What Rising Tariffs Mean for Companies, Workers, and the Future of Trade - John Murphy, SVP & Head of International at the U.S. Chamber of Commerce

With tariffs back in the spotlight, what’s their real impact on trade, business, and jobs? Are they a necessary tool for protecting American industry, or do they do more harm than good?

This week, host Matt Kirchner sits down with John Murphy, Senior Vice President, Head of International for the U.S. Chamber of Commerce, to break down the complex world of tariffs and trade policy. With decades of experience in global trade, John sheds light on the history, purpose, and unintended consequences of tariffs.

From manufacturing to agriculture, tariffs have ripple effects across industries, supply chains, and even the workforce. Who really pays the price when tariffs are imposed? How do they shape innovation and investment in the U.S.? And with shifting political winds in early 2025, is the U.S. moving toward a more protectionist future?

This conversation tackles these pressing questions while exploring what business leaders, policymakers, and even students should consider as they navigate the evolving trade landscape.

Listen to learn:

• How tariffs impact American manufacturing and the six million jobs tied to exports
• The surprising truth about who actually pays tariffs—and how they drive up costs
• When tariffs become a tool for political leverage rather than economic policy
• Why protectionism can stifle innovation instead of promoting domestic industries
• What today’s trade policies mean for the next generation of skilled workers

Resources in this Episode:

Learn more about the U.S. Chamber of Commerce: www.uschamber.com

Other resources mentioned in this episode:

• From The Wall Street Journal: "The New Plan for Western Companies Is ABC: ‘Anything But China’"
• Learn more about the National Association of Manufacturers (NAM)
• U.S.-Mexico-Canada Agreement (USMCA)
• University of Michigan Consumer Sentiment Index

Instagram - Facebook - YouTube - TikTok - Twitter - LinkedIn

Transcript

Matt Kirchner: 0:00

Matt, welcome into The TechEd Podcast. It is your host. Matt Kirk, nurse, so much talk these days about tariffs, about trade policy, about where the US stands in the global economy. We wanted to talk about that, and even more specific about the impact that is going to have, or could have, all of these policies on things like careers and technical education and what our students should be learning, and so on. So if you are in the world of TechEd and stem and you're hearing about all these trade policy questions and topics, this will be the episode for you. If you're wondering how that is going to affect our space, we could think of nobody more appropriate to talk about this topic than the guests that we have joining us today. He leads the US chambers advocacy on international trade and investment policy. His name is John Murphy. He is the senior vice president, Head of International for the US Chamber of Commerce. John, so awesome to have you in

John Murphy: 1:04

the studio. Matt. I'm really excited, looking forward to

Matt Kirchner: 1:06

it. So let me tell you this. For starters, I grew up as kind of in the the Reagan economy, big believer in free trade. The whole idea in the econ classes as I was taking going through my education pathway was that, you know, the more hands off, the better. The more free market, the better. So let's just start out with this. In this, in this era where we're talking so much about tariffs, about protectionism here in the United States, are tariffs Good? Are they bad? Or does it depend?

John Murphy: 1:32

I suppose it depends. It's good to take a step back and just reflect on how important trade is to our economy. There's 40 million American jobs that depend on trade, and they're all around us. And many of those people don't even necessarily think of that. Their job depends on trade to the degree that it does. You see it in the manufacturing sector very heavily. About half of everything that American factories make is for export. Wow. You know, there's about 13 million Americans employed in manufacturing. So that means, you know, half of those, that's what is that? Six and a half million Sure, they get up every day and they make stuff that's for foreign consumption, and you don't see exports. So maybe that's part of why that is agriculture. One in every four acres on American Farms is planted for export. And you can just go through sector by sector, it's it's really fascinating to hear from companies, as I do every day about what trade means to them. And so when you bring along a tariff, you may be inadvertently running the risk of cutting those those lines of communication, those sales relationships, and losing foreign customers. It doesn't mean that all tariffs are bad. There are trade remedies, which are tariffs imposed when a good that's coming into the United States is deemed to be subsidized. It's not fair trade. Maybe they're dumping, which means selling below cost to drive you out of business. So those kinds of tariffs, they're they've been around forever, and you know, they certainly have a role, but you got to stop and think about the tariffs before you slap them on.

Matt Kirchner: 2:58

So, you know, it's fascinating. I worked in manufacturing for 25 years, led manufacturing companies still have quite a few interests in the world of manufacturing. I didn't appreciate that half of what's manufactured here in the United States is manufactured for export. We hear about trade imbalance. We hear about the trade deficit. I guess you're maybe led to, if you're not paying close enough attention, as apparently I wasn't, you're not led to the understanding of how important it is that we're manufacturing products here, that we're raising crops here, growing things here. I mean, I had no idea for you to think about a section of land which would be 640, acres, and a quarter section of that, on average, is earmarked for foreign commerce and is being sent to outside of the country. I mean, those observations are really, really helpful to understand the importance of trade, the importance of all those people, the six and a half million people, as you suggest, that are working in manufacturing, in roles that are creating products for foreign markets. So thank you for kind of laying that down from a philosophical standpoint and the economics of it. What are your thoughts on, just from a free trade standpoint? Like, you know, I just remember going through my economics courses in in college, right? And the whole idea was, free market economy. Good protection isn't bad. The tariffs are going to do nothing but raise prices domestically. Maybe we'll get into a little bit about the your impact on on innovation and so on. But talk a little bit about, for those free traders in the audience, how should they be thinking about the role of tariffs?

John Murphy: 4:22

Yeah, no, that's a great way to start. Think back to Adam Smith and exactly the invisible hand. Yep, trade. You know, so much of human progress comes from trade in the form of it can be domestic trade too. It's all specialization and exchange. Those two words are just so powerful to describe the course of human progress and people rising up out of poverty. The poorest people in the world today are subsistence farmers in places like Central America or some parts of Africa, maybe India. And think about what it is to be a subsistence farmer. You're living off of everything that only what you produce. Your

Matt Kirchner: 4:58

purpose in being in agriculture is to. Produce enough food for your family to survive, is that what we're getting exactly

John Murphy: 5:03

so you are entirely autonomous, and that's how humanity was long ago. And then, you know, people lived in villages, and a guy specialized in being the blacksmith, and then you had other crafts and the cart maker. And over time, people became more and more specialized, and would exchange what they produced more and more. And you think about our economy today, where there's maybe a factory down the road making semiconductors, right? These incredibly intricate, high tech things. The person working there has one job making semiconductors. They don't make anything else in their lives. They're not, you know, raising chickens or, you know that to put eggs on the table, maybe they are, but that would be like an exceptional element you're complimenting, right? So specialization and exchange and here in the United States, our 50 states, one of the tremendous advantages we have is that, from the beginning, we're a big free trade zone. There's no trade barriers, really, between the 50 states some other parts of the world, like in Canada, there are some barriers between the provinces, and that includes their progress. Yeah, they're actually trying to address that. But that free trade within the United States has been just a huge boon. But it all goes back, as you say, philosophically thinking about it, to specialization and exchange, absolutely

Matt Kirchner: 6:18

and that, I mean, I can tell you again, as somebody who worked in manufacturing, all those all those years, there weren't too many employees that were doing anything other than working in that manufacturing plant, earning a wage. And then this whole idea of specialization, whether they were spending that money on food, they were spending it on a vehicle, they were spending it on entertainment, whatever that was, it really requires somebody else to be a specialist in in that particular area of commerce, and that's what really makes and drives our economy, you know, you think about John and you mentioned a little bit earlier, in the case of a country that is heavily subsidizing an industry with with government money or monetary policy, or what have you, and then sending products into a foreign economy, those highly subsidized products selling, you know, at or below cost in some cases, and trying to crush domestic competition in the short term to maybe create leverage in the long term. Certainly in those cases, we recognize, you know, the impact and the importance of having some tariff policy that can prevent those types of behaviors. You know, we hear more and more in the current administration about using tariffs or the threat of tariffs to drive political behavior. So talk about that a little bit. It's one thing to say, Okay, we're trying to maybe engineer our economy a little bit, or to create or to discourage an unfair advantage that maybe a foreign manufacturer, for example, has. But what about on the political side of things, to influence political behavior. Is that good? Is that bad? What are your thoughts there? Yeah,

John Murphy: 7:45

so I do think there's a difference. As you mentioned, there trade with China is a big topic these days, and of course, there's a growing recognition around the world that the Chinese economy, they're hefty subsidies. We hear the term over capacity a lot because of Chinese industrial policies, they have developed an overgrown manufacturing sector that now produces about 30% of the world's manufactured goods, and they only consume something like 13% so that imbalance means that they're going to try to export their way out of their economic problems, which are substantial. They have declining demographic growth. They've had a big property bubble. Their economy has slowed a lot, but they think they can export their way out of this problem. So that's a problem for the rest of the world, sure. So that's one thing I think is really quite different when you look at North America here. So Canada and Mexico are our two largest trading partners, right? And for for many years, with Canada. Going back to 1965 there was a US Canada auto pact. We have eliminated trade barriers, and increasingly, we build things together, right? This is a phrase you hear all the time about us. We North Americans, and for instance, in the auto sector, one of the largest parts of the manufacturing economy, it's common for goods to cross the border, 678, times in the process of making a car.

Matt Kirchner: 9:04

I was just in Detroit yesterday having that conversation, right? So we were working on a project with a bunch of the automakers there, and exactly that conversation that it's like, look, here we are in Detroit. You literally, we were in the conference room of the Detroit Regional Chamber of Commerce, and you can see Canada from the windows that we're looking out of. And that's exactly what they said. People have no idea how many times, you know, parts and components and assemblies will go back and forth between the two countries.

John Murphy: 9:29

It's a very real thing. And because of that relationship, because we're making cars together, if you happen to be buying a car that's has its final point of assembly in Canada, you know, over half the content might be made in the US and similar for Mexico, sure. So what happens if you come along with a tariff imposed for whatever reason, you're introducing all kinds of problems for American workers? And one of my colleagues was just telling me about his visit to a very large auto parts manufacturing facility. And. Hour to north of Detroit, and the management there was saying that if these tariffs come along, we'll probably shut down within days. This is a US plan, yes. Okay, yeah. So tariffs are taxes. They're paid by Americans. They are literally paid by the importer. So it has to be an American enterprise, right? Substantively, we've seen the tariffs in recent years going back to 2018 they would 100% of the costs were passed on to American consumers and businesses. That's a problem. Sure, at a time when we're trying to get out from under the inflation of recent years, the cost of living crisis, which is real very much still with us, that's a problem. But for manufacturing, it's even more than that, that there are some sectors that where we're just so integrated with our our key trading partners, like Canada and Mexico, that tariffs are really going to scramble things. Autos is one. Medical devices, you know, another sector where you might be importing a product that's coming in from Mexico, but well over half the content is American. Another one is power generation equipment, which is really very important right now, with demand for electricity rising with data centers right electricity is quite a lot more expensive than it was 10 years ago, all over the US, and there's a real shortage of transformers and the other equipment that goes to strengthening the grid, building out the grid so that we can structure you Yeah, that's one. That is another. Tariffs would very much scramble that, because we do need those imported inputs.

Matt Kirchner: 11:31

Agree with everything you said, and really fascinating to think about. Who pays the tariff you know that it is actually a tax on on domestic companies and eventually being passed on to consumers, right in one form or another, maybe, if not all of it, at least a good portion of it. What about the impact on innovation? You know, you hear the argument about, look, if we're creating an artificial competitive advantage for domestic manufacturers, suppliers, innovators, because they can now, if a foreign competitors, products are more expensive in the in the US now, we've got a cost advantage, or a pricing advantage, some leveraging there. Does that curtail innovation at all? I mean, does that have an impact on on the incentive for a company to innovate, to remain competitive with foreign companies and products that may be either driving cost out of the product or adding features and benefits to their products that we don't necessarily have that need to here because we have this cost or this pricing leverage or benefit in the marketplace. I

John Murphy: 12:27

think it has a direct impact on innovation. One interesting historical example might be Brazil's so called informatics policy. Back in the 1980s Brazil looked at the world and said, We really need to develop our own industry to make things like consumer electronics and early computers and so on. And so they set up a big tariff wall around the country. They provided some subsidies, and they built out the beginnings of an industry. And sure enough, within a time, they were able to make some of these things themselves. But the thing is, they were very expensive and they were very backward. They were not globally competitive. You know, when you're hiding behind a tariff wall and not competing out in the global market, odds are you're going to be falling behind pretty quickly trade and the higher margins that you get by exporting and growing markets that provide some of the seed corn for your research and development. If you're not able to expand that way, then it's it's going to have an impact on your innovation in the long run. So

Matt Kirchner: 13:25

all these potential negative impacts of of tariffs, and you know, I didn't yet, we saw, most recently, the the threat of tariffs, both on on Canada and Mexico, changed some behavior, or at least it changed some some dialog. And you know, in this case, around the concerns related to illegal immigration, we did get some reaction, and we will see six months a year from now how much staying power that has. What are your thoughts around that part of it, that when we're literally like trying to he's for as long as we're talking to, in this case, about, or have been about, Canada and Mexico changing their behavior, from a policy standpoint, using the threat of tariffs, is that worthwhile? Not worthwhile? Scary. Okay, what are your thoughts there?

John Murphy: 14:06

Well, these are important problems. You know, the fentanyl drug trafficking crisis is very real. I think we all know people in you know, close or friends or relations who've been impacted by this crisis, and similarly, illegal immigration, and that's a serious challenge. Nobody wants to support an open border that dis control and people just coming across without any sense of order. It's good to have a focus on these problems. I think what we see coming out of these exchanges with Canada and Mexico is a very sincere desire to work on these on these issues, and sure, both of them came forward with plans that they're putting in force. They're substantial. And particularly with regard to Mexico, a lot of the immigration into the United States for for a long time, is not Mexicans. It's people coming from other parts of the world. But. Afghans, Chinese, it's a regular United Nations, but the Mexicans have really stepped up in a big way, and they're cooperating with the United States to lend greater control there. So did tariffs help that happen? I'm not so sure. I believe that both Canada and Mexico have wanted to work with the United States on these problems, and if you look at the plans that they've rolled out, they're sincere and serious, significant investments. So I think it's positive that we're addressing the problem and certainly imposing tariffs at this point when so much depends on it for our economy, for American jobs. It's really important to see it through that lens understood.

Matt Kirchner: 15:40

And so, you know, let's be a little bit of a prognosticator, if you would. I mean, we nobody knows for sure how much of this is, you know, saber rattling and trying to, trying to maybe modulate behaviors. I mean, nobody knows how much of it is, maybe trying to get and maybe that's another question to explore, is trying to get foreign governments to change their tariff policies as it relates to exports from the United States. Nobody knows how much of it is a true desire to create more of a protectionist economy here in the United States. When I say, nobody knows, and maybe, maybe some people do, but very few of us, if we're going to turn the clock forward a year, John, how much of this do you think actually becomes part of US policy from a tariff standpoint, and how much of it kind of works its way through the rhetoric and never really sees the light of day.

John Murphy: 16:25

That's a really good question. There's been a lot of tariffs that the Trump administration has been talking about. For instance, they talked about bringing back and full force the steel and aluminum tariffs. That does appear to be very sincere, and I believe it's March 14, they're supposed to come into force. That's going to be, you know, heavy new costs for the manufacturing sector. Sure, I think that's real. Okay, it's going to have an effect. Because, you know, look, tariff spring, concentrated benefits and diffuse costs. The costs are a lot larger than the benefits. But if you're a steel manufacturer, that's good for you. What we saw with the steel tariffs when they were first imposed in 2018 was the industry added about 2000 jobs, but the downstream industries, they lost about 75,000 jobs. So if you're a steel consuming industry, it's quite a burden to have to put up with these much higher costs. So I think that that's coming. I do think that the administration has been clear, saying that they don't want to have any carve outs, no exclusions for individual companies, no exceptions for individual countries, some of the other ones, it's less clear. I am hopeful that we will not see the tariffs imposed on Canada and Mexico, and in the long run, you know, as a candidate. Now, President Trump talked a lot about imposing hefty tariffs on goods from China. Right now, the administration seems to be more in deal making mode with the Chinese, sure, so we'll see what happens there. But I do think that there is more of a bipartisan consensus in Washington about tariffs on goods from China, if they're not happening right now, I don't think that the tide is genuinely turned against them in the long run. Interesting. Well,

Matt Kirchner: 18:06

it'll be interesting to watch it roll out over the course of the next 12 months and beyond, and maybe we'll have you back in a year, and we can look back and see where we're where we're sitting. You know, another topic on the on the tariff front, we've talked about tariffs on on products coming into the United States, but you know, a lot of the talk these days is about, how do we normalize or maybe create a level playing field in the other direction, right? So there's a lot of countries that are imposing significant tariffs on our products as they leave our shores and enter their borders. What are your thoughts on that? And, you know, just in general, I mean some observations on what you've seen globally, and then whether our tariff policy should be used to try to offset those, you know, those tariffs that other countries are charging on the products that we're exporting to them.

John Murphy: 18:51

Yeah, that's a great question. First of all, I would say that we have our collection of free trade agreements with 20 countries around the world, and if you look at those, what they give us is that perfect reciprocity of zero tariffs on almost all products, you know, more than 99.5% of products. And so that includes Canada and Mexico under the US Mexico Canada agreement, usmca, but it includes other countries such as Chile, Australia, Singapore, Morocco, and they're hugely beneficial. A number of these are pretty small economies, but by opening up those markets and sweeping away their tariffs, sure what you get is real market growth. And so those 20 countries together, they buy almost half of all our exports worldwide. Wow. So getting more agreements like that is the kind of reciprocity that I think the business community can really rally behind. So beyond that, you look at other countries, like, say, Europe, European Union, or Japan, their tariffs are actually generally pretty low both of those, but the EU and Japan, their average tariffs are actually lower than those of the United States. States, there are exceptions. I think President Trump has talked about how the EU has a 10% tariff on autos, the US has a 2.5% tariff on autos. So, you know, let's, let's wrestle with that. Let's see what we can do with that. And of course, there are always other non tariff barriers, which they can take all kinds of forms. Sometimes countries put them together in a way that appears to be singling out American industries, like a number of countries have imposed these digital services taxes, which seem to target American technology companies. So there are very real trade barriers all around the world, and going after them is worth doing, and something the business community supports, but we need to do it in a proportional way. I believe that through negotiations, you can actually accomplish a lot.

Matt Kirchner: 20:45

So is it fair for me, as I'm listening to you talk about the free trade agreements, policies like NAFTA have come under fire over the course of the last several years, maybe even longer than that, in terms of maybe a perception that they created an environment where American manufacturing jobs were being exported to other countries. You know what I'm hearing you say is, when we have this balanced policy in fair trade between countries, that's a positive, I'm assuming, but I want to hear your thoughts on it. Have policies like NAFTA, agreements like NAFTA been a net positive for manufacturing employment. For example, in the United States, American

John Murphy: 21:25

manufacturers have very much benefited from our trade agreements around the world. And you see this in the trade flows. We actually have manufactured goods trade balance more or less when you look at our trade agreement partners. So by removing the tariff barriers that other countries have, and the non tariff barriers that are sometimes sneaky and not always that easy to pin down, but our trade negotiators do a good job. You really can turn small economies into big markets. So for the manufacturing sector, I think that's a real priority. And our friends at the National Association of Manufacturers have been very supportive of these trade agreements as well. What we're not going to get, even if we have, if we built the highest tariff wall in the world, it's it's worth thinking about, what are those jobs that we lost, that you are going to get back? About half of all the manufacturing jobs lost on net since 1979 which was the year when we had the highest number of manufacturing jobs in the United States 19 million. About half of all the net jobs we lost are actually in the apparel sector. You know, the apparel sector is not really the kind of place that you would want, you know, your child to grow up and go work in. Because if you look at the wages they paid in, say, in the Carolinas or Georgia back in the 1970s you know, they were seven or $8 in our current dollars. Wow, seven $8

Matt Kirchner: 22:44

adjusted for inflation zone, right? Yeah, yeah. So it's those. Those

John Murphy: 22:48

were bad jobs. And there's countries with much lower costs and lower wages that are happy to take those jobs, and today we import that stuff and trying to bring that back. Those are manufacturing jobs. Those are manufacturing jobs we lost. We should not be trying to get those back. We should be thinking about the jobs of the future. We should be thinking about the innovative economy technology. You know, there's been a big focus on things like semiconductor manufacturing in recent years. We need to rebuild our defense base as well. There's a lot of technology behind that that takes a lot of skilled labor, and that's why your your podcast is so important.

Matt Kirchner: 23:26

It's a race on debt right here at The TechEd Podcast, absolutely our reason for existing. So on that topic of jobs, and the kind of jobs we should be promoting here in the United States, you know, touch on for a moment and a little bit deeper. So we think about semiconductors. We think about technology now, of course, you know, we'd already mentioned data centers as it relates to energy policy, but certainly that being driven by artificial intelligence, machine learning and advancements, there are there types of jobs that we should be focusing on here in the United States in terms of growth as maybe that's a policy question. Maybe it's just more of a looking into the future, and what are the jobs of the future? You know,

John Murphy: 24:03

you started off with a question about the philosophy of free enterprise and free markets. You know, I think it's you really can't plan that too much, right? You want to create the best possible environment for businesses to operate in an environment where executives can plan for the long term so that they can build, invest, hire, innovate, do that R and D that calls for taxes that aren't too onerous, a regulatory environment that's predictable, you know, not too burdensome, right? And so on. I think that that's really how you succeed in doing that. I do think a lot about those jobs, though, like the apparel jobs, or going back to the auto sector, there's a lot of different parts that go into a car, including wire harnesses. I don't know if everybody's heard of a wire harness, I certainly have. Yeah, it's a pretty simple product. And, you know, they're made in countries. They're made in, you know, Mexico, Honduras, they're made in environments with pretty low skilled labor. Is low wage work. Sure, we shouldn't. Be trying to make those jobs come back to the United States. We should recognize that we have a privileged position in this industrial ecosystem. Our workers get to do the high value added, high wage work, and so trade helps us to do that. It's also, I'm not picking on the poor Hondurans, because it's where you start in the global economy, and you work your way up, just like, you know, Americans did at a certain point. Sure, we should be clear eyed about that not all jobs in the manufacturing sector are the same, and we should always be trying to have an environment that favors the creation of those high wage, high skill jobs. You know,

Matt Kirchner: 25:36

it's interesting that you bring up that that whole predictable business environment, and I used to argue in this, maybe not quite as long term as you're focusing on, but when I was in manufacturing, and we used to consume a tremendous amount of natural gas, and we used to hedge our natural gas, you know, years in advance. In other words, try to create a stable price for the company and and people would always be asking, why are you trying to, you know, game the natural gas market. What do we know about the futures market? So that's not what we're trying to do. We want to know what we're paying for that particular part of our product, so that or producing our product, so that we take the guesswork and the variability out of the business model, and the more predictable our business model can be with things that maybe we can't control, the more we can focus on the things that we can control. And it sounds to me, am I getting that right? That you're kind of thinking about it the same way that the more you know, more predictable our trade policy can be, the more our executives and our companies can focus on, okay, I know what that environment with some degree of certainty is going to look like now I can focus on those parts that I can control. Is that kind of what you're after there?

John Murphy: 26:39

That's hugely important. And it comes back to the tariff question. Right for executives to be able to plan they want to have that predictability, and I think there's plenty of evidence that tariff threats, even if they're not executed, can impose a real cost on the economy. We saw this back in 2018 2019 when we saw tariffs imposed on a variety of products coming into the United States. What you see is business confidence waiver. I think the University of Michigan has this index everybody refers to about business confidence. And the next thing you see is business investment. And we saw in 2018 the tariffs cause business investment to go down. You're going to sit on the sidelines. I think there's a danger right now, if you look at the economy, is now really the time when you would build a new plant or expand your current operations. If you're dependent to some degree on ability to sell your goods in Canada and Mexico and so on, or if you're dependent to some degree on some imported components from Canada or Mexico, are you going to suddenly be paying a lot more for them? Is that going to mess up your plans? So you can see the real nexus to that question of uncertainty and confidence going forward, and that's something that we we really need to value much more highly. I

Matt Kirchner: 27:53

think. Got it. So let me, let me ask you this, and maybe a little bit of a political question, but are you as fascinated? Or is maybe fascinated is the right word. Maybe it isn't. But you look at, I came of age, as I mentioned in the intro, during the Reagan era, that's where I started to get at least kind of following politics and policy a little bit. So back in the, you know, in the 1980s and back in those days, I mean, it was the conservative or Republican, if you will. Viewpoint was tariffs are bad, free markets and competition are good, and it was more the Democratic side of the aisle, maybe fueled a little bit by strong union influence as well that well, we need more protectionism where, you know, if it's whether it's a Japanese car that's coming across the border, we need to create some protectionism for our domestic manufacturers and create an area where they're not as influenced by foreign competition adversely. And now, I mean, it's like the opposite, right? I mean, you know, you look at the and I don't want to get overly political, but you turn on MSNBC, and now tariffs are bad and protectionism is bad, and you're watching Fox News, and it's like, well, you know, we need to punish these other countries that are maybe not playing as well with the US as we would like them. Are you as fascinated as I am by that juxtaposition in the political environment? It

John Murphy: 29:08

is interesting, isn't it? You know, I recently learned a fancy word from an expert in public opinion polling. The word is thermostatic. It means that, I suppose, another way to say it is that people are ornery and they don't like being told what to think. They may say in an election that they want one thing, but once they see a certain policy imposed, they start to sour on it. And I think it happens time and again, sure, but, you know, looking at public opinion on trade, I think it's especially volatile, because the reality is, people don't think about trade very much, right? There is a lot of evidence. You know, I've seen opinion polls for years, they always find that of all the priorities that people rank, usually something like the cost of living or the economy or jobs or there's a recession and there's a high unemployment, those are the things that are at the top. And there's usually maybe 1% of the public that will really say anything important about trade. Trade, and I think that lends the volatility and people also will follow. If you are a Democrat, you're going to adopt the policy positions on these low importance issues of your party leader, or, similarly, for a Republican, right? Sure. So I think that's a lot of what happens here. But as a guy who's worked on trade for 25 years. There may have been a time when I might have said to myself, gosh, I wish people paid more attention to trade, but here we are now, right? Yeah,

Matt Kirchner: 30:27

yep, exactly. You know, it's interesting. One of the stories I love to tell is this is back when George W Bush was the president, and he had proposed moving Daylight Savings Time by three weeks. And I have tons of friends all over the political spectrum. And all of my conservative friends are like, Yeah, this is a really good idea. I think the President's on to something. And all my liberal friends were like, you know, this is the worst thing in the world. And you know, then it's not sun's not going to come up until whatever, and kids are going to get run over by their school busses waiting for them in the morning and so on. And I'm like, you know, there's a lot of things that should come down to our political philosophy, but when we turn our clocks forward and back, doesn't seem like it should be one of them. So I think that was just an example of what you said is that sometimes people will follow the herd of whatever you know, whatever political side they they identify with, at that particular point in time, regardless of whether you know, people are sitting here having in depth conversations about tariffs and political philosophy and so on. Yeah,

John Murphy: 31:23

you know, I will you do make me think of one thing, people are paying a little bit more attention today to trade. And I was just looking at some of the recent polling. There's a CBS poll which, among other things, actually gave the president pretty high marks, but it said that the thing that people wanted the most, that they were not seeing was more attention being paid to prices that what are we going to do to bring prices down? Right? And the administration is not doing enough on that. So this is by far the biggest, the top finding, and a pretty important one, right? Because the election, we just had inflation and the cost of living was arguably the number one issue for sure. So not a surprise that people want the White House to focus on this, and at the very bottom of the list of things that wanted people want to see was tariffs. And people do understand that tariffs are taxes and that they're going to send costs up, and that's why, that's also, I think, why you're seeing inflation expectations in various surveys are going up, right? You know, it's been painful trying to get them to go down, and we really don't want to lose that progress, absolutely.

Matt Kirchner: 32:24

And I think the President actually even acknowledged that in the wake of some of the tariffs that are being proposed that that could have an adverse effect on pricing. So, and I think just, you know, the theory of economics is tell, tells you that that's what's going to happen if we have significant tariffs, we will hard to both, you know, raise a tax on something as it's coming into the country, and drive prices down at the same time. So I think not an economics expert, but I know it well enough to know that there's a potential issue there is, if I'm a business leader, John, and I'm trying to figure out you touched on before. Hey, you know we have this uncertainty that may have an adverse impact on capital investment. Is one example that you raise. How do I need to be thinking about current policy and kind of the attitudes toward tariffs and trade as I'm planning for the next 12 to 36 months in my business. Well,

John Murphy: 33:11

I think it's a bit of what we've seen in recent years, including with the COVID pandemic. People need to think about their supply chains and how you're going to spread your risk, how you're going to mitigate your risk, and one of the ways you do that is just by not putting all your eggs in one basket, right? Do not depend entirely on China to source all of you know some needed component. Try and have a I've seen this in the press the China plus one strategy, right? I've heard it from business executives

Matt Kirchner: 33:38

exactly, mitigate some of that risk, Yep, yeah. And I

John Murphy: 33:40

actually, there was actually a Wall Street Journal article quite recently that talked about the ABC strategy, which goes a step further anywhere by China, right? So, and you know, a lot of companies have done that kind of thing. They're sourcing more from Southeast Asia or Mexico. They've moved some operations there. Obviously, they want to do as much as possible in the US, but that tends to be the high skill, high wage parts of it, and it's in your production processes you often want to compliment that with some components that come from somewhere else. And businesses would really like to have the certainty that that direction that they've been getting for years, that don't depend too much on China, is still the direction, right? You know, if you started to expand your operations in Mexico instead, which is good for the United States, because stuff that's made in Mexico has a lot more US content in it. Sure. Can we not tariff that, right? You know,

Unknown: 34:34

exactly I get it. So, yeah,

Matt Kirchner: 34:36

interesting. So, so taking it to the other end of the spectrum of manufacturing, one of the things I insisted with my kids when they were going through whatever came after high school was we'll help you with that. But I want you to work in manufacturing. I want you to spend some time around production. I want you to know the amazing people that work creating the plants and factories across the United States of America and and know how hard they work, how dead. Dedicated they are to the manufacturing sector, to their work, that these are just genuinely, genuinely amazing, good, productive people. And I'm proud to say that they both had that experience as they were, you know, working their way through what came after high school. Just tremendous respect that we have here at the podcast for those people that are adding credible value to our economy, those 13 million people that you mentioned, as we were getting started here,

John Murphy: 35:22

it could be my son soon. He's graduating with a degree in mechanical engineering. Really, I think this is where he's looking. So, you know, we're all in on it. So sorry to ask where he went to school. Case, Western, yeah, in Cleveland,

Matt Kirchner: 35:32

Ohio. Awesome. Yeah. I just, I mean, it is, and to choose engineering as a career that kudos to your son, because that's really, really,

Unknown: 35:39

my hope is born to it. Yeah, exactly. It's a calling, and it

Matt Kirchner: 35:43

is and manufacturing, especially for people who spent a lot of time in and around it, there is nothing like getting to the end of the day and looking over your shoulder and saying, I made that, or standing at the end of a semi truck that's leaving the dock and saying that I had a part in building all those parts. And that's just, it's a rewarding feeling of accomplishment that most people don't ever get to, you know, get to experience. We've got 13 million people in the US, you know, working in manufacturing. That means we've got whatever the number is, two, 90 million or whatever that are that are not more than that. So very few people get that, that feeling of accomplishment. So, so awesome that your son is taking his career in that direction, with regard to those people that are doing that work, and the people that your son will have an opportunity to work around. If I'm the person, I'm a machine operator, right? I'm a machine tender in a manufacturing plant. I'm an industrial maintenance technician making sure that all this equipment continues working and so on. What's your message to them? I mean, what do they need to be do they need to be considering trade policy? What should they know about all these things that we're talking about here? It's

John Murphy: 36:45

always good to be informed. Understand what's going on at the US Chamber of Commerce. We're doing more in civics education. You know, it's we think it's terrific when people engage with and share their views with their members of Congress and other elected officials. That's how it's supposed to work, and it doesn't have to be way again with your member of Congress, like vote for this bill or don't vote for that bill, just helping elected officials to understand this very complicated economy that we have, sure it's not always very easy to understand, and it's you and I have this privilege of hearing so many interesting stories about The incredibly innovative things that come into our economy and how it all works together. It's educating policy makers is important. Certainly,

Matt Kirchner: 37:27

educating policy makers is important. Informing themselves is important, as you think about ways that they can do that, I'm an employee working in a manufacturing plant. I'm hearing this podcast. I'm like, You know what? I don't want to run off and a degree in foreign policy or a degree in economics, but I at least want to make sure that I'm informed enough to make good decisions, and if I am, you know, interacting with legislators or with other public policy makers, I want to be able to have a coherent conversation. Where can they go for that information? Well,

John Murphy: 37:56

I always encourage people to get involved in their local Chamber of Commerce. You're visiting Milwaukee, because I'm coming to an event with Wisconsin manufacturers and commerce, a great State Chamber, but municipal, Metro chambers, local chambers, just do a great job, and they're always having programs where you can learn more about these issues. And you know, a lot of them will have trade events throughout the year as well, and on a variety of other topics, workforce development, such a challenge in this country we're, you know, we're blessed with low unemployment right now, yeah, but it certainly makes it hard to keep that talent pipeline filled for sure, so many of these public policy issues that chambers get involved in awesome

Matt Kirchner: 38:37

two more questions for you as we close out our time with you, John, the first One is, we all had our own journey through education. I've got probably more opinions about education and what we could be doing differently than maybe anybody else on the planet. I don't know, but if you think about the world of education these days, is there something that you believe about either your trip through education or the state of education here in the United States that would be a little bit different than maybe the way others would look at their education, the world of education. Well, you

John Murphy: 39:06

know, I think about people in Washington, because I've been living and working in Washington for, you know, 30 years, and there are a lot of people who make a good living, who are sort of journeymen without a whole lot of deep expertise in anything. And, you know, you can hop around from job to job, but to me, it's the people who develop the deep subject matter expertise, and that's part of your college education and but it's something that you cultivate after that as well. Sure, you got to do that, yeah, at the same time, you're not just about that one thing. I really appreciate the colleagues that I have who are able to apply their classical education and invoke the Greeks or Shakespeare or something, that there's benefit to that rounded education as well.

Matt Kirchner: 39:46

Awesome, yeah, I love that. And as somebody is a product, actually, of a liberal liberal arts education. Studied business, but at a liberal arts university, I talk often about, yeah, the hardcore learning, the at that time, the nuts and bolts of public accounting and. Counting and so on. Really, really important. But I learned as much in courses like theology and philosophy as I did, maybe even more in terms of communication and abstract thinking than I did in some of those hardcore courses that were really central to what I ended up doing initially in my career. So super, super good advice. And speaking of advice, you know, let's turn the clock back a little bit. We haven't mentioned this yet, although, as we were warming up, we talked about you growing up in or near Fort Collins, Colorado. Let's you know, you're a sophomore in high school back then, 15 year old young man, whole life ahead of you. If you could go back in time and give that person one piece of advice, John, what would it be? So

John Murphy: 40:37

I was thinking about this a little bit. I think I would counsel myself to, you know, don't be afraid to hang out with the weird people, you know, because, again, I live and work in Washington, a lot of people are not that weird, but you learn so much from the people who think different, absolutely right? I think I've been blessed in my life to not just to be able to hang out with people who were who were different, but they actively sought me out, and it did me a lot of good. So, you know, when, when they come knocking, you know, go out and experience something completely novel with the richness of humanity and all the people who are not necessarily the same as you absolutely,

Matt Kirchner: 41:12

one of my really, really good friends actually talks about, he, and he's a he's an artist, and very, a very successful one. I taught art at the Chicago Institute. Talks about, he started his art classes with his new students, about, look, your whole life you've been a weirdo, is what he said. And I want you to know that you're now with a bunch of weirdos, and it's okay to be a weirdo. And I just think about I've made, actually, a similar comment many, many times, is that my most interesting relationships, and I've gotten an opportunity to meet lots of people and build numbers of great friendships. The most interesting ones are the ones that think about the world just a little bit different than I do. So I think that's really, really good advice. I think the fact that you you said, you know, when those people seek you out, and in this case, you know, the weirdos at The TechEd Podcast came knocking and you accepted the invitation. Really appreciate the fact that you did that, John, that's great advice. Awesome conversation here about trade policy, about tariffs, about the impact on education, about how our young people should be thinking about their careers. Really, really glad that you took some time for us here on The TechEd Podcast. It's been great. Thanks for having me, and we'll have you back again maybe a year or two from now, and we'll look back on what's happened in the world of tariffs in the world of trade policy and so on. It is going to be an interesting ride here in the United States of America over the course of the next several months, and maybe even over the course of the next four years. But with any luck, our manufacturing sector and our economy as a whole will be better for it. Looking forward to that, looking forward to seeing everybody next week on our next episode of The TechEd Podcast. In the meantime, be sure and check out the show notes. We will link up all of the great content that we talked about here on this episode of the podcast with our friend John Murphy. So check out the show notes. Those will be at TechEd podcast.com/murphy that is TechEd podcast.com/m u, r, p, h, y. And also be sure and visit us on social media. You'll find us on tick tock, on Instagram, on Facebook, on LinkedIn, wherever you are, we will be there as well. Reach out and say hello. Thanks again to John Murphy, the Senior Vice President, Head of International for the US Chamber of Commerce, for joining us here. We will see you next week. Until then, I am your host. Matt Parker, you.