WSJ What’s News - U.S. Stocks Tumble as Trump Delays Tariffs on Canada, Mexico

Episode Date: March 6, 2025

P.M. Edition for Mar. 6. Markets dipped and Nasdaq closed in correction territory. WSJ markets reporter Sam Goldfarb talks about what’s got investors on edge. Plus, demand for nuclear energy is growing, but as science reporter Eric Niiler tells us what to do about the U.S.'s’ radioactive waste is a persistent problem. And books reporter Jeffrey Trachtenberg joins to discuss why publishers of nonfiction books are increasingly skipping the paperback. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

With the Fizz loyalty program, you get rewarded just for having a mobile plan. You know, for texting and stuff. And if you're not getting rewards like extra data and dollars off with your mobile plan, you're not with Fizz. Switch today. Conditions apply. Details at fizz.ca. The U.S. grants tariff exemptions for certain goods from Canada and Mexico. Plus, stocks sink as trade policy changes make investors anxious. There's also just the uncertainty.

It potentially unnerves businesses. They don't know what's in the future, so it's harder for them to plan, harder for them to make investments. And what can the U.S. do with its nuclear waste? It's Thursday, March 6th. I'm Alex Osela 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.

We start our show with the latest developments on President Trump's tariffs. The White House said today that the U.S. will pause tariffs on goods from Mexico and Canada that comply with the North American Free Trade Pact until April 2nd. It's a continuation of the president's streak of moderating his recent trade actions that have disrupted markets and strained relations with close allies.

A White House official said the exemption will cover about half the imports from Mexico and more than a third of imports from Canada. Any tariffs already paid since Tuesday will not be refunded to companies. In a later address from the Oval Office, Trump said that his decision to roll back some tariffs on Mexico and Canada

was unrelated to the volatility they caused in US markets. The day-to-day changes in the White House's tariffs policy did spook the markets. The tech-heavy NASdaq closed in correction territory, falling by about 2.6 percent. The S&P 500 tumbled roughly 1.8 percent, and the Dow dropped about 1 percent. The reaction in the markets is a sign that 2025 isn't going as some investors had hoped. At the start of the year, they were optimistic. The economy was strong, and a market-friendly administration

seemed poised to roll back regulations. Instead, today's market performance is a continuation of the recent dip, which shows that investors are more anxious. WSJ Markets reporter Sam Goldfarb is here to tell us more. Sam, what is underpinning investors' anxiety? It's largely one word, which is tariffs and uncertainty about tariffs, which is changing day by day, hour by hour.

It does seem that US tariffs on a broad array of goods coming from a broad array of countries are going to be going up. And so that's one thing that investors are a little queasy about because the fear is that those tariffs, the cost of those will be passed on to consumers, then consumers might pull back spending a little bit. Either that or the businesses will have to accept smaller profit margins if they don't pass on those costs.

So either way, it's not great for stocks. And then there's also just the uncertainty. It potentially unnerves businesses. They don't know what's in the future, so it's harder for them to plan, harder for them to make investments. So investors have all this anxiety. What are they doing as a result? In short, selling riskier assets like stocks and buying safer assets like gold and U.S.

government bonds. That's kind of like the standard playbook for when they're concerned about at least a slowdown in economic growth, even if we don't have a recession. So yields on US government bonds have fallen since January and the price of gold has gone up. You know, you write that so far the worst economic reports have been confined to soft data like confidence surveys. How significant is that? What does that mean for the prospect of a recession or a slowdown in growth? So, you know, I guess it's step one, and because they could signal that the hard data,

like the jobs report that we're going to get on Friday or the incoming months could turn worse. Sometimes the soft data doesn't translate to the hard data. People might be saying that they're not feeling great, but they actually just keep on spending. That's happened a little bit in recent years, so we'll just have to see. That was Market's reporter Sam Goldfarb. Thank you, Sam. Thank you. The U.S. trade deficit surged in January as imports grew much more than exports.

According to Commerce Department data out today, imports rose 10% to about $401 billion, while exports climbed by 1.2% to roughly $270 billion. That resulted in a deficit of about $131 billion, which was 34% greater than the deficit in December. I'm joined now by Matt Grossman, who covers economics for the journal. Okay, Matt, break it down for us. What is driving this growth and the deficit? A lot of economists think that what's going on is companies in the US that rely on goods

from overseas, whether that's products that they want to sell to American consumers or things that they need for their factories to create goods in the United States. Those companies saw tariffs coming and in anticipating that, many of those companies really ramped up their imports in January, thinking that tariffs would come into play down the line. So where do we go from here? Was this just potentially a one-off? It's a little bit hard to say. These data are more than a month old now, and we're going to have to wait a couple months to see how the tariffs that went into place this week affected the trade balance in March.

Often the exchange rates between countries adjust, and that's another layer that affects the decisions that companies and shoppers make about where to buy things from. This is really a new world, so it's going to be very challenging for economists to see what's coming, and that's why data like this are so important. That was WSJ reporter Matt Grossman. Thank you, Matt. Thank you. And in companies reporting today, Macy's said it expects sales to decline again this

year as even affluent customers wait to see how swirling tariffs and inflationary pressures hit the economy. Speaking of retailers, we've got another bonus episode for you today. In What's News and Earnings, we take a look at American retailers and how the industry is grappling with a growing list of issues, including tariffs, cautious consumers, and still-high inflation. You can find it in the What's News feed just before this episode. Coming up, what should US nuclear power plants do

with their waste? That's after the break. Demand for nuclear energy is growing, driven in part by power-hungry AI data centers. And that's revived a thorny problem. What's to be done with the radioactive waste nuclear power plants produce? Yesterday, the Supreme Court heard arguments in a case over whether private companies

can temporarily store spent fuel at facilities in Texas and New Mexico. But this kind of temporary storage is especially costly for taxpayers, and efforts at permanent disposal often run into dead ends. My colleague Pierre Bienamay spoke with Wall Street Journal science reporter Eric Neeler and asked about the size of this radioactive mess. There's about 90,000 metric tons of spent nuclear fuel and that's being stored at sites in 39 states. Now, most of it is from commercial nuclear reactors,

but it also includes more than three dozen university and government facilities, according to a report by the Pacific Northwest National Laboratory. Every year, just with current production from nuclear facilities and research labs, it's about 2,000 metric tons. Now, of course, that number's gonna increase just because we've seen a greater demand for nuclear energy

for AI data centers, for just electricity demand throughout the economy. How is it that the lack of permanent disposal ends up costing taxpayers more than it otherwise would? Basically, under federal law passed in the 1980s, The Department of Energy was supposed to pick up all the nuclear waste and find a location for it starting in 1998. It was a federal law. That didn't happen and since then basically the commercial nuclear reactor fleet, these utilities that run these plants, they've been suing the federal government and getting court-ordered payments of anywhere

from $600 million to $800 million a year to pay for basically not picking up the waste. That waste disposal cost is projected to reach up to $44.5 billion, according to a 2024 audit by the Department of Energy's Office of Inspector General. Why is it so difficult to figure out permanent disposal? Well, for a while it was sort of not in my backyard syndrome. There was a permanent repository that was selected in Nevada. State officials said, no, this is not going to happen. Since then, there's just been sort of a lack of momentum, a lack of progress.

The Nuclear Regulatory Commission has given licenses to two interim storage facilities. These places, one in New Mexico, one in Texas, are under litigation themselves. That was Wall Street Journal Science reporter Eric Neeler speaking with Pierre Bienamé. When a splashy new nonfiction book comes out, thrifty readers may figure, I'll buy it when it's cheaper in paperback.

These days, they may just have to keep waiting. Publishers are increasingly reducing their orders of nonfiction paperbacks or dropping them altogether. According to bibliographic database Bowker Books in Print, adult nonfiction paperback titles dropped by 42% between 2019 and 2024, while the number of adult hardcover nonfiction titles fell by just 9% in that same period. Jeffrey Trachtenberg covers the book industry for the journal and is here to tell us more. So Jeffrey, why are publishers choosing to print fewer nonfiction paperbacks?

What's going on here? It's really a confluence of economic events all taking place. On one hand, you have three different formats published the same day. The hardcover edition, a much cheaper e-book edition, and an audiobook edition. And what publishers have found is that people, if they want to read a nonfiction book right away and they don't want to wait, they can buy the cheaper e-book. Many nonfiction readers are buying the audiobook. And then of course you have your hardcover.

So by the time the paperback is issued nine months a year later, there's less demand. It used to be publishers believed that when they issued a paperback, they could gin up excitement about it. The feeling is today, that's become very, very difficult. One agent said to me, there is no second life anymore. What does this mean for authors? I mean, don't they earn more from a hardcover book? Yes, economically, they benefit more from a hardcover. They get a higher royalty rate. But at the same time, authors want to be in the bookstore.

And when the natural shelf life of their hardcover is over, they count on a paperback appearing a year later to give them a second chance to reach readers who may be younger, who maybe can't afford a $30 hardcover, but can afford a $15 paperback. It gives them one more shot to be a star, an extra opportunity to find a readership. Where does this tell us about where nonfiction publishing might be headed? It is possible that nonfiction is having a more difficult time

right now competing in the marketplace. We don't see as much nonfiction promoted on TikTok. By comparison, there are many popular fiction categories, such as romantasy and fantasy and other genres, where influencers on social media platforms hold up copies of a trade paperback and represent those books as a good opportunity for a reading experience to their viewers.

That was WSJ reporter Jeffrey Trachtenberg. Thanks Jeffrey. Thank you. And that's What's News for this Thursday afternoon. Today's show is produced by Anthony Bansi with supervising producer Michael Kosmitis. I'm Alex Osela for The Wall Street Journal. We'll be back with the new show tomorrow morning. Thanks for listening.