WSJ What’s News - Trump Presses Ahead With More Tariffs

Episode Date: February 10, 2025

A.M. Edition for Feb. 10. The U.S. is imposing 25% levies on steel and aluminum imports today, with further trade announcements expected in the coming days, but the market’s reaction is muted. Plus, France attempts to rival Stargate with plans to use nuclear energy to power a huge AI project. And WSJ reporter Jack Pitcher explains how speculative meme-coin funds pegged to assets linked to President Trump look set to test the boundaries of U.S. financial regulators. Luke Vargas hosts.  Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

What's behind the Blue Cow Quality Milk logo? Proud Canadian dairy farmers. Is Canadian milk produced to high standards? You bet. And farmers who care for their cows? Always. And what about sustainable farming practices? It's our commitment. We're behind the Blue Cow logo. And that's what the logo certifies. Dairy Farmers of Canada. President Trump slaps tariffs on steel and aluminum. We'll look at how markets are responding.

Plus France's answer to Stargate, using nuclear energy to power a huge AI project. And speculative meme coin funds look set to test regulators' boundaries. The new SEC under the Trump administration essentially has to decide where, if anywhere, to draw the line on crypto. And it's an interesting proposition when the president's name is on a couple of these meme coins. It's Monday, February 10th.

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. The U.S. is imposing 25 percent tariffs today on imported steel and aluminum, fulfilling a campaign promise made by President Trump. The levies will target every nation that exports the metals to the U.S., and Ohio Republican Senator Bernie Moreno, a Trump ally, said that the measures would be structural and long-term, not the kind that can be averted by a few phone calls from foreign leaders. Trump has previously pledged to impose levies on computer chips, pharmaceuticals, copper,

and oil and gas imports as soon as this month. When Trump unveiled steel and aluminum tariffs in his first term, the Dow tumbled more than 500 points and industry trade groups denounced the move. But as Journal Markets editor for Europe, Katie Barnado says this time around, the reaction appears to be more muted. Earlier this morning, we did see some losses among Asian steelmaking companies. There was a little bit of reaction in some London listed base metals. That would be aluminum. There was a bit of a jump in copper prices. There was a little bit of currency reaction. We

saw the Japanese yen and the Canadian dollar weaken a bit. But looking over at the U.S., stock futures are actually pointing to a higher market open. Markets definitely at the moment seem to be taking this in their stride. In another trade move, Trump says he'll announce reciprocal tariffs tomorrow or Wednesday that would target all trading partners that imposed duties on the U.S. Trump had previously weighed across-the-board or flat-fee tariffs. Vice President J.D. Vance and Elon Musk are lashing out at a federal judge who on Saturday temporarily blocked members of Musk's Department of Government Efficiency who lacked proper

background checks and security clearances from accessing the Treasury Department's payment system. Vance responded by suggesting that U.S. District Judge Paul Engelmeier had acted illegally, posting on social media that, quote, judges aren't allowed to control the executive's legitimate power. Musk meanwhile called for the judge's impeachment, and President Trump said this while traveling to the Super Bowl on Air Force One. When a president can't look for fraud and waste and abuse, we don't have a country anymore.

So we're very disappointed with the judges that would make such a ruling. Administration opponents said the criticisms were out of line and misguided. A court hearing about the Treasury Department case is scheduled for Friday. Separately, a federal judge in Boston is set to hear arguments today over whether to block a Trump administration program that offered buyouts to federal workers. Well, in the latest push by the new administration to overhaul the federal government, newly installed White House Budget Director Russell Vote is closing the Consumer Financial Protection Bureau's headquarters and has told staff to halt all of their supervisory efforts.

The moves from Vogt, who took over as acting head of the CFPB on Friday, could defang the financial regulator, a long-time goal of Republicans and a recent target of President Trump and Elon Musk. And President Trump has instructed the U.S US Treasury to stop producing pennies, saying that the one-cent coins cost more than twice that to make. Proponents say the move would save costs, while opponents say it could increase consumer prices if transactions are rounded up. We are exclusively reporting that France is making a bid to catch up in the AI race by

pledging a gigawatt of nuclear power for a new AI computing project expected to cost tens of billions of dollars. Fluidstack, the company spearheading the nuclear-powered AI cluster in France, aims to begin construction in the third quarter in a project that will rival the SoftBank and OpenAI-backed Stargate venture in the US, though there's no guarantee it will secure enough money or AI chips to be built. And in market news today, shares in BP are up about 7% in London this morning on news that Elliott Investment Management has built a stake in the struggling oil giant.

The size of the stake couldn't be learned, but according to people familiar with the investment, the activist hedge fund is pushing for dramatic moves to improve performance. And China's consumer inflation accelerated to 0.5% last month as food and service prices climbed ahead of the Lunar New Year. Core CPI rose for the fourth consecutive month, a sign that consumer demand may be starting to recover following a raft of stimulus measures. Coming up, do you want to double your exposure to the Trump meme coin? Well, an asset manager is hoping to launch an ETF that does just that.

We've got that story and more after the break. TD Direct Investing offers live support, so whether you're a newbie or a seasoned pro, you can make your investing steps count. And if you're like me and think a TFSA stands for Total Fund Savings Adventure, maybe reach out to TD Direct Investing. President Trump wants to use his brand to sell investment funds. His social media company Trump Media and Technology said last week it had applied for trademarks on a series of exchange-traded

funds and managed accounts bearing names like Made in America and Energy Independence. It would be a first for a sitting president to ask a federal agency to sign off on investment products sold by a company he controls, though a Trump Media spokeswoman said the company is abiding by all applicable laws. The move comes as the Securities and Exchange Commission weighs whether to approve a slate of leveraged ETFs that would magnify investors' exposure to another recent Trump venture, meme coins bearing the first family's names. The journal's Jack Pitcher has this story.

Jack, let's start by defining what a meme coin even is and we should especially talk about the two tokens in question here, which are trading under the tickers Trump and Melania. Jack So meme coins are sort of a broad term that we use to describe cryptocurrencies that are either associated with internet jokes and memes or otherwise have no clear economic value. So we don't know exactly who in the administration pushed this. We know because they disclosed it that the Trump Organization owns a significant portion

of the supply of these coins. And there was a really wild first week of trading for these coins. The Trump coin quickly became worth billions of dollars as a lot of his followers were buying it. Then when the Melania coin launched, his coin crashed almost 50% in a day. A lot of people think it's because the same audience was buying and selling both. But we saw these wild price swings and a lot of the investors were really intrigued by

this. Now we have asset managers jumping in trying to create ETFs that would trade on regular brokerage apps like Schwab or Vanguard and would offer leveraged exposure to these meme coins. So we're talking about ETFs that would target doubling the return of the meme coin each day. So if the Trump coin falls 40% in a day, the ETF would fall 80%. This is the boutique asset manager, Tuttle Capital Management that has filed to create

these leveraged ETFs. And as you describe it, really kind of pushing the boundaries of what is considered an appropriate amount of market speculation. I mean, had these funds existed a few weeks ago, what would have happened to investors? I mean, if one had been around the first week of trading for the Trump coin that coin fell around 50% in a day if these funds had been around and functioning properly they would have been wiped out and They're pretty upfront any of these leveraged funds in their prospectus It will say if the underlying asset falls 50% in a day our fund will be wiped out

Thanks to the leverage it employs vice versa if it rises 50%, the price is going to double. I imagine that is a degree of thrill seeking that isn't palatable to many investors. Though leveraged funds, there are more mainstream versions of them that are tied to more conventional cryptocurrencies, right? There are. I don't think your average investor has been trading a lot of leveraged ETFs, but they have actually been quite popular since their recent launch. are I don't think your average investor has been trading a lot of leveraged ETFs, but they have actually been quite popular since their recent launch. So for a long time, we've had leveraged

ETFs tracking an entire index of stocks, getting you more than just the normal daily exposure. Only recently, the SEC approved leveraged ETFs holding a single asset, like Nvidia, for instance. Those funds really took off in 2024 and gained a lot of assets. You saw Nvidia stock rising really rapidly and the leveraged ETFs were rising twice as much and a lot of investors were really attracted to that and these funds took off in assets, making them an attractive proposition for investment managers to be offering and collecting fees on. Finally, Jack, what is the SEC likely to do here?

I know some of their crypto related decisions have been quite fraught ones in the past. This one all the more sensitive, I imagine, because it involves the Trump organization. Under the old administration, I think we would expect these funds to be rejected very quickly because there's no real history for these meme coins to look at. They don't know what kind of disclosure should be made, and they seem like something that's really volatile and dangerous for investors. That being said, the previous SEC did approve the first ever funds holding cryptocurrencies with Bitcoin and Ethereum, and they approved a leverage fund offering leverage exposure to Bitcoin. So the new SEC under the Trump administration, which is indicated it's going to be crypto

friendly, essentially has to decide where, if anywhere to draw the line on crypto. Is any sort of crypto product fit for a fund that anyone can buy on their broker job? Is there a distinction to be made between real cryptocurrencies versus meme coins? And it's an interesting proposition for them to decide where to draw that line when the president's name is on a couple of these meme coins. I've been speaking to Wall Street Journal reporter Jack Pitcher in New York. Jack, thank you so much. Thank you.

And staying on the topic of riskier ways to play the market, one of the hottest names out there at the moment is Strategy, which recently changed its name from MicroStrategy. The software company has turned itself into a Bitcoin buying machine and its share price has soared, though as skeptics point out, investors buying the stock as a bet on Bitcoin are paying a hefty premium. So is it worth it? Investors buying the stock as a bet on Bitcoin are paying a hefty premium. So is it worth it? WSJ's Take on the Week asked journal Hurt on the Street columnist Jonathan Weill exactly

that. And I'm not necessarily making a call on micro-strategy stock itself. I mean, if Bitcoin goes to a million bucks and there are plenty of people out there who preach that it's going to a million bucks, I mean, micro-strategy stock will go up. It just shouldn't be worth more than the value of the stuff that it owns on a net asset value basis. And to hear that full conversation, check out the latest episode of WSJ's Take on the Week wherever you get your podcasts.

And that's it for what's news for this Monday morning. Today's show was produced by Daniel Bach and Kate Bullivant with supervising producer Christina Rocca. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a brand new show. Until then, thanks for listening.