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