WSJ What’s News - The Impact of Trump’s Tariffs on the Rest of His Agenda

Episode Date: April 7, 2025

P.M. Edition for April 7. Amrith Ramkumar, who covers tech policy for the Journal, discusses how President Trump’s tariffs risk undercutting his goals of curbing inflation, supporting U.S. manufacturing and boosting a build-out of AI data centers. Plus, Trump threatens China with an additional 50% levy if Beijing doesn’t withdraw its retaliatory tariff by tomorrow. And U.S. markets went on a wild swing that added—and then erased—more than $2 trillion in value in a matter of minutes. WSJ markets reporter Hannah Erin Lang walks us through what happened. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

With the FIZ 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 FIZ. Switch today. Conditions apply. Details at fiz.ca. President Trump threatens China with an additional 50% levy if Beijing doesn't withdraw its retaliatory tariff by tomorrow. Plus, it was a rollercoaster day for markets after a

false tariff headline sent stocks on a two trillion dollar ride. And what Trump's tariffs mean for the other policy items on his agenda. He's been fascinated by tariffs for many decades and in the first administration didn't think he went far enough essentially so definitely he's almost willing to maybe potentially sacrifice some of the other things on his agenda to get what he wants with tariffs. It's Monday, April 7th. I'm Alex Osela 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. It was a volatile day in the markets. First, they rallied in the morning in response to erroneous headlines that President Trump would delay the implementation of tariffs by 90 days. The administration clarified that there will be no delay in implementing new levies, leading to stocks dropping. Later in the morning, President Trump said he plans to increase tariffs on China by 50%

starting Wednesday if the country doesn't withdraw its retaliatory tariff increase on the U.S. by tomorrow. China said last week it would hit all U.S. goods with an additional 34% levy starting Thursday. In a social media post today, Trump added that talks with China to arrange meetings would be terminated. Stocks dropped again in response. In the afternoon, speaking from the Oval Office, Trump confirmed that he's not considering

a broad pause on tariffs, but he opened the door for individual countries to negotiate tariff rates. He said that there can be both permanent tariffs and also negotiations. A wild stock market swing based on that false information about a possible tariff pause added $2.4 trillion in value and erased it almost as quickly this morning. The episode played out in just over a half an hour. In the end, the Dow fell 0.9%, the S&P 500 was down 0.2%, and the Nasdaq finished 0.1% higher. For more on the market moves, I'm joined by WSJ reporter Hannah Aaron-Lang. So Hannah,

it's been a pretty wild ride. Yeah, it's been a very volatile trading day. And most of this just comes down to the fact that investors are still really searching for clarity, for answers, or even just clues about the direction of Donald Trump's tariff policy and additionally how other countries will respond to that, which companies here in the US will be most exposed to that policy. It really just all orbits around these questions about tariffs.

What does this volatility tell us? We've certainly seen today, just given the wild swings in stocks over the course of the trading day, that there's a growing desperation among investors for some clarity on what lies ahead. It tells us that developments on the tariff front can have a really huge impact in markets right now. We saw this brief mid-morning rally today, kind of wild swing up and down after there were these erroneous headlines that President Trump was considering a 90-day pause in tariffs. That report turned out to be false. The White House denied it. But it prompted a really big lift in major stock indexes, then promptly reversed after we found out it wasn't true.

There are kind of two ways to interpret that based on the reporting I've done today. I spoke to some investors who saw that as a reassuring sign that any positive catalyst on the trade front could make a big difference for investors and for markets. The more pessimistic way to view that is a sign of that increasing desperation among the investment community and on Wall Street. That was WSJ reporter Hannah Erin Lang. Thanks so much, Hannah.

Thank you for having me. Speaking after meeting President Trump in Washington, Israeli Prime Minister Benjamin Netanyahu said today that he wants to completely erase the trade deficit between the U.S. and Israel, opening up negotiations on tariffs that the U.S. imposed last week. Meanwhile, the European Union is preparing its first round of retaliatory tariffs. EU Commissioner Marj Shevcevic said that these won't target the same value of goods as the US steel and aluminum tariffs, though he didn't specify the value of goods they will cover. Shevcevic said that the bloc continues to be open to negotiations with the US. We have offered zero for zero tariffs for cars and all industrial goods. industrial goods. Second, let's be clear, however, engaging the US will take both time and effort. Right now we are in the early stages of discussions because the

US views tariffs not as a tactical step but as a corrective measure. We are fully prepared to sit at negotiation table whenever our American partners are ready. The commissioner added that the EU would not wait forever. EU member states are expected to vote this week on a final list of US goods that will be subject to the EU's retaliation for US metal tariffs.

If the list is approved, some of those tariffs will start to take effect on April 15. European officials are also weighing further measures to respond to President Trump's automotive tariffs and so-called reciprocal tariffs. Coming up, how are Trump's tariffs affecting other items on the president's agenda? That's after the break. Over the past week or so, President Trump's tariffs have dominated the national conversation. And though tariffs are just one of the president's agenda items, they could have ripple effects across a number of other policy issues. Amrith Ramkumar, who covers tech policy for the journal,

is here to tell us more. Amrit, you write that Trump's tariffs risk undercutting his goals of curbing inflation, reducing drug prices, supporting US manufacturing, and boosting the build out of AI data centers. What do these things have in common that they're so negatively affected by the tariffs? They're all driven by these globally interconnected

supply chains that have developed over many many years and decades so trying to unwind them in a short period of time just isn't feasible. In many cases there are labor shortages and high skilled labor shortages so getting the talent that you need to do this type of work is often very difficult whether you're looking in the tech sector, healthcare, other industries. And we're really dependent still on countries like China for so many raw materials and chemicals and basic things like screws. So even though the president says this is going to boost US manufacturing and create all these jobs, there are a lot

of reasons why that might not be the case in the short term. What does this tell us about the president's priorities, tariffs versus everything else on his agenda? This moment tells everyone that President Trump wasn't lying when he was on the campaign trail and said he was going to use tariffs to achieve his goals. He's been fascinated by tariffs for many decades and in the first administration didn't think he went far enough essentially, so he's really trying to rectify what he sees as an unjust trade situation. So definitely that he's almost willing to maybe potentially sacrifice some of the other things on his agenda

to get what he wants with tariffs. That was WSJ reporter Amrit Ramkumar. Thank you, Amrit. Thanks so much for having me. Thanks so much for having me. We know that the new tariffs President Trump imposed last week will make it more expensive for companies to import goods to the U.S. But U.S. exporters could also suffer from the trade war. Conrad Putser covers the economy for the Wall Street Journal and he joins me now.

Okay, so Conrad, tariffs affect goods brought into the U.S. We know this. Why could this affect exporters too? How does this work? The interesting thing here is that there's a real connection between what the US imports and what it exports. Think about China, right? Like China, essentially the economy grew rich, partly by exporting a lot of stuff to America. What that created in return was more wealth in China, which created demand for American goods and American services. And something like that has happened around the world, where just globalization and free trade and all these exports that have flown into America have created demand for American goods. And that's really helped American exporters.

So, of course, if you now restrict imports through tariffs, that reverberates back to exporters. That hurts them, at least in the short run. There's also the threat of retaliation that just puts American exporters at a disadvantage. And finally, there's this really fascinating basic connection between imports and exports, which is if more ships with stuff from Asia, for example, arrive at the port of Seattle, there's all these ships in empty containers that have to go back. And all those ships and empty containers are great for exporters because it's a way for them to ship goods abroad cheaply. You know, Conrad, this isn't our first time with tariffs in recent history.

In Trump's first term, of course, he also implemented tariffs against some of the same countries. I'm curious, though, if things are expected to be or already proving to be different this time around. In Trump's first term, of course, he also implemented tariffs against some of the same countries. I'm curious, though, if things are expected to be or already proving to be different this time around. Well, they're going to be different for sure because the tariffs now are just a lot broader and they impact a lot more countries and a lot more goods than the first time around. But what happened in the first Trump administration is probably not a good sign for exporters because some of them were hurt.

Great example here is the apple industry in Washington state. Apple orchards in the state have made a lot of money over the years selling them to China and India. And during the first Trump administration, Trump put tariffs on steel and aluminum imports. And then what China and India both did in return was put tariffs on American agricultural exports. That trade fight ended and India lifted its tariffs on American apples, but still the market didn't really recover. That was WSJ reporter Conrad Putsier.

Thank you, Conrad. Thanks for having me. And that's What's News for this Monday afternoon. Additional audio in today's episode courtesy of Reuters. Today's show was produced by Pierre Bienneme and Anthony Bansi with supervising producer Michael Cosmitis. I'm Alex Osala for The Wall Street Journal. We'll be back with a new show tomorrow morning.

Thanks for listening.