A.M. Edition for April 8. Beijing pledges more countermeasures if President Trump follows through on a threat for an additional 50% tariff on Chinese goods. Despite signs of an intensifying trade war, the WSJ’s Alex Frangos explains why global equities are regaining ground today. Plus, the U.S. and Iran plan high-stakes nuclear talks. And correspondent Kejal Vyas takes us to the U.S.-Mexico border as the normally-bustling frontier braces for new trade barriers. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the latest developments in the US-China trade war?
Beijing pledges more countermeasures if President Trump follows through on a threat for an additional 50% tariff on Chinese goods. Plus, global equities regain ground after yesterday's market whiplash.
This is a standoff between markets and the White House. And markets are desperate for any sign that the White House is open to negotiate, to pausing the tariffs. And the White House is basically saying, don't even think about it.
And we'll get an update from the U.S. 's unusually quiet southern border. It's Tuesday, April 8th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. China is vowing to fight until the end in response to new U.S.
tariffs, a day after President Trump threatened to raise duties on Chinese goods by an additional 50 percent. That pledge is cementing expectations that Beijing and Washington are set for a deepening trade war. And within China, it's beginning to lead to a shift in monetary policy as the country seeks to boost exports and prop up domestic markets.
Chapter 2: How is China responding to US tariffs?
Here with more is Journal finance editor for Europe, Alex Frangos. Alex, we report China is now easing its grip on the yuan. Walk us through what exactly is going on here.
Yeah, so the Chinese government every day sets a level for its currency. And this morning, they set the level weaker than it's been in a number of months. Now, that's what you would expect if a country imposes massive tariffs on you. You would expect your currency to weaken as a way to adjust to that condition and make your goods weaker. cheaper vis-a-vis the tariffs that were just imposed.
Now, what they did today was like minuscule, very tiny, but noteworthy enough and has people talking about whether China will continue with that path and maybe slowly or maybe quickly, we don't know, allow the yuan to weaken in the days, weeks, months ahead as its own countermeasure against the tariffs that Trump has imposed on China.
All right, this yuan strategy, as you mentioned, could help boost Chinese exports. Is it also part of a strategy to support stock prices within the country?
In some ways, yes. For companies that are listed companies in China that do a lot of exports, a cheaper currency is certainly a good thing. But the government has done other things. It's encouraged some of its state-owned enterprises to go in and buy stocks today. And so we've seen the market go up a bit, especially after yesterday's absolute shellacking.
And the Hong Kong market recovered a little bit. So the Chinese government is trying to support the economy, support the market as a show of force against what Trump has thrown at them.
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Chapter 3: What impact are tariffs having on global markets?
Alex, we are seeing in Hong Kong, in Shanghai, a recovery in markets in the 1% to 2% range today, though more profound is what's occurring over in Japan, the Nikkei up around 6%. Are we seeing markets, at least just using the Asian snapshot here, finding a floor of sorts?
Well, we won't know if it's a floor for many days or weeks after the floor has been reached, so I will make no predictions. What we saw in Japan was a big snapback today because Treasury Secretary Besant basically said Japan is first in line for negotiations. Japan has already nominated one of its ministers to go and do those negotiations.
They seem very eager to get something going so that their very export-oriented economy is not hit too hard by very, very high tariffs, which are meant to come into force tomorrow. Alex Frangos, thank you so much for stopping by. Thank you.
Chapter 4: How are businesses adapting to new tariff challenges?
In morning trading, European stocks are following Asia higher as are US futures, with contracts tied to the Dow, Nasdaq and S&P 500 all making gains off hours. Meanwhile, businesses are trying to navigate the new tariff landscape, with some, including Apple, reportedly looking to shift their supply chain and source more iPhones from India.
According to people familiar with the matter, that's a temporary stopgap to offset the high tariffs on China. Peter Landers is our Asia corporate news editor and says businesses are looking for solutions that can limit price increases.
In Apple's case, whether it's made in China or made in India, there's no way to avoid a certain level of price increase if these tariffs stick. And I think businesses are investigating what they can do. However, with the tariffs set to go into effect tomorrow, it's probably too late to really boost production in the next 24 hours.
but they are considering how they can use their existing manufacturing footprint most effectively.
That said, a new report commissioned by the U.S. Chamber of Commerce Foundation says many American companies plan to hold on to or even increase their ties with China. And as Peter explains, that's because changing supply chains is a lot easier said than done.
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Chapter 5: What are the implications of recent US Supreme Court decisions on deportation?
A lot of businesses are trying to figure out where is the location they can manufacture with the lowest tariffs to the US. Some countries had 50% or more like China, Vietnam at 46% was quite high. So they're looking for places like India or perhaps Mexico or the UK. However, what they're also telling us is that it's too soon to make long-term decisions.
If you already have factories in two places and one has a lower tariff, then you're going to try to use that one to export more to the U.S. But they don't know whether Trump will stick to his plan, and that's why it's too soon to make long-term decisions that might take years to implement.
In other news from Washington, the Supreme Court has lifted a block on the deportation of suspected Venezuelan gang members to El Salvador. The 5-4 ruling allows the Trump administration to keep expediting removals under the 18th Century Alien Enemies Act, though the court said that detainees were entitled to an opportunity to challenge their deportation before a federal judge in Texas.
In a separate move, Chief Justice John Roberts agreed last night to pause a midnight deadline for the Trump administration to return a Maryland man who was deported to El Salvador by mistake. The administration has conceded that Kilmar Abrego Garcia should not have been sent to El Salvador because an immigration judge found he'd likely face persecution by local gangs.
However, they say he's no longer in U.S. custody and the government has no way to get him back. Abrego Garcia's lawyers panned Roberts' move for enabling the executive branch to violate court orders and then, quote, invoke the separation of powers to insulate its unlawful actions from judicial scrutiny. And the U.S. and Iran have agreed to hold high-stakes talks on Tehran's nuclear program.
Officials from both sides are expected to meet in Oman on Saturday, with President Trump suggesting he could take military action if no deal is reached.
Doing a deal would be preferable to doing the obvious. And the obvious is not something that I want to be involved with or, frankly, that Israel wants to be involved with if they can avoid it.
The talks will test Trump's ability to roll back Iran's nuclear program that's left it closer than ever to a workable weapon. Coming up, journal correspondent Kajal Vyas will take us to the normally bustling U.S.-Mexico border where an eerie quiet has set in. That's after the break. Two and a half months into the Trump presidency, what's the situation at the U.S.-Mexico border?
The journal's Kajal Vyas recently traveled to Ciudad Juarez in Mexico, across the border from El Paso, Texas, to check in on migration trends, as well as the flow of goods between the two countries, which was valued at more than $800 billion last year. And Kajal joins me now with more. Kajal, before we talk trade, let's discuss border security and illegal crossings, a big focus for the president.
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