WSJ What’s News – November 19, 2024

Hosted by The Wall Street Journal

Antitrust Actions in the Final Days of the Biden Administration

As the Biden administration nears its end, significant strides are being made in the realm of tech antitrust enforcement. U.S. antitrust officials are intensifying their efforts to dismantle the monopolistic structures of big tech giants, with a particular focus on Google and Microsoft.

Key Developments:

• Google’s Monopoly in Search: The Department of Justice (DOJ) secured a victory against Google in August, finding that the company maintained an unlawful monopoly in the search engine market. The DOJ is now awaiting judicial decisions on the appropriate remedies. According to Sam Schechner, a tech reporter for the Wall Street Journal, “The DOJ is arguing that Google might have to divest its Chrome browser or Android mobile operating system in some circumstances” (01:45).

• Potential Remedies and Government Actions: The DOJ has proposed that Google could be required to cease paying Apple its substantial fees to remain the default search engine on Safari browsers. Furthermore, there are impending actions against Microsoft’s cloud business, though Microsoft has so far declined to comment on the Federal Trade Commission’s (FTC) intentions.

• Administration’s Antitrust Agenda: Schechner elaborates on the administration's aggressive stance, highlighting the roles of key figures like FTC Chair Lina Khan and DOJ Antitrust Chief Jonathan Cantor. “The Biden administration has put in place some pretty strident figures when it comes to using the government's antitrust powers against big tech companies” (03:13). However, with a transition to a new administration, the future of these initiatives remains uncertain.

• Google’s Defense: Google has countered the DOJ's proposals, stating that splitting its core services would detrimentally impact both consumers and the broader tech ecosystem. Google’s VP of regulatory affairs emphasized, “The government was putting its thumb on the scale in ways that could harm consumers, developers, and American technological leadership” (02:40).

The Biden administration’s robust antitrust measures reflect a significant push to regulate and potentially restructure major tech companies, aiming to foster a more competitive and fair market landscape.

Trump Transition and Key Nominations

With the Trump administration preparing to return to power, several high-profile nominations are underway, accompanied by controversies and investigations.

Key Highlights:

• Sean Duffy for Transportation Secretary: President-elect Trump has announced former Wisconsin Representative Sean Duffy as his nominee for Transportation Secretary. Promoting the nomination on Truth Social, Trump outlined Duffy’s agenda to “push to rebuild highways, tunnels, and other infrastructure and to end the diversity, equity, and inclusion efforts for pilots and air traffic controllers” (04:26).

• Matt Gaetz for Attorney General and Ongoing Investigations: The nomination of former Florida Representative Matt Gaetz as Attorney General has stirred significant debate. A House Ethics Committee panel is set to convene to discuss allegations against Gaetz, including claims he engaged in sexual activities with a minor in 2017. Despite Gaetz’s steadfast denials, Trump’s transition team maintains his suitability for the role, asserting that the allegations are “baseless and intended to derail the second Trump administration” (04:26).

• Implications of the Ethics Investigation: The investigation into Gaetz had anticipated releasing a report earlier, but the process was stalled due to Gaetz’s resignation from Congress. There remains a possibility for the full House to approve a report through a floor vote, potentially bringing more clarity to the ongoing allegations.

These nominations underscore Trump's focus on reshaping key government departments, albeit amid significant scrutiny and ongoing ethical investigations.

Hong Kong's Crackdown on Pro-Democracy Activists

Hong Kong continues to experience stringent crackdowns under Beijing’s national security laws, significantly impacting its pro-democracy movement.

Key Developments:

• Mass Sentencing: In a landmark decision, 45 former lawmakers and activists were sentenced to prison terms ranging from four to ten years. This case marks one of the most severe applications of Hong Kong's national security law, aimed at suppressing dissent and dismantling the pro-democracy camp.

• Details of the Case: The defendants were charged for their involvement in an unofficial primary election, which prosecutors argued was intended to “paralyze Hong Kong's government” (07:54). Among them, college professor Benny Tighe received the longest sentence of ten years.

• Impact on Activism: Sam Schechner commented on the broader implications, stating, “Of course it will silence more people because you see how a primary can be illegal and lead to 10 years of sentencing” (06:23). This landmark case serves as a stark warning to other activists, effectively stifling the pro-democracy movement in the region.

• Statements from Affected Individuals: Amelia Wong, the girlfriend of one of the defendants, conveyed the chilling effect of the verdicts during a press interaction, highlighting the personal toll of the crackdown.

The severity of these sentences underscores Beijing’s unwavering stance against political dissent in Hong Kong, signaling a bleak future for the city’s pro-democracy advocates.

Canada and Mexico Brace for Potential Second Trump Term

Anticipating a possible second term for President Trump, Canada and Mexico are strategizing to safeguard their economies and navigate upcoming trade challenges.

Key Insights:

• USMCA and Trade Protectionism: Santiago Perez and Vipal Monga discussed the implications of Trump’s protectionist policies on the United States-Mexico-Canada Agreement (USMCA). The review of USMCA in 2026 is a focal point, with Trump signaling a desire for increased protections and the imposition of substantial tariffs on Mexican imports.

• Canadian Concerns: An unnamed Canadian official expressed apprehension, noting that “China will be at the center of concerns for both the US and Canada”. Canada anticipates that any revamped USMCA could enforce stricter regional content rules, mandating higher North American content in manufactured goods to counteract Chinese competition (08:08).

• Impact on Canadian Economy: Vipal Monga highlighted the economic stakes, pointing out that approximately 78% of Canada’s exports are directed towards the U.S. A hypothetical 10% tariff could precipitate a recession in Canada, severely impacting sectors like automotive and energy. In response, Canada is employing a “Team Canada approach”, with diplomats and provincial leaders actively engaging with U.S. counterparts to advocate against punitive measures and emphasize the reciprocal harm tariffs could inflict on American consumers (09:35).

• Border Security and Immigration Pressures: The U.S.-Mexico border remains a critical area of focus. Mexico has reported a 74% decrease in illegal border crossings under the current administration, but fears that Trump’s policies might reverse these gains. Enhanced U.S. tariffs may compel Mexico to enforce more stringent border controls, potentially exacerbating migration flows and straining bilateral relations (10:31).

• Potential Migration to Canada: Vipal Monga revealed a surge in Americans seeking to migrate to Canada, driven by uncertainty over Trump’s potential policies. Canadian authorities, including the RCMP and Canadian Border Patrol, are preparing for a possible influx, though there are concerns about the capacity to manage a large-scale migration event (11:40).

The proactive measures by Canada and Mexico reflect their strategic efforts to mitigate the economic and social impacts of a protectionist U.S. stance, striving to maintain stability and robust trade relations in the face of potential policy shifts.

Market Highlights

The financial markets witnessed notable movements influenced by corporate developments and potential mergers.

Key Updates:

• Super Microcomputer’s Stock Surge: Shares of Super Microcomputer soared by over 30% in after-hours trading following the company’s submission of a plan to remain listed on the Nasdaq. This move comes after Super Microcomputer missed crucial deadlines for financial reporting, signaling potential stabilization and investor confidence in the company’s future prospects (12:36).

• Blackstone’s Potential Deal on Jersey Mike’s Subs: Private equity giant Blackstone is nearing an acquisition deal for Jersey Mike’s Subs, valuing the sandwich chain at approximately $8 billion. This deal, if successfully finalized, could be announced imminently, provided negotiations continue smoothly (12:36).

• Earnings Season Insights: As the earnings season approaches its conclusion, WSJ What’s News announced the release of a special bonus episode focusing on key themes from the latest financial results. Listeners are encouraged to tune in for in-depth analysis and expert commentary on the prevailing market trends (12:36).

These market movements highlight the dynamic nature of the financial sector, with significant investments and strategic decisions shaping the landscape for the upcoming quarter.

Concluding Remarks

The November 19, 2024, episode of WSJ What’s News delivered a comprehensive overview of pressing issues spanning antitrust enforcement, political transitions, international relations, and market dynamics. By integrating expert insights and on-the-ground reporting, the podcast provided listeners with a nuanced understanding of the factors influencing global and domestic landscapes as the political and economic year draws to a close.

For more detailed discussions and updates, listen to the full episode of WSJ What’s News.