WSJ What’s News: Trump Presses Ahead With More Tariffs
Released on February 10, 2025
Host: Luke Vargas, The Wall Street Journal
Introduction
In this episode of WSJ What’s News, host Luke Vargas delves into President Donald Trump's latest economic maneuvers, including the imposition of new tariffs on steel and aluminum. The discussion extends to the broader implications for international trade, market reactions, and the intersection of politics and cryptocurrency regulation. Additionally, the episode explores France's ambitious nuclear-powered AI project and examines speculative investment trends surrounding meme coins.
Trump’s New Tariffs on Steel and Aluminum
Implementation of Tariffs
President Trump fulfilled a campaign promise by imposing a 25% tariff on imported steel and aluminum, affecting all exporting nations to the U.S. This move aims to protect domestic industries and reduce dependency on foreign metals.
Senator Moreno’s Endorsement
Ohio Republican Senator Bernie Moreno, a staunch Trump ally, emphasized the permanence of these tariffs, stating, “these measures would be structural and long term, not the kind that can be averted by a few phone calls from foreign leaders” (00:56).
Market Reaction
Unlike the initial market turmoil during Trump's first term tariff announcements, the current response appears subdued. Katie Barnado, Journal markets editor for Europe, noted, “there was a little bit of reaction in some London listed base metals... but U.S. stock futures are actually pointing to a higher market” (02:00). This suggests that markets may be acclimating to the new tariffs without significant disruption.
Future Tariff Plans
Trump indicated plans to announce reciprocal tariffs targeting U.S. trading partners imposing duties on American exports. This strategy represents a comprehensive approach to trade protectionism, potentially escalating trade tensions globally (02:28).
Conflict with Federal Judiciary and Executive Branch
Criticism of Federal Judges
Vice President J.D. Vance and Elon Musk criticized a federal judge who temporarily blocked members of Musk's Department of Government Efficiency from accessing the Treasury Department’s payment system. Vance asserted that “judges aren't allowed to control the executive's legitimate power” (02:28), while Musk went further, calling for the judge's impeachment.
Trump’s Statement
President Trump, addressing the issue while en route to the Super Bowl, declared, “when a president can't look for fraud and waste and abuse, we don't have a country anymore, so we're very disappointed with the judges that would make such a ruling” (02:28). This strong rhetoric underscores the administration's contentious relationship with the judiciary.
Legal Proceedings
A court hearing regarding the Treasury Department case is scheduled for Friday, highlighting ongoing legal battles between the executive branch and the judiciary.
The SEC’s Stance on Cryptocurrency and Meme Coins
Introduction to Meme Coins
Jack Pitcher explains that meme coins are cryptocurrencies often tied to internet memes or jokes, lacking clear economic value. Notably, the Trump Organization holds a significant portion of these coins, including ones named Trump and Melania (07:38).
Leveraged ETFs on Meme Coins
A boutique asset manager, Tuttle Capital Management, has filed to create leveraged Exchange-Traded Funds (ETFs) that aim to double the daily returns of these meme coins. Jack Pitcher highlights the extreme volatility, stating, “if the Trump coin falls 40% in a day, the ETF would fall 80%” (09:35).
SEC’s Potential Decision
Under the Trump administration, the SEC faces the challenge of regulating these high-risk financial products. Jack Pitcher posits, “the new SEC under the Trump administration has to decide where, if anywhere, to draw the line on crypto” (10:47). The involvement of Trump’s name in these coins adds political pressure to the regulatory decision-making process.
Historical Context
Previously, the SEC approved leveraged ETFs for established cryptocurrencies like Bitcoin and Ethereum. However, meme coins present a new level of risk and volatility, testing the SEC's regulatory boundaries (10:47).
France’s Nuclear-Powered AI Initiative
France is making strides to compete in the global AI race by committing a gigawatt of nuclear energy to power a massive AI computing project. Fluidstack, leading this initiative, plans to start construction in the third quarter, aiming to rival the U.S.-backed Stargate project. The ambitious endeavor faces challenges, including securing adequate funding and obtaining sufficient AI chips (02:28).
Market News and Economic Indicators
BP’s Share Surge
BP's shares rose approximately 7% in London after Elliott Investment Management acquired a stake in the struggling oil giant. The activist hedge fund seeks significant changes to enhance BP’s performance, although the exact size of the stake remains undisclosed (02:28).
China’s Rising Inflation
China reported a 0.5% increase in consumer inflation last month, driven by rising food and service prices ahead of the Lunar New Year. Core CPI rose for the fourth consecutive month, indicating a potential recovery in consumer demand following recent stimulus measures (02:28).
Speculative Investment Trends: Meme Coins and ETFs
Trump Meme Coin ETF Initiative
An asset manager is attempting to launch an ETF that doubles exposure to Trump-associated meme coins. Jack Pitcher discusses the volatility and risks involved, noting that such ETFs could be devastating if the underlying coins experience significant declines (07:38).
Investment Risks
Investors are warned about the high-risk nature of leveraged ETFs tied to meme coins. Jack Pitcher emphasized, “if one had been around the first week of trading for the Trump coin,... they would have been wiped out” (09:11). The prospectus for these funds clearly states the potential for total loss, highlighting the speculative nature of these investments.
SEC’s Critical Role
The SEC’s forthcoming decisions on these ETFs will play a crucial role in determining the future of such high-risk financial products. The involvement of Trump’s brand adds a unique dimension to the regulatory considerations (10:47).
Strategic Shifts in the Tech Sector
MicroStrategy’s Transformation
Strategy, formerly known as MicroStrategy, has rebranded and transformed into a significant Bitcoin investor. This strategic pivot has led to a surge in its stock price. However, critics argue that investors betting on Strategy are paying a premium, as the stock’s value is contingent on Bitcoin’s performance. Jonathan Weil of WSJ's Take on the Week comments, “MicroStrategy stock will go up... it just shouldn't be worth more than the value of the stuff that it owns on a net asset value basis” (11:49).
Conclusion
This episode of WSJ What’s News provides a comprehensive overview of President Trump’s aggressive trade policies, the intricate dynamics between the executive branch and the judiciary, and the burgeoning yet volatile world of cryptocurrency investments. Additionally, it highlights significant developments in global AI initiatives and market movements, offering listeners a nuanced understanding of the factors shaping today’s economic landscape.
For those interested in detailed discussions on tax strategies and further market analysis, additional segments and related podcasts are available.
Timestamps
- 00:26 - Introduction to Trump’s tariffs
- 00:44 - SEC and crypto regulation overview
- 00:56 - Detailed discussion on tariffs and market reactions
- 02:00 - Market response analysis
- 02:28 - Reciprocal tariffs and judicial conflicts
- 07:38 - Explanation of meme coins and ETFs
- 09:35 - Risks associated with leveraged ETFs
- 10:47 - SEC’s regulatory challenges
- 11:49 - Strategic shifts in MicroStrategy
Produced by Daniel Bach and Kate Bullivant with supervising producer Christina Rocca.