Judge Orders U.S. to Pay Back $130 Billion of Tariffs

SPEAKER_1 (0:02)

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Luke Vargas (0:33)

China cuts its economic growth forecast as it preps for an era of slower expansion. Plus, Europe ups its support for the US war on Iran, and a trade court judge tells the Trump administration to pay back billions in tariffs.

Tom Fairless (0:47)

The Supreme Court ruling and then this refund ruling both create a certain idea that there's a limit to how the administration can use these tariffs at will to penalize countries from one day to the next.

Luke Vargas (0:59)

It's Thursday, March 5th. 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. China has cut its annual economic growth target to a range of 4.5% to 5%, its lowest expansion goal since 1991 The details were released during China's biggest political gathering, known as the Two Sessions, and kicks off the next five-year plan for the world's second-largest economy. Economics reporter Hannah Miao told us that Beijing is aiming to reshape its economy as it grapples with challenges both at home and abroad.

SPEAKER_5 (1:42)

Households are fairly cautious to spend. Investment has slowed down, and the real estate market is still very much struggling. And last year, China had set a growth target of around 5%, and it was really achieved in large part through exports. And that has become an area of increased tension. With trading partners, the IMF has suggested that China should try to move away from relying on exports because it creates all these tensions around this global trade imbalance.

Luke Vargas (2:16)

And while less reliance on exports might be welcome news for countries frustrated by the dominance of Chinese products, Hannah told us that the new growth targets include a growing focus on key technologies.

SPEAKER_5 (2:27)

While the lower growth target does take some of that pressure off to really continue juicing GDP growth, policymakers are really doubling down on these goals of upgrading their industrial system and being technologically self-reliant. So in terms of this competition between the US and China in key cutting-edge technologies, China is really not letting up on that front.

Luke Vargas (2:54)

The five-year plan also revealed a 4% target for the fiscal deficit, suggesting China won't be stepping up its stimulus for the beleaguered property sector. The Trump administration is on the hook for more than $130 billion in tariff refunds. That was yesterday's ruling from a federal trade court judge who grew impatient when a Justice Department lawyer said that the government hadn't formalized its position on refunding tariffs and that issuing refunds would be time-consuming. The ruling comes as more than 2,000 companies have filed lawsuits seeking to recoup their money including Costco and FedEx. I asked journal global economics correspondent Tom Fairless how businesses are responding to the verdict.

Tom Fairless (3:35)

So firstly, it's a relief and there's enormous interest in claiming back these refunds. German manufacturers were immediately facing questions from customers about how to get these, how quickly they would get these refunds. But there's also continued uncertainty around how to claim it back, who gets the money, how much it will cost, how long it will take. There's lots of new layers of uncertainty.

Luke Vargas (4:00)

While refunds could boost some companies' bottom lines and provide some much-needed certainty, Tom said that new tariffs put in place just last month are causing more damage.

Tom Fairless (4:09)

Businesses tell me they could live with a 10% tariff, even a 20% tariff, if they knew what it was. But it's the not knowing, the not being able to plan that is really poison for investment and for just making decisions on future markets and future investments.

Luke Vargas (4:26)

The Trump administration is expected to appeal the order to prevent it from taking effect immediately. Morgan Stanley is laying off 2,500 employees or around 3% of its global workforce. We report that many of the cuts took place yesterday and are affecting all of the bank's major divisions, investment banking and trading, wealth management, and investment management. Morgan Stanley and its Wall Street peers are coming off one of their strongest years on record as trading desks navigated volatility, the wealthy continued to spend, and big companies struck more deals. Speaking of deals, we've got a special bonus episode coming later today. It's the latest What's News in Earnings, where we'll be looking at the merger drama that dominated the media industry this earnings season. Look for that at midday in your What's News feed. Coming up, we've got the rest of the day's news, including a look at how the US and Iran's allies are or aren't joining the war. That and more after the break.