WSJ What’s News - The Businesses Adding an Extra Charge With Trump’s Name On It

Episode Date: April 18, 2025

P.M. Edition for April 18. Some U.S. businesses are tacking an extra fee onto customer orders—and attributing them specifically to the man in the Oval Office. WSJ business reporter Natasha Khan tells us about the “this tariff isn’t our fault” fee. And as financial stress mounts, chains that cater to the budget-conscious are seeing more of a new class of shoppers. CFO Journal team Jennifer Williams tells us how that’s reflecting shifts for shoppers at all income levels. Plus, President Trump has replaced the acting IRS commissioner he appointed earlier this week. Pierre Bienaimé 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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as well as on gas, EV charging, daily transit, streaming services, digital gaming and more. All the time. Get the RBC ION Plus Visa. Three times the points. Conditions apply. Visit rbc.com slash ION cards. President Trump is replacing the acting IRS commissioner he appointed just three days ago.

Plus, for lower income shoppers, dollar store prices aren't as attractive as they used to be. And how some U.S. businesses are passing tariff costs on to customers. It's Friday, April 18th. I'm Pierre Bienemé for the Wall Street Journal, filling in for Alice Osala. This is the PM edition of What's News, the top headlines and business stories that moved the world today. We exclusively report that the Trump administration is pressing Harvard University to turn over

records on the money it receives from foreign sources going back a decade. It's the latest move in the White House's growing pressure campaign against the country's most prominent university. Secretary of Education Linda McMahon said in a statement that the request is meant to quote, ensure Harvard is not being manipulated by or doing the bidding of foreign entities. An education department letter to the school presented no evidence that that was occurring. In a written statement, Harvard said it has filed such reports for decades, quote,

as part of its ongoing compliance with the law. Federal law requires universities to report donations from foreign sources of more than $250,000. President Trump is replacing the acting IRS commissioner he appointed just three days ago. That's according to people familiar with the matter. Deputy Treasury Secretary Michael Falkender will now run the Internal Revenue Service, becoming the fifth person to hold that job so far this year.

He replaces Gary Shapley, the former IRS criminal investigator who had criticized the government's investigation of Hunter Biden. The move furthers upheaval at the agency. The managers overseeing tax enforcement, human resources, finances, communications, privacy, risk, information technology, and legal counsel have all left this year or are leaving soon. As we've discussed many times on the show, consumer sentiment has fallen to near-historic lows in the U.S. But higher-income consumers still seem to be spending with a bit of an adjustment.

Consumers on the wealthier side are now spending at chains that typically cater to more budget-conscious shoppers. Jennifer Williams is a reporter on the Wall Street Journal's CFO Journal team, and she joins me now. Jennifer, where are these wealthier shoppers going exactly? Is it just dollar stores? It's not just dollar stores. They are also shopping at chains that still cater to the budget conscious shopper, but they're not selling items with price tags at a dollar.

It would be like Academy Sports and Outdoors, which sells grills and bicycles and outdoor gear, but at a lower cost than you might find in other store shelves. And a wealthier clientele, is that good news for some of the retailers out there? It is because their core consumer, which tends to be in the middle income range, is pulling back as is the lower income consumer. And that means they've been trading down into lower cost options as well as cutting back on how much they spend. And so the thinking is that this higher income consumer is a bit more insulated from some of the economic pressures and so can spend more whether that's buying

more or showing up more to the store. But Academy, their higher income consumer traffic increased by mid single digits in December and that continued into January. And so while they're seeing an overall drop in same store sales by 3% for their latest quarter, they have seen that pick up from the higher income consumer. At Dollar Tree, they have seen same store sales for the latest three-month period grow 2 percent, and that's driven by a 1.3 percent lift in average purchase ticket and a 0.7 percent increase in traffic.

And that's another example of a store that is seeing a higher income consumer increasingly shop for their range of goods. What are these stores doing to cater to these new kinds of customers they've attracted? They are invested in marketing that will attract the consumer and they are also changing what's on the shelves. So at Academy this month, they are for the first time rolling out Jordan products in 145 of their stores and online and so their thinking is that they have historically had three categories of items in their stores, good, better, and best and that goes up in price range as you go from good to best. They see Jordan as situated

in that best category and they're rolling that out towards the end of this month and they are hoping that that brings in the higher income consumer. Jennifer Williams covers corporate finance for the Wall Street Journal. Jennifer, thanks so much. Thanks for having me. Coming up, some businesses are labeling surcharges with names like Trump Tariff to show who's responsible. That's after the break. If only life had a remote control. You could pause or rewind.

Well, life doesn't always give you time to change the outcome. But pre-diabetes does. Take the one-minute risk test today at DoIHavePreDiabetes.org. Brought to you by the Ad Council and its pre-diabetes does. Take the one-minute risk test today at doiheprediabetes.org. Brought to you by the Ad Council and its pre-diabetes awareness partners. Over the coming weeks, we're going to be taking a look at how companies are responding to Trump's tariffs and the tactics and strategies they're using to react to, survive, or even take advantage of the new trade war. Have you noticed anything different on your shopping bills recently? An extra fee, maybe.

You may see them labeled Trump Tariff Surcharge, or something like that, as businesses want to make one thing clear. These tariffs weren't our idea. Natasha Kahn covers business for the Wall Street Journal, and she joins me now. Natasha, what kinds of businesses are making this move, adding a charge that's specifically chalked up to the effects of tariffs? Well, we're seeing this tariff surcharge come up in a variety of companies selling things to consumers, you know, from bathroom fixture makers to toy shops, especially companies

that make a lot of their products in China, they're really starting to tack tariff surcharges onto invoices as a separate line item. They want to be as transparent as they can with their customers about why they're suddenly a price differential between a product they might have been buying for some time or how they plan to attribute that tariff charge. One example we'll have is Jolie, which sells high-end filtered showerheads. Jolie's chief executive, Ryan Babenzine, told us that they haven't raised prices yet, but they are considering a price hike later in the year, depending on the situation. And he told us that the uncertainty is making consumers pull back on discretionary spending. Our business is off about 15 to 20 percent, not because of price increase, because of

uncertainty. And I think you're seeing that across the board. I think you're seeing that in home purchases. I think you're seeing that in hoarding of basic items where people are concerned that prices will go up so they're going to buy these basics. But everything else is sort of on pause. Babazine told us that in anticipation of these tariffs, the company had been stocking up on inventory as much as they can before this latest announcement.

Alexandra Fine is the chief executive of Dame, which is a sexual health company which markets vibrators made in southern China. Her company has already added what it calls a Trump tariff surcharge. Fine was telling us that the flat fee actually doesn't cover the full cost of what the tariffs have added to her cost of doing business, but that she felt that it was better than pretending that everything was normal.

Everyday consumers don't understand how the tariffs are gonna impact them, and they don't understand how the tariffs are going to impact them. And they don't necessarily understand how and why businesses manufacture in the places they do and what it could look like elsewhere. And we thought this would be a good opportunity to educate and kind of just let people know that this is the policy that is impacting our price. In previous years, perhaps companies might have absorbed that cost or just sort of raised

the price of the products. And so that's really something that is a little bit different about the situation is that they're specifically calling it out. We're in the midst of a 90 day pause on many tariffs and a whole bunch of uncertainty regarding what happens after that or maybe even sooner. Do the executives say that these charges could change if and when tariff rates do? Yes, definitely. One of the companies that we mentioned in our story, which is a toy

store in Wisconsin, laid out all of these extra charges to their customers in an email soon after the latest tariff rate was announced and expressing sentiment of really regret that there has to be an increase in prices, but also promising that as the tariff rates adjust or perhaps get removed in the future, that they would accordingly also adjust that tariff surcharge. This is slightly different from a strategy of raising prices across the board. If they use this strategy of having a tariff surcharge, the price could be more dynamic as the situation changes. That was WSJ Business reporter Natasha Khan. The U.S. has accused China of helping Yemen's Houthi militants target their attacks on American

interests. A sign of Beijing and Moscow's increased support for the rebel group. A State Department spokesperson said yesterday that a Chinese company has been providing the group with satellite imagery even after the US had pressed China to stop the support. President Trump began a campaign of airstrikes against the Iran-backed militants last month, bringing a second aircraft carrier into the region in an effort to stop attacks that have snarled key commercial routes through the Red Sea. China said it has worked to reduce tensions in the Red Sea since the situation escalated,

implying that the US was making them worse. Marketers are getting more comfortable with using artificial intelligence to speak for their brands. In fact, the industry is getting closer to the day when proponents of AI say the technology will develop, produce, and even approve entire campaigns with little or no human intervention. But as Patrick Coffee, a reporter for the Wall Street Journal's CMO Today, told our Tech News Briefing podcast, brands aren't waiting for perfection. Essentially marketers have a constant demand to produce more content. One of the main reasons is that a big part of marketing strategy now is to personalize

everything, going from addressing each customer by name to using the data that they've collected to customize whatever you're showing them based on where they're located, what they buy, the interests they've expressed through their online behaviors and things like that. So marketers are increasingly turning to generative AI tools and they do everything from creating websites to straight up generating ideas for campaigns and now making videos. You can hear Patrick's full interview on today's episode of Tech News Briefing. And that's what's news for this week. Tomorrow you can look out for our weekly Markets Wrap-Up, What's News in Markets.

Then on Sunday, we'll be looking at how the Trump administration's moves could force U.S. universities to recalculate their bottom lines. That's in What's New Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Anthony Bansi with supervising producer Michael Kosmides. Michael Laval wrote our theme music. Aisha al-Muslim is our development producer. Scott Salloway and Chris Sinseley are our deputy editors.

And Falana Patterson is The Wall Street Journal's head of news audio. I'm Pierre Bienemé. Thanks for listening.