Ukraine Tries to Salvage U.S. Ties

Summary

WSJ What’s News: Ukraine Tries to Salvage U.S. Ties (February 20, 2025)

Host: Luke Vargas
Featuring: James Marson (Journal's Ukraine Coverage Chief), Ben Katz (Aviation Reporter)

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1. Escalating Tensions Between U.S. and Ukraine

Overview:
The episode opens with a deep dive into the strained relationship between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy. The tension stems from Trump's recent derogatory remarks about Zelenskyy and his administration's shifting stance on supporting Ukraine amidst the ongoing conflict with Russia.

Key Discussions:

• Trump’s Rhetoric and Its Impact:
  President Trump has been vocally critical of President Zelenskyy, referring to him as a "dictator." This rhetoric has sparked significant concern within Ukraine about the reliability of U.S. support. As Vargas states, “After calling Zelensky a dictator yesterday, Trump repeated his attacks last night… Blaming for Ukraine's current misfortune.”

• Ukraine’s Response and Strategy:
  Despite the anger and disappointment, President Zelenskyy remains resolute.
  James Marson explains, “Ukrainians have been very angry and upset about this. On the other hand, they are defiant... We will fight on.” Zelenskyy is pivoting to secure support from European allies and engaging with figures like Senator Lindsey Graham to mediate and possibly mend ties with the Trump administration.

• Economic and Security Negotiations:
  Zelenskyy has expressed openness to negotiating a critical minerals deal with the U.S., which involves Ukraine granting access to essential resources in exchange for security guarantees. However, he views the initial proposal as imbalanced and seeks a more equitable arrangement.

Notable Quote:
“Zelensky has clearly been hoping to keep the support from the US Going. He knows that Ukraine needs us for weapons and for security guarantees if any peace comes”
— James Marson [02:50]

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2. Hamas and Hostage Developments

Overview:
The podcast addresses recent developments involving Hamas and the release of hostages to Israel, highlighting the ongoing complexities in the Middle East.

Key Updates:

• Hostage Releases:
  Hamas has released the bodies of four hostages, including a mother and her two young sons, in a highly publicized manner. This act underscores the dire human cost of the conflict and the symbolic weight of these kidnappings.

• Ceasefire Agreements:
  Under a ceasefire deal, Hamas is set to release six more living hostages, marking the first phase of the agreement. This development brings some relief but also raises questions about the longevity and effectiveness of the ceasefire.

Notable Quote:
“Hamas turned the transfer into a televised spectacle, attaching to the coffins a picture of Israeli Prime Minister Benjamin Netanyahu over which was written the killer”
— Luke Vargas [03:34]

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3. President Trump’s Consideration of DOGE Savings Redistribution

Overview:
President Trump is contemplating reallocating savings from Elon Musk-led Department of Government Efficiency (DOGE) to provide direct payments to American citizens and reduce national debt.

Key Points:

• Proposed Redistribution Plan:
  Trump is evaluating the possibility of distributing 20% of DOGE’s $55 billion savings to Americans and another 20% toward debt reduction. However, he has yet to provide concrete details about this initiative.

• DOGE’s Achievements and Challenges:
  DOGE has identified significant savings through fraud detection, grant cancellations, and workforce reductions. Yet, translating these savings into meaningful action remains a challenge.

• Interplay with Ad Conglomerate Interpublic Group:
  Exclusive reports suggest potential friction between Elon Musk’s DOGE and Interpublic Group, hinting at possible retaliatory measures from the Trump administration if advertising expenditures on Musk’s platform, X (formerly Twitter), do not increase.

Notable Quote:
“There's even under consideration a new concept where we give 20% of the doge savings to American citizens and 20% goes to paying down debt because the numbers are incredible.”
— Ben Katz [04:45]

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4. Boeing vs. Airbus: A Shifting Aviation Landscape

Overview:
A significant portion of the episode is dedicated to the competitive dynamics between aerospace giants Boeing and Airbus, highlighting Airbus’s recent successes and Boeing’s ongoing struggles.

Key Discussions:

• Airbus’s Market Expansion:
  Airbus reported an 8% revenue increase and a 16% growth in adjusted EBIT for Q4. With a robust order book, including over 500 orders for the new A321XLR, Airbus is poised to deliver approximately 820 commercial aircraft in 2025.

• Boeing’s Challenges:
  Boeing is facing delays, holding only six aircraft available compared to Airbus’s twelve. Delays in the 737 Max 10 certification have further strained Boeing’s position, leaving it lagging in key market segments.

• The A321XLR Impact:
  The introduction of the A321XLR has been a game-changer, allowing airlines to operate long-distance routes more efficiently. This aircraft is enticing major airlines like American and United, signaling a shift in customer preferences and market share.

• Future Prospects and Challenges:
  While Boeing focuses on getting the 737 Max 10 certified, it may not fully compensate for the lost ground to Airbus. Additionally, Airbus faces its own hurdles, including supply chain issues and potential tariffs under Trump's administration.

Notable Quotes:
“Airbus now boasts a much bigger product lineup than Boeing. And it's been able to not just expand its own market share, but also to almost to steal some of Boeing's critical customers that Boeing has picked up along the way.”
— Ben Katz [09:20]

“Interpublic leaders have interpreted the communications from X as reminders that the company's recently announced $13 billion deal to merge with rival Omnicom Group could be torpedoed or at least slowed down by the Trump admin”
— Ben Katz [07:37]

Conclusion:
The Airbus-Boeing rivalry exemplifies the high-stakes competition in the aerospace industry. Airbus’s strategic innovations and broader product offerings are currently outpacing Boeing’s efforts to recover, potentially reshaping the future landscape of global aviation.

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5. Corporate Earnings and Market Movements

Overview:
The podcast briefly touches upon upcoming corporate earnings reports and their potential impact on market movements.

Upcoming Reports:

• Earnings Pre-Market Open:
  Walmart, Alibaba, Wayfair, and Hasbro are scheduled to release their earnings reports.

• Earnings Post-Market Close:
  Companies like Ticketmaster, Live Nation, Rivian Automotive, and Booking Holdings will announce their financial results after the market closes.

Implications:
These earnings reports are closely watched indicators of market health and investor sentiment, particularly in sectors like retail, automotive, and entertainment.

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6. Advertising Spotlight: Mint Mobile

Overview:
A brief advertisement segment introduces Mint Mobile's wireless offerings, emphasizing affordability and value.

Ad Highlights:

• Promotional Offer:
  Premium wireless services are available for just $15 a month, with an upfront payment of $45 for a three-month plan.

• Call to Action:
  Listeners are encouraged to switch to Mint Mobile for cost-effective wireless solutions.

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Produced by:
Kate Bullivant and Daniel Bach
Supervising Producer:
Christina Rocca

Closing Remarks:
Luke Vargas wraps up the episode, reminding listeners of the next show’s schedule and thanking them for tuning in.

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Note: For a more in-depth analysis of government spending and the impact of the DOGE initiative, subscribers can access exclusive content on WSJ.com.

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This summary is crafted to provide a comprehensive overview of the "Ukraine Tries to Salvage U.S. Ties" episode of WSJ What's News, capturing all essential discussions, insights, and conclusions for those who have not listened to the episode.

Transcript

[Luke Vargas]

My dad works in B2B marketing. He came by my school for Career Day and said he was a big Roas man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B, but with LinkedIn you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to LinkedIn.com results to claim your credit. That's LinkedIn.com results. Twitter terms and conditions apply. LinkedIn the place to be to be President Trump weighs returning some of the money saved by Doge back to Americans. Plus what the president's feud with Volodymyr Zelensky could mean for the fate of Ukraine. And while Boeing licks its wounds, Airbus exploits gaps in its rival's lineup.

[Ben Katz]

We count six aircraft that Boeing has currently available due to delays on some of its other models versus 12 at Airbus that are currently available. And it's really exposing Boeing.

[Luke Vargas]

It's Thursday, February 20th. 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. Let's begin today with the escalating war of words between President Trump and Ukrainian President Volodymyr Zelensky. After calling Zelensky a dictator yesterday, Trump repeated his attacks last night at a Saudi investment summit being held in Miami. Blaming for Ukraine's current misfortune, I asked the Journal's Ukraine coverage chief, James Marson, how Kyiv is reacting to its sudden sidelining by Washington as the Trump administration lays the groundwork for talks with Russia to end the war.

[James Marson]

So Ukrainians have been very angry and upset about this. On the other hand, they are defiant. They say, yes, the US Is our biggest supporter, possibly was our biggest supporter, but we will fight on. We have no choice but to fight on. That's also coming from President Zelensky. Zelensky has clearly been hoping to keep the support from the US Going. He knows that Ukraine needs us for weapons and for security guarantees if any peace comes, because that's pretty much the only thing that will deter Russia from trying to attack again. And he said things like he's ready to discuss a critical minerals deal. This is something that the Trump administration brought to Kyiv recently, that the US Will conclude a kind of economic and security deal with Ukraine if Ukraine gives the US Access to critical minerals, rare earths. Zelenskyy said the original proposal was one sided, it was expecting Ukraine to give too much. But he said, look, let's keep discussing it. If the US can give US Security guarantees in return for that, then we can return to it. So Zelenskyy clearly wants to salvage this, but it's going to be tough with the rhetoric like it is.

[Luke Vargas]

And if he can't, James, does Zelenskyy have anywhere else to turn?

[James Marson]

Well, Zelenskyy has said that he hopes that European Union countries will be able to step up if the US Stops supporting Ukraine. Europe has provided significant aid to Ukraine and it can supply more military support. The issue is that the quality and sophistication of that equipment is not the same as the US Equipment. He's also spoken with Turkish President Erdogan this week while he was on a visit. More interestingly, last night Zelenskyy spoke with Republican Senator Lindsey Graham, who has been something of an intermediary between Ukraine and Trump. So that's a signal that he's looking to people for ways to patch up that all important relationship with Trump and.

[Luke Vargas]

With the US that was the Journal's Ukraine coverage chief James Marson. Hamas handed over the bodies of four dead hostages to Israel this morning, including a mother and her two young sons, aged nine months and four years when they were kidnapped, a family whose capture had become symbolic of the horrors of the group's October 7, 2023 attack. Hamas turned the transfer into a televised spectacle, attaching to the coffins a picture of Israeli Prime Minister Benjamin Netanyahu over which was written the killer before placing them onto a stage before cheering spectators amid the crowds were some Palestinians recently released by Israel who were supposed to be exiled from Gaza. According to the terms of a ceasefire deal, Hamas has agreed to free another six living host on Saturday as the first phase of that deal nears its end. Returning to the US President Trump says he is considering using part of the savings from Elon Musk's cost cutting drive to provide direct payments to Americans Here he was in Miami last night.

[Ben Katz]

There's even under consideration a new concept where we give 20% of the doge savings to American citizens and 20% goes to paying down debt because the numbers are incredible.

[Luke Vargas]

Elon Trump didn't offer further details about the plan. The Musk led Department of Government Efficiency, or DOGE, says it's come up with $55 billion in estimated savings as of Monday through a combination of things including fraud detection, grant cancellations, contract renegotiations and workforce reductions. In the most recent fiscal year, federal agencies that report what they call improper payments identified $149 billion in such out but as our Journal colleagues report, identifying wasteful spending isn't the hard part. Actually doing something about it is. For a breakdown of which government programs are the biggest culprits and why waste persists, Journal subscribers can check out that story on WSJ.com, we've left a link to it in our show. Notes we are exclusively reporting that in talks with ad conglomerate Interpublic Group, Elon Musk's ex has hinted at possible retribution from the Trump administration if they didn't get their clients to spend more more on the social media platform, according to people with knowledge of the talks. That message was made clear in a phone call between Inter Public and EX lawyers in December, and X CEO Linda Yaccarino has made comments that seemed like similar warnings in conversations with Interpublic executives. Interpublic leaders have interpreted the communications from X as reminders that the company's recently announced $13 billion deal to merge with rival Omnicom Group could be torpedoed or at least slowed down by the Trump admin, given Musk's powerful role in the federal government. Musk has piled criticism on advertisers that ditched X since he bought it in 2022. Interpublic recently signed a new annual deal with X for potential client spending, people familiar with the agreement said. A company spokesman said Interpublic doesn't make spending commitments on behalf of clients. Yaccarino and representatives from X didn't respond to requests for comment. And in markets news, Walmart is set to headline a busy day for corporate results. The retailer, along with Alibaba, Wayfair and Hasbro, will report earnings before the market open, while the likes of Ticketmaster, owner Live Nation, Rivian Automotive and Booking holdings, whose brands include Priceline, Kayak and OpenTable, will follow after the closing bell. Coming up, aviation reporter Ben Katz will drop by to discuss how the success of a new Airbus jet spells more trouble for rival bo. That's after the break. Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment of $45 for three month plan equivalent to $15 per month required first three months only, then full price plan options available, taxes and fees extra. See full [e-mail] European planemaker Airbus reported earnings this morning, announcing an 8% revenue jump and 16% growth in adjusted earnings before interest and taxes for the fourth quarter. It's got a rosy outlook for 2025 as well, forecasting it can deliver roughly 820 commercial aircraft, an increase from last year and more than double What's Strug struggling US rival Boeing managed to deliver in 2024. And according to Journal aviation reporter Ben Katz, who joins me now, more trouble could be heading Boeing's way, thanks to the recent success of a new Airbus jet known as the xlr. Ben, how did I do characterizing the fortunes of Airbus and Boeing here?

[Ben Katz]

Over the last five years, there's really been this divergence between the two companies. Boeing is struggling with billions in debt, hemorrhaging cash. Airbus is raking it in. Boeing has been cutting back spending on research, and Airbus meanwhile, has been ramping up. And really, at the end of the day, Airbus now boasts a much bigger product lineup than Boeing. And it's been able to not just expand its own market share, but also to almost to steal some of Boeing's critical customers that Boeing has picked up along the way.

[Luke Vargas]

Yeah, Ben, it's a pretty significant development, is it not, in a duopoly environment like this Airbus, Boeing rivalry, for one of these players to just not have a product offering in every category. And yet that's what we're seeing now.

[Ben Katz]

Absolutely. If you look at just from a bird's eye view at the aircraft offerings that Boeing and Airbus have, we count six aircraft that Boeing has currently available due to delays in some of its other models, versus 12 at Airbus that are currently available. And Airbuses span a much broader range. So it starts at the very small part of the market. It goes to the bigger part of what's called the single aisle market, where this aircraft that we're talking about, the xlr, sits. Then we go into smaller widebodies and then bigger widebodies. Airbus has products available in each one of their segments and it's really exposing Boeing.

[Luke Vargas]

All right, so let's talk about the XLR here. This is the A321XLR, a new Airbus plane that it began to deliver late last year. I don't think we've mentioned it on the podcast before. What should we know about it? Foremost as a plane, but then also as a bellwether of the state of this rivalry.

[Ben Katz]

So the ingenuity with this aircraft is really this giant extra fuel tank that sits just behind the wings. And what that allows is for this aircraft to fly further than any single aisle that's currently on the market. So this aircraft, it flies 11 hours. It can carry as many as 220 passengers, which is a big number for a small single aisle aircraft. It's allowing airlines to really open up long distance routes. Maybe an airline may have flown a bigger aircraft once a week between two airports that don't have that much demand. Now it can suddenly start offering multiple trips in a week, multiple trips in a day. It allows that kind of flexibility. This again was a segment that Boeing really dominated with the Boeing 750. But since that aircraft is being phased out, a lot of customers are now turning to this A321XLR to replace that functionality. So far, the XLR has racked up over 500 orders. So we've seen American, United Airlines both choosing this aircraft. Qantas in Australia, they've never bought a single aisle from Airbus before they've gone for this aircraft. So it's really quite telling. It's really indicative of what happens in a duopoly when you have one side with the product and the other without.

[Luke Vargas]

What is Boeing doing to avoid falling behind in this category? Can they do anything?

[Ben Katz]

So their main competitor is the 737 Max 10. That aircraft is still awaiting certification from the FAA, the Federal Aviation Administration. They're expecting to get that maybe later this year. It still leaves that aircraft about five years delayed. They've now shifted some of their engineers from future programs and things like that to really focus on getting this aircraft certified so that it can get to the market, start delivering on the backlog that it has, and put up a bit of a fight to Airbus in this segment of the market. That being said, the Max 10 doesn't have quite the same flexibility as the A321XLR. They aren't a like for like aircraft. But it will help Boeing once they can get it certified, at least punch back.

[Luke Vargas]

All right, so Airbus seeming to gain some market share here at Boeing's expense. Yet I have to ask about any gray sky factors here that could still emerge for Airbus.

[Ben Katz]

Airbus is still struggling with supply chain hurdles as they come out of the pandemic. They've got a really ambitious ramp up plan, so they're trying to produce more aircraft than they've ever produced in a single year. That project has hit some hiccups as they go ahead. There's just kind of this looming question of what does President Trump's potential tariffs on Europe look like and what impact that could have on the business.

[Luke Vargas]

Ben Katz is the Wall Street Journal aviation reporter Ben, thank you so much for the update.

[Ben Katz]

Thanks.

[Luke Vargas]

And that's it for what's news for this Thursday morning. Today's show was produced by Kate Bullivant 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.