WSJ What’s News: "Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?"

Release Date: March 24, 2025
Host: Alex Osola
Produced by: The Wall Street Journal

1. Introduction

In this episode of WSJ What’s News, host Alex Osola delves into the ramifications of President Trump's evolving trade policies on small businesses and examines the legal industry's divisive response to the President's recent attacks on major law firms. Additionally, the episode touches upon significant developments in the auto sector and notable movements within the business software and pharmaceutical industries.

2. President Trump’s Tariffs and Their Impact on Small Businesses

Timestamp: [00:00] – [05:08]

President Trump continues to adjust his tariffs strategy, aiming to impose new tariffs on automobiles and pharmaceuticals while potentially softening tariffs on certain U.S. trading partners. These fluctuations have led to increased market volatility, with major U.S. indexes—Dow Jones up by 1.4%, S&P 500 by 1.8%, and Nasdaq by 2.3%—responding positively to the latest tariff adjustments.

However, Ruth Simon, senior special writer at WSJ, highlights the disproportionate impact these policies have on small businesses. According to a Vistage Worldwide survey cited by Simon, nearly two-thirds of small business owners believe tariffs will adversely affect their operations, with only 8% expecting benefits.

Ruth Simon explains:

"Small businesses have thinner cash cushions and narrower profit margins than big companies. They don't have big, diverse product lines to spread things around, making them more vulnerable to tariff-induced disruptions."
[02:28]

Key Challenges for Small Businesses:

• Financial Strain: Limited cash reserves and tight profit margins.
• Operational Limitations: Concentrated production sites and lack of specialized supply chain teams.
• Market Uncertainty: Fluctuating policies create an unpredictable business environment.

Strategies Adopted by Small Businesses:

• Relocating Production: Moving products to the U.S. ahead of tariffs to mitigate impact.
• Cost Management: Reevaluating pricing strategies, reducing package sizes, and altering product designs.
• Cost-Cutting Measures: Tightening budgets to prevent layoffs and reduce investment.

Ruth Simon adds:

"If small businesses are suffering, that can lead to economic weakness, particularly if they slow their hiring or have to scale back their investments."
[05:08]

3. President Trump’s Assault on the Legal Industry

Timestamp: [06:01] – [10:08]

President Trump has intensified his criticism of the legal sector, specifically targeting major law firms through executive orders. These orders accuse firms like Paul Weiss of undermining his administration by challenging policies, delaying immigration enforcement, and pursuing partisan causes.

Erin Mulvaney, WSJ national legal affairs reporter, details the administration's actions:

"The president has targeted three firms in executive orders, associating each with lawyers deemed his political or legal adversaries. Consequences include the removal of security clearances, barring lawyers from federal buildings, and revoking federal contracts."
[07:00]

Paul Weiss Case: Initially preparing to litigate, Paul Weiss negotiated directly with the White House. The firm secured an agreement allowing the rescission of the executive order in exchange for commitments to support veterans, combat anti-Semitism, and avoid partisan client engagements. This negotiation underscores the high stakes law firms face under Trump's directives.

Internal Divide Within Law Firms: Law firms are now split on how to respond:

• Push Back: Firms like Perkins Coie are actively suing the administration, successfully obtaining temporary relief from court orders.
• Lay Low: Other firms prefer to avoid confrontation, fearing further repercussions without making public statements.

Erin Mulvaney observes:

"Firms are trying to decide how to respond because there is a divide among firms' clients and within the firms themselves on the best course of action."
[09:27]

Perkins Coie’s Legal Battle: Perkins Coie took a strong stance by suing the administration, resulting in an emergency court ruling that temporarily blocks the executive orders. This legal fight exemplifies the broader resistance within the legal industry against the administration's attempts to curb its influence.

Broader Implications: The ongoing conflict may lead to unprecedented chills within the legal sector, potentially affecting firms globally and altering the landscape of legal practices in the U.S.

4. Developments in the Auto Sector

Timestamp: [10:08] – [11:56]

Hyundai’s Expansion in the U.S.: South Korea’s Hyundai is set to invest $20 billion in U.S. manufacturing, including a new auto plant in Georgia and a $5 billion steel plant in Louisiana. Announced by President Trump alongside Louisiana Governor Jeff Landry, this investment underscores Hyundai’s commitment to expanding its presence in the American market.

BYD Surpasses Tesla in Revenue: Chinese automaker BYD has achieved $107 billion in revenue, surpassing Tesla’s $97.7 billion for the year. Although BYD's profitability trails Tesla's, the company is rapidly closing the gap, reflecting the intense competition within the electric vehicle (EV) industry.

Tesla’s Stock Decline: Despite previous investor confidence buoyed by CEO Elon Musk’s vision, Tesla's stock has declined over 30% this year. Factors contributing to this downturn include:

• Economic Uncertainty: Concerns over a potential trade war, overall economic health, and the impact of artificial intelligence.
• Competitive Pressure: Increased competition in the EV market.
• Leadership Challenges: Musk’s behavior and actions under the Trump administration have also played a role.

Hannah Aaron Lang, WSJ reporter, notes:

"Broader economic uncertainty is a big factor, along with concerns about the trade war and AI, affecting investor confidence in Tesla."
[11:37]

5. Business Software and Pharmaceutical News

SAP Becomes Europe’s Largest Company: German business software giant SAP has overtaken Danish pharmaceutical company Novo Nordisk to become Europe’s largest company by market value. This milestone is attributed to SAP’s strategic shift from selling software licenses to offering subscription-based cloud services.

Novo Nordisk’s Strategic Acquisition: Novo Nordisk has agreed to acquire developmental drug UBT251 from a Chinese pharmaceutical company for up to $2 billion. The drug targets three hormones to treat obesity, type 2 diabetes, and other related diseases, positioning Novo Nordisk at the forefront of innovative diabetes and obesity treatments.

6. Conclusion

In this episode, WSJ What’s News provides a comprehensive overview of the current economic and legal landscape shaped by President Trump’s policies. From the challenging environment for small businesses navigating fluctuating tariffs to the legal industry's internal conflicts amid executive orders targeting major law firms, the episode underscores the intricate interplay between government actions and business responses. Additionally, significant movements in the auto sector and strategic shifts within the software and pharmaceutical industries highlight the dynamic nature of today's global markets.

Notable Quotes:

• Ruth Simon:

  "Small businesses have thinner cash cushions and narrower profit margins than big companies."
  [02:28]

• Erin Mulvaney:

  "The president has targeted three firms in executive orders... it's pretty sweeping."
  [07:00]

• Hannah Aaron Lang:

  "Broader economic uncertainty is a big factor, along with concerns about the trade war and AI, affecting investor confidence in Tesla."
  [11:37]

Produced by: Pierre Bienname and Anthony Banci
Deputy Editor: Chris Zinsley

For more updates and in-depth analysis, tune in to the next episode of WSJ What’s News.