WSJ What’s News - Supreme Court Justices Question Trump Administration on Tariffs

Episode Date: November 5, 2025

P.M. Edition for Nov. 5. The U.S. Supreme Court heard oral arguments over President Trump’s global tariffs, and whether he exceeded his authority to impose them. WSJ Supreme Court correspondent Jess Bravin discusses the justices’ responses. Plus, we hear from Journal White House reporter Meridith McGraw on the president’s reaction to Democrats’ election victories: he’s urging Republican lawmakers to end the filibuster. And OpenAI’s CFO says that the company is not looking to go public in the near term. 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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The Supreme Court hears a case that will decide the future of President Trump's tariffs. The vehicle is in position of taxes on Americans, and that has always been the core power of Congress. Plus, the president's response to Democrat election victories and the filibuster. And France moves to suspend Sheehan's website after discovering childlike sex dolls for sale on its platform. It's Wednesday, November 5th. I'm Alex O'Sullough 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. In a breaking news update, the Federal Aviation Administration says it's ordering airline traffic to be reduced by 10% in 40 locations,

while air traffic controllers work without pay during the government shutdown. See more at WSJ.com. The U.S. Supreme Court this morning heard arguments on one of the most common. consequential economic and political cases to come before it in decades. The nine justices are weighing whether the president's sweeping global tariffs under the International Emergency Economic Powers Act without congressional approval are lawful, as well as tariffs on Canada, China, and Mexico related to fentanyl. The challengers, a group of small businesses and states, say he exceeded his legal powers.

Lower courts have agreed, and now it's up to the Supreme Court to decide the fate of a cornerstone of the president's agenda. During the hearing today, justices on both sides of the court's ideological divide expressed skepticism about President Trump's authority to set the tariffs. This is Chief Justice John Roberts. The vehicle is imposition of taxes on Americans, and that has always been the core power of Congress. So to have the president's foreign affairs power, Trump that basic power for Congress seems to me to kind of at least neutralize between the two powers, the executive power, and the legislative power. WSJ Supreme Court correspondent Jess Braven told us more about the justice's responses.

Today's argument really seemed like a route for the Trump administration. From the Chief Justice to the newest justice, Justice Jackson, we saw a lot of skepticism about the basic claim that the president can impose these worldwide tariffs because this emergency economic law from the 70s, allows them to regulate foreign financial transactions in an emergency. The justices just didn't buy the idea that that word carries in it the power to impose tariffs because tariffs are a tax. There are tax paid by Americans to buy products that are imported from overseas.

Taxes are the basic power that Congress has. Remember, taxation without representation way back when in 1776? Most of the justices were very skeptical of the Trump administration position. Some, though, of course, did have serious questions for the challengers. The most notable was Justice Samuel Alito, who kept trying to raise various hypotheticals and various arguments that might be used to justify the Trump administration's position. But even he was skeptical of some of the administration's claims. Trump has called the case, quote, literally life or death for our country.

A decision upholding President Trump's authority would legitimize the use of tariffs as a cudgel to resolve trade and non-economic disputes alike. and could give the president broad authority to regulate the U.S. economy without the involvement of Congress in any circumstance where he finds an emergency exists. But if the court overturns the tariffs, the Trump administration has warned it will need to repay tens of billions of dollars it has already collected. It would also undercut a core legal justification for a large chunk of Trump's tariffs and potentially remove leverage in trade talks. In a positive sign for the labor market, the pay.

Payroll Processing Company, ADP, said today that American businesses added 42,000 jobs in October, after two months of declines. Data from private sources like ADP have become more important as the government shutdown disrupts the usual stream of economic data releases. And U.S. markets rebounded today after yesterday's sell-off. The three major indexes each rose less than 1%, with the NASDAQ leading the gains. We're exclusively reporting that OpenAI said, it's not working towards an IPO for now. Speaking at the Wall Street Journal's Tech Live conference, OpenAI CFO Sarah Fryer said the AI giant's conversion to a new structure

does not mean an IPO is imminent, and that OpenAI is prioritizing growth and research and development over profitability. We are continuing to get the company into a state of, like, constantly stepping up to the scale that we're at. So I don't want to get wrapped around an IPO. The Wall Street Journal has reported that the company has discussed, a public listing as soon as 2027. Friar says the chat GPT maker is on pace to

generate $13 billion in revenue this year, and that OpenAI is trying to find new ways to grow sales. News Corp, owner of the Wall Street Journal, has a content licensing partnership with OpenAI. And in another exclusive, the Motion Picture Association, which has

administered the parental guidance ratings for films for more than 50 years, is asking meta-platforms to stop using the term PG-13 for its content restriction system for teens on Instagram. A lawyer for the movie industry trade group sent META a seats and desist letter, saying META's assertions that content on Instagram's teen accounts would be guided by PG-13 ratings are, quote, literally false and highly misleading.

Meta says it never claimed or implied that its teen accounts were officially PG-13 rated or certified by the Motion Picture Association. Coming up, how President Trump is responding to Democrats' electoral victories. after the break. As you heard from us this morning, Republicans suffered losses in key races in New York, New Jersey, and Virginia during yesterday's election, a sign of voter dissatisfaction with the economy and a crack in the coalition that elected President Trump. The president's response today, once again urging Republican senators to dump the filibuster.

At a breakfast with GOP senators at the White House this morning, the president said lowering that 60-vote threshold for passing most bills would let Republicans rack up policy victories and boost its political prospects before next year's midterm elections. The president also says terminating the filibuster is the only way to end the 36-day government shutdown that is now the longest in history. He says the shutdown is a, quote, big factor in the GOP's losses. Journal reporter Meredith McGrath joins me now to discuss. Meredith, how is Trump responding to these election results? Well, this morning at the White House, President Trump seemed pretty reflective on the results of last night's election. He said if you look at what the pollster said, the shutdown played a role, but also the fact that he wasn't at the top of the ticket was actually a drag on Republican candidates. And he also said that they really didn't expect there to be a lot of Republican victories last night because these races,

were mostly in Democrat areas. One big winner from last night was Zoran Mamdani, who will become the next mayor of New York City. In a press conference today, Mamdani announced a transition team, which includes former Federal Trade Commission chair, Lena Kahn. He says his administration will address affordability as well as threats from the Trump administration. New Yorkers are facing twin crises in this moment, an authoritarian administration and an affordability crisis. and it'll be my job to deliver on both. It'll be my job to stand up for the city and also to ensure that we do not look at Washington, D.C.,

as if it is the reason for all of the problems right here in New York City. So, Meredith, in the lead-up to the mayoral election, Trump threatened to withhold billions in federal funds if Mamdani won. What is he saying now? I was talking to a White House official this morning about the election post-mortem, and I think they're really going to be framing Mamdani as the face of the Democratic Party and forcing more moderate Democrats

to have to answer to whatever Mamdani's policies are in New York. And yet the day after this election, Trump is pushing Republican senators to end the filibuster. Why is that? Well, President Trump has long made the case that he thinks Republicans should end the filibuster. He thinks that if they get rid of the filibuster, not only would they be able to reopen the government,

but they could very quickly enact some of the things that have been on his legislative wish list, things like voter ID. And he claimed that they would be able to potentially fare better in the midterms because they'd be able to show voters what they were able to accomplish in Congress. Is there indication that more Republicans are on board? Republican leadership has so far resisted any calls to terminate the filibuster. Senator John Thune has been pretty clear on that from the start and has said that he doesn't think the Republicans have the votes right now for that. Have the election results pushed the ball forward on the bipartisan negotiations in Congress to end the shutdown? The expectation was that after Tuesday

night, Democrats might put up some wins. Republicans felt that maybe they'd have some sort of opening to get them to agree on something on the hill. But right now, it does seem like they remain in the same sort of limbo that we've been in now for weeks. That was WSJ White House reporter, Meredith McGrath. Thanks so much, Meredith. Thank you. We have an update on the UPS cargo plane that crashed yesterday in Louisville, Kentucky, killing at least 11 people. National Transportation Safety Board officials said today that an engine detached from the plane's left wing shortly after takeoff and fell on the airfield.

Local officials say several people were injured and taken to hospitals. And Kentucky Governor Andy Beshear says he expects the death toll to rise. UPS hasn't confirmed any casualties or injuries of the three-person crew on its aircraft. UPS's main air cargo hub is in Louisville, where it processes millions of packages daily. McDonald's says its push-into-value meals is paying off at a time when more customers are feeling economic pressure. The burger chain says its U.S. same-store sales, grew by 2.4% in its most recent quarter, beating analyst expectations. The company is trying to win back cost-conscious consumers

and says the growth came after it increased spending on value meals, new products, and marketing. And the French government is moving to suspend Sheehan's website after authorities discovered that sex dolls resembling children and weapons were being sold on the Chinese-founded e-commerce company's platform. The French finance ministry says it's giving the company 48 hours to demonstrate it has scrubbed its platform of illegal products. The Interior Ministry has separately asked a court to shut down the website. As Sheehan representative says, the company has temporarily suspended sales from third-party vendors on its marketplace in France,

and is, quote, seeking dialogue with French authorities. Sheehan today also opened its first ever permanent physical store in Paris, attracting both customers and protesters. And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Bienname, with supervising producers, Tali Arbell. I'm Alex O'Sullough for the Wall Street Journal. We'll be back with the new show tomorrow morning. Thanks for listening.