A.M. Edition for April 4. Global markets extend their declines following yesterday's tariff-driven Wall Street rout, with several indicators now pointing to a heightened risk of a global recession. Plus, the chair of the European Parliament’s trade committee, Bernd Lange, explains how the bloc is responding to new U.S. tariffs and what it’s not willing to compromise on. And the WSJ’s Dasl Yoon has the latest from Seoul, as South Korea’s impeached president is removed from office. 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 current fears surrounding a global recession?
Recession fears mount following Wall Street's biggest one-day wipeout since 2020. Plus, as EU officials prepare to head to Washington for tariff talks next week, we'll hear why there are limits to how much the bloc is willing to negotiate. And South Korea's impeached president is removed from office as political divisions grip the country.
Following this vote, on one side, the crowd erupted with cheers. They were shouting things like, we won. While we also saw Yoon's supporters, some of them crying, appearing devastated on the streets.
It's Friday, April 4th. 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. Global markets are extending declines today following yesterday's rout on Wall Street. Asian stocks were dragged down by Japan's Nikkei, with analysts chalking up the sell-off to heightened recession risks.
Chapter 2: What factors are contributing to the recent global market selloff?
European markets are in the red in midday trading, continuing their slide for a second day in a row. And WSJ Markets Editor for Europe Katie Barnado told me several other indicators point to growing concerns about a worsening economic outlook.
Perhaps the most notable is the fall in Treasury yields this morning, down below 4%. That is the lowest level since October. And that would appear to be on rising concerns about a US recession or even a global recession. Yesterday, we had JP Morgan say it now thinks a global recession is more likely than not this year. It puts the risk at about 60%.
Chapter 3: How are U.S. Treasury yields and the dollar reacting to recession concerns?
Meanwhile, we saw the US dollar weaken to its lowest of the year yesterday, but it's still holding near those lows. That's a bit of an interesting dynamic in that tariffs would typically cause the dollar to strengthen, but at the same time, it is viewed as a bit of a bet on the strength of the US economy. The other asset of interest is
Global oil prices, they are continuing to fall off fairly steeply this morning, and that is on concerns about global demand and, again, on global recession.
Meanwhile, a number of U.S. allies are readying their next steps in response to the latest tariff moves, among them the European Union, which is sending a delegation to Washington next week. Making that trip will be Bernd Lange, a member of the European Parliament for Germany and the chair of the Parliament's Trade Committee.
Chapter 4: How is the European Union responding to new U.S. tariffs?
I spoke to him earlier this morning and began by asking him what he made of President Trump's characterization of the EU in his Rose Garden speech.
European Union, they're very tough, very, very tough traders. You know, you think of European Union, very friendly. They rip us off. It's so sad to see. It's so pathetic. 39 percent. We're going to charge them 20 percent. So we're charging them essentially half.
Chapter 5: What is Bernd Lange's perspective on U.S.-EU trade relations?
First of all, it's unjustified. So we have quite low tariff level between the United States and Europe, around about 5%. But regarding the situation, around about 70% of our goods are tariff-free. The reality is that we have an average of 2% tariffs between Europe the two regions. And this means this figure of 39% unfair tariffs and non-tariff barriers is totally unjustified, and even this 20%.
And therefore, we are really clear in rejecting this measure with countermeasures, but also we are trying to negotiate and convince trade guys and the White House that this is not justified.
What do you make broadly of the U.S. viewing the EU-U.S. relationship in terms of the trade balance? That really is what's going on here.
Chapter 6: What are the potential impacts of tariffs on the U.S. and EU economies?
Yeah, but listen, we have to really look on the whole picture. The trade balance of goods, of course, is negative for the United States. But this is based on our good products because we are not doing any illegal subsidies or dumping practices or so. And if a man or woman in California wants to buy a Porsche instead of a Ford, so what? This is not an illegal process.
And secondly, as I mentioned, the deficit on our side on services and also regarding investment. So we need really to look for the whole picture. And then I guess it's more or less balanced.
President Trump has said countries that want to negotiate down their U.S. tariffs should get rid of their own tariffs and other trade barriers. They should stop currency manipulation and start buying tens of billions of dollars of American goods. Is any of that on the table?
And are you looking at other carrots, if we could call them that, to try and repair the relationship and prevent damage to the EU economy?
And the U.S. economy as well. I guess higher prices will be also the result for U.S. consumers. So therefore, I'm not calling this day a day of liberation. I am calling it a day of inflation. Look to the reality on tariffs. I'd say on average we have 5%. But looking to the volume of trade, it's only 2%. We can look to specific tariff lines.
of course, always mention 10% for cars imported to the European Union and only 2.5% for cars going to the United States. So if going to the tariffs, let's go to facts and figures and discuss it and we can do something. That is an offer. Secondly, yes, it is also clear that we could buy some cars U.S. goods to reduce the deficit in goods. That's also in our negotiation basket.
But certainly, it's totally clear that legislation inside the European Union, which is valid for people inside the European Union, for domestic companies, and valid for people coming from outside and foreign companies, that legislation is not on the negotiation table.
Could you elaborate on that? I know the U.S. released a document this week that described EU legislation. What did you make of that?
Yes, there are different standards for several goods and also for agricultural goods. That's for sure. We have a different view on some cases. And there was one remark, our standards are not scientific based. So what? We have a different view on that. And this is not a trade barrier.
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