WSJ What’s News: China Vows to Fight U.S. Tariffs ‘To The End’
Release Date: April 8, 2025

In this episode of WSJ What’s News, hosted by Luke Vargas, the Wall Street Journal delves into the escalating trade tensions between the United States and China, the consequential shifts in global markets, and the broader geopolitical impacts. The episode also explores significant developments in U.S. immigration policy, nuclear negotiations with Iran, and the current state of the U.S.-Mexico border.

1. Escalating US-China Trade War

Trump's Additional Tariff Threats

The episode opens with President Donald Trump's recent announcement threatening to impose an additional 50% tariff on Chinese goods, a move that has significantly heightened tensions between the two economic giants. Luke Vargas contextualizes the gravity of this threat:

“China is vowing to fight until the end in response to new US Tariffs a day after President Trump threatened to raise duties on Chinese goods by an additional 50%.” (00:32)

China's Determined Response

China has responded steadfastly, pledging to counteract these tariffs fiercely. Alex Frangos, the Journal's finance editor for Europe, provides an in-depth analysis:

“If a country imposes massive tariffs on you, you would expect your currency to weaken as a way to adjust to that condition and make your goods cheaper vis a vis the tariffs that were just imposed.” (01:40)

Frangos explains that China recently set the yuan at a weaker level than in months, a strategic move aimed at boosting exports and supporting domestic markets amidst the tariff pressures.

Monetary Policy Shifts and Market Support

The weakening of the yuan is part of a broader strategy to stabilize China's economy. Frangos notes:

“The Chinese government's trying to support the economy, support the market as a show of force against what Trump has thrown at them.” (02:32)

China has also encouraged state-owned enterprises to purchase stocks, leading to a modest recovery in Chinese and Hong Kong markets. This intervention is intended to counteract the negative impact of the tariffs and demonstrate resilience.

2. Shifts in US Corporate Supply Chains

Corporate Relocation Efforts

In response to the looming tariffs, U.S. businesses are actively seeking to mitigate potential disruptions. Notably, Apple is reportedly shifting parts of its iPhone production from China to India as a temporary measure:

“Apple, reportedly looking to shift their supply chain and source more iPhones from India.” (03:54)

Challenges in Supply Chain Realignment

Despite these efforts, changing supply chains is proving to be challenging. A report commissioned by the U.S. Chamber of Commerce Foundation highlights that many American companies intend to maintain or even strengthen their ties with China due to the complexity and time required to restructure supply chains effectively.

“...changing supply chains is a lot easier said than done.” (05:00)

Businesses are navigating a delicate balance, attempting to limit price increases while managing the uncertainty surrounding potential long-term tariff implementations.

3. US Supreme Court Rulings on Deportations

Deportation of Venezuelan Gang Members

In Washington, the Supreme Court has recently lifted a block on the deportation of suspected Venezuelan gang members to El Salvador. This 5-4 ruling allows the Trump administration to expedite removals under the ancient Alien Enemies Act, albeit with a provision for detainees to contest their deportation in federal court.

Case of Kilmar Abrego Garcia

A notable case involves Kilmar Abrego Garcia, a Maryland resident mistakenly deported to El Salvador. Despite an immigration judge ruling that he would likely face persecution, the administration has paused his deportation after Chief Justice John Roberts extended a midnight deadline.

“Abrego Garcia's lawyers panned Robert's move for enabling the executive branch to violate court orders...” (06:02)

This case underscores the tension between the executive branch's immigration policies and judicial oversight, highlighting potential vulnerabilities in the separation of powers.

4. US-Iran Nuclear Talks

High-Stakes Negotiations

The United States and Iran have agreed to engage in high-stakes talks in Oman to address Tehran's nuclear program. These negotiations are critical, as President Trump has signaled a willingness to consider military action if no agreement is reached.

“The talks will test Trump's ability to roll back Iran's nuclear program that's left it closer than ever to a workable weapon.” (07:24)

Strategic Implications

Alex Frangos emphasizes the importance of reaching a deal:

“Doing a deal would be preferable to doing the obvious, and the obvious is not something that I want to be involved with...” (07:37)

A successful negotiation could stabilize regional tensions, while failure might escalate conflict involving key allies like Israel.

5. Quiet at the US-Mexico Border

Dramatic Decline in Illegal Crossings

Cajel Villas, the Journal's correspondent, reports an unprecedented reduction in illegal crossings at the U.S.-Mexico border. Recent U.S. Customs and Border Patrol data indicate over 7,000 encounters last month, a stark decrease from nearly 190,000 in the same period the previous year.

“We've seen the number of people trying to illegally cross into the US just plummet more than 90%.” (09:18)

Enhanced Border Security Measures

This decline is attributed to intensified law enforcement efforts and heightened surveillance. Villas describes the border area as "eerily quiet," with both U.S. military and Mexican state police deploying extensive operations to monitor and control the border effectively.

Impact on Cross-Border Trade

The strict border measures have also affected trade between the two nations. Cross-border commerce, valued at over $800 billion last year, has seen a significant slowdown. Specifically, truck crossings in Ciudad Juarez have dropped sharply following the imposition of tariffs, with a 14% decline on the third day of the tariff trial run.

“...we're coming across this very pivotal moment where this could very much be disrupted or even ruptured.” (11:13)

Potential Consequences for US-Mexico Relations

The strained trade environment threatens to disrupt the highly integrated economies of the U.S. and Mexico. Additionally, Mexican officials fear that severe tariffs could undermine cooperation on migration and security fronts, potentially jeopardizing successful joint operations against drug trafficking.

“...we've heard this from Mexican officials directly that if they are slapped with very painful tariffs, it could affect their cooperation on the security and migration front.” (12:18)

This episode of WSJ What’s News provides a comprehensive overview of the current geopolitical and economic landscape, highlighting the intricate interplay between U.S. policy decisions and global market reactions. From the intensifying US-China trade war to the quiet on the US-Mexico border, the Wall Street Journal offers valuable insights into the forces shaping today's world.