Trump Administration Announces New Tariffs on Over 80 Countries

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Alex Ossola (0:34)

The Trump administration unveils new tariffs on 60 countries. Plus, oil prices pass $100. The 10-year treasury hits an 18-month high, and mortgage rates are at their highest levels in nearly a year, as the Middle East conflict ripples through markets.

IBM's earnings tell investors more about what went wrong for its business in the second quarter.

Anissa Gardizy (0:54)

Investors believed IBM when they said that AI was a tailwind for them, and that customers really needed to buy more mainframes so that they could do more AI. But as we saw last quarter, that actually wasn't the case.

Alex Ossola (1:06)

It's Thursday, July 23rd. 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.

The US will impose new tariffs on its major trading partners. The new tariffs are meant to replace President Trump's temporary 10% global tariff, which expires tomorrow. Trump put that temporary tariff in place in February, after the Supreme Court struck down many of his tariffs. The new tariffs target 60 countries, or about 99% of US trade. The administration says they're designed to push against forced labor. Countries that have laws against forced labor were given a 10% tariff, while those without those laws were given a 12.5% tariff.

There are exemptions for some goods, like steel, which comes under a separate national security tariff. The tariffs aren't expected to have much immediate impact, since their rates are similar to the 10% global tariff that they're replacing. But trade experts say that the administration has other tariff plans, and those could raise costs for businesses and consumers.

President Trump has added a new hurdle to the nuclear deal with Saudi Arabia, its contingent on the kingdom normalizing relations with Israel. Saudi Arabia was close to doing so during the Biden administration. The October 7th, 2023 attack by Hamas and subsequent war sidetracked those talks. The Saudis now are open to normalization, but they insist that the Israeli government commit to a plan to establish a Palestinian state. The 30-year multi-billion-dollar nuclear deal with Saudi Arabia was announced yesterday, and it potentially opens the door to uranium enrichment in Saudi territory. The Saudi embassy in Washington didn't respond to a request for comment.

On the conflict with Iran, President Trump said the US would hold Iran responsible for future attacks by Houthi militants and threatened quote military punishment on both. His threat comes after the Houthis fired on two Saudi tankers in the Red Sea. The group says the ships violated a naval blockade it has imposed on Saudi shipping. It's a move that threatens to choke an important route in the global oil supply. WSJ National Security reporter Laura Seligman says that even though the Houthis are in Yemen and aren't operating anywhere near Iran, the group has a well-known relationship with the country.

Laura Seligman (3:19)

Iran has historically supplied arms and other resources to the Houthis. So obviously we're in this broader direct conflict with Iran. The Houthis have stayed out of it, but now we're seeing them take on the Saudis in this separate conflict that Trump is now linking to the broader Iran conflict.

Alex Ossola (3:35)

Trump is considering expanding the conflict with Iran.

Laura Seligman (3:38)

Trump has been escalating the rhetoric against Iran lately.

The tenuous ceasefire deal that they've made is falling apart. Iran keeps attacking ships in the Strait of Hormuz. Then the Trump administration is responding by sending military aircraft and bombing. In fact, last night, US forces bombed Iran for the 12th consecutive night. The conflict is heating up. So I think that President Trump's aim here is to put some additional pressure on Iran.

And don't forget that there's a big squeeze on oil right now with the Strait of Hormuz. And this issue that we're having in the Red Sea with the Houthis firing on Saudi ships in the Red Sea is going to add another squeeze to oil prices.

Alex Ossola (4:19)

Brent crude futures jumped 7% today to more than $100, the highest in about two months. And stocks fell after earnings from Google, parent Alphabet and Tesla deepened fears about how much big tech companies are spending on AI. The phrase of the day is free cash flow, which turned negative at both companies. Free cash flow is the money companies have leftover after expenses and making big ticket investments. It offers investors an idea of how much cash is available for things they like, like dividends and stock buybacks. Alphabet dropped 7.1% today, while Tesla tumbled 15%.