Trump Opens Key Trade Week With Fresh Tariff Threat

Summary

WSJ What’s News: Trump Opens Key Trade Week With Fresh Tariff Threat

Release Date: July 7, 2025

---

The Monday morning edition of WSJ What’s News delves into significant developments shaping the economic and political landscape. Hosted by Luke Vargas, the episode covers President Donald Trump's recent tariff threats, catastrophic flash floods in Texas, Elon Musk's foray into politics, ongoing negotiations with Columbia University, strategic moves by Oracle, and alarming predictions from top CEOs about the impact of artificial intelligence on employment.

---

1. President Trump's New Tariff Threats and Trade Deal Deadlines

Key Highlights:

• Tariff Announcement: President Trump has threatened an additional 10% tariffs on countries aligning with the BRICS group—Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates. He accuses these nations of harboring "anti-American policies."

• BRICS Response: The BRICS nations have responded by voicing concerns over the potential impact of these tariffs on global trade and economic development during their annual summit declaration.

• Market Reaction: Trump's announcement has led to a downturn in Asian stock markets and U.S. futures, setting a tense tone for the week. There is a Wednesday, July 9 deadline for countries to negotiate trade deals with the U.S., or else face new tariffs.

• Treasury Secretary's Statement: Speaking on CNN's State of the Union, Treasury Secretary Scott Besant indicated that 18 key trading relationships account for 95% of the U.S. deficit, focusing negotiations on these crucial partners.

Notable Quote:

“There are 18 important trading relationships that account for 95% of our deficit, and those are the ones we were concentrating on.” — Treasury Secretary Scott Besant [02:12]

Investor Insights: Journal Deputy Finance Editor Quentin Webb elaborates on the imminent deadlines and the bifurcation of target countries:

“One is this core group of large trading counterparties... and then you have a long tail of smaller countries where the US just says it doesn't have the bandwidth to go through in detail and strike trading deals.” — Quentin Webb [02:12]

---

2. Devastating Flash Floods in Central Texas

Key Highlights:

• Casualties and Damage: The flash floods have resulted in at least 82 deaths, primarily along the Guadalupe River. The disaster struck during a time when the area was populated with families and campers celebrating the July 4th holiday.

• Response Efforts: Rescue teams are battling harsh conditions, including heavy mud, debris, and hazardous wildlife. The rapid rise of the river—35 feet in just over an hour—caught many off guard.

• City Manager's Statements:

  “We did not see any signs of the river rising and by 5:20 we almost weren't able to get out of the park on the upper end. It rose that quickly.” — Kerrville City Manager Dalton Rice [03:49]

Weather Forecast Mismatch:

• The National Weather Service had initially forecasted 3 to 7 inches of rain, but up to 18 inches fell within three hours on Friday, exacerbating the flooding beyond expectations.

---

3. Elon Musk's Political Ambitions and Tesla's Market Reaction

Key Highlights:

• Political Party Formation: Tesla CEO Elon Musk announced the creation of a new political entity, the America Party, via social media. This move has caused Tesla shares to drop in premarket trading.

• Trump's Reaction:

  “I think starting a third party just adds to confusion. It really seems to have been developed for two parties. Third parties have never worked so he can have fun with it, but I.” — President Donald Trump [04:56]

• Regulatory Concerns: Trump's allies question Musk's ability to manage his duties at Tesla alongside his political endeavors. Businessman James Fishback has already postponed an investment in Tesla, expressing concerns over Musk's dual roles.

---

4. Columbia University Negotiates Federal Funding Restoration

Key Highlights:

• Funding Restoration Talks: Columbia University is in discussions with the Trump administration to restore some of its federal funding, which was previously canceled due to alleged antisemitism.

• Potential Terms: Sources indicate that the proposed agreement might forgo a consent decree, opting instead for a monitor or outside observer with limited authority compared to a federal judge. The negotiations are still in progress and the deal remains uncertain.

---

5. Oracle’s Strategic Discount to the Federal Government

Key Highlights:

• Discount Offer: Oracle is reportedly offering the federal government a substantial 75% discount on its database software and cloud computing services. This move follows similar deals from other tech giants like Google, Adobe, and Salesforce.

• Federal Savings Initiative: The General Services Administration (GSA) is negotiating with various cloud providers to further enhance savings from federal contractors, emphasizing the administration's commitment to cost-cutting measures.

---

6. CEOs Sound Alarm on AI's Impact on Employment

Key Highlights:

• Bold Predictions: CEOs from major corporations are increasingly vocal about the potential for artificial intelligence to displace a significant portion of the workforce. Amazon CEO Andy Jassy, for example, has projected a reduction in their corporate workforce due to AI advancements.

• Sector-Wide Concerns: Beyond tech, executives from the automotive industry (Jim Farley of Ford) and online retail (Thredup CEO) predict that AI could replace up to half of all white-collar jobs in the U.S. within the next few years.

• Industry Response: These statements have sparked anxiety among workers about job security and the future of the employment market.

Notable Quotes:

“I could see AI replacing, as he put it, literally half of all white collar workers in the U.S.” — Jim Farley, CEO of Ford [08:15]

“I think it's going to destroy way more jobs than the average person thinks.” — CEO of Thredup [08:15]

Contrasting Opinions:

• OpenAI's View: Brad Lightcap, COO of OpenAI, offers a more tempered perspective, suggesting that while AI will displace some jobs, it may also create new opportunities. He cautions against panicking, emphasizing the uncertainty surrounding the extent of AI's impact.

“We have yet to see any evidence that people are kind of wholesale replacing entry level jobs... any new technology can lead to shifts in the job market.” — Brad Lightcap, COO of OpenAI [11:55]

Business Strategy Shifts:

• Companies are not only cutting jobs but also rethinking their workforce structures. There's a trend towards smaller, more experienced teams and role consolidation, aiming for increased efficiency and productivity in the AI era.

---

Conclusion

The episode underscores a period of significant uncertainty and transformation across various sectors. From geopolitical tensions affecting global trade to natural disasters prompting emergency responses, and from high-profile political maneuvers to the rapid advancement of AI reshaping the employment landscape, the week ahead promises to be pivotal. Listeners are encouraged to stay informed as developments unfold in these critical areas.

---

This summary encapsulates the key discussions and insights from the WSJ What’s News podcast episode titled "Trump Opens Key Trade Week With Fresh Tariff Threat." For a more detailed account, listening to the full episode is recommended.

Transcript

[Oracle Representative]

In business, they say you can have better, cheaper or faster, but you only get to pick two. What if you could have all three? You can with Oracle Cloud infrastructure. Try OCI for [e-mail] Wall Street.

[Luke Vargas]

President Trump opens a key week for trade deals by threatening new tariffs on emerging market countries. Plus, rescue efforts in central Texas face weather challenges following deadly flash floods.

[Chip Cutter]

This is tough work. It's hot, they're in the mud, they're removing debris. There's snakes, there's water, moccasins.

[Dalton Rice]

This, this is God's work that they're doing.

[Luke Vargas]

And Tesla shares drop after Elon Musk announces the formation of a new political party. It's Monday, July 7th. 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, President Trump is threatening additional 10% tariffs on countries that align with the BRICS group of emerging markets, which he accused of harboring anti American policies. Hours earlier, BRICS members gathered at an annual summit had signed a declaration voicing concern with tariffs and their effect on global trade and economic development. Along with core Brazil, Russia, India, China and South Africa, brics recently grew to include Egypt, Ethiopia, India, Indonesia, Iran, Saudi Arabia and the United Arab Emirates. Trump's threat sent Asian stock markets and US Futures lower ahead of what was already shaping up to be a tense week featuring a Wednesday deadline for dozens of countries to strike trade deals with Washington or face new tariffs. Speaking on CNN's State of the Union yesterday, Treasury Secretary Scott Besant promised several big announcements over the next couple of days, but didn't get into specifics. There are 18 important trading relationships that account for 95% of our deficit, and those are the ones we were concentrating on. I asked Journal deputy finance editor Quentin Webb what investors should be expecting in the days to come.

[Quentin Webb]

So there's a couple of things going on here. One is that we still have this Wednesday, July 9, deadline for reaching deals with the US on tariffs. Then there's this August 1 deadline for the tariffs taking effect. And there's also two groups of countries that the Trump administration is addressing. One is this core group of large trading counterparties. So you have the European Union, Japan, India, South Korea and others who are scrambling to come up with something that will work for them and work for the US and then you have a long tail of smaller countries where the US Just says it doesn't have the bandwidth to go through in detail and strike trading deals. Treasury Secretary Benton said on Sunday that there was 100 or so of these where letters will just go out informing them of the table tariff rates.

[Business Analyst]

Countries that export to the US are.

[Luke Vargas]

Currently subject to a 10% baseline tariff. For some trading partners, that rate could rise as high as 60 or 70% after Wednesday's deadline. Officials in Central Texas are continuing to search for survivors after flash floods on.

[Business Analyst]

Friday killed at least 82 people, the.

[Luke Vargas]

Majority of them along the Guadalupe river, which have been crowded with families and campers ready to enjoy the July July 4th holiday. Among the missing are nearly a dozen girls from a summer camp that was located upstream from the town of Kerrville, where the river rose almost 35ft over just an hour and 15 minutes on Friday morning. Kerrville City Manager Dalton Rice, heard here courtesy of KSAT, said the intensity of the flooding couldn't have been predicted.

[Texas City Manager]

So we did look at stuff. Obviously I had told the story. I was out on the river trail at 3:30. I left about 4 o'. Clock. We did not see any signs of the river rising and by 5:20 we almost weren't able to get out of the park on the upper end. It rose that quickly.

[Luke Vargas]

While the National Weather Service first issued flash flood warnings early Thursday afternoon, forecasters at the time expected a maximum of 3 to 7 inches of rain, though by early Friday up to 18 inches had fallen over a three hour period. Texas is the deadliest state in the country for flood related deaths with its so called flash flood alley between Dallas and San Antonio, Antonio considered the worst region for extreme flooding. Tesla shares have dropped in premarket trading after Elon Musk over the weekend announced he's creating a new political party called the America Party, reigniting a feud between the Tesla CEO and President Trump. Trump responded to Musk's move while speaking to reporters yesterday.

[President Trump]

I think starting a third party just adds to confusion. It really seems to have been developed for two parties. Third parties have never worked so he can have fun with it, but I.

[Luke Vargas]

Think it's ridiculous Musk made the announcement on social media without offering evidence. He's taken steps to create the party and neither Musk nor his advisors have filed paperwork to the Federal Election Commission in response. A number of Trump's allies are questioning whether starting a new party is compatible with Musk's full time obligations to Tesla as CEO, with businessman James Fishback saying he sent a letter to Tesla chair Robin Denholm and is postponing an investment into the company. Meanwhile, we have learned that Columbia University is in talks with the Trump administration to restore some of its federal funding after the government canceled $400 million in federal grants and contracts over allegations of antisemitism back in March. That's according to people familiar with the matter, two of whom added that the potential agreement may not include a consent decree, which a government task force had init sought, and instead would involve the possibility of a monitor or outside observer who'd have less power than a federal judge. The exact terms of a deal are still being hashed out, and any deal could still fall apart. And we are exclusively reporting that Oracle is offering the federal government a major discount on the cost of its database software and cloud computing service in what would be the latest in a series of deals struck between the General Services Administration and the likes of Google, Adobe and Slack parent company Salesforce Force. While Oracle declined to specify the size of the discount, the GSA put it at 75%. The agency has set it's in negotiations with other cloud providers to potentially make similar deals as part of the administration's continued focus on extracting savings from federal contractors. Coming up, Chief executives are no longer playing down fears about how many human jobs AI will make redundant. Instead, they're beginning to predict how deep those cuts will go. That story after the break.

[Viking Representative]

Foreign.

[Dalton Rice]

This message comes from Viking, committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, destination focused dining and cultural enrichment on board and on shore. And every Viking voyage is all inclusive with no children and no casinos. Discover [e-mail].

[Luke Vargas]

Forget hedging or saying it's.

[Business Analyst]

Too early to tell how artificial intelligence will affect jobs.

[Luke Vargas]

The Journal's chip cutter reports that the CEOs of some of America's largest businesses are increasingly speaking their minds, and what they're saying could be a cause for alarm or opportunity, depending on your role in the workforce. Chip not too long ago, we made.

[Business Analyst]

Mention on the podcast briefly of these comments from Amazon CEO Andy Jassy, in which he said AI was going to usher in once in a lifetime technological change and allow the company to reduce its corporate workforce over the next few years. Now you've been looking at this, and it seems Jassy was far from alone in making a bold prediction like that.

[Luke Vargas]

Tell us what you've heard.

[Chip Cutter]

Well, we're seeing a real shift in how CEOs talk about this. They used to sort of dodge the question of whether AI would take jobs. In the wake of Jassy's comments, we're seeing other CEOs be a little more bold in their predictions. So, for example, the CEO for Jim Farley said on stage at the Aspen Ideas Festival that he could see AI replacing, as he put it, literally half of all white collar workers in the U.S. the CEO of the online resale site Thredup was at an investor conference recently where he said, I think it's going to destroy way more jobs than the average person thinks. And so you have certainly some of the biggest, most prominent companies in America, like Amazon, sounding this warning. But then you also have executives in a range of other industries increasingly saying AI could displace people, could change jobs.

[Business Analyst]

And Chip, the importance here is what? It's not just folks who are developing AI technology that are the ones predicting transformative change.

[Chip Cutter]

That's right. The biggest AI companies have been saying there are going to be jobs that are eliminated or sort of just changed dramatically because of AI, but then we haven't necessarily seen executives in other industries say the same thing. And so I think that's what's notable here. These are executives outside of Silicon Valley making really pointed comments on what AI could do to the white collar workforce. And as you'd imagine, this is then causing a lot of workers to feel a sense of alarm about how do you stay relevant? What does this mean for entry level workers? What does it mean if you're mid career and trying to hold on right now? I mean, it's, it's, I think, just raising a lot of questions about where the employment market is headed and how people kind of keep their jobs.

[Business Analyst]

I mean, on one hand, Chip, I guess you might expect folks in the AI industry to be having very rosy forecasts about the kind of positive change AI would bring. And yet it was the CEO of.

[Luke Vargas]

Anthropic, a big player in the industry.

[Business Analyst]

Who issued what really sounded like a warning.

[Chip Cutter]

The Anthropic CEO said in May that half of all entry level jobs could disappear in one to five years. Now he said that could result in U.S. unemployment of 10 to 20%. So huge numbers. And then he urged other company executives and government officials to stop what he called, quote, sugarcoating the situation. So a real sort of shot there of saying this is real, it's gonna cause a lot of pain and people need to be ready for it.

[Business Analyst]

Chip, you can't answer this for us, but I would be just very curious to hear what heads of state, labor secretaries, central bank chiefs make of that prospect. 10 to 20% unemployment in a half a decade is pretty alarming stuff. But you know, I'm curious if you can say how businesses have been suggesting they may go about implementing AI related job cuts. Do we have a sense of how they're inclined to view their workforces given the emergence of this technology?

[Chip Cutter]

To date, a lot of the sort of AI job cuts have happened in places like customer service, of course, in human resources, some in law. There are areas where companies feel like they can apply this software and be able to take roles out or put people in other places. But there's a more fundamental shift underway at the moment in how executives just think about headcount period. We've heard a number of executives say that they actually think bigger teams are an impediment, that having more people doesn't actually help you grow. They want smaller teams. They want, for example, more experienced engineers working with AI instead of hiring a bunch of sort of entry level coders. And then you hear companies talking about ways to consolidate roles even more so blurring two jobs into one.

[Business Analyst]

Yeah, and I would imagine folks will be hearing this now, bracing for pressure from management over efficiency targets, productivity targets. Were there any silver linings here, though? Any contrarian views about the scope of change that we could be in store for?

[Chip Cutter]

Well, we can go to the AI companies. Brad Lightcap, who is the chief operating officer of OpenAI, told a new York Times podcast that he doesn't think the impact to entry level workers will be as swift and sweeping as some predict. He said that we have yet to see any evidence that people are kind of wholesale replacing entry level jobs. He said there certainly will be job displacement and but he noted that any new technology can lead to shifts in the job market. And so I think you have a number of people like him who would say that there can still be new jobs created, that it's a little bit unclear where this all goes still, and so maybe it's not a total reason to panic just yet.

[Luke Vargas]

That was the Journal's chip cutter and we'll be anxiously awaiting updates from you in the coming weeks and months as you hear more chip.

[Business Analyst]

Thank you.

[Chip Cutter]

As always, thanks for having me.

[Luke Vargas]

And that's it for what's news for this Monday morning.

[Business Analyst]

Today's show was produced by Kate Bullivant and Daniel Bach. Our supervising producer was Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show.

[Viking Representative]

Until then, thanks for listening.

[Reba McEntire]

Isn't home where we all want to be? Reba here for realtor.com the Pro's number one most trusted app, finding a home is like dating. You're searching for the one with over 500,000 new listings every month. You can find the one today download the realtor.com app cause you're nearly home. Make it real with realtor.com Pro's number.

[Luke Vargas]

One most trusted app. Based on August 2024 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings February 2024 through January 2025.