WSJ What’s News - Judge Orders U.S. to Pay Back $130 Billion of Tariffs

Episode Date: March 5, 2026

A.M. Edition for Mar. 5. The Trump administration is on the hook for billions in tariff refunds. WSJ global economics correspondent Tom Fairless says that provides some relief for the more than 2,000 companies who are looking to claw back money they’ve paid in duties. Plus, China cuts its economic growth forecast as it preps for an era of slower expansion. And Europe ups its support for the U.S. war on Iran but many countries remain critical. WSJ’s Max Colchester and Austin Ramzy explain why the strikes on Iran have divided U.S. allies and adversaries equally. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Getting ready for a game means being ready for anything, like packing a spare stick. I like to be prepared. That's why I remember, 988, Canada's suicide crisis helpline. It's good to know, just in case. Anyone can call or text for free confidential support from a train responder anytime. 988 suicide crisis helpline is funded by the government in Canada. China cuts its economic growth forecast as it preps for an era of slower expansion. Plus, Europe ups its support for the U.S. war on Iran.

And a trade court judge tells the Trump administration to pay back billions in tariffs. The Supreme Court ruling and then this refund ruling both creates a certain idea that there's a limit to how the administration can use these tariffs at will to penalize countries from one day to the next. It's Thursday, March 5th. 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. China has cut its annual economic growth target to a range of four and a half to five percent, its lowest expansion goal since 1991. The details were released during China's biggest political gathering,

known as the two sessions, and kicks off the next five-year plan for the world's second largest economy. Economics reporter Hannah Miao told us that Beijing is aiming to reshape its economy as it grapples with challenges both at home and abroad. Households are fairly cautious to spend. Investment has slowed down, and the real estate market is still very much struggling. And last year, China had set a growth target of around 5%. And it was really achieved in large part through exports. And that has become an area of increased tension with trading partners.

the IMF has suggested that China should try to move away from relying on exports because it creates all these tensions around this global trade imbalance. And while less reliance on exports might be welcome news for countries frustrated by the dominance of Chinese products. Hannah told us that the new growth targets included growing focus on key technologies. While the lower growth target does take some of that pressure off to really continue juicing GDP growth, policymakers are really doubling down on these goals of upgrading their industrial system and being technologically self-reliant. So in terms of this competition between the U.S. and China in key cutting-edge technologies, China is really not letting up on that front. The five-year plan also revealed a 4% target for the fiscal deficit, suggesting China won't be stepping up its stimulus for the beleaguered property sector. The Trump administration is on the hook for more than $130 billion in tariff refunds.

That was yesterday's ruling from a federal trade court judge who grew impatient when a Justice Department lawyer said that the government hadn't formalized its position on refunding tariffs and that issuing refunds would be time-consuming. The ruling comes as more than 2,000 companies have filed lawsuits seeking to recoup their money, including Costco and FedEx. I asked journal Global Economics correspondent Tom Fairless, how much? businesses are responding to the verdict? So firstly, it's a relief and there's enormous interest in claiming back these refunds. German manufacturers were immediately facing questions from customers about how to get these, how quickly they would get these refunds. But there's also continued uncertainty around how to claim it back, who gets the money, how much it will cost, how long it will take. There's lots of new layers of uncertainty. Well, refunds could boost some

company's bottom lines and provides some much-needed certainty. Tom said that new tariffs put in place just last month are causing more damage. Businesses tell me they could live with a 10% tariff, even a 20% tariff if they knew what it was, but it's not knowing, they're not being able to plan that is really poison for investment and for just making decisions on future markets and future investment. The Trump administration is expected to appeal the order to prevent it from taking effect immediately. Morgan Stanley is laying off 2,500 employees or around 3% of its global workforce. We report that many of the cuts took place yesterday and are affecting all of the bank's major

divisions, investment banking and trading, wealth management, and investment management. Morgan Stanley and its Wall Street peers are coming off one of their strongest years on record as trading desks navigated volatility, the wealthy continued to spend, and big companies struck more deals. Well, speaking of deals, we've got a special bonus episode coming later today. It's the latest What's News and Earnings, where we'll be looking at the merger drama that dominated the media industry this earnings season. Look for that at midday in your What's News feed.

Coming up, we've got the rest of the day's news, including a look at how the U.S. and Iran's allies are or aren't joining the war. That and more after the break. At Desjardin, our business is helping yours. We are here to support your business through every stage of growth, from your first pitch to your first acquisition. Whether it's improving cash flow or exploring investment banking solutions, with Desjardin business, it's all under one roof. So join the more than 400,000 Canadian entrepreneurs who already count on us, and contact Desjardin today. We'd love to talk, business.

The conflict in the Middle East is expanding yet again this morning after Iranian drone. drones landed in Azerbaijan, the latest evidence of Tehran's regional escalation strategy designed to maximize economic disruption. Israel imports a significant amount of crude oil from Azerbaijan. Well, Iran's target list may be lengthening, but the U.S. military claims that its adversary's military response may be faltering. U.S. Central Command says that Iran's missile launches have dropped by 86 percent in four days, while drone launches decreased by 73 percent, a possible result of U.S. and Israeli strikes on launch sites and manufacturing facilities. Still, a Western official cautioned that Iran could still attack with cheaper systems,

such as drones. The House is set to vote today on a war powers resolution seeking to limit President Trump's ability to attack Iran without congressional approval. The Senate blocked a similar effort yesterday, and while the votes are largely symbolic, given that they would require supermajorities in both chambers to override a likely Trump veto, reporter Anvi Bhutani said there are some simmering debates playing out on Capitol Hill. While President Trump has said that America is at war, many Republican lawmakers have strayed away from the term war or have had contention around the use of the term war. Lawmakers have also made comparisons to the U.S.'s poorly run ground wars in the Middle East.

After some intelligence briefings earlier this week, most lawmakers still had further questions around the scale and scope of the operation, as well as, the timeline as to how long the U.S. would stay committed in operations involving Iran. Well, despite a lack of congressional backing for the war, a seeming coalition of America's European allies is taking shape, contributing planes, ships, and air defenses, or opening up their bases to be used by the U.S. Meanwhile, the major player in Iran's corner, China, is offering little more than rhetorical support to Tehran. To discuss these dynamics, I'm joined now by journal correspondent Max Colchester in London and reporter Austin Ramsey in Hong Kong. Max, let me start with you.

And to get a sense of where America's allies are standing in this conflict, I actually want to play a clip. This is of the NATO Secretary General Mark Ruta yesterday appearing on Newsmax's The Record with Greta Van Sustern, where he said the following. NATO is not involved, but obviously allies are basically in a massive scale, our supporter for the president is doing. and are also enabling what the US is doing now in the region. Max, is that representative of where most European countries in particular stand on this conflict? Well, we've seen an evolution, really, in the last week in their stance. No European country was involved in the initial strikes on Iran. However, as Iran hit back, launching drones and missiles seemingly indiscriminately across the Gulf,

European allies have been forced to respond. and what we're seeing now is they are providing air defences to golf partners, and they are trying to intercept and stop the drones and missiles headed towards allies, or in some cases their own bases. The Brits are sending a destroyer to Cyprus to try and protect their base there, which has come under attack from Iranian drones. The French are also deploying an aircraft carrier to the Mediterranean to try and defend Cyprus and regional allies.

The Italians are sending airmen. air defense to the Gulf, and there's even talk of Ukrainians going into the Gulf to try and help train people there to better take down drones. So there's an effort going on to try and bolster defenses in the region. And they're also allowing the U.S. in some cases to use their airfields to launch strikes on Iran to try and take out the missile launchers that are firing these projectiles at them. And yet, Max, there have been a number of countries in Europe that are opposed to what the U.S. is doing, though many of them. that with at least one notable exception are staying relatively quiet about it.

Yes, and that notable exception is Spain. We saw the Spanish Prime Minister Pedro Sanchez come out and heavily criticize the war. Trump has responded, threatening that the U.S. would cut all trade with Spain, and the Spanish government don't appear to have backed out. They say that they still don't want the U.S. to use any of its bases to launch attacks on Iran. And to quote Pedro Sanchez directly, he's called the war a disaster. And I think this is quite a bold move, and it's seen as a bold move in Europe, because Europe is very beholden to the U.S. for its own defense. Awesome.

I think that's a good point to bring China into the discussion now. Its diplomats have also been denouncing U.S. actions. And we did hear this morning that China's foreign minister is sending a special envoy to the Middle East to try and mediate the conflict. And yet, in terms of offering any material support here to a Chinese ally, Iran, there's not much to speak of. That's right. The Chinese have criticized the war on several levels. They've criticized the fact that it was launched as negotiations were still taking place. They criticized the attacks killed much of the Iranian leadership.

But yes, at the same time, China has not done much more than provide rhetorical support for Tehran. They're in a somewhat difficult position. China is very reliant on oil imports, and it buys most of Iran's oil. At the same time, it also buys a lot of oil from other countries in the region. And so they can't be too forceful on Iran's side without alienating other countries in the region that have been attacked by Iran in recent days. So China, while overtly is very critical, privately I think they're very flexible and they are waiting to see what happens, waiting to see who ends up running the country after the fighting stops. So China sitting out this fight at least, and yet you report they are benefiting in some ways from being able to sit back and observe. how the U.S. presses a military campaign, a very modern one, right, with all of its highest

end equipment being pulled out into the field, opposition research, so to speak, that could be useful for China in the future. That's right. There are benefits to China in this war. They get to see how the U.S. presses this campaign, what the U.S. is bringing to the fight against Iran, and they will take note of that. The U.S. is also, as we've reported, using an incredible amount of munitions, the sort of munitions that would be important for a fight with China in the Pacific over, say, Taiwan.

And so it puts the U.S. on the back foot for a period, perhaps years, to rebuild that arsenal. So that's something that will go into any Chinese calculation over what they might do with regards to Taiwan in the future. I've been speaking to Wall Street Journal reporter Austin Ramsey in Hong Kong and correspondent Max Colchester in London. Austin, Max, thank you both so much. Thank you, Luke. And while Europe and the U.S. may be finding some alignment now over the war in Iran, France is adopting a more combative tone on other fronts. The country's bureaucrats are quite literally ditching the language of diplomacy

and have set up an account on X that posts English-language takedowns. Reporter Sam Schectner in Paris says that the government account is called French response and aims to combat online trolls and misinformation one meme at a time. French response was targeting most of its trolling at Russia, which has long been an antagonist of France, especially in the Internet sphere. And traditionally, they would fight back with a communique or explain that this or that thing is wrong. And France's foreign minister, Jean-Nuel Barreau, had the idea that really they should be fighting back, you know, fight fire with fire. Responding to a critical post on X with a press release is sort of like showing up to drinks with your friends in a tuxedo. And so they decided to match the tone.

Some of the ones that made me chuckle were after Trump's declarations that he wanted the U.S. to take possession of Greenland. There was a tweet that said, breaking, Statue of Liberty, reported spotting, swimming back across the Atlantic, said she, quote, preferred the original terms and conditions. Well, here are What's News version of Rapid Response. Leave us a five-star review on Apple Podcasts. I'm kidding. Who am I? And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for The Wall Street Journal.

We will be back tonight with a new show. Until then, thanks for listening.