WSJ What’s News - Harvard Hit With $2 Billion Government Funding Freeze

Episode Date: April 15, 2025

A.M. Edition for April 15. The Trump administration freezes billions in funding for Harvard University, after the school said it would resist demands to change its governance structure over antisemitism concerns. Plus, confusion in Detroit as automakers struggle to claim tariff relief on U.S.-sourced products. And Chinese leader Xi Jinping heads overseas, pitching stability to Asian countries facing high reciprocal tariffs from Washington. WSJ reporter Austin Ramzy explains what Beijing can realistically offer amid broader trade tensions. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Okay, Martin, let's try one. Remember, big. You got it. The Ford It's a Big Deal event is on. How's that? Uh, a little bigger. The Ford It's a Big Deal event. Nice. Now the offer? Lease a 2025 Escape Active all-wheel drive from 198 bi-weekly at 1.99% APR for 36 months with $27.55 down. Wow, that's like $99 a week.

Yeah, it's a big deal. The Ford It's a Big Deal event. Visit your Toronto area Ford store or Ford.55 down. Wow, that's like $99 a week. Yeah, it's a big deal. The Ford It's a Big Deal event. Visit your Toronto area Ford store or Ford.ca today. The Trump administration freezes billions in funding for Harvard, widening its fight with the nation's wealthiest university. Plus confusion in Detroit, as automakers struggled to claim tariff

relief on US-sourced products, and Xi Jinping embarks on a global charm offensive hoping to draw contrasts with American protectionism. He's offering a pitch of stability, of support for free trade, so he's coming to these countries at a time when they're looking for support. It's Tuesday, April 15th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today. The Trump administration is freezing more than $2 billion in federal grant and contract

funding for Harvard University after the school resisted demands to change its governance structure over campus anti-Semitism concerns. An administration task force had demanded Harvard enact a mask ban, end DEI programs, and change classroom instruction to, among other things, improve viewpoint diversity. Harvard's president issued a letter yesterday rejecting those demands, leading the Trump administration to announce the funding freeze hours later. The government has couched the withholding of funding as an effort to uphold civil rights laws while lawyers for Harvard say its demands violate the First Amendment and ignore due

process. This month, Harvard issued $750 million in the bond market that it could use to free up cash flow should it be unable to reconcile with the task force. New filings by the Commerce Department show the Trump administration opened tariff investigations into pharmaceutical products and semiconductors on April 1, potentially teeing up additional

duties. Both investigations are broad and are being carried out under the Trade Expansion Act of 1962, which allows the president to impose tariffs on goods deemed essential for national security. President Trump has indicated that around 25 percent tariffs on the sectors are forthcoming after he previously exempted some semiconductors and other electronic products from separate reciprocal tariffs. Meanwhile, Asian auto stocks closed higher today after President Trump said he was considering

short-term tariff exemptions to help car companies looking to move components manufacturing to the U.S. I'm looking at something to help some of the car companies where they're switching to parts that were made in Canada, Mexico and other places. And they need a little bit of time because they're going to make them here. But they need a little bit of time. Trump didn't offer any specifics, potentially adding to confusion within the auto industry, which imports about

seven and a half million vehicles into the U.S. each year. Journal Auto's reporter Ryan Felton says that when Trump enacted a 25 percent tariff on vehicle imports last month, he gave automakers some relief in the form of a U.S. content deduction, but the weeks on, industry executives remain puzzled over how to collect it on certain of the 20,000 to 30,000 parts in the average vehicle. The way it would work is you basically just subtract the dollar amount or take the percentage of content that isn't from the United States and reduce the effective tariff rate that companies would pay on these cars.

Basically at this point, the Commerce Department hasn't yet set a process for declaring and reduce the effective tariff rate start kind of getting the lower effective tariff rate. So it could happen soon. It may not happen soon. There's real no clear guidance at this point, but there's essentially money being left on the table every day that the companies can't save as a result of this process not being in place from the time the tariffs were initially imposed.

A White House spokesman said the Commerce Department was working on a process for automakers to seek approval and begin taking advantage of the U.S. content deduction as soon as possible, but did not give a timeline. In other markets news, after announcing emergency support measures for its auto sector last week, South Korea Today said it's preparing roughly $23 billion in government support for the chip sector as it faces US tariff pressure. Semiconductors made up about 20 percent of the country's exports in 2024, led by homegrown firms like Samsung and SK Hynex, a key partner to Nvidia. The funds will cover infrastructure construction costs, low interest loans to companies and worker recruitment.

structure construction costs, low-interest loans to companies, and worker recruitment. We are exclusively reporting that Netflix aims to achieve a $1 trillion market cap and double its revenue in five years, according to people present at the Streaming Giant's annual business review last month, where executives also shared ambitious plans to earn about $9 billion in global ad sales by 2030. The streaming giant is set to report quarterly results on Thursday. And speaking of earnings, the likes of Bank of America, Citigroup, Albertsons, and United Airlines are reporting results today. Also in focus, Boeing, its stock fell pre-market after a report from Bloomberg at Beijing told

Chinese airlines to stop taking delivery of the U.S. company's planes. And in Europe, luxury stocks sank after industry heavyweight LVMH reported a drop in sales as it contends with mounting trade tensions and faltering Chinese demand. Coming up, China's leader hits the road, pitching a free trade message to countries facing high U.S. tariffs. Plus the rest of the day's news after the break. Xi Jinping is taking Beijing's pro-trade message on tour.

The Chinese leader embarked on an overseas charm offensive yesterday with a visit to Vietnam with later stops planned for Malaysia and Cambodia. And the Journal's Austin Ramsey is here to discuss what Xi is pitching on this trip. Austin, I suppose it doesn't take too much guesswork to figure out why these specific countries were picked for what is Xi's first trip out of China since President Trump took office, doesn't it? That's right. These countries were all hit with pretty steep tariffs initially. Earlier this month, Vietnam was 46%, Cambodia 49%, Malaysia 24%. Those are on pause for 90 days. But it was quite a shock to all of them. And they are now trying to figure out their trade

relationship with the US and the rest of the world. So Xi is visiting now and he's offering a pitch of stability, of support for free trade, a pitch of predictability that China is not going to impose tariffs or anything like that in a manner like the US. So he's coming to these countries at a time when they're looking for support. Pete Slauson You say pitching stability, pitching predictability, but could it be something concrete? Just looking at the China-Vietnam relationship, Vietnam in recent years has become a major exporter of products to the US, but it's not like China can just step in and replace that market should

exports to the US be significantly reduced. That's right. China can't unilaterally fix the problems for these countries. And that's why there has been a heavy reliance on sort of the rhetorical side of things, the swarming and trip, and not a lot announced in terms of deals. But at the same time, China does have close relationships with all of these countries. Those relationships are growing deeper. China is very interested in investment in data centers in Malaysia, and that's been a key part of their economic relationship in recent years. In Cambodia, China's funded a lot of infrastructure investment, built some major highways. Cambodia just reopened a

naval base that was refurbished with Chinese investment. So these are all countries that have close ties with China and rely on China for investment. Southeast Asia is, as a region, China's biggest trading partner. And these countries are all very important to China. So Xi is stepping in at a time to offer some at least rhetorical support. But the numbers, the improvements in trade and investment, we have to wait to see the details on that. And finally, Austin, is Southeast Asia the extent of this diplomatic push? I noticed last week when we were reporting on comments from Xi Jinping, we had a line that the Spanish prime minister was visiting Beijing at the time.

So clearly there's more engagement going on at present. Right. So we've seen China preparing for the likelihood of a trade fight with the U.S. for some time now. And so it announced last month that they were holding off on tariffs on French brandy, for example. And the European Commission president recently had a call with the Chinese premier discussing trade.

And one of the key issues is whether or not products that will now no longer be expert to the US might hit other markets, which is obviously a concern of a lot of countries. And then in Latin America, China is carrying out a lot of economic diplomacy there as well. They buy a lot of commodities from the region. And foreign policy experts have told us that it's seen as a place where the US perhaps

has dropped the ball in terms of engagement. The Chinese foreign minister spoke recently about not trying to dominate regions around the world, which is obviously a slight towards the US. And Lula De Silva will visit Beijing next month, and he and she have met several times recently. So there is likelihood that there will be more agreements announced between. So that provides an opportunity for China as well. I've been speaking to Wall Street Journal reporter Austin Ramsey in Hong Kong. Austin, thanks so much for the update.

Thank you. Israeli troops have taken over about a third of the Gaza Strip in renewed military action, declaring security zones in swaths of the north and south while pushing out their populations. After relying mainly on airstrikes and tactical raids for the first year and a half of the war, Israel is now seizing land and threatening to hold it indefinitely as it presses Hamas to release hostages still held in Gaza. Israel's military said it was following an updated defense strategy that calls for maintaining a broad military presence in buffer zones that have been cleared of threats, adding that evacuations

are ordered to reduce harm to civilians. And we exclusively report that pro-government militias in Yemen are planning a ground offensive against the Houthis in an attempt to take advantage of a U.S. bombing campaign that has degraded the Iranian-backed militant group's capabilities. Yemeni officials said if successful, the ground operation would dislodge the U.S. designated terrorist group from coastal territory on the Red Sea that it's used to launch attacks on passing ships. U.S. officials have signaled an openness to supporting the ground operation, but a final

decision hasn't been made. Senior Houthi leader Muhammad Ali al-Houthi said the U.S. air campaign had failed to stop the group and that a ground operation would meet the same fate. And that's it for What's News for this Tuesday morning. Today's show was produced by Kate Bulevent, our supervising producer was Daniel Bach, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.