House GOP Threaten to Sink Trump Megabill
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President Trump ramps up pressure on Japan, threatening 35 percent tariffs ahead of a July 9th deadline for trade talks. Plus, House Republicans threaten to sink the president's mega bill and the U.S. stops delivery of key weapons for Ukraine. The U.S. is by far the biggest supplier of weapons to Ukraine and has been since the start. And some of those weapons will not be easy to replace by other countries.

countries. It's Wednesday, July 2nd. 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 has threatened to raise tariffs on Japan to as high as 35 percent a day after he appeared to cut off trade talks with Tokyo. Trump has expressed anger that Japan would not agree to accept U.S. rice imports, and he told reporters aboard Air Force One it's unlikely the sides will reach an agreement ahead of a July 9th deadline for trade deals set by his administration.

We've dealt with Japan. I'm not sure if we're going to make it. I doubt it with Japan. They're very tough. You have to understand, they're very spoiled. I love Japan. I really like the new prime minister, too. Abe was one of my closest friends. You know, the new prime minister is great. He's a very strong guy. But they and others are so spoiled from having ripped us off for 30, 40 years.

Japanese officials have said repeatedly they cannot agree to any deal that doesn't reduce industry-specific tariffs, especially after the UK received some relief from steel and auto tariffs.

After slapping so-called reciprocal tariffs on dozens of countries on April 2nd, the White House paused many of the levies while vowing to strike a spate of trade deals before the 9th. Though so far, the administration has only cut a limited trade agreement with the UK and struck a tariff truce with China. Though Trump said yesterday the U.S. was nearing a deal with India.

President Trump has said that Israel has agreed on terms for a 60-day ceasefire in Gaza, while warning Hamas to accept the truce before conditions in the enclave worsen. With more, I'm joined by Wall Street Journal Deputy Middle East Bureau Chief Shandi Reis. Shandi, where do things stand this morning and what are the terms Israel has agreed to?

We don't actually know the terms that Israel has agreed to, but it sounds like what Trump is talking about is something called the Witkoff proposal, which has actually been accepted by Israel for a very long time. Hamas have not accepted that deal. And there's a very clear reason why they haven't, because it's a temporary deal and it doesn't bind Israel to ending the war. And Hamas has made clear that they will not engage in another ceasefire until or unless it means that Israel is committed to ending the war.

So this would be about 10 Israeli hostages being released in exchange for 60 days of no fighting. Israel would probably pull back from some key locations. More aid would be allowed in. And part of that would be a commitment on Israel's part to start talking about ending the war.

If this is a proposal that has been out there, as you said, for a very long time and accepted by Israel, what would explain then the timing of President Trump bringing this up now? I think President Trump very much wants this war to end. I think he's trying to show that there's a deal out there and putting pressure on Hamas to agree to the deal. It also puts pressure on Israel in a way because it sort of shows that there's something out there with momentum and kind of ups the ante for them. They don't want to lose

look like they're the ones who are going against the president. So on some level, it kind of raises expectations for all the parties to come to the table and agree to something. But I would note that there are still no negotiations going on between Hamas and Israel. There has been a push since the Iran war wrapped up, which we've reported to get a Gaza deal going. But I do think that by President Trump saying this publicly, he raises the pressure on all sides, especially ahead of

of Israeli Prime Minister Benjamin Netanyahu coming to the White House next week. That was Journal Deputy Middle East Bureau Chief Shane D. Race. Meanwhile, satellite images show that Iran has built a new access road at its Fordow uranium enrichment site. The imagery, captured in recent days by Maxar Technologies, shows a new road up to the mountain where Fordow is located, along with a number of vehicles, including an excavator and a mobile crane.

The Institute for Science and International Security, a think tank studying the Iranian nuclear program, said the excavator was likely preparing a staging area to send cameras or personnel down the holes that were made by American bombs in order to inspect the damage done to the underground facility.

And we report that the U.S. is moving to withhold some arms deliveries that were earmarked for Ukraine, including Patriot air defense interceptors, artillery rounds, and a variety of missiles, and will instead use them to beef up Pentagon stockpiles.

It marks the second time the Trump administration has redirected weapons intended for Ukraine to U.S. forces and comes as Moscow keeps up punishing air attacks and has amassed troops in northern Ukraine as a part of a summer offensive. Journal foreign correspondent Ian Lovett.

So this is the fourth summer of war, and the Russians are really trying to make use of their substantial manpower advantage. It has become, as the war has gone along, more and more difficult for either side to make significant progress territorially. A big part of that has to do with the technology. It's just much easier now for either side to defend mostly with these explosive attack drones called FPV drones or first-person view drones.

And so now any soldiers that are advancing have to get past the

the kind of phalanx of drones before they even reach the first line trenches. So it's much harder for the Russians to advance than it was earlier in the war, but it's not impossible. And their strategy, according to Ukraine's top general, is that they're trying to wear the Ukrainians down with their numbers because it is a country three times as large as Ukraine, and they've been more effective in mobilizing men to keep fighting at the front than the Ukrainians have.

And while that is unfolding on the front lines, I asked Ian if and how outside dynamics are playing a role in the conflict, especially after NATO members last week reaffirmed their commitment to support Ukraine's defense. I don't think people in Kiev are feeling particularly secure. Obviously, they welcomed that news from the NATO summit, but the U.S. has not expressed enthusiasm of any sort for arming Ukraine since Donald Trump took office again earlier this year.

And I don't think there is any trust from the Ukrainian side that he is going to continue to do that, irrespective of whatever NATO pledges made. But the U.S. is by far the biggest supplier of weapons to Ukraine and has been since the start. And some of those weapons will not be easy to replace by other countries.

In addition, the Russians have redesigned the Shahed drones that they use to attack Ukrainian cities. These are these long-range drones that were originally Iranian. They now fly much higher. They're much faster. They're more explosive. They're more difficult to shoot down. And those have made the nighttime attacks, even in places like Kiev, which had been comparatively safe, much more dangerous than in past years.

Coming up, despite clearing the Senate, President Trump's big, beautiful bill is now facing fresh challenges in the House. We'll look at the road ahead for the mega bill and more after the break.

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A day after the Senate backed President Trump's tax and spending mega bill, a number of House Republicans are lining up to oppose it, taking issue with changes that were made to the legislation since it left their hands and was modified by the Senate. And their numbers appear large enough to potentially block its passage.

At a meeting of the House Rules Committee yesterday, Republican Chairwoman Virginia Fox of North Carolina tried to strike a conciliatory tone. And while I don't often think that the other body improves our legislation...

It's important to recognize that much of what the House included in H.R. 1, when we initially passed it, is still included. But it didn't take long for differences of opinion to surface even among fellow Republicans on the committee.

Texas' Chip Roy took particular issue with the decision by senators to forego standard accounting rules and declare that extending tax cuts would have no impact on the federal budget. My colleagues in the Senate failed us. They sent us a bill knowingly using a policy baseline gimmick.

They sent it knowingly, and they sent it knowing that it was going to have increased deficits. Roy is one of several House Freedom Caucus members who've warned they'll oppose the bill unless changes are made to it. Though skeptics on Capitol Hill predict that fiscal conservatives and other holdouts will fall in line when the president gets directly involved. Trump has already threatened to find primary challengers to those who block the legislation. The House is due back in session at 9 a.m. Eastern.

The University of Pennsylvania is revoking records of a transgender swimmer who competed for the school several years ago and apologizing to affected female swimmers under a resolution announced by the Education Department that will see withheld federal funding to the school restored. The resolution is the latest in the Trump administration's ongoing campaign to remake higher education, which has included criticisms of policies related to diversity, equity, and inclusion.

While investigating the school, the administration froze $175 million in federal research funds earlier this year. And Paramount Global has agreed to pay $16 million to settle a lawsuit with President Trump over a 60-minutes interview with former Vice President Kamala Harris. The settlement, which doesn't include an apology, takes in legal fees and payments made to the president's future presidential library.

Paramount also agreed that 60 Minutes will release transcripts of interviews with presidential candidates in the future. Caps a months-long legal saga after Trump alleged that the network committed election interference by editing the interview to make Harris sound better. CBS has said it didn't doctor her comments, but rather aired a more succinct version of her response.

And that's it for What's News for this Wednesday morning. Today's show was produced by Daniel Bach. Our supervising producer was 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.