WSJ What’s News - U.S. Stocks Sink Ahead of Trump’s 104% Tariffs on China

Episode Date: April 8, 2025

P.M. Edition for April 8. U.S. stocks gyrated today but ultimately ended down as investors’ hopes for tariff resolution turned out to be unfounded. WSJ markets reporter Jack Pitcher walks us through what happened. Plus, investors looking for a guide to trading in turbulent times are turning to a book first published in 1997. Kevin Dugan, who covers business culture for the Journal, talks about why it is still resonating with investors. And Journal reporter Peter Grant discusses the potential impact of President Trump’s tariff blitz on the coastal industrial-property sector. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Yeah, it's a big deal. The Ford It's a Big Deal event. Visit your Toronto area Ford store or Ford.ca today. US stocks rally stalls ahead of 104% tariffs on China going into effect at midnight. Plus, how do you trade in turbulent times? Some investors are turning to a 1997 book for strategies. Ever since the COVID pandemic, there's a really tremendous shift. And the pre-2020 world is just very different from where we are today. And we're seeing that a lot now with Trump's tariffs. And how President Trump's tariff plan could send coastal commercial real estate into a tailspin.

It's Tuesday, April 8th. I'm Alex Osolla 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. More volatility in the markets today. There was a big bounce-back rally in morning, stemming from comments from Treasury Secretary Scott Bessent, who said that the Trump administration was open to negotiating to reduce tariffs.

But by the afternoon, the enthusiasm had stalled out, as US Trade Representative Jameson Greer said Trump won't provide tariff exemptions for individual products or companies. US stocks capped off a volatile session in a downswing. The Dow rose more than 1,400 points early on, reflecting investors' faith that the administration may deliver on talks of potential trade deals, but ultimately closed down about 0.8%.

The S&P 500 fell about 1.6%. And the Nasdaq, which had rallied more than 4 percent earlier, ended the day roughly 2.2 percent lower, blowing its biggest intraday gain since at least 1982. I'm joined now by WSJ Markets reporter Jack Pitcher. So Jack, we saw a lot more volatility today. What is going on? Yeah, we're looking at some historic volatility as far as the ranges the major stock indexes have

been trading in day to day. Today started off with a lot of optimism. There were some headlines overnight that the Trump team was willing to negotiate on tariffs. Some people were hoping there would be an announcement today that these are getting pushed back before they're actually implemented tomorrow. By the afternoon, it was clear that that was not the case. We saw the S&P 500 up more than 4% at one point earlier in the day, and it

closed down more than 1%. And our data going back to 1978, that is the first time that's ever happened. How long can volatility stay high like this? It's impossible to know when things might calm down, but right now with so little clarity on the tariff situation and markets reacting so heavily to individual headlines, it's so important whether or not these are in effect, whether they're paused because the business implications are so wide reaching. Traders, investors we're talking to, expect volatility to remain highly elevated as long

as it's an open question of whether these tariffs are implemented and whether deals have been cut. That was WSJ Markets reporter Jack Pitcher. Thanks so much, Jack. Thank you. Meanwhile, White House Press Secretary Caroline Levitt confirmed that President Trump's tariffs, including the steep duties set for Chinese imports, will go into effect just after midnight. Levitt said China's retaliatory tariffs were a mistake, and in response the administration

would increase China's total tariff rate to 104% at midnight. Trump had already placed 20% tariffs on Chinese imports since taking office. He was said to increase the rate by 34% starting tomorrow, but said he would add an additional 50% because of China's retaliation. Leavitt said the administration would prioritize allies, as advisors consider deals to lower tariffs. Markets are particularly volatile at the moment. Recently, the Chicago Board Options Exchange's Volatility Index, or VIX, also known as Wall Street's fear gauge, hit its highest level since early 2020, though it's come down a bit since.

For investors, this could be a moment of reckoning, but some feel prepared for a world run amuck thanks to a surprising playbook, a 1997 book called The Fourth Turning, An American Prophecy. One of its authors, Neil Howe, is planning to launch a financial product this summer that would invest in assets he believes would do well during generational crises and extreme market turbulence. For more, I'm joined by Kevin Dugan, who covers business culture for the journal. Kevin, what are some of these assets that author Neil Howe considers relatively safe in such volatile circumstances? Well, some of them are like security companies, commodities, futures, long shot options,

investing in companies that would do well during times of strife, like war, for instance, so like national security companies. There are also different financial instruments, different options that would become more valuable as markets tank. Howe didn't give me all the details about everything that would be in the strategy, but those are the broad ideas of what he's planning.

So why has this book resonated with investors so much in the past few years? Howe is a demographer, and he is one of the people who coined the term millennial. And he has been doing a lot of work for years on the way that different generations, what they like and how film and TV companies or banks could market or create products that would appeal to different generations. And some generations act in a way

where they want more personal freedom and some act in a way where they want more personal freedom, and some act in a way where they don't. And right now we're in a moment where, according to Howe's book, things are moving towards more of that institutional mindset. That was WSJ reporter Kevin Dugan. Thanks, Kevin. Thank you.

The Justice Department is scaling back prosecutors' ability to bring criminal charges against cryptocurrency firms. According to a memo issued yesterday by Deputy Attorney General Todd Blanche, the department will no longer bring charges against exchanges, dealers, mixing services, and wallet providers for the acts of their end users. The new policy underscores the Justice Department's move to align with President Trump's affinity for crypto products. And the Supreme Court has lifted a lower court order

that directed the Trump administration to reinstate about 16,000 federal employees it fired. The justices said that environmental groups and other nonprofit organizations who say they were harmed by the reduction in public services caused by the layoffs didn't have legal standing to bring the suit. The groups bringing the lawsuit said they would try to fight for the affected workers through other means. The order marks the White House's third victory in a row as it seeks the justice's emergency action to stop district judges from slowing its policies. But it doesn't resolve

broader legal disputes over the administration's mass layoffs of federal employees. Coming up, how Trump's tariffs could have an impact on entire port cities. That's after the break. During the era of globalization, investors poured billions of dollars into building warehouses and distribution centers near major U.S. ports. Now as President Trump's tariff blitz threatens to upend global trade, the industry around those once coveted coastal industrial properties could be thrown into a tailspin. WSJ reporter Peter Grant tells us more.

Peter, break this down for us. How do tariffs affect the coastal industrial property sector? Tariffs affect trade. And when trade is booming, the ports and the industrial sectors around those ports do very well. When trade isn't booming, they don't do that well. And that's what we're now looking at. If trade is curtailed, that's going to have a direct impact on shipping into these ports

and that's going to have a direct impact on the real estate in the ports as well as the broader ecosystem. How are some of the big companies in this space responding to Trump's tariff announcement? So far the industrial real estate companies, the landlords, aren't responding at all. The companies that are responding, though, are the tenants, the companies that lease a space from the landlords. A lot of them, even before Trump's plan was announced, were beginning to get a little bit more wary about committing themselves to big deals.

So you're talking about landlords and tenants, but really this is a whole ecosystem, right? How are these port cities really going to be affected by this? Well there are huge regional economies that have developed around these ports. It's not just the ships going in and out, and it's not even just the warehouses and the distribution centers. There's a massive ecosystem that supports hundreds of thousands of jobs. And now all these jobs will be affected if shipping declines and demand declines for these ports.

Could other industrial real estate benefit from new trade patterns? If trade continues, distribution centers and warehouses will be necessary. They just might not be as much in port areas. So where will they be? They'll be more internal. They'll be inland. And some of these trade hubs have begun to develop and even expand because there has been some more manufacturing showing up in different parts of the country. So what we would expect to see would be that trend continuing. That was WSJ reporter Peter Grant. Thanks so much, Peter.

My pleasure. Thanks. In other news, Panama's top auditor said Hong Kong-based CK Hutchison owes $300 million in unpaid fees and failed to get necessary clearances for two key Panama Canal ports. It's a blow to BlackRock's plans to buy the ports for about $23 billion. BlackRock and Hutchison didn't immediately respond to a request for comment. BlackRock's acquisition of the ports situated at either end of the Panama Canal, along with some 40 other ports around the world, has become a flashpoint between the US and China as the two superpowers are squaring off in an

escalating trade war. And Ukraine said today its military had captured two Chinese citizens fighting in the Russian army, raising questions about the extent of Beijing's involvement in the war. Ukrainian President Volodymyr Zelensky announced the capture of the men in eastern Ukraine on social media, saying there was evidence to suggest there were significantly more Chinese citizens fighting for Russia and calling it a clear signal that Russia sought to continue the war. China has professed itself neutral but supported Russia economically, while stopping short of providing military equipment or troops. And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre while stopping short of providing military equipment or troops. And that's what's news for this Tuesday afternoon.

Today's show is produced by Pierre Bienamé and Anthony Bansi with supervising producer Michael Kosmitis. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.