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.

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.

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