India Strikes Pakistan, Escalating Kashmir Standoff

Summary

WSJ What’s News Podcast Summary

Episode: India Strikes Pakistan, Escalating Kashmir Standoff
Release Date: May 7, 2025
Host: Luke Vargas, The Wall Street Journal

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1. Escalation in India-Pakistan Conflict Over Kashmir

The episode opens with an in-depth analysis of the escalating tensions between India and Pakistan, two nuclear-armed neighbors engaged in a prolonged dispute over the Kashmir region.

• Military Strikes: India conducted overnight strikes targeting nine sites in Pakistan, including locations in Pakistan-occupied Kashmir. In response, Pakistan claims to have shot down four to five Indian aircraft.

• Retaliation Motive: These strikes were reportedly retaliation for an April attack where gunmen killed over two dozen people in a popular tourist area in Indian-administered Kashmir. Indian Prime Minister Narendra Modi had previously vowed justice and dispatched troops to combat what India accuses as Pakistan-linked militant groups.

  [02:12] Tripty Lahiri: "India is trying to proceed with restraint and only pursue militant groups that it believes are associated with the attack on civilians in April."

• Potential Pakistan Response: Pakistan has signaled a strong retaliatory stance, with the Prime Minister labeling India's actions as aggressive. While Pakistan claims to have downed several Indian jets, confirmation remains pending from official sources.

  [02:40] Tripty Lahiri: "We should very much expect to see some kind of action from Pakistan."

• Risk of Escalation: Experts express concerns about the possibility of miscalculations leading to a broader conflict. However, there is a consensus that neither nation desires an all-out war, especially given India's economic ambitions and its growing role as a trade partner alternative to China.

  [03:21] Tripty Lahiri: "I don't think that they actually do want to go to war. India has a lot to lose from going into a conflict at this time."

• International Involvement: Both the US and China have urged de-escalation. China's stance is particularly noteworthy as it has been a key arms supplier to Pakistan, while India has strengthened its ties with the US.

  [04:14] Tripty Lahiri: "China has also been echoing similar things to what the US has said, that they're very worried about escalation and wanting the countries to de-escalate."

2. U.S.-China Trade Talks Signal Possible De-escalation

Amid ongoing tensions, there are promising signs of a thaw in the trade war between the United States and China.

• High-Level Meetings: U.S. Treasury Secretary Scott Besant and Trade Representative Jamison Greer are set to meet with China’s Vice Premier in Switzerland, aiming to initiate de-escalation.

  [05:21] Unnamed Analyst: "We have shared interest that this isn't sustainable... We don't want to decouple. What we want is fair trade."

• Economic Measures: In response to trade tensions, the People's Bank of China announced key rate cuts and relaxed reserve requirements for lenders, marking the first substantial economic steps since the tariff hikes began.

• European Union's Strategic Moves: The EU has secured significant trade agreements with Mercosur and Mexico, and is actively pursuing deals with Indonesia, the UAE, the Philippines, and Thailand. These moves aim to diversify trade partnerships as the U.S. appears less reliable as a long-term partner.

  [06:59] Kim McRail: "The EU's trade commissioner often says... there's another 87% with the rest of the world."

3. Business Sector Highlights

The podcast delves into several critical business developments impacting global markets.

• Novo Nordisk's Downgrade: The Danish pharmaceutical giant has lowered its financial guidance due to increased competition from generic versions of its flagship drugs, Ozempic and Wegovy. The U.S. FDA has instructed distributors to halt the distribution of these generic copies by the end of the month, which may alleviate some competitive pressures.

• Weight Watchers Bankruptcy: After decades in the health and wellness industry, Weight Watchers has filed for bankruptcy. The company struggled to maintain its relevance amid the rise of pharmaceutical weight loss solutions, despite offering complementary services.

  [08:04] Luke Vargas: "Weight Watchers intends to be taken over by the institutions that own its loans and bonds, and its stock will largely be wiped out."

• Electric Vehicle (EV) Market Decline: U.S. EV sales saw a 5% decline in April, with Tesla alone experiencing a nearly 13% drop. Factors cited include waning consumer interest and reduced promotional activities. Upcoming earnings reports from companies like Carvana, Uber, and Walt Disney are anticipated to provide further insights.

4. Upcoming Federal Reserve Interest Rate Decision

The Federal Reserve is poised to announce its latest interest rate decision at 2 PM Eastern. Expectations lean towards holding rates steady, but investors are keenly awaiting signals regarding the Fed's assessment of inflation risks versus economic slowdown threats.

5. Vatican Conclave to Elect a New Pope

The podcast covers the intense political maneuvering within the Vatican as cardinals gather in the Sistine Chapel to elect a new pope.

• Leading Candidates: Cardinal Pietro Parolin, the current Secretary of State, is a frontrunner, offering continuity with Pope Francis. However, his prospects hinge on securing sufficient early-round votes.

  [11:01] Stacey Meitri: "If Parolin doesn't manage to get enough votes in the early rounds, his candidacy could start to fade."

• Conclave Drama: The election process has been unusually contentious, highlighted by a banned cardinal attempting to participate despite prior exclusions. This has added a layer of drama reminiscent of cinematic portrayals.

  [11:48] Stacey Meitri: "There's been a lot of drama around this particular conclave."

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Conclusion

This episode of What’s News provides a comprehensive overview of significant global developments, from the heightened India-Pakistan tensions and shifting U.S.-China trade dynamics to pivotal business sector changes and the Vatican's high-stakes papal election. Host Luke Vargas, along with expert contributors, delivers insightful analysis and critical updates, ensuring listeners are well-informed about the events shaping today's world.

Transcript

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[Luke Vargas]

One most trusted app based on August 2024 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings. February 2024 through January 20India hits Pakistan with military strikes ratcheting up tensions between the nuclear armed states. Plus the US And China schedule talks in a trade war first.

[Unnamed Analyst]

My sense is that this will be about de escalation, not about the big trade deal and but we've got to de escalate before we can move forward.

[Luke Vargas]

And Novo Nordisk cuts its guidance as copycat versions of Ozempic hit sales. It's Wednesday, May 7th. 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. The confrontation between India and Pakistan has intensified after India carried out strikes on nine sites in Pakistan overnight and Pakistan claimed to have shot down four, five Indian aircraft. The fighting came despite diplomatic efforts by the US to dial back tensions between the nuclear armed neighbors which have fought several wars over the disputed Kashmir region. Tripty Lahiri is the Wall Street Journal's South Asia Bureau Chief. Tripty India is claiming these strikes were retaliation for an incident in April when gunmen killed more than two dozen people in a popular tourist spot within Indian administered Kashmir. Prime Minister Narendra Modi had vowed justice and deployed troops to hunt, which India had accused Pakistan of having links to. So I guess we expected some sort of response here. What do you make of what we've now seen?

[Tripty Lahiri]

So I think we were expecting some sort of airstrikes. India said that it targeted nine different sites, some of them in Pakistan occupied Kashmir and some of them even into Pakistan. India has said that it didn't target any Pakistan military installations and it described that as showing that India is trying to proceed with restraint and only pursue, you know, militant groups that it believes are associated with the attack on civilians in April.

[Luke Vargas]

How might we expect Pakistan to respond to this?

[Tripty Lahiri]

So Pakistan has been saying all along that while they would not act first, if India took any kind of action, then Pakistan would respond very, very strongly. And indeed the prime minister of Pakistan has said that India's act is an act of aggression. And so I think we should very much expect to see some kind of action from Pakistan. Pakistan has said that in fact, it has even already downed about five Indian jets. We haven't heard any confirmation of that from the inside.

[Luke Vargas]

This story, Tripty, is obviously of foremost importance to India and Pakistan, though the world is certainly watching closely. Given that these are both nuclear states. How should we understand the risk here that this could escalate, potentially spiraling into something much more severe?

[Tripty Lahiri]

I think there is a lot of concern from experts who have been observing India and Pakistan for a long time. You know, the tempers are perhaps warmer than they have been in a while. I think the biggest fear here is sort of the threat of some sort of a miscalculation. But I don't think that they actually do want to go to war. I mean, I think India has a lot to lose from going into a conflict at this time. First of all, it would then take attention away from being that good trade partner, being that alternative to China in terms of supply chains. I think it'd be very difficult to wage a war while also doing all the economic things that India needs to do. And you know, there's more at play here as well beyond just India and Pakistan. You know, India is closer to the US now, while China has been kind of the main arms provider for Pakistan. So what happens here also has those larger ramifications of how those two powers are trying to balance out in Asia.

[Luke Vargas]

Have we heard anything from Beijing on this?

[Tripty Lahiri]

So to some extent, I mean, China has also been echoing similar things to what the US has said, that they're very worried about escalation and wanting the countries to de escalate. And Iran is saying, Russia is saying China and the UN Kind of issuing pleas to de escalate. But certainly India has moved forward and I think Pakistan will also then take another step.

[Luke Vargas]

Tripty Lahiri is the Wall Street Journal's South Asia Bureau chief. Tripty, thank you so much for the update.

[Tripty Lahiri]

Thank you so much for having me.

[Luke Vargas]

For the first time since the start of the trade war between the US And China, both countries are signaling a willingness to move forward. Treasury Secretary Scott Besant and U.S. trade Representative Jamison Greer are heading to Switzerland tomorrow where they'll meet with China's vice premier over the weekend. Bilateral trade has all but dried up in recent weeks after China responded to President Trump's 145% tariffs on Chinese goods with its own 125% retaliatory tariffs. Speaking on Fox News is the Ingram angle. Besson said the meetings in Switzerland could be the start of de escalation.

[Unnamed Analyst]

Look, we have shared interest that the this isn't sustainable, as I said before, especially on the Chinese side And you know, 145%, 125% is the equivalent of an embargo. We don't want to decouple. What we want is fair trade.

[Luke Vargas]

Well, news of the meeting between US And Chinese officials paired with a raft of new policy easing measures from Beijing have seen Chinese shares shoot higher this morning to help boost the economy. The People's bank of China said it would lower key rates, including for mortgages, and relax requirements on the amount of cash that lenders must hold in reserve. The measures were Beijing's first concrete steps since President Trump ratcheted up tariffs on Chinese goods in April. The UK And India have struck a long awaited trade deal ensuring the tariff free exchange of goods within a decade. Among the terms of the agreement, most British goods to India won't be taxed and the UK Is making it easier for Indian professionals to enter the country. Journal reporter Kim McRail in Brussels says the breakthrough comes as many other countries are doubling down on free trade as the US Erects new barriers.

[Kim McRail]

In December, the EU came to an agreement with Mercosur, which is a South American customs union, includes four South American countries. That's a really big deal for the EU this year. They also reached a deal with Mexico and they're speeding up talks with a few other countries, including Indonesia, the United Arab Emirates, the Philippines and Thailand.

[Luke Vargas]

And Kim says those EU deals represent a two pronged approach to trade.

[Kim McRail]

They don't want to lose their trade opportunities with the U.S. but at the same time, the U.S. is looking a little bit less reliable as a long term trade partner. And maybe there are opportunities to expand trade with other parts of the world. The EU's trade commissioner likes to bring up some numbers to try to illustrate this and often says, yes, the US represents about 13% of trade opportunities for the EU. That's really significant and it matters a lot. But there's another 87% with the rest of the world.

[Luke Vargas]

Coming up. We'll hit the rest of the day's markets, news including Novo Nordisk downgrading its guidance and cardinals gather at the Vatican to start the process of electing a new Pope. We've got those stories and more after the break.

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[Luke Vargas]

Switch upfront payment of $45 for 3 month plan equivalent to $15 required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail] in other markets News Today Danish pharma giant Novo Nordisk has downgraded its guidance amid US Competition from copycat versions of its blockbuster weight loss and diabetes drugs. That competition, though, should theoretically let up soon, as the US Food and Drug Administration has told anyone distributing copies of Novo's Ozempic and Wood Govi to stop by month's end. Compounded versions of the drugs had been allowed during an earlier supply crunch. Weight Watchers has filed for bankruptcy. Founded in 1963, the Health and wellness company has struggled to adjust to the increased use of drugs for weight loss despite offering them alongside its legacy food consumption and exercise plans. Weight Watchers intends to be taken over by the institutions that own its loans and bonds, and its stock will largely be wiped out. US electric vehicle sales declined by 5% in April in spite of 10% growth in the broader car market, according to research firm Motor Intelligence. Tesla, which accounts for half of all US EV sales, reported a drop of nearly 13%, though Kia, Hyundai, Ford and Rivian also saw sales declines. Dealers cited multiple factors for the pullback, from cooling customer interest to fewer promotions and discounts that had juiced sales in the past. Well, we will get more insights into the state of the auto market when used car dealer Carvana reports earnings later today. Updates are also due from Uber and Walt Disney this morning, and the Federal Reserve will announce its latest interest rate decision at 2pm Eastern. It's widely expected to hold rates steady, though investors will be listening for clues on how policymakers gauge the risks of tariff induced inflation pressure against the odds of an economic slowdown, and heads up that we have got a bonus episode coming later today in the next what's News in earnings. We'll dig into the latest quarterly results from the aforementioned automotive sector, including how car companies are reacting to President Trump's tariff plans and whether and when consumers might see higher prices passed along to them. That'll be in the feed around midday ahead of our usual PM show tonight. And finally, cardinals will close themselves in the Vatican's Sistine Chapel today to cast their first ballots in the conclave to choose a new pope. Journal editor Stacey Meitri says that after weeks of alliance building and unusually blunt campaigning, all eyes are on this year's frontrunner.

[Stacey Meitri]

So Cardinal Pietro Parolin is the secretary of state for the Vatican, which means he's basically the number two official under Pope Francis. And so therefore, you know, if you're looking for somebody who is going to maybe provide a bit of continuity with the previous pope, Padolin is your man. But the thinking among the experts here, and also some of the cardinals, is that if Padolin doesn't manage to get enough votes in the early rounds, his candidacy could start to fade. And if his candidacy does fade, then we'll start to see some of the dark horse candidates emerge.

[Luke Vargas]

Speaking of dark horses, Stacy says there has been an unusual amount of intrigue around this conclave rivaling a recent Oscar nominated dramatization.

[Stacey Meitri]

Usually you don't see this level of politicking going on in the College of Cardinals because it's supposed to be and it is a sacred vote, the fact that one of the cardinals who had been banned by the pope from participating in this conclave decided to show up at the beginning of the pre conclave deliberations, demanding that he be admitted into the voting session. And the only reason he wasn't allowed in is because Paulin, the frontrunner, produced not one, but two letters from the pope from beyond the grave, reiterating the fact that this particular cardinal was Persona non grata. So there's been a lot of drama around this particular conclave.

[Luke Vargas]

And that's it for what's news for this Wednesday morning. Today's show was produced by Kate Bullivant and Daniel Bach. Our supervising producer is Sandra Kilhoff. I'm Luke Vargas for the Wall Street Journal. And as always, thanks for listening.