New Year’s Violence Rattles U.S.

Summary

WSJ What’s News – Episode: New Year’s Violence Rattles U.S. Release Date: January 2, 2025 Host: Luke Vargas

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1. Escalating Violence on New Year’s Day

New Orleans Truck Attack: On New Year’s Day, New Orleans was shaken by a deadly truck attack in the French Quarter. The FBI has identified the perpetrator as 42-year-old Shamsuddin Jabbar, a Texas-born father of three with a notable corporate background, including positions at Accenture, Ernst & Young, and Deloitte. Jabbar was killed in a shootout with police after ramming a rented Ford F150 truck into a crowd, resulting in at least 15 fatalities and numerous injuries. An Islamic State flag and improvised explosive devices (IEDs) were discovered inside the vehicle, suggesting potential terrorist motives.

Legal and Investigative Insights: Louisiana Attorney General Liz Merle provided critical insights into the investigation:

• Merle [01:43]: “We do know that there is a connection between a house that was located on Mandeville street in New Orleans and where we believe that these IEDs may have been put together... there are multiple people that are involved.”

Merle indicated that multiple individuals might be responsible, with at least one confirmed deceased at the scene. Deloitte has condemned the attack and is collaborating with authorities.

Las Vegas Cybertruck Explosion: In a separate incident hours later, a Tesla Cybertruck exploded outside the Trump International Hotel in Las Vegas. The explosion resulted in one fatality and seven injuries. Although authorities consider it an isolated event, they have not dismissed the possibility of a connection to the New Orleans attack.

Sheriff Kevin McMahill’s Remarks:

• McMahill [02:57]: “We know that Elon Musk is working with President Elect Trump, and it's the Trump Tower, so there's obviously things to be concerned about there, and that's something we continue to look at.”

McMahill highlighted the potential implications given the Cybertruck’s associations with high-profile figures like Elon Musk and President Elect Trump. Tesla has stated that the explosion was unrelated to the vehicle’s design, with Musk confirming on social media that the vehicle itself was not the cause.

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2. Political Turmoil: House Speaker Showdown

As Congress reconvenes, the focus shifts to the election of the House Speaker, a role that has proven contentious in recent years. Historical context includes:

• January 2023: Kevin McCarthy took four days to secure the position.
• Later in 2023: Mike Johnson also struggled, taking three weeks to win the speakership.

Current Dynamics:

• Thomas Massie’s Opposition: Kentucky Representative Thomas Massie has declared his intent to oppose Johnson’s reelection as Speaker. Given the narrow Republican majority, Massie’s stance could jeopardize Johnson’s bid, as only one additional Republican backing an alternative candidate is needed to prevent a majority.

Massie’s resistance stems from his frustration with Johnson’s reliance on Democratic support for passing legislation, placing him at odds with both his GOP colleagues and President Elect Trump, who supports Johnson’s leadership.

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3. Business and Market Movements

China’s Electric Vehicle (EV) Market Surge: China’s leading EV manufacturer, BYD, reported a 41% increase in full-year sales, reaching 4.3 million vehicles. December sales set a new record, bolstered by government incentives encouraging consumers to trade in older vehicles for new electric or hybrid models. Despite strong sales, BYD’s stock experienced a decline, with analysts like Nomura suggesting that these robust figures were largely anticipated by the market.

Comparative Analysis: Investors are anticipating Tesla’s Q4 delivery figures, set to be released later, to benchmark against BYD’s performance. Additionally, overall Chinese EV stocks dipped due to broader market concerns, including a slowdown in manufacturing activity and weaker performance in chip and insurance sectors.

European Markets and Energy Concerns: European stock indexes are grappling with the halt of Russian natural gas supplies through Ukraine, following Kyiv’s refusal to renew pipeline agreements. While the immediate impact on the EU is minimal—accounting for only about 5% of total imports—the disruption is expected to significantly affect non-EU countries like Moldova.

Wall Street Trends: Contrary to the traditional Santa Claus rally—a period where stocks typically rise in the final trading days of the year—the S&P 500, Nasdaq, and Dow have been slipping. This downturn is attributed to volatility in speculative assets like Bitcoin, struggling small-cap stocks, and declines in major tech company shares.

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4. Shifting Corporate Stance on China Amid Potential Trade War

Change in Tone from US Businesses: As the possibility of a second Trump presidency looms, American companies are altering their approach toward the Chinese market. Previously vocal against tariffs and seeking growth in China, businesses are now adopting a more cautious stance.

Case Studies:

• Starbucks:

  • Stu Wu [07:38]: “Starbucks is a fascinating example... the new CEO of Starbucks says, hey, this is a tough market, we're going to have to look at some partnerships. It's going to be tough to figure out what they do going forward.”

  Once optimistic about China as a major market, Starbucks is reevaluating its strategy due to economic slowdowns and increased competition from local brands like Luckin Coffee.

• General Motors (GM):

  • Stu Wu [08:36]: “Two big reasons why these Chinese companies are doing so well... direct subsidies by the Chinese government... incentives for people to buy Chinese cars.”

  GM is reconsidering joint ventures with Chinese automakers as Chinese competition intensifies, supported by substantial government subsidies and consumer incentives favoring domestic brands.

Policy and Supply Chain Adjustments: US export controls are increasingly restrictive, limiting the transfer of strategic technologies to China. Politicians are encouraging companies to invest domestically rather than in China, leading to a strategic shift in supply chain management:

• Supply Chain Diversification: Companies are maintaining existing Chinese manufacturing bases while exploring new locations in Asia less impacted by US-imposed tariffs.

Lobbying and Future Implications:

• Stu Wu [10:35]: “Apple was a great example of how lobbying could work... Apple got some exemptions to tariffs. So we'll see.”

While direct lobbying has decreased compared to the Trump administration’s first term, companies like Apple have successfully negotiated exemptions, indicating that lobbying efforts, though quieter, remain influential.

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Conclusion

The episode of "What’s News" delivered a comprehensive overview of significant events impacting the United States and global markets. From the tragic New Year’s Day attacks and ensuing investigations to intricate political battles within Congress, the coverage underscored the complexity of current affairs. In the business realm, the shifting dynamics between US companies and the Chinese market reflect broader geopolitical tensions and economic strategies. As the New Year unfolds, these developments are poised to shape the socio-political and economic landscape significantly.

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Produced by Daniel Bach with supervising producer Christina Rocca. For more updates, tune in to the next episode of "What’s News."

Transcript

[Luke Vargas]

Tim.

[Tim Higgins]

I'm Tim Higgins with the Wall Street Journal. We've got this spot to hear directly from the leaders behind the bold name companies we cover every day. Check out our new series Bold Names in the Tech News briefing feed from the Wall Street Journal.

[Luke Vargas]

The FBI investigates a deadly New Orleans truck attack as an act of terrorism as authorities probe potential links to an explosion outside the Trump Hotel in Las Vegas.

[Kevin McMahill]

Do I think it's a coincidence? I don't know, but can tell you is we're absolutely investigating any connectivity to what happened in New Orleans as well as other attacks that have been occurring around the world. We're not ruling anything out yet.

[Luke Vargas]

Plus, lawmakers prepare for a potential House speaker fight. And US Executives go quiet about the importance of the Chinese market ahead of a second Trump presidency. It's Thursday, January 2nd. 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. We are learning more about the alleged terrorist behind the New Year's Day attack in New Orleans that left at least 15 people dead and dozens injured. The FBI has identified 42 year old Shamsuddin Jabbar as the man who rammed a rented Ford F150 truck into a crowd in the heart of the French Quarter early yesterday. Police say that the Texas born and raised father of three was killed in a shootout with police and that an Islamic State flag was found inside the pickup along with improvised. Louisiana Attorney General Liz Merle says authorities believe multiple people may be responsible for the attack.

[Liz Merle]

We do know that there is a connection between a house that was located on Mandeville street in New Orleans and where we believe that these IEDs may have been put together and there was a house fire there. So we also believe that they were trying to get rid of evidence and then, you know, we know that there and understand there are multiple people that are involved. So one individual was deceased at the.

[Luke Vargas]

Scene, but the other Jabbar was an army veteran and had a lengthy corporate resume, including roles at Accenture, Ernst and Young and most recently at Deloitte, where he worked since 2021. Deloitte condemned the attack and said it's doing all that it can to help authorities in their investigation. Well, just hours after the New Orleans attack, a Tesla cybertruck loaded with canisters of gas and firework mortars blew up outside the Trump International Hotel in Las Veg, an incident that police believe to be isolated, though they haven't ruled out a connection between the two cases. The explosion killed the person inside the rented vehicle and injured seven others, according to a person familiar with the matter. Authorities haven't ruled out terrorism as a possible motive. Here was Las Vegas Sheriff Kevin McMahill.

[Kevin McMahill]

We know that Elon Musk is working with President Elect Trump, and it's the Trump Tower, so there's obviously things to be concerned about there, and that's something we continue to look at.

[Luke Vargas]

According to the police, the stainless steel exterior of the cybertruck limited the damage it caused. Tesla didn't respond to a request for comment yesterday, but Musk said on X that his team investigated the incident and that the explosion wasn't related to the vehicle itself. House lawmakers are expected to convene in Washington tomorrow, but before newly elected and returning representatives representatives can get to work on other business, they'll first need to elect a House Speaker. Back in January 2023, it took four days of voting for California's Kevin McCarthy to win the job and three weeks of voting for Louisiana's Mike Johnson to win election later that year. And now another speaker fight looms. Kentucky's Thomas Massie is pledging to oppose Johnson's reelection, and given the tight math in the chamber, just one other Republican would need to join him in backing an alternative candid for Johnson to fall short of a majority, assuming that all Democrats vote along party lines. Massie's stance, driven largely by his frustration that Johnson has relied on Democratic support to pass government funding and other measures, has put him at odds with his GOP colleagues and with President Elect Trump, who is backing Johnson's speaker bid. And in markets today, China's top EV maker BYD says it sold a record number of electric and hybrid cars in December, helping it to grow its full year sales sales by 41% to 4.3 million vehicles. BYD's Chinese peers also posted strong December figures, thanks to government incentives for consumers to trade in old cars to purchase new ones. Carmakers also offered discounts last month to meet annual sales targets. Chinese EV stocks fell today, however, with a Nomura analyst saying that the robust December sales were mostly priced in. And investors will soon be able to compare BYD's progress with that of rival Tesl, which is due to disclose fourth quarter deliveries later today. Meanwhile, shares in Hong Kong and in mainland China closed the day lower, dragged down by chip and insurance stocks after a private gauge of Chinese manufacturing activity showed the sector expanded at a slower pace in December. European indexes are looking for direction in morning trading. The Continent is contending with a shutoff of Russian natural gas flows through Ukraine after Kyiv refused to extend a pipeline deal for the new year. The move is expected expected to have limited impact on the EU given that the pipeline only supplied about 5% of the bloc's total imports, but is expected to cause supply issues in non EU member Moldova. And hopes are fading for a so called Santa Claus rally. On Wall street, stocks tend to rise over the period spanning the final five trading days of the year and the first two of the new one. However, The S&P 500, Nasdaq and Dow have thus far slipped with speculative assets like Bitco as well as small cap stocks and shares in big tech companies all stumbling in the final few days of the year. Coming up, American businesses that once vouched for China in opposition to Trump's tariffs are now keeping quiet as storm clouds gather ahead of a renewed trade war. Reporter Stu Wu joins us to explain that change in tone from American executives after the break.

[Stu Wu]

Christopher.

[Christopher Mims]

I'm Christopher Mims of the Wall Street Journal. Every day we talk to the leaders behind Bold Name companies and you can hear from them in our new series Bold Names in the Tech News Briefing feed from the Wall Street Journal.

[Luke Vargas]

In Donald Trump's first term, businesses small and large from diverse sectors including technology, agriculture and apparel made their displeasure known about Trump's tariffs. But as Inauguration Day approaches and more tariffs against Beijing loom, Journal reporter Stu Wu says that US Companies are taking a markedly different approach. And Stu joins me now with more from Singapore. Stu, I know it's just one of many companies we could be talking about, but Starbucks kind of jumped off the page to me from your reporting as a business that has taken a radically different view about China now than it did in 2016. What can we learn by looking just at them?

[Stu Wu]

Yeah, I chose to focus on Starbucks because back in 2016, its CEO at the time said China could conceivably be our biggest market in the future. And if you had gone to Starbucks five, 10 years ago, you'd see them in all the big streets, big cities, and even the smaller ones. But a lot has changed since then. And I think the biggest thing is the economy. So China's economy grew at nearly 10% a year for decades, and economists think 5% is going to be a really tough number to hit this year. At the same time, there's been a bunch of competitors in China, most notably Luckin Coffee and a bunch of smaller ones too, that are selling coffee for less than $2 a cup now. And now the new CEO of Starbucks says, hey, this is a tough market, we're going to have to look at some partnerships. It's going to be tough to figure out what they do going forward.

[Luke Vargas]

Stu, Starbucks is a fascinating example there, but they're hardly alone. And you've even spoken to business trade representatives in China who are making it pretty clear their members broadly in a whole lot of industries are just now basically looking elsewhere for opportunity.

[Stu Wu]

Yeah, let's take General Motors, for example. So two decades ago, GM said it's worth it to do joint ventures with Chinese automakers and share technology with them because it granted GM access to this big Chinese market that was growing. Now they're rethinking that because they're getting their lunch eaten by these Chinese automakers. There's two big reasons why these Chinese companies are doing so well. Number one is that they're getting direct subsidies by the Chinese government. And second, they're getting indirect subsidies because China is trying to give incentives for people to buy Chinese cars. So that's a tough environment for GM right now, competing against state supported companies.

[Luke Vargas]

And this pressure is kind of coming in both ways. Right. You've got China specifically around tech saying state owned companies really need to diversify away from American products. And then Washington sort of also pushing along what Trump started in his first term, it seems.

[Stu Wu]

That's right. And there's two big things. Number one, our export controls politicians are saying that US Companies shouldn't transfer strategic technologies to China. So they've blocked tens of billions of dollars worth of sales of important technology to China. The second thing is it's just the mood in Washington right now. If you're a company and you manufacture stuff in China and you're arguing President Trump shouldn't add tariffs, well, a Congress member or a member of the administration is going to say, well, you should be doing that investment in the US Instead. So they're really in a tough spot. That doesn't mean they're not lobbying against tariffs. They're just doing it in a more quiet way. What's clear is that American companies in China are prepared for what's next. Trump has proposed an additional 10% tariffs on imports from China. And what American companies have been doing is that they have been diversifying their supply chains. So companies are keeping their existing factories manufacturing in China, but maybe for their next investment, they're going to look for another country, perhaps in Asia, that wouldn't be affected by tariffs.

[Luke Vargas]

All right, so moving supply chains around, but going back to the sort of pr, the lobbying of all of this, we're seeing a change in tune from US Businesses. Is it clear what effect that's gonna have on the policies we get out of Washington and whether this trade war escalates?

[Stu Wu]

So if we look at Trump's first term, there was an analysis that said the average effective rate on imports from China went up from 3% to 11% in Trump's first term. So there was like a real consequence to that. So I did look at the lobbying between the transition period during Trump's first administration and now, and there's a lot less noise right now. But that doesn't mean the companies won't do it. Apple was a great example of how lobbying could work. Apple CEO Tim Cook continually sent to Washington the message that if you raise tariffs, that's going to make Apple products more expensive for consumers. And in the end, Apple got some exemptions to tariffs. So we'll see.

[Luke Vargas]

I've been speaking to Journal reporter Stu Wu in Singapore. Stu, thanks so much.

[Stu Wu]

Thanks, Luke.

[Luke Vargas]

And that's it for what's news for this Thursday morning. Today's show was produced by Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.

[Tim Higgins]

Every day, Wall Street Journal reporters talk with the most powerful, influential and interest. And now we're bringing some of those conversations directly to you. I'm Tim Higgins.

[Christopher Mims]

And I'm Christopher Mims. We're teaming up to ask tough questions of the leaders behind the bold name companies found in the pages of the Journal every day. Are you going to build that $20,000 vehicle?

[Luke Vargas]

No, because that market sucks.

[Tim Higgins]

Check out bold names in the tech news briefing feed from the Wall.