WSJ What’s News - What Will Trump’s Team Do About His Conflicting Growth and Trade Agendas?

Episode Date: November 21, 2024

P.M. Edition for Nov. 21. WSJ chief economics commentator Greg Ip explains how President-elect Trump’s economic team will work on his policy priorities. And Justice Department reporter Sadie Gurman discusses the fallout from former Congressman Matt Gaetz’s withdrawal of his U.S. attorney general nomination. Plus, WSJ Middle Eastern correspondent Omar Abdel-Baqui discusses the implications of the International Criminal Court’s arrest warrant for Israeli Prime Minister Benjamin Netanyahu. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Courage. I learned it from my adoptive mom. Hold my hand. You hold my hand. Learn about adopting a teen from foster care at adoptUSkids.org. You can't imagine the reward. Brought to you by AdoptUSkids, the U.S. Department of Health and Human Services, and the Ad Council. The International Criminal Court today issued war crimes arrest warrants

for Israeli Prime Minister Benjamin Netanyahu and others. And I want to say that this is one of the most consequential or monumental decisions that the ICC has made in comparison with issuing warrants with Russian President Vladimir Putin last year. And Matt Gaetz has withdrawn his nomination for U.S. Attorney General. Plus, white President-elect Trump's growth and trade agendas are in conflict. It's Thursday, November 21st. I'm Tracy Hunt for the Wall Street Journal.

This is a PM edition of What's News, the top headlines and business stories that move the world today. The International Criminal Court today said it has issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant, along with top Hamas military leader Mohammed Daif. Daif has been reported killed, but the ICC said it hasn't been able to confirm his death. Netanyahu's office said it strongly rejected the court's decision, calling it politically motivated, and said Israel wouldn't retreat until all its war aims are achieved.

Golan called the ICC's decision outrageous for equating Israel with Hamas, and said he was proud of his tenure leading the country's armed forces. Omar Abdu'l-Baki is a Middle East correspondent for The Wall Street Journal, and he joins us now. Omar, what are the court's allegations? There are a number of charges that include war crimes and crimes against humanity. One of the primary ones is using starvation as a weapon of war. The court alleges that Israel, under the directives of Galant and Netanyahu restricted humanitarian aid,

including food and medicine, into the Gaza Strip from the beginning of the war into May. And another charge relates to crimes against humanity for murder and other atrocities and the targeting of civilians as well. For Galant and Netanyahu, similarly for Daif, he is also being charged with war crimes and crimes against humanities for the conduct of Hamas under his directives during the October 7 attacks on Israel. So Israel does not recognize the court's jurisdiction. But what effect would this warrant have on Netanyahu and Gallant?

For members that are assigned to the Rome statute, which gives the ICC some of its powers, there are 120-plus states that are a part of that statute. And basically, Netanyahu and Galant would not be able to travel to those countries, or they would face the risk of being arrested upon arrival and turn to the ICC to face prosecution in The Hague in the Netherlands where the court is located. To not be able to travel to 125 countries as a head of state is quite a restriction. It also isolates Israel internationally and sends a statement that

Israel is not complying with international law. And I want to say that this is one of the most consequential or monumental decisions that the ICC has made in comparison with issuing warrants with Russian President Vladimir Putin last year. That was Wall Street Journal Middle East correspondent Omar Abdel-Baki. Thanks so much, Omar. Thank you for having me. A spokesperson for the U.S. National Security Council said the court doesn't have jurisdiction and that the U.S. quote, fundamentally rejects the decision.

Sales of existing U.S. homes rose in October, producing the first year-over-year gain in sales in more than three years. The National Association of Realtors today said that existing home sales in October rose 3.4% from the prior month to a seasonally adjusted annual rate of 3.96 million. Home sales in 2024 are still on track to hit the lowest level since 1995, but WSJ reporter Nicole Friedman said a boost in activity during the fall could salvage another slow year for sales. The increase in home sales in October reflected the fact that mortgage rates fell in August and September, and so that made it a little bit more affordable for home buyers, and some

of them jumped into the market. And those deals that went under contract in August or in September closed in October. So the data is a little bit backward looking. And mortgage rates have risen since September. And they are back closer to 7% now. And so some of that momentum has really stalled in the market. And this is also typically a slower time of year

for home sales. People don't like to go shopping for a house over the holiday season and it's cold in a lot of the country and so some of the momentum in home buying activity has slowed down and real estate agents expect that it could stay slow through the rest of the year. U.S. markets ended the day up. The Dow closed more than one percent higher and the S&P 500 closed up about half a percent. NASDAQ ticked up less than 0.1 percent.

And Bitcoin hit a new intraday peak just above 99000 today, continuing its wild rally on hopes of crypto-friendly policies from the Trump administration. Coming up, the fallout from former Congressman Matt Gaetz's nomination and withdrawal continues. That's after the break. Matt Gaetz is out. The former Florida congressman today withdrew his nomination as president-elect Donald Trump's pick for attorney general.

In a post on the social media site X, Gaetz wrote that his confirmation was becoming, quote, a distraction. Gaetz resigned from Congress last week on the day Trump announced him as the attorney general nominee. Our Justice Department reporter Sadie Gurman says it became clear Republican lawmakers were prepared to reject his nomination amid sexual misconduct and drug allegations. This is a huge political blow to Trump since his election and it's a signal that this sort of rapid fire installation of very unconventional cabinet picks might be potentially backfiring. We don't know exactly what caused this somewhat sudden decision but what we do know is that allegations that were being investigated by the House Ethics Committee continued to seep out with each one becoming worse

than the next including allegations that he had sex with a 17-year-old at a drug-fueled party. And so it looked as though more of those allegations were going to emerge around the time when he announced he was stepping aside. Meanwhile, according to people familiar with the matter, the Trump transition team was blindsided by the latest details to emerge about a 2017 sexual assault allegation against Defense Secretary nominee Pete Hegseth. Late last night, the Monterey City Police in California released a heavily redacted report that details a boozy night at a hotel, a poolside argument, and two conflicting versions of what ultimately took place inside of Hegseth's hotel room.

Hegseth, who spent the day on Capitol Hill meeting with senators, told reporters that the matter was fully investigated and he was completely cleared. He maintains the sexual encounter was consensual. Officially, the Trump transition team is sticking by Hegseth, saying the report corroborates what he and his attorneys have said about the incident. And staying with the president-elect's nomination for his future administration, former Federal Reserve Governor Kevin Warsh, former Trade Ambassador Robert Lighthizer, and hedge fund manager Scott Bessent are just some of the big names in the running to lead Trump's

economic agenda. Think of it as The Apprentice, Treasury Edition. But it isn't just great theater. Trump's choice will be key to where his economic agenda is headed. Greg Ip is The Wall Street Journal's chief economics commentator, and he joins us now. So Greg, what are the two main planks of Trump's economic agenda? The first plank is he wants to promote economic growth by lowering taxes and bringing about deregulation. The second plank is he wants to eliminate the trade deficit and bolster

domestic manufacturing jobs by imposing tariffs on our trading partners. The problem is that these two planks of the agenda are in conflict with each other. If you succeed in boosting investment and economic growth, and if you do it with tax cuts that add to the budget deficit, that will tend to pull in more imports and push up the dollar, which makes our manufacturing less competitive. So that works against the second mission of trying to reduce the trade deficit.

On the other hand, if you impose really high trade tariffs on our trading partners, that will tend to hurt consumer spending and business sentiment and slow down economic growth. And so that tends to work against the first plank of his agenda. Among the people that Trump is looking at for Treasury Secretary, are they more likely

to champion economic growth or tariffs? The folks that he's looking at for Treasury Secretary, a lot of them fit into that traditional Wall Street mold. Hedge fund managers, people who run a big private equity fund, or who run a Wall Street firm. They're very committed to economic growth, lower taxes, deregulation. They're generally okay with a strong dollar. And it's not that they're absolutely opposed to tariffs. None of the people that he's looking at for Treasury Secretary I would call a big tariff champion, but in the background is a guy

named Robert Lighthizer and everybody considers him the main architect of Trump's trade program. But we haven't seen much from him in the last few days and indeed a different gentleman named Howard Letnick who is from Wall Street is said to be in charge of trade policy, which leaves open the question, well, who in this administration is going to be there pushing for that other piece of Trump's agenda? And it doesn't look like right now that there is an obvious name. And what is the market expecting?

We've seen the stock market rally since Trump was elected president. That's a sign that they expect that his policies will be good for profits. Now you also see a rise in the dollar and weak performance by foreign stock markets. That's a sign that markets expect that there will be tariffs. In the markets estimation, you will not get the level of tariffs that Trump often talked about. It'll be more like sort of a sprinkling of tariffs rather than a tariff first agenda. It'll be the growth agenda that wins out. That was our chief economics commentator, Greg Ip. And that's what's news for this Thursday afternoon.

Today's show was produced by Anthony Bansi with supervising producer Michael Kazimides. I'm Tracy Hunt for The Wall Street Journal. We'll be back with the new show tomorrow morning. Thanks for listening.