P.M. Edition for May 23. In posts on social media and statements from the Oval Office today, President Trump threatened a 50% tariff on imported goods from the European Union, as well as new duties on iPhones and other smartphones made overseas. WSJ reporter Gavin Bade joins to discuss how the EU might negotiate with the president, and whether Apple can make iPhones in the U.S. Plus, a weak bond auction earlier this week pushed some long-term bond yields higher. WSJ chief economics commentator Greg Ip digs into what’s behind this recent bond turmoil. And a judge temporarily blocked the government’s move to prevent Harvard from enrolling international students. Alex Ossola 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 tariffs did President Trump threaten on the EU?
President Trump threatens 50% tariffs on the European Union.
Chapter 2: What are the ongoing frustrations from the U.S. side regarding the EU?
You're seeing a number of things build up here. It's hard to know which one is the straw that broke the camel's back, but there's a lot of ongoing frustrations from the U.S. side.
Plus, what's behind the recent turmoil around U.S. bonds? And a federal judge halts the government's move to prevent Harvard from enrolling international students. It's Friday, May 23rd. I'm Alex Ozola 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. President Trump fired new salvos in the global trade war today.
He threatened a 50 percent tariff on imported goods from the European Union, as well as new duties on iPhones made overseas. In comments at the Oval Office this afternoon, the president said he's not looking for a tariff deal with the EU.
I'm not looking for a deal. I mean, we've set the deal. It's at 50 percent. But again, there is no tariff if they build their plant here.
I'm joined now by Gavin Bade, who covers trade for The Journal. Gavin, where are the president's comments about the EU coming from? Are they out of the blue here?
Well, certainly for the EU, they feel out of the blue for them. The European diplomats really felt like they were making progress in these trade talks. Certainly, they did not go to lunch on Friday expecting to see this sort of online missive from the president. But when you ask the administration, the frustrations are kind of multifold here.
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Chapter 3: How might the EU respond to President Trump's tariffs?
We've heard Trump talk often about tariffs and non-trade barriers, about European Union lawsuits against companies like Google, something he brought up in the Oval Office today again. And then I think there are some unstated frustrations as well, especially when it comes to how they want the EU to approach China. And then you just see that this is a little bit of art of the deal stuff, right?
Like Trump is dissatisfied with the pace of these negotiations. He and his team certainly don't like to be lectured by EU officials like we saw this week at the G7. And so I think you're seeing a number of things being build up here, there's a lot of ongoing frustrations from the US side.
Has the EU responded to any of this?
Chapter 4: What impact will tariffs have on iPhones and other smartphones?
Not publicly yet, but I think there's going to be a redoubling of an effort to get to a deal here. Treasury Secretary Scott Besson said on Fox this morning, we want to light a fire under the EU. The president is dissatisfied with the pace here. And so far from blowing up the negotiations, I think the two sides are still going to come back to the table.
And maybe this just is the push they need to get some of the more intractable issues solved here.
Chapter 5: What challenges does Apple face in U.S. manufacturing?
Chapter 6: How are recent bond market fluctuations affecting the economy?
He threatened a 50 percent tariff on imported goods from the European Union, as well as new duties on iPhones made overseas. In comments at the Oval Office this afternoon, the president said he's not looking for a tariff deal with the EU.
I'm not looking for a deal. I mean, we've set the deal. It's at 50 percent. But again, there is no tariff if they build their plant here.
I'm joined now by Gavin Bade, who covers trade for The Journal. Gavin, where are the president's comments about the EU coming from? Are they out of the blue here?
Well, certainly for the EU, they feel out of the blue for them. The European diplomats really felt like they were making progress in these trade talks. Certainly, they did not go to lunch on Friday expecting to see this sort of online missive from the president. But when you ask the administration, the frustrations are kind of multifold here.
We've heard Trump talk often about tariffs and non-trade barriers, about European Union lawsuits against companies like Google, something he brought up in the Oval Office today again. And then I think there are some unstated frustrations as well, especially when it comes to how they want the EU to approach China. And then you just see that this is a little bit of art of the deal stuff, right?
Like Trump is dissatisfied with the pace of these negotiations. He and his team certainly don't like to be lectured by EU officials like we saw this week at the G7. And so I think you're seeing a number of things being build up here, there's a lot of ongoing frustrations from the US side.
Has the EU responded to any of this?
Not publicly yet, but I think there's going to be a redoubling of an effort to get to a deal here. Treasury Secretary Scott Besson said on Fox this morning, we want to light a fire under the EU. The president is dissatisfied with the pace here. And so far from blowing up the negotiations, I think the two sides are still going to come back to the table.
And maybe this just is the push they need to get some of the more intractable issues solved here.
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Chapter 7: What political implications do AI chip deals have?
For example, Saudi Arabia recently agreed to buy large amounts of NVIDIA's AI chips for local infrastructure projects. And NVIDIA has described India as a major customer. But though it can be very lucrative to cut deals like these, they can also be polarizing.
WSJ Heard on the Street columnist Dan Gallagher told our Tech News Briefing podcast about the challenges that these kinds of deals can present.
I don't think there's a business right now that's more politicized than chips, especially AI chips. These AI chips are front and center in the trade war with China between the US and China. The Trump administration and the Biden administration before that really wanted to make sure China did not get its hands on the latest AI chips to get more competitive with the US.
And so that governs everything Nvidia can do in terms of how it can sell its chips into other countries. And it's been a back and forth. The Trump administration did recently kill a rule that the Biden administration had set up where it was going to be a lot harder for Nvidia to sell chips into other countries, even like friendly ones to the U.S. There's going to be all these different rules.
Those were scrapped. But the signs now are that NVIDIA's ability to sell into other countries might hinge on bigger picture stuff. Are these countries striking trade deals with us? Is there concern that chips sold to one country could eventually find their way to China?
So it's just going to be a much more complicated business than NVIDIA just getting the country to sign on the dotted line and make some sales. There's going to be a lot of politics involved.
For more on this, listen to Tech News Briefing next week. Coming up, what the recent upheaval with bonds says about long term bets on the U.S. government. That's after the break. A weak auction for 20-year bonds on Wednesday exacerbated worries about rising deficits in Washington and drove sharp declines for stocks and bonds.
The 30-year Treasury bond yield reached its highest level since 2023, though it's come down a bit since. For more on what the recent bond turmoil means for the broader market, I'm joined by WSJ's chief economics commentator, Greg Ip. So, Greg, it doesn't seem like this upheaval of bonds is a sign of widespread panic per se, but what does it mean?
It's very important to look at the individual behavior inside the bond market to kind of understand the message that's going on. When bond yields go up, that's essentially a very long-term interest rate, and it's telling you what the market thinks the cost of long-term borrowing should be.
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