Stocks Slump as Trump Threatens Tariffs on All U.S. Trading Partners
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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.
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.
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.
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.
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.
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Chapters
6 chapters
1
How are markets reacting to new U.S. tariffs?
0:03–0:55
2
What are the current U.S. tariff plans under Trump?
0:55–2:06
3
What is the economic outlook from major banks like Goldman Sachs?
2:06–3:06
4
How is the EU responding to U.S. tariff threats?
3:06–3:52
5
Why are global markets experiencing volatility?
3:52–5:13
6
What does the VIX indicate about market sentiment?
5:13–12:23
Speakers
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