Pentagon Says Iran Attacks Don’t Rise to Level of Restarting War

Summary

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WSJ What’s News – PM Edition

Episode Title: Pentagon Says Iran Attacks Don’t Rise to Level of Restarting War
Date: May 5, 2026
Host: Alex Osola
Podcast: The Wall Street Journal

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Episode Overview

This episode delivers a rapid-fire update on some of the day's biggest global, business, and policy news stories. The main theme revolves around escalating Middle Eastern tensions—particularly Iran’s stepped-up attacks in the Gulf—and the Trump administration’s measured response, alongside closer looks at US-China economic friction, labor market shifts, healthcare policy, and the looming challenge of America’s crumbling infrastructure.

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Key Discussion Points & Insights

1. Iran’s Attacks in the Gulf and US Response

• Situation:
  • This week, Iran launched missiles and drones targeting the UAE, with attacks also reported on commercial and US warships ([00:49]).
  • Despite active hostilities, US Defense Secretary Pete Hegseth asserted that the ceasefire “holds for now,” urging Iran to be “prudent.” The US seems intent on avoiding escalation ([00:49]–[02:10]).
• Iran’s Perception & Gulf States' Reactions:
  • Yaroslav Trofimov (WSJ Chief Foreign Affairs Correspondent):
    • Iran believes the US is "in a rush to extricate itself from the conflict" and "is clearly willing to look the other way as Iran escalates" ([02:10]).
    • Gulf allies feel "the Trump administration has thrown the Gulf under the bus once again," fueling fears about the US’s willingness to intervene only when it perceives a direct benefit ([02:27]).
    • Quote:
      • “There is growing fear that even though the US is committed to helping, especially its European treaty allies... President Trump would be very reluctant to come to help, at least if there is no perceived benefit to the US in his eyes.” – Yaroslav Trofimov ([02:40])

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2. China Pushes Back Against US Sanctions

• Regulatory Aggression:
  • After the US sanctioned five Chinese refineries over Iranian oil, Beijing directed companies to not comply.
  • Chinese regulations now actively threaten lawsuits against local businesses complying with US sanctions, putting foreign companies and banks in a bind ([03:19]–[04:25]).
• Escalating Tactics:
  • Ling Lingwei (WSJ Chief China Correspondent):
    • China is no longer just slow-walking unwelcome deals; it's issuing outright, one-sentence bans (as with Meta’s failed acquisition of Manus AI startup).
    • Reflects a posture shift: "That is not coincidence. That is a posture shift." ([04:34])
    • Xi Jinping believes he’s "cracked a code on Trump—that Trump can be outweighed, can be exhausted, that you can escalate without blowing up the whole relationship" ([04:52]).

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3. US Domestic Business & Market News

• Job Cuts:
  • PayPal to cut 20% of its workforce (~4,000 jobs) as part of AI adoption and cost-cutting. Stock fell 7.8% ([06:17]).
• Airline Reactions to Industry Shakeups:
  • Following Spirit Airlines' collapse, Frontier Airlines expects to gain 3–5% more revenue per seat ([06:17]–[07:01]).
  • Frontier plans to hike airfares due to fuel costs; shares rose 6.9%.

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4. Health Care and Policy

• Prior Authorization Relief:
  • UnitedHealth will cease requiring as many pre-approvals for outpatient surgeries and tests, aiming to curb care delays ([07:25]).
• Trump, the FDA, and Vaping:
  • Trump is pressuring FDA Commissioner Marty Makary to approve flavored vapes, a campaign promise ("save vaping"). Makary reluctant due to youth health concerns ([07:25]–[08:20]).

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5. Infrastructure Crisis Hidden in City Budgets

• Unfunded Liabilities:
  • A new study estimates US cities face over $1 trillion in silent liabilities from unaccounted infrastructure decay ([08:28]).
• Financial Reporting and Civic Impact:
  • Heather Gillers (WSJ):
    • Not tracking these impending costs makes current financials look better, but as with pensions post-2014, accounting for them could lead to service cuts and higher taxes ([08:45]).
    • Quote:
      • "So while this seems like a very sort of hypothetical... it could become very real and front and center if the governmental accounting powers that be decide that cities need to face up to these costs a little bit more seriously." – Heather Gillers ([09:36])

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Notable Quotes & Memorable Moments

• Yaroslav Trofimov on US Reluctance:

  • "It looks like the Trump administration has thrown the Gulf under the bus once again." ([02:27])

• Ling Lingwei on China’s Strategy:

  • "Xi Jinping thinks he's, quote, cracked a code on Trump—that Trump can be outweighed, can be exhausted, that you can escalate without blowing up the whole relationship." ([04:52])

• Heather Gillers on Infrastructure Warnings:

  • "It could become very real and front and center if the governmental accounting powers that be decide that cities need to face up to these costs a little bit more seriously." ([09:36])

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Timestamps for Key Segments

• Middle East/Iran Update: [00:49]–[03:14]
• China’s Regulatory Moves: [03:19]–[05:20]
• Market Headlines (PayPal/Frontier): [06:17]–[07:21]
• Health Policy/Vaping: [07:25]–[08:28]
• Infrastructure & City Budgets: [08:28]–[09:58]

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Tone and Language

The episode maintains a brisk, concise, fact-driven tone appropriate for a business news roundup, while allowing correspondents to share pointed, sometimes cautionary insights in their own words.

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This summary covers all critical stories and commentary, providing a clear roadmap for listeners and non-listeners alike.

Transcript

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[Alex Osola]

President Trump downplays Iran's latest attacks worrying US Allies in the Gulf. Plus, Beijing is using regulatory aggression to push back against the U.S. the people

[Ling Lingwei]

I talk to around the Chinese leadership keep telling me that Xi Jinping thinks he's, quote, cracked a code on Trump

[Alex Osola]

and flavored vapes have become a point of tension between President Trump and the FDA. It's Tuesday, May 5th. I'm Alex Osola for the Wal Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. We begin this evening's show in the Middle east where fighting has picked up again this week that includes missiles and drones that Iran's firing at the United Arab Emirates, as well as attacks on commercial ships and American warships. During a press conference this morning, Defense Secretary Pete Hegseth downplayed the attacks and said the ceasefire holds for now. Ultimately, the president's going to make a decision whether anything were to escalate into a violation of a ceasefire, but certainly we would urge Iran to be prudent. Hours after Hegseth's comments, the UAE said it was intercepting new attacks. Iran denied the attacks, but said there would be a, quote, crushing response if it's targeted by the uae. Iran and other adversaries and allies are all watching the US Response for a hint of how the outcome of the conflict could ripple around the world. I'm joined now by WSJ chief foreign affairs correspondent Yaroslav Trofimov. Yaroslav, what is Tehran gleaning from the Trump administration's response to its most recent attacks?

[Yaroslav Trofimov]

What they are saying is that they think that the US Is in a rush to extricate itself from the conflict and that the US Is clearly willing to look the other way as Iran escalates and attacks other countries.

[Alex Osola]

And what does the US Response signal to other Gulf states?

[Yaroslav Trofimov]

There is a lot of consternation across the Gulf. It seems like even as Iran is violating the ceasefire and attacking in the Gulf, the US Is not inclined to punish Iran for that. And so, as one official told me, it looks like the Trump administration has thrown the Gulf under the bus once again. This reinforces the conviction held by many governments friendly to the US that the US Administration and President Trump is a transactional one. There is growing fear that even though the US Is committed to helping, especially its European treaty allies as well as treaty allies in Asia, that President Trump would be very reluctant to come to help, at least if there is no perceived benefit to the US in his eyes.

[Alex Osola]

That was WSJ chief foreign affairs correspondent Yaroslav Trofimov. Thanks, Yarrow.

[Yaroslav Trofimov]

Thank you.

[Alex Osola]

Geopolitical tensions are also playing out in Asia, where China has escalated its fight against the US Over Iranian oil. The US had sanctioned five Chinese refineries for buying Iranian crude. Well over the weekend, the Chinese government told companies not to comply with those sanctions. In the past, Beijing has been wary of openly violating U.S. sanctions. That's not the case anymore. Ling Lingwei is the WSJ's chief China correspondent and the author of the WSJ China newsletter and and in this morning's edition, she wrote all about Beijing's latest moves.

[Ling Lingwei]

If you're a bank and you refuse to process a payment for one of those refineries because of U.S. sanctions, you can get sued in China. Same if you're the insurer who won't write the policy or the shipping company that won't carry the cargo. So suddenly complying with American law could be an offense in China. And there's really no clear way out. Follow Washington, you get sued in Beijing. And follow Beijing, you lose access to the dollar system.

[Alex Osola]

This isn't the only way China is pushing back against US Economic interests. Last week, China banned Meta's acquisition of AI startup Manus.

[Ling Lingwei]

Historically, when China didn't want the deal to go through, it would just slow walk it for many years until the parties gave up. This time they just said no in one line sentence. So you've got two unprecedented moves in seven days, both one sentence orders, both using tools that have been sitting on the shelf for years. That is not coincidence. That is a posture shift. The people I talk to around the Chinese leadership keep telling me that Xi Jinping thinks he's, quote, cracked a code on Trump, that Trump can be outweighed, can be exhausted, that you can escalate without blowing up the whole relationship.

[Alex Osola]

Ling Ling says the timing is not a coincidence. These moves come ahead of the meeting between President Trump and Chinese leader Xi Jinping planned for next week. Coming up, what the US Crumbling infrastructure means for cities, budgets. That and more after the break.

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[Alex Osola]

Stocks climbed today with the Nasdaq and S and P hitting their latest records. The Nasdaq led the gains and closed up 1%. The Journal has learned that PayPal plans to cut 20% of its staff more than 4,000 jobs over the next few years. The job cuts are part of the company's new plans to adopt AI and cut costs. Its stock closed down 7.8% and Frontier Airlines expects to gain from Spirit Airlines collapse. Its parent company projected today that it will make 3 to 5% more revenue for every seat it flies as a direct result of Spirit's demise. For from the earnings call, we have

[Telus Demos and Miriam Gottfried]

more over route overlap with Spirit than any other US Carrier, uniquely positioning us to recapture the demand they left behind.

[Alex Osola]

Like other airlines, Frontier also plans to raise airfare prices this year to offset higher fuel costs. Its stock ended the day 6.9% higher. Heads up that we dropped a special bonus episode earlier today. In the latest what's News and Earnings, we look at how US Oil companies are navigating a world short on crude oil. That's in your what's News feed.

[Yaroslav Trofimov]

Now.

[Alex Osola]

In health care news, doctors have long complained about the paperwork they have to do to get insurers permission for care. They say the process can lead to delays and denials. Now UnitedHealth says it plans to stop requiring doctors to get approvals for things like certain outpatient surgeries and tests like echocardiograms. And in Washington, we're exclusively reporting that President Trump has pressured FDA Commissioner Marty Makary to to approve flavored vapes and nicotine products. McCary hasn't wanted to approve fruit flavors and others potentially appealing to children. He was worried about the public health risks, people familiar with the matter say. Makary and Trump have discussed the FDA commissioner changing course. In his 2024 campaign, Trump had promised to, quote, save vaping. A White House spokesman said that science is guiding the Trump administration's health. US Cities are facing huge liabilities that aren't showing up on their books. It's the dilapidated roads, bridges and buildings. And now a new study from a municipal bond expert tried to put a dollar figure on that wear and tear. It arrived at just over $1 trillion. While those costs are hypothetical for now, the study offers a glimpse at just how expensive those repairs and upgrades might be. And Journal reporter Heather Gillers says those can have a real impact on city operations.

[Heather Gillers]

This whole question of should cities have to account for their long term cost of their infrastructure repairs on their financial statements is a very sort of nerdy academic question. It starts to feel a little bit less hypothetical if you think about what happened in 2014 with pensions. Prior to 2014, cities didn't really account for the promises that they had made to workers and retirees to pay pensions to them until they died, which is a lot of money.

[Alex Osola]

Heather says that the city's debt skyrocketed when they had to account for the full future costs of those pensions.

[Heather Gillers]

That was when you started to see things like higher taxes, service cuts and real strain involved in setting aside money to lessen the unfunded future pension liabilities. So while this seems like a very sort of hypothetical, don't have to worry about it now, future cost, it could become very real and front and center if the governmental accounting powers that be decide that cities need to face up to these costs a little bit more seriously.

[Alex Osola]

And that's what's news for this Tuesday afternoon. Today's show is produced by Danny Lewis and Anthony Banzi with supervising producer Tali Arbell. ALEX I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

[Telus Demos and Miriam Gottfried]

Hey, this is Telus Demos and I'm Miriam Gottfried. We're reporters at the Wall Street Journal and The hosts of WSJ's take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to the Wall street journal. Visit subscribe WSJ.comtakeontheweek to subscribe now.