How Startup Insiders Are Using IRAs to Stash Their Wealth

SPEAKER_1 (0:00)

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Danny Lewis (0:34)

Businesses are bracing for fresh trade uncertainty as the Trump administration readies a new round of tariffs.

Plus how startup founders, hedge fund managers and Silicon Valley insiders found a hidden advantage to growing their wealth. And it's IRAs?

Theo Francis (0:49)

For people who have multi-billion dollar stakes in companies, these accounts may not be about retirement at all. They are an investment strategy supercharged by the tax benefits.

Danny Lewis (1:01)

And one baseball team is officially the biggest waste of money the sport has ever seen. Let's go Mets. It's Wednesday, July 22nd. I'm Danny Lewis for the Wall Street Journal, filling in for Alex Osala. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

After months of relative calm, businesses are facing new trade uncertainty.

The Trump administration put temporary 10% duties in place after losing their big tariffs case at the Supreme Court in February. Now, those temporary tariffs have run out their 150-day clock and they're set to expire this Friday. But there's more to come. During testimony before the Senate Finance Committee today, US. Trade Representative Jameson Greer said the administration is still committed to using tariffs as a core part of its trade policy.

Jameson Greer (1:54)

That national emergency still persists, and so our policy remains the same. The specific authorities this administration is using have changed, but the trade strategy has not.

Danny Lewis (2:03)

WSJ trade and economic policy reporter Gavin Bade says the Trump administration has spent the past five months coming up with a replacement for these temporary tariffs.

Gavin Bade (2:12)

These are under a different legal authority, what's called Section 301

This is, you know, to police discriminatory practices from other countries. It's very commonly used and very legally durable. There's only one problem. We don't have the final report on those new tariffs yet. We might not actually see these new tariffs be completed before the temporary tariffs expire. So on Friday, if we do see the new set of tariffs come into place, what they're going to be based on is concerns about forced labor. This is slave labor or deterred servitude in global supply chains. And that's actually quite clever. A lot of lawyers say, because who would argue against policing global supply chains for forced labor? That's just one slice, however, of all of the tariff plans that are going on right now. We also have, you know, last night Trump posted on Truth Social that they're going to put tariffs on generic pharmaceuticals. That's not going to be until 2028 This is an about face from what the Trump administration said they were going to do. Then we have other tariffs that are coming down the pike. We just put new tariffs against Brazil in place today. That's under Section 301 against supposed discrimination from the Brazilian government on our products. And then there's another Canada tariff threat as well. So after about five months of relative calm, trade agenda is really kicking up again.

Danny Lewis (3:30)

Gavin says that in the short term, the top line US tariffs might not change that much.

Gavin Bade (3:35)

The Trump administration, they've said that they will try to rebuild a tariff wall that is akin to the tariffs that were thrown out by the Supreme Court. However, all of these actions are going to stack on top of each other. A country could get 10% for forced labor. But then there's another Section 301 report that we haven't even talked about out there on industrial overcapacity. Maybe that is one where a country gets another tariff on top of them. Then there's all of these different national security tariffs under Section 232 So seeing about how all of these tariffs are going to stack on each other in the next few months is really the big uncertainty for firms. The bottom line for them is that they say they would be investing more in the United States if they actually knew what their tariff bill was going to be a few years out.

Danny Lewis (4:22)

Some big earnings came out today. AT&T's revenue rose 2% in the second quarter. The telecommunications company says a key measure of cell phone plans grew by the highest amount in more than three years. Shares rose 3.6%.