WSJ What’s News - Surrender or Resist? The Dilemma Facing Allies Caught in Trump’s Trade War

Episode Date: March 26, 2025

P.M. Edition for Mar. 26. When confronted with President Trump’s plan to impose tariffs, governments are still figuring out how best to respond. Canada correspondent Vipal Monga walks us through the strategies they have chosen, and how they might play out in the long term. Plus, Trump is set to announce his plans for tariffs on the automotive industry. And the Atlantic magazine has published more screenshots of the cabinet members’ Signal chat. WSJ national security reporter Alex Ward analyzes the texts and the Trump administration’s response. Alex Ossola hosts. An Annotated Analysis of Signal Group Chat With Top Trump Officials Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

In an age of unprecedented disruption and opportunity, success depends on what you do with your data and how fast you do it. This is the era of AI. This is the era of KX. KX, survival of the fastest. What we learned from the new Trump team's war chat text that the Atlantic has released. Plus, the president is set to announce his plans for tariffs on the automotive industry. And when confronted with Trump's tariffs,

U.S. allies face a choice, agree to his demands or fight back. It's a game of psychology at this point. People are just trying to read Trump because I think everyone realizes in the end that despite the people around him, the only guy who makes a decision is Trump ultimately. So they are trying to use whatever levers they think work

with this very complicated man. It's Wednesday, March 26th. I'm Alex Osala 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. President Trump is set to announce later today tariffs on automobiles.

The tariffs are expected to be narrower than the administration once envisioned and are expected to apply to finished vehicles coming into the U.S. but not automotive parts. Trump said for months that he would impose reciprocal tariffs on April 2nd that would equalize U.S. tariffs with those other countries' charge. But he has suggested in recent days that some countries might not be subject to duties equal to what they charge. An administration official said the White House is considering a plan that would offer nations some lenience.

Later in the show, we'll talk about the dilemma facing governments on the receiving end of U.S. tariffs. The News about the U.S. Automotive Tariffiff plans weighed on stocks, with automaker shares coming under pressure. General Motors and Stellantis have been among the hardest hit, though Ford Motor has held up better. Meanwhile, new data out today showed that durable goods orders rose 0.9% in February, blowing past expectations for a 1% decline.

That wasn't enough to keep major US indexes afloat today. The Dow fell about 0.3%, the S&P 500 dipped about 1.1%, and the NASDAQ ended the day down about 2%. The Atlantic magazine has released more texts from the Signal Group chat with Trump administration cabinet members in which editor-in-chief Jeffrey Goldberg was accidentally included. The texts show that Defense Secretary Pete Hegseth posted plans for the timing and weapons to be used in a military strike against Houthi militants at least two hours before the bombs

were scheduled to drop. Testifying before Congress today, U.S. National Intelligence Director Tulsi Gabbard denied that the information shared in the chat was classified. The conversation was candid and sensitive, but as the President National Security Advisor stated, no classified information was shared. There were no sources, methods, locations, or war plans that were shared. For more on the texts and their implications, I'm joined by national security reporter Alex Ward. So Alex, what did we learn from these texts that were released today? Oh, oh so much. There were attack plans discussed in this chain. Defense Secretary Pete Hegseth

basically said, look, guys, these fighter jets are leaving at this time. They might bomb at this specific time. And then National Security Advisor Mike Waltz, he said, hey, we've found out that actually one of these targets was successfully eliminated, aka killed. This is the kind of conversation you have in the secure rooms of the Pentagon, in the Situation Room of the White House. You do not have this on Signal, which is an unclassified venue and it's publicly available and it's on unclassified phones that presumably people can hack and get access to. So let's talk about this designation of classified because there's already been quite a lot of debate about this.

Tulsi Gabbard, as we just heard, as well as other members of the administration, have said the information shared in this Signal Group chat was not classified. Would information like this that was shared that we have screenshots for normally be classified? Literally any former official who's dealt with this from any administration, a Republican or Democrat, would tell you this is classified information. It strains credulity that this was at any point unclassified. There's also guidance from the Office of the Director of National Intelligence, the office that Tulsi Gabbard leads, from September of 2024, which basically provides guidance as to how one should classify information.

And it could not be clearer that information about ongoing future current attacks need to be designated at least at the top secret level. So that is classified. The complication here is the Secretary of Defense does have the authority to declassify classified information, but it's very unlikely that Hegseth did that in order to post it in the Signal Chat. And when asked about it during his trip to the Indo-Pacific region, did not answer that question directly. He was given a chance to say, yes, I declassified

it and he did not say that. And so now the administration's argument is all about, well, the Atlantic reported it was war plans and these were attack plans. Attack plans are arguably more sensitive because you're literally being specific down to the unit level. So when the administration says, well, actually, these weren't war plans, these were attack plans, what they're really saying is, it's not bad, it's worse. What happens next? Right now there are calls for heads to roll here. You know, Mike Waltz has been in the crosshairs for being the one to start the group and put Jeffrey Goldberg into it. But

now it seems like attention is turning toward Hegsteth because he is the one that did put in the allegedly classified information. But Trump loves Hegseth and is seen by many as kind of one of the closest top aides that Trump has. And so it's hard to believe Trump would let him go. Also, that would necessitate another Senate confirmation fight to replace him. Whereas say if they were to fire waltz, they would not need a Senate confirmation fight because that position is not Senate confirmable. That was National Security Reporter Alex Ward. And the journal has broken down the text between the White House officials. You can find an annotated analysis of the group chat texts on wsj.com.

We'll leave a link in the show notes. Coming up, are countries fighting back against Trump's tariffs making more headway with the president than those that don't retaliate? That's after the break. With the Fizz loyalty program, you get rewarded just for having a mobile plan. You know, for texting and stuff. And if you're not getting rewards like extra data and dollars off with your mobile plan, you're not with Fizz.

Switch today. Conditions apply. Details at fizz.ca. President Trump's trade war is forcing America's closest allies to choose between fighting back or acquiescing. The trouble is, nobody's figured out which is the best way to get Trump to do what they want. The Trump administration plans to move forward with a list of what the president calls reciprocal

tariffs on April 2nd, a date Trump has called Liberation Day. Should US allies agree to Trump's demands or fight back? Vipal Munga is our Canada correspondent and joins me now from Toronto. Vipal, how are US allies approaching this dilemma? So Canada has taken a very strong position against the tariffs. They immediately come out of the gate and said they're going to retaliate. Dollar for dollar, and they're specifically trying to target red states that they feel will hurt Republicans and get those Republicans to talk to Trump and get them to back off.

The European Union also has decided to go for retaliatory tariffs. And they're making the same calculation as Canada to some extent. They think that Trump is a bully, and bullies don't particularly respect people who roll over, so you've got to hit back. Punch him in the mouth is the attitude. And it's early to say whether that works or not. We do know that he's a very emotional leader.

And when people do retaliate, he has not reacted well in the past. Okay. So that's the fight back approach. Let's talk about the softer approach. So Mexico also has a lot at stake, in theory, as much at stake as Canada does. But Mexico has decided not to retaliate for now. President Claudia Scheinbaum, she's very forceful with Trump apparently in the calls, but extremely respectful when they

talk, and they've decided not to hit back in the hopes that what they're creating is an environment where Trump goes easier on them when he finally comes out with his full slate of tariffs. The UK has said that they're not going to retaliate in any way. They seem to be happy to mollify Trump, right? The UK has a lot at stake because since Brexit, they've been trying to create trade deals with the US.

World's largest economy in a way to help fix their own economic problems. What is the calculus that these leaders are making between the short-term approach and the longer-term impact of some of these tariffs? It's a game of psychology at this point. People are just trying to read Trump because I think everyone realizes in the end that despite the people around him, the only guy who makes a decision is Trump ultimately. So they are trying to use whatever levers they think work with this very complicated man.

Now that's in the short term. In the longer term, a few of the people I've talked to, particularly in Canada, think that Trump's strategic approach has been terrible. There's a theory that if you cook the frog slowly, they won't notice they're being cooked. But what Trump did was he turned up the heat all the way and the frog is effectively totally cooked. And what this has done is made the country's leaders, all of them, focus on things that they've avoided for the past, which is building up their own industrial capacity, building out trade agreements with other countries like Europe, finding other sources for their resources than the United States.

So in the longer term, this could really hurt the US's position in the world as other countries realize that they need other sources, other markets to look to. That was WSJ Reporter Vipal Manga. Thank you, Vipal. Thanks. Each new car model Ford Motor Designs is first sculpted out of clay before being passed on to engineers for testing.

It's a useful but also time consuming process. Brian Goodman, the company's director of artificial intelligence is now pushing forward a number of use cases for artificial intelligence at the company in director of artificial intelligence, is now pushing forward a number of use cases for artificial intelligence at the company in an effort to design and engineer new cars as quickly as Ford's competitors. Enterprise technology reporter Isabelle Bousquet told our tech news briefing podcast about how that's been working for the company. Ford's strategy is essentially to build its own data centers and buy its own GPUs. And it's been doing that for a while.

Ford has been coming to this NVIDIA conference for the last 10 years. They have a close relationship with NVIDIA. And they've been buying these NVIDIA chips and filling their own data centers with them. And they feel like that gives them the opportunity to not be reliant on the cloud providers. They don't have to wait for that capacity.

They don't have to worry about what that capacity might cost today versus what it might cost tomorrow. They have their set costs. And yeah, they're continuing to buy GPUs and build out that infrastructure. To hear more about Ford's AI strategy, listen to today's episode of Tech News Briefing. And finally, do you know women who were single and not looking? Turns out that's kind of a thing. More American women than ever are on their own and aren't looking to get married. On our Your Money Briefing podcast, economics reporter Rachel Wolf explained what's driving this shift. What I found is that this trend is not just something that's going on in people's heads.

It's not just a product of having expectations that are too high. It's a product of real and huge demographic shifts between men and women. Both men and women are struggling to find what they're looking for, but women are more likely to report that it's causing them to swir off the search altogether and to deprioritize romance in favor of focusing on things like their friendships and their careers. To hear more on this story, listen to today's episode of Your Money Briefing. And that's what's news for this Wednesday afternoon.

Today's show is produced by Pierre Bienneme and Anthony Bansi with supervising producer Michael Kazmitis. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.