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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 of 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 U.S. That may not be hard. Trump is expected to get a warm embrace from Gulf states eager to gain influence with his administration. But most of all, he's not going to be able to get a warm embrace from the United Arab Emirates.
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 Shandy Race.
Stephen, starting with you, what should we be expecting to see over the next couple of days? 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 surrounded by some of the top U.S. business people and financiers who will be joining him at private events.
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 an exchange for what will probably be hundreds of billions, potentially trillions of dollars in investment commitments over the coming years. 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 Trump Inc. of late.
Yeah, so there's both a commercial element to the Trump foreign policy in terms of him wanting to secure investments into the U.S. and in U.S. 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 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. But 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. And Stephen, 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 that and how that's gone over.
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 reestablish 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 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.
Shandi, 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 U.S. policy are ones that I understand get the Israeli government a little bit nervous. 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, you know, 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.
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. 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. Deputy Middle East Bureau Chief Shandy Race and Foreign Correspondent Stephen Kalin. Shandy, Stephen, thank you both so much. Thank you. Thanks for having me.
A day on from the U.S. 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 Frankos says markets are now watching for the next batch of economic data. 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. Yeah.
And Alex says while businesses relying on Chinese imports are set to resume shipments, they still face higher prices and lower profits. 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, and they 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.
The latest CPI report from the Labor Department is due at 8.30 a.m. 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 U.S. levies on foreign-made cars.
Car exports make up about a third of Japan's shipments to the U.S., 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 U.S. 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.
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Prep for your next trip with the ANF Vacation Shop. Get their newest arrivals in-store, online, and in the app. 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 of an equipment outage.
On the flight deck, we have advanced safety technology that allows 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 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. Yesterday, 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.
This is substantial, monumental. This is his magnum opus of what 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 percent 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.