WSJ What’s News - New Year’s Violence Rattles U.S.

Episode Date: January 2, 2025

A.M. Edition for Jan. 2. At least 15 people are killed in New Orleans after a man in a pickup truck drives into a crowd, while a Tesla Cybertruck explodes outside the Trump Hotel in Las Vegas. Plus, Rep. Thomas Massie (R., Ky.) prepares to challenge Mike Johnson’s re-election as House speaker. And with Donald Trump’s second term about to begin, WSJ reporter Stu Woo explains why U.S. companies aren’t sticking up for China this time around. Luke Vargas hosts. Learn more about your ad choices. Visit megaphone.fm/adchoices

Get groceries delivered across the GTA from real Canadian superstore with PC Express. Shop online for super prices and super savings. Try it today and get up to $75 in PC optimum points. Visit superstore.ca to get started. The FBI investigates a deadly New Orleans truck attack as an act of terrorism as authorities probe potential links to an explosion outside the Trump Hotel in Las Vegas. Do I think it's a coincidence? I don't know, but what I can tell you is we're absolutely investigating any connectivity to what happened in New

Orleans as well as other attacks that have been occurring around the world. We're not ruling anything out yet. Plus lawmakers prepare for a potential house speaker fight and. executives go quiet about the importance of the Chinese market ahead of a second Trump presidency. It's Thursday, January 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.

We are learning more about the alleged terrorist behind the New Year's Day attack in New Orleans that left at least 15 people dead and dozens injured. The FBI has identified 42-year-old Shamsadeen Jabbar as the man who rammed a rented Ford F-150 truck into a crowd in the heart of the French Quarter early yesterday. Police say that the Texas-born-and-raised father of three was killed in a shootout with police and that an Islamic State flag was found inside the pickup along with improvised explosive devices. Louisiana Attorney General Liz Murrell says authorities believe multiple people may be

responsible for the attack. We do know that there is a connection between a house that was located on Mandeville Street in New Orleans and where we believe that these IEDs may have been put together. And there was a house fire there, so we also believe that they were trying to get rid of evidence. And then, you know, we know that there are, and understand there are multiple people that are involved. So one individual was deceased at the scene, but the other...

Jabbar was an Army veteran and had a lengthy corporate resume, including roles at Accenture, Ernst & Young, and most recently at Deloitte, where he worked since 2021. Deloitte condemned the attack and said it's doing all that it can to help authorities in their investigation. Just hours after the New Orleans attack, a Tesla Cybertruck loaded with canisters of gas and firework mortars blew up outside the Trump International Hotel in Las Vegas, an incident that police believe to be isolated, though they haven't ruled out a connection between the two cases. The explosion killed the person inside the rented vehicle and injured seven others. According to a person familiar with the matter, authorities haven't ruled out terrorism

as a possible motive. Here was Las Vegas Sheriff Kevin McMahill. We know that Elon Musk is working with President-elect Trump and it's the Trump Tower, so there's obviously things to be concerned about there and that's the Trump Tower, so there's obviously things to be concerned about there and that's something we continue to look at." According to the police, the stainless steel exterior of the Cybertruck limited the damage it caused. Tesla didn't respond to a request for comment yesterday, but Musk said on X that his team

investigated the incident and that the explosion wasn't related to the vehicle itself. House lawmakers are expected to convene in Washington tomorrow, but before newly elected and returning representatives can get to work on other business, they'll first need to elect a House Speaker. Back in January 2023, it took four days of voting for California's Kevin McCarthy to win the job, and three weeks of voting for Louisiana's Mike Johnson to win election later that year. And now another speaker fight looms.

Kentucky's Thomas Massey is pledging to oppose Johnson's re-election, and given the tight math in the chamber, just one other Republican would need to join him in backing an alternative candidate for Johnson to fall short of a majority, assuming that all Democrats vote along party lines. Massey's stance, driven largely by his frustration that Johnson has relied on Democratic support to pass government funding and other measures, has put him at odds with his GOP colleagues and with President-elect Trump who is backing Johnson's speaker bid. And in markets today, China's top EV maker BYD says it sold a record number of electric

and hybrid cars in December, helping it to grow its full-year sales by 41 percent to 4.3 million vehicles. BYD's Chinese peers also posted strong December figures thanks to government incentives for consumers to trade in old cars to purchase new ones. Carmakers also offered discounts last month to meet annual sales targets. Chinese EV stocks fell today however, with a Nomura analyst saying that the robust December sales were mostly priced in. And investors will soon be able to compare BYD's progress with that of rival Tesla, which is due to disclose fourth quarter deliveries later today. Meanwhile, shares in Hong Kong and in mainland China closed the day lower, dragged down by

chip and insurance stocks after a private gauge of Chinese manufacturing activity showed the sector expanded at a slower pace in December. European indexes are looking for direction in morning trading. The continent is contending with a shut-off of Russian natural gas flows through Ukraine after Kiev refused to extend a pipeline deal for the new year. The move is expected to have limited impact on the EU, given that the pipeline only supplied about 5% of the block's total imports, but is expected to cause supply issues in non-EU member Moldova.

And hopes are fading for a so-called Santa Claus rally on Wall Street. Stocks tend to rise over the period spanning the final five trading days of the year and the first two of the new one. However, the S&P 500, Nasdaq and Dow have thus far slipped with speculative assets like Bitcoin, as well as small cap stocks and shares in big tech companies all stumbling in the final few days of the year. Coming up, American businesses that once vouched for China in opposition to Trump's tariffs are now keeping quiet as storm clouds gather ahead of a renewed trade war.

Reporter Stu Wu joins us to explain that change in tone from American executives after the break. In Donald Trump's first term, businesses small and large from diverse sectors including technology, agriculture, and apparel made their displeasure known about Trump's tariffs on China. But as Inauguration Day approaches and more tariffs against Beijing loom, Journal reporter Stu Wu says that U.S. companies are taking a markedly different approach. And Stu joins me now with more from Singapore. Stu, I know it's just one of many companies we could be talking about, but

Starbucks kind of jumped off the page to me from your reporting as a business that has taken a radically different view about China now than it did in 2016. What can we learn by looking just at them? Yeah, I chose to focus on Starbucks because back in 2016, its CEO at the time said China could conceivably be our biggest market in the future. And if you had gone to Starbucks five, 10 years ago, you'd see them on all the big streets, big cities, and even the smaller ones. But a lot has changed since then.

And I think the biggest thing is the economy. So China's economy grew at nearly 10% a year for decades. And economists think 5% is going to be a really tough number to hit this year. At the same time, there's been a bunch of competitors in China, most notably Luckin Coffee, and a bunch of smaller ones too that are selling coffee for like less than $2 a cup now. And now the new CEO of Starbucks says, hey, this is a tough market, we're going to have to look at some partnerships. It's going to be tough to figure out what they do going forward. if Starbucks says, hey, this is a tough market,

for opportunity. Yeah, let's take General Motors for example. So two decades ago, GM said it's worth it to do joint ventures with Chinese automakers and share technology with them because it granted GM access to this big Chinese market that was growing. Now, they're rethinking that because they're getting their lunch eaten by these Chinese automakers. There's two big reasons why these Chinese companies are doing so well. Number one is that they're getting direct subsidies by the Chinese government.

And second, they're getting indirect subsidies because China is trying to give incentives for people to buy Chinese cars. So that's a tough environment for GM right now competing against state-supported companies. And this pressure is kind of coming in both ways, right? You've got China specifically around tech saying state-owned companies really need to diversify away from American products. and then Washington sort of also pushing along what Trump started in his first term, it seems. That's right. And there's two big things.

Number one are export controls. Politicians are saying that US companies shouldn't transfer strategic technologies to China. So they've blocked tens of billions of dollars worth of sales of important technology to China. The second thing is just the mood in Washington right now. If you're a company and you manufacture stuff in China and you're arguing President Trump shouldn't add tariffs, well, a congress member or a member of the administration is just going to say, well, you should be doing that investment in the US instead.

So they're really in a tough spot. That doesn't mean they're not lobbying against tariffs. They're just doing it in a more quiet way. What's clear is that American companies in China are prepared for what's next. Trump has proposed an additional 10% tariffs on imports from China. And what American companies have been doing is that they have been diversifying their supply chains. So companies are keeping their existing factories manufacturing in China, but maybe for their next investment, they're going to look for another country, perhaps in Asia, that wouldn't be affected by tariffs.

All right. So moving supply chains around, but going back to the sort of PR, the lobbying of all of this, we're seeing a change in tune from US businesses. Is it clear what effect that's going to have on the policies we get out of Washington and whether this trade war escalates? So if we look at Trump's first term, there was an analysis that said the average effective rate on imports from China went up from 3% to 11% in Trump's first term. So there was like a real consequence to that. So I did look at the lobbying between the transition period during Trump's first administration

and now and there's a lot less noise right now. But that doesn't mean the companies won't do it. Apple was a great example of how lobbying could work. Apple CEO Tim Cook continually sent to Washington the message that if you raise tariffs, that's going to make Apple products more expensive for consumers. And in the end, Apple got some exemptions to tariffs. So we'll see. Luke Worsley I've been speaking to Journal reporter Stu

Wu in Singapore. Stu, thanks so much. Stu Worsley Thanks, Luke. Luke Worsley And that's it for What's News for this Thursday morning. Today's show was produced by 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.