Why Tariff Bills Are Catching Online Shoppers by Surprise

Summary

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WSJ What’s News – PM Edition

Episode Title: Why Tariff Bills Are Catching Online Shoppers by Surprise
Date: September 16, 2025
Host: Alex Osola

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Episode Overview

This episode of WSJ’s “What’s News” PM edition navigates the biggest developments of the day in business and politics. The main segment dives into how changes to U.S. import rules are leading to surprise tariff bills for online shoppers and the ripple effect on consumers and sellers. The episode also reports on key political wrangling over government spending bills in Congress, discusses IBM's bold push into quantum computing, and touches on YouTube’s rollout of AI-driven video tools.

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Key Discussion Points & Insights

1. Government Shutdown Standoff and Spending Bill

Timestamps: 00:32–04:23

• House Republicans are working on a spending bill to prevent a government shutdown on Oct. 1, but omit a provision crucial to Democrats: continuation of enhanced Affordable Care Act subsidies.
• Siobhan Hughes, WSJ reporter (02:31), highlights the deadlock:

  “The main point of contention is over whether or not to include some enhanced Affordable Care act subsidies as part of the bill.”

• Republicans seek only short-term funding, while Democrats press for urgent action on subsidies set to expire by year’s end.
• The bill includes $30 million for member security (in response to the killing of conservative activist Charlie Kirk) and allows DC to use its own tax revenue, which was previously barred.

Memorable Quote:

“They are in a real game of chicken right now... And so the question is really, who blinks?”
— Siobhan Hughes (03:43)

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2. Surprise Tariff Bills for Online Shoppers

Timestamps: 04:28–07:20

• Background:
  • Previously, the U.S. allowed an $800 “de minimis” exemption: packages under this value could enter duty-free.
  • That exemption is now largely ended, with packages valued under $800 now subject to tariffs.
  • U.S. Customs and Border Protection reports a steep decline in daily low-value package arrivals:

    “...fell to 1 million, down from an average of 4 million last year.”
    — Esther Fung (00:45)

• Current Situation:
  • Sellers vary: some absorb the tariff costs, others pass them to buyers (either in the price, at checkout, or post-delivery).
  • Many U.S. consumers are caught off guard, receiving unexpected tariff bills from delivery firms like FedEx and UPS.
  • Additional brokerage or processing fees charged by these carriers add to the sticker shock.

Notable Quotes:

“The confusing thing... is when the sellers say the US Consumer is responsible for paying the tariff. These consumers are now getting surprise tariff bills... and they feel blindsided by an additional tariff bill that comes with that package.”
— Esther Fung (05:34)

“All these nasty surprises, not good customer experience. And sellers, they are trying to adapt to this new environment.”
— Esther Fung (06:36)

• Consumer Impact:
  • Some shoppers are now more cautious or postponing international purchases.
  • Sellers grapple with whether to prepay tariffs or risk customer frustration over unwelcome charges.

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3. IBM’s Big Bet on Quantum Computing

Timestamps: 08:13–11:57

• Background:
  • IBM has bounced back over the past five years, largely via hybrid cloud and consulting, and now CEO Arvind Krishna’s focus is on quantum computing.
• Quantum’s Promise & Challenge:
  • Krishna reveals IBM’s ecosystem strategy and willingness to share value:

    “We might perhaps collect 10% of the value. 90% of the value should go to the people and the consumers of the technology, not to us.”
    — Arvind Krishna (08:39)

  • The company acknowledges a likely 4–5 year wait for quantum’s commercial returns (potentially 2029–2030).

Memorable Exchange:

“A lot of the way he talks about this technology almost seems like science fiction. And when does the sci-fi become real?”
— Tim Higgins (10:18)

“Not today, but on the near-term horizon.”
— Tim Higgins (10:18)

• Competition:
  • IBM is now more measured after past over-promising (e.g., with Watson AI), competing with Google and others in the “race” for quantum supremacy.

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4. Tech & Business News Briefs

YouTube’s AI Video Generator Rollout (11:58–12:55)

• YouTube launches VEO3, Google's AI-powered video creation tool, now accessible to a broader public.
• The tool garners both excitement and concern among creators and developers for its advanced production capabilities.

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Notable Quotes & Timestamps

• “The number of packages... worth $800 or less ...fell to 1 million, down from an average of 4 million last year.”
  — Esther Fung (00:45)
• “Consumers are now getting surprise tariff bills from FedEx, UPS or DHL. And they feel blindsided...”
  — Esther Fung (05:34)
• “These are subsidies that got put into law by Democrats during the pandemic. They expire at the end of the year, and Republicans chose not to renew them...”
  — Siobhan Hughes (02:31)
• “Quantum is pretty straightforward. To maintain the momentum, we have to grow a very large ecosystem on Quantum...”
  — Arvind Krishna (08:39)
• “A lot of the way he talks about this technology almost seems like science fiction and when does the sci fi become real?”
  — Tim Higgins (10:18)

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Timestamps for Key Segments

• Government Shutdown Debate: 00:32–04:23
• Tariff Surprise for Online Shoppers: 04:28–07:20
• Crime & Judicial Update (Charlie Kirk case): 07:24–07:53
• IBM Quantum Interview: 08:13–11:57
• YouTube AI News / Show Wrap: 11:58–12:55

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Episode Takeaways

• Consumers and businesses alike are grappling with the end of tariff exemptions on low-value imports, leading to confusion, extra costs, and rapidly changing e-commerce strategies.
• Political tensions continue around government funding and health care subsidies, with real shutdown risks looming.
• IBM’s vision for the quantum future is cautiously optimistic and notably more measured than its past tech hypes.
• AI video tools are quickly rewriting creative industries, as YouTube's VEO3 spreads beyond early adopters.

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For more business news, listen directly to the WSJ “What’s News” podcast or check the show notes for further links.

Transcript

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[Alex Osola]

House Republicans, determined to avoid a government shutdown, are setting themselves up for a fight with Democrats. Plus, surprise online shoppers are getting stuck with unexpected bills for tariffs in May and June.

[Esther Fung]

The CBP Customs and Border Protection said that the number of packages with items worth $800 or less arriving in the US each day fell to 1 million, down from an average of 4 million last year.

[Alex Osola]

And IBM is making a big bet on quantum computing. Will it pay off? It's Tuesday, September 16th. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. The Federal Reserve's September meeting kicked off today, and even before any decision about rate cuts has been announced. The meeting is on, already shaping up to be a strange one. It follows months of attacks from President Trump over the Fed's reluctance to lower rates and legal dramas that have cast doubt on who will attend the meeting. That part, at least, has been settled. Stephen Myron, who was confirmed last night by the Senate, is in attendance, and so is Lisa Cook after a federal appeals court rejected an emergency request from the Trump administration to remove her ahead of this meeting. The Trump administration said it would appeal the decision to the Supreme Court because the Fed is widely expected to cut rates at this meeting. Investors will be watching whether Fed Chair Jerome Powell and his colleagues pencil in a total of three rate cuts this year or stick with the two that a slim majority anticipated when the labor market looked sturdier in June. Answers tomorrow. House Republicans have unveiled a spending bill that, if passed, would prevent a government shutdown on October 1. But it omits a key provision sought by Democrats. Senate setting the stage for a bruising fight. Siobhan Hughes covers Congress for the Journal. Siobhan, what is the point of contention here?

[Siobhan Hughes]

The main point of contention is over whether or not to include some enhanced Affordable Care act subsidies as part of the bill. These are subsidies that got put into law by Democrats during the pandemic. They expire at the end of the year, and Republicans chose not to renew them in their major new tax law. Democrats say it's urgent. Republicans say we just need to buy a little bit more time to keep the government open and we can work on the fine points of how to extend those subsidies a little bit later.

[Alex Osola]

What else is in the bill?

[Siobhan Hughes]

A big item has to do with member security. There is an extra $30 million so that individual lawmakers can reimburse police back home for their work related to member security in the wake of Charlie Kirk's killing. There's also extra money for security executive branch officials and members of the judiciary. There is a fix that looks like it would finally let the District of Columbia spend its taxpayers own money that had been blocked from spending under the current spending law.

[Alex Osola]

So are Republicans able to pass this bill?

[Siobhan Hughes]

Well, they're in a real game of chicken right now with the Democrats in the House. The chances are a lot greater that Republicans can pass this bill, but its fate is by no means assured in the Senate, where Republicans are going to need some Democratic votes to get this across the finish line. And so the question is really, who blinks? If anyone does, will Republicans blink and cave in to the Democrats demands on health care subsidies? Will the Democrats blink in an effort to stave off a shutdown? Or will we in fact end up in a spot that we were in during President Trump's first term where the government shuts down?

[Alex Osola]

That was WSJ reporter Siobhan Hughes. Thanks, siobhan.

[Siobhan Hughes]

Thank you.

[Alex Osola]

U.S. retail sales rose by 0.6% in August, according to the Commerce Department, which also revised up its July figure. The data defied expectations for a slowdown last month when hiring slowed and inflation picked up. Separate data today indicated import prices, which exclude duties and transportation costs, rose unexpectedly by 0.3% last month. Major US indexes were flat to modestly lower today. The dow dropped about 0.3% and the S&P 500 and the Nasdaq both fell about 0.1%. You might recall that last month we were talking about the end of the de minimis exemption for low cost goods. So packages worth less than $800 that were once allowed to enter the US tariff free are now being levied. To hear how that's playing out, I'm joined by WSJ reporter Esther Fung. Esther, I remember talking to you not all that long ago about how consumers and companies were really fearing the worst here. Has that come to pass? How is all of this going?

[Esther Fung]

It's been a mixed bag. Some sellers, they are absorbing the tariffs and they might include the tariffs in the price of the goods itself or they added at checkout process. The confusing thing that's happening right now for several consumers is when the sellers say the US Consumer is responsible for paying the tariff. These consumers are now getting surprise tariff bills from FedEx, UPS or DHL. And they feel blindsided by an additional tariff bill that comes with that package.

[Alex Osola]

So how are consumers reacting?

[Esther Fung]

Some people have told me that they are now more concerned and paying more attention to what they buy from abroad. And there are some consumers who say they're holding back purchases. So there's a lot of wait and see.

[Alex Osola]

And how are sellers dealing with this?

[Esther Fung]

More and more businesses are trying to prepay the tariffs. Some of the US Consumers are also complaining about the processing or brokerage fees that UPS, FedEx and DHL also charge. On top of collecting the tariffs. UPS, FedEx and DHL told me that they're collecting tariffs on behalf of the US Government. The money is not something that goes into these companies coffers all round. All these nasty surprises, not good customer experience. And sellers, they are trying to adapt to this new environment. And if they still want access to the US market, they'll have to figure this out.

[Alex Osola]

WSJ reporter Esther Fung. Thank you, Esther.

[Esther Fung]

Thank you.

[Alex Osola]

Utah prosecutors unveiled seven charges today against Tyler Robinson in the killing of conservative activist Charlie Kirk. The charges include aggravated murder, felony discharge of a firearm, obstruction of justice and witness tampering. Prosecutors said they would seek the death penalty. Coming up, IBM is betting on quantum computing. But are they too early? That's after the break.

[Marine Corps Narrator]

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[Alex Osola]

After spending much of the 2,010s in the doldrums, IBM has made something of a comeback in the past five years. The success of its hybrid cloud business and consulting services have led to a surge in the company's stock price. IBM CEO Arvind Krishna is hoping that the next few years will be even better for the company as it makes a big bet on quantum computing. Krishna recently spoke with WSJ's Bold Names podcast about what the company needs to do to get Quantum to scale.

[Arvind Krishna]

Quantum is pretty straightforward. To maintain the momentum, we have to grow a very large ecosystem on Quantum. So the use cases multiply and we might perhaps collect 10% of the value. 90% of the value should go to the people and the consumers of the technology, not to us. So educating people, teaching them how to use quantum, unlocking their imagination is A big part of what we have to do, and I'm honest about the 1090 trade off, I think that that is where it has to go. Otherwise the technology doesn't really scale.

[Alex Osola]

For more, I'm joined now by WSJ business columnist and Bold Names co host, Tim Higgins. Tim, IBM is coming out of this period that was defined by Watson, its artificial intelligence system that the company struggled to monetize. As you say, the episode, it was maybe a bit ahead of its time. Is the company again, maybe too much ahead of its time with quantum?

[Tim Higgins]

You know, it's an interesting question. It's definitely this race with the likes of Google and other big tech names who see this huge potential for this kind of next generation technology. One of the big differences this time around from IBM compared to previously with Watson is that it seems to be tempering expectations a little bit, not leaning so heavily into the idea that the world is changing right now, yet still trying to stoke some of that excitement about what is possible.

[Alex Osola]

We've seen how many companies are still trying to monetize AI even now. Despite all this hype. Is IBM at a place to monetize quantum computing anytime soon?

[Tim Higgins]

No, not yet. That's a really great question. I mean, it's one of the things that I wanted to know because a lot of the way he talks about this technology almost seems like science fiction and when does the sci fi become real? And he's talking about four to five years out for return, something like 2029, 2030. So not today, but on the near term horizon.

[Alex Osola]

Let's get onto your podcast. You're back after a little bit of a break and I can't help but notice one of the biggest differences is that you're now on video. What has that been like?

[Tim Higgins]

Yeah, we're back and bigger than ever. Video's a thing to do, so you can finally look at my face. I don't know if you want to, but I know my mother's happy. But really at the core, the show is still the same. And that is this idea that we are having these conversations with some of the world's most interesting people, business leaders, about the challenges of business that they are facing, how they are addressing them. And now the viewers and listeners get to come along with us.

[Alex Osola]

And after your interview with the CEO of IBM, what are some topics you expect to talk about on the show in the next few weeks?

[Tim Higgins]

Oh, please, stay tuned. China is top of mind. This, the geopolitical situation. It's very hard for us companies to kind of plot forward how to adapt to a rapidly changing world. Tariffs are always of interest and of course Mims and I are big into AI and how that is changing the world and the way that companies think about how they're going to do business.

[Alex Osola]

Tim Higgins now available in all formats. That was WSJ business columnist and Bold Names co host Tim Higgin Higgins thank you, Tim.

[Tim Higgins]

Thank you.

[Alex Osola]

To watch or listen to the most recent episode of Bold Names with Tim Higgins and Christopher Mims, check out the links in our show notes. And finally, YouTube is entering its AI era. Starting today, it's making VO3, Google's new AI video generator that's giving game developers and filmmakers jitters. Available to normal users. For short videos, users in the U.S. canada, the UK and several other countries will get access. First released in May and available to paying Google AI subscribers, VEO is met with a mixture of awe and apprehension from people across industries because of its advanced capabilities and ability to generate matching video and sound. And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre Bienime and Rodney Davis, with supervising producer Michael Cosmides. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning.

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