The Diplomatic Storylines to Watch in 2025

Summary

WSJ What’s News: The Diplomatic Storylines to Watch in 2025

Release Date: December 26, 2024

Introduction

In the latest episode of WSJ What’s News, host Luke Vargas delves into pressing global developments that are set to shape the diplomatic landscape in 2025. From geopolitical realignments in the Middle East to escalating trade tensions between the U.S. and China, the episode provides a comprehensive overview of the key storylines to watch. This summary captures the essence of the discussions, highlights notable insights from Journal editors and reporters, and presents the conclusions drawn from these pivotal narratives.

---

Key Headlines

1. Azerbaijan Airlines Crash Linked to Russian Air Defenses

   On Christmas Day, an Azerbaijan Airlines plane bound for Grozny, Russia, tragically crashed, resulting in at least 38 fatalities. Aviation security firm Osprey Flight Solutions attributed the crash to Russian air defenses, a claim supported by a Ukrainian national security official's X post noting visible damage indicative of an air defense system strike (00:41). Russian authorities have yet to comment on these assessments.

2. Political Instability in Syria Amid Sectarian Tensions

   The episode highlights the fragile power dynamics in Syria following the takeover by the Islamist group Hayat Tahrir al-Sham (HTS). Omar Abdel Baki, a Journal correspondent in Damascus, discusses recent challenges faced by HTS, including an ambush that resulted in the deaths of 14 security force members in a region predominantly inhabited by the Alawite sect, allies of the ousted Assad regime (02:23). Furthermore, protests erupted accusing HTS-affiliated forces of destroying religious symbols, exacerbating sectarian tensions and complicating HTS's consolidation of power.

3. U.S. Economic Indicators Amid Holiday Spending Surge

   Despite political turmoil abroad, U.S. consumers demonstrated robust spending behavior from November 1 through Christmas Eve, increasing by 3.8% compared to the previous year, according to Mastercard’s Spending Pulse (03:21). Online retail sales surged more than twice the rate of in-store purchases, with high-end retailers outperforming discount stores facing consumer belt-tightening. Additionally, last week's jobless claims held steady at 219,000, indicating a resilient labor market despite a slight uptick in the unemployment rate.

---

Diplomatic Storylines to Watch in 2025

Following a brief interlude, host Luke Vargas introduces the main segment featuring insights from three esteemed Journal editors and reporters on the diplomatic narratives poised to shape the coming year.

1. Geopolitical Realignments in the Middle East: Potential U.S.-Saudi Normalization

   Speaker: Deputy Middle East Bureau Shane de Reis
   Timestamp: 05:45

   Shane de Reis discusses the prospects of normalization between Israel and Saudi Arabia, a development that had been progressing under the Trump administration but stalled following Hamas's attack on October 7th. De Reis explains, “One is that Israel had a very successful military campaign against Hezbollah in Lebanon. It also weakened Iran's axis of resistance...” (06:19). The potential return of Donald Trump could revive efforts towards normalization, despite Saudi Arabia's public condemnation of Israel's actions in Gaza. De Reis emphasizes the delicate balance Saudi leaders must maintain, acknowledging internal dissent among their citizens while considering geopolitical advantages.

   Notable Quote:
   “...there is a real divide between what the Saudis say publicly and what they say privately.” – Shane de Reis (06:19)

2. U.S. Recognition of Somaliland: A Long-Shot but Regionally Significant

   Speaker: Journal Africa Bureau Chief Gabrielle Steinhauser
   Timestamp: 09:09

   Gabrielle Steinhauser sheds light on the possibility of the U.S. recognizing Somaliland, a self-declared nation in the Horn of Africa that remains unrecognized internationally. Mentioned within the Trump administration's Project 2025 policy blueprint, this move would break longstanding diplomatic norms and have profound implications for international law and regional stability. Steinhauser notes, “...if it were to happen, it would really shake things up quite dramatically.” The recognition would challenge the United Nations' stance on national borders and potentially alter the strategic balance in a region critical to global maritime routes.

   Notable Quote:
   “...it would really shake things up quite dramatically. It would break with long standing diplomatic precedent and international law...” – Gabrielle Steinhauser (09:09)

3. Escalation of the U.S.-China Trade War: The Critical Mineral Battle

   Speaker: Trade Reporter Lisa Lin
   Timestamp: 10:35

   Lisa Lin explores the intensifying trade conflict between the U.S. and China, focusing on China's recent decision to ban the export of essential minerals such as gallium, germanium, and antimony. These minerals are crucial for American economic and national security, with vulnerable supply chains already a concern. Lin explains, “...China is the largest producer of these things and in this tech rivalry with the US...” (11:20). The move is seen as a strategic lever in the broader trade war, potentially leading to a significant economic impact on the U.S. if China maintains its export restrictions. Lin anticipates that the situation may culminate in high-stakes negotiations, with both nations striving to gain leverage in the ongoing rivalry.

   Notable Quote:
   “...export controls on critical minerals which the US cannot be fully self sufficient in, that's actually the best hand.” – Lisa Lin (11:20)

---

Conclusion

As 2025 approaches, the diplomatic arenas in the Middle East, the Horn of Africa, and the U.S.-China trade relationship stand at pivotal junctures. Potential normalization between Israel and Saudi Arabia could redefine Middle Eastern alliances, while the hypothetical recognition of Somaliland by the U.S. might disrupt African geopolitics. Concurrently, the escalation of the trade war over critical minerals underscores the intricate economic interdependencies between global powers. These storylines, among others discussed in the episode, are set to influence international relations and global stability in the coming year.

Produced by Charlotte Gartenberg with Supervising Producer Michael Cosmides. Host: Luke Vargas.

---

Notable Quotes with Speaker Attribution and Timestamps

• Omar Abdel Baki on Syrian Sectarian Tensions:
  “This ambush highlights the remaining presence of people who may be loyal to the Assad regime...” (02:23)

• Shane de Reis on U.S.-Saudi Normalization:
  “...there is a real divide between what the Saudis say publicly and what they say privately.” (06:19)

• Gabrielle Steinhauser on Somaliland Recognition:
  “...it would really shake things up quite dramatically. It would break with long standing diplomatic precedent and international law...” (09:09)

• Lisa Lin on U.S.-China Critical Minerals Trade War:
  “...export controls on critical minerals which the US cannot be fully self sufficient in, that's actually the best hand.” (11:20)

---

Stay Informed

For those eager to delve deeper into these diplomatic developments and their implications, tuning into WSJ What’s News offers timely and insightful analysis to stay ahead of global trends shaping our world.

Transcript

[Luke Vargas]

Viking committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, cultural enrichment and all inclusive fares. Discover [e-mail] US holiday spending rises from last year driven by high earners plus sectarian and political divisions flare in Syria, complicating work for new Islamist rulers Hayat.

[Omar Abdel Baki]

Tahrir al Sham the US is facing their first clear challenges to their power after seizing control of Syria from the.

[Luke Vargas]

Assad regime and Journal reporters and editors on the diplomatic storylines to watch in 2025. It's Thursday, December 26th. I'm Luke Vargas for the Wall Street Journal, and here is today's edition of what's News, the top headlines and business stories moving your world today. The Christmas Day crash of an Azerbaijan Airlines plane bound for the Russian city of Grozny was likely caused by Russian air defenses, according to aviation security firm Osprey Flight Solutions. A Ukrainian national security official also said in an X post that the plane was shot down by a Russian air defense system, citing visible damage to the aircraft. At least 38 people were killed in the crash, which occurred when the plane diverted course over an area where Moscow has been battling Ukrainian drones before crashing in Kazakhstan. As many as 29 passengers on the flight survived. Russian officials couldn't be immediately reached for comment about the Osprey and Ukrainian assessments. Just weeks after seizing power, Syria's new leaders, the Islamist group Hayat Tahrir al Sham, or hts, are facing fresh challenges to their authority, including from allies of the toppled assad Regiment. Yesterday, 14 members of the new government's security forces were killed in an ambush in a coastal province heavily populated by Syria's minority Alawite sect, which includes the Assads. Elsewhere, protesters yesterday gathered to accuse HTS affiliated forces of destroying religious symbols. Journal correspondent Omar Abdel Baki in Damascus has more.

[Omar Abdel Baki]

This ambush highlights the remaining presence of people who may be loyal to the Assad regime. It also comes as HTS is cracking down on people who were affiliated with the regime and who they say committed atrocities under the Assad regime, causing some not only controversy but also what is seen as violent pushback against HTS's efforts. Given HTS's background as a Sunni group that has its history rooted in Al Qaeda. Everyone is waiting to see how HTS and the factions under HTS this are going to run Syria. So that's why the destruction of religious symbols is quite important because it's a sensitive time and a small act by a rogue troop can lead to the fanning of flames and an instability that spreads across the country.

[Luke Vargas]

And in markets. News US consumers spent 3.8% more from November 1 through Christmas Eve compared to the same period last year. That's according to mastercard Spending Pulse, which showed online retail sales rising more than twice as much as in store sales. Higher end retailers also appeared to have fared better than discounters, who have been suffering from belt tightening among their core consumers. US Jobless claims fell last week, a sign the economy continues to avoid a major surge in layoffs despite the unemployment rate inching higher throughout the year as the labor market softens. The initial jobless claims figure of 219,000 came in economist expectations. Stock markets in Asia ended the day broadly higher. Europe's major indexes were closed for Boxing Day, and US Stocks are mostly flat entering afternoon trading in their first post Christmas Day session. Coming up, we'll hear from journal editors and reporters about the diplomatic storylines that could come to define 2025, from resource wars to a grand bargain in the Middle East. That's after the break.

[Lisa Lin]

This episode is brought to you by Dutch Bros. Get stoked for all the holly jolly vibes this season at Dutch Bros. Stay cozy with returning winter faves. Hazelnut truffle mocha and candy cane mocha. Plus the new Winter Shimmer Rebel energy drink blends up sweet cream and blue razz flavor with soft top and shimmer sprinks to keep those spirits energized all winter long. Download the Dutch Bros. App to find your nearest shop, order ahead and start earning rewards.

[Luke Vargas]

It's the most wonderful time of the year to consider what stories could define the next year. And since we heard earlier this week how fiscal strain could dominate 2025 in parts of Latin America and Europe, let's cast an eye now to some diplomatic dramas potentially coming into focus. To do that, I asked three journal editors and reporters what they'll be watching for, starting with Deputy Middle East Bureau Shane de Reis, who told me that the upcoming change in US Administrations could unlock a major geopolitical realignment that's lately been on hold.

[Shane de Reis]

At the end of the Trump administration, Israel normalized relations with the United Arab Emirates and a handful of other Muslim countries. This was meant to be the precursor to a bigger normalization deal that would have seen Israel normalize relations with Saudi Arabia. The Trump administration was fairly close. The Biden administration was much closer, actually, and before Hamas's October 7th attack, it was thought to be perhaps weeks away. That attack obviously threw everything into disarray, and the Saudis decided to take normalization off the table.

[Luke Vargas]

So Shaindy, what exactly has changed? The war in Gaza obviously is continuing.

[Shane de Reis]

One is that Israel had a very successful military campaign against Hezbollah in Lebanon. It also weakened Iran's axis of resistance, which is this sort of proxy militias that it has throughout the region that fight against Israel and Western interests. It also led to the collapse of Bashar Al Assad's regime in Syria. And these are things that make Israel appear to be a stronger partner for the Saudis. The other is President Trump is going to be coming back into office and he has said, and many of his people have said that they plan on reviving this effort. The big catch here is that Saudi Arabia has very publicly condemned Israel. They even recently said that Israel's campaign in Gaza was tantamount to genocide. But a lot of people who go and meet with the Saudis within Israel from America, they say that there is a real divide between what the Saudis say publicly and what they say privately.

[Luke Vargas]

Shaindy, if that's true, I imagine a deal here with Saudi Arabia that could potentially be followed by other Muslim nations also normalizing with Israel would be met with dismay among Palestinians.

[Shane de Reis]

It has been the long standing policy of the Arab world generally that they would not normalize relations with Israel until there was a Palestinian state. The Abraham Accords destroyed that. So yes, there would be a lot of anger within the Palestinian world, within a lot of the Arab world if Saudi Arabia were to normalize with Israel. There was a lot of anger at the UAE for normalizing with Israel without really getting anything concrete towards statehood. And it's become much harder for the Israelis politically to give anything like statehood after October 7th. At the same time, it would be very difficult for the Saudis to do it, especially because they have their own citizens who probably are tremendously angry at Israel. But at the end of the day, they're going to decide what's best geopolitically for them.

[Luke Vargas]

Before the war in Gaza started, the Saudis had expressed hope a deal with Israel could lead to a range of economic and security benefits. Well, quite a bit further off the radar, but still regionally significant, is the possibility that Donald Trump could recognize the self declared nation of Somaliland, a comparably peaceful corner of violent Somalia that despite its strategic location across the Gulf of Aden from Yemen, has yet to be recognized by a single country as independent. But Journal Africa bureau chief Gabrielle Steinhauser's long shot item to watch is that that could change given mention of US recognition of Somaliland within the 900 PA policy blueprint for federal government actions during the Trump administration, known as Project 2025, where the idea is raised as a way for the US to hedge against its weakening position in neighboring Djibouti, the home to a Chinese naval base.

[Gabrielle Steinhauser]

The US which obviously has not recognized Somaliland, has for many years supported the Somali government in its fight against Al Shabaab. But we have with Project 2025, funnily enough, in its chapter about Africa, the one place that is sort of mentioned by name is Somaliland and the recognition of Somaliland. It's important to say here that Donald Trump has distanced himself from Project 2025, but it is something that comes up in conversations with people who are sort of in the Trumpian orbit. And if it were to happen, it would really shake things up quite dramatically. It would break with long standing diplomatic precedent and international law, right, where most countries have sort of signed up to national borders. And for the US the world's most powerful country and largest economy, to then recognize a country that according to the UN is not a country and according to most countries in the world is not a country would certainly have pretty big implications.

[Luke Vargas]

And ending on something a bit more likely. Reporter Lisa Lin told me that the Trump administration's promised escalation of tariffs on China could lead Beijing in the new year to dial up the firepower that it's bringing to its trade battle with.

[Lisa Lin]

The US as the China tech reporter, you tend to spend a huge amount of time on the byzantine world of export controls, and for most part of the recent years it's been focused on chips. Towards the end of 2024, I've seen the conversation turn in a different direction. I've started hearing people talk not just about a chip war, but a raw material and critical mineral war.

[Luke Vargas]

Just this month, China kicked things off by saying it would ban the export of gallium, germanium and antimony to the U.S. three minerals that the U.S. geological Survey deems as essential to American economic or national security and which have vulnerable supply chains. China has made threats about capping exports before, but Li Ze thinks this time it's serious.

[Lisa Lin]

Firstly because China is the largest producer of these things and in this tech rivalry with the us, it doesn't have that many hands to play. And imposing export controls on critical minerals which the US cannot be fully self sufficient in, that's actually the best hand. And the second reason why we think that this is going to blow up is because over the last couple of years, ever since Trump first left export controls on companies like Huawei, zte, smic, all these large Chinese tech companies, China has seen the patent coming out from the US and they're gradually preparing themselves to do the same. So what we saw over the last couple of years is China was preparing and actually putting in place an export control regime that allows them to much better track where exports of these critical minerals are going and how to stop them. So this makes them a lot more effective in playing this export control game.

[Luke Vargas]

So where could this critical mineral war lead, according to the USGS, to a nearly $3.5 billion hit to US GDP. Should China stick with a total ban or, as Li Ze predicts, to high stakes negotiations?

[Lisa Lin]

I do think it might end up in a situation of who blinks first. But I think more fundamentally, people believe that these salvos are really just meant to set the stage for a broader negotiation between Trump and China. China knows Trump is a negotiator and it wants to show its cards early so that Trump will come to the table.

[Luke Vargas]

Well, from the Middle east to the Horn of Africa or the front lines of the US China trade war, if any of those predictions come to pass in the new year, you'll hear about them here. And that's it for what's news for this Thursday. Today's show was produced by Charlotte Gartenberg with supervising producer Michael Cosmides. And I'm Luke Vargas for the Wall Street Journal. We will be back with a new single show tomorrow at midday. Until then, thanks for listening.