Israel’s Lebanon Strikes Threaten Iran Peace Push

Lebanon emerges as the key sticking point for the ceasefire as Israel continues to hammer

bay root. Plus we look at the economic fallout of the war with Iran with the full impact

yet to come.

We went into the home spring-selling season with mortgage rates finally dipping down

below 6% people are very optimistic and as soon as the war started rates went back up

people have gotten skittish and gotten scared.

And how the creators of AI are trying to avert a public backlash.

It's Wednesday, April 9th. I'm Daniel Bach for the Wall Street Journal filling in for

Luke Vargas. And here's the AM edition of What's News, the top headlines and business

stories moving your world today.

Global markets are selling off and oil prices have shot back up as shipping traffic through

the Strait of Hormuz remains choked off amid the tentative ceasefire with Iran.

Iran is limiting the number of ships crossing the street to around a dozen a day and has

said it will start charging tolls. But world leaders are pushing back. Here's UK foreign

minister of that Cooper speaking to the BBC's Radio 4 today program.

There may be territorial waters there but there is also an international shipping route

and an international transit route which means that freedom of navigation principles apply

and that countries cannot simply hijack those kinds of international transit routes and

unilaterally apply tolls. They cannot do that as part of the the laws of the sea and

the United Nations arrangements that are in place.

In a fresh warning, President Trump said in a social media post that US military personnel

and assets will remain near Iran until the quote, real agreement reached is fully complied

with and quote, including the full reopening of the waterway.

Upon semi-official Farsi news agency said oil tanker traffic was halted after Israel

hit Lebanon with fresh airstrikes yesterday killing more than 250 people.

Tehran has said it will only participate in planned peace negotiations in Pakistan

this weekend. If there's a pause in Israel's conflict with Hezbollah, something the White

House has said isn't part of the ceasefire. At the same time, Israel says its ground

operations in Lebanon will continue, even as Prime Minister Benjamin Netanyahu faces

criticism for not laying out an end game.

Israel's just demonstrated over the last three years or so, just really stunning tactical

victories on the battlefield in terms of military operations, intelligence operations,

such as exploding beepers, targeted assassinations, but then when you look sort of at the strategy

or long term beyond the military, so more political diplomacy, you don't see it translating

into that.

That's the journals Annette Palad in Tel Aviv.

So I spoke to experts and also former Israeli officials in the government and the military,

and they spoke about a weakness in Israel, not just now, but also historically, basically

not being very good at planning for the long term. One example of this is really that

in Israel, unlike the US or France or the UK, there's no tradition of publishing official

government national security strategies where countries lay out their biggest threats,

how they're going to deal with them. In Israel, it's just historically, it's focused

on short kinetic action. It's often been quite short wars, and now we're just seeing

a real change, and it's just long wars that are dragging out, and it's not really clear

what Israel's long game here is.

Trump has also been lashing out at NATO Allies, writing that quote, NATO wasn't there when

we needed them, and they won't be there if we need them again. This after NATO Secretary

General Mark Ruta met with Trump yesterday in Washington in a bid to soothe tensions.

We're exclusively reporting that the White House is now considering a plan to punish some

members of the Alliance that the President thinks were unhelpful to the US and Israel

during the war. Here's White House Press Secretary Caroline Levitt.

I have a direct quote from the President of the United States on NATO, and I will share

it with all of you. They were tested, and they failed. And I would add, it's quite sad

that NATO turned their backs on the American people over the course of the last six weeks

when it's the American people who have been defunding their defense.

The proposal would involve moving US troops out of NATO member countries deemed unhelpful

to the Iran war effort and stationing them in countries that were more supportive. The

proposal would fall short of President Trump's recent threats to fully withdraw the US from

the Alliance, which by law he can't do without Congress.

Meanwhile, the chair of NATO's military committee, Admiral Giuseppe Cabo Dragoni, is brushing

away suggestions that the Alliance isn't united. He spoke to our Luke Vargas about how

NATO is set up for future conflicts, and Luke began by asking him what's been learned

about modern warfare out of the Iran conflict.

UAVs, drones has been the actors of this conflict, and of course, we take it very seriously.

Drone, of course, we learned that they are not anymore a nice capability. They are central

in modern warfare. They, of course, involve affect surveillance, targeting, logistic,

even for protection. This is an operational reality that directly impact our deterrence

and defense. And, of course, we are strengthening our layered integrated air and missile defense.

We are increasing vigilance and readiness, and, of course, we are accelerating innovation.

Because we need to speed up the capability to develop and to deploy.

Yeah, I mean, how far off is that capability? And even if some of the technology exists,

is there not a real concern around cost and the asymmetry here of expensive defenses

for a very cheap and powerful weapon?

This is one of the lessons we learn. At the moment, probably a layer and cost effective

approach is needed. NATO must be able to use the cheapest, but effective response at

each level. And we are ranging from electronic warfare to kinetic and direct energy weapons.

And we should get higher end interceptors as the last ditch, only when it is necessary.

We need to avoid situation where cheap drones force this proportionate costly countermeasure.

Of course, requires more abundant, scalable and affordable solution, as well as smarter prioritization.

That's basically the key to effectively face this kind of overwhelming threat.

Does that goal align with what else the alliance is trying to focus on, namely defending

against maybe a more conventional land threat on the eastern front? Or is there some overlap here?

Let's say that there is no single solution. As NATO, we are pursuing a layered approach,

which includes the detection system right, for example, radar sensor and artificial intelligence,

of course, electronic warfare like jamming and spoofing, or also kinetic option,

guns, missiles, interceptor drones too. And also, we not to forget the passive measures,

camouflage, arming, increasing, of course, artificial intelligence and autonomy,

of course, increasing, improving detection and decision making. Of course, at the end of the day,

the key is an integration across system rather than to rely on a single technology.

Admiral Giuseppe Kavo Dragoni is NATO's most senior military officer serving as the Alliance's

chair of its military committee. Admiral Dragoni, thank you so much for being with us on what's news.

Thank you, Rick. Thank you for giving me this chance.

Coming up, a setback for Anthropic and its legal fight with the Pentagon for declaring the

company a supply chain risk. And with AI hype everywhere, more Americans now think it will do more

harm than good. Those stories end more after the break.

Now, the fragile ceasefire involving the US, Israel, and Iran is welcome news for the US economy,

but economists are warning not to expect an immediate return to normal.

In recent weeks, soaring gas prices and climbing mortgage rates have pinched consumers

while rising energy and transportation costs have squeezed businesses.

And journal economics editor Alex Franco says we haven't yet felt the full effects.

We're going to start to get the first readings of the with inflation figures this week for March,

which was the month where the war really took off. And I mean, the main place are going to

say it is gas prices, diesel prices, and then things that are also made of petroleum and natural gas,

like fertilizer, which then feeds into food. So the concern here is that the damage already

done from the war with the straight of hormones closed has yet to feed through and ships are not

streaming through the straight of hormones. So for now, it's not clear that there's going to be a

big burst of supply of oil and gas and fertilizer streaming out of the Persian Gulf.

Further complicating the long-term economic outlook and stick with me here because this is

quite a pivot, not enough babies. New data shows the US fertility rate is at a record low for the

sixth straight year. We're now below 1.6 average fertility for the average woman in their life

to how many children they're going to have. And that's below so-called replacement value,

which is around 2.1 in order to keep the population steady. In recent years, you've had the population

grow also because of immigration. The Trump administration is always a crackdown on immigration

quite a bit. So for the economy, this means eventually you have an issue where you don't have

enough labor and that can be a constraint on the economy. It can lead to inflation. But as we've

seen in other countries that faced this earlier on, it also pushes companies to be more productive,

to say, well, we don't have the workers, so how are we going to use machines or AI or computers

or whatnot to do what we're doing now more efficiently?

We are exclusively reporting that Disney plans to lay off as many as a thousand employees

in the coming weeks, mainly from its marketing department. It's one of the first moves under

New CEO Josh Tomorrow aimed at offsetting lower box office and streaming profits and to fund

digital growth. The cuts reflect a broader industry trend as rivals like Sony, Paramount,

and Warner Bros. Discovery also cut staff. And a federal appeals court has upheld the defense

department's designation of anthropic as a supply chain risk, prioritizing national security

over the company's financial harm. While anthropic recently secured an injunction against a

broader federal ban in California, this ruling keeps them excluded from Pentagon contracts and

systems. Acting Attorney General Todd Blanche called the decision of victory for military readiness

while for its part anthropic maintains its focus is on providing safe AI.

And speaking of safe AI, more than half of Americans now fear the technology will do more harm

than good. To that end, tech reporter Sam Schechner says AI companies have started a

charm offensive in earnest. Open AI this week published a list of policy proposals such as

a four-day work week and an AI-invested public wealth fund that would be distributed to citizens.

They also bought the podcast TBPM, which is known in part for its tech booster vibe. Anthropic

for its part has been signing partnerships and building tools for sectors like consulting and

software where share prices have been whacked by fears they'll be replaced by AI. Those efforts

have helped push back up the shares of some of these companies. What we're seeing is something

of a vibe shift. You're seeing AI companies trying to shift the narrative away from a sort of

anxious backlash against AI towards the more optimistic vision that they would like to articulate.

Sam added that tech companies once framed AI risks as far off science fiction,

but those dangers are no longer a distant concern as the technology integrates into daily life.

Now as we're really getting into the rollout of these tools, some of the dangers are much

closer to home. We're talking about jobs. We're talking about the survival of industries

and that's leading the companies to take a different approach to how they talk about the dangers

and responses to the potential impacts from AI. And that's it for what's news for this Thursday

morning. Additional sound in this episode was from Reuters. Today's show was produced by Hattie Moir.

Our supervising producer is Sandra Killhoff and I'm Daniel Bach for the Wall Street Journal.

We'll be back tonight with a new show. Until then, thanks for listening.