Possible tariff delays and the stock market

Summary

Marketplace Morning Report - Episode: Possible Tariff Delays and the Stock Market (March 24, 2025)

In this episode of the Marketplace Morning Report, host David Brancaccio delves into the latest developments in tariffs, their impact on the stock market, ongoing legal battles involving Monsanto’s Roundup, tensions between US retailers and suppliers, Mexico’s crackdown on counterfeit imports, and updates on the Social Security administration. The episode provides a comprehensive overview of these critical economic and business issues, enriched with expert insights and notable quotes.

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1. Possible Tariff Delays Boost Stock Market

David Brancaccio opens the episode by highlighting a shift in investor sentiment as reports emerge suggesting potential delays in the implementation of import tariffs initially announced by President Trump. These delays have injected optimism into the stock market, alleviating fears of immediate tax impacts on various industries.

Key Insights:

• Tariff Deferral News: Reports from the Wall Street Journal and Bloomberg News indicate that certain industries, including automotive and technology sectors, might avoid import taxes slated for mid next week.
• Industry Impact: Industries such as cars, trucks, and microchips stand to benefit significantly from these possible delays.

Expert Commentary: Economist Julia Coronado provides an in-depth analysis:

“The reports are that potentially the tariffs are going to be more targeted instead of blanket tariffs... the notion it might be more targeted is certainly a relief to industries with complicated supply chains that would have to pay that tax many times in the production of their goods.”
— Julia Coronado [01:40]

Coronado emphasizes that targeted tariffs can mitigate disruptions in supply chains, which are crucial for industries with intricate cross-border dependencies.

Market Uncertainty: Brancaccio notes the persistent uncertainty businesses face, highlighting that the clarity on tariffs might remain elusive:

“Uncertainty is not going to go away. I don't expect the ultimate clarity on April 2nd. It will be the beginning of an ongoing process.”
— Julia Coronado [02:20]

This ongoing ambiguity contributes to market volatility, as investors navigate the fluctuating landscape of trade policies.

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2. Monsanto’s Roundup Faces Another $2 Billion Verdict

The episode transitions to legal battles surrounding Monsanto’s widely used weed killer, Roundup. Novo Safo reports on a significant jury award that adds to Monsanto’s mounting litigation woes.

Key Developments:

• Recent Verdict: A Georgia jury awarded $2 billion in compensatory and punitive damages to a plaintiff claiming Roundup caused his non-Hodgkin lymphoma.
• Previous Cases: This award follows two other billion-dollar verdicts, both of which were later reduced on appeal.
• Bayer’s Stance: Monsanto’s parent company, Bayer, maintains that scientific evidence supports Roundup's safety and plans to appeal the latest verdict.

Details from Novo Safo:

“The jury found Monsanto liable and awarded $65 million in compensatory damages and $2 billion in punitive damages.”
— Novo Safo [03:20]

The lawsuits focus on glyphosate, Roundup’s active ingredient, which Bayer has since removed from its products in the US two years prior. Despite scientific debates, Bayer faces thousands of similar lawsuits and seeks a definitive Supreme Court ruling.

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3. US Retailers Clash with Suppliers Over Tariffs

David Brancaccio highlights the friction between major US retailers and their suppliers amidst rising tariffs. Reuters reports illustrate the challenges in negotiations over who should bear the cost of tariffs.

Key Points:

• Negotiation Standoff: Retail giants like Walmart and Target are in tense discussions with both domestic and foreign suppliers over the 25% aluminum tariffs.
• Supplier Response: Suppliers are resistant to reducing their prices to offset tariff increases, leading to a potential squeeze on retailer profits or higher prices for consumers.

Industry Example: The CEO of Nordic Ware in Minneapolis shares insights:

“The wrangling over who pays 25% aluminum tariffs in its bands is taking months.”
— Nordic Ware CEO [04:22]

This prolonged negotiation process underscores the broader economic tensions and the impact of tariffs on consumer goods pricing and retailer-supplier relationships.

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4. Mexico Cracks Down on Counterfeit Imports Amid Tariff Pressures

President Trump’s tariffs on imports from Mexico aim to curb smuggling and the influx of counterfeit goods. David Brancaccio reports on recent enforcement actions and their implications for Mexico’s trade dynamics.

Law Enforcement Actions:

• Large-Scale Raids: Last fall, Mexico City police confiscated 19 tons of counterfeit products, including items from brands like Nintendo, Marvel, and Hello Kitty.

“This is a symbolic stance, saying, Mr. Trump, we are following your orders. Don’t worry, we will not become your backdoor for illegal imports.”
— Enrique Dussel Peters [07:28]

Expert Analysis: Prof. Enrique Dussel Peters emphasizes the intertwined nature of China-Mexico trade relations:

“Imagine a day in Mexico without China... Ports, airports and whatever would not work.”
— Enrique Dussel Peters [08:50]

Retail Landscape: Despite raids targeting specific locations, the prevalence of Chinese imports remains pervasive in Mexico’s economy, especially in areas like Tapito, where numerous vendors sell a wide array of products, both legitimate and counterfeit.

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5. Social Security Agency Remains Operational Despite Warnings

In a final update, Brancaccio addresses concerns over the potential shutdown of the Social Security Administration. Despite previous warnings from the agency head about possible closures due to judicial restrictions, operations continue uninterrupted.

“Social Security is open for business this morning in Los Angeles.”
— David Brancaccio [09:19]

This assurance comes after a judge’s decision that could have limited access to Social Security’s data, highlighting the agency’s resilience in maintaining essential services amid legal and political challenges.

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Conclusion

This episode of the Marketplace Morning Report provides listeners with a nuanced understanding of the current economic climate, focusing on the complexities of tariff policies, legal challenges faced by major corporations, and the intricate balance between international trade enforcement and domestic economic stability. Through expert interviews and detailed reporting, David Brancaccio encapsulates the multifaceted nature of today’s business environment, offering valuable insights for investors, businesses, and consumers alike.

Transcript

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[David Brancaccio]

Delays boosts the stock market I'm David Brancaccio in Los Angeles. The mood of stock investors turned more upbeat this morning after the Wall Street Journal and Bloomberg News each had sources saying some might not get hit with import taxes by the middle of next week, as previously advertised by President Trump. Among industries where tariffs might be deferred cars, trucks and microchips. Economist Julia Coronado is founder of Macro Policy Perspectives.

[Julia Coronado]

Well, the reports are that potentially the tariffs are going to be more targeted instead of blanket tariffs and for example, tariffs on all imports from Mexico and Canada, that's particularly damaging because of the supply chain connections. Goods often go back and forth across the border. So if you apply a tariff each time, people are talking about, you know, 20% increases in car prices, at least from this type of tariff. So the notion it might be more targeted is certainly a relief to industries with complicated supply chains that would have to pay that tax many times in the production of their goods.

[David Brancaccio]

It also underscores something that happens when we call just about any business right now, which is they use the word uncertainty. It's like, is something going to happen on April 2nd? No, we're not sure. Or maybe it is.

[Julia Coronado]

And this is where we might be in for just a rollercoaster ride in markets. David Uncertainty is not going to go away. I don't expect the ultimate clarity on April 2nd. It will be the beginning of an ongoing process. And that's just one front of policy. There's multiple fronts of uncertainty that businesses have to grapple with right now and it is a real macroeconomic headwind.

[David Brancaccio]

Economist Julia Coronado is also professor at the University of Texas, Austin. Thank you.

[Julia Coronado]

My pleasure.

[David Brancaccio]

A jury has awarded $2 billion in a lawsuit claiming the weed killer Roundup causes cancer. The award is the third billion dollar civil verdict against Monsanto. Its parent company Bayer is promising to once again appeal. Marketplace's Novo Safo has that.

[Novo Safo]

The latest jury award stems from a lawsuit in Georgia where a man claimed Roundup caused his non Hodgkin lymphoma, a cancer that affects a part of the immun system. The jury found Monsanto liable and awarded $65 million in compensatory damages and $2 billion in punitive damages. There have been two other verdicts of similar size. Last year a Philadelphia jury awarded $2.3 billion. A judge later reduced the amount to 400 million and Monsanto's parent company Bayer, is appealing the case. Further, a $2 billion award in California was whittled down to about 80, 87 million. Bayer says the jury verdicts are in conflict with the overwhelming scientific evidence that Roundup is safe. Still, it's facing thousands of other lawsuits and has indicated a desire to get a case before the Supreme Court for a definitive ruling. At issue is Roundup's former active ingredient glyphosate, widely used for decades in agriculture. Two years ago, Bayer removed glyphosate from Roundup sold in the US I'm Nova Safa for Marketplace.

[David Brancaccio]

So big US Retailers are engaged in edgy, if not acrimonious talks with suppliers along the lines of hey suppliers, you cut prices to compensate for rising tariffs versus the suppliers saying Walmart, telling Walmart and Target no, you raise prices so either your shoppers pay or cut your profits so your shareholders pay. These are both domestic and foreign suppliers of things that you buy in department stores, including cookware. The news agency Reuters had the Nordic Ware CEO in Minneapolis suggesting the wrangling over who pays 25% aluminum tariffs in its bands is taking months.

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[David Brancaccio]

Of President Trump's rationale for imposing tariffs on imports from Mexico is to stop smuggling and counterfeit goods from third countries, including China, from getting into the US From Mexico. For instance, last fall, Mexico City police raided a building there and confiscated what they said were 19 tons of knockoff products, mostly from China. This includes Nintendo, Marvel and hello Kitty contraband. Ted Seifer reports from Mexico City.

[Ted Seifer]

Mexican authorities said the raid was just the start of ongoing operations aimed at protecting domestic manufacturing and enforcing trade agreements. But for Professor Enrique Dussel Peters, the timing of the raid is telling.

[Enrique Dussel Peters]

This is a symbolic stance, saying, Mr. Trump, we are following your orders. Don't worry, we will not become your backdoor for illegal imports.

[Ted Seifer]

Dussel heads the center for China Mexico Studies at the National Autonomous University of Mexico. He points out that there are many places selling imported goods from China. In the city's historic center where the raid took place, you have hundreds of.

[Enrique Dussel Peters]

Blocks and they just see this one building.

[Ted Seifer]

Reporting by Mexican journalists has revealed dozens of shops, warehouses and plazas selling products from China, and many, according to the reporting, operate clandestinely and skirt local laws. Much of this trade takes place in a rough neighborhood called Tapito. Here one can find block after block of vendors selling things like scooters, stereo speakers, makeup and new shoes, including some dubious Nike Air Jordans for about $20. A vendor named Francisco was one of the few who are willing to be recorded. We're not using his last name because he fears legal trouble. He says the glut of Chinese poor products makes it hard to compete. The bigger reality here is that imports from China, both legal and smuggled, have become thoroughly enmeshed in the Mexican economy.

[Enrique Dussel Peters]

Imagine a day in Mexico without China. Professor Dussel Again, we would be walking barefoot without underwear. Cellular phones would not work because the antennas are of Huawei, a Chinese firm. Ports, airports and whatever would not work.

[Ted Seifer]

From this perspective, a raid or two might be a light lift for Mexico, considering some of the other tough choices the country faces to stay in the good graces of the United States. In Mexico City, I'm Ted Seifer for.

[David Brancaccio]

Marketplace, and the head of Social Security said Saturday his agency will not shut down after all this, after he had warned he would have to effectively close operations after a judge Ltd. The doge cost cutters from access to Social Security's data. Bottom line on this Monday today, Social Security is open for business this morning in Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report.

[Lisa]

From.

[David Brancaccio]

APM American Public Media.

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