The UAW’s relationship with the Trump administration? It’s complicated

Summary

Marketplace Morning Report: The UAW’s Relationship with the Trump Administration? It’s Complicated

Release Date: April 4, 2025
Host: David Brancaccio
Publisher: Marketplace

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Market Overview

The episode opens with David Brancaccio providing a comprehensive update on the tumultuous state of global financial markets. Highlighting significant downturns, Brancaccio notes, “The NASDAQ index fell 6% yesterday, the biggest drop since the pandemic lockdowns took hold in 2020” (00:01), with futures for both the Nasdaq and Dow showing steep declines. The ripple effects of U.S. tariffs are palpable worldwide, as China retaliates with a 34% tariff on U.S. goods, causing major stock indices in London, Paris, Frankfurt, and Tokyo to plummet by over 2%, 3.4%, and similar margins respectively.

Brancaccio emphasizes the interconnectedness of these economic shifts, stating, “The losses more than doubled this morning with news China is responding to new U.S. tariffs with trade penalties of its own” (00:01). This global sell-off underscores the fragile balance of international trade relations and their immediate impact on markets.

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Impact of Tariffs on Commodities

Soybeans: Elizabeth Troval delves into the agricultural sector, focusing on soybean farmers in Iowa. She interviews Dave Walton, an Iowa soybean farmer, who poignantly describes the economic strain: “It feels a bit like today, cloudy, overcast, gray” (01:19). Walton explains how the new tariffs have eroded soybean prices from near break-even to substantial losses: “With that additional drop in price, it just creates more red ink” (01:29).

Crude Oil: The discussion shifts to the energy sector, where Joe Delora from Rabobank explains that higher tariffs on U.S. consumer products lead to increased prices, subsequently dampening demand for fuel used in shipping and transportation. Walton adds, “Are just going to cut back on orders. That's going to decrease domestic usage of logistics, transportation and shipping” (02:08). Suzanne Lang from the Colorado School of Mines highlights the vulnerability of U.S. oil producers amid falling prices: “The shale revolution means we're now, you know, big producers... there's sort of like an extra negative impact right on the US Economy as a result of us being big producers of oil and gas” (02:27).

Metals: Volatility in the metals market is addressed by Chris Berry, a consultant with House Mountain Partners. He points out that metals like copper, which are “pretty good predictors of economic growth in an economy” (02:51), are experiencing price drops, signaling broader economic challenges.

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United Auto Workers and the Trump Administration

A significant portion of the episode focuses on the intricate relationship between the United Auto Workers (UAW) and the Trump administration. Nova Safo reports on this complex dynamic, featuring insights from Jason Wade, an assistant to the union's president, Shawn Fain. Wade articulates the union's cautious support for tariffs: “We are supportive of changing this system, but that doesn't mean we're supportive of everything that he's doing” (04:00). He emphasizes the potential benefits of tariffs in bringing manufacturing back to the U.S. while expressing the union's primary focus on renegotiating the USMCA to establish a more sustainable and fair trading framework.

Michigan Congresswoman Debbie Dingell provides a political perspective, noting that while tariffs might stoke inflation, autoworkers are generally supportive: “They're worried about increased prices and they're glad to see someone fighting for them” (04:44). Dingell and Wade advocate for a multifaceted approach from the Trump administration, combining tariffs with manufacturer incentives and labor-friendly policies to ensure long-term economic stability and job security.

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Venture Capital Focus on AI

Shifting gears, the report examines the surge in venture capital (VC) funding directed towards artificial intelligence (AI). According to research firm PitchBook, over a third of U.S. VC funding in the first quarter of the year went to OpenAI, with half of the remaining funding earmarked for AI-related projects. Debbie Dingell observes, “Venture capitalists are piling into AI. They have a serious case of FOMO” (05:43), highlighting the industry's intense focus on AI as the next big opportunity.

Sarah Kunz from Clio Capital discusses the trend of startups rebranding themselves to emphasize AI capabilities, acknowledging that "leaning into the AI story will help you raise money, will help your company get off the ground" (05:54). However, Emily Zung, an analyst at PitchBook, warns of potential pitfalls: if AI-focused companies fail to become profitable, the substantial investments made could lead to diminished future funding pools. Dingell concurs, questioning whether the obsession with AI might cause the industry to overlook innovations in other sectors.

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TikTok Buyer Deadline

In the final segment, Brancaccio touches on the looming deadline for TikTok's search for a non-Chinese buyer, a mandate imposed by Congress. With the deadline set to expire the next day, there is significant interest from major firms like Blackstone and Amazon. The Trump administration is likely to extend the deadline, adding uncertainty to the acquisition process and potential regulatory outcomes.

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Closing Remarks

David Brancaccio wraps up the episode by tying together the global economic tensions, shifts in labor relations, and the explosive growth in AI investments, painting a picture of an economy in flux. The episode underscores the delicate interplay between trade policies, market dynamics, and technological advancements shaping the current economic landscape.

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This summary captures the key discussions and insights from the episode, providing a comprehensive overview for listeners seeking to understand the complexities of UAW's relationship with the Trump administration, the impact of tariffs on various sectors, the surge in AI-focused venture capital, and significant corporate developments.

Timestamps:

• Market Overview: 00:01
• Impact of Tariffs on Commodities: 01:13 - 03:08
• UAW and Trump Administration: 03:18 - 05:22
• Venture Capital and AI: 05:22 - 06:44
• TikTok Buyer Deadline: 06:44 - 07:12

Transcript

[David Brancaccio]

Remember when once upon a time there was this thing called globalization? I'm David Brancaccio in Los Angeles. I'm looking at market screens now showing the tariff sell off of stocks is continuing today after The NASDAQ index fell 6% yesterday, the biggest drop since the pandemic lockdowns took hold in 2020. Nasdaq futures are down two and a quarter percent now. Dow futures down 2.3%, another 937 points after the nearly 1700 point drop yesterday, 4% there. The losses more than doubled this morning with news China is responding to new U.S. tariffs with trade penalties of its own. A 34% tariff on U.S. goods round the world stock indicators are also in red. London, Paris, Frankfurt, all down more than 2%. Tokyo's Nikkei fell 3.4% today. You get the picture. Let's do the commodities numbers. Yes, down. Crude oil in New York down 13 over two days. Copper and soybeans also down as traders factor in a US and perhaps global economic downturn amid the new Trump import taxes. Marketplace's Elizabeth Troval has that tariffs have.

[Elizabeth Troval]

Cast a shadow on the upcoming planting season. For Iowa soybean farmer Dave Walton.

[Dave Walton]

It feels a bit like today, cloudy, overcast, gray.

[Elizabeth Troval]

He says before this round of tariffs, soybean prices were almost breaking even.

[Dave Walton]

With that additional drop in price, it just, it creates more red ink. So we went from a break even or a small loss to a larger loss.

[Elizabeth Troval]

As for crude oil, the commodity of all commodities, Rabobank's Joe Delora says new tariffs make U.S. consumer products pricier. That will cool the demand for fuel for transoceanic shipping and other transportation companies.

[Dave Walton]

Are just going to cut back on orders. That's going to decrease domestic usage of logistics, transportation and shipping.

[Elizabeth Troval]

Gasoline demand could also take a hit. Consumers may be less likely to get in their cars and drive to the store.

[Dave Walton]

You're not going to go shopping at target if the $15 T shirt costs you $30.

[Elizabeth Troval]

OPEC is adding oil supply, which is also pushing down prices, lower prices that could hurt U.S. oil producers. Suzanne Lang with the Colorado School of Mines.

[Suzanne Lang]

The shale revolution means we're now, you know, big producers, the biggest producer. And so then there's sort of like an extra negative impact right on the US Economy as a result of us being big producers of oil and gas. When the price of oil and gas.

[Elizabeth Troval]

Goes down in the world of metals, volatility has taken a toll on prices, says consultant Chris Berry of House Mountain Partners. Including for copper, which was recently at.

[Dave Walton]

A high when you look at copper, it's called the meddle with the PhD in economics because it generally speaking is a pretty good predictor of economic growth in an economy. And if you're going to lay higher costs into an economy, it's going to hit copper prices in particular.

[Elizabeth Troval]

In other words, a growing economy needs more copper, A weakening one needs less. I'm Elizabeth Troval for Marketplace.

[David Brancaccio]

With the recession forecasts given tariffs, the benchmark 10 year interest rate is down at 3.88% right now, first time below 4% in a year and a half. Jeep and Ram's parent company Stellantis announced at least temporary layoffs as it alters strategy given tariffs. The Wall Street Journal says Volkswagen is planning to put an import fee line onto the sticker price of its cars. Yet tariffs are winning tentative support from the United Auto Workers union in the hope that the import taxes could bring more production back to the US in union plants. Marketplace's Nova Safo has that story.

[Nova Safo]

The United Auto Workers relationship with the Trump administration can be described as a complicated one.

[Jason Wade]

We are supportive of changing this system, but that doesn't mean we're supportive of everything that he's doing.

[Nova Safo]

Jason Wade is an assistant to the union's president, Shawn Fain. Speaking to reporters, he said the auto tariffs now in effect can help bring manufacturing back to the U.S. but the union is more focused on a renegotiation of the USMCA, the trade pact between the U.S. mexico and Canada.

[Jason Wade]

We want to have a durable rules based system that makes sense not only for corporations but for workers and the environment. And this is not it.

[Nova Safo]

This being the so called reciprocal tariffs which analysts say could stoke inflation and slow the economy. Still, Michigan Congresswoman Debbie Dingell says autoworkers are willing to give the president some leeway.

[Debbie Dingell]

I go into union house and I go in and they say two things to me. They're worried about increased prices and they're glad to see someone fighting for them.

[Nova Safo]

Dingell and Wade said they want the Trump administration to employ a broader strategy, not just tariffs, but also manufacturer incentives and supportive labor policies. I'm Nova Safa for Marketplace.

[David Brancaccio]

More than a third of US venture capital funding in the first three months of this year went to a single company, OpenAI. This from the research firm PitchBook. Of the remaining VC funding for risky new ventures, half went to other artificial intelligence projects. Brings to mind the California gold rush. Marketplace's Stephanie Hughes has that one reason.

[Debbie Dingell]

Venture capitalists are piling into AI. They have a serious case of fomo.

[Elizabeth Troval]

People tend to Chase Hot sectors Venture is a very shiny object industry.

[Debbie Dingell]

Sarah Kunz is with the venture capital firm Clio Capital. She's invested in AI companies herself and says lots of startups that were first focused on fintech or e commerce but use artificial intelligence for something are rebranding themselves as AI companies now.

[Elizabeth Troval]

Because you know that leaning into the AI story will help you raise money, will help your company get off the ground.

[Debbie Dingell]

Still, there's a drawback to all this focus on AI. Emily Zung is an analyst at PitchBook.

[David Brancaccio]

If all these companies are doing AI, are we missing out on potential innovation in other spaces?

[Debbie Dingell]

Also, Zung points out, a lot of AI focused companies have yet to make money. And if they never do, this big bet VCs are making won't pan out and they'll have less to invest with in the future. I'm Stephanie Hughes for Marketplace.

[David Brancaccio]

And the Trump administration's delay on Congress's order for TikTok to find a non Chinese buyer runs out tomorrow. There's interest from some big players from Blackstone to Amazon. The Trump team could extend the deadline. In Los Angeles, I'm David Brancaccio, Marketplace Morning Report. We're from apm, American Public Media.

[Jannelli Espinal]

If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance. Financially Inclined from Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of. I'm the host, Jannelli Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can afford, and how to talk about money with friends and family. Listen to Financially Inclined wherever you get your podcasts.