The U.S. Military Buildup Near Iran Intensifies

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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. The U.S. Navy's largest aircraft carrier is on its way to the Middle East. After spending months in the Caribbean, the USS Gerald R. Ford will be joining another aircraft carrier and nine warships already in the Middle East as the U.S. steps up plans for a potential attack on Iran. Journal correspondent Jared Malson says the Trump administration has been using a carrot and stick approach with Iran since promising to protect protesters. Since then, we've seen an evolution of U.S. policy. The protests have died down after this brutal crackdown by the Iranian regime in which they have apparently killed thousands of people. Now the administration has pivoted to this very uncertain policy where they are both negotiating with Iran over their nuclear program and also saying that if they don't make a deal, they will strike Iran. The administration is also dialing up the economic pressure on Iran through imposing more sanctions, for example, on its shadow fleet of tankers that it uses to export oil. So all of those things are happening at the same time. and Trump keeps saying that he wants to make a deal. And if that doesn't happen, there will be strikes. So he seems to be keeping his options open. Jared says that the Trump administration has acknowledged the potential downsides of military action and ruled out possible regime change. There are tens of thousands of U.S. troops deployed in the region who they would have to protect. They would also need the air defenses in place to protect Israel, as they have in the previous round of clashes with Iran. And Secretary of State Marco Rubio in January said there was a lot of complexity to the Iranian system where they essentially couldn't go in and do what they did in Venezuela with Maduro. Washington and Taipei have today finalized a trade deal to lower the tariff on Taiwan from 32 percent to 15 percent. Core to the deal is an agreement that the world's largest advanced chipmaker, TSMC, will continue investments in the U.S. and in turn be exempt from tariffs, as the journal's Zhou Yu Wang explains. Taiwan is where most of the world advanced semiconductor chips are being made And the German administration has been trying to basically bring the semiconductor production back to U soil which is why TSMC is playing a key role in this tariff negotiation. Zhou Yu told us that officials also see the deal strengthening security ties. Beijing hasn't commented on the announcement, but said last month that it opposes any official exchanges between Taiwan and Washington. It's been one year now since Vice President J.D. Vance addressed the Munich Security Conference, and standing before U.S. allies eager for clues about the Trump administration's approach to tackling a slew of global threats, turned the tables on them. Europe faces many challenges, but the crisis this continent faces right now the crisis I believe we all face together is one of our own making. Those words left conference chairman Christoph Heusgen close to tears. We have to fear that our common value base is not that common anymore. Let me conclude and this becomes difficult. Vance's remarks suggesting a deepening estrangement with Europe proved prescient, and the transatlantic relationship this year looks as strained as ever, as France's Emmanuel Macron recently observed. Competition from the United States of America through trade agreements that undermine our export interests, demand maximum concessions, and openly aim to weaken and subordinate Europe, combined with an endless accumulation of new tariffs that are fundamentally unacceptable. Well, a year on from Vance's remarks, what's changed in the trajectory of the transatlantic relationship. Joining us this morning from the Munich Security Conference is Wall Street Journal Brussels Bureau Chief Daniel Michaels. Dan, what's the mood there? J.D. Vance notably won't be back representing the U.S. That'll be Secretary of State Marco Rubio instead. What are people expecting? I guess the expectation and hope is that this year, the event will draw less attention than last year and that the mood will be a little calmer and less tense. Secretary of State Rubio has been a bit more, shall we say, diplomatic, doesn't show the level of antipathy towards Europe that Vance and some other senior members of the U.S. administration have. He's much more measured in his words. And it's cliched to say, but we are in the new normal. And the new normal is, I think, especially in Europe, a sort of constant brace position for whatever the next thing coming from Washington is. So any day or week that goes without some new conflict or point of tension arising from the European perspective is a week of bought time to try and adapt to the current reality. Now, the open question and continued pressure from Washington is, is Europe adapting enough and fast enough? And that is a big question here this week. I mean, how will we tell whether that's the case? What will be the big tests? So one of those tests, Europe seems to have passed. Yesterday in Brussels at a meeting of NATO defense ministers. U.S. Secretary of Defense Pete Hegseth did not attend One of his deputies Elbridge Colby did And Colby gave a sort of tough love message but it was by the standards of what this administration has said about Europe not bad for Europe It kind of like OK good job so far Keep it up and do more. And if that's the message coming out of Munich over this weekend, I think European leaders will somewhat breathe a sigh of relief. And yet, Dan, tensions still remain. I'm curious what fault lines you'll be keeping an eye on in the next few days that could maybe crop up there in Munich. One thing you hear a lot from European leaders is that most of them are not happy with how President Trump approaches Europe and the things he says. But beneath it all, there is a grain of truth. Everyone has said Europe needs to do more about its own security. There were issues in the trade and economic relationship between Europe and the U.S. Europeans would beg to differ with Trump's take on that, even if there were imbalances. There are a lot of people here in Europe who look around and see everything electronic they deal with. I mean, if it's not manufactured in China, it's a U.S. company like Google or Facebook or Amazon. So each side has issues with the other and increasingly wants to, to some degree, break free of the other. One of the words that rises up above conversations here is sovereignty. Digital sovereignty, data sovereignty are huge issues. Europe doesn't want to be beholden to U.S. tech giants, though Europe has struggled to assert itself in that field. And at the same time, the administration is pushing back at European efforts to limit expansion of U.S. tech giants. So the digital arena probably is going to be an increasing area of tension, even as some other issues like defense spending seem to be sorted out. I've been speaking to Wall Street Journal Brussels Bureau Chief Daniel Michaels with us this morning from Munich, Germany. Dan, thank you so much for the update. Always good to talk with you. Thanks. Coming up, the crypto slide drags Coinbase to a big quarterly loss. And we'll tally up the growing bill as Detroit unwinds years of EV investments. Those stories and more after the break. number one most trusted app. A dream home isn't a dream home if it comes with a nightmare commute. That's why Realtor.com has Real Commute, so you can search by drive time. Download the Realtor.com app today, because you're nearly home. Make it real with Realtor.com. Pro's number one most trusted app, based on August 2025 proprietary survey. In the latest fallout from the Epstein Files, Goldman Sachs top lawyer Catherine Rumler is set to step down later this year. Recently released files revealed Rumler remained a close ally of the convicted sex offender up until his 2019 arrest, with him calling her on the night of his arrest and naming her a backup executor in a version of his will. Rumler maintains their relationship was strictly professional and says she had no knowledge of any new or ongoing unlawful activity on Epstein's part. It's been a tough earnings season for Detroit carmakers. After years of big EV investments GM Ford and Stellantis have collectively announced more than billion in write amid signs that U EV demand could remain muted after a massive 30 drop in Q4 sales Otto reporter Stephen Wilmot told me that car makers around the world are contending with the fast-evolving EV market, but that American companies have been especially hard hit. Ford was the latest to report a huge loss because of EV write-downs this week. It announced back in December a $19.5 billion charge on its EV business sort of numbers reminiscent almost of the financial crisis. Stellantis hasn't actually reported formal results yet, but last week said it would report $26 billion, way higher than expectations. GM slightly lower charges because it's ploughing on with its large EV truck platform, but still in the high single-digit billions of dollars. And the reason for this really is the U-turn in US policy, Biden had promoted EVs pretty heavily. And since his election, Trump has gone much further than I think most people were expecting in reversing that policy. The most notable feature perhaps is the $7,500 tax credit, which until the beginning of October, you could get against the purchase of an EV. And since that has fallen away, EV sales in the US have really fallen off a cliff. All right, Stephen, some major headwinds for Detroit there, but things aren't exactly rosy for foreign car makers either, right? Yeah, that's right. We haven't seen the same level of write-downs from the overseas automakers. We've seen some, particularly from the Japanese, which have a big stake in the US market too. But I was in Germany yesterday for Mercedes results. They're not doing well at all, but it's not EV write-downs. It's rather the intense competition in China, where European automakers used to be much bigger than the Americans and have been losing share very rapidly to the Chinese EV makers. So ironically, it's the rise of EVs, particularly in China, that's the problem for the European automakers, not the abrupt U-turn in EV demand in the US. That was Otto's reporter, Stephen Wilmot. And a crypto exchange Coinbase has posted a fourth quarter loss, with revenue falling more than 20% as the recent downturn in crypto prices starts to hit the biggest institutional investors. Bitcoin has been on a months-long slide since touching record highs in October, with the broader market for digital assets having lost nearly $2 trillion in market value, with many fearing the start of the next crypto winter. Robinhood Markets, the brokerage app popular with crypto investors, has tumbled more than 50% since Bitcoin's high. And that's it for What's News for this Friday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer was Sondra Kilhoff. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Otherwise, have a great weekend. Thanks for listening. boardroom and in their communities. It's not about titles, it's about impact. Discover what drives them and the advice they carry forward. Subscribe and start listening today. Published by Capital Client Group Inc.