at Marketplace is to raise the economic intelligence of the country, and that goes for teens and young adults too. The newest season of Financially Inclined, hosted by Yaneli Espinal, tackles topics like how to align your values with your money decisions, the skill of negotiating, and what you can get out of internships. Financially Inclined is presented in partnership with Greenlight, the debit card and money app for teens. Greenlight helps teens learn to earn, save,

spend wisely, and invest. Tune into Financially Inclined wherever you find your podcasts. On the program today, tariffs, the housing market, and college admissions. We report, you decide. From American Public Media, this is Marketplace. In Los Angeles, I'm Colin Rizdall. It is Monday today, the 24th of March. Good as always to have you along, everybody.

All right, quick. Tell me President Trump pulled back on his tariff threats even a little bit without telling me that President Trump pulled back on his tariff threats even a little bit. Were you to show me a chart of what the major stock indexes did to start the week? That would be a good response. Asked about his promised reciprocal tariffs set to go into effect next week, the president said this, quote, I may give a lot of countries breaks. Traders needed no further encouragement than that, and equities were off to the races.

We here, however, prefer data to understand where this economy might be going. And we got it this morning in the form of the S&P Global Purchasing Managers Index, which marketplaces Brie Benishaw spent his day reporting on. If you ask businesses in the service economy, the diners, the hair salons, how they are doing in March, in general, they say better than January and February, which were terrible. Terrible because of terrible weather. Polar vortexes, snowstorms in the south. You know, your tourism sectors, restaurants and so forth, just people not wanting to go out.

Chris Williamson is chief business economist at S&P Global Market Intelligence. S&P Global puts out the PMI. So in March, the weather got better and businesses in services did better. Manufacturing is a complete opposite. Companies in the manufacturing side of the economy had a great start to the year. They were ramping up production to get shipments out ahead of any possible tariffs. That bump is over. And so in March, manufacturing sank back into the swamp of malaise and periodic contraction that it has been in for more than two years.

The cost of inputs for manufacturers is at a 31-month high, see, tariffs. But despite all that, manufacturers in March were the most optimistic about the future that they've been in years. That reflects this sort of more protectionist environment. The manufacturers are saying, hey, you know, in the long run, this is going to help us. Ryan Sweet is not so sure that it is. He's chief U.S. economist at Oxford economics. Tariffs, they're going to cut into economic activity and the dollar is likely going to appreciate, which doesn't really

bode well for U.S. manufacturers. Tariff anxiety did help sour the mood in the service economy, though, that in the cooling labor market and slowing wage growth. When that occurs, it's not a great barometer of what's ahead for services. And confidence there around how this year will go fell to its lowest level since 2022. The service economy, by the way, employs more than 80% of the workers in the US. In New York, I'm Sabri Banishur for Marketplace. Wall Street today, music happy. percent of the workers in the U.S. In New York, I'm Sabri Banishur for Marketplace.

Wall Street today, music happy. It will be. Details, numbers, we shall have. We're going to do a couple of housing stories now. First, Redfin was out with a report today about home ownership rates thereof, specifically. It seems that last year, growth in home ownership stalled out for both Gen Z and Millennials. Only about 26% of older Gen Zers owned homes in 2024. That's people who were between 19 and 27 years old last year, if you have lost track of which Gen is which.

That ownership figure is 55% for millennials, people 28 to 43. Point is that while younger people in this economy are not increasing their share of home ownership the way they did as recently as just before the pandemic, those ownership rates for Jan Xers and Baby Boomers, well, they kept on growing. Marketplace's Elizabeth Troval explains why that all matters. 33 year old Tyler Kleene from Denver started his home search a year ago. First with standalone homes. Even something that was like a single bedroom little bitty thing. I couldn't afford that anywhere that I wanted to live. So he expanded his search to town homes and condos that seem to fit his $300,000 budget.

But with HOA and other fees... That just made them out of reach. After a year, he's mostly given up. These high interest rates, the low amount of inventory, it's creating this barrier where it's harder for young people to advance in terms of home ownership. Daryl Fairweather withFIN says those elevated interest rates are making it even harder for first-time home buyers. DERRIL FAIRWEATHER, FAMILY, FAMILY, AND FAMILY, DERRIL FAIRWEATHER, FAMILY, AND FAMILY, DERRIL

FAIRWEATHER, FAMILY, AND FAMILY, DERRIL FAIRWEATHER, FAMILY, AND FAMILY, DERRIL FAIRWEATHER, FAMILY, AND FAMILY, DERRIL FAIRWEATHER, FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY, AND FAMILY just the pumping on the brakes to say, okay, what's going to happen? Younger people are waiting and seeing as they continue to trail their parents' generation in terms of homeownership.

Daniel McHugh is with Harvard. Homeowners have about 40 times the wealth of renters. But Mauricio Soto, a real estate agent in Oregon, is optimistic young people will figure it out. They have well-paying jobs and time on their side. Millennial, Gen Z, they understand and they know how important it is to save money for the future. Definitely they will be in a really, really good position.

He says young people should start saving and earning interest as early as they can to prepare for homeownership. I'm Elizabeth Troval for Marketplace. Home ownership in the United States is a thing thanks largely to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, or if you prefer, Fannie Mae and Freddie Mac. And they are not immune from the politics of this moment. Last week, 14 members of the boards of directors at the two government-sponsored enterprises,

that's what they're called, GSEs, those boards and senior executives at both were summarily replaced. Fannie and Freddie, you might remember this, have been under government conservatorship since the financial crisis, but the White House is now said to be considering a plan to reprivatize them would not be the first time by the by. Marketplace's Matt Levin has more on what that might mean for the housing market. Fannie and Freddie do not lend people money to buy homes. Instead, they buy mortgages from the lenders that originate them, so those loans and the

risks associated with them are no longer on those lenders' books. Then they bundle up the mortgages into neat little snackable securities and then sell those snacks to pension funds and insurance companies and other big investors around the globe. David Dworkin, Jr. Investor, The World Bank of America They're important because they're the grease, basically, that makes the whole mortgage finance system work,

and they've been incredibly successful at it. David Dworkin is CEO of the National Housing Conference, which pushes for more affordable housing. Fannie and Freddie's big value add is the federal government acting as a backstop. If a homeowner defaults on a Fannie or Freddie backed mortgage, the investor who owns it still gets paid. Torgon says that lowers mortgage risks and mortgage rates. The mortgage that you get is going to have

a lower interest rate than it would have otherwise. Probably about half a percent. Last year, Fannie and Freddie backed about 40% of all new securitized US mortgages. It's not exactly clear how the administration backed about 40% of all new securitized U.S. mortgages. It's not exactly clear how the administration might go about ending their government-run conservatorship. Mike Franentoni at the Mortgage Bankers Association

says reprivatization could have an upside. We think when they're out of conservatorship, it'll help them to be more innovative, more responsive to the markets, but it needs to be gunned cautiously. The government selling at stake in Fannie and Freddie could also yield hundreds of billions of dollars for Uncle Sam.

But Andrew Fieldhouse at Texas A&M's Mays Business School says we've seen this movie before, like before the government had to bail out Fannie and Freddie when the financial system choked on those mortgage-backed security snacks. The pre-2008 status quo in which Fannie and Freddie's upside gains were privatized going to shareholders and management and any big downside losses were backstopped by taxpayers was problematic.

The Federal Housing Finance Agency, which oversees Fannie and Freddie, declined a request for comment. I'm Matt Levin for Marketplace. We're pretty much smack in the middle of college acceptance or wait list or not acceptance season and you don't need me to tell you that college admissions has gotten super competitive the past couple of decades and on top of that longer-term trend there have been changes to standardized test requirements and affirmative action and a whole bunch more which is leaving kids and their parents confused and

anxious about the whole admissions process. So enter now the world of independent college counseling, which has grown into a $3 billion a year industry, as Nicole Laporte wrote in Town & Country not too long ago. She's also the author of the book Guilty Admissions about the Varsity Blues scandal, a couple of years back, if you remember that. Nicole, welcome to the program. Thanks for having me.

Could you define a term for me here? What is an independent college counselor? Yes, an independent college counselor is a counselor that works outside of a high school. You can hire them to provide a service for your high school student or maybe even your middle middle school student to walk them through the college admissions process, everything from looking over their essays

and filling out the application, just doing all of, helping out with all of this stuff that these kids need to do to apply. Could I, if I wanted to? I mean, I've had four kids go through the college application process. Could I hang out or shingle tomorrow and say,

here I am, I'm an independent college counselor? You absolutely could, and you'd probably be very good. No, because the truth is my wife did all of them, but that's a whole different thing. Yeah, I mean, sort of the dirty secret of college counseling is that you do not need a certification. You absolutely can set up shop. How much for those parents of kids

who are confused and anxious, and parents probably who are confused and anxious, and, you know, parents probably who are confused and anxious, how much is it gonna cost? There's quite a range. Um, the numbers that get the big headlines, of course, are the super, super high numbers, and that can go up to $200,000 over the... I know. Sorry, come on. That's like, that's like,000 over the, I know. Sorry, sorry, come on.

That's like, that could be a whole college education someplace. Exactly. Well, that's not for a month of counseling or even a year of counseling. That's counseling that starts in middle school. So that's safe from eighth to 12th grade. That might involve, at that point it becomes almost like a concierge service where the counselor is perhaps mapping out visits to colleges and doing a lot more than just, you know, editing an essay.

Let's say I don't have 200 large to spend on my kid before they even get to college. What's the, you know, sort of average going price? Yeah, the average is about 6,500. And you know, when you get into New York and LA and San Francisco, kind of these higher, more expensive places to live, it goes up to maybe 15 grand. Again, that's over a couple years. That's not just for a couple months or even one year. But it's expensive. I mean, there's no way around that. I'm obliged to point out here, and as you say in this piece, you know, the schools know

this. This is a service that's available to a teeny tiny fraction of the tippity tippity top of the income spectrum and it brings with it a whiff of elitism that is inescapable. Absolutely. I mean, the numbers that I was just citing alone tell you what segment of the population we're talking about. And yeah, and colleges admit this. I mean, I talk about Christoph Gutentag, the longtime Duke admissions officer, and he admits that this is absolutely a luxury and it's giving advantaged kids another advantage.

Not only are the parents deeply interested in this, but as you point out in this piece, venture capital firms are interested in this. There's a company that you talk about in here that raised some high tens of millions of dollars funding round. Yes. I will point out that's not the norm. Okay. Fair enough. But still, fair enough. But the idea that VC is interested in this, you should tell you something. Well, I think it speaks to just how this has come to dominate, you know, media headlines and the cultural interest in this is particularly amongst, yes, elite members of the population.

And you know, it's a $3 billion industry. I just think that number alone, you can't ignore that. But again, that's a rare example. With the observation here that not everybody and probably most people don't and shouldn't want to have to need to go to this tiny piece of higher education because you can get a good college education lots of places, do these companies have the secret code? They would like you to think that. Yes, they would. Well, it's funny

because you look at their websites and there's all kinds of promises and statistics, much of which is very hard to discern and get behind and prove, but then when you actually speak to them and you think virtually all of them and probably the first meeting with a family will say, we cannot guarantee admission to X school. So no, there is no secret sauce. But again, it's just, it's providing an advantage. Yeah. Nicole LaPorte, the piece is in Town and Country.

Your book on the subject at hand though is called Guilty Admissions. Nicole LaPorte, thanks a lot for your time. Thank you. Coming up... Right now there are certain cruise ships that cannot serve the Port of Baltimore. Building a bridge from here to the future. But first, let's do the numbers. Dow Industrial is up 597 today 1.4% ended at 42,583. The Nasdaq up 404 points 2.25% 18,188. The S&P 500 up 100 points 1.75% finished at 5767.

The DNA testing company 23 and me tumbled how much you figure because you heard about the chapter 11 bankruptcy filing right? The DNA testing company 23andMe tumbled down 59%. Listen, Patrol Ball was telling us about stalling rates of homeownership among Gen Zers, older Gen Zers and Millennials. So Home Builders stocks, Pulte Groups stacked up 3%. Toll Brothers rang up 3.8%. KB Home improved 3.4%. You're listening to Marketplace.

If you want to be savvy about the economy, the Marketplace newsletter is just what you need. Every Friday you'll get explainers and analysis that make sense of everything from the moving markets to grocery prices. No jargon, no hype, just smart takes delivered to your inbox. Sign up today at marketplace.org slash subscribe. This is Marketplace. I'm Kyle Rizdal. Tens of thousands of people so far have been summarily fired from their federal government

jobs by Elon Musk and his operatives. Some of those people have been called back to work either because of court rulings or because the federal government realized workers are in fact important. But in that chaos lies opportunity because state and local governments are now able to scoop up some badly needed talent. But that switch from federal to state or local government work does come with some big changes, as Marketplace's Savannah Peters reports. Late last year, Eric Ham was feeling a little uneasy about his job security.

He was working as a maintenance mechanic at Big Ben National Park in Texas, and he was aware that President Trump had plans for big federal budget cuts, so he applied for a municipal job, the City Forester in Cortez, Colorado, and in January, he got an offer. I actually turned it down, saying, you know, we want to stick around, we want to help the park, and we want to get the benefits that come with being part of the federal system. Then, about a month later, Ham's wife, Keelon Crawford's job was one of thousands cut in the first wave of downsizing under the Department of Government Efficiency.

She also worked in the park as a science technician and was five months pregnant. To Eric Ham, it felt like a betrayal. It's kind of a no brainer for me. I don't, I don't want to work for an organization that's going to do that to people. So Ham turned in his resignation and then called the city of Cortez back. Kind of with my tail between my legs. But he says they were happy to extend him another offer. In other words, the federal government's downsizing is the city of Cortez's gain.

Other states and localities have the same idea. We feel like tapping into this applicant pool that we up until now have had limited success in recruiting from is a real opportunity. Brenna Hashimoto directs Hawaii's Department of Human Resource Development, which is enthusiastically recruiting sideline federal workers and fast tracking their hiring. We've had a tremendous response so far. Over 1,600 new applications for around 60 high-priority, hard-to-fill positions, like research statisticians and IT specialists.

But Liz Farmer, a researcher with the Pew Charitable Trusts, says matching those workers' federal salaries, or what they could make in the private sector, could be tough. I would expect that to be a concern and something that states and localities don't have necessarily an advantage of. However, one of the things that government has always had going for it is this idea of a job with purpose. It's an important part of who I am, right? Like the ability to serve and to give back. That's a federal worker we're calling Anne, her middle name, since she is still employed by the US Department of Agriculture.

But she's looking for an exit strategy. She's got an interview lined up for a state government job in Pennsylvania, where she lives. The work is comparable. The base salary? Not even close. I'd be looking at a $60,000 pay cut. So that's really ouch. Yeah. Yeah. There's a new policy in Pennsylvania to weigh federal work the same as state experience

in hiring. If Ann gets the job, she's counting on that to help narrow the salary gap. Eric Ham, the former National Park Service worker, says he's not taking a pay cut at his new municipal job in Colorado. But it's hard to beat federal benefits. With their baby due in three months, Ham and his wife won't get the paid parental leave they were counting on. Their health insurance won't be as good. And they're struggling to find housing in their new and much more expensive city.

In a lot of ways, we're hurting. Ham is grateful he gets to keep working in the outdoors and for the public. But the move from federal to local government work comes with big sacrifices for his family. I'm Savannah Peters for Marketplace. It's a year this week that the Francis Scott Key Bridge collapsed after it was hit by that container ship. Six construction workers were killed. The channel into the Port of Baltimore was blocked for more than 10 weeks, and the Mid-Atlantic

lost a key commercial thoroughfare. Maryland released its design for new bridge in February, and it's obviously early days yet, but that replacement is being built to have an expected lifespan of 100 years, which means it's going to have to accommodate not just the ships and trucks of today, but the ships and trucks of a century from now. Marketplace's Stephanie Hughes reports. First of all, the New Bridge is going to look really different, says Rick Geddes, who studies infrastructure policy at Cornell.

The old Key Bridge was truss kind of design that looks like kind of a cage and that is holding up the roadway. Geddes says truss bridges were very common back in the 1970s when the old Key Bridge was built. The new bridge will be a kind Geddes says is more commonly built now, what's called a cable-stayed bridge. Where you have very tall towers and those towers hold cables, and the roadway is suspended under the towers

via those cables. And so the cable-stayed design allows the center span to be longer. The center, or main span of the bridge, goes over the shipping channel. The old Key Bridge's main span was 1,200 feet. The new one is expected to be 1,600. So the likelihood that a big ship is going to veer out of the channel and hit a part of the bridge is reduced by the fact that you have the towers about a

third, which is a lot, wider apart than under the old bridge. The deck of the new bridge, where the road is, will be about 45 feet higher than the old one, allowing bigger ships to pass underneath. Paul Wiedefeld leads Maryland's Department of Transportation, which is overseeing the project. Today, right now, there are certain cruise ships that cannot serve the Board of Baltimore, because as you've seen, they've gotten very large.

I asked Wiedefeld if the new bridge will be able to accommodate the biggest ships. Probably not the biggest in the future. I mean, you have to think of it in the scale of the Port of Baltimore versus other ports, right? Wiedefeld says the Port of Baltimore does have room to grow, even though? You know, it's tight. It's within a very dense urban environment.

But as with other kinds of infrastructure, he says there have been big advances in bridge building technology in the last half century. When you think, you know, we're building a bridge for 100 years, so you start to use materials that basically that can last much longer. For example, there are better coatings for metal that protect against corrosion, says civil engineer Maria Lehman. She also says you can now embed sensors in a bridge that will give a heads up when something is off.

Maria Lehman, Civil Engineer, LEMON You know, you get an alarm, hey, you should check this out, and things that normally you may not notice with a visual inspection because it's going on, you know, at the steel level. LESLIE KENDRICK Lehman worked on a different bridge meant to last 100 years, the Mario Cuomo bridge over the Hudson River in New York, which opened in 2018. And she says, from an engineering standpoint, you can address a lot of different outcomes, but you're on a budget.

You really have to think about risk, which is the probability of failure times the consequences of the failure. And where is that sweet spot where you're investing enough that you're meeting the risk, but not too much because there isn't an unlimited pot of money to be able to do this. In the case of the new bridge in Baltimore, there's also not unlimited time. Maryland has set a goal of October 15th, 2028 for the new bridge to open. And forecasting what shipping and trucking will look like in 2128 is hard, says Ben Schaeffer, who studies civil and systems engineering at Johns Hopkins. So if there's another new idea that you and I can't really even

conceptualize right now and that becomes the most important way to move goods around, there's not an easy way to get into that sort of prediction. The best engineers and planners can do is rely on current standards, which try to take into account how the economy will grow. In Baltimore, I'm Stephanie Hughes from Marketplace. This final note on the way out today, in which I know we talk about tariffs here a lot, but they are kind of driving things right now, right? The president has in the past called himself a tariff man, and he proves it in new and creative ways every single day.

The president said today that he is going to put 25 percent tariffs on imports to the United States from any country that buys oil from Venezuela. Among the countries that have been buying the most oil from Venezuela, the New York Times had this tidbit, China and the United States. Our daily production team includes Andy Corbin, Nicholas Guillaume, Maria Hollenhorst, Iru Ekbanobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kai Rizdal. We will see you tomorrow, everybody.

This is APM. Consumer confidence had its sharpest monthly decline since 2021, which means we're all in our fields about money. And while uncertainty is the only constant these days, it's also a great reason to get serious about understanding personal finance. I'm Janelia Espinal, host of Financially Inclined, a podcast from Marketplace that makes learning about money simple. Learn about practical skills like negotiating job offers,

dealing with money and friendship and love, entrepreneurship, and student loans. Get serious about your money and build a life you've always dreamed of. Listen to Financially Inclined wherever you get your podcasts.