The Trump Administration Is Quietly Watering Down Some Tariffs

Summary

WSJ What’s News – PM Edition

Episode: The Trump Administration Is Quietly Watering Down Some Tariffs
Date: October 17, 2025
Host: Alex Osola
Guests: Gavin Bade (Trade and Economic Policy Reporter), Sarah Nassauer (Retail Reporter)

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Episode Overview

This episode dives into two core stories impacting business and politics:

1. The Trump Administration’s Shifting Tariff Policy: Despite making tariffs a signature trade move, President Trump is now increasing exemptions and offering more flexibility in tariff policy, potentially affecting international businesses and trade partners.

2. Walmart’s Wage Revolution: A retrospective look at Walmart’s controversial wage increases a decade ago—seen as a risky move then but now regarded as a successful strategy that spurred industry-wide changes and growth.

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Key Discussion Points and Insights

[00:32–04:44] The Trump Administration’s Tariff Policy Pivot

• President Trump’s Position on Ukraine & Russia:

  • Trump expresses a preference for ending the Ukraine-Russia war over providing additional weapons.
  • He recently spoke with Russian President Vladimir Putin and plans to meet him in Hungary soon to pursue peace negotiations.
  • Notable quote:

    “Would much rather have them not need Tomahawks, would much rather have the war be over.”
    —Gavin Bade [01:26]

• Tariff Exemptions and International Negotiations:

  • Trump’s “reciprocal tariffs,” originally prominent, are being quietly modified.
  • Dozens of products have recently received new tariff exemptions, accompanied by an executive order opening the door for even more exemptions tied to trade negotiations.
  • The administration is signaling to other nations that they can secure carve-outs through deals.
  • Notable quote:

    “They’re putting the offer out there to other nations to say if you do a deal with us, we can carve out more of these tariffs as well.”
    —Gavin Bade [02:20]

• Legal and Strategic Reasons for Tariff Shift:

  • Reciprocal tariffs face a Supreme Court challenge, as they’re based on a novel use of national security law.
  • The administration is moving emphasis toward “Section 232” tariffs, widely seen as having more secure legal footing.
  • Companies face uncertainty due to the lack of a formal exemption process.
  • Memorable moment:

    “If you want an exemption, you kind of have to call up Howard Lutnick, the commerce secretary, or call up Jameson Greer, the US Trade representatives, and hope that you can convince them... There’s not a bona fide technocratic process.”
    —Gavin Bade [04:02]

[04:52–06:43] Financial Headlines

• Goldman Sachs is launching a team focused on financing infrastructure for the AI boom and traditional sectors like toll roads and airports.
• Jefferies addresses investor concern after the auto parts supplier First Brands collapses, with shares rebounding 6% following clarifications from its CEO [05:43].
• American Express reports higher cardholder spending and increased fees, leading to a 7% stock jump.
• The Dow, S&P 500, and NASDAQ all close higher, boosted in part by Trump’s statements dialing back threats of new tariffs on China.

[07:16–11:38] Walmart’s Wage Decision—A Case Study

• The Historic 2015 Pay Raise:

  • Walmart raised starting wages to $9/hour, impacting nearly half its workforce.
  • Initial investor response was negative, dropping $21.5 billion in market value in one day.
  • Memorable moment:

    “I think it surprised a lot of people. I mean, I think people were shocked, frankly... The stock does not get hit like this.”
    —Jim Cramer, quoted by Alex Osola [09:13]

• Long-Term Outcomes:

  • The wage hike was the foundation for a decade of strategic change, including increased pay, more training and benefits, and a focus on retention/promotion.
  • Walmart also invested in e-commerce and improved store standards, fueling steady and strong sales growth.
  • Notable quote:

    “They kind of use that announcement as a foundation for lots of other big strategy shifts over the last 10 years.”
    —Sarah Nassauer [09:38]

• Industry Impact:

  • Competitors like Target and TJX matched Walmart’s wage hikes within weeks; later, Amazon, Target and others surpassed it.

• Current Wage Standing:

  • Walmart’s pay is now slightly above average for the retail sector, by deliberate design—balancing wages, benefits, and opportunities for advancement.
  • Notable quote:

    “They used to be at the bottom and now they’re just above the middle. And that’s where they say they want to be on wages because... they want to have enough money to do other things like bonuses and benefits and training.”
    —Sarah Nassauer [11:08]

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Notable Quotes & Memorable Moments

• [01:26] Gavin Bade (on Trump and Ukraine):

  “Would much rather have them not need Tomahawks, would much rather have the war be over.”

• [02:20] Gavin Bade (on tariff carve-outs):

  “They’re putting the offer out there to other nations to say if you do a deal with us, we can carve out more of these tariffs as well.”

• [04:02] Gavin Bade (on businesses seeking tariff exemptions):

  “If you want an exemption, you kind of have to call up Howard Lutnick, the commerce secretary, or call up Jameson Greer, the US Trade representatives, and hope that you can convince them... There’s not a bona fide technocratic process."

• [09:13] Jim Cramer (via Alex Osola):

  “I think it surprised a lot of people. I mean, I think people were shocked, frankly... The stock does not get hit like this.”

• [09:38] Sarah Nassauer (on Walmart’s strategic shift):

  “They kind of use that announcement as a foundation for lots of other big strategy shifts over the last 10 years.”

• [11:08] Sarah Nassauer (on Walmart’s wage positioning):

  “They used to be at the bottom and now they’re just above the middle... and that’s where they say they want to be on wages...”

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Timestamps for Important Segments

• 00:32–04:44: Trump’s shifting tariff approach, trade negotiation strategy, and legal backdrop.
• 04:52–06:43: Market and financial news including Goldman Sachs, Jefferies, and American Express.
• 07:16–11:38: Walmart’s wage increase, impacts on business and the retail sector, and long-term strategic outcomes.

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Conclusion

This episode provides a concise update on two crucial shifts: the Trump administration’s pragmatic moderation on tariffs amid growing legal and international pressures, and the surprising long-term benefits of Walmart’s pioneering wage hike—now a business school case study in strategy and adaptation. Listeners gain an informed view of evolving trade policy and the ripple effects of corporate wage decisions on both industry and labor.

Transcript

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[Alex Osola]

President Trump says he'd rather end the war between Ukraine and Russia than send Ukraine powerful new weapons. Plus, Trump made tariffs his signature trade policy. Now he's pivoting away from some of them.

[Gavin Bade]

They're putting the offer out there to other nations to say if you do a deal with us, we can carve out more of these tariffs as well.

[Alex Osola]

And how. Walmart's decision to pay workers more shocked Wall street, but then put the company on a path to Success. It's Friday, October 17th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. At a White House meeting with Ukrainian President Volodymyr Zelenskyy today, President Trump said he hoped Ukraine wouldn't need the US to provide it with long range Tomahawk cruise missiles.

[Gavin Bade]

So we're going to be talking about Tomahawks and would much rather have them not need Tomahawks, would much rather have the war be over.

[Alex Osola]

To be honest, Trump had been talking in recent weeks about sending the powerful weapons to Ukraine. The meeting between the two came after Trump and Russian President Vladimir Putin spoke at length on the telephone yesterday. Trump says he plans to meet Putin separately in Hungary in the coming weeks to try to broker a peace deal. Foreign since taking office in January, President Trump has made tariffs his signature trade policy. Now, though, he's tiptoeing away from some of them, saying reciprocal tariffs don't apply to dozens of different products. WSJ trade and economic policy reporter Gavin Bade is here to tell us more. Gavin, what are some of the tariffs that the Trump administration is shifting on?

[Gavin Bade]

Yeah, so this is a subtle but important shift in the Trump administration's reciprocal tariffs. These are the ones that he unveiled on Liberation Day back in April, then paused. Then there are a bunch of negotiations. He put them back in place in early August. Right. And so what he's done in the last few weeks here is he has increased the exemptions or the carve outs from these tariffs for a few dozen products. They've also given indications that they're going to do more in the future. There was an executive order in September where Trump said not only am I exempting more products from these tariffs, but I'm going to lay out an entire list of hundreds of products that I'm going to say are available for exemptions if we make a trade deal with another country. They're putting the offer out there to other nations to say if you do a deal with us, we can carve out more of these tariffs as well.

[Alex Osola]

And why is this happening now?

[Gavin Bade]

There's a few reasons for this. One of them is the reciprocal tariffs are under legal threat. This is based on a very novel interpretation of emergency national security law. The Supreme Court is going to hear a case on this early next month. They're expanding this other tranche of tariffs, the so called Section 232, the more classic national security tariffs. They're on much firmer ground, legally speaking. This is what you see as tariffs on steel, aluminum, automobiles deals. And really what we're tracking here is they are shifting the emphasis away from the reciprocal tariffs somewhat and toward the section 232 national security tariffs.

[Alex Osola]

So for businesses that have been trying to navigate these tariffs that have been changing, what does this mean for them?

[Gavin Bade]

It's still going to be a lot of uncertainty here, right? In the first term tariffs and the tariffs on China, there was an official exemptions process. So any business could apply to the U.S. trade Representative's office and say, hey, I get this component from China. I can't get it from anywhere else. Can I get a break on the tariffs until we redo our supply chain? And usually they would get that exemption. Now there's no such process. It's just if you want an exemption, you kind of have to call up Howard Lutnick, the commerce secretary, or call up Jameson Greer, the US Trade representatives, and hope that you can convince them there's not a bona fide technocratic process. So I think we're only going to see more uncertainty coming forward.

[Alex Osola]

Wall Street Journal reporter Gavin Baid, thanks so much for joining us.

[Gavin Bade]

Thank you, guys.

[Alex Osola]

In other news, we're exclusively reporting that Goldman Sachs is expanding its push into financing data centers and other infrastructure so the bank can grab a bigger piece of the AI boom. The Wall street giant is creating a team within its global banking and Markets division that will focus on financing infrastructure both for the AI buildout and for building and improving traditional infrastructure like toll roads and airports. That's according to people familiar with the matter. And the investment bank Jefferies appears to have calmed investors worst fears about its involvement in the collapse of auto parts maker First Brands. At the bank's investor day yesterday, CEO Rich Handler said Jefferies believes it was defrauded and that he doesn't see the collapse of the auto parts supplier as a sign of broader credit issues. Jefferies shares rose almost 6%. Its stock tumbled 11% yesterday after the WSJ published a report about the firm's ties to First Brands through both its investment banking and asset management divisions. In other trading today, American Express shares jumped more than 7% after the credit card company said its cardholders spent more and card fees grew, boosting profit. Stocks overall rose after some fresh comments from President Trump about new tariffs he's threatened to put on goods from China. He said in a television interview that those extra charges weren't sustainable. The Dow, the S&P 500 and the NASDAQ all closed about half a percent higher. The three indexes also finished the week higher, with the S and P rising 1.8% overall to close back near records after several turbulent days of trading. Coming up, how Walmart, once known for its low pay, became a case study for how to treat workers. That's after the break.

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[Alex Osola]

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[Alex Osola]

There are tremors in the peace process between Israel and Hamas that underscore the fragility of the high stakes deal. The truce is stumbling after Hamas failed to return all of the bodies of dead hostages that remain in Gaza. Israel knew Hamas wasn't able to locate all of them. But the militant group's initial decision to return only four bodies looked like stalling to Israel and set off a political skirmish. And even thornier issues lie ahead, such as the disarmament of Hamas. But the two sides must first pass the initial phase of the deal they agreed to last week, which was supposed to be the easy part. Former national Security adviser John Bolton appeared in federal court for the first time today following his indictment yesterday for allegedly mishandling classified information. Bolton pleaded not guilty to the charges. He was ordered to surrender his passport to his lawyer, and the magistrate judge imposed restrictions on his travel. Bolton is the latest of the president's prominent critics to face prosecution, and Apple has signed a five year deal with Formula One for the US rights to air its races. Apple TV will begin airing F1 races in 2026. Terms of the deal weren't disclosed. The Wall Street Journal previously reported that Apple bid as much as $150 million a year for the rights to air the races. Back in 2015, Walmart increased its starting wage to $9 an hour. Walmart was then and still is the largest private employer in the US So raising the salaries of nearly half of its more than a million US hourly workers made it the biggest pay raise in history. Investors reacted by sending Walmart shares down 10%, destroying $21.5 billion in market value in hours. Here's CNBC's Jim Cramer commenting on it to Walmart CEO Doug McMillan shortly after, executives at an investor meeting mentioned how much the move would cost the company.

[Gavin Bade]

I think it surprised a lot of people. I mean, I think people were shocked, frankly. You gotta give them that the stock does not get hit like this.

[Alex Osola]

Fast forward to today. This fall, Walmart's experience will be published as a Harvard Business School case study. And now it's viewed as a success. I'm joined now by Sarah Nassauer, who covers large retailers for the Journal. Sarah, looking at Walmart and all of its many operations, did that investment 10 years ago pay off?

[Sarah Nassauer]

Most people would say that it did. But it's not just a straight line from an increase to $9 an hour to today, that was the underpinnings of a pretty big strategic shift overall towards increasing wages gradually over time, adding more training and benefits. Thinking about their employees a little different and at the same time then using investments to grow online and reduce prices and increase their expectations for store managers about store quality. They kind of use that announcement as a foundation for lots of other big strategy shifts over the last 10 years.

[Alex Osola]

And what does its business look like now, just in terms of numbers?

[Sarah Nassauer]

We've seen steady and very strong sales growth from them over the last at least eight years. And, and they're in a position where they have grown their E commerce business and they're still the country's largest company by revenue. You know, Amazon is close on their heels, but they have grown in a way that 10 years ago people did not think they would.

[Alex Osola]

How did Walmart's moves affect its competitors initially?

[Sarah Nassauer]

Really? Within weeks, we saw announcements from Target and tjx, which owns TJ Maxx and other brands, that they would also set their minimum at $9 an hour. Years after you saw Amazon, Target, others, surpassing Walmart's minimum and average wage.

[Alex Osola]

Where do Walmart's wages stand now compared to those competitors?

[Sarah Nassauer]

Basically just above the average of its retail competitors. And that's very much by design. They used to be at the bottom and now they're just above the middle. And that's where they say they want to be on wages because they want to have enough money to do other things like bonuses and benefits and training. They feel that giving a path to promotion, for example, that would mean a higher wage is something that keeps people around longer. And that's what they're trying to do, is keep people around longer, they say.

[Alex Osola]

Wall Street Journal reporter Sarah Nassauer, thanks so much for joining us.

[Sarah Nassauer]

Thanks for having me.

[Alex Osola]

And that's what's news for this week. Tomorrow you can look out for our weekly markets wrap up what's news in markets? Then on Sunday, as part of our USA250 project, will be digging into how speculation has helped shape the US Economy. That's in what's New Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienname and Zoe Kolkin, with supervising producer Tali Arbel. Michael Lavall wrote our theme music. Aisha El Musleam is our development producer, Chris Insinsley is our deputy editor. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osola. Thanks for listening.