Why Markets Seem Unfazed by Tariff News

Summary

WSJ What’s News: Why Markets Seem Unfazed by Tariff News
Release Date: July 11, 2025
Host: Kate Bullivant (Filling in for Luke Vargas)

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1. President Trump's Tariff Threats and Market Response

Overview:
President Donald Trump has announced intentions to impose a 35% tariff on certain Canadian goods starting August 1. Despite the severity of these threats, markets appear largely indifferent, maintaining stability amidst the uncertainty.

Key Points:

• Tariff Details:
  Trump indicated that an exemption exists for goods complying with the US-Mexico-Canada Agreement (USMCA), but this could be renegotiated. He warned that tariffs might increase if Canada retaliates but could decrease if Canada curbs fentanyl imports.

  "The tariffs could climb higher if Ottawa retaliates, but that could lower if Canada stops fentanyl from crossing the border."
  — Kate Bullivant (00:56)

• Market Reaction:
  Initially, the Canadian dollar weakened sharply against the US dollar following the announcement but later regained some of its losses. Alex Frangos, Journal Finance Editor, notes that the market's reaction has stabilized compared to the volatility seen in March and April.

  "We have indexes in the US hitting records. Bitcoin's at a record. I mean, there's just not that kind of fear about these trade threats."
  — Alex Frangos (03:05)

• Historical Context:
  Frangos attributes the subdued market response to increased resilience in companies and economies, as well as Trump's tendency to negotiate compromises despite initial aggressive rhetoric.

  "Trump always chickens out this feeling that like he talks big, but in the end they'll make some sort of compromise that everyone can live with."
  — Alex Frangos (03:05)

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2. Investigation into Last Month's Air India Crash

Overview:
An investigation into the Air India crash, which resulted in 260 fatalities, is currently focusing on pilot actions rather than any potential aircraft design flaws. Preliminary findings suggest that critical fuel control switches were turned off, leading to engine thrust loss shortly after takeoff.

Key Points:

• Preliminary Findings:
  The investigation has identified that two fuel control switches were deactivated, an unusual occurrence that points towards pilot error rather than mechanical failure.

  "Two fuel control switches, which controls fuel to the engines, were switched off at the time of the crash, which is highly unusual."
  — Shan Li (00:46)

• Impact on Boeing:
  With Boeing previously facing issues with the 737 Max fleet, any indication of a design flaw in the 787 Dreamliner could have severe repercussions for the company. However, early reports do not suggest any mechanical defects.

  "If it turns out that there was some sort of design flaw in a 787 Dreamliner, it would be a huge, huge problem for the company."
  — Shan Li (04:24)

• Investigation Progress:
  The Indian Aircraft Accident Investigation Bureau is expected to release a preliminary report, although delays and limited public information have caused frustration among U.S. officials.

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3. Harvard’s Potential Conservative Scholarship Center Amid Political Tensions

Overview:
Harvard University is contemplating the establishment of a new conservative scholarship center, akin to Stanford's Hoover Institution. This move comes amid accusations from the Trump administration that Harvard is overly liberal and following significant disruptions from pro-Palestinian protests.

Key Points:

• Motivation and Timing:
  The initiative gains traction following increased campus protests in late 2023, intensifying the long-standing debate over Harvard's federal funding and autonomy.

• Trump Administration’s Stance:
  Officials view the creation of a conservative institute as superficial and not a substantive solution to their concerns about Harvard's political leanings.

  "The creation of a new institute would be considered window dressing and not a meaningful part of their negotiations."
  — Kate Bullivant (05:10)

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4. Escalating Rift Between Unilever and Ben & Jerry’s

Overview:
Unilever has appointed Johannes Senf as the new CEO for Ben & Jerry’s, exacerbating the ongoing conflict between the parent company and Ben & Jerry’s independent board. The dispute centers around the brand's social activism and public positions on contentious issues.

Key Points:

• Leadership Change:
  Senf, formerly managing director of Ben & Jerry’s Europe, will assume his role next month, signaling a strategic shift that may further strain relations.

• Underlying Issues:
  The conflict has been fueled by disagreements over Ben & Jerry’s stances on matters such as Israel and the Palestinian territories, leading to legal battles over executive appointments and company direction.

• Future Implications:
  The ongoing legal fight reflects broader tensions between corporate governance and the autonomy of subsidiary brands engaging in social activism.

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5. President Trump's Engagement with African Leaders: Immigration and Critical Minerals

Overview:
In a significant diplomatic effort, President Trump met with five West African heads of state at the White House. The discussions focused on securing immigration agreements and access to critical minerals essential for various industries.

Key Points:

• Immigration Negotiations:
  The Trump administration is pushing for West African nations to accept migrants, especially in light of the Supreme Court's recent decision permitting the deportation of migrants to third countries. This move is intertwined with broader security and economic cooperation.

  "Immigration deportation seems to be in the background of almost every foreign policy conversation that the Trump administration is having right now."
  — Robbie Grammer (08:00)

• Critical Minerals Strategy:
  The U.S. aims to secure access to Africa's vast reserves of critical minerals required for manufacturing batteries, solar panels, and other technologies. Africa is also striving to retain more value by processing and refining these minerals domestically.

  "Nearly half of the continent's 54 countries have restricted or banned raw material exports in the last two years."
  — Nicholas Barillo (10:24)

• Chinese Influence and Challenges:
  Chinese state-owned companies are actively investing in Africa's mineral processing infrastructure. However, the success of these endeavors is uncertain due to infrastructural challenges, potential political risks, and local labor issues.

  "Some of the unintended consequences we've seen in the case of Zimbabwe is these rules created a situation where small scale miners had nowhere to keep these minerals, have them processed, so they were forced to smuggle them in large quantities across borders."
  — Nicholas Barillo (12:26)

• Economic Development vs. Local Impact:
  While the localization of mineral processing promises economic growth and job creation, there are concerns about the actual distribution of benefits and the potential for increased illicit activities.

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Conclusion

In this episode of WSJ What’s News, host Kate Bullivant navigates through a spectrum of pressing global issues, from trade tensions between the U.S. and Canada to critical investigations affecting major aviation companies, and the intricate dynamics of international diplomacy and corporate governance. Notably, despite significant geopolitical moves, markets exhibit a surprising steadiness, suggesting a matured resilience in the face of ongoing trade uncertainties.

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Produced by Daniel Bark | Supervising Producer: Sandra Kilhoff

Transcript

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[Kate Bullivant]

President Trump threatens a 35% tariff on some Canadian goods, but markets seem unfazed. Plus, a probe into last month's Air India crash is focusing on the pilot.

[Shan Li]

Two fuel control switches, which controls fuel to the engines, were switched off at the time of the crash, which is highly unusual.

[Kate Bullivant]

And the rift between Unilever and Ben and Jerry's board ramps up. It's Friday, July 11th. I'm Kate Bullivant for the Wall Street Journal, filling in for Luke Vargas. And here is the AM Edition of what's news, the top headlines and business stories moving your world Today, President Trump has threatened to slap 35% tariffs on imports from Canada starting Aug. 1. A white Trump said an exemption would apply to goods that comply with the USMCA trade deal, but stressed that could change in a letter to Prime Minister Mark Carney. Trump said the tariffs could climb higher if Ottawa retaliates, but that they could lower if Canada stops fentanyl from crossing the border. Canadian officials have repeatedly said very little fentanyl enters the US From Canada, with the country previously announcing plans to boost border security spending by almost $1 billion to plac. The countries have been involved in talks to lower tariffs ahead of a self imposed July 21 deadline, which Carney said on X he remains committed to with the new August 1st timeline. The Canadian dollar initially weakened sharply against the US dollar on the news before clawing back some of the losses last night.

[Alex Frangos]

It's just such a crazy difference from March and April, when markets reacted to every utterance about tariff threats with maximum volatility and now it's like everyone's just used to it. So the Canadian dollar weakened but less than half a percent, which in currency terms is a normal day. But we saw that repeated this week with all these letters going out to different countries. The 50% tariff against Brazil over Trump's displeasure over the prosecution of former President Bolsonaro and Brazilian markets. They moved, but it wasn't crazy.

[Kate Bullivant]

That's Journal finance editor Alex Frangos, who says markets are taking the week's flurry of tariff announce in its stride.

[Alex Frangos]

We have indexes in the US Hitting records. Bitcoin's at a record. I mean, there's just not that kind of fear about these trade threats. And part of it is the kind of taco trade. Trump always chickens out this feeling that like he talks big, but in the end they'll make some sort of compromise that everyone can live with. But also that even if it is a little bit worse than expected, maybe companies are more resilient than we thought, economies are a little bit more resilient than we thought. That's a very short term view. I don't know that everyone shares it, but that's the way the market's interpreting it.

[Kate Bullivant]

We're exclusively reporting that an investigation into last month's Air India crash, where 260 people died, is focusing on pilot actions and not on a problem with the Boeing 787 Dreamliner, according to people familiar with US officials early assessments. Preliminary findings indicate that switches controlling fuel flow to the jet's two engines were turned off, leading to an apparent loss of thrust shortly after takeoff. Indian officials have released little information to the public about the investigation, fueling some frustration among US Officials with the pace of the probe, including analysis of the plane's black box. WSJ South Asia correspondent Shan Li has more.

[Shan Li]

So this is a very high stakes investigation because there's a lot of parties involved. For Boeing, they've gone through years of one problem after another with their planes. Most of their 737 Max fleet was grounded for nearly two years after two fatal crashes in 2019. So if it turns out that there was some sort of design flaw in a 787 Dreamliner, it would be a huge, huge problem for the company. But that said, the preliminary findings so far has not shown any sort of design or mechanical problem, and the investigators are looking at more pilot action based on what they found with the fuel control switch being turned off. But however, these are very early days in the investigation and the conclusions could change over time.

[Kate Bullivant]

India's Aircraft Accident Investigation Bureau is expected to issue a preliminary report as soon as today. It didn't respond to a request for comment on Thursday. Harvard is exploring the creation of a new conservative scholarship center similar to Stanford's Hoover Institution, as the school fights the Trump administration's accusations that it is too liberal. The idea has been circulating at the Ivy League school for several years, but has gained steam after pro Palestinian protests began disrupting campus in late 2023. Harvard has been battling the Trump administration for months over the school's federal funding and autonomy. Broader negotiations between the two are continuing but have hit repeated snags delaying any settlement. And according to a person familiar with the Trump administration, the creation of a new institute would be consider window dressing and not a meaningful part of their negotiations. Unilever has appointed a new CEO for Ben and Jerry's, escalating its dispute with the ice cream brand's independent board. Johannes Senf will take up the role next month, having previously served as managing director of Ben and Jerry's Europe business. The ice cream brand's board and Unilever have fought bitterly for years over the company's social activism, particularly its public stances on Israel and the Palestinian terrorists territories. The sides are currently locked in a legal fight over issues including the removal of Ben and Jerry's previous chief executive. Coming up, President Trump found himself in a give and take with African leaders this week as the US Hopes to secure an immigration deal and those all important critical minerals. We've got that story after the break.

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[Kate Bullivant]

This week, President Trump met with five heads of state from West Africa at the White House. It was his first major engagement with the continent. In the new administration and Journal National Security reporter Robbie Grammer said a hot button domestic political issue ended up taking center stage.

[Robbie Grammer]

Immigration deportation seems to be in the background of almost every foreign policy conversation that the Trump administration is having right now. With a lot of around the world there's this aggressive deportation campaign and as part of that, if home countries refuse to take back migrants, the administration is looking for third countries to host these migrants temporarily or even longer. On paper, this conversation was all about security, cooperation, commercial ties, part of the administration's drive to reorient US Engagement with Africa from what they call trade, not aid, get away from aid and development and more toward trade commercial ties. But behind the scenes, there was this big push by the Trump administration State Department to go to West African countries before the summit and say, hey, would you agree to take in migrants?

[Kate Bullivant]

Robbie said. It's not clear if the leaders who visited the White House intend to accept that offer. Their embassies didn't immediately respond to requests for comment. But after the Supreme Court cleared the way last month for the US to deport migrants to third countries, they, like heads of state from around the world, find themselves on the receiving end of a new American demand.

[Robbie Grammer]

That ruling really paved the way for this massive new drive that's taking place behind the scenes. US embassies in various countries asking will you take third party migrants? And there seems to be a quid pro quo here. Even if it's not written down on paper, there is a sense of, hey, your country might face tariffs if you take in these third country migrants, that might grease the wheels, so to speak. We might be more interested, more amenable to trade deals, to lowering tariffs. Some of the countries in this region are facing very serious problems. They have their own migration flows. Guinea Bissau has been labeled by the United nations as a narco state because Latin American cartels have used it as a transit point in key hub to disseminate its drugs elsewhere in the world. There's this growing threat of Islamist insurgencies in the Sahel region in West Africa. And so there is this bevy of really important and for these countries, existential issues that they might want to talk to the United States about. And on top of that, now they have to juggle this political high wire act of do we accept third country migrants? You know, is this the only way to get our foot in the door? With the Trump administration, the US may.

[Kate Bullivant]

Hope to call the shots on migration, but on a different key issue for the US Securing access to critical minerals. Africa is trying to call the shots. According to the OECD, nearly half of the continent's 54 countries have restricted or banned raw material exports in the last two years. Reporter Nicholas Barillo said it's a bet that the West's desire to catch up to China's lead in strategic materials could mean more jobs and economic development if they insist that processing and refining take place within their borders.

[Nicholas Barillo]

One example we have is Zimbabwe where the minist minister says their ultimate objective is to manufacture batteries and solar panels instead of exporting minerals in our form. Other countries, including Guinea, Uganda, Namibia have also introduced similar rules, while others like Ghana, Rwanda and Zambia are expanding processing plants within their borders. So the whole idea is to capture more value from this industry.

[Kate Bullivant]

A pair of Chinese state owned mining companies operating in Zimbabwe and Ghana appear to be playing by the new rules as they build a lithium processing plant and manganese refinery. But Nicholas says it's an open question whether the localization gambit will pay off off. Creaky infrastructure could test the profitability of new projects. Other investors could end up on the wrong side of local authorities. Canada's Barrick Gold saw Mali take ownership of one of its gold mines in April following a tax dispute. And Niger seized a uranium mine from its French majority shareholder after a dispute on the size of its stake and along with the risk of foreign investors outright bypassing certain countries or resources slipping into the black market. Nicholas said skilled labour shortages could lead companies that do invest to bring in their own workers to staff plants.

[Nicholas Barillo]

Some of the unintended consequences we've seen in the case of Zimbabwe is these rules created a situation where small scale miners had nowhere to keep these minerals, have them processed, so they were forced to to smuggle them in large quantities across borders. And one other downside risk is that some of these investors may actually end up not giving a lot of jobs to the local people. So they come invest in processing plants, donate the value chains and still end up undercutting some of the local authorities. And we have in the case of Indonesia, the Chinese invested so much in there manufacturing industry, but again that value chain is dominated by the Chinese.

[Kate Bullivant]

And that's it for what's news for this Friday morning. Today's show was produced by Daniel Bark. Our supervising producer was Sandra Kilhoff. And I'm Kate Bullivant for the Wall Street Journal. We'll be back tonight with a new show. Until then, have a great weekend and thanks for listen.