WSJ What’s News: Recession Fears Rise as Global Selloff Continues
Release Date: April 4, 2025

In this episode of WSJ What’s News, hosted by Luke Vargas, The Wall Street Journal delves into the escalating concerns surrounding a potential global recession amidst a significant global market selloff. The discussion spans multiple regions, including the European Union's trade negotiations with the United States, the political upheaval in South Korea, and the Trump administration's intensified scrutiny of major U.S. law firms and universities.

1. Global Market Selloff and Rising Recession Concerns

The episode opens with an overview of the deteriorating global markets. Following Wall Street's most substantial one-day wipeout since 2020, global markets have continued to decline. Asian stocks, particularly Japan's Nikkei, have been significantly impacted, a trend analysts attribute to heightened fears of a recession.

European Markets:
European stocks are also in the red, marking a second consecutive day of decline. Katie Barnato, WSJ Markets Editor for Europe, provides insight into the factors fueling these concerns:

"Perhaps the most notable is the fall in treasury yields this morning down below 4%. That is the lowest level since October and that would appear to be on rising concerns about a US Recession or even a global recession."
[01:48]

Barnato highlights JP Morgan's updated stance, now assigning a 60% probability to a global recession occurring this year. Additionally, the U.S. dollar has weakened to its lowest point of the year, an unusual trend given that tariffs typically bolster the currency. This weakening persists despite falling global oil prices, which are also indicative of diminishing global demand.

2. U.S.-EU Tariff Negotiations and Tensions

A significant portion of the discussion centers on the strained trade relations between the United States and the European Union. As the EU prepares to send a delegation to Washington for tariff negotiations, tension is palpable.

Interview with Bernd Lange, Member of the European Parliament for Germany and Chair of the Parliament's Trade Committee:

"European Union, they're very tough, very, very tough traders. You know, you think of European Union, very friendly. They rip us off. It's so sad to say."
[03:13]

Lange criticizes President Trump's stance on EU tariffs, noting:

"We have an average of 2% tariffs between the two regions. And this means this figure of 39%, unfair tariffs and non-tariff barriers is totally unjustified."
[04:16]

He emphasizes that the EU seeks a balanced view of the trade relationship, pointing out that while the U.S. has a negative trade balance in goods, it maintains a surplus in services and investments:

"If a man or woman in California wants to buy a Porsche instead of a fraud, so what? This is not illegal process."
[04:25]

Lange further discusses the EU's commitment to fair competition and the protection of consumers, dismissing certain U.S. criticisms as non-tariff barriers rather than legitimate trade issues.

3. Political Upheaval in South Korea

The removal of South Korean President Yoon Suk Yeol marks a significant political shift in the region. His impeachment, driven by his declaration of martial law in December, sets the stage for snap elections within the next 60 days.

"Thousands of supporters and anti Yoon protesters took to the streets ahead of the ruling, which Yoon didn't attend."
[09:27]

This political instability complicates South Korea's relationship with the United States. The nation has faced challenges in negotiating tariffs with the Trump administration, which has criticized South Korea's trade surplus and contributions to U.S. troop deployments.

"Trump has already taken aim at South Korea's trade surplus, and in the meantime, South Korea has had difficulty holding direct talks with the administration."
[09:59]

The upcoming elections are crucial, as the new leader will inherit a nation divided between liberals and conservatives, further impacting diplomatic and trade relations with the U.S.

4. Trump Administration’s Crackdown on Law Firms and Universities

The episode also explores the Trump administration's escalating campaign against major U.S. law firms and academic institutions.

Kirkland and Ellis Law Firm:

Kirkland and Ellis, the largest U.S. law firm by revenue, is reportedly in talks with the White House to avert an executive order targeting the firm. This move is part of a broader initiative where the administration has identified 20 firms for potential sanctions, primarily due to issues related to diversity, equity, and inclusion (DEI) practices.

"The president's executive orders so far have generally threatened lawyers access to federal buildings as well as government contracts held by their clients."
[09:59]

Impact on Universities:

The administration is intensifying its scrutiny of American universities regarding DEI policies and antisemitism. Brown University is speculated to face the withdrawal of over $500 million in federal grants from the National Institutes of Health, although the institution has denied confirming these rumors.

Harvard University is also under pressure, having received a letter from Trump's antisemitism task force outlining nine demands to retain billions in government funding. These demands primarily relate to operational aspects of the university, reflecting the administration's broader agenda to influence academic institutions' policies.

"Brown said the freeze was a rumor they couldn't confirm. At the same time, a Harvard spokesperson said Thursday night that members of Trump's antisemitism task force had sent a letter with nine demands the school must meet to avoid losing billions in government funding."
[10:50]

Conclusion

The episode underscores a period of significant economic uncertainty and geopolitical tension. With global markets reacting to recession fears, strained U.S.-EU trade relations, political instability in South Korea, and domestic pressures on major institutions, the financial and political landscapes remain highly volatile. Luke Vargas effectively synthesizes these complex issues, providing listeners with a comprehensive understanding of the forces shaping today's interconnected world.

Notable Quotes:

• Katie Barnato, WSJ Markets Editor for Europe:
  "Perhaps the most notable is the fall in treasury yields this morning down below 4%. That is the lowest level since October and that would appear to be on rising concerns about a US Recession or even a global recession."
  [01:48]

• Bernd Lange, Member of the European Parliament for Germany:
  "European Union, they're very tough, very, very tough traders. You know, you think of European Union, very friendly. They rip us off. It's so sad to say."
  [03:13]

• Bernd Lange:
  "If a man or woman in California wants to buy a Porsche instead of a fraud, so what? This is not illegal process."
  [04:25]

This detailed summary encapsulates the critical discussions and insights from the episode, providing a clear and comprehensive overview for those who have not listened to the podcast.