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Luke Vargas
As President Trump and American tech leaders prepared a touchdown in Beijing, we'll consider if an AI breakthrough between the US and China could be in the cards. Plus, US household debt closes in on $19 trillion. And continued disruption to the Strait of Hormuz sends trade over land.
Ed Ballard
What we're really talking about is really long lines of trucks barreling across the desert. Before the war, there were about 100 trucks. Now there are 7,000.
Luke Vargas
It's Wednesday, May 13th. 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. President Trump is on his way to Beijing for this week's summit with Chinese leader Xi Jinping. And with him is an entourage of American business leaders, as our China bureau chief, Jonathan Chang explains.
Jonathan Chang
You have Tim Cook, the CEO of Apple, Jensen Huang of Nvidia, Elon Musk, three of the biggest names in tech. And there are also a host of CEOs from the Financial sector as well. And it does reflect an interest still in pockets of corporate America to continue to engage with China despite all of the geopolitical risks and tensions between the two countries, despite the fact that China has seen all of these domestic rivals spring up in a lot of these industries. A lot of the easy money is now, in theory, gone in China, but obviously these CEOs see a lot of potential there still.
Luke Vargas
And John told us that tech heavy delegation could signal a potential opening on AI. In spite of concerns from hawks in Washington about giving China access to advanced US Tech.
Jonathan Chang
The fact that Jensen Huang is going to be there suggests that perhaps this is going to be a positive sign for China and its ability to get its hands on Nvidia's chips. And Jensen Huang has made the argument that if Chinese entities are not able to get their hands on the top Nvidia chips, then they're going to develop their own indigenous capabilities, and that will be detrimental to U.S. interests in the long run. Elon Musk is interesting because he's been such a central player in the rise of China's own industries in many ways, in particular the EV industry. And he has very deep ties with the Chinese leadership as well. So insofar as he can serve as a bridge between the two sides, it does signal perhaps that there's going to be just a little bit more of a meeting of minds here between the US And Chinese delegations.
Luke Vargas
Iran is dramatically expanding its definition of the Strait of Hormuz, saying that it won't tolerate any encroachment in hundreds of miles of water well outside of its narrow maritime choke point with Oman. That announcement by its Revolutionary Guard naval force is the latest signal of Iran's intent to widen its grip over the waterway. The despite an ongoing U.S. blockade of Iran's ports and American efforts to guide ships through the strait, few vessels are making the journey. Instead, our Ed Ballard reports that new overland trade routes are emerging to get goods into and out of the Gulf.
Ed Ballard
What we're really talking about is really long lines of trucks barreling across the desert. The UAE has ports on both sides of the Strait of Hormuz, and the ones on the outside we write about. Khorfakan in our story has gone from being relatively sleepy and quiet to an extremely important conduit for goods coming in and out. So container traffic at that port has exploded from 2,000 to 50,000 a week, and that's been enabled by these huge lines of trucks. Before the war, There are about 100 trucks a day. Now there are 7,000.
Luke Vargas
Meanwhile, a much longer route is seeing Saudi fertilizer exports that were once shipped out of the Gulf instead trucked all the way to the Red Sea, a less efficient but strategically vital route that Ed said could stick around.
Ed Ballard
It's never going to be as cheap as moving stuff by sea, and you won't be able to compensate for all the volumes. And of course, there are lots of energy products that can't be moved over land. But I think it's quite likely these countries will move to shore up these arrangements, maybe strengthen them with new rail links, new infrastructure so that they have this option in future.
Luke Vargas
ICE has a new acting director. President Trump is tapping David Venturella, a former career employee of the agency, as its next chief, filling a void after Todd Lyons resigned from his post to join the private sector. Venturella has his own experience in that sector, having worked at private prison company Geo Group and subsequently advocating for the use of warehouses in immigration detention. US household debt has risen to almost $19 trillion in the first quarter, according to the New York Fed, while the total number of Americans falling behind on payments was little changed. Student loan delinquency rates are climbing. And as the Trump administration narrows pathways to loan forgiveness in favor of emphasizing repayment, it's a trend that personal finance reporter Oyen Adedoyan says is leading older borrowers to fall behind.
Oyen Adedoyan
The average student loan borrower entering default is nearly 40 years old. That's two and a half years older than before the pandemic. These are people who are 270 days or more past due on a payment, and they might also be parents who borrowed on behalf of their kids. This is significant because at the end of 2023, a pandemic era government pause on student loan payments ended. The government then started pushing millions of borrowers back into repayment, but many of them either weren't aware the pause had ended or just didn't have the money to get back into repayment. And the Fed is estimating that more than 3.5 million people defaulted on their student loans between October and March.
Luke Vargas
And Princeton's honor code is proving no match for AI. Faced with what they perceive as widespread, widespread AI fueled cheating, faculty at the Ivy League university this week voted to reinstate exam proctors, bringing back a practice not seen at the school since the 19th century. Nationwide studies suggest that a third of students admit to using AI to produce entire assignments, fueling an arms race between professors and students to detect or mask the technology's use in markets. News Walmart is cutting or relocating about 1,000 workers as it consolidates its teams at its Bentonville, Arkansas headquarters. While a number of large employers have announced significant layoffs in recent months following heavy artificial intelligence investments, a Walmart spokeswoman said its changes were related to organizational structure, not AI. Well, Jack Daniels and Fireball Whiskey won't be living in the same corporate drinks cabinet. For now, at least. We're exclusively reporting that jackmaker Brown Forman has rejected a $15 billion takeover offer from Sazerac, the company behind Fireball, Buffalo Trace and Ready to Drink Buzzballs cocktails. That comes as separate talks to combine Brown Forman and Absolut vodka maker Pernod Ricard also fell apart last month. The discussions come as major alcohol brands are contending with slowing sales and a decline in drinking among American adults. And talks between Samsung and its labor union in Korea have collapsed, setting up a potentially disruptive strike next week after the two sides failed to agree on how to share the profits from the company's booming memory business. The labor union wants employees to get roughly 15% of operating profit. However, Samsung's management has rejected that demand, as it would exceed the company's cap on bonus pay currently set at 50% of annual salary. Coming up. In the 10 years since President Trump last set foot in China, the world's second largest economy has become increasingly competitive. We'll look at what that's meant for American businesses like Nike after the break.
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Luke Vargas
Well, as President Trump makes his way to Beijing flanked by a host of top business and technology executives, one US Company which once dominated that market is now flailing. We're talking about Oregon based Nike, whose China business lately has flatlined. A cautionary tale of an American giant that's been wounded by China's hyper competitive and increasingly nationalistic consumer market. Our Daniel Bach spoke to Journal senior reporter John Eamont.
Daniel Bach
John, take us through how bad things are for Nike now in China and how that's changed from a position of dominance.
John Eamont
Yeah, well, things have really been tough for Nike over the past few years, going back about five years now. So Nike was huge in China. There was a growing sports market and Nike really owned it to a great degree. And so Nike sponsored Chinese athletes and it really made itself a brand that was that was associated with athletic prowess. And the NBA, which of course Nike's very associated with as well, is very popular, was very popular for a very long time in China, too. So Nike was just had this great position and they enjoyed double digit growth for many years and it became a real cash cow for the company and a reason that investors were very excited about about Nike's prospects. But that hasn't been true recently. Nike situation in China has gotten so bad that revenue over the past three quarters was nearly 30% lower than in the same period five years ago. And the company has said that they're estimating that this current quarter that revenue will drop by about 20%.
Daniel Bach
That's quite a big hit. And you write that part of this is about the strategy, focus on the wrong sports, for example, but also on competition as well. Tell us a little bit more about why consumers have soured on Nike particularly.
John Eamont
Right. Well, I guess the most positive read for Nike is they were a victim of their own success. They were just so big that it was going to be hard to maintain and that there are a lot of new competitive brands that are very interested in the Chinese market. From foreign brands like an and Hoka to these increasingly competitive domestic brands like Li Ning and Anta. And so it was hard for Nike to maintain control over its huge market share. And at the same time, younger Chinese, especially, are very interested in using clothing to express themselves, to show their identity. And Nike's in everything. You know, they make tennis shoes, they make soccer shoes, they make running shoes, they make basketball shoes. A lot of the brands that have had success in China recently have been good at sort of pinpointing specific niches. And so, you know, if you wear Lululemon leggings, that that might mean that you love yoga. So brands that are, you know, very targeted at specific sports have often done better recently than sort of the omnibrands like Nike.
Daniel Bach
And Nike's not the only American business that seems to be struggling. You write about Starbucks, the auto companies, gm, Ford Gas, fashion labels. What does this say about the environment in China for US Businesses as a whole at this moment?
John Eamont
Yeah, it's definitely gotten a lot harder to succeed in China. And a lot of American companies for many years were growing very quickly in China because China's economy was growing very fast, and also because Chinese domestic brands weren't as competitive. But that has all flipped. It's just tough. And these are companies that know their market very well. They know how Chinese consumers expect products to come out quickly. They expect products to come out loaded with features. They know how to meet the Chinese consumer where they are. So it's just gotten tougher. There's no question some brands are managing to succeed, to be clear, but it has definitely gotten tougher.
Daniel Bach
And how does that play into the current trading relationship between the countries? We know Trump is bringing a group of US CEOs with him for a summit this week with President Xi in order to secure business deals. His tariffs have been predicated on Chinese overcapacity. But obviously, for American businesses, the Chinese domestic market remains incredibly important.
John Eamont
Yeah, it does. One way to think of this is that one thing that was keeping the United States and China sort of diplomatically close for many years was this optimism among American companies that they could earn a lot of money in China. So that even though there were always going to be issues with China from IP infringement, all sorts of problems, that China was worth keeping close. You know, the fact these CEOs are coming to China means that they still see some potential there. And obviously they're hoping to get better market access. But what we also see is that a lot of this isn't political. A lot of the reason why Chinese consumers are not choosing American brands is not because the Communist Party has turned on American brands necessarily, but just because their products aren't seen in is especially competitive. So that's something that no meeting between Trump and Xi is going to be able to fix.
Daniel Bach
Journal Senior reporter John Eamont Jon, thank you for this.
John Eamont
Thank you.
Luke Vargas
And that's it for what's news for this Wednesday morning. Today's show was produced by Hattie Moyer and Daniel Bock. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.
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Episode Title: Are Tech Leaders Pushing a U.S.-China AI Truce?
Date: May 13, 2026
Host: Luke Vargas (The Wall Street Journal)
This episode centers on President Trump’s high-stakes visit to Beijing, accompanied by leading American tech executives, raising the prospect of a thaw in U.S.-China relations, especially over artificial intelligence. The episode explores whether tech leaders might catalyze a breakthrough or truce on AI, while also examining the evolving business climate for American companies in China, U.S. household debt trends, disruptions in Gulf trade routes, and the struggles of market giants like Nike.
(Starts at 01:01; Deep dive from 01:28–03:05)
(Main discussion 03:05–04:44)
(Highlights from 04:44–06:14)
(06:14–07:01)
(07:01–08:23, select highlights throughout)
(Focus segment: 08:54–13:35)
Nike’s Fall from Grace
Broader Implications for U.S.–China Trade