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

Summary

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

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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.

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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]

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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.

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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]

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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.

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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.

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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]

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

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

Transcript

[Alex Osola]

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[Ruth Simon]

Even some companies that manufacture in the US Are feeling some softness because their customers are uncertain and they're not investing as much.

[Alex Osola]

And why some investors have soured on Tesla. It's Monday, March 24th. I'm Alex Osila for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. First, the latest on President Trump's tariffs. Trump told reporters in the Oval Office today that he might soften reciprocal tariffs on some US Trading partners, while others might be exempt. Earlier at a Cabinet meeting, Trump said the US Will announce tariffs on automobiles soon and pharmaceuticals at some point without offering further details. His comments came a few hours after Trump said the US would impose a 25% tariff on any country that buys oil or gas from Venezuela, sending oil futures higher. US Stocks were up today as investors welcomed Trump's latest pivot on tariffs. Major US Indexes all ended the day higher. The dow rose about 1.4%, the S&P 500 was up roughly 1.8%, and the Nasdaq climbed about 2.3%. Well, the market may be into Trump's latest lighter touch approach to tariffs, but the back and forth is tough on small businesses. According to a survey conducted by Vistage Worldwide, nearly two thirds of small business owners said tariffs would hurt their business, while 8% said they'd benefit from them. Joining me now to talk about how the changing US Trade policy is affecting small businesses is our senior special writer, Ruth Simon. Ruth, why are small businesses affected more than large ones by these trade policies?

[Ruth Simon]

There are a whole bunch of different reasons why that's the case. For one thing, small businesses have thinner cash cushions and they often operate with narrower profit margins than big companies. They also are just smaller. They don't have big product and big, diverse product lines to spread things around. They're more likely to have production concentrated in one or two places and perhaps even as important or more important. Their staffs are small, so they don't have teams of supply chain experts and when somebody has to focus on tariffs, it's taking them away from, from other roles that they might have other things that they need to do. And that makes what we've been seeing lately this stop start. Today, it looks like one thing. Another day, it looks like something else. Particularly difficult for small companies to manage.

[Alex Osola]

What kinds of small businesses are feeling this squeeze?

[Ruth Simon]

There is a wide range of small businesses that are feeling pressure. One of the most obvious ones are companies that do a lot of importing from China who have things like I talked for this story to a hat maker. There are people who make aprons, who make all sorts of stationary products, all kinds of different things. But we also have companies that get components from China or components from Mexico or have moved some of their manufacturing to Mexico because they thought, hey, there are gonna be more tariffs on China. And suddenly Mexico is in the crosshairs too. Even, even some companies that manufacture in the US Are feeling some softness because their customers are uncertain and they're not investing as much.

[Alex Osola]

Okay, that seems like kind of a tough situation for some of these small businesses. What can they actually do about any of this?

[Ruth Simon]

So some of the small businesses that I talked to try to move product to the US Ahead of the tariffs to at least give them a little bit of a cushion. They also have to figure out what to do. How much do you pass on tariffs to your customers? Do you put fewer items in a package? Do you make things a little differently? And finally, they're just taking a very close look at their costs. If small businesses are suffering, that can lead to economic weakness, particularly if small businesses slow their hiring or have to lay off employees or they scale back their investments.

[Alex Osola]

That was WSJ senior special writer Ruth Simon. Thank you, Ruth.

[Ruth Simon]

It was a pleasure to join you.

[Alex Osola]

Coming up, President Trump is taking on the legal industry and big law is split on what to do about it. That's after the break. Your data is like gold to hackers. They're selling your passwords, bank details and private messages. McAfee helps stop them.

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[Alex Osola]

In legal news, the Justice Department is asking the Supreme Court to block a judge's order that required it to REINSTATE More than 16,000 fired federal employees Administration Officials are seeking the justice's intervention to clear away lower court rulings that have slowed President Trump's policies. Meanwhile, Trump has set his sights on law firms, and he's escalating his attacks on the industry. On Friday, he sent out a presidential memorandum broadly accusing law firms of abusing the legal system to challenge his policies, stymie immigration enforcement, and pursue partisan causes. Now firms are scrambling to stay out of the crosshairs. WSJ national legal affairs reporter Erin Mulvaney joins me now with more. Erin, I want to talk about what happened before Friday's memo. Earlier this month, the president signed executive orders targeting several law firms, including Paul Weiss, which challenged a number of Trump's policies during his first administration. So in these most recent executive orders, what is the president accusing these firms of?

[Erin Mulvaney]

So the president has targeted so far three firms in executive orders, and in each one, he has attached the firm to a lawyer that has worked there or represented clients that were considered his political or legal enemies in various ways. And then the result is that the firm has security clearances removed, the lawyers at the firm cannot access federal buildings, and the agencies are directed to remove federal contracts from any firms or their clients. So it's pretty sweeping. That's at least for two of the executive orders. One of them was a little more narrow, but that's why law firms are scrambling. It's pretty sweeping consequences of those orders.

[Alex Osola]

So Paul Weiss was sort of confronted with this situation from the president. What did the firm do about it?

[Erin Mulvaney]

But first they, they were preparing to fight. They were hiring some really important litigation firms to back them and discussing how to put a lawsuit together. But instead, the chair also took this other path where he made his way to the White House and went to the Oval Office, met with Trump, and they hashed out an agreement that would allow Trump to rescind the executive order in exchange for a few things like $40 million to certain pro bono services. The administration cares about veterans and fights against anti Semitism and generally just a support for not taking on clients that are partisan. That's basically how he got out of it.

[Alex Osola]

All right, so firms are confronted with a situation that could turn into something similar to Paul Weiss. What are they doing about it?

[Erin Mulvaney]

They're really trying to decide how to respond because there is a, a divide among firms clients, which is usually the most important thing to them, as it's their business clients, or some of them are asking them to support efforts to fight back against these orders. Others say, please stay out of this. We don't want the president to come after us. And then they have the internal forces of the lawyers within the firm having different views on what the best course of action is as well. And in the meantime, they definitely just want to keep their heads down, not make big public statements or swings against the president and his actions against the legal industry out of fear that they'd be the next target.

[Alex Osola]

But not everyone is adopting that approach. Right. What is Perkins Coie doing?

[Erin Mulvaney]

So Perkins Coie sued the administration over the order, and almost immediately they did get an emergency ruling from a judge who blocked the order from taking effect. So agencies can no longer take those actions that I mentioned to stop their lawyers from entering buildings. There is an order against that order right now because Perkins Coie will be suing and that litigation will continue in court. The broader concern is that this chill in the legal industry is quite unprecedented and there could be broad repercussions on firms across the board.

[Alex Osola]

That was national legal affairs reporter Erin Mulvaney. Thank you, Erin.

[Erin Mulvaney]

Thank you.

[Alex Osola]

Now over to the auto sector. South Korea's Hyundai is planning to invest $20 billion in U.S. manufacturing. The company plans to open an additional auto plant in Georgia, as well as a $5 billion steel plant in Louisiana. President Trump announced the plans from the White House this afternoon with Louisiana Governor Jeff Landry. Chinese automaker BYD has hit $100 billion in sales, racing past rival Tesla. BYD says revenue last year grew to the equivalent of $107 billion, beating Tesla's revenue of 97.7 billion for the year. BYD isn't as profitable as Tesla, but it's catching up fast. And speaking of Tesla, for years, investors have flocked to the electric vehicle company, many driven by confidence in CEO Elon Musk and his techno utopian vision for the EV maker. As recently as a few months ago, investors were betting that a second Trump administration would be great for the company. Instead, shares have fallen more than 30% this year as of today's close. So why are investors jumping ship? Some tell us it's because of Musk's behavior as part of the Trump administration. But as reporter Hannah Aaron Lang told our Tech News Briefing podcast, broader economic uncertainty is also a big factor. There's concerns about a trade war, there's concerns about the economy, and even concerns about artificial intelligence. And, you know, if it's really going to deliver profits at these companies as promised, Tesla stock is definitely being impacted.

[Erin Mulvaney]

By those broader market trends.

[Alex Osola]

But I do think Tesla has faced some unique problems. The company has seen some hits to their sales numbers, competition in the electric vehicle industry is intensifying.

[Erin Mulvaney]

So I think that there are Tesla specific challenges, there are Musk specific challenges.

[Alex Osola]

And also just broader market dynamics at work here. You can hear more from Hannah in today's episode of Tech News Briefing. In other news, German business software group SAP is now Europe's largest company by market value. Its ascent comes as the company moves away from sales of software licenses in favor of subscription based cloud services. SAP took the crown from Danish pharmaceutical giant Novo Nordisk, the maker of blockbuster drugs Wegovy and Ozempic. Separately, Novo Nordisk has agreed to pay up to $2 billion for the rights to a developmental drug from a Chinese pharmaceutical company company. The drug, called UBT251, targets three different hormones to treat obesity, type 2 diabetes and other diseases. And that's what's news for this Monday afternoon. Today's show is produced by Pierre Bienname and Anthony Banci with Deputy editor Chris Zinsley. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for.