Name: EJ Antoni Decodes the Trump Economy and the ‘Big, Beautiful Bill’ Controversy
Uploaded: 2025-11-29T04:21:43.000Z
Description: Five months into the Trump administration, I sit down with Heritage Foundation chief economist EJ Antoni to get his insights into how the American economy is doing, where the US-China trade war is headed, and how he assesses the “big, beautiful bill,” which has engendered significant debate among conservatives. How are Americans faring financially today compared to a few months ago?

Jan Jekielek is a senior editor with The Epoch Times, host of the show “American Thought Leaders” and co-host of “FALLOUT” with Dr. Robert Malone and “Kash’s Corner” with Kash Patel. Jan’s career has spanned academia, international human rights work, and now for almost two decades, media. He has interviewed nearly a thousand thought leaders on camera, and specializes in long-form discussions challenging the grand narratives of our time. He’s also an award-winning documentary filmmaker, producing “The Unseen Crisis: Vaccine Stories You Were Never Told,” “DeSantis: Florida vs. Lockdowns,” and “Finding Manny.”

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[RUSH TRANSCRIPT BELOW] Five months into the Trump administration, I sit down with Heritage Foundation chief economist EJ Antoni to get his insights into how the American economy is doing, where the US-China trade war is headed, and how he assesses the “big, beautiful bill,” which has engendered significant debate among conservatives.

How are Americans faring financially today compared to a few months ago?

Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of NTD.

RUSH TRANSCRIPT
Jan Jekielek:

E.J. Antoni, such a pleasure to have you back on American Thought Leaders.

It’s my pleasure. Thank you for having me.

We spoke about nine months ago about the state of the economy, about inflation, about discrepancies between statistics and indicators and reality in the economy. So how have things changed nine months in with the new administration?

It’s interesting to see we still have some of those problems that we discussed previously, whether those are problems just with the statistics or problems in the real economy. But it’s remarkable how, in just a few months, we’ve already seen a tremendous amount of progress, a tremendous amount of change, so much so that it’s actually showing up in the macro-level data. And we’re seeing how it affects people, people just in terms of their daily life.

One really good example is how, if you look at not just the size of the average American’s weekly paycheck, but what that paycheck could actually buy, that fell about 4% from when Biden took office until when he left office. Conversely, under Trump, in literally just the last few months, I mean, he’s only been president, right, since the end of January, basically. So just from the end of January to today, that paycheck, that average American’s weekly paycheck, not only is it bigger, but it can buy more too, because those wage increases are exceeding inflation. So that’s actually increased about 1% now, a little over 1%. So that’s a stark contrast: a decline of 4%, an increase of 1%. I mean, it really is amazing what a difference an administration can make.

What accounts for that? What accounts for both those changes?

The biggest change has been the slowdown in inflation. Prices are not rising anywhere near as fast as they did under Biden. In fact, prices right now under Trump are growing at an annualized rate of less than 2%, which is phenomenal. It’s about 1.4%, which is less than the 1.8% that they averaged from about mid-2009 until the end of 2020.

That was essentially the end of the Great Recession all the way until Biden took office. So that averaged, it was an annualized 1.8%. Conversely, Biden takes office; his first 18 months, inflation is an annualized 8.6%. That’s terrible. And then for the last 30 months of his term, which was the bulk of it, inflation was well over 3%. It was over 3.5% at an annualized rate.

So you contrast that with what is happening under Trump. Inflation has been not only cut in half from that latter portion of the Biden administration, but it’s running even slower than it did in the economic expansion before Biden took office. So really tremendous news on that front. We’ve seen a lot of consumer staples. Not only has inflation slowed down where the prices are rising, but not as fast as before.

You know, some of these things, the prices are actually going down. Eggs are a good example. Gasoline is a good example. There are other staples as well. But what we see when we look at the entire landscape, we say, okay, some things have risen a little bit. Some things have fallen a little bit in terms of price.

But on average, there’s been almost no change. There’s been only a very slight increase, which is great news considering Biden handed Trump an economy with inflation running at an annualized rate of over 5% from December to January. And Trump has managed to cut that by about 80%. It’s terrific.

Much of it has to do with energy. The fact that energy production is helping drive down prices so much. And it’s not just domestically, but it’s also foreign suppliers as well, in part because nations like Saudi Arabia realize if they don’t become the marginal producer, in other words, if they don’t step up and produce more today, then we’ll do it. So they’d rather have the production than us.

But whatever the case, it’s forcing down energy prices around the world, which has been tremendous for the American consumer because energy affects the price of everything we do and everything we buy. So if you bring down that input, if you will, into other goods and services throughout the economy, then you see prices everywhere start to go down as well. And sure enough, that’s what we’re seeing today.

A couple of quick things come to mind. First of all, that huge increase in inflation had to do with the sort of massive spending around COVID. So some of that actually still came from the Trump administration, didn’t it?

This is a really, really interesting kind of phenomenon that happens there. What we saw in 2020 was the government printing trillions and trillions of dollars, but most of it didn’t get spent. In fact, interestingly, a lot of the money that got handed out to folks, they didn’t go out and spend it. First of all, it was hard to find anything to spend money on, right? You couldn’t get cars. There were all kinds of things. There were shortages everywhere. There were all kinds of things that you couldn’t get.

People, for the first time since the global financial crisis, started paying down their credit card balances en masse, so much so that the interest people were paying on those credit cards just plummeted. And between the decline in the balances and then also the decrease in interest rates, the financing charges went to almost nothing. So what that did was put actually downward pressure on the money supply because as you borrow money, that actually creates money. Lending actually creates money. And when you pay back those loans, it extinguishes the money.

So can you just explain that a little bit more to me, like how that works?

Sure. We use what’s called fractional reserve banking. This is the whole reason that you can get bank runs. It’s because when you put a dollar on deposit in the bank, the banker turns around and loans out that money as quickly as he can and to more than one person. And so what ends up happening is you get multiple claims on the same dollar. You’re walking around thinking, I own the dollar that’s in my bank account.

And you do, but it’s already been handed out to a bunch of other people in the form of loans. And so if you go and you put a dollar into the banking system, it ends up creating about $10. It’s the original dollar plus about nine additional dollars because the money gets lent out. Not all of it; some of it has to get kept on reserve just in case you do go and ask for your money back.

But let’s say 90 cents on the dollar gets lent out to somebody else. Well, he spends that money, and then he puts whoever receives that money that he spent, they go and put it on deposit in their bank. And 90% of that, or 81 cents, gets lent out. Well, this cycle continues, and you end up with a situation where, again, the $1 that you put on deposit in the bank ended up creating $10 in the banking system.

And when the Fed creates money, it works the exact same way. This is why it’s so problematic when the Federal Reserve creates a dollar for the government to spend. The government spends it. It goes through the banking system and ends up creating $10. So to give the government a little bit of money to spend, you end up creating a lot of inflation.

Conversely, in 2020, because of this very weird confluence of events, people were paying down debt, not taking on debt. And that resulted in a reduction in the money supply, not an increase. And a lot of the money that the Fed created for the government to spend, they basically kept in what you might call a kind of rainy day fund. They kept it in their cash account at the New York Federal Reserve.

This is part of why, when we look at the amount of the debt increase under Trump, it’s a little misleading. A trillion dollars of that increase was literally just cash that the treasury left sitting in the bank because they weren’t sure in April of 2021 what tax receipts were going to look like. They thought that tax receipts might be terrible because nobody was working in 2020. Now it turns out tax receipts were fine and they didn’t need that money.

So the correct move by the Biden administration would have been to simply take all the cash sitting in the bank and retire that extra trillion dollars in debt. Instead, they turned around and spent it. So a big reason why you don’t see literally any inflation in 2020 is the fact that the Fed creates all of this money. And then whether you’re a consumer or the government, you just keep a lot of that cash on the sidelines. You’re not actually using it. It’s not really flowing through the economy.

Fast forward to 2021. The economy is opening back up. People are feeling more confident. They go out and they start spending all that money that the government has been handing them in 2020. And then in 2021, whether it’s ARPA [American Rescue Plan Act] or a couple of the other bills they passed, they gave people even more money that the Fed printed out of nothing. And so at the precise time we should have taken our foot off the gas and put it on the brake, we just stomped all the way on the gas. And so what could have been essentially a non-inflationary episode turned into the worst inflationary episode in four decades.

Let’s talk about a specific product. This was a big deal a few months ago, eggs. And so do you have a sense of what caused the price increase in eggs ultimately? Because there were actually different theories about what that was and how that got actually contained.

Sure. So the avian flu definitely plays a big part in that. But we had even worse bouts of avian flu and other diseases. We had even worse bouts previous to this. And we never saw this huge increase in the price of eggs. So what did change? The government’s response changed. And what we saw at the very end of the Biden administration was this just crazy policy. It’s the only appropriate word I can think of for it. This crazy policy where we were literally paying farmers more to cull their flocks of egg-laying hens than the farmer could get if he allowed the hens to produce eggs and then brought those eggs to market.

So of course, it was a no-brainer for the farmer to go and cull their flocks. And what was really crazy was we even applied this policy in cases where the birds had already gotten the disease and then recovered from it. And so they were fine. Whatever happened to herd immunity and trusting the science, right? And instead, we just went ahead with this very ill-advised policy that resulted in millions upon millions of egg-laying hens being killed, whether there was even a cause to kill them or not.

Well, if you kill the producers of eggs, what’s going to happen to eggs? You’re going to get less of them. And as they become more scarce, the price goes up. And so all we had to do to get the price of eggs back down was simply reverse that policy. And sure enough, as we did, in the months that followed, we saw the population of egg-laying hens go through the roof. And the supply of eggs has likewise come back, which has helped put downward pressure on prices.

It’s so astonishing how powerful incentives are. When it comes to oil prices, energy prices in general, what is the impact of this Iran-Israel war that’s happening now on those ways? Has there been a significant change at this point?

The oil markets have been very volatile, and we saw initially futures go through the roof, the futures markets. And they’ve since come back down and then turned negative on the day. So it’s very, very unclear which direction they’re going to go. A lot of that has to do with the fact that speculators just don’t know the extent of damages on the ground, not just right now, but a week from now, what is the damage on the ground going to look like? And I think it’s going to take actually a whole heck of a lot of damage in Iran and to the Iranian infrastructure before you’re going to see a significant impact on global production, not just Iranian production. Obviously, that can take a hit.

But when we look around the world, a lot of these oil-producing countries, whether it’s the Saudis, the Russians, or whether it’s us here in America, you have countries in South America, to a lesser extent. But whatever the case around the world, you have a lot of different countries where they are not actually producing at their maximum; there is excess capacity there where we could pump more, we could certainly drill more, but we can even with existing wells, we can pump more and we can ship more. You’re not looking at pipelines that are at maximum capacity.

The big pipeline up in Alaska, for example, has fallen so low in capacity that they’re not sure how much longer they can keep it open because if they’re not flowing enough pressure, exactly, and they need enough heat. If that cools down enough, if the pipeline isn’t full enough, the Arctic air cools it down, it basically turns to sludge and it’s difficult to move it through that pipeline, at least in a cost-effective way.

So what I’m getting at, Jan, is that there’s just tons of excess supply or excess capacity for bringing new supply online around the world. And unless Iran were to, I mean, just have their oil infrastructure and production completely wiped out, it’s hard to imagine a scenario where the rest of the world can’t make up for whatever deficit is incurred because of this conflict.

Something almost just south of 80% of their oil is actually bought by China since it’s sanctioned. Now, what is the impact of that? Because I’m assuming the capacity will be severely degraded.

But with a commodity like oil, it’s really, really difficult for those sanctions to be 100 percent effective. There’s absolutely nothing that stops somebody like China from buying all of that oil and then just reselling it somewhere else. So again, it’s very, very difficult. This is part of the problem with Russia, for example, all of the oil sanctions on Russia and why they were completely ineffective.

It was the fact that you had countries, ironically, in the southeastern Pacific, who were buying all of this Russian oil and then selling it. And all of a sudden, Chinese imports of oil from Indonesia were something like four, five, or six hundred percent beyond Indonesia’s capacity. So it was obvious what was happening, right? Indonesia had to have been getting the oil from somewhere else to then resell it to the Chinese Communist Party.

So you raise the concept of transshipment. And so it’s really interesting what happened with oil. But so when I was at the White House, when these various tariff regimes on different countries were announced. And it very quickly occurred to me as I was looking at these tables that from the little that I knew, the countries that seemed to be getting the highest tariffs on average, right, not 100%, but on average, were the China transshipment countries.

For example, in Vietnam, you would set up a warehouse and you would bring your goods in from China that had a high tariff already from the previous Trump administration, and then you would just sell them outside of the tariff regime. And then, of course, actually, since Russia was sanctioned in various ways, all sorts of countries near Russia all of a sudden are importing really large amounts of goods from different places. So transshipment is just a big thing, right? And it struck me that this tariff regime saw that as important. And I’m curious what your thoughts are here.

I think this is part of the reason why Trump goes after Canada the way he does. So many people have said, why is he going after our friendly neighbors to the North? The reason for that is simply because they actually commit a whole host of violations of USMCA [United States-Mexico-Canada Agreement]. They allow China to abuse that trade agreement. China dumps products into Canada. It gets repackaged, relabeled, and reshipped into the United States.

And because of that, not only does it avoid the Chinese tariff, but it gets preferential treatment under the Mexico-Canada trade agreement. So things like that are really, really problematic for this administration, aside from the fact that Canada does things like put these crazy quota regimes on American dairy products, on American automotive products, automotive parts, et cetera.

But I think a lot of what we saw on Liberation Day wasn’t so much a focus on individual trade abuses. It was just looking at trade deficits, which I have to say, I’m not a fan of, right? And I appreciate the fact that since then, the administration seems to be, I think, reevaluating that approach, where they’re not so concerned about whether we run a trade deficit with this country or not, specifically a trade deficit in products as opposed to services. Less of a focus on that and more of a focus on, we need to counter the Chinese Communist Party, number one.

They’re our number one adversary. And we need to go after, no matter who it is, friend or foe, we need to go after trade abuses. And that could be, you know, China checks a lot of these boxes, right? It could be dumping products, subsidized products. It could be currency manipulation and destructive monetary policy. It could be utilizing slave labor. It could be abusing country of origin provisions, the transshipments that you’re talking about—a whole host of different things.

So there is some kind of a deal from what we’ve heard with communist China as we speak. I mean, the question I keep asking myself, is it possible to even have a deal in your opinion? I mean, I guess my experience of 25 years of watching China tells me that it’s impossible to have a good faith agreement with the Chinese Communist Party. But what do you make of this deal?

Two things. The first is that because we don’t have any details yet on it, like any real specifics, it’s difficult to see how it’s different from the status quo. I want to withhold judgment from that standpoint. That’s not to say there isn’t anything different. I just haven’t seen those details yet. So we’ll wait and see. Hopefully, it’s an improvement over the status quo and not simply the status quo or, heaven forbid, making things worse.

To your point, though, on how we can’t trust the CCP, if you look at all of the agreements and all of the deals from the first Trump administration, China followed through on precisely none of them, not a single one. And because of COVID, we saw a lot of waivers and things, right? Because getting supply chains normalized was the only priority.

But as soon as 2021 came around and supply chains did normalize, and we have a couple of different ways to measure that, but it’s clear by the end of 2021 that things were fine. Supply chains were actually in better shape then than they were in 2019. But what we saw was the Biden administration that had no interest whatsoever in actually going after the CCP for any of these violations. And the Biden administration did nothing to enforce any of the deals that were already on the books.

Let’s talk about samarium, this rare earth metal that’s used primarily in defense. It’s a bizarre thing that the only place that one could get it would be from communist China. What do you think about that?

There are a couple of things. One is simply cost-effectiveness. Rare earths, it’s an odd nomenclature, right? Because they’re not actually that rare. Some rare earths are more common or just as common as elements that we would never call rare. Something like copper. You have rare earths, quote, unquote, that are about as common as copper is.

The difference is copper, when you find it, is very concentrated. Iron ore, when you find it, tends to be concentrated. Aluminum, same thing. So the difficulty with rare earths is that when we do find them, they are very diffuse. You can have this huge deposit, and only a tiny percentage of it is actually the rare earths themselves. They tend to be mixed in with other things.

So it helps to not have environmental guidelines that you have to follow, for example.

That’s a huge constraint, Jan. Absolutely huge. But even when you go to a country like Russia, it can be much, much more cost-effective there, even if you have some of those environmental regulations in place. And a lot of that just has to do with the economies of scale. So I think part of the difficulty is that China and the U.S. right now are dependent on each other, not in a healthy way. Because, again, we’re adversaries, in a similar way that we were dependent on the Soviet Union for titanium at one point, and that was not a healthy relationship.

But it is similar to what you might call, what the psychologists would call a codependent relationship, right? That’s not a good thing, the ways in which those two people are dependent on each other. And we are still in a lot of ways like that with China. So it’s going to take time to decouple. Even if you don’t want to decouple, it’s going to take time just to scale back that relationship. There’s no quick answer. There’s no easy fix for it.

I was giving a talk in Poland recently, and they were asking about the threat of the EU tariffs, which were considerable. I suspect that if the EU actually also tariffs Chinese goods, it doesn’t open up the flood. Basically, as the U.S. tariffs came up, all these goods were flooding into the EU and other markets because they’re this kind of one-trick pony. The export economy is kind of all they have left right now. Actually, I’d love to get you to comment on that too. But my suggestion was, well, if they kind of cooperate with Trump’s plan to be able to have leverage using this fact, that they probably go a long way to having their own problems resolved.

It’s interesting what we’ve seen where China is already taking steps. I mean, literally, as soon as the tariffs were announced, China immediately began taking steps to try to circumvent them. They began devaluing their currency at a horrid pace, where the offshore yuan just kept hitting record low after record low against the dollar. They were taking products that previously were getting dumped in the U.S. and they’re dumping them in the EU [European Union], which, of course, is angering the EU because it puts their suppliers out of business. It is shocking how all of a sudden now the people in the EU are finally waking up to what a problem this is, right? It was fine when it was happening here, but not there.

So the impact of the tariffs on China is not going to be as bad as I think a lot of people say. Because again, they have lots of different maneuvers that they can use, at least in the short term, to get around those tariffs or to minimize that negative impact. It is definitely having an impact on the EU, though. It is definitely having a negative impact there, whether it’s because China is now dumping in the EU or because the EU is going to have a more difficult time getting their products into the United States.

And I think it’s amazing how so much of this could simply go away if the EU would get rid of all their trade barriers they have in place. But they don’t want to do that. Trade barriers with whom? With us, with the United States. Okay. And there are lots of different trade barriers that they have. People think it’s all tariffs. It’s all tariffs, in part because that’s what President Trump just won’t stop hammering, right? Tariffs, tariffs, all day tariffs. There are a lot of other problems in international trade that we find. Europe is infamous for using these value-added taxes, which in and of themselves, I’m not saying they’re bad, but the problem is they’re structured like a tariff.

It functions almost identically if you slapped American imports with a tariff. They have all kinds of labeling restrictions where there’s nothing wrong with an American product. It might be exactly the same, more or less, as the European product. But because of this one regulation, essentially, it blocks the American product from competing in the European market.

I think Trump, at least this is my view, Trump uses the term tariff to kind of approximate all trade barriers. I don’t know if that’s what you think, but that’s what I kind of assumed from the beginning.

Yes. When the president, when he’s talking about putting these tariffs on other countries, this is what Liberation Day was supposed to be. We’re going to take all of these tariff and non-tariff barriers that other nations impose on us. And it’s basically going to be like holding up a mirror to them and saying, see what you do to us, we’re going to do it to you. What is the effective tariff rate, which is surprisingly hard to calculate, of all tariff and non-tariff barriers that other countries are imposing on you, and then you impose a tariff rate on them that’s equal to that?

Unfortunately, that’s not what we saw on Liberation Day. They took that big beautiful book that Jamieson Greer and all his team put together that went through in tremendous detail all of these tariff and non-tariff barriers of other countries, and they essentially threw that out and just used this crazy formula where we said, okay, we’re going to use the portion of the trade deficit in products that we have with a country as a ratio to the overall trade that we have with them.

In other words, let’s say we have a random number here, a $50 billion trade deficit in terms of products with Switzerland. But the overall trade that we have with Switzerland is $100 billion. Well, 50 over 100 is 50%. So now we’re going to slap them with a 50% tariff. That’s not a good way to calculate these things. Unfortunately, that is what they did at the time. Again, it looks like the administration is reevaluating all that and is kind of taking a second look to reprioritize going after China and really going after trade abusers as opposed to just having a trade deficit with the country.

I remember I interviewed a former U.S.Trade Representative Robert Lighthizer. And when I was reading his book, I remember I told him the one thing that I got from reading your book is that you deeply believe that if there’s a sustained trade imbalance over time, then someone’s gaming the system and that’s wrong. And eventually, you should kind of come back to some equilibrium. It sounds like you don’t agree with that view.

It depends on why the trade deficit is there. For example, you can’t get rid of the trade deficit entirely so long as you’re the world’s reserve currency. Because by definition, if I’m the U.S. and you’re from another country, I’m buying a bunch of stuff from you, I’m handing you dollars. Now, if there’s no reserve currency, what do you do with all those dollars? Well, you send them right back to me, and you buy stuff from me, and it ends up equaling out. Why on earth would you keep worthless pieces of paper?

It makes no sense, but if you’re going to hold that as a reserve, maybe your central bank will keep it as a reserve for loans for other currencies; maybe you use it as international exchange so you want to hold dollars just so that you can trade freely with other nations because you know every other nation is going to accept those dollars. Guess what? Now, all of a sudden, some of the dollars I send your way, you’re not sending back to me.

Because you have another purpose for that, basically.

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