WSJ What’s News - Corporate America Is Picking Up the Tab for Trump’s Tariffs

Episode Date: July 25, 2025

P.M. Edition for July 25. American corporations have paid much of the additional $55 billion in tariffs that the U.S. has collected this year. WSJ economics reporter Jeanne Whalen explains why these companies are footing the bill, and when we might expect to see those costs passed on to consumers. Plus, earlier this week Columbia University agreed to pay the Trump administration $200 million to restore its federal funding. We hear from WSJ White House reporter Natalie Andrews about how this agreement may provide a blueprint for negotiations with other schools. And banks are getting picky about who they want as credit card customers. WSJ personal economics reporter Imani Moise discusses what kinds of customers they’re looking for, and the impact this higher bar could have on consumers. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

American corporations are footing the bill for Trump's tariffs, as hopes rise for a trade deal between the U.S. and Europe. Plus, banks are getting pickier about who they want to hold their credit cards. It shows that banks are cautious. The economy continues to be really, really strong, but there are some concerns. So they are hedging a bit by focusing on customers that they see as safer. And how the Trump administration is looking to strike deals with universities like it did with Columbia.

It's Friday, July 25th. I'm Alex Osala 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. The U.S. has collected an additional $55 billion in tariffs this year. So far, corporate America has largely shouldered the bill. Now, who's making that first payment isn't much of a mystery. Tariffs are typically paid by importers when goods reach U.S. ports, so it's usually a

manufacturer, a logistics or a customs broker, or a retailer that ordered the shipment. But economists and others have been watching for signs of who will ultimately bear the cost. For more, I'm joined by Wall Street Journal economics reporter, Jean Whelan. Jean, what is the strategy for businesses to be shouldering this cost right now? Well, businesses so far, they're paying the higher tariffs when goods arrive at port or when they buy the goods from some other company that has imported them. And the strategy is mostly, they don't really know

how long these tariffs are sticking around, and so they don't really wanna go through the hassle of raising their prices before they're sure that the tariffs are permanent. They also don't want to raise prices quickly if their competitors are not doing it yet, so they don't want to get out of step with the competition. And in the minority of cases, they're probably concerned also about raising the ire of President Trump, who has attacked some companies, including Walmart, for announcing price increases because of tariffs.

A fourth is many of them also stocked up on a lot of goods. So some of them are still making their way through that pre-tariff inventory and therefore don't need to raise prices on that inventory yet. Will these costs eventually get passed on to consumers? Eventually, most economists expect companies to pass this along to consumers in one way or another. The most obvious way would be to raise prices to match the tariff level. Another way companies pass on the pain to the rest of us is they don't hire as many people. They may fire people. They may not introduce as many new products that maybe we all want. They may decide that importing something is too expensive and they're not really able

to charge enough to make it worth their while. What role are foreign suppliers playing in this dynamic? Broadly foreign suppliers are not cutting their prices. So that means foreign companies are not setting the bill. And so that leaves U.S. companies and consumers to absorb the cost. At the same time, we haven't really seen consumer inflation go up very much yet, which means that the rest of us are not paying too much of the cost yet. So really, it's the U.S. company so far that had been on the hook to absorb it. That was WSJ Economics reporter, Jean Whelan.

Thanks, Jean. Sure thing. And hopes are rising for a trade deal between the US and Europe. European Commission President Ursula von der Leyen said today that she had a good call with President Trump and the two had agreed to meet in Scotland on Sunday to discuss transatlantic trade relations. According to people familiar with their thinking, European officials are optimistic that they're nearing an agreement on an outline deal that could see the European Union accept 15% baseline tariffs on most goods. But the people have emphasized that any agreement would need Trump's approval and could be upended if he pushes for significant additional concessions. A deal with Europe would be by far the biggest of several recent such agreements as Trump seeks to redraw international trading rules.

since such agreements as Trump seeks to redraw international trading rules. The S&P 500 and NASDAQ rose today to fresh highs following a busy week of tariff updates and earnings. The S&P 500 climbed 0.4%, ending the week with its fifth straight record close, its longest such streak in over a year. The NASDAQ rose about 0.2% and the Dow added more than 20 points, or about half a percent. Metaplatforms said it would stop political advertisements from being displayed on its social networks in the European Union starting in October, citing an incoming law designed

to tackle misinformation and foreign interference in elections. The European Commission did not immediately respond to a request for comment. The announcement follows a similar move from Alphabet's Google, which last November said it would halt political ads in Europe. The biggest name in Jeffrey Epstein's 2003 birthday book was a past president rather than a future one. According to people involved in putting the gift together, Epstein's 2003 birthday book was a past president rather than a future one. According to people involved in putting the gift together, Epstein's former girlfriend Ghislaine Maxwell was keen for Bill Clinton and other boldface names to submit letters. In the end, she was successful.

The leather-bound album, assembled before Epstein was first arrested in 2006, included a page with a single paragraph in Clinton's distinctive scroll. A spokesman for Clinton declined to comment on the birthday message, which was reviewed by the Wall Street Journal. He referred the journal to a previous statement that the former president had cut off ties more than a decade before Epstein was arrested in 2019 and didn't know about Epstein's alleged crimes. According to documents reviewed by the Wall Street Journal, the former president was among five dozen people, including Donald Trump, Wall Street billionaire Leon Black,

fashion designer Vera Wang, and media owner Mort Zuckerman, who ended up with letters in the 2003 book. Black has said he regretted having any involvement with Epstein. Zuckerman and Wang didn't respond to requests for comment. In 2023, Wang had told the journal that she regrets ever associating with Epstein. Coming up, who are the kinds of customers that banks are looking for as they get choosier about who holds their credit cards harder to get. For some people.

Total new credit card openings across four major lenders fell 5% in the second quarter. That's the first decline in more than a year. But it's not affecting all customers equally. Imani Moise, who covers personal economics for the journal, is here now with more. Imani, who are banks targeting for new credit cards? Banks really want the big spenders, people with high credit scores, people who are going to charge maybe $4,000 a month on a card and pay it off. That's who they're really going after with ads right now.

If you have a lower credit score, you're probably not seeing as many credit card offpiling up in your mailbox. About 80% of credit card offers in the most recent study that I saw went to people who are considered to have exceptional credit. So that means a credit score above 780. Why are they doing this? It makes sense if you're a bank to focus on this segment because they went in two ways. Big spenders, they spend more money and banks earn revenue every single time you make a purchase with your credit card that's called

interchange fees. And on the other side of it, these customers are more likely to pay off their bill in full every month, so they're less of a credit risk. What does this show us about how banks are thinking about the economy right now? It shows that banks are cautious. So overall on earnings over the past few weeks, banks said that the economy continues to be really, really strong. But there are some concerns about potential rising unemployment or how tariffs and trade tensions are going to translate for the consumer's pockets. So they are hedging a bit by focusing on customers that they see as safer.

How big of a shift is this really for lenders? It's like a faucet, and they increase the flow and decrease the flow. Right now, they're slightly decreasing the flow, narrowing the customers that they want to focus on. But when times are good and they think that they can make money off of more people, they're going to twist it in the opposite direction

and kind of open the floodgates for credit, which we saw in 2021. That was WSJ Personal Economics reporter Imani Moise. Thanks, Imani. Thank you. The White House is seeking fines from several universities. It says, fail to stop antisemitism on campus in exchange for allowing the schools

to access federal funding. That's according to a person familiar with the matter. White House correspondent Natalie Andrews joins me now. Natalie, earlier this week Columbia University agreed to pay $200 million to the federal government. How does that fit in with what the White House is asking of these other universities? The case with Columbia is going to be seen as the blueprint for how the other schools get access to their federal funding again. Cornell, Duke, and Harvard are key. We know they're in talks with the administration. And this is the higher echelons of the administration. They were looking at all sorts of agencies that deal with the Civil

Rights Act and education are in talks with these schools. What have the schools said about these talks? For many of the schools, publicly, this is a no comment type of issue. A lot of these schools are doing a delicate dance of wanting the funding from the administration. This is federal funding that they rely on for research, for grants, and with also their alumni, many of them who maybe for more liberal leaning schools, you do not want to see them so-called caving to the administration. So it's a delicate dance for a lot of these schools who are trying to please their alumni, their faculty, and

also get that federal funding back. I'm curious how the deal with Columbia is going over at the university and the broader higher education community. It is not exactly what you would call something that universities love, this idea that they are going to settle with an administration. But on a wider scale, this is an issue that was very popular for Donald Trump in his campaigning. And a lot of people feel like the universities have become too liberal. So while in campus community this may not be favorable,

definitely there are audiences where it does play very well. That was WSJ White House correspondent, Natalie Andrews. Thanks, Natalie. Thanks so much for having me. And police are searching for a suspect after a shooting at the University of New Mexico campus today left one person dead and another injured. The university in Albuquerque, New Mexico, said on social media it was sheltering in place following the shooting in a student apartment building early today, adding that the shooter had a firearm and might still be on campus. School officials haven't named the shooter or the victims.

The university said the surviving victims' injuries weren't life-threatening. And that's What's News for this week. Tomorrow you can look out for our weekly markets wrap-up, What's News in Markets. Then on Sunday we'll be discussing the audacious plan to reboot America's nuclear energy program. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Bienamé, with supervising producer Michael Cosmides. Michael Laval wrote our theme music. Aisha Al-Muslim is our development producer, Scott Salloway and Chris Zinsley are our deputy editors, and Philana Patterson

is the Wall Street Journal's head of news audio. I'm Alex Osela. Thanks for listening.