U.S. Doubles Steel, Aluminum Tariffs to 50%

Summary

WSJ What’s News: Detailed Summary of "U.S. Doubles Steel, Aluminum Tariffs to 50%" Episode

Release Date: June 4, 2025
Host: The Wall Street Journal
Episode Title: U.S. Doubles Steel, Aluminum Tariffs to 50%

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Introduction

In this episode of WSJ What’s News, the Wall Street Journal delves into significant developments affecting global trade, the banking sector, clean energy policies, and international relations. Key topics include the U.S. doubling tariffs on steel and aluminum, the easing of regulatory restrictions for Wells Fargo, debates within the Senate over clean energy tax credits, and strategic shifts in manufacturing amidst escalating trade tensions.

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1. U.S. Steel and Aluminum Tariffs Doubled to 50%

Overview of the Tariff Increase

The United States has implemented a substantial increase in tariffs on imported steel and aluminum, raising them to 50%. This marks a doubling of the previous rates, significantly impacting major global metals producers.

Economic Implications and Industry Reactions

Industry leaders have expressed concerns that this surge may lead to higher prices from steelmakers and increased surcharges on aluminum purchases. Such adjustments could potentially result in shortages within the market. These tariffs are poised to disrupt ongoing trade negotiations and may incite retaliatory measures from affected countries.

"50% US tariffs on imported steel and aluminum are kicking in today... potentially triggering shortages."
—Luke Vargas, [01:08]

Global Response and European Union's Stance

EU Trade negotiator Maros Shefjevic is scheduled to meet with U.S. Trade Representative Jamison Greer in Paris to address these changes. The European Union views this tariff hike as a problematic shift in U.S. policy, especially amidst the EU's efforts to bolster economic growth and develop its defense manufacturing base, which heavily relies on metals.

"This is an inconvenient change in US policy... could actually trigger retaliation by putting tariffs on US goods."
—Kim McRail, [02:00]

Impact on Global Economies

The tariffs are already influencing global economic indicators. For instance, Australia's economy experienced a sharp slowdown in the first quarter, growing by only 0.2%, following an OECD report warning of a potential global growth stall. This slowdown is attributed to diminished export demand from China, Australia's largest trading partner.

"Australia's economy slowed sharply in the first quarter to just 0.2%."
—Luke Vargas, [02:46]

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2. Wells Fargo Regulatory Changes

Easing of Regulatory Restrictions

Nearly a decade after its notorious fake accounts scandal, Wells Fargo is seeing the removal of regulatory constraints that previously capped its assets at approximately $2 trillion. This significant policy shift allows the bank to expand its balance sheet and reallocate resources previously dedicated to restructuring and reputation management.

"The US bank will now be able to grow its balance sheet and redirect resources it had been pouring into efforts to fix itself and repair its tarnished reputation."
—Alex Frankos, Finance Editor, [06:53]

Historical Context and Future Prospects

The asset cap, imposed in 2018, was an unprecedented measure aimed at curtailing Wells Fargo's growth until it could rectify its internal issues. With regulators lifting this cap, there is optimism within the investment community about the bank's potential for resurgence.

"Wells Fargo is now on a foundation to grow and catch up... Just look at the stock price of Wells Fargo since 2018 compared to its peers like JP Morgan."
—Alex Frankos, [06:41]

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3. Shifts in Manufacturing Amid Trade Tensions

Automakers Considering Moves to China

In response to Beijing's export restrictions on rare earth magnets essential for electric vehicle (EV) motors and other components, major U.S. automakers are contemplating shifting parts of their manufacturing operations to China. This strategic pivot contrasts with the original intent of the trade war, which aimed to repatriate manufacturing to the U.S.

"Major automakers say they're considering shifting some parts manufacturing to China... a remarkable outcome from a trade war."
—Luke Vargas, [02:46]

China's Export Restrictions

China's policy initiated in April requires companies to obtain permission to export magnets made with rare earth metals. While finished parts remain exempt, this move has prompted U.S. manufacturers to reassess their supply chains and consider alternative manufacturing locales.

"China in April began requiring companies to apply for permission to export magnets made with rare earth metals."
—Luke Vargas, [02:46]

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4. South Korea's New Leadership and International Relations

Election of Lee Jae Myung

South Korea has elected Lee Jae Myung, often dubbed the "Bernie Sanders of South Korea," as its new president following snap elections. Lee's administration faces the challenge of revitalizing the economy and strengthening alliances with the U.S. and Japan, while also seeking improved relations with Beijing.

"Lee pledged to revive the country's economy and strengthen alliances with the US and Japan while continuing his call for a better relationship with Beijing."
—Luke Vargas, [03:57]

Implications for U.S.-China Relations

Lee's balanced approach could complicate efforts by the U.S., led by President Trump, to galvanize allies into countering China's growing influence in trade and security sectors. South Korea's significant investments in the U.S. juxtaposed with China's role as its largest trading partner underscore the delicate diplomacy required.

"That strategy could complicate President Trump's efforts to convince allies to help contain China in trade and security matters."
—Luke Vargas, [04:22]

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5. SpaceX's Revenue Growth Amid NASA Budget Cuts

SpaceX's Financial Projections

Elon Musk announced that SpaceX is on track to achieve a revenue of $15.5 billion this year, driven by its Falcon 9 rocket operations and Starlink satellite internet service. Musk emphasized that SpaceX's commercial revenue would surpass NASA's entire budget.

"SpaceX would exceed the entire budget of NASA."
—Elon Musk, via social media, [05:30]

NASA's Proposed Budget Reduction

Contrasting SpaceX's growth, the White House has proposed reducing NASA's budget from nearly $25 billion to $18.8 billion for the next fiscal year. This proposed cut poses challenges for SpaceX, a major NASA contractor, which anticipates $1.1 billion in revenue from the agency this year.

"The White House has proposed cutting NASA's budget to $18.8 billion for its next fiscal year from nearly $25 billion."
—Luke Vargas, [05:55]

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6. Senate Deliberations on President Trump's "Big Beautiful Bill"

Overview of the Legislation

Senate Republicans are actively working to pass President Trump's expansive spending bill, colloquially dubbed the "big beautiful bill." The House passed the spending legislation narrowly last month, urging GOP senators to avoid modifications that might complicate its subsequent return to the House.

Internal Divisions Within the GOP

Key disagreements among Senate Republicans include concerns over increased spending leading to a potential $4 trillion rise in the debt ceiling, influenced by border expenditures and tax cuts. A significant point of contention is the proposed phase-out of clean energy tax credits by 2028, as set in the House bill.

"Republicans push to pass President Trump's so called big beautiful bill... one stumbling block dividing some GOP senators besides increased spending is what to do about clean energy tax credits."
—Luke Vargas, [08:02]

Interview with Jason Grummet on Clean Energy Tax Credits

Jason Grummet, CEO of the American Clean Power Association, provided insights into the current status and future of clean energy tax credits. He emphasized the essential role these credits played in accelerating the deployment of clean energy sources and fostering American manufacturing in the sector.

"If you rip it up too fast, you just strand a lot of investment. You create a lot of chaos."
—Jason Grummet, [00:52]

Challenges and Economic Impacts

Grummet warned that the House bill's timeline for phasing out credits by 2028 poses significant risks, including potential chaos in energy markets and chilled investments in clean energy infrastructure. He advocated for a more predictable and gradual phase-out to maintain economic stability and honor existing financial commitments.

"It's going to really chill investment for all energy infrastructure... We need to land the plane, not crash the plane."
—Jason Grummet, [13:07]

Optimism for Bipartisan Support

Despite the partisan origins of the Biden administration's clean energy initiatives, Grummet remains hopeful that reforming the tax credits can gain bipartisan support in the Senate by framing clean energy investments as engines driving economic growth.

"The clean energy investment are engines that are driving economic growth."
—Jason Grummet, [13:07]

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Conclusion

This episode of WSJ What’s News comprehensively covered pivotal developments in U.S. trade policy, the banking sector's regulatory environment, shifts in global manufacturing strategies, international political dynamics, the evolving landscape of space and energy sectors, and legislative debates shaping the future of clean energy investments. Expert insights, coupled with real-time economic indicators, provide listeners with a nuanced understanding of the complex interplay between policy decisions and their global ramifications.

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Produced by Daniel Bach and Kate Bullivant | Supervising Producer: Sandra Kilhoff

Transcript

[Luke Vargas]

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Until it results in not just one truck, but a whole lineup. The 2025 GMC Sierra lineup featuring the Sierra 1500, Heavy Duty and EV. Because true bliss is removing every shadow from every doubt, we are professional grade. Visit gmc.com to learn more. The US doubles steel and aluminum tariffs plus the handcuffs come off for Wells Fargo nearly a decade after its fake accounts scandal. And the potential phase out of clean energy tax credits divides Senate Republicans as the chamber takes on the GOP's big, beautiful bill.

[Jason Grummet]

There's right now, by our estimate, $328 billion of clean energy projects under development. And so the issue is when you have tax policy to encourage U.S. companies to make investments, if you rip it up too fast, you just strand a lot of investment. You create a lot of chaos.

[Luke Vargas]

It's Wednesday, June 4th. 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 50% US tariffs on imported steel and aluminum are kicking in today. That is a doubling of prior rates for many of the world's large metals producers, leading industry players to warn that the new rate may necessitate price increases from steelmakers or higher surcharges on aluminum purchases, potentially triggering shortages. The measures could also shake up trade negotiations with those in talks with Washington. Journal reporter Kim McRail is in Paris, where EU trade negotiator Maros Shefjevic is set to meet with US Trade Representative Jamison Greer today at meetings convened by the oecd.

[Kim McRail]

For the eu, this is an inconvenient change in US policy, to say the least. It comes as they've recently promised to advance negotiations to speed things up. To have another increase on US Tariffs is something that EU officials have warned could actually cause some problems. For those negotiations. They've suggested as well that it could actually trigger retaliation by putting tariffs on US goods. In response, EU countries are compared with some big steel exporters like India, Japan, South Korea. They are relatively smaller players. The measures nonetheless come at a very sensitive time for the EU as it tries to increase its economic growth. It's working on building up its defence manufacturing base and obviously that's something that relies very heavily on metals production.

[Luke Vargas]

And those tariffs are now beginning to take their toll, with data showing that Australia's economy slowed sharply in the first quarter to just 0.2%. The slowdown follows an OECD report yesterday warning that global growth could stall amid US d on trading partners like China, which is Australia's biggest source of export demand. The slowdown could heighten speculation of further rate cuts after Australia's central bank said it had considered an emergency 50 basis point cut in May due to the deteriorating outlook. And investors will also be watching the bank of Canada today, which is expected to hold rates steady as policymakers set aside weak domestic demand amid accelerating core inflation. Their decision is due at 9:45am Eastern. And major automakers say they're considering shifting some parts manufacturing to China in the face of export restrictions from Beijing on rare earth magnets used in everything from EV motors to windshield wipers and headlights. That would amount to a remarkable outcome from a trade war that was meant to bring manufacturing back to the U.S. china in April began requiring companies to apply for permission to export magnets made with rare earth metals, though those restrictions don't cover finished parts. And for much more on the race to secure critical minerals, tune in to what's New Sunday this weekend, where we'll be looking at the challenges facing Washington as it scrambles to catch up to China. You can find episodes of what's News Sunday on the very same feed you're using to listen to us now. The so called Bernie Sanders of South Korea, Lee Jae Myung, has been sworn in as president following snap elections that punished former conservative leader Yoon Suk Yeon Yul for attempting to impose martial law. At a ceremony in Seoul, Lee pledged to revive the country's economy and strengthen alliances with the US And Japan while continuing his call for a better relationship with Beijing. That strategy could complicate President Trump's efforts to convince allies to help contain China in trade and security matters. While South Korea's corporate giants are big investors in the US China remains the country's largest trading partner. Elon Musk says that SpaceX is on track to record another significant revenue increase this year, reaching $15.5 billion. The company's launch operation, which revolves around its partially reusable Falcon 9 rocket as well as its satellite Internet business, Starlink, have been fueling revenue growth in recent years. In a social media post, Musk said that commercial revenue at SpaceX would exceed the entire budget of NAS year. The White House has proposed cutting NASA's budget to $18.8 billion for its next fiscal year from nearly $25 billion. Currently. SpaceX is a major contractor at NASA, with Musk saying that about $1.1 billion of the company's expected revenue this year would come from the agency. And federal regulators have moved to lift an asset cap of around $2 trillion placed on Wells Fargo in 2018, an unprecedented punishment that handcuffed the bank's growth after its fake accounts scandal erupted nearly a decade ago.

[Alex Frankos]

This goes back to 2018. It was a very unusual regulation imposed on Wells Fargo for some very unusual behavior, which is that they were signing customers up to accounts and the customers didn't know that they were and it caused a huge scandal and the Fed imposed this cap on them. Say, basically, until you've put your house in order, we're not going to let you grow.

[Luke Vargas]

That was finance editor Alex Frankos, who says the US bank will now be able to grow its balance sheet and redirect resources it had been pouring into efforts to fix itself and repair its tarnished reputation.

[Alex Frankos]

This has been a very punishing regulation for a bank that for years before had been one of the most popular banks for investors. Warren Buffett was famously an investor for a long time. So the investment community is excited about this bank having a foundation now to grow and catch up. Just look at the stock price of Wells Fargo since 2018 compared to its peers like JP Morgan, and it's just so far behind. And so maybe there's some catch up to do if it can take advantage of its newfound liberation.

[Luke Vargas]

Coming up, as Republicans push to pass President Trump's so called big beautiful bill, one stumbling block dividing some GOP senators besides increased spending is what to do about clean energy tax credits. We have got that story after the break.

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[Jason Grummet]

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[Luke Vargas]

Members of the US Senate returned from recess this week with a major item on their to do list, passing President Trump's big beautiful bill, as some are calling it. House Republicans narrowly passed the spending legislation last month and they've urged GOP senators to go easy on any changes, lest they introduce issues that could crop up when the bill returns to them in the House. But that could be tricky. As we report, at least four Senate Republicans have voiced issues with elements of the text which would increase the debt ceiling by at least $4 trillion as a result of increased border spending and tax cuts. Another issue that's dividing Republicans is what to do about clean energy tax credits, which the House bill set to phase out in 2028. And here to talk about that is Jason Grummet, the CEO of the American Clean Power association, an industry group representing wind, solar and energy stor. Jason, remind us quickly, if you could, where clean energy tax credits broadly stand now. What policy could we see shaken up here?

[Jason Grummet]

So about three years ago, the Biden administration passed its own version of a big, beautiful bill. And one of the many things it did was try to really kind of accelerate the deployment of clean energy. It tried to do two things. It tried to increase the deployment of clean power. And we now saw that last year, over 90% of all of the new electrons added to the grid were coming from these clean sources. And the other thing it tried to do is to really kind of supercharge American manufacturing so that we were making the components, the batteries, the solar panels, the wind turbines here in the US and so the goal was just to kind of supercharge the clean energy system. We've done this with almost every aspect of energy in our economy, has some different amount of public support. And no, those credits, those incentives are up for some significant change, which shouldn't surprise us, right? The bill under Biden was passed with just Democratic control. That makes these pieces of legislation vulnerable. There's been broad bipartisan support for clean energy. Most of the investment, most of the energy production is happening in conservative parts of the country. But because the bill was adopted in this partisan way, using the reconciliation process, we knew that when we had a unified flip in government, there was going to be an effort to unwind those credits. The question is how they make the changes and just how disruptive they are to existing investment.

[Luke Vargas]

So the House bill being looked at by the Senate now would phase out these credits in 2028. What are you hearing about this from the companies you represent? How could they stand to be affected?

[Jason Grummet]

Well, so the House bill is kind of a 2028 head fake. It says 2028, but what it really says is if you're not starting to build the project within 60 days of the bill passing, you don't get access to the credits. And if that were not modified in the Senate, you would just see a lot of chaos. Right? You would see energy prices go up, energy demand is really strong. And if we constrain supply, we will see some price spikes. But more than that, it would just be kind of commercial chaos. And if this actually goes forward, it's going to really chill investment for all energy infrastructure. Because who's going to invest tens of billions of dollars in the United States if the expectation is that the law is in kind of this like green light, red light, stop start. And so I think the industry is economically competitive, right? Like we are happy to have clean power compete in the marketplace with the cost of new natural gas. You know, one of the things that people don't appreciate is how quickly you can build renewable projects. Right. These projects can be up and running in 12 months. There's going to be more natural gas added to the system. But it's going to be very difficult to add any of that during the Trump administration. So we're not anxious about the ability to compete as long as the US Congress doesn't intentionally harm US Companies.

[Luke Vargas]

Mentioning the economics of clean energy sources, now I'm looking at research by Bloomberg New Energy Finance here showing that almost everywhere in the world now new wind and solar farms can undercut coal and gas plants on production costs. What would you say to folks who say, well, given that these clean energy tax credits, what's the point? They should be able to and maybe already can stand on their own?

[Jason Grummet]

Yeah, no, look, I think that is a fair assessment. Now the question just is, who's going to wind up paying for these bills? No one in this industry ever wanted credits forever. The expectation was that you would have credits, that they would kind of enable us to really increase the capacity to scale. And that's essential because energy is expected to increase in a way that it hasn't in generation. Right. We're anticipating a 50% increase in electricity demand in the next 15 years. We just need a predictable phase out so that companies don't have to kind of tear up contracts and have half built projects trying to figure out whether they're still economically viable. Right. People made financial commitments based on the law. And when Congress changes the law, they need to do that in a way that honors those commitments.

[Luke Vargas]

Are you optimistic that is an argument that will be received well in the Senate?

[Jason Grummet]

It is certainly being received well by, you know, eight or 10 senators who we're talking to who agree that we have to deal with the deficit. The deficit's like an overweight plane. It's inefficient, it's hard to gain altitude, but you don't reduce weight on a plane by taking off the engines. Right. The clean energy investment are engines that are driving economic growth. And I think members of the Senate appreciate that. We need to land the plane, not crash the plane.

[Luke Vargas]

Jason Grummet is the CEO of the American Clean Power Association. Jason, thanks so much for being with us on what's news.

[Jason Grummet]

Good to be with you, Luke.

[Luke Vargas]

And that's it for what's NEWS for this Wednesday morning. Today's show was produced by Daniel Bach and Kate Bullivant. 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. Until then, thanks for list.