WSJ What’s News
Stocks Slump as Trump Threatens Tariffs on All U.S. Trading Partners
Mon, 31 Mar 2025
A.M. Edition for Mar. 31. The Trump administration is still scrambling to set out the specifics of its new tariff agenda ahead of ‘Liberation Day’ on Wednesday. WSJ reporter Caitlin McCabe explains how the tariff threats are ramping up market volatility and dampening the outlook for the U.S. economy. Plus, Trump threatens Russia with new tariffs, after expressing anger at Vladimir Putin as Ukraine peace talks make little progress. And Apple clashes with SpaceX amid a race to eliminate cellphone dead spots. 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: How are markets reacting to new U.S. tariffs?
Markets brace for a big week of trade announcements as the U.S. puts universal tariffs back on the table.
So what we're seeing is what the world's largest banks have been doing really for the last several weeks now, which is essentially escalating their warnings about the American economy.
Plus, President Trump threatens sanctions on Russia as Ukraine peace talks stall, and Apple's satellite expansion plans landed in SpaceX's crosshairs. It's Monday, March 31st. 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. Tariff week is upon us.
President Trump has set Wednesday as Liberation Day when he'll pull back the curtain on a range of new levies.
Chapter 2: What are the current U.S. tariff plans under Trump?
And even as that deadline nears, we report that the administration is still scrambling to nail down the specifics, including whether to impose individualized tariffs on specific trading partners or reach for across-the-board tariffs, potentially as high as 20 percent, that would affect virtually every country doing business with the U.S.
That's according to people familiar with conversations between the president and his team in recent days in which he's pushed them to be more aggressive. Trump for months promoted the idea of universal tariffs during his campaign, but later ditched the idea in favor of a so-called reciprocal tariff plan.
Yet administration officials said that reciprocal plan is still on the table, but that whatever is unveiled on April 2nd, Trump wants the policy to be, quote, big and simple. Well, suffice it to say, market watchers care a great deal about where the president lands on his tariff strategy. And here to parse the news heading into a pivotal week, I'm joined by journal reporter Caitlin McCabe.
Caitlin, I see Goldman Sachs and Barclays are both out with new growth forecasts that really feature the growing risk of a global trade war front and center. Walk us through what they're saying.
Chapter 3: What is the economic outlook from major banks like Goldman Sachs?
So Goldman raised the probability of a recession in the US economy in the next 12 months to around 35%. And that's the second time that Goldman has done this in the past few weeks. In addition, the bank said it is expecting an increase in pricing pressures, a decline in GDP, and that it is expecting an increase in the year-end unemployment rate.
And basically in calculating this stuff, Goldman's looking at the deterioration in business and consumer confidence. We saw some of this come through last week with the University of Michigan Sentiment Survey. It also said it's doing it because of comments from the Trump administration that it's willing to tolerate some economic weakness in pursuit of their policies.
Meanwhile, we also have Barclays saying something similar. It says that for the first time in years, it finds itself, quote, genuinely worried about risk assets. And it says that cash allocations for investors should be higher.
Chapter 4: How is the EU responding to U.S. tariff threats?
All right. So Barclays and Goldman, they're both seeing the risk of a trade war increasing based on actions likely coming out of Washington. But this does go both ways. Yesterday, we heard from German Chancellor Olaf Scholz, who pledged that the EU was ready to hit back against existing U.S. tariffs. So as you'll hear, he didn't exactly sound thrilled about it.
We know that free global trade, which has created so much prosperity, is at risk because political movements of protectionism are becoming fashionable all over the world. We also know that this benefits no one, that there are only losers if we all carry this in front of us.
Caitlin, I guess we can see that sentiment kind of rippling through into market behavior today. Asian stocks falling and European markets opening lower as well.
Chapter 5: Why are global markets experiencing volatility?
Yeah, it's been pretty ugly this morning in Asia and Europe. And we're already seeing that bleed through in US pre-market trading, where US stock futures are lower. And I think this speaks to concerns about just not US growth, but global growth too. Of course, there are expectations that tariffs will hit these economies and some of their important sectors very hard.
And I think it's worth noting that a lot of these areas and countries were already at a disadvantage in terms of economic strength, even before all of this started. And so in terms of market action, what we're seeing this morning is really a flight to safety everywhere. Gold, which has had a pretty stunning rally this year, it's up again this morning. U.S.
bond prices are up again, sort of considered another flight to safety. Other risk assets like Bitcoin is falling again. And I think what investors are saying right now is riskier assets are not where they want to be. And so instead, they're hanging out in cash or other cash like products.
Right. Sounds like investors are preparing for volatility this week.
I think that's exactly right. And I think a really key place that we can look is the VIX. It's also known as Wall Street's fear gauge. And this is a metric that people really look to quite closely when things are starting to get choppy in markets. This morning, the VIX is trading around the 23 range.
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Chapter 6: What does the VIX indicate about market sentiment?
And when we think about the VIX, anything over 20 indicates that nervousness and expectations for volatility are increasing pretty markedly in markets. So to see the VIX trading around the 23 range this morning is something that is important to pay attention to. especially given where it was trading last week. Last week, we were seeing it in the 17 to 18 range.
So we are definitely seeing a noticeable leg up in expectations for volatility today.
That was Wall Street Journal reporter Caitlin McCabe. Caitlin, thanks for stopping by and for the VIX crash course there.
Happy to. Thanks for having me.
And coming up, we've got the rest of the day's news, including frustration in Washington as Vladimir Putin appears to drag his feet on peace talks with Ukraine. That story and much more after the break. So We are exclusively reporting that Apple has clashed with Elon Musk's SpaceX in its push to eliminate cell phone dead spots with its satellite technology.
The iPhone maker is investing heavily in satellite-based communications, while SpaceX has launched more than 500 satellites that provide cell phone connectivity through Starlink. Now, the companies are competing for the limited supply of spectrum rights, the airwaves, to carry their signals, with Musk pushing federal regulators to stall an Apple-funded satellite expansion effort.
People familiar with the matter said the conflict has intensified in recent months after SpaceX and its partner T-Mobile asked Apple to offer Starlink on iPhones. After tense discussions, the sides reached an agreement that allows the SpaceX and T-Mobile satellite cell phone service to be offered on newer iPhones, which will roll out this summer.
President Trump is threatening new economic penalties on Russia as talks have resulted in little progress toward a real ceasefire in Ukraine. Speaking yesterday, Trump expressed anger at recent comments by Vladimir Putin, where he called for interim governance in Ukraine under the auspices of the United Nations, which would essentially push out Ukrainian President Volodymyr Zelensky.
I was disappointed in a certain way. some of the things that were said over the last day or two having to do with Zelensky, because when he considers Zelensky not credible... He's supposed to be making a deal with them, whether you like him or you don't like him. So I wasn't happy with that.
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