WSJ What’s News: "Chips, Juice and Airplanes - Exemptions Confuse as Tariffs Kick In"

Release Date: August 7, 2025
Host: Azhar Sukri
Podcast: WSJ What’s News by The Wall Street Journal

Introduction

In the August 7th episode of WSJ What’s News, host Azhar Sukri delves into the complexities of the ongoing U.S.-China trade war, focusing on recent tariff implementations and their broad-reaching impacts. The episode, titled "Chips, Juice and Airplanes - Exemptions Confuse as Tariffs Kick In," explores how new tariffs are affecting various industries, the confusion arising from exemptions, and the consequential strain on global trade relationships.

Trump’s Tariff Announcement and Exemptions

The episode opens with significant news that President Donald Trump has imposed a 100% tariff on semiconductor chips but has granted exemptions to major tech firms like Apple. This move has led to a surge in tech stocks, as highlighted by Azhar Sukri at [00:33].

Key Highlights:

• Apple’s Investment Pledge: Apple CEO Tim Cook announced an additional $100 billion investment in the U.S., supplementing the company’s previous $500 billion commitment in February. At [01:44], President Trump states, “...the company is also unveiling its ambitious new American manufacturing program, which will bring factories and assembly lines across our country all roaring to life.”

• Market Reaction: According to Journal finance editor Alex Frangos at [02:17], the markets have reacted positively, indicating investor confidence despite the overarching tariff threats. Frangos observes, “The investors seem to be welcoming the bonhomie between the big tech companies and Trump.”

Market and Tech Industry Reaction

The exemptions have created a complex landscape as reciprocal tariffs begin affecting U.S. trading partners. Alex Frangos discusses the initial market stability, noting that while tariffs are high, the negotiated exemptions provide a “Swiss cheese of exemptions and carve outs” that obscure the full impact of the tariffs ([03:10]).

Notable Quote:

“There’s this feeling that at the top level, Trump is throwing out these tariffs, but underneath it, he’s making life palatable for everyone.” – Alex Frangos [02:17]

Impact on Global Automakers

The trade war's repercussions extend beyond the tech sector into the automotive industry. The episode cites a Journal tally revealing nearly $12 billion in losses for global automakers this earnings season. Toyota alone reported a $3.1 billion reduction in operating profit for the second quarter ([03:56]).

Insights from Stephen Wilmot: Stephen Wilmot explains the automotive sector's predicament, stating at [04:27], “These are companies with high fixed costs, very inflexible production works,” highlighting the industry's limited ability to maneuver swiftly in response to tariffs. He further elaborates on the trend toward regional production hubs as a long-term strategy cemented by the current tariffs.

Effects on Developing Countries: The Case of Indonesia

A significant portion of the episode examines the adverse effects of U.S. tariffs on developing nations, with a focus on Indonesia. Senior reporter John Emont discusses how a 19% tariff on Indonesian exports threatens jobs and economic stability in regions reliant on labor-intensive products like shoes, clothing, and textiles ([05:51]).

Key Points:

• Trade Dependency: Indonesia ranks as the U.S.’s second-largest trading partner after China, heavily depending on exporting labor-intensive goods to the American market ([06:25]).

• Economic Strain: Reduced U.S. demand due to tariffs may lead to decreased employment opportunities in Indonesia’s manufacturing sectors.

Notable Quote:

“The United States actually buys a lot of the labor intensive products... whereas China tends to buy more commodities that tend to be less labor intensive.” – Ryan Reynolds [06:25]

Note: The transcript attributes this statement to Ryan Reynolds, likely an error, as Ryan Reynolds is associated with Mint Mobile advertisements in this episode.

Economic Rationale Behind U.S. Tariffs

The discussion shifts to exploring the United States' motivations for imposing high tariffs on some of the world’s poorest countries. The analysis suggests that President Trump’s focus on trade deficits drives the targeting of nations that cannot significantly boost their imports of U.S. goods, thereby exacerbating trade surpluses ([08:10]).

Insights from Ryan Reynolds: Reynolds posits that the tariffs are strategically aimed at reducing trade imbalances, albeit at the cost of straining relationships with nations like Lesotho and India ([08:25]).

Notable Quote:

“Sometimes it definitely feels a little bit confounding, like why would we be punishing Lesotho? Other times it may be makes a little bit more sense...” – Ryan Reynolds [08:25]

Again, the attribution to Ryan Reynolds seems misplaced within the context of trade analysis.

Additional Business News Briefs

While the core focus remains on the trade war, the episode also touches upon other significant business developments:

• United Airlines Outage: A major system-wide technology issue caused United Airlines to cancel over 60 flights and delay more than 1,000 departures. The problem centered around the Unimatic system, crucial for flight data management ([10:22]).

• Microsoft’s AI Recruitment Drive: Microsoft has hired Mustafa Suleiman, a founder of Google’s DeepMind, to spearhead its AI division. This strategic move mirrors Meta Platforms’ tactics, aiming to bolster Microsoft’s competitive edge in the AI sector by attracting top talent through higher pay and a startup-like environment ([10:22]).

• Italy’s New Suspension Bridge: Italy is proceeding with plans to construct the world’s longest suspension bridge, linking Sicily to the mainland. The two-mile bridge, projected to cost $15.6 billion, symbolizes a century-old ambition to unify the nation and stimulate economic development in historically impoverished regions ([12:16]).

Notable Quote:

“This is a project that has been talked about literally since the 19th century...” – Margarita Stancati [12:16]

Conclusion

The episode concludes by highlighting the intricate balance the U.S. is attempting to maintain between enforcing trade tariffs and providing exemptions to key industries and companies. As Azhar Sukri summarizes, the trade war remains a dynamic and evolving situation with significant implications for global markets, industries, and economies.

Closing Note:

"That’s it for what’s news for this Thursday morning." – Azhar Sukri [13:08]

Produced by: Kate Bullivant and Daniel Bark
Supervising Producer: Sandra Kilhoff

This comprehensive analysis provides listeners with an in-depth understanding of the current state of international trade, the strategic maneuvers of major corporations, and the broader economic consequences of protectionist policies. For those seeking to grasp the nuances of today's global market dynamics, this episode offers valuable insights and expert commentary.