Why Tariffs Haven’t Balanced Out Global Trade

SPEAKER_1 (0:00)

Hello, I'm Laura Castleton with Janice Henderson Investors. We've worked to help our clients achieve superior financial outcomes and fulfill our purpose of investing in a brighter future together. To learn more, go to janicehenderson.com.

Daniel Bach (0:18)

Violence in Mexico after authorities hunt and kill a cartel boss. Plus, a second wave of protest builds in Iran, and as President Trump doubles down on tariffs, we'll hear why his signature policy isn't shrinking the trade deficit.

Tom Fairless (0:32)

The big exporting economies like China, Germany, South Korea, Japan, have been moving in the opposite direction. So rather than try and restructure their own economies to rely more on local demand and less on exports, they've doubled down on exports.

Daniel Bach (0:48)

It's Monday, February 23rd. I'm Daniel Bach for The Wall Street Journal filling in for Luke Vargas. And here's the AM Edition of What's News, the top headlines and business stories moving your world today. We begin in Mexico, where the killing of the country's most powerful drug kingpin in a raid by the Mexican military has sparked a wave of violence across the country. The US had placed a $15 million bounty on Nemesio Mencho Oseguera, a former police officer who was the leader of the Jalisco New Generation Cartel. His killing marks the most significant operation yet in Mexico's recent crackdown on cartels, which comes as the US has pressured its neighbor to allow the American military to get involved in the fight against drug gangs. Mexico has pushed back on that, but has boosted security and intelligence cooperation. Oseguera controlled vast swaths of territory and was known for sophisticated paramilitary tactics. His gunmen responded to his death by burning cars and trucks and blocking roads in Guadalajara, forcing a near shutdown of Mexico's second largest city yesterday. The US embassy in Mexico is warning American citizens to seek shelter and minimize unnecessary movement in several Mexican states. Turning now to Iran, where a second wave of popular anger is building, with students holding anti-government rallies over the weekend. According to Journal correspondent Jared Molson, the unrest marks the most significant show of defiance since last month's deadly protests.

Jared Molson (2:19)

This weekend, you had students on university campuses, especially in Tehran, coming out to protest, chanting for the fall of the regime and also chanting to remember the people who were killed in the crackdown that took place in January, in which thousands of people were killed by government forces. We're not seeing evidence that this is turning into a national challenge to the regime as we saw in January, but it is significant that people are again defying the regime by protesting at all.

Daniel Bach (2:54)

Meanwhile, the US continues to amass forces in the region, and President Trump finds himself at a crossroads.

Jared Molson (3:00)

So this week, the US has another round of negotiations with Iran over its nuclear program and potentially its missile program. However, over the weekend, Trump's special envoy for the Middle East, Steve Witkoff, who was leading the talks for the American side, said that the president is increasingly frustrated, potentially with the fact that the Iranians haven't capitulated in the face of military pressure and there is a sense that it's increasingly a question of when and not if there will be American military strikes on Iran. That said, the administration has said repeatedly that it wants a deal and the negotiations are continuing for now. And it's clear that the administration wants to hold those negotiations when it is applying an immense amount of pressure on Iran, both militarily and economically, through sanctions.

Daniel Bach (3:55)

Back in the US., a man who tried to breach the secure perimeter at President Trump's Mar-a-Lago home was shot and killed by US officers yesterday. The White House identified the man as Austin Tucker Martin. Authorities said he was in his 20s and had a shotgun and a gasoline canister with him. The president and the first lady were in Washington this weekend. And more than 9,000 flights scheduled for yesterday and today have been canceled due to a major winter storm hitting the US. East Coast, with Boston and New York airports affected the most. According to the National Weather Service, very heavy snowfall and strong winds will continue to batter the East Coast today. Coming up, tariff uncertainty is back. While President Trump shows no sign of giving up on import duties, we'll hear why they've so far failed to rebalance global trade. That story after the break.

SPEAKER_5 (4:50)

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