The Trump Administration Is Quietly Watering Down Some Tariffs

SPEAKER_1 (0:00)

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Alex Ossola (0:17)

President Trump says he'd rather end the war between Ukraine and Russia than send Ukraine powerful new weapons. Plus, Trump made tariffs his signature trade policy. Now he's pivoting away from some of them.

Gavin Bade (0:29)

They're putting the offer out there to other nations to say if you do a deal with us, we can carve out more of these tariffs as well.

Alex Ossola (0:37)

And how Walmart's decision to pay workers more shocked Wall Street, but then put the company on a path to success. It's Friday, October 17th. I'm Alex Ossola 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. At a White House meeting with Ukrainian president Volodymyr Zelensky today, President Trump said he hoped Ukraine wouldn't need the US to provide it with long-range Tomahawk cruise missiles.

SPEAKER_4 (1:10)

So we're going to be talking about Tomahawks, and would much rather have them not need Tomahawks, would much rather have the war be over, to be honest.

Alex Ossola (1:21)

Trump had been talking in recent weeks about sending the powerful weapons to Ukraine. The meeting between the two came after Trump and Russian President Vladimir Putin spoke at length on the telephone yesterday. Trump says he plans to meet Putin separately in Hungary in the coming weeks to try to broker a peace deal. Since taking office in January, President Trump has made tariffs his signature trade policy. Now, though, he's tiptoeing away from some of them, saying reciprocal tariffs don't apply to dozens of different products. WSJ trade and economic policy reporter, Gavin Bade, is here to tell us more. Gavin, what are some of the tariffs that the Trump Administration is shifting on?

Gavin Bade (2:05)

Yeah, so this is a subtle but important shift in the Trump Administration's reciprocal tariffs. These are the ones that he unveiled on Liberation Day back in April, then paused, then there were a bunch of negotiations. He put them back in place in early August, right? And so what he's done in the last few weeks here is he has increased the exemptions or the carve-outs from these tariffs for a few dozen products. They've also given indications that they're gonna do more in the future. There was an executive order in September where Trump said, not only am I exempting more products from these tariffs, but I'm gonna lay out an entire list of hundreds of products that I'm going to say are available for exemptions if we make a trade deal with another country. They're putting the offer out there to other nations to say, if you do a deal with us, we can carve out more of these tariffs as well.

Alex Ossola (2:58)

And why is this happening now?

Gavin Bade (3:00)

There's a few reasons for this. One of them is the reciprocal tariffs are under legal threat. This is based on a very novel interpretation of emergency national security law. The Supreme Court is going to hear a case on this early next month. They're expanding this other tranche of tariffs, the so-called Section 232, the more classic national security tariffs. They're a much firmer ground, legally speaking. This is what you see as tariffs on steel, aluminum, automobiles. And really what we're tracking here is they are shifting the emphasis away from the reciprocal tariffs somewhat and toward the Section 232 national security tariffs.

Alex Ossola (3:39)

So for businesses that have been trying to navigate these tariffs that have been changing, what does this mean for them?

Gavin Bade (3:47)

It's still going to be a lot of uncertainty here, right? In the first term tariffs and the tariffs on China, there was an official exemptions process. So any business could apply to the US Trade Representative's Office and say, hey, I get this component from China. I can't get it from anywhere else. Can I get a break on the tariffs until we redo our supply chain? And usually, they would get that exemption. Now, there's no such process. It's just if you want an exemption, you kind of have to call up Howard Lutnick, the Commerce Secretary, or call up James and Greer, the US Trade Representative, and hope that you can convince them. There's not a bona fide technocratic process. So I think we're only going to see more uncertainty coming forward.

Alex Ossola (4:26)

Wall Street Journal reporter Gavin Bade, thanks so much for joining us.

Gavin Bade (4:29)

Thank you, guys.