WSJ What’s News - Grocers Try to Hold Prices Steady as Tariffs Threaten Produce

Episode Date: March 14, 2025

P.M. Edition for Mar. 14. Much of the fresh produce that Americans expect year-round is imported from places like Mexico and Canada, which were subjects of Trump’s whipsaw approach to trade. WSJ agriculture reporter Patrick Thomas joins to discuss how grocers are handling the rapid shifts. Plus, consumer sentiment in the U.S. hits its lowest level since 2022, but, as economics reporter Justin Lahart tells us, it’s the expectations element that’s particularly concerning. And Sara Randazzo, who covers education for the Journal, talks about what steps universities are taking to avoid becoming President Trump’s next target. 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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Get Uber One for students, a membership to save on Uber and Uber Eats. With deals this good, everyone wants to be a student. Join for just $4.99 a month. Savings may vary. Eligibility and member terms apply. U.S. consumer sentiment hits its lowest level since 2022. Plus, grocers try to hold prices steady

as tariffs come for the produce aisle. It's just a tough math for these guys, and some of them took losses last week on this and trying to figure out what to do with it has been really complicated for a lot of people in the supply chain. And universities are scrambling to avoid becoming President Trump's next target. It's Friday, March 14th. I'm Alex Osola 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. Consumer sentiment sank this month. The University of Michigan's closely-watched index fell 11 percent to 57.9 in mid-March from 64.7 last month. That's the lowest level since November 2022 and was much weaker than economists expected. Compared with a year earlier, consumer sentiment is down 27%. WSJ Economics reporter Justin Layhart says that particularly worrisome was also a decline in the expectations component of the sentiment index, which fell 15%. The expectations component of the University of Michigan Sentiment Index is really the

most predictive when it comes to future spending. And we saw that expectations really deteriorated across the board. Even Republicans were feeling less cheery. It doesn't mean that people are going to stop spending just because they're feeling a little down. However, you do have to be a little bit more worried about consumer spending in the months ahead than you might've been before this number came out.

Despite consumer sentiment with a threat of a government shutdown receding, stocks wrapped up a tough week with a rally. The Dow rose about 1.7%, the S&P 500 added about 2 percent, and the Nasdaq led the way with a 2.6 percent gain. As we've talked about before on the show, President Trump's rapidly changing trade policy is affecting goods from cars to champagne. One place Americans might start feeling it?

The grocery store produce aisle. Patrick Thomas covers agriculture for the Journal and breaks it down for us. Patrick, what is the produce most affected by Trump's new tariffs? So the biggest item that you're going to see fruits and vegetables, the first thing in the supply chain that you would see affected, the tariffs are constantly changing. But we import quite a bit of fruits and vegetables from both Mexico and Canada. So depending how the tariffs work out, that would be an area really affected, especially if you think about produce.

Perishable goods, you can't put it on ice like you could even in meats. So you're going to see that cost pass down the supply chain a lot faster than you would, say, something else like the ingredient in a cereal that used maybe wheat imported from Canada. So what do tariffs mean for grocers? It's a tricky equation for them. If you think about the supermarket right now, they're balancing a lot of costs increases on certain commodities.

One of the grocers that I talked to for the story talked about his 80-20 rule. For example, you price 80% of the wholesale increase and then eat the other 20%. So basically, he's been doing this with eggs. And what that does for him is his eggs look cheaper than store down the street. Maybe it's a big Kroger, Albertson store, Whole Foods, and might gain market share from them because the consumer's gonna see that

and maybe they'll think, wow, this is the low priced retailer. I'm gonna keep coming back here. If consumers are getting sticker shock from particular goods that are going to be impacted by the tariffs, what options do they have? Can they look for a different supplier? Well, that's one of the things that companies are starting to talk about.

Kroger about a week ago talked about their willingness to start looking at their supply chain and shifting around to some trading partners that maybe aren't immediately of concern to the president about which country he's going to slap tariffs on. One of the produce companies quoted in the story, he talked about the uncertainty that the last two weeks has brought and he has had to cancel orders, bring them back, paid two days worth of tariffs and instead of passing that along to the customer, ate the costs. It's just a tough math for these guys and some of them took losses last week on this

and trying to figure out what to do with it has been really complicated for a lot of people in the supply chain. That was WSJ Reporter Patrick Thomas. Thank you, Patrick. Thank you for having me. President Trump and Russian President Vladimir Putin painted a rosy picture of discussions to bring an end to the war in Ukraine. Trump described the talks as productive, while the Kremlin said that there were reasons to

be cautiously optimistic. Meanwhile, Ukrainian President Volodymyr Zelensky called on the U.S. to press Russia to do more to end the three years of grueling fighting, as he appeared to acknowledge that Ukraine's incursion into the Kursk region was coming to an end. Coming up, what universities are doing to avoid becoming President Trump's next target. That's after the break. Drag your friends. Novocaine? I thought you'd be dead by now. Get to the theater and experience the movie audiences are calling. An adrenaline rush of a good time. It's a big screen blast.

Find a badass. I know, right? Novocaine. Now playing. President Trump has been pushing for changes at universities. Last week, the Trump administration canceled roughly $400 million in federal grants and contracts to Columbia University over anti-Semitism allegations. Now some universities are making tangible changes in response to government spending

cuts and the Trump administration's DEI guidance as they're trying to avoid becoming President Trump's next target. Education reporter Sarah Randazzo is here now with more. Sarah, what exactly are universities worried about here? Universities are really facing headwinds on a few different fronts here. And so one of them is around a lot of the Trump administration's directives around DEI

and getting rid of DEI programs. Schools are also reacting to changes in federal funding to research. The National Institutes for Health, there's a big formula change potentially coming that would cost universities potentially hundreds of millions of dollars. And then there's also a task force

named to anti-Semitism at the federal level that schools are responding to. And so there's really a lot of different fronts at this point that they're responding to. So what are universities doing? A lot of schools are preemptively doing hiring freezes. For instance, we've seen dozens of universities across the country from elite ones on down saying that they're having temporary hiring freezes because they need to figure out whether that money for research grants is coming or not.

And as part of that, PhD students are also having some offers withdrawn because they just don't know if they can support those PhD students for the next five years. So those ones are a little in the preemptive bucket around the DEI. There was a letter that the education department put out that didn't have the force of law but gave a kind of deadline of the end of February

to get rid of a lot of DEI-related things. And so some schools were worried about that and didn't want to get in the crosshairs. So again, it didn't totally have legal bearing, but it was kind of a big scary letter that went out from the education department. And then obviously there are some schools facing immediate backlash like Columbia. How central exactly could these changes be to a university's identity, the education it offers, the research it does? It permeates across campuses. The research grants themselves are mostly focused on the sciences,

but it's interesting because schools are saying that even if there's cuts to the science research grants, that's going to have trickle effects because they'll have to maybe move money from elsewhere to accommodate. And culture-wise, if you do things like some of the schools we found that cancelled a black student alumni event or are no longer going to have graduation ceremonies for different ethnic or affinity groups, it's going to be smaller changes that impact the overall culture of a place and then also some larger changes when it comes to, say, employment or opportunities for graduate programs that are more tangible. That was WSJ Education reporter Sarah Rendazzo. Thank you, Sarah. Thanks so much. The Senate is set to vote today on a Republican measure that would fund the government through

September. As we mentioned on this morning's show, Senate Minority Leader Chuck Schumer said that he would vote in favor of the bill to avoid a government shutdown, but members of his own party are begging him to reconsider his decision. Congress is also working on a budget, and cuts to Medicaid are on the table. The program is mainly for low-income Americans, but deep cuts could affect state budgets and health care more broadly. What questions do you have? Send a voice memo to wnpod at wsj.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show. Lip Booth Tan is set to start as Intel's new CEO next week. WSJ herd-on-the-street columnist

Dan Gallagher told our Tech News Briefing podcast about what Tan is expected to start as Intel's new CEO next week. WSJ herd on the street columnist Dan Gallagher told our tech news briefing podcast about what Ton is expected to do once he's in the top job. His initial email to employees suggests he's gonna keep going down the two tracks of trying to build out a manufacturing business that makes chips for other companies, as well as improving Intel's own products that they design making those more

competitive against AMD and Nvidia. So for the time it looks like he's gonna still do things the way they've been doing them but I would expect there's gonna be some major changes possibly a lot of restructuring going on. There are reports that when he left the board last year it was out of frustration that he thought Intel was moving too slow. It was too bloated, too many employees. So there might be some major changes on that front. But beyond that, we don't really know what he'll do ultimately. Is he going to do partnerships, sell one end of the business or the other?

That all remains to be seen. For more from Dan, listen to today's episode of Tech News Briefing. [♪THEME MUSIC PLAYING -♪)] For more from Dan, listen to today's episode of Tech News Briefing. And finally, what lengths would a team go to to win? In the case of the University of Oregon's basketball team, I mean literal lengths. This year, the Ducks joined the Big Ten Conference, and since their season began in November, they've spent more time in the air than actually playing basketball. The total distance they've traveled this season is 26,700 miles, the equivalent of

traveling the entire circumference of planet Earth plus a few thousand more miles. Fortunately for Oregon, it hasn't stopped them from attaining the best record of any of the Big Ten's newcomers. And that's What's News for this week. Tomorrow you can look out for our weekly Markets Wrap-Up, 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 bringing you an episode of the WSJ's Bold Names podcast. It features an interview with Palmer Lucky, who founded the weapons manufacturer Andril, talking about how he's trying to remake the government's approach to national security.

That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienamé and Anthony Bansi with supervising producer Michael Cosmitis. Michael Laval wrote our theme music. Aisha El-Moussoulym is our development producer, Scott Salloway and Chris Inslee are our deputy editors, and Philana Patterson is The Wall Street Journal's head of news audio. I'm Alex Osela.

Thanks for listening.