WSJ What’s News - California’s Gavin Newsom Wants to Lead the Trump Resistance

Episode Date: November 13, 2024

P.M. Edition for Nov. 13. WSJ reporter Zusha Elinson on how the Democratic California Gov. Gavin Newsom is positioning himself to face off against the incoming administration of President-elect Donald Trump. And European autos reporter Stephen Wilmot takes us inside the Volkswagen-Rivian deal that could rescue both companies. Plus, inflation edges up slightly in the U.S., but might not derail a possible interest-rate cut by the Fed in December. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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brokerage services provided by FREC Securities LLC, member FINRA SIPC and advisory services provided by affiliate FREC Advisors LLC, U.S. inflation rose in October, but not enough to derail a December Fed cut. And California's governor says he's ready for a showdown once Donald Trump takes office. In almost every issue that Trump is promising voters to deliver on, it's directly opposite to California's policies on immigration, environment, crime, etc. everything. Plus, Volkswagen and EV startup Rivian hatch a plan they hope will save both companies. It's Wednesday, November 13th. I'm Tracy Hunt for the Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. Consumer prices edged up in October after having recorded the slowest rate of growth in three and a half years in the previous month, a sign of how inflation continues to move lower on an uneven and bumpy path. The U.S. Labor Department today said that consumer prices in October rose 2.6 percent from a year earlier. That marks a pickup from the previous month. Core prices, which exclude food and energy items in an effort to better reflect inflation's underlying trend, were up 3.3%. The latest report likely wasn't enough to derail another interest rate cut from the

Federal Reserve in December. But together with solid consumer spending and steady hiring, firmer inflation could kick off a bigger debate at officials' next meeting over whether to slow the pace of rate cuts early next year. In U.S. markets, following the inflation report, traders ramped up bets on another Fed rate cut. The Dow rose 0.1 percent while the S&P 500 eeked out a slim gain of less than 0.1 percent. The tech-heavy Nasdaq slipped 0.3 percent. of less than 0.1 percent. The tech-heavy Nasdaq slipped 0.3 percent.

The price of Bitcoin topped $90,000 for the first time today, building on a hot streak since Election Day. Wall Street Journal Markets reporter Vicky Huang says the new record reflects investor euphoria over the prospect of a pro-crypto president. One of the major factors for this is that Donald Trump won the presidential election and he has been very vocally pro crypto since earlier this year. He made a series of promises to the crypto industry, including creating a so-called Bitcoin reserve to hold the nation's supply of Bitcoin, and firing Gary Gensler, who is currently the chair of the Securities and Exchange Commission, and who has been leading this fight to police the crypto sector. And the crypto industry backed a lot of congressional candidates, and most of them have won their races. So the prospect of a crypto-friendly Congress, that again further fueled the momentum of Bitcoin.

Two car makers facing multiple challenges are teaming up to help each other. Rivian, the struggling California EV startup, and German automotive pioneer Volkswagen. According to final terms announced late yesterday, VW, the world's second largest automaker, will invest up to $5.8 billion in Rivian stock and a joint venture. In return, the German company gets access to much needed technology. Joining us now is Wall Street Journal reporter Stephen Wilmot. Stephen, why are they doing this? How will it help them? They have very different problems. Volkswagen has a very strong legacy business selling

largely combustion engine cars, but it has really struggled to produce cutting edge EVs. A really key reason for that weakness is it's really struggled to perfect the software. On the other hand, Rivian has come up with some really cutting edge EVs, but it's really struggled financially. In fact, it lost about $39,000 on every vehicle it sold in the third quarter. So basically, the rationale for this deal is that these companies can help each other fix their biggest weakness. And what are the risks for each carmaker? The real risk for both companies is

that they're betting on each other and a kind of untested collaboration for this really crucial strategic project. Collaborations have a rocky history in the auto industry. Rivian has said that its electronic architecture is a core competitive advantage, and now it's sharing it with Volkswagen, and it's also saying that it wants to use that

to share it more widely. So I guess there really is a question of, is Rivian going to dilute what makes it special by opening up its crown jewels, as it were. Stephen Wilmot is The Wall Street Journal's European Autos reporter. Thank you, Stephen. Thank you. Coming up, being a California Democrat can be a liability in national politics, but that

isn't stopping the state's governor from trying to lead the Trump resistance. That's after the break. Skipable. Midnight snacks? Skip. My neighbor's nightly saxophone practices. Er, nope. You're on your own there. Could've skipped it. Should've skipped it. Skip to the good part and get groceries, meals, and more delivered right to your door on skip. President Biden and President-elect Donald Trump shook hands and emphasized a peaceful

handover of power during a meeting today at the White House, a moment that stood in contrast to the discord that followed Biden's 2020 victory over Trump. The meeting marked Trump's dramatic return to Washington. He reveled in the attention as he stands poised to take over in January, with the Republican Party united behind him and as he builds out an administration of loyalists. Today, he named Florida Congressman Matt Gaetz as attorney general, as he tries to bring the Justice Department under more direct presidential control.

direct presidential control. Before entering a meeting that lasted roughly two hours, Biden and Trump sat across from each other for photographs but didn't take questions from reporters. The president congratulated Trump on his victory and welcomed him back. And in return, the president-elect thanked him. Thank you very much. And politics is tough. And it's, in many cases, not a very nice world, but it is a nice world today. And I appreciate it very much. A transition that's so smooth, it'll be as smooth as it can get. And I very much appreciate that, too. Meanwhile, GOP senators chose South Dakota Senator John Thune as their majority leader,

their first new leader in nearly 20 years. Thune beat Texas Senator John Cornyn and Florida Senator Rick Scott. Joining us now is Siobhan Hughes, a reporter covering Congress for The Wall Street Journal. Siobhan, what does Thune's election say about how GOP senators are approaching this second Trump term? What it tells us is that at least for now a majority of the conference is prioritizing as much continuity as they can over some sort of radical change. John Thune has been serving as the number two Senate Republican, the whip, so he is a very close lieutenant of Mitch McConnell.

He understands a lot of the inside game of how the Senate works. He can see around corners and understand some of the risks that the Senate Republican Conference might be running if they open up the process too much in ways that a lot of the rank and file have demanded. Looking ahead, what are Dune's biggest challenges, you know, immediately and down the line? He's got to advance the Republican agenda, which for now, center, for example, on tax cuts, on government spending, and things like Trump's border policies. And so he's going to have to keep all of his Republicans in line around what is going to be a very, very contentious set of debates because he's got a very, very narrow margin.

And then he's also going to have to manage the relationship with Donald Trump. He's also going to have to manage some difficult talks over things like funding for Ukraine. And so there is really going to be no shortage of places where Thun is gonna have a tricky time. That was our reporter, Siobhan Hughes. Thank you so much, Siobhan. Thank you, good to be here. As a Democratic Party licks its wounds and looks for a way forward, California Governor

Gavin Newsom is positioning himself as a leader of the resistance and a defender of liberal values. Within two days of the election, Newsom set the stage for a faceoff with President-elect Trump by calling on state lawmakers to convene an emergency special session to, quote, safeguard California values. Zusha Ellinson is a WSJ reporter based in Northern California, and he joins us now. So Zusha, during the campaign, California was at the center of many of Trump's attacks on his opponent, Kamala Harris. What are Democrats saying about another California politician positioning himself as a possible

presidential candidate? So California, as in many past national campaigns, really became a symbol of everything that Republicans are saying is wrong with this country. And almost every issue that Trump is promising voters to deliver on, it's directly opposite to California's policies on immigration, environment, crime, etc. What's happening now is Gavin Newsom, the governor of California, very telegenic guy, is positioning himself as sort of the leading antagonist to Trump, sort of leading the liberal charge. He did this last

time and it really propelled him on the national stage. A lot of people look towards California, especially during COVID and Newsom's profile really rose. But it's different this time, very different. And the difference is that Trump got a lot more support on election day and California itself has shifted somewhat rightward during this election. So people are questioning how are they going to lead this charge against Trump if the ground has shifted beneath them? Are Democrats buying Newsom's approach to this face off? That's the real question I think we need to ask right now. Certainly during the last four

years of Trump, Democrats were buying it. But now it may be a little different. People have mentioned Newsom as a potential 2028 contender in the presidential election. But after Kamala Harris, who's part of his cohort here, a California politician, failed on the national stage, people are wondering if nationally Americans have an appetite for another Californian. That was our reporter, Zusha Ellinson. Thank you so much. It was great talking to you. Thanks for having me, Tracy. Really appreciate it. What questions do you have about Trump's campaign promises?

How they may be implemented and what they mean for you? Send a voice memo to wnpod at wsj.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show. And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Bienneme and Anthony Bansi, with supervising producer Michael Kosmitis. I'm Tracy Hunt for The Wall Street Journal.

We'll be back with a new show tomorrow morning. Thanks for listening.