Big Law Is Split on Trump’s Attacks: Push Back or Lay Low?
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What are President Trump's new tariff plans?
Markets welcome President Trump's plan to limit his new tariffs. But the back and forth is making life harder for small businesses.
Even some companies that manufacture in the U.S. are feeling some softness because their customers are uncertain and they're not investing as much.
And why some investors have soured on Tesla. It's Monday, March 24th. 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. First, the latest on President Trump's tariffs. Trump told reporters in the Oval Office today that he might soften reciprocal tariffs on some U.S. trading partners while others might be exempt. Earlier at a cabinet meeting, Trump said the U.S. will announce tariffs on automobiles soon and pharmaceuticals at some point without offering further details. His comments came a few hours after Trump said the U.S. would impose a 25 percent tariff on any country that buys oil or gas from Venezuela, sending oil futures higher. U.S.
stocks were up today as investors welcomed Trump's latest pivot on tariffs. Major U.S. indexes all ended the day higher. The Dow rose about 1.4 percent, the S&P 500 was up roughly 1.8 percent, and the Nasdaq climbed about 2.3 percent. Well, the market may be into Trump's latest lighter-touch approach to tariffs, but the back-and-forth is tough on small businesses. According to a survey conducted by Vistage Worldwide, nearly two-thirds of small business owners said tariffs would hurt their business, while 8% said they'd benefit from them. Joining me now to talk about how the changing U.S. trade policy is affecting small businesses is our senior special writer Ruth Simon. Ruth, why are small businesses affected more than large ones by these trade policies?
How are small businesses reacting to tariff changes?
There are a whole bunch of different reasons why that's the case. For one thing, small businesses have thinner cash cushions and they often operate with narrower profit margins than big companies. They also are just smaller. They don't have big product and big diverse product lines. to spread things around. They're more likely to have production concentrated in one or two places. And perhaps even as important or more important, their staffs are small, so they don't have teams of supply chain experts. And when somebody has to focus on tariffs, it's taking them away from other roles that they might have, other things that they need to do. And that makes what we've been seeing lately, this stop-start, today it looks like one thing, another day it looks like something else, particularly difficult for small companies to manage.
What kinds of small businesses are feeling the squeeze?
There is a wide range of small businesses that are feeling pressure. One of the most obvious ones are companies that do a lot of importing from China and who have things like, I talked for this story, to a hat maker. There are people who make aprons, who make all sorts of stationary products, all kinds of different things. But we also have companies that get components from China or components from Mexico or have moved some of their manufacturing to Mexico because they thought, hey, there are going to be more tariffs on China and suddenly Mexico is in the crosshairs too. Even some companies that manufacture in the U.S. are feeling some softness because their customers are uncertain and they're not investing as much.
What strategies are small businesses using to cope with tariffs?
Okay, that seems like kind of a tough situation for some of these small businesses.
What can they actually do about any of this?
So some of the small businesses that I talked to tried to move product to the U.S. ahead of the tariffs to at least give them a little bit of a cushion. They also have to figure out what to do. How much do you pass on tariffs to your customers? Do you put fewer items in a package? Do you make things a little differently? And finally, they're just taking a very close look at their costs. If small businesses are suffering, that can lead to economic weakness, particularly if small businesses slow their hiring or have to lay off employees or they scale back their investments.
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