WSJ What’s News - U.S. Could Pause Ukraine Talks If Progress Isn’t Made Soon

Episode Date: April 18, 2025

A.M. Edition for April 18. Secretary of State Marco Rubio says Washington has presented Kyiv and Moscow with a framework deal to end their war, but that the clock is ticking for both to act before the U.S. shifts its diplomatic priorities elsewhere. Plus, President Trump signals that China, the EU and Japan could all reach trade deals with Washington. And WSJ Heard on the Street tech columnist Dan Gallagher breaks down Netflix’s latest earnings, in which the streaming giant posted a record profit and showed little sign of being dragged down by tumult in global markets. 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 signals that China, the EU and Japan could all reach trade deals with Washington. Plus, the U.S. says time is ticking on efforts to end the war in Ukraine. We're prepared to be engaged in this as long as it takes, but not indefinitely, not without progress. If this is not possible, we're going to need to move on. And Netflix posts a record profit with no fallout from the trade war. It's Friday, April 18th. 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. world today. Secretary of State Marco Rubio says the outline of a deal to end the war in Ukraine is being

considered by Kiev, with Washington hopeful to hear back soon. However, in response to a question by Journal National Security correspondent Michael Gordon, America's top diplomat today said U.S. patience to negotiate an end to the conflict has its limits. We need to figure out here now, within a matter of days, whether this is doable in the short term. Because if it's not, then I think we're just going to move on from our perspective. The president feels very strongly about that.

He has dedicated a lot of time and energy to this, and there are a lot of things going on in the world right now that we need to be focused on. So this is important, but there are a lot of other really important things going on that deserve just as much if not more attention." Those comments followed talks held in Paris yesterday that French officials had hailed as a moment of convergence after feeling cut out of prior negotiations about the future of Ukraine. Rubio, Trump envoy Steve Witkoff, senior Ukrainian and European officials attended the talks, and a follow-up meeting could be held in the UK in a matter of days. Separately, President Trump says a Mineral Rights Deal between the U.S. and Ukraine will be signed next Thursday, though Michael told us the proof will be in

the pudding. This agreement's been promised several times and hasn't quite materialized, but he said it's set for next week, and that would certainly reinforce a possible sense of momentum. We should wait and see what happens in London next week, whether Witkoff in fact attends as the French have indicated he was. There was no confirmation of that on the US end. So that's going to be an important sign. The US is moving ahead with a plan to charge fees on Chinese ships calling at American ports, part of the Trump administration's effort to counter China's dominance in ocean

shipping and revive the domestic maritime industry. In a plan released by the US Trade Representative's Office, Chinese owners and operators will be charged $50 a net ton on each US voyage, while operators of ships built in China will also face a charge starting at $120 per container. The USTR's fee plan would come into force in six months, with fees increasing every year over the next three years. Meanwhile, at the Oval Office, Trump said he's in contact with the highest levels of the Chinese government about a potential deal to reduce tariffs, appearing to confirm

that he's talking to Chinese President Xi Jinping himself. He also signaled he might lower tariffs on China from the current 145 percent. I think that we will make a deal with China. I think we've had some very good talks, but we will have some very good talks remaining. And you know, I view it and some people say, oh, rush. I think we have a lot of time. I think we have plenty of time. But we have very, very good—you saw Japan was here yesterday. We had Italy today. We had a great conversation with the prime minister. We've had very good talks yesterday with Mexico.

Talking with everybody, you know, the problem is it's only so many hours in the day." Meanwhile, on trade talks with the EU and Japan, Trump said he expects to reach a deal with both before the 90-day pause on reciprocal tariffs ends. While many markets are shut today, Japanese shares were trading, and journal Asia Finance editor Peter Landers told us that the news provided a bit of a boost for the Nikkei. The Nikkei stock average closed up 1 percent, continuing a modest recovery. It's still down about 15 percent from its peak, has fallen since Trump's inauguration, but it is steadying and recovering a bit on these signs that the trade war may ease.

Not many specifics are out there about what the sides are even talking about or what the U.S. is demanding, but certainly Trump is suggesting that at the end of his 90-day negotiating period there will be some deals. And as Peter explains, progress on a trade deal bolsters the Bank of Japan's case for hiking interest rates as it looks to tackle higher inflation. So in Japan in March, inflation was about 3%, depending on which measure you use, and that's above the Bank of Japan's 2% target.

And it suggests that the Central Bank in Japan does have room to raise rates later this year, as it has suggested it plans to do. But the tariffs are a bit of a wild card here because right now cars and car parts exports to the U.S. are subject to a 25% tariff and that could lead to factory closures, job losses in Japan and that would be deflationary and that's why some analysts in Japan think the Bank of Japan is going to be cautious about raising interest rates.

And we've got a pair of developments concerning a man mistakenly sent by the U.S. to a Salvadoran prison, a case that's become a political and legal flashpoint over the Trump administration's deportation efforts. On a visit to El Salvador yesterday, Maryland Senator Chris Van Hollen met with Kilmar Abrego Garcia a day after pressing El Salvador's Vice President about why he remained imprisoned without evidence of his alleged gang membership, to which Van Hollen was told that it's because the US is paying the country to incarcerate deported migrants. Meanwhile, a US appeals court became the latest to rebuke the handling of the case, with Judge

J. Harvey Wilkinson, a Reagan appointee, chiding the Trump administration for continuing to resist a Supreme Court directive last week that it facilitate Abrego Garcia's return. In his order, Wilkinson accused the government of, quote, asserting a right to stash away residents of this country in foreign prisons without the semblance of due process. Abrego Garcia has denied any gang involvement and said he's never been charged with a crime after living in the U.S. for around a decade. Both the Trump administration and El Salvador's president have said they didn't have the

authority to return Abrego Garcia. Coming up, Netflix reports a record profit with no mention of any trade war impact. So can the streamer reach its lofty hopes of a trillion dollar valuation? We'll bring you the answer after the break. needed to or hit rewind like that time you knock down that wasps nest. Well, life doesn't always give you time to change the outcome, but pre-diabetes does. With early diagnosis and a few healthy changes, you can stop pre-diabetes before it leads to type 2 diabetes. To learn your risk, take the one-minute test today at Do I Have Pre-Diabetes.org, brought

to you by the Ad Council and its pre-diabetes awareness partners. The markets are closed and it's a holiday weekend for many people. Time to get outside, gather with family, and maybe fire up the world's most popular streaming service to catch up on that show you've been meaning to watch. Dan Gallagher is the Wall Street Journal's hurt-on-the-street tech columnist and stayed up late for us to crunch Netflix's Q1 earnings. Earnings that, Dan, didn't disappoint. We've got record profit here, no signs of fallout from the trade war. Dan Gallagher It was a really strong report. Companies like Netflix and Spotify, they're not exposed to these tariffs directly, obviously,

because there's not going to be tariffs on a digital subscription service. And they're also historically pretty resilient in recessions, which we're obviously not in a recession yet, but that's obviously a big fear now with what's going on with trades and tariffs. And so what Netflix showed day is like they're in a really strong position. Even if the world economy gets tighter, they're probably going to still do well. Right. Take us into a bit more detail here. Netflix has surpassed 300 million subscribers now and crucially are signaling strength to come.

It has. And one interesting thing about the subscribers, this is actually the first quarter that Netflix has actually not reported any subscriber metrics at all. And they've prepared investors for that over the last few years. Their last report had just a little over 300 million and they did say today that membership growth did help fuel the revenue growth they reported. So we know it came up some, we don't know exactly how much, but they're trying to go into this new phase where they get investors to focus on revenue and earnings growth. The earnings is a really interesting story because Netflix now makes over three and a half billion dollars in operating earnings every quarter. And Disney, which is probably their strongest competitor amongst traditional media companies, they're still working to get to a billion in streaming profits for a full year.

That's an idea of how much the rest of the market is trying to catch up to Netflix in where they've come in their business. And that lead over competitors is crucial, right? Especially should the global economy falter or the American consumer begin to penny-pinch in the coming quarters. So they're in a good position for a few reasons. Obviously, they've been around a long time. They have a huge library of shows that people are now accustomed to watching. The average streaming subscriber now has, you know,

about three to four streaming subscriptions. If they have to turn back because of budgets, Netflix is probably going to be the last one to cut. And worst case for Netflix is that if customers get really pinched, they can trade down. They have several tiers. They can trade down amongst the premium tiers. They could trade down to the ad tier, which is like half the price of the standard. So they have a lot of options that they can use. This is where Netflix shares like a similarity with Spotify. Obviously, Spotify does music, but they're both in this position where they have such a strong lead over their competitors. And with services that are deemed for the customers important and kind of cost effective. If you think about it, you know,

15 bucks a month for Netflix on the standard plan. You can watch all these shows as much as you want. Spotify has various tiers of plans where you can just listen to all the music ever made as much as you want. Those are things that are pretty resilient. Those are the things that people are not going to cut easily. You know, you'd cut going out to dinner once a month, I think, before you would cut back on your music or shows. And finally, Dan, we've learned recently that some Netflix executives see a trillion-dollar valuation as a possibility for the company.

What should we make of that? And what would it take for Netflix to punch its way into the next weight class, so to speak? It would take a lot. Those are ambitious targets that our colleagues reported earlier this week. It's not implausible but get into a trillion dollar valuation for instance that's a little over double what Netflix is commanding right now. So there needs to be a lot of revenue growth a lot of earnings growth there one thing in China is on the conference call discuss the earnings report. Is that they tried to not really walk that back but to kind of make the distinction that.

walk that back but to kind of make the distinction that you know these are internal discussions they have about internal goals those are not a forecast so investors shouldn't kind of treat it as like oh this is definitely where they're gonna get to but I do think it's worth looking at Netflix in their history they've had a strong history of execution and getting some pretty ambitious targets so it's not implausible that they might hit those as well I've been speaking to Wall Street Journal heard on the street tech columnist Dan Gallagher. Dan, thank you so much, as always, for the update. Thank you for having me.

And that's it for what's news for this Friday morning. Today's show was produced by Daniel Bach. 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. Otherwise, have a nice weekend. Thanks for listening.