WSJ What’s News - China Bets Trump Will Cave on Tariffs

Episode Date: April 24, 2025

P.M. Edition for April 24. Chinese officials call for full repeal of levies and dismiss suggestions that trade talks with Washington have begun. WSJ Asia economic reporter Jason Douglas says President Trump’s apparent softening on tariffs against China strengthens Chinese leaders’ resolve that he will eventually cave if they wait him out. Plus, U.S. home sales fell 5.9% in March, their biggest drop since 2022. WSJ reporter Nicole Friedman joins to discuss what’s behind the fall that comes at the start of the crucial spring season. And Florida Gov. Ron DeSantis hopes to address a labor shortage with teenage workers. WSJ reporter Tali Arbel discusses how Florida might remove the barriers for teenage workers. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Conditions apply to all benefits. Visit pcfinancial.ca for details. U.S. home sales fell last month, boating ill for the crucial spring selling season. Plus, China dismisses suggestions it's in negotiations about tariffs with the U.S. Trump has blinked. And the way this will be interpreted in Beijing is that China has a much greater tolerance for pain than the U.S. does.

And Florida's solution to a labor shortage? Teenage workers. It's Thursday, April 24th. I'm Alex Osolo for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. President Trump's apparent softening on tariffs against China in recent days has buoyed markets and raised hopes for a de-escalation between the world's two largest economies.

For Chinese leaders, it only strengthens their resolve that Trump will eventually cave if they wait him out. President Trump said today his team was actively talking to Beijing about trade. Beijing played down hopes for an imminent rapprochement, saying it hasn't held negotiations with the U.S., let alone reached an agreement, and described reports of U.S.-China talks as fake news. WSJ Asia Economic reporter Jason Douglas. Part of Beijing's strategy is certainly to suggest to Trump that they're not rattled by what he's doing at all. They seem very keen not to take the first step in ratcheting down tensions either.

It seems clear that they think that strategy is working or that Trump is the one to signal that he is prepared to de-escalate and reduce tensions. The real risk here is that the trade war spills over into arenas that are removed from tariffs, that it is just tariffs that get affected. But the US, for instance, has talked about delisting Chinese stocks. Could it stop investors putting money into China? Could it put further restrictions on investment flows?

Trump says that he wants China to give him a call. It doesn't seem like China will do that until they see some real movement on tariffs. To read Jason's full story, check out the link in the show notes. Since starting his second term in January, President Trump has toppled federal agencies, consolidated executive power, challenged global alliances, and reconfigured America's economic relationships around the globe. His moves have been met with protests, court challenges, dipping poll numbers, and political opposition.

But faced with market turmoil, the president seems ready to soften his stances on the economy and trade. For more, I'm joined by White House reporter Meredith McGraw. Meredith, is Wall Street the only force that has reliably pushed the president to back down? There's definitely been a pattern here where the president announces some sweeping economic policy and it's met with actual turmoil in the markets as investors try to figure out in real time what the president and his advisors have planned. The White House has said this is all part of a negotiation tactic by the president and

his advisors. After they put the 90-day pause on the tariffs, with the exception of China, they said that's because so many countries were coming to the table and trying to make a deal. And Caroline Levitt, the White House press secretary, has urged people to have patience. And yet at the same time, we know that the president watches the markets very carefully. And we know that he's aware of how economists and even CEOs who have come to the White House have told him that these tariffs are having serious implications or could have serious implications on supply chains. And we've already seen how they've impacted things like consumer confidence.

Trump wants to drive market gains, but he also wants to reshore American manufacturing through these steep tariffs. Can he do both? The president and the White House basically say they can walk and chew gum at the same time with this, that they're going to be enacting this serious realignment of global trade and at the same time boosting manufacturing and investments here in the US. And they point to a lot of the investments that have been already announced by companies that are reshoring different projects or building additional projects in the US. But a lot of these projects can take decades. These deals can take years to make and take a lot of complex negotiations. So there are still a lot of outstanding question marks about whether it's possible to do both at the same time. That was White House reporter Meredith McGrath.

Thank you, Meredith. Thanks, Alex. same time. That was White House reporter Meredith McGraw. Thank you, Meredith. Thanks, Alex. U.S. stocks rallied again today despite few concrete developments on the trade war front. Investors expect volatility is here to stay, but for now, they're clinging to optimism. Major indexes rose. The Nasdaq led the gains, adding about 2.75% for the day. The S&P 500 gained roughly 2% and the Dow notched up about 1.2%.

The National Association of Realtors said today that U.S. existing home sales fell 5.9% in March from the prior month. That's the biggest monthly decline since November 2022 and was much worse than the 3.1% drop that economists expected. Meanwhile, mortgage rates have stayed high. According to Freddie Mac, mortgage rates have held between 6.5 and 7% for most of 2025, though today the 30-year fixed-rate mortgage averaged 6.81%, down slightly from 6.83% last week. Nicole Friedman, who covers the housing market for the Journal, joins me now. Nicole, what's behind this drop in home sales?

What this is basically showing is that the spring housing market, which is the most important time of year for home sales, is off to a weak start. That's a combination of buyers being hesitant right now that affordability is still poor, home prices are high, mortgage rates are high. And then just this broader economic uncertainty, consumer confidence is low because people are looking at the economy right now, wondering, are we going to enter a recession? What's going to happen with tariffs? What's going to happen with my job? And so they're hesitant to jump in and make a big purchase. There were hopes that this spring would offer signs of a turnaround for the industry.

There's more inventory. Does that turnaround seem likely now? So there is more inventory, which is good news for buyers because the supply of homes for sale has been really, really low for a couple of years. And economists and real estate agents have been saying if we had more supply, we would have more purchases, that the buyers are out there, they just can't find a home that fits their needs.

But now we are starting to get more supply and the sales aren't going up as expected. And what we're seeing is that buyers are paying close attention to mortgage rates. So the rate was pretty unchanged this week. It ticked down just slightly, but it's still just hovering in this six and a half percent to seven percent range that it's been in for months now. And so we're not yet seeing a big change in rates that might lead to a pickup in activity. That was WSJ reporter Nicole Friedman.

Thanks, Nicole. Thank you for having me. Coming up, why Florida's governor wants more teen workers. That's after the break. Talking about guns with others might not always feel comfortable, but it could save a life. Here's a way to start a conversation. Your family is going over to your neighbor's home for dinner for the first time. How would you ask if there are any unlocked guns in the home?

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A number of U.S. states are looking to get the most out of teenage workers. The latest? Florida. The Office of Governor Ron DeSantis has drafted and pitched bill language for the current legislative session that would cut restrictions on the hours that minors can work. The proposals have the support of small business groups and opposition from unions and advocates for the poor. For more on the move, I'm joined by reporter Tali Arbel. Tali, why is Florida looking to lean more on teenage workers? The governor, Ronda Santis, he specifically has talked about Florida wanting to use team workers at resorts and other employers.

In 2023, Florida started cracking down on illegal immigration law and on foreign workers. And so in March, he was the one who made a connection to the foreign worker situation saying they need these resorts and other businesses need workers and we should use teens for that. This proposal in Florida and proposals in other states lower the age that teens can do certain things, like let them do certain jobs that were deemed hazardous for them before, or saying that they can work more hours on a school night. Florida's law now says that when 16 and 17-year-olds are in school, they can't work more than 30 hours during the week.

And this would get rid of that. And critics, what do they say? Why are they opposed to it? They say that teens can already work, that this isn't necessary, and that lifting these protections could be bad for them, could be bad for their academic performance, for their mental health. Also, some people say that the reason that these laws are being changed or being sought to be changed is that businesses would like to be able to lower their labor costs.

That was WSJ reporter Tali Arbel. Thank you, Tali. Thanks, guys. In business news, PepsiCo said today that it expects flat earnings this year, reversing earlier forecasts of growth. The company relies on concentrate from Ireland to make its U.S. drinks, which is now subject to a 10 percent tariff. Revel Coca-Cola doesn't have this problem, but both companies could be hurt by a 25% tariff on aluminum imports, which they use for cans. Pepsi executives said they plan to take action to mitigate the impact of tariffs on the company's

supply chain costs, but declined to provide details on their plan. Intel said today that it will streamline its business by cutting management positions, a move the chipmaker said will allow it to increase focus on engineering new products. The company didn't say how many jobs it would cut or detail the charges it expects to incur as a result of the restructuring. Intel's streamlining plan came as the company logged a wider loss and lower sales in the first quarter. And Alphabet posted higher profit and revenue in the first quarter, driven by growth in

its advertising, services, and cloud divisions. Google's parent company posted a profit of more than $34 billion for the first quarter, while revenue rose 12% to about $90 billion. Both profit and revenue beat analyst expectations. Revenue increased 10% across Google services, which includes advertising, and 28%

in its cloud unit, which includes its artificial intelligence business. And that's What's News for this Thursday afternoon. Today's show is produced by Pierre Bienamé and Anthony Bansi, with supervising producer Michael Kosmitis. I'm Alex Osala for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.