Corporate America Is Picking Up the Tab for Trump’s Tariffs

Summary

WSJ What’s News: Corporate America Is Picking Up the Tab for Trump’s Tariffs

Release Date: July 25, 2025
Host: Gene Whalen, The Wall Street Journal

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Corporate America Bearing the Cost of Tariffs

In the latest episode of WSJ What’s News, Gene Whalen delves into the financial implications of President Trump’s tariffs on Corporate America. As the United States has accumulated an additional $55 billion in tariffs this year, businesses are predominantly absorbing these costs. Gene explains, “Tariffs are typically paid by importers when goods reach US ports, so it's usually a manufacturer, a logistics or customs broker, or a retailer that ordered the shipment” (01:00).

Natalie Andrews, a seasoned economist, elaborates on the strategies businesses are employing to manage these tariffs. She states, “Businesses so far they're paying the higher tariffs when goods arrive at port or when they buy the goods from some other company that has imported them” (01:38). Companies are hesitant to raise prices prematurely, fearing a competitive disadvantage and potential backlash from the Trump administration. Andrews highlights that “most economists expect companies to pass this along to consumers in one way or another” (02:37), either through increased prices or by cutting costs in other areas like hiring and product development.

Foreign Suppliers and Consumer Impact

A key factor in this dynamic is the role of foreign suppliers. Natalie points out, “Foreign suppliers are not cutting their prices, so that means foreign companies are not footing the bill” (03:10). This situation forces US companies and ultimately consumers to bear the financial burden. Despite these tariffs, consumer inflation hasn’t surged significantly yet, suggesting that the primary impact remains within Corporate America.

Prospects for a US-Europe Trade Deal

Amidst these tariff challenges, there is growing optimism for a trade agreement between the US and Europe. European Commission President Ursula von der Leyen has engaged in high-level discussions with President Trump, with plans to meet in Scotland to negotiate transatlantic trade relations. Whalen notes, “European officials are optimistic that they're nearing an agreement on an outline deal that could see the European Union accept 15% baseline tariffs on most goods” (04:00). However, any agreement remains contingent on Trump’s approval and his potential push for additional concessions.

Stock Market Reactions and Technology Companies' Policy Shifts

The episode also covers the recent performance of major stock indices. The S&P 500 reached its fifth consecutive record close, marking the longest streak in over a year, while the Nasdaq and Dow saw slight gains (05:00). In related news, Meta Platforms and Alphabet’s Google have decided to halt political advertisements in the European Union. Meta cited new EU laws aimed at combating misinformation and foreign interference as the reason for this move, aligning with Google’s similar decision made last November (05:30).

Controversies Surrounding Jeffrey Epstein’s Birthday Book

A controversial topic discussed is the revelation about Jeffrey Epstein’s 2003 birthday book, which prominently features past presidents rather than future ones. The book includes a notable entry from Bill Clinton, among other high-profile figures such as Donald Trump and Leon Black. Clinton’s representative stated that he had severed ties with Epstein over a decade ago and was unaware of Epstein’s alleged crimes (06:00). This revelation has sparked discussions about the extent of Epstein’s influence and the nature of his associations with powerful individuals.

Banks Becoming More Selective with Credit Card Offerings

Shifting focus to the financial sector, Imani Moise, the WSJ personal economics reporter, discusses how banks are increasingly selective in issuing credit cards. “Banks really want the big spenders, people with high credit scores, people who are going to charge maybe $4,000 a month on a card and pay it off” (07:33). Approximately 80% of credit card offers are now directed toward individuals with exceptional credit scores (above 780). This strategy is a cautious response to economic uncertainties, including potential rising unemployment and ongoing trade tensions. Moise explains, “It shows that banks are cautious… they are hedging a bit by focusing on customers that they see as safer” (08:26).

White House’s Initiative to Fine Universities Over Antisemitism

The White House is actively seeking fines from several universities accused of failing to curb antisemitism on campus. Natalie Andrews, White House correspondent, reports that Columbia University has agreed to pay $200 million, setting a precedent for other institutions like Cornell, Duke, and Harvard. These universities are navigating a delicate balance between securing federal funding and maintaining their reputations among alumni and faculty. Andrews notes, “This is a delicate dance for a lot of these schools who are trying to please their alumni, their faculty and also get that federal funding back” (09:46).

Shooting at the University of New Mexico

Tragically, the episode also covers a recent shooting at the University of New Mexico, resulting in one death and another injury. The incident has led to a lockdown as authorities search for the suspect. Official statements confirmed that the surviving victim’s injuries are not life-threatening, but details about the shooter and the deceased remain undisclosed (09:21).

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Looking Ahead

Tomorrow’s episode will feature a weekly markets wrap-up, and Sunday’s What’s News will include an in-depth discussion on the ambitious plans to reboot America’s nuclear energy program.

Notable Quotes:

• Natalie Andrews: “Most economists expect companies to pass this along to consumers in one way or another.” (02:37)
• Imani Moise: “Banks really want the big spenders, people with high credit scores, people who are going to charge maybe $4,000 a month on a card and pay it off.” (07:33)

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Produced by Pierre Biennime with Supervising Producer Michael Cosmides. Theme music by Michael Lavall. Development Producer Aisha El Musleam. Deputy Editors Scott Salloway and Chris Zinsley. Head of News Audio Falana Patterson.

Transcript

[Alex Zosalev]

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[Imani Moise]

You can Venmo that.

[Alex Zosalev]

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[Gene Whalen]

American corporations are footing the bill for Trump's tariffs as hopes rise for a trade deal between the US And Europe.

[Imani Moise]

Please.

[Gene Whalen]

Plus, banks are getting pickier about who they want to hold their credit cards.

[Imani Moise]

It shows that banks are cautious. The economy continues to be really, really strong, but there are some concerns. So they are hedging a bit by focusing on customers that they see as.

[Gene Whalen]

Safer and how the Trump administration is looking to strike deals with universities like it did with Columbia. It's Friday, July 25th. I'm Alex Zosalev for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the the US has collected an additional $55 billion in tariffs this year so far. Corporate America has largely shouldered the bill. Now, who's making that first payment isn't much of a mystery. Tariffs are typically paid by importers when goods reach US Ports, so it's usually a manufacturer, a logistics or customs broker, or a retailer that ordered the shipment. But economists and others have been watching for signs of who will ultimately bear the cost. For more, I'm joined by Wall Street Journal economics reporter Gene Whalen. Gene, what is the strategy for businesses to be shouldering this cost right now?

[Natalie Andrews]

Well, businesses so far they're paying the higher tariffs when goods arrive at port or when they buy the goods from some other company that has imported them. And the strategy is mostly they don't really know how long these tariffs are sticking around and so they don't really want to go through the hassle of raising their prices before they're sure that the tariffs are permanent. They also don't want to raise prices quickly if their competitors are not doing it yet. So they don't want to get out of step with the competition. And in a minority of cases, they're probably concerned also about raising the ire of President Trump, who has attacked some companies, including Walmart, for announcing price increases because of tariffs. A fourth is many of them also stocked up on a lot of goods, so some of them are still making their way through that pre tariff inventory and therefore don't need to raise prices on that inventory.

[Gene Whalen]

Yet will these costs eventually get passed on to consumers?

[Natalie Andrews]

Eventually? Most economists expect companies to pass this along to consumers in one way or another. The most obvious way would be to raise prices to match the tariff level. Another way companies pass on the pain to the rest of us is they don't hire as many people. They may fire people. They may not introduce as many new products that maybe we all want. They may decide that importing something is too expensive and they're not really able to charge enough to make it worth their while.

[Gene Whalen]

What role are foreign suppliers playing in this dynamic?

[Natalie Andrews]

Broadly, foreign suppliers are not cutting their prices, so that means foreign companies are not footing the bill. And so that leaves US Companies and consumers to absorb the cost. At the same time, we haven't really seen consumer inflation go up very much yet, which means the rest of us are not paying too much of the cost yet. So really it's US Companies so far that have been on the hook to absorb it.

[Gene Whalen]

That was WSJ economics reporter Gene Whalen. Thanks, Gene.

[Natalie Andrews]

Sure thing.

[Gene Whalen]

And hopes are rising for a trade deal between the US And Europe. European Commission President Ursula von der Leyen said today that she had a good call with President Trump, and the two had agreed to meet in Scotland on Sunday to transatlantic trade relations, according to people familiar with their thinking. European officials are optimistic that they're nearing an agreement on an outline deal that could see the European Union accept 15% baseline tariffs on most goods. But the people have emphasized that any agreement would need Trump's approval and could be upended if he pushes for significant additional concessions. A deal with Europe would be by far the biggest of several recent such agreements, as Trump seeks to redraw international trading rules. The S&P 500 and Nasdaq rose today to fresh highs following a busy week of tariff updates and earnings. The S&P 500 climbed 0.4%, ending the week with its fifth straight record close, its longest such streak in over a year. The Nasdaq rose about 0.2% and the Dow added more than 20 points, or about half a percent. Meta Platforms said it would stop political advertisements from being displayed on its social networks in the European Union starting in October, citing an incoming law designed to tackle misinformation and foreign interference in elections. The European Commission did not immediately respond to a request for comment. The announcement follows a similar move from Alphabet's Google, which last November said it would halt political ads in Europe. The biggest name in Jeffrey Epstein's 2003 birthday book was a past president rather than a future one, according to people involved in putting the gift together. Epstein's former girlfriend, Ghislaine Maxwell, was keen for Bill Clinton and other boldface names to submit letters. In the end, she was successful. The leather bound album, assembled before Epstein was first arrested in 2006, included a page with a single paragraph in Clinton's distinctive scrawl. A spokesman for Clinton declined to comment on the birthday message, which was reviewed by the Wall Street Journal. He referred the Journal to a previous statement that the former president had cut off ties more than a decade before Epstein was arrested in 2019 and didn't know about Epstein's alleged crimes. According to documents reviewed by the Wall Street Journal, the former president was among five dozen people, including Donald Trump, Wall street billionaire Leon Black, fashion designer Vera Wang and media owner Mort Zuckerman, who ended up with letters in the 2003 book. Black has said he regretted having any involvement with Epstein. Zuckerman and Wang didn't respond to requests for comment. In 2023, Wang had told the Journal that she regrets ever associating with Epstein. Coming up, who are the kinds of customers that banks are looking for as they get choosier about who holds their credit cards? More after the break.

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[Gene Whalen]

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[Gene Whalen]

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[Alex Zosalev]

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[Gene Whalen]

1-800-Contacts. Banks are making credit cards harder to get for some people. Total new credit card openings across four major lenders fell 5% in the second quarter. That's the first decline in more than a year, but it's not affecting all customers equally. Imani Moise, who covers personal economics for the Journal, is here now with more. Imani who are banks and targeting for new credit cards?

[Imani Moise]

Banks really want the big spenders, people with high credit scores, people who are going to charge maybe $4,000 a month on a card and pay it off. That's who they're really going after with ads right now. If you have a lower credit score, you're probably not seeing as many credit card off piling up in your mailbox. About 80% of credit card offers in the most recent study that I saw went to people who are considered to have exceptional credit. So that means a credit score above 780.

[Gene Whalen]

Why are they doing this?

[Imani Moise]

It makes sense if you're a bank to focus on this segment because they win in two ways. Big spenders, they spend more money and banks earn revenue every single time you make a purchase with your credit card. That's called interchange fees. And on the other side of it, these customers are more likely to pay off their bill in full every month. So they're less of a credit risk.

[Gene Whalen]

What does this show us about how banks are thinking about the economy right now?

[Imani Moise]

It shows that banks are cautious. So overall on earnings over the past few weeks, banks said that the economy continues to be really, really. But there are some concerns about potential rising unemployment or how tariffs and trade tensions are going to translate for the consumers pockets. So they are hedging a bit by focusing on customers that they see as safer.

[Gene Whalen]

How big of a shift is this really for lenders?

[Imani Moise]

It's like a faucet and they increase the flow and decrease the flow. Right now they're slightly decreasing the flow but narrowing the customers that they want to focus on. But when times are good and they think that they can make money off of more people, they're going to twist it in the opposite direction and kind of open the floodgates for credit, which we saw in 2021.

[Gene Whalen]

That was WSJ personal economics reporter Imani Moiz. Thanks, Imani.

[Imani Moise]

Thank you.

[Gene Whalen]

The White House is seeking fines from several universities it says failed to stop antisemitism on campus in exchange for allowing the schools to access federal funding. That's according to a person familiar with the matter. White House correspondent Natalie Andrews joins me now. Natalie, earlier this week Columbia University agreed to pay $200 million to the federal government. How does that fit in with what the White House is asking of these other universities?

[Unknown]

The case with Columbia is going to be seen as the blueprint for how the other schools get access to their federal funding. Again, Cornell, Duke and Harvard are key. We know they're in talks with the administration and this is the higher echelons of the administration there. We're looking at all sorts of agencies that deal with the Civil Rights act and education are in talks with these schools.

[Gene Whalen]

What have the schools said about these talks?

[Unknown]

For many of the schools publicly, this is a no comment type of issue. A lot of these schools are doing a delicate dance of wanting the funding the administration, this is federal funding that they rely on for research, for grants and with also their alumni, many of them who maybe offer more liberal leaning schools. You do not want to see them so called caving to the administration. So it's a delicate dance for a lot of these schools who are trying to please their alumni, their faculty and also get that federal funding back.

[Gene Whalen]

I'm curious how the deal with Columbia is going over at the university and the broader higher education education community.

[Unknown]

It is not exactly what you would call something that universities love this idea that they are going to settle with an administration. But on a wider scale. This is an issue that was very popular for Donald Trump and his campaigning and a lot of people feel like the universities have become too liberal. So while in campus community this may not be favorable, definitely there are audiences where it does play very well.

[Gene Whalen]

That was WSJ White House correspondent Natalie Andrews. Thanks, Natalie.

[Unknown]

Thanks so much for having me.

[Gene Whalen]

And police are searching for a suspect after a shooting at the University of New Mexico campus today left one person dead and another injured. The university in Albuquerque, New Mexico, said on social media it was sheltering in place following the shooting in a student apartment building early today, adding that the shooter had a firearm and might still be on campus. School officials haven't named the shooter or the victims. The university said the surviving victim's injuries weren't life threatening. And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up, what's news and markets. Then on Sunday, we'll be discussing the audacious plan to reboot America's nuclear energy program. That's in what's New Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Biennime with supervising producer Michael Cosmides. Michael Lavall wrote our theme music. Aisha El Musleam is our development producer. Scott Salloway and Chris Zinsley are our deputy editors. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osola.

[Natalie Andrews]

Thanks for listening, Sam.