WSJ What’s News - Ukraine Tries to Salvage U.S. Ties

Episode Date: February 20, 2025

A.M. Edition for Feb. 20. President Trump’s feud with Ukrainian President Volodymyr Zelensky will make it difficult for Kyiv to salvage American support in its war against Russia, the WSJ’s James Marson says. Plus, Trump says he’s considering using part of the savings from Elon Musk’s cost-cutting drive to provide direct payments to Americans. And the WSJ’s Ben Katz explains how a new jet from Airbus is winning over customers in a segment Boeing used to dominate. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Further reading: DOGE Is Searching for Wasteful Spending. It Isn’t Hard to Find.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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. President Trump weighs returning some of the money saved by Doge back to Americans. Plus what the president's feud with Vladimir Zelensky could mean for the fate of Ukraine. And while Boeing licks its wounds, Airbus exploits gaps in its rivals lineup. We count six aircraft that Boeing has currently available due to delays on some of its other

models versus 12 at Airbus that are currently available. And it's really exposing Boeing. It's Thursday, February 20th. 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. Let's begin today with the escalating war of words between President Trump and Ukrainian President Volodymyr Zelensky. After calling Zelensky a dictator yesterday, Trump repeated his attacks last night at a Saudi investment summit being held in Miami, blaming him for Ukraine's current misfortune. I asked the journal's Ukraine coverage chief James Marson how Kiev is reacting to its sudden

sidelining by Washington as the Trump administration lays the groundwork for talks with Russia to end the war. So, Ukrainians have been very angry and upset about this. On the other hand, they are defiant. They say, yes, the U.S. is our biggest supporter, possibly was our biggest supporter, but we will fight on. We have no choice but to fight on. That's also coming from President Zelensky. Zelensky has clearly been hoping to keep the support from the US going.

He knows that Ukraine needs US for weapons and for security guarantees if any peace comes, because that's pretty much the only thing that will deter Russia from trying to attack again. And he said things like he's ready to discuss a critical minerals deal. This is something that the Trump administration brought to Kiev recently, that the US will conclude a kind of economic and security deal with Ukraine if Ukraine gives the US access to critical minerals, rare earths. Zelensky said the original proposal was one sided.

It was expecting Ukraine to give too much. But he said, look, let's keep discussing it. If the US can give us security guarantees in return for that, then we can return to it. So Zelensky clearly wants to salvage this, but it's going to be tough with a rhetoric like it is. And if he can't, James, does Zelensky have anywhere else to turn?

Well, Zelensky has said that he hopes that European Union countries will be able to step up if the US stops supporting Ukraine. Europe has provided significant aid to Ukraine, and it can supply more military support. The issue is that the quality and sophistication of that equipment is not the same as the US equipment. He's also spoken with Turkish President Erdogan this week while he was on a visit. More interestingly last night,

Zelensky spoke with Republican Senator Lindsey Graham, who has been something of an intermediary between Ukraine and Trump. So that's a signal that he's looking to people for ways to patch up that all important relationship with Trump and with the US. That was The Journal's Ukraine Coverage Chief, James Marsden. Hamas handed over the bodies of four dead hostages to Israel this morning, including

a mother and her two young sons, aged nine months and four years when they were kidnapped, a family whose capture had become symbolic of the horrors of the group's October 7, 2023 attack. Hamas turned the transfer into a televised spectacle, attaching to the coffins a picture of Israeli Prime Minister Benjamin Netanyahu over which was written The Killer before placing them onto a stage before cheering spectators. Amid the crowds were some Palestinians recently released by Israel who were supposed to be exiled from Gaza according to the terms of a ceasefire deal. Hamas has agreed to free another six living hostages on Saturday as the first phase of

that deal nears its end. Returning to the U.S., President Trump says he is considering using part of the savings from Elon Musk's cost-cutting drive to provide direct payments to Americans. Here he was in Miami last night. There's even under consideration a new concept where we give 20 percent of the Doge savings to American citizens and 20 percent goes to paying down debt because the numbers are incredible, Elon. Trump didn't offer further details about the plan.

The Musk-led Department of Government Efficiency, or DOGE, says it's come up with $55 billion in estimated savings as of Monday through a combination of things including fraud detection, grant cancellations, contract renegotiations, and workforce reductions. In the most recent fiscal year, federal agencies that report what they call improper payments identified $149 billion in such outlays. But as our journal colleagues report, identifying wasteful spending isn't the hard part. Actually doing something about it is. For a breakdown of which government programs are the biggest culprits and why waste persists,

journal subscribers can check out that story on WSJ.com. We've left a link to it in our show notes. We are exclusively reporting that in talks with ad conglomerate Interpublic Group, Elon Musk's ex has hinted at possible retribution from the Trump administration if they didn't get their clients to spend more on the social media platform. According to people with knowledge of the talks, that message was made clear in a phone call between InterPublic and X lawyers in December, and X CEO Linda Jacarino has made comments that seemed like similar warnings in conversations

with InterPublic executives. InterPublic leaders have interpreted the communications from X as reminders that the company's recently announced $13 billion deal to merge with rival Omnicom Group could be torpedoed or at least slowed down by the Trump administration given Musk's powerful role in the federal government. Musk has piled criticism on advertisers that ditched X since he bought it in 2022. Interpublic recently signed a new annual deal with X for potential client spending, people familiar with the agreement said. A company spokesman said Interpublic doesn't make spending commitments on behalf of clients. Yakarino and representatives from X didn't respond to requests for comment.

And in market news, Walmart is set to headline a busy day for corporate results. The retailer, along with Alibaba, Wayfair, and Hasbro will report earnings before the market open, while the likes of Ticketmaster owner Live Nation, Rivian Automotive, and Booking Holdings, whose brands include Priceline, Kayak, and Open Table, will follow after the closing bell. Coming up, aviation reporter Ben Katz will drop by to discuss how the success of a new Airbus jet spells more trouble for rival Boeing. That's after the break. European plane maker Airbus reported earnings this morning, announcing an 8 percent revenue

jump and 16 percent growth in adjusted earnings before interest in taxes for the fourth quarter. It's got a rosy outlook for 2025 as well, forecasting it can deliver roughly 820 commercial aircraft, an increase from last year, and more than double what struggling U.S. rival Boeing managed to deliver in 2024. According to Journal Aviation reporter Ben Katz, who joins me now, more trouble could be heading Boeing's way thanks to the recent success of a new Airbus jet known as the XLR. Ben, how did I do characterizing the fortunes of Airbus and Boeing here?

Ben Beard Over the last five years, there's really been this divergence between the two companies. Boeing is struggling with billions in debt, hemorrhaging cash, Airbus is raking it in. Boeing has been cutting back spending on research and development. Airbus, meanwhile, has been ramping ramping up and really at the end of the day, Airbus now boasts a much bigger product lineup than Boeing and it's been able to not just expand its own market share but also to almost to steal some of Boeing's critical customers that Boeing has picked up along the way. Ben, it's a pretty significant development is it not in a duopoly environment like this Airbus-Boeing rivalry for one of these players to just not have a product offering in every category and yet that's what we're

seeing now. Absolutely. If you look at just from a bird's eye view at the aircraft offerings that Boeing and Airbus have, we count six aircraft that Boeing has currently available due to delays on some of its other models versus 12 at Airbus that are currently available. And Airbus has a much broader range. So it starts at the very small part of the market. It goes to the bigger part of what's called the single aisle market where this aircraft

that we're talking about, the XLR, sits. Then we go into smaller widebodies and then bigger widebodies. Airbus has products available in each one of those segments and it's really exposing Boeing. All right, so let's talk about the XLR here. This is the A321XLR, a new Airbus plane that it began to deliver late last year. I don't think we've mentioned it on the podcast before. What should we know about it foremost as a plane, but then also as a bellwether of the

state of this rivalry? So the ingenuity with this aircraft is really this giant extra fuel tank that sits just behind the wings. And what that allows is for this aircraft to fly further than any single aisle that's currently on the market. So this aircraft, it flies 11 hours, it can carry as many as 220 passengers, which is a big number for a small single aisle aircraft. It's allowing airlines to really open up long distance routes. for a small single-aisle aircraft.

that Boeing really dominated with the Boeing 757. from Airbus before they've gone for this aircraft. So it's really quite telling. It's really indicative of what happens in a duopoly when you have one side with a product and the other without. – What is Boeing doing to avoid falling behind in this category? Can they do anything? – So their main competitor is the 737 MAX 10. That aircraft is still awaiting certification from the FAA, the Federal Aviation Administration. They're expecting to get that maybe later this year.

It still leaves that aircraft about five years delayed. They've now shifted some of their engineers from future programs and things like that to really focus on getting this aircraft certified so that it can get to the market, start delivering on the backlog that it has and put up a bit of a fight to Airbus in this segment of the market. That being said, the MAX 10 doesn't have quite the same flexibility as the A321XLR. They aren't a like for like aircraft, but it will help Boeing once they can get it certified, at least punch back.

All right. So Airbus seeming to gain some market share here at Boeing's expense, yet I have to ask about any gray sky factors here that could still emerge for Airbus. Ben Katz, Wall Street Journal Aviation Reporter Airbus is still struggling with supply chain hurdles. As they come out of the pandemic, they've got a really ambitious ramp up plan. So they're trying to produce more aircraft than they've ever produced in a single year. That project has hit some hiccups as they

go ahead. This is kind of this looming question of what does President Trump's potential tariffs on Europe look like and what impact that could have on the business. Ben Katz is a Wall Street Journal aviation reporter. Ben, thank you so much for the update. Thanks. And that's it for What's News for this Thursday 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.