WSJ What’s News - What to Make of the U.S.-EU Deal That Averted Trade War

Episode Date: July 28, 2025

P.M. Edition for July 28. Business leaders on both sides of the Atlantic welcomed a trade deal between the U.S. and European Union, despite pushback from Europe. WSJ White House economic policy reporter Brian Schwartz discusses how the deal came to be and the reaction from around the world. Plus, workforces are getting smaller and CEOs want everyone to know. WSJ’s Chip Cutter explains why companies are bragging about staff reductions. And is Dubai chocolate the next pumpkin spice? WSJ’s Owen Tucker-Smith talks about the latest food craze and its possible staying power. Sabrina Siddiqui hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The U.S.-EU trade deal averts a potential trade war as President Trump seems set on tariffs. It goes to show that Trump has zero intention on removing these tariffs entirely, that they're going to be part of his negotiating strategy. And it's a real clear signal for other countries coming to the table they're not going to do away with these tariffs one way or another. The deal marks a victory for Trump, but faces pushback in Europe. And why companies are touting workforce reductions

to Wall Street. It's Monday, July 28th. I'm Sabrina Siddiqi for The Wall Street Journal, covering for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that move the world today. news the top headlines and business stories that move the world today. Business leaders on both sides of the Atlantic breathe a sigh of relief that the US and European

Union have averted a bruising trade war with their agreement on tariffs and investment. Now attention is shifting to assessing the deal's winners and losers. The deal would impose a 15% baseline tariff on most European goods, while the EU has also agreed to buy hundreds of billions of dollars of US energy products and invest in the US. Brian Schwartz, The Wall Street Journal's White House economic policy reporter joins me to discuss. Brian, this is the most consequential agreement Trump has announced thus far. How did we arrive at this deal? Well, this was weeks in the making. There was a letter that was sent out by President Trump recently, basically saying that the EU was set to pay a 30% tariff. But then things quickly

changed when the president decided to meet with the leaders of the EU in Scotland. That ratcheted things up very, very quickly. And it led to the deal that was announced. And his presence, according to everybody we talked to, really did make the difference to push this thing with a finish line over the last few days. What does this agreement mean for the US? Well, frankly, the deal seems to give more of a benefit to the United States than it does to the European Union.

You're talking about the European Union guaranteeing hundreds of billions of dollars in investments into the United States. That's a big deal. I don't remember a trade deal featuring the European Union that had those types of details. And on the other hand, the 15% tariff, although less than the 30% that the president originally

said he would put on the European Union, is significant because it goes to show that Trump has zero intention on removing these tariffs entirely, that they're going to be part of his negotiating strategy, and it's a real clear signal for other countries coming to the table they're not going to do away with these tariffs one way or another. And what has the reaction been like here at home? The stock market overall has been pretty happy about this. The White House has of course been

pushing out how big of a deal this is. Listen, this was one of his wills for the president and his team. And in the end, they managed to get this done. How has the deal been received in Europe? When I read things from expert analysts on this stuff, a lot of people think it really isn't a great deal for the European Union, that they gave a lot of way in order to avoid the president's wrath. A lot of analysts think that EU gave away kind of the barn here a little bit. That's the thinking out of fear that the president was going to unleash the tariff juggernaut on them. So the deal has been agreed to in principle. What are

the next steps? Just like any other trade deal, it's not going to be something that happens automatically. You know these are hundreds of billions of investments over the time span of a couple years. So you're not going to see something jump out in the next week where you're going to see this company come out and immediately be able to build a plant somewhere in the United States. But if it pans out the way the president wants it to pan out, that is going to be pretty significant for potential job growth here in the United States.

Brian Schwartz is a White House economic policy reporter at the Wall Street Journal. Brian, thank you. Thank you. Following President Trump's trade deal with the European Union, the euro sank against the dollar. In U.S. markets, the Nasdaq edged 0.3% higher while the Dow Industrial slipped 0.1% and the S&P 500 wavered. and the S&P 500 wavered.

A majority of Americans support President Trump's goal of cracking down on illegal immigration, but they say his approach has gone too far. That's according to a new Wall Street Journal poll, which found that just over half of voters approve of Trump's handling of illegal immigration, a centerpiece of his agenda. 62% of respondents favored deporting people who came to the country illegally. But 58% of voters oppose two steps under Trump's mass deportation push.

The first is detaining and deporting people believed to be in the US illegally without them seeing a judge or getting a hearing. The second is deporting immigrants to prisons in other countries, such as El Salvador and South Sudan, where they have no personal connections. Speaking in Scotland today, President Trump said he would shorten the deadline for Russian President Vladimir Putin to reach a ceasefire with Ukraine or face more economic pressure from the U.S. I'm going to make a new deadline of about 10 or 12 days from today. No reason in waiting. There's no reason in waiting. It's 50 days. I want to be generous, but we just don't see any progress being made.

Earlier this month, Trump had given Putin 50 days to agree to a peace deal or threaten that the U.S. would unleash a tariff package on Russia's trading partners. Today, Trump voiced frustration with Russian attacks on Ukraine intensifying despite what he thought were positive talks with Putin. It was not exactly clear what actions Russia would face if it didn't end the fighting by mid-August. The president also said the U.S. and Europe would launch a program to deliver food directly to Palestinians in Gaza as a deadly hunger crisis grips the territory.

Speaking in Scotland with UK Prime Minister Keir Starmer, Trump described the food crisis in Gaza as a terrible situation. The initiative's details are unclear, with questions arising over whether it is a new effort or an expansion of an existing Israeli-backed program. A White House spokeswoman said further details of the plan would be forthcoming. Trump's announcement comes amid growing pressure over Gaza's food crisis, which has rapidly deteriorated in recent weeks. The United Nations says thousands of children are being treated for malnutrition. Its medical partners have reported that more than a dozen children have starved to death

this month alone. Coming up, CEOs are shrinking their workforces and they couldn't be prouder. That's after the break. Big companies are getting smaller, and their CEOs want everyone to know it. Gone are the days when trimming headcount was a sign of trouble. Companies are openly touting workforce reductions to Wall Street, marking a shift from more careful language in the past. Smaller workforces, influenced by startups and the use of AI are now viewed by many executives as an asset.

For more, I'm joined by Wall Street Journal reporter, Chip Cutter. Chip, what is behind the shift in how corporations are talking about staff reductions? Part of it is a cooling labor market, and this desire among many large companies to really embrace AI and to wring costs out in the process.

So we've gone from a point where CEOs used to talk about employees as the talent, as their greatest assets, to now many CEOs thinking that these employees are almost an impediment, that large teams might be holding them back from progress. We've seen a really dramatic swing now in the ways that companies are talking about this. They're almost bragging about the ways that they're able to cut headcount. Just to give you a little flavor for what we're seeing out there, the CEO of Wells Fargo recently said that the bank had been able to cut headcount for 20 consecutive quarters. He said that the bank was using nutrition, quote, as our friend. The CEO of Verizon, meanwhile, boasted to investors that the company had been, quote, very, very good on headcount. He noted that it's going down all the time.

We're expecting the latest monthly jobs report on Friday. What does this smaller workforce trend tell us about the labor market? It just shows that we are at this moment where companies are thinking really critically about whether to add white-collar jobs or not. This is all affecting the corporate positions, the higher paid, knowledge based jobs that are out there. And so what companies are doing is they're turning to blur roles, they're keeping jobs unfilled, they're holding back on hiring. So it's not that we're typically seeing large scale layoffs yet, but it's companies sort of really

evaluating whether they need to add jobs to grow going forward. We've heard, for example, companies talk about a product manager being blended with that of a software engineer. There's been other examples of that, of companies saying, we're going to use more technology to then ensure that we no longer need to add headcount in this area. Perhaps it gets redeployed elsewhere or perhaps we just don't fill those positions. Chip Cutter is a reporter at The Wall Street Journal. Thank you, Chip. Thank you.

The latest food trend to take over TikTok feeds and convenience store treat aisles? Dubai chocolate, a confection that typically involves a shell of rich chocolate filled with pistachio cream and a shredded dough known as kataifi. Some of the biggest food companies in America are picking up on it while considering whether the Dubai chocolate flavor might endure cream and a shredded dough known as kataifi. Some of the biggest food companies in America are picking up on it while considering whether the Dubai chocolate flavor might endure as a future classic like a pumpkin spice or salted caramel. My colleague Alex Osala spoke with WJJ reporter Owen Tucker-Smith and asked him about the challenges these companies are facing as they are looking to incorporate Dubai chocolate into their products. So the list of ingredients in Dubai chocolate happened to be difficult to procure.

Chocolate has already been a problem because cocoa prices are remaining so, so high. And so chocolate has actually been a product that plenty of food companies have been backing away from recently. Pistachios are also a traditionally expensive nut, and some companies had even been skeptical about including more pistachio desserts because it hasn't always traditionally sold well. And then the katayfi is a lesser known product in the US, and you will all of a sudden have all these companies

from across the world trying to get a hold of it at the same time. And when those things happen, there's a supply chain bottleneck, prices go up, supply goes down. And it means that you have to really deploy a lot of resources in your company to make it happen at an affordable level, at a high quality level, and in the short timeframe required to get it out while this is still a hot trend.

Gretchen Kerr Given these challenges, is this likely to become a long-term staple in terms of flavor profile? That is the question for all these food companies these days, is there's a new TikTok trend every week that's hyping up a new flavor profile, a new food, and oftentimes you don't want to chase those because by the time you get the resources together, it's already over. And one of the examples we see in the story is whipped coffee, which for a moment during COVID felt like it was all the rage, but if you had pivoted your business model to chase something like that, now it wouldn't be good for you. But at the same time, another trend is that we're seeing a faster emergence of long-term flavor profiles,

meaning that there are trends that might look like a fad at the moment, but are actually very quickly becoming competitors to some of the staples like salted caramel. And so that's the bet that these companies are making, but you'll never know if it's going to be a long-term thing until it stands the test of time. That was WSJ reporter Owen Tucker-Smith speaking with Alex Osola. And that's what's news for this Monday afternoon. Additional audio in today's episode, courtesy of Reuters. Today's show was produced by Pierre Bienemé

with supervising producer Michael Kosmitis. I'm Sabrina Siddiqi for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.