Trump Calls for U.S. Takeover of Gaza

Summary

WSJ What’s News
Episode: Trump Calls for U.S. Takeover of Gaza
Release Date: February 5, 2025
Host: Luke Vargas
Publisher: The Wall Street Journal

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1. President Trump's Call for U.S. Takeover of Gaza

In a groundbreaking and controversial move, President Donald Trump has announced that the United States will assume long-term control of Gaza, effectively abandoning the longstanding vision of a Palestinian state. This announcement marks a significant departure from decades of U.S. Middle East policy.

Key Points:

• Trump’s Proposal: President Trump stated his intention for the U.S. to take over Gaza, citing potential stability for the region and the creation of thousands of jobs.

  • Quote: “I do see a long term ownership position and I see it bringing great stability to that part of the Middle East and maybe the entire Middle East.” (00:30)

• Call for Palestinian Relocation: Trump also suggested that nearly 2 million Palestinians living in Gaza should permanently relocate to neighboring countries such as Egypt and Jordan.

  • Quote: “If it's necessary, we'll do that. We're going to take over that piece, we're going to develop it, create thousands and thousands of jobs...” (01:41)

• Policy Shift: This stance is a stark contrast to previous administrations, which envisioned Gaza as part of an eventual Palestinian state. Successive presidents emphasized creating a Palestinian state alongside Israel, a vision now seemingly dismantled by Trump’s remarks.

Analysis and Reactions:

• Shaindy Reis’s Insights: Wall Street Journal Deputy Middle East Bureau Chief Shaindy Reis highlighted the unexpected nature of Trump’s proposal, noting it deviates from Trump’s previously isolationist tendencies. She emphasized the unprecedented nature of the U.S. taking control of Gaza and the complications it introduces regarding military involvement and regional acceptance.

  • Quote: “The biggest shocker from last night was that he said that the US would take control of Gaza. I don't think anyone was expecting that.” (02:22)

• Israeli Perspective: Israeli Prime Minister Benjamin Netanyahu did not express support for Trump’s proposal. While some Israeli far-right politicians favored the idea of annexing Gaza, Netanyahu maintained a more cautious stance.

  • Quote: “This idea is far outside what anyone in Israel has ever thought of or proposed.” (04:18)

• Regional Implications: Countries like Saudi Arabia have condemned the plan, while Egypt and Jordan have historically rejected the mass evacuation of Palestinians. This rejection casts doubt on the feasibility of Trump’s proposal becoming a reality.

  • Quote: “I would say it is possible that this could be a negotiating tactic that Trump is saying to the Saudis...” (05:37)

Conclusion:
Trump’s announcement to take over Gaza introduces a complex and unprecedented strategy in Middle Eastern politics. The proposal raises significant questions about regional stability, international law, and the humanitarian implications for the Palestinian population. Whether this move is a strategic negotiation tactic or a genuine policy shift remains to be seen, but it undeniably shakes the foundations of established U.S. foreign policy in the region.

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2. U.S. Postal Service Halts Shipments from China

In a significant policy shift affecting international trade and e-commerce, the U.S. Postal Service (USPS) has announced the suspension of parcel shipments from China and Hong Kong until further notice.

Key Points:

• Suspension Details: USPS will no longer accept parcels from China and Hong Kong, impacting millions of shipments that previously benefited from the de minimis rule, which allowed packages valued under $800 to enter the U.S. duty-free.

  • Quote: “The USPS has said it will stop accepting parcels from China and Hong Kong until further notice.” (06:36)

• Reasoning Behind the Decision: The move accompanies President Trump’s imposition of an additional 10% tariff on imports from China and aims to curb the influx of counterfeit goods and illicit substances such as fentanyl.

  • Quote: “Critics say that the use of de minimis has enabled bad actors to send in counterfeit goods or drugs like fentanyl into the U.S.” (08:36)

• Market Impact: Global exports of low-value single packages from China surged over tenfold between 2018 and 2023. The USPS suspension is expected to disrupt this trend, although other carriers like UPS, FedEx, and DHL will continue their operations independently.

  • Quote: “Research shows global exports of low value single packages from China grew more than tenfold between 2018 and 2023.” (09:23)

Conclusion:
The USPS’s halt on accepting parcels from China and Hong Kong represents a strategic move to tighten control over international shipments, aligning with broader trade policies aimed at reducing counterfeit and illicit imports. While it may inconvenience consumers and online vendors accustomed to seamless shipping, it underscores the administration’s commitment to protecting domestic markets and public safety.

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3. Nissan and Honda Merger Faces Hurdles

The automotive industry faces a significant hurdle as Nissan’s board is set to reject Honda’s latest proposal for a merger, jeopardizing the formation of what would have been the world’s third-largest carmaker.

Key Points:

• Merger Details: Initially, Honda proposed making Nissan a subsidiary, altering the previously anticipated equal partnership structure.

  • Quote: “Honda presented a new proposal that would make Nissan a subsidiary of Honda instead of the more equal structure that had originally been planned.” (09:23)

• Nissan’s Response: Citing unacceptable terms, Nissan intends to reject Honda’s revised offer but remains open to collaborations on specific areas such as software and electric vehicles.

  • Quote: “Nissan found this unacceptable and plans to reject it, though the two companies will continue to collaborate...” (09:23)

• Market Reaction: Following the announcement, Nissan’s shares fell by 5% before trading was halted on the Tokyo Stock Exchange, while Honda’s shares saw an 8% increase.

  • Quote: “Nissan's shares slipped 5% today before the Tokyo Stock Exchange halted trading, while Honda shares closed up more than 8%.” (09:23)

Conclusion:
The stalled merger between Nissan and Honda underscores the challenges of consolidating major automotive brands in a competitive global market. While the merger’s failure may preserve the current competitive landscape, it highlights the complexities of negotiating ownership structures and strategic alignments in the industry.

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4. Additional Business News Highlights

a. U.S. Agency for International Development (USAID) Workers on Administrative Leave

The Trump administration is initiating a significant restructuring of USAID by placing nearly all its workers on administrative leave and mandating their return home within 30 days. This move is part of a broader effort to dismantle the agency, which has seen its headquarters shut down and website taken offline. The suspension has led to confusion among employees and aid recipients regarding which programs will continue to operate.

b. Novo Nordisk’s Sales Growth Slows

Novo Nordisk, the pharmaceutical company behind the weight loss drug Ozempic, anticipates a slowdown in sales growth for the year due to capacity constraints, increased competition, and pricing pressures. Despite these challenges, the company reported a 29% rise in net profit and a 30% jump in fourth-quarter sales, leading to an increase in its stock price.

c. Alphabet and Advanced Micro Devices (AMD) Stock Performance

• Alphabet Inc.: Shares are declining in after-hours trading after the company reported a slowdown in cloud computing sales, adversely affecting Google’s overall revenue growth.

• Advanced Micro Devices (AMD): AMD’s shares also saw a sharp decline in after-hours trading despite reporting a nearly 70% jump in data center division sales, particularly in AI chips, in the fourth quarter.

d. Upcoming Earnings Reports

Investors are anticipating earnings reports from major companies, including Disney and Uber scheduled for the morning, followed by Ford, Qualcomm, and MicroStrategy after the closing bell.

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5. Production Credits

Produced by: Kate Bullifant and Daniel Bach
Supervising Producer: Christina Rocca
Host: Luke Vargas

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This summary encapsulates the key discussions and insights from the February 5, 2025, episode of WSJ What’s News, providing a comprehensive overview for those who have not listened to the episode.

Transcript

[Luke Vargas]

This episode is brought to you by Amazon Business. We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn [e-mail] President Trump says the US will take over Gaza, leaving the idea of a Palestinian state in tatters.

[Donald Trump]

I do see a long term ownership position and I see it bringing great stability to that part of the Middle east and maybe the entire Middle East.

[Luke Vargas]

Plus, the US Postal Service halts shipments popular with online vendors in China. And Nissan's deal to merge with Honda hits a bump. It's Wednesday, February 5th. 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 Trump is calling for the US to assume long term control of Gaza and for the nearly 2 million Palestinians who live there to permanently leave for neighboring countries. Those remarks, made at a White House press conference alongside Israeli Prime Minister Benjamin Netanyahu, mark a sharp break with decades of American policy in the Middle east, over which successive presidents have said that Gaza would form part of an eventual Palestinian state, and Trump's comments in fighting a flurry of questions from reporters.

[Shaindy Reis]

Mr. President, given what you've said about.

[Luke Vargas]

Gaza, did the US send troops to help secure the security vacuum?

[Donald Trump]

As far as Gaza is concerned, we'll do what is necessary. If it's necessary, we'll do that. We're going to take over that piece, we're going to develop it, create thousands and thousands of jobs, and it'll be something that the entire Middle east can be very proud of.

[Luke Vargas]

And joining me now with more on Trump's proposal is Wall Street Journal Deputy Middle East Bureau Chief Shaindy Reis. Shaindy, you joined us early last week for an interview after President Trump discussed wanting to clean out Gaza and have Palestinians sent to Egypt and Jordan. And you told us at the time that we should be taking those comments seriously and that Trump was likely to keep working on this idea. Obviously, you were right. What jumped out to you last night?

[Shaindy Reis]

Well, the biggest shocker from last night was that he said that the US Would take control of Gaza. I don't think anyone was expecting that. Trump has obviously positioned himself as more of an isolationist, looking to take the US out of conflicts all over the world, end wars. This is a somewhat puzzling change in policy and tone from Trump. The whole proposal really raises a lot more questions than it answers, I think.

[Luke Vargas]

Right. Not Least of which is the fact that Trump's comments left the door open to the US Military being involved here.

[Shaindy Reis]

Obviously, you know, the image of US Troops clearing out Gazans at the barrel of a gun seems like a very difficult image to picture, as does US Troops having to fight a war with Hamas. Because in this proposal, you can't really imagine that they're going to send Hamas to Egypt or Jordan. But I think the important thing to remember about Trump is that, you know, he likes to shake things up. He likes to suck the oxygen out of the room. There were a lot of issues that were on the agenda that we all thought were gonna be the top priority for the discussion, and we were all wrong.

[Luke Vargas]

In terms of how this is going over. We should note that the Palestinian Authority and Hamas say they wouldn't support an evacuation of Gaza. And unlike last week, we had the benefit of being able to get the Israeli perspective on this pretty much immediately afterwards from Prime Minister Netanyahu last night. Let me play a clip of his response to what Trump was suggesting.

[Donald Trump]

I think it's worth paying attention to this. We're talking about it. He's exploring it with his people, with his staff. I think it's something that could change history and it's worthwhile really pursuing this avenue.

[Luke Vargas]

Shane, can you decode that for us? As far as I'm aware, while there have been some right wing politicians in Israel who have gone as far as endorsing an annexation of Gaza after the war, Netanyahu's government has not endorsed that, let alone what Trump is suggesting.

[Shaindy Reis]

Yeah, this idea is far outside what anyone in Israel has ever thought of or proposed. Netanyahu is obviously in a position where he needs to listen to whatever Trump says. But I will say that Israel has a history of opposing any idea of transferring Palestinians. It was really considered taboo in Israel up until this far right politician named Itzamar Benvir started talking about the idea. But even Itamar Ben GVIR didn't go as far as Trump. He talked about voluntary emigration for Gazans who wanted to. One thing that I did find interesting is the Israeli far right is obviously very excited about the idea of Palestinians leaving Gaza because they of course, want to settle Gaza with Jewish settlements and make it part of Israel. Trump was asked by an Israeli reporter if he supports Jewish settlements in Gaza and he essentially said no. So it's a very complex, confusing plan because it doesn't neatly fit into any box that anyone had sort of thought of before. It really shakes things up.

[Luke Vargas]

And how is this mass relocation plan likely to go down with countries in the region. Shane, the Saudis I see have already come out and condemned the plan. Meanwhile, Egypt and Jordan, the countries we report White House officials believe could be persuaded to accept displaced Palestinians. They've also rejected this idea in the past. So doesn't that make Trump's proposal a non starter?

[Shaindy Reis]

I would say it is possible that this could be a negotiating tactic that Trump, he's saying to the Saudis, like you give up on demanding a Palestinian state in exchange for normalization and instead will promise not to empty Gaza of Palestinians. I don't know that that's the case, but there could be other types of negotiations with Egypt and Jordan over the role that they'll play in post war Gaza. It could also be an attempt to threaten Hamas that, you know, they should take the opportunity to leave now to be expelled from Gaza. It's hard to necessarily game out all the different possibilities and options that there could be. But one thing I will say is that there have not been many new ideas in how to approach this region for a very, very long time. We're at a moment where I think both Israelis and Palestinians feel deeply frustrated about what the future holds. People feel like they've tried everything and it hasn't worked. And so the question is, is there some way to shake things up and change things and try something new? I don't know if that's his intention, but that might be the result.

[Luke Vargas]

That was the Wall Street Journal's deputy Middle east bureau chief, Shaindy Reis. Shaindy, thank you so much.

[Shaindy Reis]

My pleasure.

[Luke Vargas]

Coming up, the rest of the day's headlines, including an announcement by the U.S. postal Service that it won't handle packages from China. That story and much more after the break.

[Hannah Miao]

It's tax season. So what's new this year that could save you money?

[Shaindy Reis]

The IRS says that taxpayers spend 13 hours and $290 preparing and paying just.

[Luke Vargas]

For the tax prep.

[Shaindy Reis]

So it's worth looking into different options.

[Hannah Miao]

On the YOUR MONEY Briefing PODC from the Wall Street Journal. We're breaking down the latest tax rules, how to keep your tax data safe and ways to file for free. Catch our series tax season 2025 what's new? February 2nd and 9th on your money briefing.

[Luke Vargas]

The Trump administration is putting almost all workers with the U.S. agency for International Development on administrative leave starting this weekend and giving staff spread out around the world 30 days, then to return home. An email sent to USAID workers said that essential personnel expected to continue working would be notified by tomorrow afternoon employees and aid recipients who've received waivers to keep operating their program say they've received limited guidance about how to interpret which programs qualify. Yesterday's notice marks the latest step connected to the administration's rapid dismantling of the 10,000 person, $40 billion foreign assistance agency, whose D.C. headquarters has shut and its website taken offline. The U.S. postal Service has said it will stop accepting parcels from China and Hong Kong until further notice. Journal reporter Hannah Miao says the announcement from USPS comes on the heels of President Trump's move to impose additional 10% tariffs on imports from China.

[Unnamed Reporter]

Part of that action also included that goods from China will no longer fall under the de minimis rule, and this rule basically allowed packages that valued at less than $800 to come into the US duty free. This was a very popular way for companies to send smaller packages from China directly to their end customer in the US in recent years, politicians have been keen to restrict the use of this, and critics say that the use of de minimis has enabled bad actors to send in counterfeit goods or drugs like fentanyl into the U.S. according to congressional.

[Luke Vargas]

Research, global exports of low value single packages from China grew more than tenfold between 2018 and 2023. The delivery of letters won't be affected by the USPS suspension, and the same goes for shipments by UPS, FedEx and DHL, which operate their own flights from China. Nissan's board is planning to reject Honda's terms for a merger of the two rivals, jeopardizing a planned tie up that would create the world's third largest carmaker. In recent days, Honda presented a new proposal that would make Nissan a subsidiary of Honda instead of the more equal structure that had originally been planned. That's according to a person familiar with the negotiations who says Nissan found this unacceptable and plans to reject it, though the two companies will continue continue to collaborate on software and electric vehicles. Honda says it continues to discuss the potential merger with Nissan and aims to decide on a general plan by the middle of the month. Nissan's shares slipped 5% today before the Tokyo Stock Exchange halted trading, while Honda shares closed up more than 8%. In other markets, news Ozempic maker Novo Nordisk expects its sales to grow more slowly this year amid capacity constraints, intensifying competition and pricing pressure on its blockbuster weight loss and diabetes drugs. The company today reported a 29% rise in net profit and 30% jump in sales for the fourth quarter, sending its shares higher. Meanwhile, Alphabet shares are sliding in off hours trading, wiping out much of their gains so far this year. That's after the company reported a slowdown in cloud computing sales that dragged Google's revenue growth. Shares in Advanced Micro Devices are also sharply down off hours. The chip maker said sales across its data center division, which includes AI chips, jumped almost 70% in the fourth quarter, but the result failed to meet investors. Lofty expectations and on deck today. Disney and Uber are due to report earnings this morning, with results from ford, Qualcomm and MicroStrategy are expected after the closing bell. And that's it for what's news for this Wednesday morning. Today's show was produced by Kate Bullifant and 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. Until then, thanks for listening.