What’s Behind President Trump’s Trade Agenda

Summary

WSJ What’s News: What’s Behind President Trump’s Trade Agenda Released May 2, 2025

Host: The Wall Street Journal

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I. Resilient US Labor Market Amid Tariff Uncertainty

Despite ongoing tariff uncertainties under President Trump's administration, the US economy demonstrated notable resilience in April. Employers added 177,000 jobs, surpassing economists' expectations as reported by the Wall Street Journal. The unemployment rate remained steady at 4.2%, signaling a robust labor market.

Greg Ip, Chief Economics Commentator, emphasized, “It's all about maximizing Trump's political power over not just people in the United States, not just U.S. politicians, but the global economy as well” (00:42). This sentiment underscores the administration's broader strategy to leverage economic policies for political gains.

Alan Garber, an economist on the show, highlighted that the current job gains indicate that the tariffs’ effects have yet to permeate the economy significantly. “[...] the effect of the tariffs is not really being felt yet,” he noted (01:49). Factors such as pre-ordered goods and delayed tariff implementations have cushioned the immediate impact on employment. However, Garber cautioned that future job growth might slow due to reduced labor force expansion and potential negative sentiment stemming from fluctuating trade policies.

II. Harvard's Tax-Exempt Status Under Fire

A contentious development in the administration's policies involves Harvard University. President Trump threatened to revoke Harvard’s tax-exempt status following a federal lawsuit filed by the institution. Harvard President Alan Garber responded, asserting that such action would be “highly illegal and destructive” to the university and broader educational institutions (04:56).

The conflict centers on Harvard's claim that the government violated its constitutional rights by freezing billions in federal funding. The tax code expressly prohibits the President and senior officials from directing the IRS to audit or investigate institutions based on political disagreements. This standoff not only threatens Harvard's financial stability but also poses a broader threat to academic freedom and the operational integrity of educational institutions nationwide.

III. Stock Market Gains Reflecting Economic Optimism

Following the positive employment data, US stock markets experienced significant gains. The Dow Jones, S&P 500, and Nasdaq Composite each surged by 1.3% or more. Notably, the S&P 500 marked its ninth consecutive session of gains, the longest streak since 2004 (04:16). This upward trend indicates investor confidence in the economy's strength despite tariff-induced uncertainties.

IV. Dissecting President Trump’s Trade Strategy

President Trump's trade agenda is multifaceted, aiming to increase federal revenue, strengthen the US's negotiating position in global trade, and revitalize domestic manufacturing within his first 100 days back in power.

Gavin Bade, Trade and Economic Policy Reporter, provided an in-depth analysis of Trump's worldview and strategic approach:

“[...] he's using that consumer power in the United States as his leverage and saying, if you want to sell into this country, you're going to have to eliminate trade barriers on US Goods, you're going to have to maybe spend more on the military, you're going to maybe have to limit your dealings with the Chinese economy. And he's really trying to drive a hard bargain when it comes to this stuff.” (08:00)

Trump’s strategy hinges on US economic dominance, particularly leveraging the nation’s vast consumer market—the "big beautiful store"—to negotiate favorable trade terms. By demanding loyalty and reshaping trading relationships bilaterally, Trump aims to minimize multilateral negotiations, potentially isolating individual trade partners.

However, this hardline approach carries risks. Bade observed that foreign officials are contemplating a united front to counteract Trump's tactics, which could undermine his unilateral strategy. Additionally, reports suggest that China is contemplating adjustments to address US concerns over the fentanyl trade, signaling possible shifts toward diplomatic negotiations that could alleviate some trade tensions (10:02).

V. Corporate America’s Evolving Diversity Initiatives

In related economic news, Goldman Sachs is revising its diversity programs, notably altering its One Million Black Women program to extend support beyond just black women to include low and moderate-income populations. This change reflects a broader trend within corporate America to reassess Diversity, Equity, and Inclusion (DEI) initiatives in light of legal and societal pressures. While some view these modifications as superficial, there are concerns that they may dilute essential funding and support critical for maintaining diversity within organizations.

VI. Additional Industry Insights

The episode also touched upon shifting workplace cultures in the tech industry. Katherine Bindley, Tech News Briefing Reporter, noted that the previously vibrant and inclusive tech workplaces are normalizing to more conventional corporate environments due to changing labor markets and reduced worker leverage (11:30). This transition marks a significant departure from the industry's earlier emphasis on employee well-being and inclusive policies.

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Conclusion

The episode of WSJ What’s News delved into the intricate dynamics of President Trump's trade policies, highlighting their immediate impacts on the US labor market and broader economic implications. While the current job growth remains robust, future prospects appear uncertain amid shifting trade strategies and potential legislative challenges. Additionally, institutional conflicts, such as the one between Trump’s administration and Harvard University, underscore the contentious landscape of political and economic power plays. The stock market's positive response reflects optimism, yet the evolving strategies in global trade negotiations and corporate diversity initiatives indicate a period of significant adjustment and potential volatility ahead.

For those interested in the nuanced interplay between politics, economics, and corporate strategies, this episode provides a comprehensive overview of the current landscape and the forces shaping it.

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Notable Quotes:

• Greg Ip (00:42): “It's all about maximizing Trump's political power over not just people in the United States, not just U.S. politicians, but the global economy as well.”

• Alan Garber (01:49): “[...] the effect of the tariffs is not really being felt yet.”

• Gavin Bade (08:00): “[...] he's using that consumer power in the United States as his leverage and saying, if you want to sell into this country, you're going to have to eliminate trade barriers on US Goods…”

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For Further Listening: Tune in to upcoming episodes of WSJ What’s News in Markets and What’s News Sunday for in-depth analyses of market trends and expert discussions on economic policies.

Transcript

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[Pierre Guyneme]

The US economy keeps adding jobs despite tariff uncertainty. But can it last? Plus what's driving President Trump's trade agenda?

[Greg Ip]

It's all about maximizing Trump's political power over not just people in the United states, not just U.S. politicians, but the global economy as well.

[Pierre Guyneme]

And President Trump says Harvard's tax exemption will be revoked. Harvard President Alan Garber says such a move would be highly illegal and destructive. It's Friday, May 2nd. I'm Pierre Guyneme for the Wall Street Journal, filling in for Alex Osola. This is the PM edition of what's news, the top headlines and business stories that moved the world today. Despite tariff uncertainty, employers in the US added 177,000 jobs in April, beating the expectations of economists pulled by the Wall Street Journal. But hiring slowed slightly compared to March's pace in a period that saw changing tariff announcements and market turmoil. The unemployment rate, based on a separate survey, held steady at 4.2%. So what do these numbers tell us about the effects of Trump's trade policy? For that, I'm joined by our chief economics commentator, Greg ip. Greg, what does this jobs report tell us about the economy post Liberation Day?

[Alan Garber]

It tells us that there's really been no loss of momentum in the economy even after the very high tariffs that President Trump announced on inflation April 2. April job gains against the revised figures for prior months. It looks very steady, very solid. The unemployment rate unchanged. This tells us a few things. One is that the underlying economy was very healthy when President Trump came into office, and secondly, that the effect of the tariffs is not really being felt yet. That's mostly because most products have not yet actually seen the prices go up because of tariffs. Partly that's because businesses may have pre ordered. Partly it's because there were delays in the implementation of those tariffs. And the president has gone on to pause many of his own tariff announcements.

[Pierre Guyneme]

You say we haven't seen the effects of tariffs in these numbers yet. Should we expect a slowdown in future jobs gains?

[Alan Garber]

Certainly all the economists that we talked to are expecting a slowing in job gains this year. There are certainly some economists who even think that we'll go into a recession. And with the border basically closed to unauthorized migrants, the labor force will be growing more slowly in coming months. So I would expect that alone to pull down job growth. The bigger question is, will some of the sentiment and spending effects of tariffs further hurt hiring? And that it's a lot less certain. Because the president keeps changing his plans, businesses are reluctant to make dramatic changes one way or the other. A lot of them are holding out hope that just as he paused or rolled back many of the tariffs so far, he will continue to do so, and that you may not see as dramatic a change as people were anticipating just a month or two ago.

[Pierre Guyneme]

What about a separate aspect of the Trump administration's policies, federal layoffs? Did those show up in the numbers?

[Alan Garber]

Yeah, we actually did see some effect of that. Federal employment was down around 10,000. If you exclude the post office, it was down around eight and a half thousand and it's now down about 20,000 since the President took office. Now, federal employment does fluctuate. It's fair to say that that definitely represents the effect of the Department of Government Efficiency and some of the very severe cutbacks it implemented on federal payrolls. That effect, I expect, will continue to trickle out over coming months. Recall that the initial wave of job reductions were essentially asking people to take voluntary resignations and they could stay on the payroll as late as September. And if you're still on the payroll, you're counted as employed.

[Pierre Guyneme]

That was Greg ip, the Wall Street Journal's chief economics commentator. Thanks, Greg.

[Alan Garber]

Thank you.

[Pierre Guyneme]

Stocks extended their multi day climb today following those jobs numbers and signs of a potential thaw between the US And China. More on that later. The Dow, the s and P 500 and the Nasdaq composite rose 1.3% or more. The S&P, which rose 1.5%, closed higher for a ninth straight session, its longest streak of daily gains since 2004. President Trump ramped up his fight with Harvard University, threatening to revoke the Ivy League school's tax exemption after it filed a federal lawsuit against his administration. Harvard President Alan Garber responded to President Trump's threat in an interview with WSJ Editor in Chief Emma Tucker this morning.

[Alan Garber]

We are speaking just hours after President.

[Emma Tucker]

Trump posted on Truth Social that he.

[Pierre Guyneme]

Would be revoking Harvard's tax exempt status, saying it's what they deserve. How big of a problem is this.

[Gavin Bade]

For you if the government goes through with a plan to revoke our tax exempt status. It would, number one, be highly illegal unless there is some reasoning that we have not been exposed to that would justify this dramatic move. But tax exempt status is granted to educational institutions to enable them to successfully carry out their mission of education and for research, universities of research. Obviously that would be severely impaired if we were to lose our tax exempt status. And I should add, it would be destructive to Harvard. But the message that it sends to the educational community would be a very dire one, which suggests that political disagreements could be used as a basis to pose what might be an existential threat to so many educational institutions.

[Pierre Guyneme]

Garber's extended interview with WSJ Editor in chief Emma Tucker will be published Monday. Harvard suit argues the government has violated the university's constitutional rights by freezing billions of dollars in federal funding. The tax code prohibits the US President and other senior officials from directly or indirectly asking the Internal Revenue Service to conduct or stop an audit or other investigations. The IRS didn't respond to requests for comment. Coming up, how the Trump administration aims to establish near absolute US Power over global trade, prioritizing American interests. That's after the break. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to [e-mail].

[Emma Tucker]

Switch upfront payment of $45 for 3 month plan equivalent to $15 per month Required intro rate first 3 months price plan options available taxes and fees extra. See full [e-mail].

[Pierre Guyneme]

President Trump and his advisors have laid out several, sometimes contradictory goals for his tariffs, increasing federal revenue, strengthening America's hand in trade talks and bringing manufacturing jobs back to the US over his first 100 days back in power, his administration has sought to relegate Congress, the courts, the World Trade Organization, multinational companies and foreign countries to roles subordinate to Trump. Here with an overview of Trump's approach and whether it's working is Gavin Bade, the Journal's trade and economic policy reporter. Gavin, how would you describe Trump's worldview and the trade strategy that goes with it?

[Greg Ip]

The way to think about Trump's trade strategy here is an extension of his domestic political strategy. What is the one thing that Trump demands from politicians in the United States, from companies in the United States, from the people who work for him? It's loyalty. We see him in his second term, extending that logic to global economics and saying, look, if you want to do business with the US you're going to do it on my terms. I am the alpha. You work for me. And really, he's trying to reshape every U.S. trading relationship at the same time using this strategy.

[Pierre Guyneme]

And how is this hardball strategy playing out?

[Greg Ip]

This is really key to his thinking here, is that he says we're the largest economy in the world, the largest consumer economy in the world as well, what he calls the big beautiful store. And he thinks everyone else, which is not false, everyone else does want to sell into the United States. And so as much as you know anything else, he's using that consumer power in the United States as his leverage and saying, if you want to sell into this country, you're going to have to eliminate trade barriers on US Goods, you're going to have to maybe spend more on the military, you're going to maybe have to limit your dealings with the Chinese economy. And he's really trying to drive a hard bargain when it comes to this stuff. There are some risks, for instance, in this strategy. The IMF and World bank meetings were last week, and we were hearing some whispering among foreign officials that, well, maybe if Trump drives too hard of a bargain here, that they could team up together and try to present a united economic front to Trump and try to dictate the terms of the conversation themselves, rather than just receiving them from the United States. Right now, Trump wants to keep everyone atomized, keep everyone negotiating with him on a bilateral basis rather than a multilateral basis. But don't be fooled. I mean, these countries are talking to each other behind the scenes, even if they won't publicly acknowledge it.

[Pierre Guyneme]

Wall Street Journal reporter Gavin Bade. Gavin, good to have you.

[Greg Ip]

Thank you so much. Glad to be here.

[Pierre Guyneme]

We exclusively report that China is considering ways to address the Trump administration's concerns over the country's role in the fentanyl trade. That's according to people familiar with the matter. Such a move could potentially allow both sides to soften their trade stance and begin talks. According to the people. China has been inquiring in recent days about what the Trump team wants Beijing to do when it comes to the chemical ingredients used to make fentanyl. The people cautioned that the discussions remain fluid, adding that Beijing would like to see some softening from President Trump on his trade offensive against China. And we exclusively report that Goldman Sachs is changing some of the language around its diversity programs and removing references to race. A senior Goldman executive now says the bank's One Million Black Women program isn't just for black women, but for low and moderate income populations. Like much of corporate America, the bank has been combing through its diversity, equity and inclusion initiatives to ensure it doesn't run into legal troubles, while trying not to entirely abandon its pledges. Supporters of Goldman's DEI efforts fear the changes won't just be cosmetic and will mean the loss of critical funding and investments. Working in tech used to mean job security, extravagant perks and a bring your whole self to the office ethos rare in other industries. But Wall Street Journal reporter Katherine Bindley told our Tech News Briefing podcast that these days a job in the industry looks like a regular gig.

[Emma Tucker]

In tech specifically, there may have been a perception that the glory days could last forever because of the way the cultures were built. For a long time, it was very standard for workers to push back on policies they didn't agree with and for leaders to really listen and in some cases make business decisions based on whether or not their workers were in favor of things or not. There were a lot of examples from that from a while back, and that's slowly been changing. For certainly a while now, they just had very different cultures that weren't common in other industries. But when the supply and demand changes and the labor market changes and the workers no longer have the leverage and the power, you do see that changing dramatically.

[Pierre Guyneme]

And you can hear more from Catherine on today's episode of Tech News Briefing. 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, we're bringing you an episode of WSJ's take on the Week, where hosts Telus Demos and Gunjan Banerjee discuss what we can expect from the Fed's upcoming interest rate decision decision and what it could mean for markets, businesses and consumers. That's in what's New Sunday, and we'll be back with our regular show on Monday morning. Today's show was produced by Anthony Banci with supervising producer Michael Kosmides. Michael Laval wrote our theme music. Ayesha El Moussle is our development producer. Scott Salloway and Chris Inslee are our deputy editors. And Falana Patterson is the Wall Street Journal's head of news Audio. I'm Pierre Biennime. Thanks for listening.