WSJ What’s News - Trump Bars U.S. Travel for Citizens of 12 Countries

Episode Date: June 5, 2025

A.M. Edition for June 5. President Trump is reinstating a controversial immigration policy from his first term, banning travel to the U.S. from a host of countries largely in the Middle East and North Africa. Plus, Dow Jones Newswires economics editor Paul Hannon discusses the tricky needle central bankers will need to thread as inflation concerns spike, even if that’s not yet showing up in the data. And gamers worldwide scramble to get their hands on Nintendo’s new Switch 2 console. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

President Trump signs a sweeping travel ban and takes fresh aim at Harvard's foreign students. Plus, the tricky needle that central bankers have to thread as inflation concerns spike, but the data doesn't add up. The question for central bankers is how quickly are those increases in inflation expectations going to translate into fresh demands for higher wages and then another round of price increases? And gamers worldwide scramble to get their hands on Nintendo's new Switch 2 console. It's Thursday, June 5th.

I'm Luke Vargas for the Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today. We begin with a trio of actions taken by the White House, starting with President Trump signing a travel ban preventing citizens from 12 countries from traveling to the U.S. The countries are largely in the Middle East and Africa and include Afghanistan, Iran and Yemen. Trump defended the move, saying it followed a State Department security review.

Their analysis considered are the large-scale presence of terrorists, failure to cooperate on visa security, inability to verify travelers' identities, inadequate record-keeping of criminal histories and persistently high rates of illegal visa overstays and other things. Haiti is the only country in the Western Hemisphere to face a complete ban, which the White House justified on the basis of recent illegal immigration trends. Separately, citizens from seven further countries, including Cuba and Venezuela, are being barred from permanently immigrating to the U.S. or applying for tourist or student visas. After years of litigation, the Supreme Court in 2018 upheld travel bans enacted in Trump's

first term, so long as the administration could articulate why countries are included. Meanwhile, the president is ramping up his attack on Harvard, suspending the university from participating in the government's student visa program. That proclamation effectively bans foreign nationals, who account for around a quarter of its student population from attending and hands Secretary of State Marco Rubio the power to decide whether foreign students currently at Harvard should have their visas revoked. Last month, a federal judge blocked a prior effort to bar Harvard from enrolling foreign students, leading Trump in his latest order to invoke his executive authority to ban people whose entry would be detrimental to the U.S. A Harvard spokesman called the latest step illegal and a violation of the school's First Amendment rights.

And President Trump has ordered an investigation into Joe Biden's actions as president and whether Biden's team conspired to deceive the public about his cognitive decline and unlawfully exercise presidential authority. The probe involves the use of auto-pen machines programmed to imitate signatures, and which are often used by presidents and other government officials to sign legal documents. Past administrations have said that auto-pen signed documents are legally valid.

In a statement, Biden said that he made all of the decisions during his presidency, and quote, any suggestion that I didn't is ridiculous and false. Trump has used the auto pen as well, though he's played down those instances as dealing with minor correspondence. Boeing has reached an agreement with the Justice Department to avoid prosecution for two crashes of its 737 MAX jets in exchange for paying $1.1 billion. Journal aviation reporter Ben Katz has more. This filing that we saw yesterday confirms details of a tentative agreement that was

reached last month. Boeing is going to invest over $400 million in strengthening its compliance mechanisms to ensure that its aircraft are coming out its factories in a safe way. The company is also being required to give around $440 million to the families of crash victims and that comes on top of prior criminal penalties. Boeing is also critically admitting to a conspiracy to obstruct the FAA's monitoring of its systems and its certification mechanisms. That's really what has been at the crux of the 737 MAX crisis, that Boeing had misled the FAA about the significance of safety features

that it employed on its aircraft. The deal means that Boeing will avoid a trial. It enables them to avoid criminal prosecution, which effectively could have barred it from receiving billions in government contracts every year. Coming up as the European Central Bank readies another potential rate cut today, we'll look at the global inflation outlook following OECD warnings that trade protectionism could send prices higher.

That and more after the break. The OECD said this week that in spite of recent progress to battle back inflation around the world, higher inflation is back in the forecast thanks in large part to trade protectionism. Though that's not yet showing up in the data, as the Fed's preferred consumer price gauge ticked up just a tenth of a point last week, and this week across the Atlantic, Eurozone inflation fell below target. Joining me with more is Paul Hannan, the economics editor at Dow Jones Newswires. Paul, that OECD report this week was kind of spooky, right?

Warning of near 4% inflation in the US by the end of the year. Getting there would obviously require basically doubling current inflation. Are we in some sort of misleading lull then before things are about to get a lot worse? I think it depends where you are in the world. It depends on whether you're in a country that's raising tariffs or in a country that is being confronted with new tariffs. The OECD's warning was catched in a certain language to kind of generalize it, but it was very specifically targeted at the US and that's where they give the

clear forecast of what the consequences are likely to be. And in future, if tariffs were to go up, for example, in the European union, which has not yet retaliated to Trump, then that would be inflationary. So there are inflationary threats from protectionism. And to go back to the question of a lull, I mean, one of the reasons why you might not see that now yet is because there's been so much stockpiling, so much front running. And what businesses are doing is basically trying to flatten out the cost profile and buy things before the tariffs hit. So what you'd expect is that as those stockpiles run down

and those goods are replaced, they will be buying at these new higher prices that incorporate the tariffs and they will get passed on to consumers. So you wouldn't expect to see a sort of instant hit to inflation from the hike in tariffs that we saw in April. In terms of the inflation outlook, I want to play a quote from the Director General of the OECD, Matthias Korman. This was him earlier in the week. Inflation expectations by households have moved up in some countries, particularly the United States,

likely related to an increase in expected costs for imports. Expectations by households have moved up in some countries, particularly the United States, likely related to an increase in expected costs for imports. Higher inflationary pressures would require monetary policy to remain restrictive for longer, rising borrowing costs and slowing economic activity. Paul, inflation expectations in the US are going up even though actual inflation rates remain relatively stable. Decode that for us. The OECD's warning is very specifically about the US.

It's about US inflation doubling by the end of the year. Now there are spillovers. If you've got like a big rise in prices in a huge consumer market like the US, prices around the world are maybe going to edge up a little. But the key thing is that those prices are being pushed up by a tax that's being imposed by the US government. No one else is imposing that tax. So why should inflation pick up elsewhere?

Corman is a diplomat, right? So he's not going to stand up and go like, it's just the US here. He's going to make a general point, but mechanically, if inflation in the biggest economy in the world doubles from your initial estimate, then the world's overall inflation rate is going to go up without it necessarily going up anywhere else at all. Soterios Johnson All right. So where does this leave policymakers then? I'm guessing it's not in an easy place given the need to kind of prevent the widespread

impression from sinking in that inflation is inevitable. So I think what the OECD secretary general is saying is that central bankers have to be very careful not to give people the impression that they're going to let this thing pass through. They're going to keep borrowing costs as high as they think is necessary to make sure that inflation does not take off again. With the US there is a difficult situation here where the OECD is forecasting this very sharp slowdown in growth now to you know 1.6 this year with obvious threats to the jobs market and that's one of the Fed's concerns. On the other hand, if it looks like it isn't confronting an expected rise in inflation

seriously enough and later have to actually, God forbid, raise interest rates, you can imagine how well that would go down if the economy in general was kind of softening. Elsewhere it's less of a challenge. The data points very much in Europe towards weaker economic growth and really inflation that's pretty well under control. So today we're very likely to see another rate cut from the European Central Bank. It's fourth interest rate cut since the Fed paused.

It will do two more. So you've got one and a half points of divergence. Canada is probably gonna go ahead next time out. The Bank of England is going to keep on going. There are very few that aren't continuing to cut. They're just going to be doing it in a fairly careful way. Paul Hannan is the economics editor for Dow Jones Newswires. As always, Paul, thank you so much for stopping by. You're welcome, Luke.

We are exclusively reporting that Kimberly-Clark is nearing a sale of its Kleenex and tissue businesses outside of North America to Brazilian pulp producer Susano for around $3.5 billion. Journal Deals reporter Ben Dummett says the sale is part of an attempt by the maker of Scott Toilet Paper and Huggy's Diapers to focus on more profitable areas. This plan sale basically would dovetail with Kimberly Clark's efforts in 2024 to reorganize its operation to three units.

The new structure is meant to add fuel to its lagging share price, which stock has performed reasonably well this year, but the prior years it's underperformed. Kimberly Clark sold its tissue business in Australia last year, and as part of its growth strategy it has also said that it's going to be investing $2 billion to expand its U.S. manufacturing capabilities over the next five years. The deal could be completed as soon as today, as long as the talks don't hit any last-minute snags.

And starting today, gaming fans around the world are lining up to get their hands on Nintendo's first new console in eight years. That's a trailer for the Switch 2 and the new game Mario Kart World. After facing anger from fans in April when it delayed pre-orders over tariff concerns, the Japanese company is now guiding for higher annual profit, betting pent-up demand for the console will boost earnings. Its shares are up around 30 percent so far this year. And that's it for What's News for this Thursday morning.

Additional sound in this episode was from Reuters. Today's show was produced by Daniel Bach and Kate Bullivant. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.