WSJ What’s News
Warren Buffett Is Stepping Down. What’s Next for Berkshire Hathaway?
Mon, 05 May 2025
P.M. Edition for May 5. The Oracle of Omaha’s move after a 60-year run will be a moment of reckoning for the company he built. WSJ deputy markets editor Justin Baer discusses how Berkshire Hathaway’s new leadership will navigate that. Plus, a study out today shows that Beijing’s “Made in China 2025” plan helped its homegrown companies close the technology gap with the West. We hear from the Journal’s chief China correspondent Lingling Wei about the implications for American tariff negotiations with China. And the Trump administration plans to offer $1,000 payments for migrants illegally in the U.S. to leave the country. 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 does Warren Buffett stepping down mean for Berkshire Hathaway?
The question is always going to be Warren Buffett's presence there. To what extent does that create a halo or a premium in the value of Berkshire as a company? We'll see.
And the Trump administration plans to offer $1,000 payments to migrants who leave the country. It's Monday, May 5th. I'm Alex Osola 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. We kick off today with the U.S. economy. President Trump is downplaying concerns over further economic turmoil.
He's stepping up pressure on Congress to pass a tax and spending bill which would extend cuts made during the first Trump administration. And according to a senior administration official, the White House aims to announce at least one deal with a country seeking to escape higher tariffs in the coming week.
This person said that the president and his advisors are feeling somewhat more confident about the economy amid some signs of resiliency, including a streak of stock market gains and a better-than-anticipated jobs report on Friday. Many economists still expect a trade-induced slowdown later this year. Employers, too, are worried.
T. Rowe Price, JetBlue, and Polaris are just some of the companies whose leadership in recent earnings calls say they're slowing or pausing hiring due to economic uncertainty. Employment reporter Lauren Weber explains why companies are in this wait-and-see mode.
They're basically saying, look, we don't know what's going to happen. We don't know the impact of tariffs yet. And until there's a little more clarity, they're being very, very cautious on hiring. The hard data still looks okay.
But what we hear anecdotally and what you see in some of these comments from companies and executives, and also what surveys are saying about consumer confidence or business confidence, they show a much more worrisome picture.
And you can hear more about how consumers are feeling about the U.S. economy and what it means for food and beverage companies in a bonus episode we released earlier today. You'll find What's News and Earnings just an episode earlier in this podcast feed. The big stock rebound showed some signs of exhaustion today.
President Trump's planned 100% tariff on films produced overseas weighed on entertainment company stocks early in the day. Shares in Netflix, Warner Bros. Discovery, and Paramount fell 2% or more in morning trading before recovering slightly. Details are scant on how the administration intends to implement the policy.
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Chapter 2: How has China's Made in China 2025 plan affected global competition?
This study is a very timely report for the Trump administration at a time when they and China are preparing for potential negotiations over trade and other economic matters. If you remember, Alex, in 2018, 2019, when the two countries fought the first trade war. Meeting China 2025 was central focus for the Trump administration back then.
Trump officials really tried to get Beijing to address concerns raised by the plan, such as subsidies and other practices involving pressuring foreign companies. In the end, both sides cut a trade deal in early 2020 However, that deal was mostly focused on how to get China to buy more U.S. products and didn't really fundamentally address issues raised by this Made in China 2025 plan.
And fast forward to today, as both sides are edging toward new negotiations, many U.S. companies are hoping that the Trump administration will try to confront China over is industrial policy.
Chapter 3: What are the implications of U.S. tariffs on China?
Chapter 4: What economic concerns is the Trump administration facing?
He's stepping up pressure on Congress to pass a tax and spending bill which would extend cuts made during the first Trump administration. And according to a senior administration official, the White House aims to announce at least one deal with a country seeking to escape higher tariffs in the coming week.
This person said that the president and his advisors are feeling somewhat more confident about the economy amid some signs of resiliency, including a streak of stock market gains and a better-than-anticipated jobs report on Friday. Many economists still expect a trade-induced slowdown later this year. Employers, too, are worried.
T. Rowe Price, JetBlue, and Polaris are just some of the companies whose leadership in recent earnings calls say they're slowing or pausing hiring due to economic uncertainty. Employment reporter Lauren Weber explains why companies are in this wait-and-see mode.
They're basically saying, look, we don't know what's going to happen. We don't know the impact of tariffs yet. And until there's a little more clarity, they're being very, very cautious on hiring. The hard data still looks okay.
But what we hear anecdotally and what you see in some of these comments from companies and executives, and also what surveys are saying about consumer confidence or business confidence, they show a much more worrisome picture.
And you can hear more about how consumers are feeling about the U.S. economy and what it means for food and beverage companies in a bonus episode we released earlier today. You'll find What's News and Earnings just an episode earlier in this podcast feed. The big stock rebound showed some signs of exhaustion today.
President Trump's planned 100% tariff on films produced overseas weighed on entertainment company stocks early in the day. Shares in Netflix, Warner Bros. Discovery, and Paramount fell 2% or more in morning trading before recovering slightly. Details are scant on how the administration intends to implement the policy.
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Chapter 5: How are companies responding to economic uncertainty?
Berkshire Hathaway, whose CEO Warren Buffett announced over the weekend that he would be stepping down at the end of the year, saw its shares fall about 5%. More on that later in the show. Major U.S. indexes fell. The Dow dropped about a quarter of a percent, and the S&P 500 dipped roughly 0.6% as both indexes broke nine-day winning streaks. The Nasdaq fell about three-quarters of a percent.
OpenAI has called off a controversial effort to change which entity controls its artificial intelligence business. The maker of ChatGPT will remain under the control of a nonprofit organization, the one that briefly ousted CEO Sam Altman in 2023. OpenAI said today it will transform its for-profit subsidiary into a public benefit corporation that is controlled by the nonprofit parent.
And Skechers is going private. The footwear company's founder and chief executive has agreed to sell Skechers to the private equity firm 3G Capital in a deal worth about $9.4 billion. The deal offers shareholders $63 in cash for each share they hold. Recently, Skechers shares had tumbled from around $75 in January to below $50. Today, shares in the company surged nearly 25% to over $61 apiece.
About a decade ago, Beijing rolled out its Made in China 2025 plan, which unleashed enormous state subsidies for Chinese companies in order to make them more competitive. A study out today commissioned by the U.S. Chamber of Commerce finds that the plan worked, narrowing China's technological gap with the West. For more, WSJ chief China correspondent Lingling Wei joins me now.
Lingling, what were some of the big takeaways from this study about the Made in China 2025 plan?
The biggest takeaway from this study is Made in China 2025 plan has been a big success for China's leader, Xi Jinping. China has significantly reduced its reliance on imports. in pretty much every sector targeted by this plan, including information technology, power equipment, new energy products, new materials, medical devices, you name it.
And another takeaway from the study is the finding that not only China is becoming less reliant on foreign products. It has also become more competitive globally, gaining market shares from foreign companies, especially in sectors like shipbuilding and robotics.
What does this mean for Washington, particularly in terms of tariff negotiations?
This study is a very timely report for the Trump administration at a time when they and China are preparing for potential negotiations over trade and other economic matters. If you remember, Alex, in 2018, 2019, when the two countries fought the first trade war. Meeting China 2025 was central focus for the Trump administration back then.
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Chapter 6: What strategies are being discussed for U.S.-China trade negotiations?
So Berkshire Hathaway, as you mentioned, one of the most valuable companies in the world. This is really a watershed moment, right, with this longtime CEO leaving. Do we expect the company to remain as valuable as it has been?
If you look at it purely from a fundamental analysis of the company, there's no reason to expect that it wouldn't. Their biggest businesses are insurance. You have this big portfolio of businesses that range across a whole group of industries, including a big railroad firm. And then you have the stock portfolio whose largest holding is Apple.
If you take apart those components, there's no reason to believe that would change. The question is always going to be Warren Buffett's presence there. To what extent does that create a halo or a premium to this company beyond the many followers and actually in the value of Berkshire as a company? We'll see.
That was WSJ Deputy Markets Editor Justin Baer. Thank you, Justin.
Sure, anytime.
In other news, the Trump administration is starting to put millions of defaulted student loan borrowers into collections today and threatening to confiscate their wages, tax refunds, and federal benefits. There are some 5 million borrowers whose loans are in default, many of whom haven't made regular payments since the pandemic.
And if too many former students have lapsed on payments, the White House could shut off the federal student loan spigot for certain schools. That's according to a notice the Education Department is expected to send out today, seen by the Wall Street Journal. The government has long had the power to restrict federal student aid if too many students don't pay it back.
The Department of Homeland Security said today that the Trump administration plans to pay immigrants illegally in the U.S. $1,000 to self-deport. The administration has set up a mobile app that provides migrants with assistance in booking flights, which the government would also pay for.
DHS said migrants would receive their payments once they confirm they've arrived in their home country, adding that one migrant has already received payment after leaving Chicago for Honduras. But it isn't clear whether offering migrants a relatively small sum will be enough to convince more people to leave voluntarily.
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