WSJ What’s News - What’s Behind President Trump’s Trade Agenda

Episode Date: May 2, 2025

P.M. Edition for May 2. President Trump wants to establish near absolute American power over global trade rules, with Trump personally at the center of it all. WSJ reporter Gavin Bade discusses the administration’s strategy—and the risks that come with it. And Harvard's president fights back against Trump’s threat to revoke its tax-exempt status, saying any such move would be "highly illegal." Plus, the U.S. added 177,000 jobs in April despite tariff uncertainty. Chief economics commentator Greg Ip discusses whether such gains can last. Pierre Bienaimé 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. economy keeps adding jobs despite tariff uncertainty. But can it last? Plus, what's driving President Trump's trade agenda? It's all about maximizing Trump's political power over not just people in the United States, not just U.S. politicians, but the global economy as well. And President Trump says Harvard's tax exemption will be revoked. Harvard President Alan Garber says such a move would be highly illegal and destructive. It's Friday, May 2nd.

I'm Keir Guenome for The Wall Street Journal, filling in for Alex Osala. This is the PM edition of What's News, the top headlines and business stories that moved the world today. Despite tariff uncertainty, employers in the U.S. added 177,000 jobs in April, beating the expectations of economists pulled by the Wall Street Journal. But hiring slowed slightly compared to March's pace, in a period that saw changing tariff announcements and market turmoil. The unemployment rate, based on a separate survey, held steady at 4.2%. So what do these numbers tell us about the

effects of Trump's trade policy? For that, I'm joined by our chief economics commentator, Greg Ip. Greg, what does this jobs report tell us about the economy post-liberation day? It tells us that there's really been no loss of momentum in the economy even after the very high tariffs that President Trump announced on April 2nd. April job gains against the revised figures for prior months, it looks very steady, very solid, the unemployment rate unchanged. This tells us a few things. One is that the underlying economy was very healthy when President Trump came into office. And secondly, that the effect of the tariffs is not really being felt yet. That's mostly because most products have not yet actually seen the prices go up

because of tariffs. Partly that's because businesses may have pre-ordered. Partly it's because there were delays in the implementation of those tariffs. And the president has gone on to pause many of his own tariff announcements. You say we haven't seen the effects of tariffs in these numbers yet. Should we expect a slowdown in future jobs gains? Certainly all the economists that we talked to are expecting a slowing in job gains this year. There are certainly some economists who even think that we'll go into a recession. And with the border basically closed to unauthorized migrants,

the labor force will be growing more slowly in coming months. So I would expect that alone to pull down job growth. The bigger question is will some of the sentiment and spending effects of tariffs further hurt hiring? And that it's a lot less certain. Because the president keeps changing his plans, businesses are reluctant to make dramatic changes one way or the other. A lot of them are holding out hope that just as he paused or rolled back many of the tariffs so far, he will continue to do so, and that you may not see as dramatic a change as people were anticipating just a month or two ago. What about a separate aspect of the Trump

administration's policies, federal layoffs? Did those show up in the numbers? Yeah, we actually did see some effect of that. Federal employment was down around 10,000. If you exclude the post office, it was down around 8,500. And it's now down about 20,000 since the president took office. Now, federal employment does fluctuate. It's fair to say that that definitely represents the effect of the Department of Government Efficiency

and some of the very severe cutbacks it implemented on federal payrolls. That effect, I expect, will continue to trickle out over coming months. Recall that the initial wave of job reductions were essentially asking people to take voluntary resignations and they could stay on the payroll as late as September. And if you're still in the payroll, you're counted as employed. That was Greg Ip, the Wall Street Journal's chief economics commentator. Thanks, Greg.

Thank you. Stocks extended their multi-day climb today, following those jobs numbers, and signs of a potential thaw between the US and China. More on that later. The Dow, the S&P 500, and the NASDAQ composite rose 1.3% or more. The S&P, which rose 1.5%, closed higher for a ninth straight session,

its longest streak of daily gains since 2004. President Trump ramped up his fight with Harvard University, threatening to revoke the Ivy League school's tax exemption after it filed a federal lawsuit against his administration. Harvard president Alan Garber responded to President Trump's threat in an interview with WSJ editor-in-chief Emma Tucker this morning. We are speaking just hours after President Trump posted on Truth Social that he would be revoking Harvard's tax-exempt status, saying it's what they deserve.

How big a problem is this for you? If the government goes through with a plan to revoke our tax-exempt status, it would, number one, be highly illegal unless there is some reasoning that we have not been exposed to that would justify this dramatic move. But tax-exempt status is granted to educational institutions to enable them to successfully carry out their mission of education and for research universities of research. Obviously that would be severely impaired if we were to lose our tax exempt status. And I should add it would be destructive to Harvard but the

message that it sends to the educational community would be a very dire one, which suggests that political disagreements could be used as a basis to pose what might be an existential threat to so many educational institutions. Garber's extended interview with WSJ editor-in-chief Emma Tucker will be published Monday. Harvard's suit argues the government has violated the university's constitutional rights by freezing billions of dollars in federal funding. The tax code prohibits the U.S. president and other senior officials from directly or indirectly asking the Internal Revenue Service to conduct or stop an audit or other investigations.

The IRS didn't respond to requests for comment. Coming up, how the Trump administration aims to establish near absolute U.S. power over global trade, prioritizing American interests. That's after the break. If only life had a remote control. You could pause or rewind. Well, life doesn't always give you time to change the outcome. But pre-diabetes does. President Trump and his advisors have laid out several, sometimes contradictory, goals for his tariffs.

Increasing federal revenue, strengthening America's hand in trade talks, and bringing manufacturing jobs back to the U.S. Over his first 100 days back in power, his administration has sought to relegate Congress, the courts, the World Trade Organization, multinational companies, and foreign countries to roles subordinate to Trump. Here with an overview of Trump's approach and whether it's working is Gavin Bade, the Journal's trade and economic policy reporter. Gavin, how would you describe Trump's worldview and the trade strategy that goes with it?

The way to think about Trump's trade strategy here is an extension of his domestic political strategy. What is the one thing that Trump demands from politicians in the United States, from companies in the United States, from the people who work for him? It's loyalty. We see him in his second term extending that logic to global economics and saying, look, if you want to do business with the U.S., you're going to do it on my terms. I am the alpha. You work for me. And really, he's trying to reshape every U.S. trading relationship at the same time using this strategy. And how is this hardball strategy playing out? This is really key to his thinking here is that he says, we're the largest economy in

the world, the largest consumer economy in the world as well, what he calls the big, beautiful store. And he thinks everyone else, which is not false, everyone else does want to sell into the United States. And so as much as anything else, he's using that consumer power in the United States as his leverage and saying, if you want to sell into this country, you're going to have to eliminate trade barriers on US goods. You're going to have to maybe spend more on the military. You're going to maybe have to limit your dealings with the Chinese economy, and he's really trying to drive a hard bargain when it comes to this stuff.

There are some risks, for instance, in this strategy. The IMF and World Bank meetings were last week, and we were hearing some whispering among foreign officials that, well, maybe if Trump drives too hard of a bargain here, that they could team up together and try to present a united economic front to Trump and try to dictate the terms of the conversation themselves rather than just receiving them from the United States. Right now, Trump wants to keep everyone atomized, keep everyone negotiating with him on a bilateral basis rather than a multilateral basis. But don't be fooled.

I mean, these countries are talking to each other behind the scenes, even if they won't publicly acknowledge it. Wall Street Journal reporter Gavin Bade. Gavin, good to have you. Thank you so much. Glad to be here. We exclusively report that China is considering ways to address the Trump administration's concerns over the country's role in the fentanyl trade. That's according to people familiar with the matter. Such a move could potentially allow both sides to soften their trade stance and begin talks. According to the people, China has been inquiring in recent days about what the Trump team wants

Beijing to do when it comes to the chemical ingredients used to make fentanyl. The people cautioned that the discussions remain fluid, adding that Beijing would like to see some softening from President Trump on his trade offensive against China. And we exclusively report that Goldman Sachs is changing some of the language around its diversity programs and removing references to race. A senior Goldman executive now says the bank's 1 million black women program isn't just for black women, but for low and moderate income populations. Like much of corporate America, the bank has been combing through its diversity, equity and inclusion initiatives to ensure it doesn't run into legal troubles, while trying not

to entirely abandon its pledges. Supporters of Goldman's DEI efforts fear the changes won't just be cosmetic and will mean the loss of critical funding and investments. Working in tech used to mean job security, extravagant perks, and a bring your whole self to the office ethos rare in other industries. But Wall Street Journal reporter Catherine Bindley told our tech news briefing podcast that these days a job in the industry looks like a regular gig. In tech specifically there may have been a perception that the glory days could last forever because of the way the cultures were built.

For a long time it was very standard for workers to push back on policies they didn't agree with and for leaders to really listen and in some cases make business decisions based on whether or not their workers were in favor of things or not. There are a lot of examples from that from a while back and that's slowly been changing for certainly a while now. They just had very different cultures that weren't common in other industries. But when the supply and demand changes and the labor market changes and the workers no longer

have the leverage and the power You do see that changing dramatically and you can hear more from Catherine on today's episode of tech news briefing And that's what's news for this week tomorrow. You can look out for our weekly markets wrap up. What's news in markets then on Sunday? We're bringing you an episode of WSJ's Take on the Week, where hosts Telus Deimos and Gunjan Banerjee discuss what we can expect from the Fed's upcoming interest rate decision and what it could mean for markets, businesses, and consumers. That's in What's New Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Anthony Bansi, with supervising producer Michael Kosminis.

Michael Laval wrote our theme music. Aisha Al-Muslim is our development producer. Scott Salloway and Chris Inslee are our deputy editors. And Falana Patterson is The Wall Street Journal's head of news audio. I'm Pierre Bienemé. Thanks for listening.