WSJ What’s News - Trump Calls for U.S. Takeover of Gaza

Episode Date: February 5, 2025

A.M. Edition for Feb. 5. President Trump calls for the U.S. to take long-term control of Gaza and for millions of Palestinians to be permanently relocated. WSJ editor Shayndi Raice walks us through the many unanswered questions surrounding this major policy break and how it's being received. Plus, the U.S. Postal Service suspends shipments of parcels from China. And Nissan is set to reject Honda’s terms for a merger of the two automakers. Luke Vargas 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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I do see a long term ownership position and I see it bringing great stability to that part of the Middle East and maybe the entire Middle East. Plus the U.S. Postal Service halts shipments popular with online vendors in China and Nissan's deal to merge with Honda hits a bump. It's Wednesday, February 5th. 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 is calling for the U.S. to assume long-term control of Gaza, and for the nearly two million Palestinians who live there to permanently leave for neighboring

countries. Those remarks, made at a White House press conference alongside Israeli Prime Minister Benjamin Netanyahu, mark a sharp break with decades of American policy in the Middle East, over which successive presidents have said that Gaza would form part of an eventual Palestinian state, and Trump's comments invited a flurry of questions from reporters. Mr. President, given what you've said about Gaza, did the U.S. send troops to help secure the security vacuum? As far as Gaza is concerned, we'll do what is necessary.

If it's necessary, we'll do that. We're going to take over that piece, we're going to develop it, create thousands and thousands of jobs, and it'll be something that the entire Middle East can be very proud of. And joining me now with more on Trump's proposal is Wall Street Journal Deputy Middle East Bureau Chief Shandy Race. Shandy, you joined us early last week for an interview after President Trump discussed wanting to clean out Gaza and have Palestinians sent to Egypt and Jordan. And you told us at the time that we should be taking those comments seriously

and that Trump was likely to keep working on this idea. Obviously, you were right. What jumped out to you last night? Well, the biggest shocker from last night was that he said that the U.S. would take control of Gaza. I don't think anyone was expecting that. Trump has obviously positioned himself as more of an isolationist, looking to take the U.S. out of conflicts all over the world, end wars. This is a somewhat puzzling change in policy and tone from Trump.

The whole proposal really raises a lot more questions than it answers, I think. Right. Not least of which is the fact that Trump's comments left the door open to the US military being involved here. Obviously, you know, the image of US troops clearing out Gazans at the barrel of a gun seems like a very difficult image to picture, as does US troops having to fight a war with Hamas

because in this proposal, you can't really imagine that they're gonna send Hamas to Egypt or Jordan. But I think the important thing to remember about Trump is that, you know, he likes to shake things up. He likes to suck the oxygen out of the room. There were a lot of issues that were on the agenda that we all thought were going to be the top priority for the discussion. And we were all wrong.

In terms of how this is going over, we should note that the Palestinian Authority and Hamas say they wouldn't support an evacuation of Gaza. And unlike last week, we had the benefit of being able to get the Israeli perspective on this pretty much immediately afterwards from Prime Minister Netanyahu last night. Let me play a clip of his response to what Trump was suggesting. President Donald Trump I think it's worth paying attention to this. We're talking about it. He's exploring it with his people, with his staff. I think it's worth paying attention to this. We're talking about it. He's exploring it with his people, with his staff. I think it's something that could change history. And it's worthwhile really pursuing this avenue.

Soterios Johnson Shandy, can you decode that for us as far as I'm aware? While there have been some right-wing politicians in Israel who have gone as far as endorsing an annexation of Gaza after the war, Netanyahu's government has not endorsed that, let alone what Trump is suggesting. Yeah, this idea is far outside what anyone in Israel has ever thought of or proposed. Netanyahu is obviously in a position where he needs to listen to whatever Trump says. But I will say that Israel has a history of opposing any idea of transferring Palestinians. It was really considered taboo in Israel up until this far-right politician named Itamar Ben-Gvir started talking about the idea. But even Itamar Ben-Gvir didn't go as far as Trump. He talked about voluntary

emigration for Gazans who wanted to. One thing that I did find interesting is the Israeli far-right is obviously very excited about the idea of Palestinians leaving Gaza because they of course want to settle Gaza with Jewish settlements and make it part of Israel. Trump was asked by an Israeli reporter if he supports Jewish settlements in Gaza and he essentially said no. So it's a very complex, confusing plan because it doesn't neatly fit into any box that anyone had sort of thought of before it really shakes things up And how is this mass relocation plan likely to go down with countries in the region? Shandy the Saudis I see have already come out and condemned the plan Meanwhile Egypt and Jordan the countries we report White House officials believe could be persuaded to accept displaced Palestinians They've also rejected this idea in the past. So doesn't that make

Trump's proposal a nonstarter? I would say it is possible that this could be a negotiating tactic that Trump is saying to the Saudis like you give up on demanding Palestinian state in exchange for normalization and instead will promise not to empty Gaza of Palestinians. I don't know that that's the case, but there could be other types of negotiations with Egypt and Jordan over the role that they'll play in post-war Gaza. It could also be an attempt to threaten Hamas that, you know, they should take the opportunity to leave now to be expelled from Gaza. It's hard to necessarily game out all the different possibilities and options that there could be. But one thing I will say is that there

have not been many new ideas in how to approach this region for a very, very long time. We're at a moment where I think both Israelis and Palestinians feel deeply frustrated about what the future holds. People feel like they've tried everything and it hasn't worked. And so the question is, is there some way to shake things up and change things and try something new? I don't know if that's his intention, but that might be the result. That was The Wall Street Journal's Deputy Middle East Bureau Chief, Shandi Reyes. Shandi, thank you so much. My pleasure.

Coming up, the rest of the day's headlines, including an announcement by the U.S. Postal Service that it won't handle packages from China. That story and much more after the break. TD Direct Investing offers live support. So whether you're a newbie or a seasoned pro, you can make your investing steps count. And if you're like me and think a TFSA stands for total fund savings adventure, maybe reach out to TD Direct Investing.

The Trump administration is putting almost all workers with the U.S. Agency for International Development on administrative leave starting this weekend, and giving staff spread out around the world 30 days from then to return home. An email sent to USAID workers said that essential personnel expected to continue working would be notified by tomorrow afternoon. Employees and aid recipients who've received waivers to keep operating their programs say they've received limited guidance about how to interpret which programs qualify. Yesterday's notice marks the latest step connected to the administration's rapid dismantling of the 10,000-person, $40 billion foreign assistance agency whose D.C. headquarters

has been shut and its website taken offline. The U.S. Postal Service has said it will stop accepting parcels from China and Hong Kong until further notice. Journal reporter Hannah Miao says the announcement from USPS comes on the heels of President Trump's move to impose additional 10 percent tariffs on imports from China. Part of that action also included that goods from China will no longer fall under the de minimis rule. And this rule basically allowed packages that are valued at less than $800

to come into the U.S. duty free. This was a very popular way for companies to send smaller packages from China directly to their end customer in the U.S. In recent years, politicians have been keen to restrict the use of this. And critics say that the use of de minimis has enabled bad actors to send in counterfeit goods or drugs like fentanyl into the U.S. According to congressional research, global exports of low-value single packages from China grew more than tenfold between 2018 and 2023. The delivery of letters won't be affected by the USPS suspension, and the same goes

for shipments by UPS, FedEx, and DHL, which operate their own flights from China. Nissan's board is planning to reject Honda's terms for a merger of the two rivals, jeopardizing a planned tie-up that would create the world's third-largest carmaker. In recent days, Honda presented a new proposal that would make Nissan a subsidiary of Honda, instead of the more equal structure that had originally been planned. That's according to a person familiar with the negotiations who says Nissan found this unacceptable and plans to reject it, though the two companies will continue to collaborate on software and electric vehicles.

Honda says it continues to discuss the potential merger with Nissan and aims to decide on a general plan by the middle of the month. Nissan shares slipped 5% today before the Tokyo Stock Exchange halted trading, while Honda's shares closed up more than 8%. In other markets news, Ozempic maker Novo Nordisk expects its sales to grow more slowly this year amid capacity constraints, intensifying competition and pricing pressure on its blockbuster weight loss and diabetes drugs. The company today reported a 29% rise in net profit and 30% jump in sales for the fourth quarter, sending its shares higher.

Meanwhile, Alphabet shares are sliding in off-hours trading, wiping out much of their gains so far this year. That's after the company reported a slowdown in cloud computing sales that dragged Google's revenue growth. Shares in advanced microdevices are also sharply down off hours. The chipmaker said sales across its data center division, which includes AI chips, jumped almost 70 percent in the fourth quarter, but the result failed to meet investors' lofty expectations. And on deck today, Disney and Uber are due to report earnings this morning, with results

from Ford, Qualcomm, and MicroStrategy are expected after the closing bell. And that's it for What's News for this Wednesday morning. Today's show was produced by Kate Bulevent 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.