WSJ What’s News: Growing Debt, Tariffs Weigh on U.S. Outlook Release Date: March 26, 2025
On the March 26, 2025 episode of WSJ What’s News, hosted by Luke Vargas and produced by The Wall Street Journal, listeners are presented with a comprehensive analysis of pressing economic and geopolitical issues impacting the United States. Covering topics from escalating US-China tech tensions and looming fiscal challenges to contentious political maneuvers and the intensifying space race, the episode delivers a detailed examination of factors shaping the current U.S. outlook.
U.S.-China Tech Tensions Escalate
The episode opens with a significant development in US-China relations as the Trump administration intensifies its restrictions on Chinese access to American technology. Luke Vargas reports that the administration has expanded the export control list by adding 80 companies and institutions, including a U.S. affiliate of China's Inspur Group, a major purchaser of Nvidia chips. This move marks an extension of policies initially rolled out during President Biden's tenure.
China tech reporter Lisa Lin provides insight into the administration's strategy:
“This is probably one of the earliest signs from the Trump administration that they are ready to play hardball when it comes to US China tech competition.” [01:25]
Lin emphasizes that while previous actions focused primarily on trade, the new measures signify a broader crackdown targeting technological advancements. The expanded export controls aim to close loopholes that previously allowed blacklisted Chinese companies to acquire U.S. technology indirectly.
A spokesperson for China's Foreign Ministry criticized the U.S. actions, labeling them as "typical hegemonic behavior" that "severely violates international law," underscoring the growing friction between the two superpowers over technological supremacy.
Moody’s Warns of Declining U.S. Fiscal Strength
The episode shifts focus to economic concerns as Caitlin McCabe, a Journal reporter, delves into Moody’s latest report warning of a multi-year decline in America's fiscal strength. Moody’s has downgraded the U.S. sovereign rating outlook, citing a combination of a widening federal budget deficit, rising debt burden, and decreasing debt affordability.
McCabe explains:
“The toxic combination of widening federal budget deficits, a rising debt burden and falling debt affordability has given the agency concerns about America's fiscal strength.” [02:13]
Moody’s forecasts GDP growth to slow to 2% in the current year and further to 1.8% the following year, indicating a significant economic slowdown. The report warns that sustained high tariffs and unfunded tax cuts, particularly the extended 2017 tax cuts set to expire, may exacerbate fiscal challenges. These policy uncertainties could hinder the U.S. economic recovery and stability.
Boeing’s Legal Battle Intensifies
In aerospace news, Vargas updates listeners on the ongoing legal saga surrounding Boeing. A federal judge overseeing the criminal case related to the two fatal 737 Max crashes has ordered a trial set for June, overturning Boeing's attempt to withdraw an earlier guilty plea.
The crashes resulted in 346 fatalities, and Boeing's decision to seek a trial increases the likelihood of the company either pleading guilty or having to defend against charges it previously acknowledged committing. Boeing maintains that it is in "good faith discussions" with the Justice Department, while the department has refrained from commenting further [03:36].
Vice President JD Vance's Controversial Visit to Greenland
The episode highlights Vice President JD Vance's upcoming visit to Greenland alongside his wife, Second Lady Usha Vance, amidst strained relations with European allies over U.S. territorial ambitions in the autonomous Danish territory. Usha Vance expressed enthusiasm for the visit:
“We want to reinvigorate the security of the people of Greenland because we think it's important to protecting the security of the entire world.” [05:18]
Greenland has condemned the visit, viewing it as an aggressive move by the U.S. The White House has reoriented the visit from a cultural celebration to a national security-focused agenda, including meetings with American soldiers stationed at a U.S. military base [04:51]. Danish Prime Minister Mette Frederiksen criticized the visit, stating it imposes "completely unacceptable pressure" on both Greenland and Denmark [05:26]. President Trump dismissed allegations of provocation, claiming the delegation was invited by Greenlandic officials despite the absence of an official invitation [04:51].
Trump’s Executive Orders and Legal Retaliations
In a series of executive moves, President Trump signed orders aimed at overhauling the U.S. election process and targeting law firms perceived as adversaries. The new election directive introduces stringent proof of citizenship requirements for voter registration, involves the Department of Justice and the Social Security Commissioner in identifying ineligible voters, and mandates the withholding of federal funding from states that delay counting mail-in or absentee ballots post-Election Day [04:51].
These actions have sparked legal challenges, with advocacy groups arguing that the president overstepped his authority. Additionally, Trump has intensified his campaign against law firms supporting opposition policies. The latest order strips security clearances from lawyers at Jenner & Block and restricts their access to federal buildings [05:26]. This follows similar actions against firms like Covington & Burling, Perkins Coie, and Paul Weiss, although the latter had its restrictions lifted after offering pro bono services to the administration [05:26].
China's Ambitious Space Race Against SpaceX
The latter part of the episode features an in-depth discussion with Clarence Leung, a Journal reporter, on China's burgeoning efforts to compete with SpaceX. China is heavily investing in its commercial space sector, aiming to develop reusable rockets and establish its own satellite internet network akin to SpaceX’s Starlink.
Leung explains:
“Beijing is aware that the US is speeding ahead, with SpaceX being the prime example, and it feels a sense of urgency to catch up.” [08:40]
China plans to launch at least six reusable rockets this year, with the potential debut of the first reusable Chinese rocket by year’s end [08:40]. Additionally, China is constructing two Starlink-like satellite systems to bolster its space capabilities [10:05].
Despite these efforts, Leung notes that China still lags in certain areas:
“China has yet to develop a rocket that can be reusable. They haven't successfully landed a booster yet.” [11:15]
While China has achieved milestones such as returning samples from the moon's far side and plans to send humans to the lunar surface by decade’s end, these advancements have not yet matched SpaceX’s technological strides, though they contribute to growing concerns in the U.S. about China’s potential to achieve symbolic space victories [11:15].
Conclusion
The episode of WSJ What’s News provides a thorough overview of the multifaceted challenges facing the United States, from economic vulnerabilities and international tensions to internal political struggles and the quest for technological and space supremacy. Through expert interviews and comprehensive reporting, the show paints a detailed picture of the strategic decisions and conflicts shaping the current U.S. landscape.
Produced by: Kate Bullivant and Daniel Bach
Supervising Producer: Sandra Kilhoff
Host: Luke Vargas