WSJ What’s News - U.S. Tariffs Test Allies’ Trust

Episode Date: March 5, 2025

P.M. Edition for Mar. 5. President Trump has granted some automakers an exemption from the 25% tariffs on goods from Mexico and Canada. WSJ senior markets columnist James Mackintosh says that no matter what happens with the tariffs, America’s closest allies will consider any future agreements to be temporary. Plus, the president wants to build a federal cryptocurrency reserve. Reporter Amrith Ramkumar tells us how that would actually work. And Greenland is full of mineral deposits. European security correspondent Sune Engel Rasmussen explains why those minerals are so hard to get. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

I've got this condition where I don't feel pain. You're a superhero. No, I'm not. This is how intense Novakane sounds. Oh wow. Imagine how it looks. Is there more? Yeah, big time.

Novakane, forming theaters March 14th. President Trump gives some automakers a one-month exemption to tariffs, but is the damage to the US's reputation already done? This is a moment when people start to say, well, hang on, can we really trust America? Plus, how would the president's crypto reserve actually work? And why aren't mining companies all over Greenland extracting its mineral riches? It's Wednesday, March 5th. I'm Alex Osala for The Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that moved the world today. First on today's show, the latest on President Trump's 25% tariffs on goods from Canada and Mexico. The White House press secretary, Caroline Levitt, said the president is giving a one-month exemption to automakers who comply with the USMCA, a previous trade deal between the US, Canada, and Mexico. She said the request came from the heads of Ford, General Motors, and Stellantis.

Meanwhile, President Trump and Canadian Prime Minister Justin Trudeau spoke this morning about tariffs with no apparent breakthrough. In a social media post this afternoon, Trump said he had told Trudeau that Canada's efforts to stop the flow of fentanyl into the U.S. weren't good enough. But no matter what happens with these tariffs, they've already changed how other countries perceive the U.S. WSJ Senior Markets columnist James McIntosh is here to tell us about it. James, what did the tariffs change for U.S. allies? The fact that the first big tariffs are on the U.S.'s closest trading partners, Canada

and Mexico, is for them a real shock. But then on top of that, this is the president who renegotiated the trade deal precisely with Canada and Mexico. So if they can't rely on the president's own trade deals, who in future is going to be willing to rely on new trade deals that the US might agree or old existing trade deals? It makes it a very untrusting world. And of course, tariffs are only a part of that. We've also got the geopolitics of it with Europe in particular.

So are we talking about a return to protectionism? People who've been following trade closely would argue that actually Biden showed clear protectionism. He continued many of the Trump policies. The shift that began under Trump's first turn against China was intensified by Biden. And there has been a general trend in the world towards de-globalization for quite a while now. But yes, this is a moment when people start to say, well, hang on, can we really trust America? Where does that leave us now? However it comes out, people are not going to be saying, well, whatever deal we now have with the US

is something that is going to be there for the long run that we can rely on. Companies aren't going to be saying, we can build our cross-border supply chains reliant on this new deal the way they did after, for example, Trump renegotiated NAFTA in his first term. Now I think companies would be very cautious about doing that because even with that deal, he was quite happy to find another excuse and impose the tariffs. And it's the unpredictability that is damaging, and it'll take a very long time

to rebuild that. That was Senior Markets columnist James McIntosh. Stocks climbed in response to the president's one-month tariff exemption for automakers. The Nasdaq was up roughly 1.5 percent, and both the S&P 500 and the Dow ended the day about 1.1 percent higher. Car maker stocks also rose, with Ford Motor up roughly 5.75%, General Motors rising about 7%, and Stellantis was up more than 9%. President Trump has said that he wants to build a federal cryptocurrency reserve.

He is expected to speak about crypto on Friday at a White House industry summit, but many details about how the Reserve would work are still unclear. Amrith Ramkumar, who covers crypto and tech policy for the journal, joins me now with more. Amrith, I want to start by talking about where the crypto for this Reserve would come from. Would the government buy it or something else? That's the enormous question that is unanswered. So the president on Sunday hastily tweeted out which cryptocurrencies would be included in the reserve.

But he did not specify whether there would be new purchases or if this would just be holding on to cryptocurrencies that have already been seized from criminals. And those are two very different things, obviously. If you're buying new cryptocurrencies, that's a source of new demand. It's seen as like making the industry more legitimate, it has all these ripple effects and investors think it's super bullish for crypto. If you're holding on to what you already have, that's much less exciting to a lot of people and they don't think it requires that much fanfare. I talked to Bo Hines who's coordinating a lot of the administration's crypto work

early last week and he said things are still in the super early stages and they're just starting by getting an accounting of what they already have. You mentioned the cryptocurrencies that would be a part of it. What are those? So the main cryptocurrency that everyone knows about is Bitcoin. It's the largest, most valuable. You can justify having Bitcoin in reserve to a lot of people because they say it's the largest, most valuable. currency, and basically the blockchain technology that underpins Ether is widely used. And so people also said, we can see why that's in there or you can make a case for it. But then there are three much smaller, more volatile currencies, XRP, Solana, and Cardano,

that are small, risky, and volatile. And so people in the crypto industry are very divided on including those in a reserve, particularly if there are new purchases. It sounds like there are so many factions within the crypto community, but more broadly, how has the idea of having a crypto reserve gone over? What has the reception been? A lot of people don't like the idea of crypto or bitcoin reserve, particularly if there are new purchases being made with taxpayer money. And the main thing you hear from a lot of financial analysts who have looked at a lot of this stuff is bitcoin and crypto are not like oil or gold or these other commodities that are strategically held.

Proponents say it would help attract more crypto activity to the US. They say it could support the dollar and also serve as a hedge. The big thing though is again just sort of providing that legitimacy and change the momentum for the industry. That was WSJ reporter Amrit Ramkumar. Thank you, Amrit. Thanks for having me. Coming up, why isn't there a mining boom in Greenland? That's after the break.

This is Carry the Fire. I'm your host, Lisa LaFlamme. Carry the Fire, a podcast by the Princess Margaret Cancer Foundation featuring inspiring personal stories about what happens when world leading doctors, nurses, researchers, and their patients come together to ignite breakthroughs. Carry the Fire launches Monday, January 27th, wherever you get your podcasts.

Greenland is rich in mineral deposits. The sparsely populated Danish territory has some 43 of the 50 critical minerals that the US considers vital to its national security. President Trump has said and reiterated in his address to Congress yesterday that he wants to own or buy Greenland in part to access these minerals, which include rare earth metals. But getting to those minerals is not so easy. Sune Rasmussen, who covers European security for the Wall Street Journal,

recently went to Greenland to understand just what it takes to mine there. Okay, so Sune, what makes mining in Greenland so difficult? First of all, there's the weather and the location of Greenland. 80% of the island is covered by ice. Most of the mining locations are above the Arctic Circle, and shipping is treacherous in Greenland because of floating ice off the coast. So getting to the

mines and getting to the minerals is logistically very difficult. But another thing that kind of sets Greenland back is that, for example, Canada and Alaska have a tradition of local companies doing exploration of the underground. So that means if you come in as an investor, you kind of know what you're buying. Greenland doesn't have a history of local companies doing exploration. So if you invest in mining in Greenland, you run a greater risk. Why are its minerals important from a geopolitical standpoint? Greenland is home to a huge wealth of rare earth minerals,

which are used in everything from fighter jets, to iPhones, to electric vehicles, headphones. So there is an economic potential here. But in fact, I think Greenland's minerals is about more than just profit. It's also about resource control. China completely dominates the global market for rare

earths and other minerals and it could wield this dominance as a weapon in a trade war. China produces roughly 60% of the world's mined rare earth minerals but it controls the entire supply chain to an even greater extent. It controls about 90% of refining activity and even more about 94% of the production of magnets, which is the main thing that these rare earths are used for. So getting access to rare earths in Greenland could help the West break this dominance that China wields over rare earths globally. That was WSJ reporter Suneh Rasmussen. Thank you, Suneh.

Thanks for having me. In other news, we're exclusively reporting that the Trump administration has stopped using military aircraft to fly migrants who entered the U.S. illegally to Guantanamo Bay or other countries. Defense officials said that the last military deportation flight was March 1st, and yesterday noted that no such flights were scheduled for the next 48 hours. They added that a pause on such flights could be extended or made permanent. The Wall Street Journal has reported that using military aircraft has proved expensive

and inefficient. The U.S. Supreme Court lifted a pause on foreign aid payouts, rejecting the Trump administration's emergency request to pause foreign aid funding. The Trump administration will now have to follow a lower court order to pay nearly $2 billion to contractors for work already performed. And finally, what do you think is the most cutting edge class in a high school? Computer science, biology maybe?

Well, at a growing number of schools, the answer is shop class. During the 2022-2023 school year in Wisconsin, 32,000 high school students took classes in architecture and construction, a 10% increase over the year before. 36,000 enrolled in manufacturing courses, a 13% increase over the same period. Schools around the US are betting on the future of manual skills that have been overlooked in the digital age. WSJ reporter Ta Ping Chen told our Your Money Briefing podcast what's driving that interest. A lot of the reason why there is a rise in interest in many cases among say school districts as well as the business community as well as voters and families in these classes is also because of the rise in the cost of college and the sense that the four-year path,

which for many years was presented to students as really the only path, might not make the most financial sense and it might not make the most career sense either when you look at some of the stats and see that many college students graduate and get jobs that didn't require college degrees. And so you have a lot of folk who are reassessing whether or not these sorts of college for all paths and mindsets are the best routes for all kids and whether they might be alternatives out there. To hear more from Teping, listen to tomorrow's episode of Your Money Briefing. And that's what's news for this Wednesday afternoon. Today's show is produced by Anthony Bansion Pierre-Bienimé with supervising producer Michael Cosmitis. I'm Alex Osala for The Wall Street Journal. We'll be back with a new show tomorrow morning.

Thanks for listening.