WSJ What’s News - Investors Cheer a Tariff Rollback for the Tech Industry

Episode Date: April 14, 2025

A.M. Edition for April 14. Global stocks rise after a Friday filing showed that smartphones, computers and other categories of tech products will be exempt from sweeping tariffs imposed earlier this month. WSJ markets reporter Caitlin McCabe surveys how equities are responding. Plus, data news editor Anthony DeBarros breaks down the Journal’s latest survey of economists, which featured an unusual lack of consensus about future U.S. growth prospects. And a Trump official who oversaw the closure of USAID has left the State Department. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Global stocks rise as investors cheer on a rollback of tariffs for the tech sector. Plus, the journal's latest survey of economists reveals an unusual lack of consensus about future U.S. growth prospects. Typically, the consensus is a bit tighter. But the fact that the Trump administration has been enacting tariffs, pausing tariffs, we can see in the gyrations of the stock market that everyone's trying to find some certainty amidst all of the changes. And an update on U.S.-Iran nuclear talks held over the weekend.

It's Monday, April 14th. 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. Global markets and tech stocks in particular are starting the week on positive footing after U.S. Customs and Border Protection said in a filing late Friday that computers, tablets, Apple watches and other electronics will be able to dodge many tariffs on Chinese products, as well as the 10 percent tariff on all global imports. That news initially fueled hope that the tech industry could avoid an immediate surge in

costs, though relief could be short-lived, with President Trump saying tech products will soon be covered by separate semiconductor tariffs, the details of which he said on Air Force One could come this week. Well here with more on what markets are making of all of this, I'm joined by journal reporter Caitlin McCabe. Caitlin, walk us through what we're seeing this morning in response to this latest U.S. trade messaging. So as expected, investors are liking this news for now at least.

Looking at the Asian session, we saw there that tech stocks and Apple suppliers were up modestly. A few notable movers from Apple suppliers that included Foxconn technology, it gained a little bit over 3% during the Asian session. Largan Precision, which supplies camera lenses to Apple, added over 5%. And looking now at even US pre-market trading, Apple itself is up as we speak. And a snapback in a name like Apple could be quite significant for the overall market. Got it.

And those big names had fallen further than the market on average in recent weeks. And yet, whether we're speaking about Apple or some of these other big companies in tech, they're not entirely out of the woods, are they? Definitely not. As you mentioned, Commerce Secretary Howard Lutnick out over the weekend saying that tech products will face separate levies. And that's a sentiment that Trump seemed to support in a true social post on Sunday. Stepping back a bit, regardless of where things end up, my colleague Dan Gallagher points out in a column this morning that Apple is in a tough situation.

It's very much at the mercy of the Trump administration right now. They could still get hit with other tariffs. And as Dan points out, the administration remains keenly interested in on-shoring production of everything designed by U.S. companies. And that's going to be tough on Apple in particular, given how much of its manufacturing base is abroad and countries like China. That was Market reporter Caitlin McCabe.

Caitlin, thanks as always. Thanks for having me. Meanwhile, new data from China today shows the country's exports rose by more than 12 percent last month compared to a year earlier. The surge was driven by U.S. importers in the waning weeks before tariffs on Chinese goods kicked in and precedes what economists expect to be a sharp slowdown in Chinese export growth in the coming months.

Chinese exports to Vietnam and Thailand also showed a notable uptick last month according to Capital Economics, possibly reflecting efforts to reroute goods to the U.S. through those economies, a back door that President Trump has signaled he wants to slam shut. Meanwhile, Chinese leader Xi Jinping is in Vietnam today at the start of a trip aimed at shoring up relations with some of China's closest trading partners in Southeast Asia, whom Trump has targeted with high reciprocal tariffs. Well, one place many American consumers could soon feel the pinch of tariffs is on the bargain

app, Xien. The Chinese fashion giant is facing a double whammy, with President Trump putting an end to duty-free shipping for Chinese goods under $800 from next month, threatening the brand's ultra-low prices that make it so popular with shoppers in the U.S. Journal reporter Rafael Huang in Singapore says the tariff impact is forcing a rethink of how Shien and Chinese rivals like Temu do business. So many analysts telling us that Shien may have to change its business model in order to survive. Over the years, the company has already tried very hard to diversify its supply chain from China

and produce in places such as Turkey and Brazil. And also people familiar with the matter telling us that Xiyin has also been in talks with some U.S. manufacturers in order to explore production locally there. And then Xiyin is also eyeing an IPO in London. It has order to explore production locally there. And then Shing is also eyeing an IPO in London. It has aimed to go public by June, but now Trump's policies are making the prospects of an IPO bleaker. So for now, U.S. consumers will obviously have to pay higher price for some items and they will probably also have to wait longer to receive the parcel.

And in other markets news today, Goldman Sachs this morning will kick off a busy earnings week with the likes of Bank of America, Citigroup, Johnson & Johnson and United Airlines providing clues in the coming days on how tariffs are impacting the economy. Goldman's results are due at 7.30 a.m. Eastern. Coming up, we'll dive into the Journal's latest survey of economists and run through the rest of the day's headlines after the break. Well, as the effects of tariffs have come into focus in recent weeks, we have reported here on the economic forecasts coming out of a number of individual firms, including Goldman Sachs and J.P. Morgan.

But today we can do you one better by digging into the Wall Street Journal's quarterly survey of economists. It was just published over the weekend and brings together the thinking of some 64 academic and business economists who were polled between Liberation Day and last week's reciprocal tariff pause. And here to crunch the numbers is Wall Street Journal data news editor Anthony DeBarros. Anthony, your report here shows that since President Trump took office, economists have dramatically slashed their growth estimates while raising their expectations for inflation

and unemployment. Let's get granular about it. Define the coming slowdown as economists see it. Yeah. So there are consensus for a significant economic slowdown with year over year GDP growth at just 0.8% for the fourth quarter. That's down from 2% in our January survey. But many of our economists also say there's a high level of uncertainty in their forecasts

due to the whipsawing nature of the Trump administration's tariff policies. You can see that reflected in the wide range of those fourth quarter GDP forecasts. They range from a negative 2% to a plus 3.1%. Typically the consensus is a bit tighter, but the fact that the Trump administration has been enacting tariffs, pausing tariffs, we can see in the gyrations of the stock market that everyone's trying to find some certainty

amidst all of the changes. Take us into some of the other findings here. You asked economists about their expectations for inflation as well as employment, two ways where Americans individually could really feel the effects of tariffs. What do they project here? Peter Van Doren Well, the economists are forecasting hotter inflation ahead. For December, the consensus is 3.6% year-over-year change in the consumer price index, and that's

up from 2.7% in their prior forecast. In terms of unemployment, at the end of this year, that's expected to be at 4.7% up from 4.3% in the January forecast. Both of those are reflecting some of these changes that we were talking about with the tariffs, a higher cost for imported goods because of the tariffs and the effects of a slowing economy on the job market. So although some economists are foreseeing job losses, the consensus is still that the

economy over the next four quarters is going to add about 55,000 jobs a month. Now, that's down, but it's still positive growth. And finally, on the risk of a recession, this probability stood at just over 20% when you asked in January. What about now? Yeah, so the probability that the US is going to fall into recession in the next month, the consensus from our economists now is 45%, and as you say, that's up from 22% in January. So that is a climb, but it's still lower than readings in, let's say, 22 and 23 when the Federal Reserve was battling persistent inflation

by raising interest rates. One thing though, it's important to note is that, like we said earlier, forecasting the economy is hard. And even though, it's important to note is that, like we said earlier, forecasting the economy is hard. And even though our panel's consensus back in 22 and 23 was that a recession was likely, we never did get a recession. Anthony de Barros is The Wall Street Journal's data news editor in Washington. Anthony, thank you so much for bringing us this report. You're welcome. Officials from the U.S. and Iran took part in indirect talks over the weekend in Oman, with Iran seeking sanctions relief from the U.S. in exchange for limits on its nuclear program.

The White House said the meeting was a step forward, while Iran's foreign minister said the next round of talks would include discussion on a timeline for negotiations and potentially a general framework for a new nuclear accord. Iran's latest proposals were largely based on the 2015 nuclear deal negotiated by the Obama administration, an agreement Trump pulled out of in 2018. And we are exclusively reporting that Pete Morocco, a key architect of the Trump administration's campaign to slash foreign aid spending, has left the State Department after less than three months on the job.

Morocco oversaw the cancellation of more than 80 percent of foreign aid programs and the closure of the U.S. Agency for International Development, working closely with Elon Musk's Department of Government Efficiency, though officials said he at times clashed with Secretary of State Marco Rubio. State Department reorganization plan is due today to the Office of Management and Budget, which is expected to lay out in part how USAID's previous functions will fold into state. And that's it for What's News for this Monday morning. Today's show was produced by Kate Bulevent, our supervising producer was Daniel Pak, and

I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.