Trump Kicks Off Mideast Trip Built Around Deals

Summary

WSJ What’s News: Trump Kicks Off Mideast Trip Built Around Deals
Release Date: May 13, 2025

In this episode of WSJ What’s News, host Luke Vargas delves into President Donald Trump’s strategic Middle East tour, the evolving dynamics of U.S.-Israel relations, the implications of the recent U.S.-China tariff rollback, and significant developments in various economic and geopolitical arenas. Below is a comprehensive summary capturing the key discussions, insights, and conclusions from the episode.

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1. President Trump’s Middle East Strategy

Overview of the Trip
President Donald Trump commenced a four-day Middle East tour aimed at fostering investment deals between the Gulf states and the United States. The itinerary includes significant stops in Saudi Arabia, the United Arab Emirates (UAE), and Qatar. This visit marks a pivotal effort to secure substantial financial commitments, potentially amounting to hundreds of billions or even trillions of dollars, to bolster the U.S. economy.

Warm Welcome and Business Focus
Journal foreign correspondent Stephen Kalin, joining from Riyadh, anticipates a "warm embrace" from Gulf states, highlighting the lavish hospitality Trump is expected to receive. Kalin stated, “They’re going to roll out the red carpet... and the whole point of that is to win his confidence and his commitment to the region” (02:30). The administration’s focus is heavily tilted towards commercial investments, with the Trump Organization already engaged in projects like golf resorts, hotels, and investments in crypto companies within these nations.

Geopolitical Priorities
Beyond business, the trip addresses critical geopolitical issues. Kalin outlined several key areas:

• Hostage Negotiations: Trump aims to secure the release of remaining hostages held in Gaza, noting a recent success with the release of the last American hostage (03:42).

• Nuclear Talks with Iran: Efforts to re-establish nuclear agreements with Iran are underway, signaling a potential thaw in a historically tense relationship.

• Ceasefire with the Houthis: The administration is working towards a ceasefire with the Houthi movement in Yemen to stabilize the region.

• Syria Sanctions: There is speculation about lifting sanctions on Syria to alleviate its struggling economy, although such moves could have profound regional implications (04:23).

2. U.S.-Israel Relations Under Strain

Diverging Agendas
Deputy Middle East Bureau Chief Shaindy Reis provided insights from Tel Aviv, highlighting tensions between U.S. policies and Israeli priorities. While the Trump administration seeks to reduce regional tensions and avoid initiating conflicts, Israel remains steadfast in its objectives to curb Iran’s nuclear ambitions and limit its support for proxy groups like the Houthis.

Reis emphasized the misalignment by stating, “there is a real disconnect right now between what the United States is trying to accomplish in the region and what Israel would like to accomplish” (04:34). This divergence is further complicated by domestic political pressures within the U.S. Republican Party, which encompasses both an isolationist wing skeptical of the U.S.-Israel special relationship and a strongly pro-Israel evangelical base.

Tariff Controversy
A point of contention arose when the U.S. imposed a 17% tariff on Israeli products despite Israel's attempt to avert such measures by announcing the cessation of all tariffs on American goods. Reis attributed this to the influential isolationist faction within the party, noting, “there is very clearly a strong isolationist and America first wing that questions the American-Israeli relationship” (05:43). Conversely, the pro-Israel evangelical segment continues to support robust U.S.-Israel ties, challenging President Trump to navigate these competing pressures.

3. Impact of U.S.-China Tariff Rollback on Markets

Market Recovery and Economic Indicators
Following the rollback of tariffs between the U.S. and China announced on Liberation Day, markets have shown resilience, recovering from initial losses triggered by the ensuing trade tensions. Economists, including Journal finance editor Alex Frangos, suggest that this reset has diminished recession risks, with markets now keenly awaiting forthcoming economic data (07:17).

Business Reactions and CPI Implications
Frangos highlighted that businesses dependent on Chinese imports are ramping up shipments to capitalize on the 90-day tariff pause, anticipating continued higher prices and squeezed profit margins. “Businesses relying on Chinese imports are set to resume shipments, they still face higher prices and lower profits,” Frangos explained (07:38). The upcoming Consumer Price Index (CPI) report is poised to provide the first concrete data on how these tariffs have affected the real economy, particularly in terms of pricing dynamics.

Japanese Economic Concerns
The episode also touched upon Japan’s economic landscape, where companies like Honda Motor are bracing for a 70% profit drop due to increased U.S. levies on foreign-made cars. With car exports constituting a significant portion of Japan’s U.S. shipments, these tariffs pose a substantial threat to the Japanese economy.

4. United Airlines’ Operational Challenges

In response to recent air traffic control and technological issues at Newark Liberty International Airport, United Airlines is actively reassuring passengers about flight safety. CEO Scott Kirby affirmed, “Travel through the New Jersey Transit hub was absolutely safe” (10:01). Additionally, Captain Miles Morgan highlighted enhanced safety protocols, including multiple layers of radar services and fail-safe measures to maintain communication with air traffic control (10:52).

Despite these assurances, United has already reduced 35 daily round-trip flights from Newark, with the Federal Aviation Administration considering further restrictions due to ongoing runway construction and a shortage of air traffic controllers.

5. Legal and Regulatory Developments

Harvard Discrimination Probe
The Trump administration has initiated a probe into Harvard University for alleged discrimination against white, Asian, male, and heterosexual employees. The Equal Employment Opportunity Commission (EEOC) cited deleted documents that tracked faculty diversification efforts, revealing a decline in tenured white male positions from 64% to 56% over a decade. Harvard has responded by emphasizing a merit-based employment approach, with President Alan Garber denying the use of quotas (10:57).

Whistleblower Program Overhaul
The Department of Justice is revamping its whistleblower program to incentivize reporting on immigration-related crimes and tariff evasion. The new framework aims to reward whistleblowers with a share of forfeited funds, shifting focus towards self-reporting and reducing reliance on embedded compliance monitors within businesses.

6. Art Market Trends and Tariff Implications

New York Art Sales as Economic Barometer
A significant week for high-end art sales unfolded in New York, with major auction houses like Christie's, Sotheby's, and Phillips targeting over $1.2 billion in sales. The market's performance is being closely monitored amidst economic uncertainties. Gustav Klimt’s "Red, Yellow, and Blue Squares" and Claude Monet’s works have already surpassed their low estimates, indicating robust demand despite broader economic jitters.

Impact of New Tariffs on Art Imports
With the introduction of a 10% duty on all art imports under President Trump's new tariffs, the future of the art auction market faces uncertainty. The episode highlighted Sotheby's upcoming sale of Alberto Giacometti's masterwork, estimated to exceed $70 million, as a critical test case for how tariffs might influence high-value art transactions.

Notable Quotes

• Stephen Kalin on Gulf States' hospitality: “They’re going to roll out the red carpet... and the whole point of that is to win his confidence and his commitment to the region” (02:30).
• Shaindy Reis on U.S.-Israel policy disconnect: “there is a real disconnect right now between what the United States is trying to accomplish in the region and what Israel would like to accomplish” (04:34).
• Alex Frangos on business reactions: “Businesses relying on Chinese imports are set to resume shipments, they still face higher prices and lower profits” (07:38).

Conclusion

The episode comprehensively covered President Trump's Middle East trip focused on securing massive investments, the intricate balance of U.S.-Israel relations amidst shifting political landscapes, the stabilization of markets following U.S.-China tariff adjustments, and other significant legal and economic developments. The discussions highlighted the multifaceted challenges and opportunities facing U.S. foreign and economic policies, providing listeners with a nuanced understanding of current global dynamics.

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Produced by Daniel Bach and Kate Bullivant. Supervising Producer: Sandra Kilhoff.

Transcript

[Reba McEntire]

Isn't home where we all want to be? Reba here for realtor.com, the Pro's number one most trusted app. Finding a home is like dating. You're searching for the 1 with over 500,000 new listings every month. You can find the one Today, download the realtor.com app cause you're nearly home. Make it real with realtor.com Pro's number.

[Luke Vargas]

One most trusted app based on August 2024 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings. February 2024 through January 20. President Trump kicks off a four day trip to the Middle east built around deals plus, United Airlines tries to reassure the flying public as travel issues mount at its New Jersey hub, it is absolutely safe to fly. And we'll look at what the sale price of a painting of red, yellow and blue squares can tell us about macroeconomic jitters. It's Tuesday, May 13th. I'm Luke Vargas for the Wall Street Journal, and here is the AM Edition. What's news, the top headlines and business stories moving your world today. President Trump landed in Saudi Arabia this morning, kicking off a Middle east visit featuring stops in the United Arab Emirates and Qatar as he tries to drum up investments in the US that may not be hard. Trump is expected to get a warm embrace from Gulf states eager to gain influence with his administration. But moving the needle on a host of other geopolitical priorities in the region may prove more challenging and risks upsetting relations with Israel, a country notably not on this week's itinerary. Well, to preview President Trump's travels, I'm joined from Riyadh by Journal foreign correspondent Stephen Kalin and from Tel Aviv by our deputy Middle east bureau chief, Shaindy Reis. Stephen, starting with you, what should we be expecting to see over the next couple of days?

[Stephen Kalin]

I think we're going to see a warm embrace. They're going to roll out the red carpet, or in the case of Saudi, a lavender carpet that we saw him walk down Air Force One in Riyadh earlier this morning. And he's going to be surround by some of the top US Business people and financiers who will be joining him at private conferences and lunches at palaces. And the whole point of that is to win his confidence and his commitment to the region. And it's going to be in exchange for what will probably be hundreds of billions, potentially trillions of dollars in investment commitments over the coming years.

[Luke Vargas]

And as you report with our colleague Elliot Brown, there's reason to think those investments are coming, not least because these Gulf states, you know, have been doing sort of family business with, with Trump Inc. Of late.

[Stephen Kalin]

Yeah, there's. So there's both a commercial element to the Trump foreign policy in terms of him wanting to secure investments into the US and in US Companies from foreign countries. That's a major part of this trip which has been historically that's not really that far out of the, out of the norm. The fact that it overshadows any larger maybe strategic vision for the region is perhaps a bit uncommon from previous presidents trips to the region. On top of that, there have been a number of investments involving the Trump Organization in all three of these countries. That involves developing golf resorts and hotels in these countries, investing in a new crypto company. And of course, all three of these countries have previously made commitments to Jared Kushner's private equity fund, and some of them re upped that in the recent past as well.

[Luke Vargas]

And Steven, aside from that business, there are some other geopolitical priorities on this trip. Washington has been shifting its policies in a number of areas lately. Tell us a bit about and how that's gone over.

[Stephen Kalin]

That's right. The President has been trying to make geopolitical deals in a number of parts of the region, of course, been trying to get the remaining hostages held in Gaza out and end that war. There was a small success yesterday when the last living American hostage held there was released. He's also been pushing for nuclear talks with Iran to try to re establish that deal. There's also been a ceasefire with the Houthis and there's also speculation that the Syrian president could turn up on this trip and there could be a deal involving the lifting of, yeah, sanctions on Syria, which are strangling that country's economy. So there are a number of areas in which there could be really significant progress both on the business side and the geopolitical.

[Luke Vargas]

Shaindy, this is where I want to bring you into the conversation because if I'm not mistaken, all three of those potential areas of shifting US Policy are ones that I understand get the Israeli government a little bit nervous.

[Shaindy Reis]

So I think that there is a real disconnect right now between what the United States is trying to accomplish in the region and what Israel would like to accomplish in the region. Israel would like a stronger hand at setting back Iran, its nuclear program and also its ability to support proxies like the Houthis. And President Trump is trying very much, I think, to dial down the pressure. And you know, he always likes to say he doesn't, he doesn't want to start wars, he wants to end them. And so on top of all of that, there appears to be some growing effort to get a ceasefire in Gaza. And Prime Minister Netanyahu has just announced that he's going to be conducting a major new war plan that would include conquering and holding on to territory in Gaza. So it definitely feels like at this moment these two powers are not completely aligned. And obviously it's coming at this time where President Trump is on this major trip and Israel is really sidelined from all of it.

[Luke Vargas]

And Cheney, this is a potential sort of divergence in perspectives that was actually made clear on Liberation Day and we just didn't get around to talking about it then.

[Shaindy Reis]

Yes, that's right. Obviously, the day before Trump announced tariffs, Israel put out a statement saying that it was ending all tariffs on American products. There weren't very many tariffs to begin with, but they put out this big statement really hoping that it would send the message to Trump and spare them from having tariffs slapped on them. And it did not. Israel was slapped with a 17% tariff, which is obviously not the highest, but also not the lowest. And so I think there is very clearly a strong isolationist and America first wing that questions the American Israeli relationship, questions the idea that Israel should have any sort of unique relationship with the United States. And that part of the party is clearly influential with the President. I don't think it's the only part of the party that's influential. There's obviously also a very strong Republican base, especially the evangelical Christian base that is incredibly pro Israel. And so Trump has to manage and contend with both of those.

[Luke Vargas]

Deputy Middle East Bureau chief Shaindy Reis and foreign correspondent Stephen Kalin. Shaindy. Stephen, thank you both so much.

[Shaindy Reis]

Thank you.

[Stephen Kalin]

Thanks for having me.

[Luke Vargas]

A day on from the US And China's tariff rollback. Markets have all but recuperated their losses since President Trump's Liberation Day announcements set off a global trade war. And at the same time, the reset has lowered the risk of recession, according to economists. Journal finance editor Alex Frangos says markets are now watching for the next batch of economic data.

[Alex Frangos]

So far this morning, things have calmed down after yesterday's big surge in stocks and the dollar in reaction to the U.S. china trade deal. One thing markets are definitely watching really closely today is April CPI numbers, which is our first look at the impact that the so called Liberation Day tariffs had on the real economy in terms of prices.

[Luke Vargas]

And Alex says while businesses relying on Chinese imports are set to resume shipments, they still face higher prices and lower profits.

[Alex Frangos]

The tariff pause immediately spurred businesses yesterday to start scrambling to get orders from China before the 90 day pause expires. You could see this real kind of surge in imports and activity. Our reporters were talking to CEOs yesterday saying they had containers filled with their goods waiting for this pause immediately called their partners in China and said put it on the boat. So it'll be really interesting to see how this all plays out.

[Luke Vargas]

The latest CPI report from the Labor Department is due at 8:30am Eastern and will be followed by a report on wholesale inflation on Thursday. Meanwhile, there's a raft of Japanese earnings out today led by tech investment firm SoftBank, which reported its first annual profit in four years following investments into AI. Meanwhile, automaker Honda Motor has projected a 70% drop in profits as it expects to be hit by higher US Levies on foreign made cars. Car exports make up about a third of Japan's shipments to the US with auto tariffs expected to weigh heavily on the Japanese economy. And Amazon is renewing a partnership with FedEx to help deliver some large packages after a previous high profile split. In 2019, FedEx will join other third party partners including UPS and the US Postal Service. Terms of the deal weren't disclosed, though FedEx described the partnership as a mutually beneficial multi year agreement. Coming up, we'll look at a bellwether week for high end art sales in New York and United Airlines tries to calm the nerves of travelers after a string of air traffic control issues at Newark. We've got those stories and more after the break.

[Reba McEntire]

Isn't home where we all want to be? Reba here for realtor.com, the Pro's number one most trusted app, Finding a home is like dating. You're searching for the one with over 500,000 new listings every month. You can find the one today. Download the realtor.com app cause you're nearly home. Make it real with realtor.com Pro's number.

[Luke Vargas]

One most trusted app based on August 2024 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings February 2024 through January25. United Airlines is trying to reassure customers about the safety of flying in and out of Newark Liberty International Airport following multiple technology and air traffic control staffing issues there in recent weeks. In an email yesterday, CEO Scott Kirby said that travel through the New Jersey Transit hub was absolutely safe. And in a video, captain Miles Morgan, who oversees the airline's flight training center, touted safety measures that kick in should planes lose contact with air traffic control. There are several layers of safety protocols in place, including additional facilities that will provide radar services and a safe handoff to the tower facility in the event.

[Stephen Kalin]

Of an equipment outage on the flight deck. We have advanced safety technology that allows.

[Luke Vargas]

Pilots to see other aircraft around us. While United has already cut 35 daily round trip flights from Newark, the Federal Aviation Administration has proposed further limits as the airport deals with Runway construction and a controller shortage. The FAA is set to meet with airlines to discuss the move. This week, the Trump administration is probing Harvard for alleged discrimination against white, Asian, male and heterosexual employees. In opening the probe, the Equal Employment Opportunity Commission pointed to now deleted documents on Harvard's website tracking its progress in diversifying its faculty over a decade. That includes a drop in tenured white male faculty from 64% to 56% between 2013 and 2023. In response, a Harvard Harvard spokesperson pointed to a Monday letter by President Alan Garber in which he said employment at the university was based on merit and achievement and denied the use of quotas. The Justice Department is overhauling its whistleblower program, created during the Biden administration, to reward people who tip authorities about companies involved in immigration crimes or tariff evasion, making them eligible to reap a share of funds forfeited to the government. The changes are part of a broader shakeup of white collar enforcement priorities aimed at encouraging self reporting and leaning less on compliance monitors that prosecutors sometimes embed within businesses. And finally, a bellwether week for art sales kicked off in New York last night, with auction houses Christie's, Sotheby's and Phillips aiming to sell more than $1.2 billion in art by Friday. The strength of the market will be closely watched following recent economic uncertainty. Yester bidding was tepid at Christie's, even though paintings by Dutch modernist Piet Mondrian and Claude Monet sold for more than their low estimates. Another test will come this evening with a sculpture by Swiss artist Alberto Giacometti on the block at Sotheby's. In a video, the auction house says the bust of his brother Diego is considered to be his masterpiece and is estimated to top $70 million.

[Reba McEntire]

This is substantial, monumental. This is his magnum opium of what.

[Luke Vargas]

Man is, of what Diego is, of what humanity is. Historically, fine art has been largely exempt from most U.S. customs duties. But President Trump's new tariffs impose a 10% duty on all imports, and it remains unclear how that could impact auction houses. And before we go, we made a mistake in yesterday morning's episode saying that Istanbul was Turkey's capital. Ankara is, in fact, Turkey's capital. And that's it for what's news for this Tuesday morning. Today's show was produced by Daniel Bach and Kate Bullivant. Our supervising producer is Sandra Kilhoff. 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. 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 fairs. Discover [e-mail].