North Korea Boosts Arms Supply to Russia

Summary

WSJ What’s News - Episode: North Korea Boosts Arms Supply to Russia
Release Date: December 23, 2024
Host: Luke Vargas
Produced by: The Wall Street Journal

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1. Introduction and Headlines

In this episode of WSJ’s What’s News, host Luke Vargas delivers a concise overview of the day's most impactful stories. Key headlines include former President Donald Trump's recent threats regarding the Panama Canal and Greenland, President Biden's actions on death sentences, North Korea's increased military support to Russia amid the Ukraine conflict, and significant developments in the automotive and tech industries.

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2. Donald Trump's Territorial Expansion Threats

Timestamp: [00:35] – [03:54]

Former President Donald Trump made headlines by threatening to seize control of the Panama Canal and annex Greenland from Denmark during a conservative conference in Arizona. Speaking candidly about U.S. territorial ambitions, Trump referenced his past remarks, including his suggestion that Canada should become the 51st state.

Notable Quote:

"His latest comments? Openly discussing aspirations for US Territorial expansion after recently trolling Canada's prime minister by suggesting it should become the 51st state."
— Luke Vargas [00:35]

Trump did not elaborate on the methods to reclaim the Panama Canal, and his transition team has remained silent on the matter. The U.S. government lacks the capacity to enforce such claims without resorting to invasion, a topic that has drawn international concern.

Panama's president responded vehemently, labeling Trump's comments as a "bold affront to the country's sovereignty."

Notable Quote:

"Comment Short of an invasion, the US Government has no ability to restore control of the canal, which the US built more than a century ago. Panama's president angrily rebuked Trump's comments, calling them an affront to the country's sovereignty."
— Luke Vargas [00:35]

Additionally, Trump hinted at involving Elon Musk in his future administration, a move that has sparked debate. GOP Representative Tony Gonzalez criticized Musk's involvement, likening it to acting as a prime minister—a notion Trump dismissed.

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3. President Biden's Commutation of Death Sentences

Timestamp: [04:20] – [07:08]

President Joe Biden announced the commutation of death sentences for 37 inmates convicted of murder. While condemning their actions, Biden emphasized a federal stance against the death penalty, opting for life imprisonment without parole instead.

Notable Quote:

"President Biden is commuting the Death sentences of 37 inmates convicted of murder, saying that while he condemns their actions, he is more convinced than ever that we must stop the use of the death penalty at the federal level."
— Luke Vargas [04:20]

However, the president maintained death sentences for three individuals involved in terrorism and hate-motivated mass killings, including perpetrators of the Boston Marathon bombing and attacks on a Pittsburgh synagogue and the Emanuel Church in Charleston, S.C.

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4. North Korea’s Enhanced Military Support to Russia

Timestamp: [07:08] – [11:55]

North Korea has significantly ramped up its arms shipments to Russia, providing essential support as the conflict in Ukraine intensifies. Satellite imagery reveals substantial progress at a North Korean missile manufacturing facility overseen by leader Kim Jong Un.

Notable Quote:

"North Korea is boosting its arms shipments to Russia and expanding domestic weapons production to meet its allies demands in Ukraine."
— Luke Vargas [04:20]

Journalist Matthew Luxmore highlights the strategic timing of this support, emphasizing Russia's dire need for ammunition, rockets, and ballistic missiles.

Notable Quote:

"According to recent satellite imagery, which shows rapid progress on construction at a North Korean missile manufacturing plant repeatedly visited by leader Kim Jong Un."
— Matthew Luxmore [03:54]

Ukrainian officials estimate that two-thirds of the artillery and mortar shells deployed by Russia along the 600-mile frontline now originate from North Korea. In return, Russia is transferring air defense systems to North Korea and assisting with the latter's spy satellite initiatives. Additionally, Pyongyang has received over a million barrels of oil since March, doubling the UN-imposed annual cap, as reported by the London-based Open Source Center.

North Korea denies these arms supplies, and Russia’s Defense Ministry has not commented on the allegations.

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5. U.S. Military Incident and International Trade Tensions

Timestamp: [11:55] – [12:19]

The U.S. Navy experienced a friendly fire incident over the Red Sea, resulting in one plane being shot down and two pilots ejecting. Fortunately, only one pilot suffered minor injuries. The U.S. Central Command is investigating the event.

Concurrently, the U.S. military conducted airstrikes against Iranian-backed Houthi rebels. These groups have been targeting cargo ships supporting Palestinians in Gaza, disrupting international trade routes.

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6. Market News and Corporate Developments

Timestamp: [12:19] – [06:35]

Significant movements in the automotive sector include Honda and Nissan confirming plans to merge by 2026, a strategy endorsed by their boards and the Japanese government. This announcement positively influenced the stock prices of both companies.

Notable Quote:

"Shares of both companies closed higher today."
— Luke Vargas [04:20]

In the tech industry, Xerox is nearing a $1.5 billion acquisition of printer maker Lexmark. This deal aims to return Lexmark to U.S. ownership after its 2016 sale to a group of Chinese buyers, one of whom faces a U.S. import ban due to alleged forced labor ties.

Notable Quote:

"We are exclusively reporting that Xerox is nearing a deal to buy printer maker Lexmark in a $1.5 billion transaction that's expected to be announced this morning."
— Luke Vargas [04:20]

Upcoming economic indicators include the Conference Board's consumer confidence reading and data on durable goods and new home sales, pivotal for assessing market trends ahead of the Christmas Eve stock market close.

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7. Economic Outlook for 2025: Optimism Amid Challenges

Timestamp: [07:08] – [11:55]

In a segment of WSJ's Take on the Week, hosts Telus Demos and Gunjan Banerjee discuss Goldman Sachs Chief Economist Jan Hatzius's optimistic forecast for the U.S. economy in 2025, despite recent market downturns.

Notable Quote:

"He's one of the most widely watched economists on Wall street. And that's because at a time when almost everyone was calling for a recession the past few years, Jan was the one who was saying, hey, I think the economy could actually hold up and I think we'll see a soft landing. So far that seems to be the case."
— Telus Demos [07:44]

Hatzius attributes his confidence to controlled inflation rates, which, while not fully normalized, are decreasing and expected to continue their downward trend into 2025. This stabilization supports sustained economic growth.

Notable Quote:

"His core argument among his core arguments is that inflation is relatively in check. It obviously hasn't come all the way back, but has slowed down and he expects it to continue slowing into 2025 and that will allow other strengths of the economy to continue to play out and should allow for kind of normal economic growth in the foreseeable future."
— Gunjan Banerjee [08:05]

Despite optimism, Hatzius warns of potential risks, notably increased tariffs. He anticipates a manageable rise in tariff rates on imports from China, expecting the economy to grow by 2.5% even with these adjustments.

Notable Quote:

"We're expecting roughly a 20 percentage point increase in the average tariff rate on imports from China... And we still expect the economy to grow 2.5% in that kind of environment."
— Jan Hatzius [08:52]

Other factors include immigration policies and possible tax cuts that could influence economic dynamics. Hatzius remains cautious, acknowledging uncertainties such as political shifts, global events, and unforeseen disruptions that could impact forecasts.

Notable Quote:

"So economic forecasting always comes with a pretty sizable asterisk."
— Gunjan Banerjee [10:32]

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8. Conclusion

Luke Vargas wraps up the episode by highlighting the key insights from the discussion with Demos and Banerjee, emphasizing Jan Hatzius's optimistic yet cautious outlook for the U.S. economy in 2025. Listeners are encouraged to subscribe to WSJ’s What’s News for ongoing updates and in-depth analyses of global and economic developments.

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Key Takeaways

• Geopolitical Tensions: Trump's territorial threats and North Korea's support for Russia escalate international tensions.
• U.S. Domestic Policies: President Biden's move away from the death penalty marks a significant shift in federal judicial policies.
• Military Incidents: Friendly fire incidents and targeted airstrikes highlight the complexities of modern military engagements.
• Economic Developments: Major mergers in the automotive sector and strategic acquisitions in the tech industry indicate shifting market landscapes.
• Economic Forecast: Optimism for 2025 hinges on controlled inflation and manageable tariffs, amid potential risks from policy changes and global uncertainties.

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This summary provides a comprehensive overview of the WSJ What’s News episode released on December 23, 2024, capturing all critical discussions, insights, and conclusions for listeners and non-listeners alike.

Transcript

[Luke Vargas]

SAP Business AI is AI that solves actual business problems, like predicting what your customers want before they know they want it, or making sure there are no weak links in your supply chain. Revolutionary technology, real world results. That's SAP Business AI. Donald Trump threatens to take control of the Panama Canal in Greenland. Plus North Korea ramps up support for Russia's war in Ukraine.

[Matthew Luxmore]

This is a huge help to Russia at a time when the fighting is particularly intense and its soldiers are trying to move forward on the battlefield.

[Luke Vargas]

And the hosts of WSJ's take on the week help us gaze into the crystal ball for some 2025 economic predictions. It's Monday, December 23rd. 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 Elect Donald Trump, speaking at a conservative conference in Arizona yesterday, threatened to take control of the Panama Canal and wrest control of Greenland from Denmark on national security grounds. His latest comments? Openly discussing aspirations for US Territorial expansion after recently trolling Canada's prime minister by suggesting it should become the 51st state. Trump didn't specify how he would take back control of the canal, and his transition team didn't respond to a request for additional comment. Comment Short of an invasion, the US Government has no ability to restore control of the canal, which the US Built more than a century ago. Panama's president angrily rebuked Trump's comments, calling them an affront to the country's sovereignty. Trump discussed purchasing Greenland in his first term, an idea that was at the time dismissed by officials in Greenland and Denmark, which controls the self governing island, while elsewhere in his speech, Trump addressed Elon Musk's role in his upcoming administration after the resolution of a government funding fight that the businessman waded into last week. Musk's involvement in congressional business drew criticism from GOP Representative Tony Gonzalez of Texas yesterday, who said it felt like Musk was acting as prime minister, a suggestion that Trump brushed off and all the different hoaxes and the new one is President Trump has ceded the presidency to Elon Musk. No, no, that's not happening. But Elon's done an amazing job. Isn't it nice to have smart people that we can rely on? Don't we want that? President Biden is commuting the Death sentences of 37 inmates convicted of murder, saying that while he condemns their actions, he is more convinced than ever that we must stop the use of the death penalty at the federal level. The man will instead serve life imprisonment without parole. However, Biden left death sentences in place for three inmates found guilty of terrorism or hate motivated mass killings, including one of the Boston Marathon bombers, the shooters behind the attacks on a Pittsburgh synagogue in 2018 and the Emanuel Church in Charleston, S.C. in 2015. North Korea is boosting its arms shipments to Russia and expanding domestic weapons production to meet its allies demands in Ukraine. That is according to recent satellite imagery, which shows rapid progress on construction at a North Korean missile manufacturing plant repeatedly visited by leader Kim Jong Un Journal reporter Matthew Luxmore says that Pyongyang's assistance at a key time for Moscow after.

[Matthew Luxmore]

Almost three years of fighting, now Russia really needs all the help it can get in terms of ammunition, rockets, ballistic missiles, all of which are things that North Korea is now providing in abundance. Ukrainian officials estimate that two thirds of the artillery and mortar shells being used by Russia along the 600 mile frontline actually now come from Pyongyang.

[Luke Vargas]

In exchange, South Korean officials say Russia is transferring air defense systems to North Korea and sending technicians to help with the country's spy satellite efforts. Pyongyang has also received more than a million barrels of oil since March, twice the annual cap imposed under UN sanctions, according to the London based Open Source Center. North Korea has denied supplying arms to Russia, while the Kremlin and Russia's Defense Ministry didn't respond to requests comment. The US Navy shot down one of its own planes over the weekend, forcing two pilots to eject from their jet fighter over the Red Sea in what US Central Command said was an apparent case of friendly fire. One pilot sustained minor injuries and an investigation is underway. The incident came as the US Military said it conducted airstrikes against Iranian backed Houthi rebels whose attacks on passing cargo ships conducted in solidarity with Palestinians in Gaza have snarled international trade. And in market news today, carmakers Honda and Nissan have confirmed plans to merge in 2026, a move they say is backed by their respective boards and the Japanese government. Shares of both companies closed higher today. We are exclusively reporting that Xerox is nearing a deal to buy printer maker lexmark in a $1.5 billion transaction that's expected to be announced this morning. The takeover would bring Lexmark back under US ownership after it agreed to be sold to a group of ch buyers in 2016, one of which has been placed under a US import ban over alleged links to forced labor. And on deck, the conference board's consumer confidence reading is due at 10am Eastern, with durable goods and new home sales data expected tomorrow morning before the stock Market's early 1pm Close for Christmas Eve. Coming up, WSJ's take on the Week hosts Telus Demos and Gungeon Banerjee share why Goldman Sachs Chief economist is optimistic about the economy in 2015. And they explain the X factors that could make things more unpredictable. That's after the break.

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[Luke Vargas]

Well, last week was a bit of a rough one for markets, but don't let that bum you out about what next year could hold. That's the message that Journal columnist Telus Demos and reporter Gunjan Banerjee got when they spoke to Goldman Sachs Chief economist Jan Hatzias for the latest episode of WSJ's take on the week, which dropped yesterday. And Tellus and Gungen are here to relay that bull case and put it into context for us. Hey guys, happy almost holidays.

[Telus Demos]

Hi Luke, thanks for having us.

[Gunjan Banerjee]

Hey, thanks for having us on.

[Luke Vargas]

Before we skim Jan Hatzius optimistic 2025 forecast for next Year we can trust this guy, right?

[Telus Demos]

He's one of the most widely watched economists on Wall street. And that's because at a time when almost everyone was calling for a recession the past few years, Jan was the one who was saying, hey, I think the economy could actually hold up and I think we'll see a soft landing. So far that seems to be the case.

[Luke Vargas]

All right then, so what is his core argument for why things are looking up next year?

[Gunjan Banerjee]

His core argument among his core arguments is that inflation is relatively in check. It obviously hasn't come all the way back, but has slowed down and he expects it to continue slowing into 2025 and that will allow other strengths of the economy to continue to play out and should allow for kind of normal economic growth in the foreseeable future.

[Telus Demos]

It's interesting. Although Jan is really optimistic about the economy next year, one of the biggest risks that he does cite to the economy is tariffs. However, Jan seemed to think that though it could pressure prices a little bit, it's not really altering his overall sunny outlook on where the economy is headed next year.

[Luke Vargas]

Right. And let's actually listen to what he told you on that.

[Jan Hatzias]

We're expecting roughly a 20 percentage point increase in the average tariff rate on imports from China. And then we have some more targeted auto tariffs on Europe and electric vehicle tariffs on Mexico in our baseline. So that gives you an overall increase again if you translate it into the overall tariff rate of about three and a half percentage points. And in my view, that's probably manageable. And we still expect the economy to grow 2.5% in that kind of environment. And we still expect gradual disinflation in that environment. The risk case is one in which in addition to these tariffs, we also get a bigger across the board tariff, say 10 percentage points, that would probably deliver a bigger hit to growth and also a re acceleration in inflation, at least for a period of time. So I would be more concerned about that.

[Luke Vargas]

All right, so Hatzius base case is the tariffs won't be such a major headwind. And that's not the only area where incoming President Trump is proposing to do things that could have a negative impact on the economy. And yet Hatzias foresees those effects as not being quite as severe.

[Telus Demos]

Yeah, so there have been a lot of concerns about deportations, how that's going to impact the labor market, how that's going to impact inflation. His expectation is that net immigration into the US in 2025 will still be around 750,000 people. So that's well below the numbers we saw a few years ago, but not that much lower than the historical average of around 1 million.

[Luke Vargas]

All right, then aside from something like immigration, there are just some net potential positives on the policy front that could come in the form of additional tax cuts, perhaps a more business friendly approach on regulation. And then finally, what other factors should we be keeping an eye on going into 2025?

[Gunjan Banerjee]

According to Hatzius, I think that when we talk about these policies, there's expectations for what the policies are, and so those things might not play out as expected. Right. And then there's also the balance. There are things that will probably hurt growth and there are things that will help it. Right. But fundamentally, the American economy has come into this next administration in a pretty good place and will continue as long as what happens isn't overly disruptive to the economy. So there is a lot of uncertainty baked into some of these things just because we don't know exactly what the policy picture will be. And so that maybe is one thing that I take away is economic cycles are not allowed to just sort of naturally come and go. There are many things that happen. There can be political changes, pandemics, wars, all sorts of things. So economic forecasting always comes with a pretty sizable asterisk.

[Luke Vargas]

Telus Demos and Gundjan Banerjee are The hosts of WSJ's take on the Week. Go and subscribe now wherever you get your podcasts. Telus Gungeon, thanks so much.

[Gunjan Banerjee]

Thanks for having us.

[Telus Demos]

Thank you.

[Luke Vargas]

And that's it for what's news for Monday morning. Today's show was produced by Daniel Bach. Our supervising producer is Christina Rocca. 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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