WSJ What’s News: Investors Cheer a Tariff Rollback for the Tech Industry

Episode Release Date: April 14, 2025
Host: Luke Vargas, The Wall Street Journal

Introduction

In today’s episode of WSJ What’s News, host Luke Vargas delves into the significant developments surrounding the recent rollback of tariffs affecting the technology sector. This move has been met with enthusiasm from investors, particularly within the tech industry. The discussion also touches upon the broader economic implications, including insights from a recent Wall Street Journal survey of economists regarding U.S. growth prospects amid fluctuating tariff policies.

Tariff Rollback and Market Response

Luke Vargas opens the conversation by highlighting the positive reaction in global markets, especially among tech stocks, following the U.S. Customs and Border Protection's announcement. The filing revealed that electronics such as computers, tablets, and Apple watches would be exempt from many tariffs on Chinese products, as well as the standard 10% tariff on global imports.

Caitlin McCabe, a Journal reporter, elaborates on the market’s response:

"As expected, investors are liking this news for now at least. Looking at the Asian session, we saw that tech stocks and Apple suppliers were up modestly..." [02:08]

She notes significant gains in companies like Foxconn Technology (+3%) and Largan Precision (+5%), indicating investor optimism. Additionally, Apple’s stock saw an uptick in U.S. pre-market trading, a potentially influential signal for the broader market.

Despite the positive sentiment, Caitlin cautions that the tech giants remain vulnerable:

"Commerce Secretary Howard Lutnick over the weekend saying that tech products will face separate levies, and that's a sentiment that Trump seemed to support..." [02:46]

This statement underscores ongoing uncertainties, as the Trump administration hinted at introducing separate semiconductor tariffs, potentially affecting tech companies' cost structures and operational dynamics.

Economic Forecasts Amid Tariff Uncertainty

Transitioning to broader economic implications, Luke Vargas introduces the Wall Street Journal's latest survey of 64 economists. Anthony DeBarros, the Data News editor, provides a detailed analysis:

"Their consensus is for a significant economic slowdown, with year-over-year GDP growth at just 0.8% for the fourth quarter, down from 2% in our January survey." [07:50]

The survey reveals a notable divergence in growth forecasts, reflecting heightened uncertainty due to the administration's erratic tariff policies. The range of GDP growth predictions spans from a contraction of 2% to an expansion of 3.1%, indicating a lack of consensus among economists.

On inflation and unemployment, the survey forecasts a rise:

"The economists are forecasting hotter inflation ahead. For December, the consensus is 3.6% year-over-year change in the consumer price index, up from 2.7% in their prior forecast." [08:54]

Unemployment is also expected to climb:

"At the end of this year, that's expected to be at 4.7%, up from 4.3% in the January forecast." [08:54]

Furthermore, the probability of a recession has increased:

"The probability that the US is going to fall into recession in the next month... is 45%. And as you say, that's up from 22% in January." [09:57]

Anthony emphasizes the unpredictability inherent in economic forecasting, especially under the current administration's shifting policies.

Impact on International Trade and Business Models

The episode also covers the repercussions of tariff adjustments on international trade, particularly focusing on China and its trade relationships. Recent data indicates a 12% rise in China’s exports last month, driven by last-minute US importers before new tariffs took effect. However, this surge is expected to be temporary, with economists predicting a sharp slowdown.

Raphael Huang, a Journal reporter in Singapore, discusses the challenges faced by Chinese companies like Shein:

"Shein may have to change its business model in order to survive... Shein is also eyeing an IPO in London. It has aimed to go public by June, but now Trump's policies are making the prospects of an IPO bleaker." [05:09]

These tariff-induced pressures are forcing companies to diversify their supply chains and consider local production in the U.S., which could lead to higher prices and longer shipping times for American consumers.

U.S.-Iran Nuclear Talks and State Department Changes

Beyond tariffs, the episode touches on the latest developments in U.S.-Iran relations. Indirect talks held in Oman aim to negotiate sanctions relief in exchange for Iran limiting its nuclear program. The White House views these talks as progress, while Iran's foreign minister signals a possible framework for a new nuclear accord based on the 2015 deal, which the Trump administration previously abandoned.

In a related update, Pete Morocco, a key figure in the Trump administration’s foreign aid reduction efforts, has resigned from the State Department after less than three months. Morocco was instrumental in canceling over 80% of foreign aid programs and closing the U.S. Agency for International Development (USAID). His departure coincides with an upcoming State Department reorganization plan, which is expected to integrate USAID's functions into the broader State apparatus.

Looking Ahead: Upcoming Earnings Reports

The episode concludes with a preview of the upcoming earnings week, featuring major companies such as Goldman Sachs, Bank of America, Citigroup, Johnson & Johnson, and United Airlines. Investors and analysts will be closely watching these reports for further insights into how ongoing tariff policies are influencing the economy.

Conclusion

Today's episode of WSJ What’s News provides a comprehensive overview of the current economic landscape shaped by fluctuating tariff policies. While the rollback has provided immediate relief to the tech sector, underlying uncertainties persist, influencing market dynamics and broader economic forecasts. The episode underscores the delicate balance policymakers must navigate to sustain economic growth while managing international trade relations.

Notable Quotes:

• Anthony DeBarros [07:50]: "Their consensus is for a significant economic slowdown, with year-over-year GDP growth at just 0.8% for the fourth quarter, down from 2% in our January survey."

• Caitlin McCabe [02:08]: "As expected, investors are liking this news for now at least. Looking at the Asian session, we saw that tech stocks and Apple suppliers were up modestly..."

• Raphael Huang [05:09]: "Shein may have to change its business model in order to survive... Shein is also eyeing an IPO in London. It has aimed to go public by June, but now Trump's policies are making the prospects of an IPO bleaker."

For more in-depth coverage and daily updates, stay tuned to WSJ What’s News by The Wall Street Journal.