WSJ What’s News - Trump and Putin Summit on Ukraine Underway

Episode Date: August 15, 2025

P.M. Edition for Aug. 15. President Donald Trump and Russian President Vladimir Putin have begun their face-to-face meeting in Alaska to discuss ending the war in Ukraine. We talk to WSJ reporter Jim Carlton, who is in Anchorage, about where the leaders stand going into the summit and the vibe on the ground. Plus, tariffs have hit their highest rate in decades, but inflation hasn’t surged—and economists are puzzled. WSJ economics reporter Konrad Putzier discusses a theory about why that happens. And EV maker Rivian says a change to U.S. fuel economy rules is holding up $100 million in revenue. Ryan Felton, who covers the auto industry for the Journal, explains the change and what it means for the EV industry. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

President Trump and Vladimir Putin meet in Alaska, beginning their much-awaited summit about Ukraine. Plus, why economists suspect inflation isn't surging despite high tariffs. The real effective tariff rate is significantly lower than what they would have thought based on just the announcement of the headline tariffs and all the averages. And how the relaxation of fuel economy rules is making EV company Rivian face $100 million whole. It's Friday, August 15th. I'm Alex Oslo 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 and Russian President Vladimir Putin are meeting in Alaska, their first face-to-face meeting in several years. On the agenda, what it will take to end the war in Ukraine. Both leaders arrived this morning local time at, Joint Base Elmendorf Richardson in Anchorage. Trump met Putin on the tarmac to welcome him and the two shook hands. The summit, if successful, could pave the way for future talks between

Putin, Trump, and Ukrainian President Volodymyr Zelensky to end more than three years of fighting that has claimed tens of thousands of lives. Though it was initially supposed to be a one-on-one between Trump and Putin, White House Press Secretary Caroline Levitt announced shortly before the meeting that it would now include two advisors for each leader. For Trump, Trump, that's Secretary of State Marco Rubio, and special envoy, Steve Whitkoff. For Putin, it's Russian Foreign Minister Sergei Lavrov and Foreign Policy Advisor Yuri Ushikov. For more, I'm joined now by WSJ West Coast correspondent Jim Carlton, who is on the ground in Anchorage. Jim, what's the vibe there? What is it like?

There's actually quite a bit of excitement in the air. I was lucky enough to watch the leaders come in from the respective planes. And even though there were people that don't like Donald Trump and there are people that don't like Putin, obviously. Together, I think there was like goosebumps. This is very historic. They met at the base, Putin and Trump, very friendly. And then the two leaders got into the presidential car, which is nicknamed the beast, to go for a private right. That doesn't happen every day.

There's caution, obviously. This is a very difficult problem to solve. But I think that there is optimism. What did each leader say going into this meeting? Where did they stand? President Trump knows that he can't do this alone. He can't just do this unilaterally without Ukraine. having some input. So he is working with Ukraine and the European Union on what they'd like in terms

of territory. President Putin, he's not saying he's going to back off on his demands for to hold the Damas and the territory that Russia has already seized. But at the same time, he's adding some other things like arms talks, maybe economic cooperation. And so it's hard to say what's really going to happen, though, honestly, because Trump is the consummate dealmaker. And the fact that Putin's come all the way here, 4,000 miles from Moscow and Trump's come almost the same distance. Maybe it means something. Is this expected to be kind of a long meeting? What is the schedule here?

I think six to seven hours is what I'm hearing is going to be. I don't hear they're really going to leave the base. It's an interesting base. Joint base, Elmendorf, Richardson. There's a lot of wildlife there. They should be careful. There's bears. There's actually a blind bear, nickname Blind Betty, that wanders the base.

And it's beautiful scenery. I talked to tourists going to Denali National Park, and they were saying it's too bad that Putin and Trump can't go together. You know, maybe that would help still the deal. And I know the meeting started only a short time ago, now that we're speaking at this time, it's early. But is there any indication of what the outcome might be? Honestly, I don't think anybody who's not in that meeting really knows it's restricted access. There's going to be a joint press conference. Right now, I'm talking to a lot of people on the outside.

Let's hope there are also people that are upset that Ukraine was not invited. I talked to some Ukrainian supporters. They said it was just terrible that Ukraine was not invited since they're the ones with the most at stake. That was WSJ reporter, Jim Carlton. Thanks so much, Jim. Thank you, Alex. I really appreciate it. Major U.S. indexes were mixed today.

The Dow rose 0.1 percent to set a new intraday high, fueled by Warren Buffett's vote of confidence in United Health, but fell short of settling at its first record close of 2025. The S&P 500 fell about point. 0.3%, and the NASDAQ dropped 0.4%. The Commerce Department said today that retail sales rose half a percent in July from June. That matched the increase that economists pulled by the Wall Street Journal had expected. The increase was driven in part by purchases of cars and parts, which rose 1.6% from the prior month. Meanwhile, expectations of more inflation ahead have soured consumers' mood.

That's according to the latest readout from the universe, of Michigan's long-running sentiment survey. In a preliminary August reading, the survey's headline index dropped to 58.6, down from 61.7 in July. Analysts had expected sentiment to improve. Coming up, why haven't tariffs sent inflation skyrocketing? And will they ever? That's after the break. The U.S. has imposed some of the highest tariffs in almost a century, and yet inflation hasn't

surged. That's puzzling economists. One theory is one you've probably heard on the show before, that companies have so far been reluctant to pass on the extra cost to their customers. But there's a new idea gaining traction, that tariffs being paid by importers are lower than advertised. WSJ economics reporter Conrad Putsier is here now with more. Conrad, what is the evidence for this theory? So what economists did is basically go through the actual data from the Census Bureau in May to figure out what did importers in the U.S. actually pay in tariffs. And what they found was that the real effective tariff rate is significantly lower than what they would have thought based on just the announcement of the headline tariffs and all the

averages. And they have two possible explanations. One is that there's a ton of exemptions, that there's all this stuff that is not yet subject to tariffs, like semiconductors and pharmaceuticals and certain. energy products and some electronics. And if foreign goods are made with at least 20% American materials, then whatever the share of American made materials is is exempt from tariffs, essentially more than half of imports weren't even subject to tariffs, even though in theory the whole world was slapped with tariffs. And then the second explanation that they have, which a bunch of other economists have also pointed out, it's just that companies have been pretty

good at shifting their imports to other countries where tariffs are lower. So China gets incredibly high tariffs, and then you switch your imports to another country, which does not have high tariffs or any tariffs. A lot of the tariffs that President Trump announced in Liberation Day have either shifted or didn't really go into effect until earlier this month. And so pulling data from May seems like it's only part of the picture, maybe. Could this idea that we're working off of that inflation hasn't surged actually change in the next few months? It almost certainly will change. There's actually a lot of reasons to think why it will change. Trump has threatened tariffs on pharmaceuticals and semiconductors, which are currently exempt.

And then the second big thing, of course, is that a lot of companies, even those that have been paying tariffs, have just not been passing them on to consumers. And now companies have more certainty. And that also means that more companies are saying, all right, this is it. Now I'm going to raise prices because I can't just eat them forever. And what economists think now with good reason is that we haven't seen this one-off dramatic spike in inflation. It's been more gradual. But on the flip side, we might see these drip-by-drip, bit-by-bit price increases for a long time. And some economists think the inflationary impact

of tariffs is not actually going to peak until like early 2026, not even this year. That was WSHA economics reporter, Conrad Putsier. Thanks, Conrad. Thanks for having me. Electric truckmaker Rivian and its rivals have generated hundreds of millions of dollars in revenue selling credits tied to the nation's fuel economy. rules. Now, the company is saying that last month's rollback of the fuel economy rules that the big, beautiful tax and spending law brought in is holding up $100 million of revenue. And an EV trade group is asking for a court to intercede. Ryan Felton covers the auto industry for the journal and joins me now. Ryan, I want to start with how all of this worked before the new law.

The National Highway Traffic Safety Administration, or NHTSA, would send these so-called compliance letters. These are certifications to show whether and how much each automaker complied with fuel economy rules so they could then finalize those credits. What has changed? After the bill was passed last month, they made penalties to zero dollars for violating the rules and then also said that separately NHTSA was going to reconsider what the fuel economy target should be. While it was doing that, NHTSA said it wasn't going to tell companies whether or not they were in compliance, which is basically the crux of all of this. So because NHTSA has pulled back on issuing these compliance notices, EV makers are saying

they can't finalize some of these transactions that they had done. When talking about companies that lose tons of money at the moment, because they're still getting up and running, it's not an insignificant amount. Rivian put a dollar amount on it of $100 million. That works out to about 6, 7% of their total revenue so far this year. And who was actually buying these credits? Stalantis, which makes Jeep and RAM, General Motors said they bought them previously Ford last year entered into agreements to buy $4 billion worth of credits. A lot of companies that sell bigger SUVs, bigger trucks that don't have large miles per gallon for those models, previously would have needed credits to offset the cost of whatever fines they may end up getting down the line.

Given the legal change that this new law has brought about, what does this mean for EV companies? Rivian's in a position where it's selling more cars now, but these EV companies are already bumping into a market and a regulatory environment that's not going to support additional EV sales in the way that people maybe would have imagined a few years ago, consumers that's not as interested in buying EVs. And at the same time, at least with respect to NHTSA, the expectation is there's going to be no money really being made on these credits anymore. That was WSJ reporter, Ryan Felton. Thank you, Ryan. Thanks.

The World Economic Forum said today that an investigation into founder Klaus Schwab found minor expense irregularities but no material wrongdoing. The Davos conference organizer also said it was shuffling the leadership of its board in the wake of the probe. In a statement, the forum said the board wants to move on from a dispute with its founder that has royaled the organization. Schwab resigned as executive chair in April when the board decided to open its probe into a whistleblower's allegations of misconduct by him and his wife, including unauthorized spending and inappropriate treatment of female staffers. Schwab had denied any wrongdoing and filed a legal complaint in Switzerland against the forum alleging reputational damage. A spokesman for Schwab

said today that he intends to drop his lawsuit against the forum and a separate legal action against anonymous whistleblowers. 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 discussing why we're seeing so much M&A right now. Why, for companies, big is in, and whether the tie-up trend is likely to continue. That's in What's New Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienname, with supervising producer Michael Cosmides. Michael LaValle wrote our theme music. Isha El-Muzleam is our development producer. Scott Salloway and Chris Zinsley are our deputy

editors, and Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Oscella. Thanks for listening.