WSJ What’s News – Episode Summary: "Automakers Are Scrambling Ahead of Trump’s Tariffs"

Release Date: February 19, 2025

The Wall Street Journal's podcast episode titled "Automakers Are Scrambling Ahead of Trump’s Tariffs," hosted by Alex Osola, delves into the escalating tensions between President Donald Trump and Ukrainian President Volodymyr Zelenskyy, the potential impact of Trump's proposed tariffs on the global automotive industry, and other significant business and political developments influencing markets.

1. Escalating US-Ukraine Tensions

The episode opens with a heated exchange between President Trump and President Zelenskyy, marking a significant deterioration in US-Ukraine relations.

• Trump’s Accusations Against Zelenskyy

  President Trump intensified his criticism of Zelenskyy by labeling him a "dictator without elections" (00:55). This follows Zelenskyy's assertion that Trump was disseminating "Russian propaganda points" (00:55).

• Zelenskyy's Rebuke

  In response, Zelenskyy accused Trump of living in a "disinformation space" (02:22) and criticized his leadership, stating that Trump had "done a terrible job as president" (00:55).

• Implications for the Ukraine Conflict

  This feud complicates efforts to resolve the war in Ukraine, which erupted three years prior when Russian President Vladimir Putin initiated a large-scale invasion. Trump's recent claims that Zelenskyy initiated the war further exacerbate the rift (00:55).

• Broader Geopolitical Shifts

  Amidst the US-Ukraine conflict, Denmark announced a significant increase in its military budget, committing an additional $7 billion over two years, bringing its annual defense spending to over 3% of its GDP (01:14). This move positions Denmark as a leading European nation bolstering its defenses against the Russian threat, aligning with Trump's demands for allies to contribute more to their security.

2. Impact of Trump’s Proposed Tariffs on the Automotive Industry

A substantial portion of the episode is dedicated to analyzing how President Trump's proposed tariffs could reshape the global automotive landscape.

• Trump's Tariff Proposals

  President Trump has indicated intentions to impose tariffs in the "neighborhood of 20-25%" on the auto industry, with the possibility of these rates increasing further (03:05). These tariffs could be accompanied by reciprocal tariffs on imports from other nations facing US trade restrictions (03:05).

• Automakers’ Vulnerability

  Stephen Wilmot, the WSJ European Autos reporter, provides an in-depth analysis of the potential repercussions for foreign and domestic carmakers:

  • Foreign Carmakers:

    "They're very exposed. Firstly, because the US is in many cases their most important market... just under 16 million cars were sold in the US last year. Of those, 8 million were imported... another 4 million imported from principally Japan, South Korea, and Germany" (03:14-03:57).

  • Domestic Carmakers:

    Domestic manufacturers are equally at risk, especially those reliant on trade with Mexico and Canada. "Domestic carmakers are obviously very worried about the proposed 25% tariff on Mexican and Canadian manufactured cars because they rely very heavily on trading parts and vehicles across the US land borders" (04:04).

• Response Strategies

  While shifting production to the US would be an ideal strategy from Trump's perspective, Wilmot highlights the complexities involved:

  "It's really not simple for a carmaker to simply move production from here to there because it costs a lot. It takes a lot of time to set up production for a vehicle in a new factory... they would be very reluctant to invest purely on the basis of tariffs alone" (05:01-05:36).

  Consequently, automakers are grappling with uncertainty, weighing the long-term benefits of investing in US manufacturing against the immediate financial burdens imposed by tariffs.

3. Nikola’s Bankruptcy Filing

In a significant development within the automotive sector, Nikola, the hydrogen truck manufacturer that once rivaled established brands like Ford, has filed for Chapter 11 bankruptcy in a Wilmington, Delaware court (05:41). The company plans to conduct a court-supervised auction of its assets. This downfall underscores the volatile nature of the green investment landscape and serves as a cautionary tale about the challenges faced by startups in sustaining momentum.

4. Market Reactions and Economic Indicators

Amidst the tariff threats and geopolitical tensions, major US stock indexes demonstrated resilience:

• Stock Market Performance

  Despite the anxiety surrounding tariffs, the S&P 500 rose by approximately 0.25%, the Dow Jones Industrial Average increased by 0.2%, and the Nasdaq saw a modest uptick of less than 0.1% (Notes).

• Federal Reserve’s Stance

  Minutes from the Federal Reserve's latest meeting revealed that officials are comfortable maintaining steady interest rates, with no immediate plans to adjust their "wait and see" approach regarding future rate cuts. The next Fed meeting is scheduled for March 18 (Notes).

5. Technological Advancements and Innovations

• Apple’s iPhone 16e Launch

  Apple has introduced the iPhone 16e, featuring the company's first in-house cellular chip, the C1. This strategic move aims to reduce dependency on external chipmakers like Qualcomm, potentially saving Apple billions in annual costs (Notes).

• AI in Startup Predictions

  Crunchbase is leveraging artificial intelligence to predict the trajectory of startups, aiming to assist investors in identifying promising ventures. Bel Lynn, WSJ reporter covering AI and enterprise technology, explains that Crunchbase's AI can forecast fundraising activities and growth trends with up to 95% accuracy through historical data analysis (08:06-09:58).

6. Shifts in Subscription Models

The podcast also explores the rise of lifetime subscriptions in the app market:

• Advantages

  According to WSJ personal tech columnist Nicole Nguyen, lifetime subscriptions encourage consumers to evaluate the actual utility of a service, eliminating recurring monthly fees and potentially offering long-term savings if the service remains valuable (10:35-10:45).

• Disadvantages

  However, there are risks, such as the possibility of the service provider shutting down prematurely, competitors offering similar services at lower costs, and users forgetting about their subscriptions due to the absence of regular billing reminders (10:45-11:31).

7. Additional Insights and Resources

• Nikola’s Story

  For those interested in the rise and fall of Nikola, the episode references a previous podcast series, "Bad Bets," hosted by Ben Foldy, available via a provided link (05:39).

• Bonus Content

  The episode mentions an exclusive bonus segment in the "What's News and Earnings" feed, which examines the oil industry's transition from boom times to the current landscape under President Trump's administration and his promises to lower gas prices (11:31).

Conclusion

In this episode of WSJ What’s News, Alex Osola effectively navigates through a complex web of political tensions and economic policies that have profound implications for global markets and industries. President Trump's aggressive tariff proposals present significant challenges for automakers, both foreign and domestic, forcing them to reconsider their manufacturing and trade strategies amidst an uncertain economic landscape. Additionally, the episode sheds light on technological innovations, market responses, and evolving business models, providing listeners with a comprehensive overview of the factors shaping today's financial and political arenas.

Notable Quotes:

• Stephen Wilmot on Automakers’ Exposure:

  "They're very exposed. Firstly, because the US is in many cases their most important market... just under 16 million cars were sold in the US last year. Of those, 8 million were imported... another 4 million imported from principally Japan, South Korea, and Germany." (03:14-03:57)

• Alex Osola on Tariff Impact:

  "That was European autos reporter Stephen Wilmot. Thanks, Steven." (05:36)

• Bel Lynn on Crunchbase’s AI Accuracy:

  "Crunchbase says that they are up to 95% accurate for certain types of data." (08:32)

• Nicole Nguyen on Lifetime Subscriptions:

  "It forces people to really pause and reflect on whether or not that service is useful in their life, which is a great thing." (10:35)

Produced by: Anthony Banci and Pierre Bienname
Supervising Producer: Michael Cosmitis
Host: Alex Osola

For more detailed discussions and future episodes, subscribe to WSJ What’s News and stay informed on the developments that shape our world.