WSJ What’s News - Trump Opens Key Trade Week With Fresh Tariff Threat

Episode Date: July 7, 2025

A.M. Edition for July 7. President Trump threatens additional 10% tariffs on countries that align with the Brics group of emerging economies. WSJ deputy editor Quentin Webb says it kicks off a crucial week for trade ahead of a Wednesday deadline for dozens of countries to strike a deal with Washington. Plus, the search for survivors in Central Texas continues after flash floods on Friday killed at least 82 people. And Tesla investors question Elon Musk’s plans to form a new political party and send the stock tumbling in pre-market trade. 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 opens a key week for trade deals by threatening new tariffs on emerging market countries. Plus rescue efforts in central Texas face weather challenges following deadly flash floods. This is tough work. It's hot. They're in the mud. They're removing debris.

There's snakes. There's water moccasins. This is God's work that they're doing. And Tesla shares drop after Elon Musk announces the formation of a new political party. It's Monday, July 7th. 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. President Trump is threatening additional 10 percent tariffs on countries that align

with the BRICS group of emerging markets, which he accused of harboring anti-American policies. Hours earlier, BRICS members gathered at an annual summit had signed a declaration voicing concern with tariffs and their effect on global trade and economic development. Along with core members, Brazil, Russia, India, China, and South Africa, BRICS recently grew to include Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates. Trump's threats and Asian stock markets and U.S. futures lower, and if it was already

shaping up to be a tense week featuring a Wednesday deadline for dozens of countries to strike trade deals with Washington or face new tariffs. Speaking on CNN's State of the Union yesterday, Treasury Secretary Scott Besant promised several big announcements over the next couple of days, but didn't get into specifics. There are 18 important trading relationships that account for 95% of our deficit, and those are the ones we're concentrating on. I asked journal deputy finance editor Quinton Webb what investors should be expecting in the days to come.

So there's a couple of things going on here. One is that we still have this Wednesday, July 9th deadline for reaching deals with the U.S. on here. One is that we still have this Wednesday, July 9th deadline for reaching deals with the US on tariffs. Then there's this August 1st deadline for the tariffs taking effect. And there's also two groups of countries that the Trump administration is addressing. One is this core group of large trading counterparties. So you have the European Union, Japan, India, South Korea, and others who are scrambling to come up with something that will work for them and work for the U.S. And then you have a long tale of smaller countries where the U.S. just says it doesn't have the bandwidth to go through in detail and strike trading deals.

Treasury Secretary Betten said on Sunday that there was 100 or so of these where letters will just go out informing them of the tariff rates. Countries that export to the U.S. are currently subject to a 10 percent baseline tariff. For some trading partners, that rate could rise as high as 60 or 70 percent after Wednesday's deadline. Officials in central Texas are continuing to search for survivors. After flash floods on Friday killed at least 82 people, the majority of them along the Guadalupe River, which had been crowded with families and campers ready to enjoy the July 4th holiday.

Among the missing are nearly a dozen girls from a summer camp that was located upstream from the town of Kerrville, where the river rose almost 35 feet over just an hour and 15 minutes on Friday morning. Kerrville's city manager Dalton Rice, heard here courtesy of KSAT, said the intensity of the flooding couldn't have been predicted. So we did we did look at stuff. Obviously I had told the story. I was out on the river trail at, you know, 330. I left about four o'clock. We did not see any signs of the river rising, and by 5.20 we almost weren't able to get out of the park on the upper end. It rose that quickly." While the National Weather Service first issued flash flood warnings early Thursday afternoon,

forecasters at the time expected a maximum of three to seven inches of rain, though by early Friday up to 18 inches had fallen over a three-hour period. Texas is the deadliest state in the country for flood-related deaths, with its so-called flash flood alley between Dallas and San Antonio considered the worst region for extreme flooding. Tesla shares have dropped in pre-market trading after Elon Musk over the weekend announced he's creating a new political party called the America Party, reigniting a feud between the Tesla CEO and President Trump. Trump responded to Musk's move while speaking to reporters yesterday. I think starting a third party just adds to confusion.

It really seems to have been developed for two parties. Third parties have never worked. So he can have fun with it, but I think it's ridiculous. Musk made the announcement on social media without offering evidence he's taken steps to create the party, and neither Musk nor his advisors have filed paperwork to the Federal Election Commission. In response, a number of Trump's allies are questioning whether starting a new party is compatible with Musk's full-time obligations to Tesla as CEO, with businessman James Fishback

saying he sent a letter to Tesla Chair Robin Denholm and is postponing an investment into the company. Meanwhile, we have learned that Columbia University is in talks with the Trump administration to restore some of its federal funding after the government canceled $400 million in federal grants and contracts over allegations of antisemitism back in March.

That's according to people familiar with the matter, two of whom added that the potential agreement may not include a consent decree which a government task force had initially sought, and instead would involve the possibility of a monitor or outside observer who'd have less power than a federal judge. The exact terms of a deal are still being hashed out, and any deal could still fall apart.

And we are exclusively reporting that Oracle is offering the federal government a major discount on the cost of its database software and cloud computing service in what would be the latest in a series of deals struck between the General Services Administration and the likes of Google, Adobe, and Slack parent company Salesforce. While Oracle declined to specify the size of the discount, the GSA put it at 75%. The agency has set its negotiations with other cloud providers to potentially make similar deals as part of the administration's continued focus on extracting savings from federal contractors. Coming up, chief executives are no longer playing down fears about how many human jobs

AI will make redundant. Instead, they're beginning to predict how deep those cuts will go. That story after the break. Get to Toronto's main venues like Budweiser Stage and the new Rogers Stadium with Go Transit. Thanks to Go Transit's special online e-ticket fairs, a $10 one-day weekend pass offers unlimited travel on any weekend day or holiday, anywhere along the Go network. And the weekday group passes offer the same weekday travel flexibility across the network, starting at $30 for two people and up to $60 for a group of five. Buy your online Go pass ahead of the show at GoTransit.com slash tickets.

Forget hedging or saying it's too early to tell how artificial intelligence will affect jobs. The journals Chip Cutter reports that the CEOs of some of America's largest businesses are increasingly speaking their minds and what they're saying could be a cause for alarm or opportunity depending on your role in the workforce. Chip, not too long ago we made mention on the podcast briefly of these comments from Amazon CEO Andy Jassy in which he said AI was going to usher in once in a lifetime technological change and allow the company to reduce its corporate workforce over the next few years.

Now you've been looking at this and it seems Jassy was far from alone in making a bold prediction like that. Tell us what you've heard. Well, we're seeing a real shift in how CEOs talk about this. They used to sort of dodge the question of whether AI would take jobs. In the wake of Jassy's comments, we're seeing other CEOs be a little more bold in their predictions. So, for example, the CEO for Jim Farley said on stage at the Aspen Ideas Festival that he could see AI replacing, as he put it, literally half of all white-collar workers in the US. The CEO of the online resale site ThredUp was at an investor conference recently where he said, I think it's going to destroy way more jobs than the average person thinks.

And so you have certainly some of the biggest, most prominent companies in America like Amazon sounding this warning, but then you also have executives in a range of other industries increasingly saying AI could displace people, could change jobs. And Chip, the importance here is what? It's not just folks who are developing AI technology that are the ones predicting transformative change. That's right. The biggest AI companies have been saying there are going to be jobs that are eliminated or sort of just changed dramatically because of AI. But then we haven't necessarily

seen executives in other industries say the same thing. And so I think that's what's notable here. These are executives outside of Silicon Valley making really pointed comments on what AI could do to the white collar workforce. And as you'd imagine, this is then causing a lot of workers to feel a sense of alarm about how do you stay relevant? What does this mean for entry level workers? What does it mean if you're mid career and trying to hold on right now? I mean, it's, it's, I think, just raising a lot of questions about where the employment

market is headed and how people kind of keep their jobs. I mean, on one hand, Chip, I guess you might expect folks in the AI industry to be having very rosy forecasts about the kind of positive change AI would bring. And yet it was the CEO of Anthropic, a big player in the industry, who issued what really sounded like a warning.

The Anthropic CEO said in May that half of all entry-level jobs could disappear in one to five years. Now, he said that could result in U.S. unemployment of 10 to 20 percent. So, huge numbers. And then he urged other company executives and government officials to stop what he called, quote, sugarcoating the situation. So, a real sort of shot there of saying, this is real, it's gonna cause a lot of pain and people need to be ready for it. Chip, you can't answer this for us,

but I would be just very curious to hear what the heads of state, labor secretaries, central bank chiefs make of that prospect. 10 to 20% unemployment in a half a decade is pretty alarming stuff. But I'm curious if you can say how businesses have been suggesting they may go about implementing AI-related job cuts, do we have a sense of how they're inclined to view their workforces

given the emergence of this technology? To date, a lot of the sort of AI job cuts have happened in places like customer service, of course, and human resources, some in law. They're in areas where companies feel like they can apply this software and be able to take roles out or put people in other places. But there's a more fundamental shift underway at the moment in how executives just think about headcount period. We've heard a number of executives say that they actually think bigger teams are an impediment,

that having more people doesn't actually help you grow. They want smaller teams. They want, for example, more experienced engineers working with AI instead of hiring a bunch of sort of entry level coders. And then you hear companies talking about ways to consolidate roles even more. So blurring two jobs into one. Yeah, and I would imagine folks will be hearing this now bracing for pressure from management over efficiency targets, productivity targets. Were there any silver linings here though? Any contrarian views about the scope of change

that we could be in store for? Well, we can go to the AI companies. Brad Lightcap, who is the chief operating officer of OpenAI, told a New York Times podcast that he doesn't think the impact to entry-level workers will be as swift and sweeping as some predict. He said that we have yet to see any evidence that people are kind of wholesale replacing entry-level jobs.

He said there certainly will be job displacement, but he noted that any new technology can lead to shifts in the job market. And so I think you have a number of people like him who would say that there can still be new jobs created, that it's a little bit unclear where this all goes still. And so maybe it's not a total reason to panic just yet. That was the Journal's Chip Cutter and we'll be anxiously awaiting updates from you in the coming weeks and months. As you hear more, Chip, thank you as always.

Thanks for having me. And that's it for What's News for this Monday morning. Today's show was produced by Kate Bulevent and Daniel Bach. Our supervising producer was Sandra Kilhoff and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.