P.M. Edition for April 23. We exclusively report that President Trump is considering cutting steep tariffs on Chinese imports, a move that could de-escalate the trade war. WSJ chief China correspondent Lingling Wei tells us what that means for the broader relationship between the U.S. and China. Plus, not even a U-turn on the trade war would erase concerns over erratic economic policy that may make U.S. assets seem riskier to some foreign investors. Heard on the Street columnist Jon Sindreu discusses what a flight of foreign investment could mean for U.S. markets. And as companies prepare for the impact of tariffs, they are already weighing how to pass those additional costs on to consumers. WSJ business reporter Natasha Khan joins the podcast to discuss the art of raising prices. 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 is President Trump's plan regarding China tariffs?
What he's considering right now is a small positive sign for de-escalation, but it doesn't fundamentally change the overall dynamics with China. But it's a move, and now the ball is in China's court.
Plus, why even a trade war U-turn might not restore confidence in U.S. assets for foreign investors. And President Trump blames Ukrainian President Zelensky for failing to accept a U.S. peace plan. It's Wednesday, April 23rd. I'm Alex Osola for The Wall Street Journal. This is the p.m. edition of What's News, the top headlines and business stories that move the world today.
We're exclusively reporting that the Trump administration is considering slashing its steep tariffs on Chinese imports in a bid to de-escalate tensions with Beijing. That's according to people familiar with the matter. A White House spokesman said that tariff decisions will come directly from the president and that anything else is speculation.
Later in the day, Bloomberg News reported that Treasury Secretary Scott Besant said told reporters that Trump hasn't offered to take down U.S. tariffs on China on a unilateral basis. For more, I'm joined by WSJ chief China correspondent Lingling Wei. Lingling, you write that President Trump hasn't made up his mind fully about this yet, but what are some of the plans floating around?
For now, nothing has been decided. The administration officials have told us that whatever action the Trump administration takes wouldn't be unilateral. They would also want to see some action from China as well to lower tariffs. So for the Trump administration, at least a couple of options are on the table right now. One involves reducing the current very, very high tariffs of 145%.
on Chinese imports to between roughly 50% and 65%. Another approach involves adopting a tiered system, similar to some legislation proposed by the House Committee on China late last year. Under that approach, the tariffs would be reduced to 35% for non-strategic products, Basically, things that are not considered the threat to U.S. national security.
And at least 100 percent tariffs for items deemed strategic to U.S. interests.
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Chapter 2: How might tariff reductions affect U.S.-China relations?
What has China said about this? Are they open to these conversations?
China has indicated that they're willing to talk, but they do not want to talk under a lot of pressure. The signaling is being viewed positively in Beijing. Now comes the hard part, how to get the negotiations process started.
Chapter 3: What options does the Trump administration have for tariffs?
Is there any indication that this could ease tensions or be the beginning of easing tensions beyond the tariff conversation?
President Trump is signaling willingness to de-escalate because he clearly is coming under pressure. What he's considering right now is a small positive sign for de-escalation, but it doesn't fundamentally change the overall dynamics with China. Even if the tariffs come down to, say, 50%, 60%, that still means the U.S. market is largely closed to Chinese. exporters.
So fundamentally, it doesn't change the overall picture, but it's a move. And now the ball is in China's court.
That was WSJ chief China correspondent Lingling Wei. Thanks, Lingling.
Thank you.
A rally in U.S. stocks continued for a second day after the Trump administration addressed two of the market's biggest concerns by softening its tone on both China and the Federal Reserve. The Dow closed up more than 400 points, or roughly 1.1 percent. The S&P 500 rose about 1.7 percent, and the Nasdaq added 2.5 percent. Business's tariff problem is rapidly becoming consumers' problem.
Companies across a variety of industries say they're making plans to pass along at least some of the cost of tariffs to consumers. Natasha Khan, who covers business for The Journal, is here to discuss how businesses are going about this. Natasha, just broadly, how are companies thinking about raising prices across these different industries?
we're seeing is that this decision of how much or whether to jack up the prices is really as much of an art as it is science. So if you pass along the tariff costs entirely to the customer, you might risk turning them off for periods that could last far beyond this moment. But at the same time, if they swallow the tariffs themselves, they could destroy profits.
For example, executives at a toy maker called Zuru told us that they're examining every item. I think they have about a thousand items that they import to find a new price point. For some items, it might be more competitive. And if they do raise the price, it may really lose market share to other companies. For others, there's things to consider like consumer psychology.
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Chapter 4: Are businesses ready to pass on tariff costs to consumers?
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Chapter 5: What strategies are companies using to adjust prices?
Today, money came rushing back into equities, bonds, and the dollar, following news that Washington is considering slashing tariffs on Chinese imports. But concerns about erratic economic policy and the threat to the Federal Reserve's independence won't simply go away. That could make treasuries and equities more exposed to an exodus of foreign investors.
WSJ Heard on the Street columnist John Cendreu is here to talk about it. John, so far, concerns about capital flight have focused mainly on the government's debt. What makes investors uneasy about treasuries?
There's a breed of investors that are concerned about how big the budget deficit is and how big the current account deficit is. These concerns are overblown. But generally, the fact that there is a sell-off in treasuries at a time when the market is concerned is a bad thing. Because usually, people think of treasuries as this safe asset that everyone piles into
when there's concerns about the global economy. Now we've had this shock of tariffs and the trade war, and everybody's thinking the opposite. And it's thinking, oh, my God, I biased my portfolio too much towards the U.S., even though I'm based in Norway or Japan or whatever it is. And I should really correct that.
Right. So the stock market has, as you write, grown more dependent on foreign money, is more at risk here. What could potentially be done about this?
The U.S. stock market has ridden this wave of foreign money and it has helped push valuations really high. The percentage of the U.S. stock market owned by foreigners, it's gone from about a quarter to a third of the total market capitalization. So clearly there's been this support of foreign enthusiastic buyers who couldn't get these types of returns in the U.K.
or in Europe or in Japan, and they were seeing them in the U.S., We should remember that part of the reason why these returns were higher is because the U.S. truly has faster growing companies and better companies. And that's not going away. So the idea that necessarily the U.S. stock market has to fall in line with the rest of the stock market around the world is not necessarily true.
So there is a certain indication that part of this was foreigners buying. If now they slowly sell, that will have an impact. So I have the impression that it's not the end-all, be-all, but it will definitely be a drag on U.S. stock performance going forward.
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Chapter 6: Are there companies that choose not to raise their prices?
That was WSJ Heard on the Street columnist, John Cendreu. Thank you, John.
Thank you.
In other news, talks to end the war in Ukraine are stalled, leaving President Trump increasingly frustrated and blaming Ukrainian President Volodymyr Zelensky for failing to accept a U.S. peace plan. A meeting in London today that was billed as a make-or-break moment for talks fizzled after Secretary of State Marco Rubio and U.S. Special Envoy Steve Witkoff abruptly canceled plans to attend.
That followed Zelensky's pushback against a U.S. proposal for a peace deal, that Washington legally recognized Russia's sovereignty over the Crimean Peninsula, which Russia has occupied since 2014. In a social media post, Trump criticized Zelensky for his comments, adding that the Ukrainian leader had to choose peace now or risk losing his entire country in three years' time.
Scientists just took a quantum leap towards more secure communications. In a study published in the journal Nature out today, scientists say they send quantum information across a record-breaking 158 miles between two cities in Germany.
It's the first time coherent quantum communication, an ultra-secure means of transmitting data, has been achieved using existing telecommunications infrastructure without the expensive cryogenic cooling that's typically required. Reporter Ailyn Woodward told our Tech News Briefing podcast what makes quantum communication so much more secure.
Today, our data is protected by encryption keys. And these encryption keys are based on algorithms, like mathematical formulas, that with enough computing power can be broken by like a quantum computer. And these quantum computers are getting better and more powerful. So eventually it's possible that encryption keys could be broken. But quantum cryptography...
basically generates a key that isn't based on any math and therefore is like virtually uncrackable. We're talking about a 500-digit string of random values. You can't reverse engineer that.
For more from Eileen, listen to tomorrow's episode of Tech News Briefing. And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Bien-Aimé and Anthony Bansi with supervising producer Michael Kosmides. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.
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