Judge Orders U.S. to Pay Back $130 Billion of Tariffs

Summary

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WSJ What’s News — "Judge Orders U.S. to Pay Back $130 Billion of Tariffs"

Date: March 5, 2026
Host: Luke Vargas (Wall Street Journal)
Guests: Hannah Miao, Tom Fairless, Anvi Bhutani, Max Colchester, Austin Ramsey, Sam Scheckner

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Episode Overview

This episode delivers a rapid-fire survey of the major headlines in global economics and geopolitical affairs for March 5, 2026. The focus centers on a blockbuster ruling ordering the Trump administration to refund over $130 billion in tariffs, as well as key developments in China's economic policy and escalating conflict in the Middle East between the US and Iran. The episode also explores European and Chinese responses to these developments, and ends on a lighter note with France’s new approach to internet diplomacy.

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Key Discussion Points & Insights

1. **China Cuts Economic Growth Target

(00:59–02:54)**

• Context:
  China sets its lowest GDP growth goal (4.5–5%) since 1991 during the significant "Two Sessions" political gathering.

• Domestic Struggles:

  • Households remain cautious; spending and investment have slowed.
  • The real estate market remains deeply troubled.
  • Last year’s 5% growth was mostly fueled by exports, leading to increased friction with trade partners.
  • "The IMF has suggested that China should try to move away from relying on exports because it creates all these tensions around this global trade imbalance." — Hannah Miao, 01:42

• Shift in Emphasis:

  • New targets signal reduced reliance on GDP expansion.
  • Clear focus on upgrading industrial systems and becoming technologically self-reliant to bolster China's competitive stance in cutting-edge tech.
  • "Policymakers are really doubling down on these goals of upgrading their industrial system and being technologically self-reliant." — Hannah Miao, 02:27

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2. **$130 Billion Tariff Refund Ruling Against Trump Administration

(02:54–04:25)**

• Ruling Overview:

  • Federal Trade Court judge orders Trump administration to refund $130 billion in tariffs after government delays and lack of clarity on policy stance.
  • Over 2,000 companies, including Costco and FedEx, have filed lawsuits seeking recoupment.

• Business Reaction:

  • Relief is widespread across affected industries, especially among German manufacturers, but uncertainty remains regarding the claiming process, eligibility, refund timing, and potential costs.
  • "There's enormous interest in claiming back these refunds... but there's also continued uncertainty around how to claim it back, who gets the money, how much it will cost, how long it will take." — Tom Fairless, 03:35

• Uncertainty is the Real Threat:

  • Businesses can handle predictable tariffs; unpredictable policy environment erodes investment confidence.
  • "It's the not knowing... that's really poison for investment and for just making decisions on future markets and investments." — Tom Fairless, 04:09

• Outlook:

  • The administration is expected to appeal, preventing immediate payouts.

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3. **Morgan Stanley Layoffs

(04:25–04:54)**

• Layoff Details:
  • Morgan Stanley cuts 2,500 employees (3% of workforce), affecting all major divisions despite a strong prior year.

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4. **Middle East Conflict Escalation: US, Iran & Global Players

(05:59–12:46)**

• Iran Expands Regional Actions:

  • Iranian drones strike Azerbaijan, aiming to disrupt economic flows, especially oil.
  • US military reports steep decline in Iranian missile (–86%) and drone (–73%) launches after recent US/Israeli strikes.

• US War Powers Debate:

  • Congress considers a war powers resolution to limit Trump’s military action, but prospects are mainly symbolic due to likely veto.
  • "Lawmakers have also made comparisons to the US's poorly run ground wars in the Middle East." — Anvi Bhutani, 07:07

• Europe’s Increasing Involvement:

  • Initial reluctance shifts to active support following Iranian retaliation.
  • European countries supplying air defenses, naval assets, and allowing US access to bases.
    • UK sends destroyer to Cyprus; France deploys aircraft carrier; Italy supplies air defenses; Ukrainians may help train Gulf partners.
  • "They are providing air defenses to Gulf partners, and they are trying to intercept and stop the drones and missiles..." — Max Colchester, 08:42

• Dissenting European Voices:

  • Spain stands out, openly criticizing the US campaign and refusing base access.
  • "Pedro Sanchez directly... called the war a disaster... quite a bold move." — Max Colchester, 10:05

• China’s Cautious Stance:

  • Provides only rhetorical support to Iran, balancing interests as a major oil importer throughout the region.
  • "China, while overtly, is very critical, privately, I think they're very flexible and they are waiting to see what happens..." — Austin Ramsey, 10:57

• Strategic Bonus for China:

  • China closely observes US military operations, gathering insights for possible future conflict over Taiwan.
  • US arms stockpiles being depleted could factor into Chinese calculations.
  • "They get to see how the US presses this campaign... the sort of munitions that would be important for a fight with China in the Pacific." — Austin Ramsey, 12:12

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5. **France's Social Media Diplomacy

(12:57–14:13)**

• ‘French Response’ on X:
  • France abandons traditional diplomatic protocols in favor of English-language memes targeting Russian disinformation and other international antagonists.
  • French Foreign Minister Jean-Noel Barrot: "Fight fire with fire" — design social media comebacks instead of formal communiqués.
  • Example: Responding to Trump's Greenland comments with satire about the Statue of Liberty.
  • "Responding to a critical post on X with a press release is sort of like showing up to drinks with your friends in a tuxedo." — Sam Scheckner, 13:23

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Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|---------------|-------| | 01:42 | Hannah Miao | "The IMF has suggested that China should try to move away from relying on exports because it creates all these tensions around this global trade imbalance." | | 02:27 | Hannah Miao | "Policymakers are really doubling down on these goals of upgrading their industrial system and being technologically self-reliant." | | 03:35 | Tom Fairless | "There's enormous interest in claiming back these refunds... but there's also continued uncertainty around how to claim it back, who gets the money, how much it will cost, how long it will take." | | 04:09 | Tom Fairless | "It's the not knowing... that's really poison for investment and for just making decisions on future markets and investments." | | 07:07 | Anvi Bhutani | "Lawmakers have also made comparisons to the US's poorly run ground wars in the Middle East." | | 08:42 | Max Colchester| "They are providing air defenses to Gulf partners, and they are trying to intercept and stop the drones and missiles..." | | 10:05 | Max Colchester| "[Pedro Sanchez has] called the war a disaster... quite a bold move." | | 10:57 | Austin Ramsey | "China, while overtly, is very critical, privately, I think they're very flexible and they are waiting to see what happens..." | | 12:12 | Austin Ramsey | "They get to see how the US presses this campaign... the sort of munitions that would be important for a fight with China in the Pacific." | | 13:23 | Sam Scheckner | "Responding to a critical post on X with a press release is sort of like showing up to drinks with your friends in a tuxedo." |

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Timestamps for Important Segments

• [00:59] — China slashes growth target
• [02:54] — $130B tariff refund court ruling
• [04:25] — Morgan Stanley layoffs
• [05:59] — Iranian drone strikes in Azerbaijan; US/Iran conflict update
• [07:07] — Congress debates war powers
• [08:42] — European allies’ military support
• [10:05] — Spain openly opposes US campaign
• [10:57] — China’s diplomatic balancing act
• [12:12] — China gains strategic insight from US war effort
• [12:57] — France’s 'French Response' on social media

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Tone & Style

The episode maintains an authoritative but approachable tone, blending brisk news delivery with context-added insights from field correspondents and reporters. The style is concise but nuanced, providing essential details while highlighting behind-the-headlines implications and witty moments, particularly in the coverage of France’s social media pivot.

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Transcript

[Instagram Representative]

Last year, Instagram launched teen Accounts, which default all teens into automatic protections for who can contact them and the content they can see. And we'll continue adding new safeguards for teens to help give parents peace of mind. Explore Teen Accounts, automatic protections and all of our ongoing [e-mail] Teenaccounts.

[Luke Vargas]

China cuts its economic growth forecast as it preps for an era of slower expansion. Plus, Europe ups its support for the US War on Iran. And a trade court judge tells the Trump administration to pay back billions in tariffs.

[Tom Fairless]

The Supreme Court ruling and then this refund ruling both creates a certain idea that there's a limit to how the administration can use these tariffs at will to penalize countries from one day to the Next.

[Luke Vargas]

It's Thursday, March 5th. I'm Luke Vargas for the Wall Street Journal and here is the AM Edition of what's news, the top headlines and business stories moving YOUR world Today. China has cut its annual economic growth target to a range of 4.5 to 5%, its lowest expansion goal since 1991. The details were released during China's biggest political gathering, known as the Two Sessions, and kicks off the next year plan for the world's second largest economy. Economics reporter Hannah Miao told us that Beijing is aiming to reshape its economy as it grapples with challenges both at home and abroad.

[Hannah Miao]

Households are fairly cautious to spend, investment has slowed down and the real estate market is still very much struggling. And last year China had set a growth target of around 5% and it was really achieved in large part through exports. And that has become an area of increased tension with trading partners. The IMF has suggested that China should try to move away from relying on exports because it creates all these tensions around this global trade imbalance.

[Luke Vargas]

And while less reliance on exports might be welcome news for countries frustrated by the dominance of Chinese products, Hannah told us that the new growth targets include a growing focus on key technologies.

[Hannah Miao]

While the lower growth target does take some of that pressure off to really continue juicing GDP growth, policymakers are really doubling down on these goals of upgrading their industrial system and being technologically self reliant. So in terms of this competition between the US And China in key cutting edge technologies, China is really not letting up on that front.

[Luke Vargas]

The five year plan also revealed a 4% target for the fiscal deficit, suggesting China won't be stepping up its stimulus for the beleaguered property sector. The Trump administration is on the hook for more than $130 billion in tariff refunds. That was yesterday's ruling from a Federal Trade Court judge who grew impatient when a Justice Department lawyer said that the government hadn't formalized its position on refunding tariffs and that issuing refunds would be time consuming. The ruling comes as more than 2,000 companies have filed LAWSU seeking to recoup their money, including Costco and FedEx. I asked Journal Global Economics correspondent Tom Fairless how businesses are responding to the verdict.

[Tom Fairless]

So firstly, it's a relief and there's enormous interest in claiming back these refunds. German manufacturers were immediately facing questions from customers about how to get these, how quickly they would get these refunds. But there's also continued uncertainty around how to claim it back, who gets the money, how much it will cost, how long it will take. There's lots of new layers of uncertainty.

[Luke Vargas]

While refunds could boost some companies bottom lines and provide some much needed certainty, Tom said that new tariffs put in place just last month are causing more damage.

[Tom Fairless]

Businesses tell me they could live with a 10% tariff, even a 20% tariff, if they knew what it was. But it's the not knowing that, not being able to plan that is really poison for investment and for just making decisions on future markets and investments.

[Luke Vargas]

The Trump administration is expected to appeal the order to prevent it from taking effect immediately. Morgan Stanley is laying off 2,500 employees, or around 3% of its global workforce. We report that many of the cuts took place yesterday and are affecting all of the bank's major divisions, investment banking and trading, wealth management and investment management. Morgan Stanley and its Wall street peers are coming off one of their strongest years on record. As trading desks navigated volatility, the wealthy continued to spend and big struck more deals. Well, speaking of deals, we've got a special bonus episode coming later today. It's the latest what's News in Earnings, where we'll be looking at the merger drama that dominated the media industry this earnings season. Look for that at midday in your what's News feed. Coming up, we've got the rest of the day's news, including a look at how the U.S. and Iran's allies are or aren't joining the war. That and more after the break.

[Instagram Representative]

This episode is sponsored by Morgan Stanley's Thoughts on the Market. Today's Financial markets move fast. Morgan Stanley moves faster with their daily podcast Thoughts on the Market. Thoughts on the Market covers daily trends across the global investment landscape with actionable insights from Morgan Stanley's leading economists and strategists. And with most episodes under five minutes long, staying informed has never been easier. Listen and subscribe to Thoughts on the Market wherever you get your podcasts.

[Luke Vargas]

The conflict in the Middle east is expanding yet again this morning after Iranian drones landed in Azerbaijan, the latest evidence of Tehran's regional escalation strategy designed to maximize economic disruption. Israel imports a significant amount of crude oil from Azerbaijan. Well, Iran's target list may be lengthening, but the US military claims that its adversary's military response may be faltering. U.S. central Command says that Iran's missile launches have dropped by 86% in four days, while drone launches decreased by 73%, a possible result of US and Israeli strikes on launch sites and manufacturing facilities. Still, a Western official cautioned that Iran could still attack with cheaper systems such as drones. The House is set to vote today on a war powers resolution seeking to limit President Trump's ability to attack Iran without congressional approval. The Senate blocked a similar effort yesterday. And while the votes are largely symbolic, given that they would require supermajorities in both chambers to override a likely Trump veto, reporter Anvi Bhutani said there are some simmering debates playing out on Capitol Hill.

[Anvi Bhutani]

While President Trump has said that America is at war, many Republican lawmakers have strayed away from the term war or have had contention around the use of the term war. Lawmakers have also made comparisons to the US's poorly run ground wars in the Middle East. After some intelligence briefings earlier this week, most lawmakers still had further questions around the scale and scope of the operation, as well as the timeline as to how long the US would stay committed in operations involving Iran.

[Luke Vargas]

Well, despite a lack of congressional backing for the war, a seeming coalition of America's European allies is taking shape, contributing planes, ships and air defenses or opening up their bases to be used by the us. Meanwhile, the major player in Iran's corner, China, is offering little more than rhetorical support to Tehran. To discuss these dynamics, I'm joined now by Journal correspondent Max Colchester in London and reporter Austin Ramsey in Hong Kong. Max, let me start with you and to get a sense of where America's allies are standing in this conflict, I actually want to play a clip. This is of the NATO Secretary General Mark Rutte yesterday appearing on Newsmax's the Record with Greta Van Sustern, where he said the following NATO is not involved, but obviously allies are basically in a

[Max Colchester]

massive scale, are supportive of what the

[Luke Vargas]

President is doing, and are also enabling what the US is doing now in the region. Max, is that representative of where most European countries in particular stand on this conflict?

[Max Colchester]

Well, we've seen an evolution really, in the last week, in their stance, no European country was involved in the initial strikes on Iran. However, as Iran hit back, launching drones and missiles seemingly indiscriminately across the Gulf, European allies have been forced to respond. And what we're seeing now is they are providing air defenses to Gulf partners, and they are trying to intercept and stop the drones and missiles headed towards allies or in some cases, their own bases. The Brits are sending a destroyer to Cyprus to try and protect their base there, which has come under attack from Iranian drones. The French are also deploying an aircraft carrier to the Mediterranean to try and defend Cyprus, and regional allies. The Italians are sending air defence to the Gulf, and there's even talk of Ukrainians going into the Gulf to try and help train people there to better take down drones. So there's an effort going on to try and bolster defences in the region. And they're also allowing the US in some cases, to use their airfields to launch strikes on Iran to try and take out the missile launchers that are firing these projectiles at them.

[Luke Vargas]

And yet, Max, there have been a number of countries in Europe that are opposed to what the US is doing, though many of them, though at least one notable exception, are staying relatively quiet about it.

[Max Colchester]

Yes, and that notable exception is Spain. We saw the Spanish Prime Minister, Pedro Sanchez, come out and heavily criticize the war. Trump has responded, threatening that the US would cut all trade with Spain. And the Spanish government don't appear to have backed down. They say that they still don't want the US to use any of its bases to launch attacks on Iraq. And to quote Pedro Sanchez directly, he's called the war a disaster. And I think this is quite a bold move. And it's seen as a bold move in Europe because Europe is very beholden to the US for its own defence.

[Luke Vargas]

Austin, I think that's a good point to bring China into the discussion. Now, its diplomats have also been denouncing U.S. actions. And we did hear this morning that China's foreign minister is sending a special envoy to the Middle east to try and mediate the conflict. And yet, in terms of offering any material support here to a Chinese ally, Iran, there's not much to speak of.

[Austin Ramsey]

That's right. The Chinese have criticized the war on several levels. They've criticized the fact that it was launched as negotiations were still taking place. They criticized the attacks that killed much of the Iranian leadership. But, yes, at the same time, China has not done much more than provide rhetorical support for Tehran. They're in a Somewhat difficult position. China is very reliant on oil imports and it buys most of Iran's oil at the same time. It also buys a lot of oil from other countries in the region. And so they can't be too forceful on Iran's side without alienating other countries in the region that have been attacked by Iran in recent days. So China, while overtly, is very critical, privately, I think they're very flexible and they are waiting to see what happens, waiting to see who ends up running the country after the fighting stops.

[Luke Vargas]

So China sitting out this fight at least, and yet you report they are benefiting in some ways from being able to sit back and observe how the US presses a military campaign, a very modern one. Right. With all of its highest end equipment being pulled out into the field, opposition research, so to speak, that could be useful for China in the future.

[Austin Ramsey]

That's right. There are benefits to China in this war. They get to see how the US presses this campaign, what the US Is bringing to the fight against Iran, and they will take note of that. The US Is also, as we've reported, using an incredible amount of munitions, the sort of munitions that would be important for a fight with China in the Pacific over, say, Taiwan. And so it puts the US on the back foot for a period, perhaps years, to rebuild that arsenal. So that's something that will go into any Chinese calculation over what they might do with regards to Taiwan in the future.

[Luke Vargas]

I've been speaking to Wall Street Journal reporter Austin Ramsey in Hong Kong and correspondent Max Colchester in London. Austin. Max, thank you both so much.

[Austin Ramsey]

Thank you.

[Max Colchester]

Thank you, Luke.

[Luke Vargas]

And while Europe and the US may be finding some alignment now over the war in Iran, France is adopting a more combative tone on other fronts. The country's bureaucrats are quite literally ditching the language of diplomacy and have set up an account on X that posts English language takedowns. Reporter Sam Scheckner in Paris says that the government account is called French Response and aims to combat online trolls and misinformation one meme at a time.

[Sam Scheckner]

French Response was targeting most of its trolling at Russia, which has long been an antagonist of France, especially in the Internet sphere. And traditionally, they would fight back with a communique or explain that this or that thing is wrong. And France's foreign minister, Jean Noel Barrot, had the idea that really they should be fighting back. You know, fight fire with fire. Responding to a critical post on X with a press release is sort of like showing up to drinks with your friends in a tuxedo. And so they decided to match the tone. Some of the ones that made me chuckle were after Trump's declarations that he wanted the US to take possession of Greenland. There was a tweet that said breaking Statue of Liberty reported spotting swimming back across the Atlantic. Said she, quote, preferred the original terms and conditions.

[Luke Vargas]

Well, to hear our what's News version of rapid response, leave us a five star review on Apple Podcasts. I'm kidding. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer and Daniel Bock. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show.

[Austin Ramsey]

Until then, thanks for listening.

[Max Colchester]

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[Tom Fairless]

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[Max Colchester]

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