WSJ What’s News: Episode Summary - "Flurry of Trade Deals Boosts Markets"

Release Date: July 31, 2025

In this episode of WSJ What’s News, hosted by Azhar Sukri, listeners are guided through a comprehensive analysis of the latest developments in global trade, market movements, and the strategic maneuvers of leading tech giants. The episode delves into the surge of new trade agreements, the political intricacies affecting these deals, the evolving US-China trade relationship, and the significant investments in artificial intelligence by major technology companies.

1. Surge of US Trade Deals

Azhar Sukri opens the discussion by highlighting a series of new trade agreements announced by the United States. These deals aim to avert the imposition of reciprocal tariffs set to take effect the following day.

• Key Developments:
  • Trade Agreements with Cambodia and Thailand: These deals were confirmed overnight, as Commerce Secretary Howard Lutnick announced on Fox News: "We're going to build ships in America. We're going to build semiconductors in America. We are going to finally take care of the core of America." [01:16]
  • US-South Korea Trade Deal: Recently concluded, this agreement includes the US imposing a 15% tariff on Korean goods. Timothy Martin, Journal Bureau Chief in Seoul, notes that South Korea is keen to eliminate trade uncertainty.

Peter Landers, Asia Business Editor, explains the significance of these agreements for Southeast Asia’s supply chains:

"All of these countries have a strong trading relationship with the United States... they are trying to do deals before tariffs go up to rates around 25%. I think markets have welcomed that." [03:35]

2. Trump's Trade Policy and Political Implications

The episode examines Donald Trump's assertive trade policies and their broader political ramifications.

• Trump’s Stance:

  • Emphasizing American consumer power, Trump states: "The magnet of the world is the US Consumer, right?... If you want to play in our sandbox, you've been treating us badly for years. Come on and play." [01:37]

• Political Factors Influencing Trade:

  • Trump has linked trade negotiations with political demands, notably criticizing Canada for its stance on Palestinian statehood. This intertwining of trade and politics raises concerns about future alliances and economic collaborations.

David Luno, Journal Editor, provides insight into the potential fallout:

"This could be a signal that those kinds of things... could be quite damaging to Israel." [05:34]

3. Impact on Israel and Western Alliances

The US Senate's rejection of proposals to block arms sales to Israel adds another layer of complexity to the geopolitical landscape.

• Senate Dynamics:
  • Led by Senator Bernie Sanders, the proposal garnered substantial Democratic support but faced unanimous opposition from Republicans.
  • The debate intensifies amidst international concern over humanitarian issues in Gaza, with growing Democratic advocacy for halting weapons exports.

4. US-China Trade Relations and AI Security Concerns

Amidst the bustling trade negotiations, tensions simmer between the US and China, particularly concerning artificial intelligence (AI) technologies.

• Nvidia and China's Cybersecurity Scrutiny:

  • China's cybersecurity regulator has summoned Nvidia to address alleged security risks related to its H20 AI chips. Nvidia is considering resuming chip sales in China despite previous US Commerce Department restrictions.

• Tariff Truce Negotiations:

  • US and Chinese negotiators are in talks to extend a tariff truce, which is set to expire on August 12. However, no agreement has been reached yet, maintaining an atmosphere of uncertainty in the markets.

5. Tech Giants’ Strategic AI Investments

A significant portion of the episode is dedicated to the strategic investments in AI by leading technology companies, Microsoft and Meta (Facebook's parent company), and their impact on market valuations.

• Microsoft’s Performance:

  • Dan Gallagher, WSJ Tech Columnist, discusses Microsoft's near attainment of a $4 trillion valuation. The company has reassured investors that its substantial investments in AI are not detracting from its robust core business growth.
  • Business Analyst notes: "Microsoft is making big spending relative to its size... their capital spending is going to be over 30% of their revenue, which is really high for them." [10:48]

• Meta’s Strategic Bets:

  • Meta has seen an 11% surge in off-hours trading after announcing heavy investments in AI, with capital spending projected to exceed $100 billion by 2026.
  • Despite high expenditures, Meta's strong ad revenue growth has alleviated investor concerns, as highlighted by the Business Analyst:

    "When the core business is doing strong, investors tend to be okay with a lot of money going out the door for AI." [08:49]

• Investor Sentiment:

  • Both companies are viewed as making high-stakes bets on AI, with investors showing confidence due to their continued strong performance and strategic foresight.

6. Looking Ahead: Future Trade Agreements and AI Developments

The episode concludes with anticipations of additional trade deals set to be announced, particularly Malaysia's expected agreement, which is seen as crucial for maintaining the stability of Southeast Asia’s supply chains.

• Upcoming Announcements:

  • Malaysia is scheduled to announce a trade deal, further solidifying the US's strategic economic engagements in the region.

• AI's Role in Market Dynamics:

  • The continuous advancements and investments in AI by major tech firms are anticipated to play a pivotal role in shaping future market trends and valuations.

Conclusion

This episode of WSJ What’s News provides a thorough exploration of the dynamic interplay between trade policies, political factors, and technological advancements. The flurry of new trade deals has not only boosted market sentiments but also underscored the intricate connections between economic strategies and geopolitical considerations. Simultaneously, the substantial investments by tech giants in AI signal a transformative shift in the industry, promising significant implications for the global market landscape.

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