Trump Fires Kristi Noem as Homeland Security Secretary

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Kristinaum is out as the Secretary of Homeland Security.

Plus, how Apple is using lower prices on iPhones and MacBooks to go after market share and

hurt its rivals.

Apple is going to also face higher costs, but they just have more capability to withstand it

and to use it as a weapon.

And US stocks plunge as the Middle East conflict widens and the region's flow of oil remains blocked.

It's Thursday, March 5th.

I'm Alex Osalep for the Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that

move the world today.

President Trump has removed Kristinaum as a Secretary of Homeland Security, the first

Cabinet Secretary to be fired by Trump in his second term.

Trump is replacing her with Republican Senator Mark Wayne Mullin of Oklahoma.

Trump had previously defended Nome, despite widespread criticism of how she handled the

immigration enforcement operation in Minneapolis that left two US citizens dead.

Her chaotic leadership style has come under scrutiny over the past year, and she had lost

the confidence of almost all Trump's senior aides.

The journal last month reported on how Nome has attempted to burnish her personal stardom.

Advisors familiar with Trump's thinking said that the final straw for the president

was Nome's combative hearing on Tuesday before the Senate Judiciary Committee.

She was questioned by Senator John Kennedy, a Republican from Louisiana.

The president approved ahead of time, you spending $220 million, running TV ads across the

country in which you are featured prominently.

Yes, sir.

We went through the legal processes.

Did it correct me?

Did the president work with OMV?

Yes.

He did.

Yes.

Okay.

Trump was upset and told senators and advisors he had not signed off on such a campaign.

Trump said in a social media post today that Nome will have a role in a new security initiative

he plans to announce on Saturday.

Posting on social media this afternoon, Nome thanked Trump for her new appointment and said

she had made historic accomplishments in her time at the Department of Homeland Security.

On day six of a conflict in the Middle East, Israel and Iran continued to exchange attacks.

As Erbazhan said it would respond after it was hit by Iranian drones, and Saudi Arabia

said it intercepted missiles and drones.

The U.S. closed its embassy in Kuwait, and President Trump told the news site Axios that

he must be involved in picking Iran's next leader.

His comments come despite top administration officials denying that the U.S. effort is

about regime change in Iran.

And across the Middle East, thousands of expat workers are navigating a conflict at their

doorstep while also trying to do their jobs.

Chip Cutter who covers workplace issues for the journal has spoken to some.

So for many of these employees, this was the first time they'd ever been in a situation

like this.

They were drawn to places like Dubai in particular, one of the world's biggest workplaces

for multinationals.

And so I talked to a number of expats who said they just didn't know what to do.

They're hearing loud booms overhead.

Some workers actually put a mattress up against the windows of their apartment.

They were worried about blast and what might happen there.

It's forced a lot of families and workers to think through what are we comfortable with?

Are we safe?

And what do we do next?

Nearly 20,000 Americans have returned to the U.S. from the Middle East and flights are

resuming across the region.

But flying is still tricky with missile and drone attacks scrambling airlines plans.

Chip says that's made it hard for expats to get out.

That's been very challenging with so many flights canceled companies like the professional

services firm KPMG.

They used various methods to get their workers out of places like Doha and Dubai and Abu

Dhabi.

It could be a flight.

It could be a land.

The CEO of KPMG in the U.S. told me that essentially they just wanted to do whatever was possible

to keep their worker safe.

I talked to some security officials who said, for example, they were advising to have a

go-back ready.

There's been a lot of planning, a lot of trying just keep in close contact with employees

knowing this is all really fluid and changing so quickly.

Two dozen states have filed a lawsuit challenging President Trump's new 15% global tariff.

The president imposed the tariff after the Supreme Court struck down an earlier set of levies.

The decision sent companies scrambling to get back the tariff they had paid, and a federal

judge this week ordered the administration to start refunds.

Today's lawsuit was filed in the Court of International Trade.

It says the new tariff is a misapplication of a 1974 trade law.

It also says the tariffs violate the Constitution in the same way that Trump's earlier tariffs

did.

Because the lawsuit says Congress is responsible for imposing tariffs.

The White House says the administration will defend the new tariffs in court.

Elsewhere in Washington, the Defense Department has officially told Anthropic it is a supply

chain risk, an action normally reserved for businesses from foreign adversaries.

That cuts Anthropic off from partners who work with the Pentagon and could affect other

companies and investors.

Anthropic said last week it would challenge the designation in court.

And House Speaker Mike Johnson and top Republican leaders asked Texas representative Tony Gonzales

to drop his reelection bid a day after he admitted to having an affair with an aide who later

killed herself.

Gonzales this week advanced to a runoff in the Texas Republican primary.

Gonzales spokeswoman today didn't immediately respond to a request for comment.

Coming up, the Middle East oil industry is in crisis, but Venezuela's exports are on

the rise.

And why Apple is rolling out cheaper iPhones and MacBooks?

That's after the break.

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The conflict in the Middle East has left the global oil market reeling, but more crude

is coming from an unlikely source, Venezuela.

Months after the aster of Nicolas Maduro, U.S. imports of Venezuelan oil have climbed to

their highest level in more than a year.

American fuel makers are snapping up the rising supplies of Venezuela's heavy crude that

their refineries were designed to process.

The continuing conflict in the Middle East weighed on stock markets today.

The Dow fell 1.6% or 785 points while the S&P and NASDAQ both fell by less than 1%.

U.S. oil prices rose 8.5% to more than $81 a barrel.

Their highest price since July 2024 and the biggest one-day jump since 2020.

And Brent crude, the global energy benchmark, climbed above $85 a barrel.

The effect of closing of the Strait of Hormuz has trapped thousands of ships in the Persian

Gulf, forcing Gulf producers to slash output and Asian refiners to hunt for alternative

supplies.

When Apple announced new products this week, the lineup came with some changes, the return

of bright colors and some lower than usual prices for the company.

The starting price for its new entry-level iPhone, the 17E, is $599, the same as last

year's model.

And the entry-level MacBook Neo laptop also costs $599.

Rolf Winkler covers Apple for the journal and joins me now.

Rolf Apple is of course known for its pricey premium products.

Why is Apple selling these cheaper devices now?

What is its business strategy?

I think they want market share.

The 17E and this new low-end Mac, they're a play for share.

Apple used to be very dominant in education.

But then over time, the education market became dominated by Chromebooks, by PCs.

They're much cheaper.

Now the MacBook, we're looking at one that's $599 and $499 for education, it's much more

in reach.

And what about for the iPhone?

The 17E, this is following from the success of the 16E, which has been a popular device

for Apple in places like Japan, the US.

Now they can attack the market in China with this too, especially because right now there

is a memory crisis.

And that's going to cause Apple's rivals to raise prices.

Yeah, let's talk about that memory crisis a little bit.

So the cost for the components inside Apple's devices are rising.

How is Apple dealing with those rising costs at the same time as it's pitching us those

relatively low-cost phones and computers?

What happens to its profit margins?

Well, on these devices, they're not going to be very good.

But Apple has premium devices where their profit margins are just fine.

The companies that are going to be in most trouble in the smartphone market are the ones

that sell low-end Android.

Android phones for under $100 are no longer economic because of the cost of memory, which is

what you put in devices to make apps run faster and storage, which is how you keep photos

and videos on your device.

The prices of both have skyrocketed because of AI demand.

Servers are, these are all computers, they all need memory, they all need storage.

And AI demand is taking what supplies available on the market and making it much harder for

device makers to afford the stuff that goes into their devices.

And Apple is not immune to that, Apple is going to also face higher costs, but they just

have more capability to withstand it and to use it as a weapon.

So in China, for instance, the low-end of the market is going to get blown out.

Meanwhile, the mid-range of the market is going to have to raise prices because they don't

have the luxury of this really great premium product portfolio that Apple has to carry the

profit load, right?

They have to raise prices.

All of a sudden, the gap with an iPhone 17 E is going to be smaller.

So Apple can use the memory crisis people who haven't fought about coming into the iOS

universe.

Maybe they'll make that switch.

And you could say the same for this new low-level Mac.

That was WSJ Reporter, Wolf Winkler.

Thanks, Wolf.

Yeah, sure, Alex.

And that's what's news for this Thursday afternoon.

Heads up that we dropped a special bonus episode earlier today.

In the latest WSJ earnings, we look at what's dominated the media industry this earnings

season?

Murder drama.

That's in your WSJ speed now.

Today's show is produced by Pierre Bienna-May with supervising producer Tally Arbel.

I'm Alex Osele for The Wall Street Journal.

We'll be back with a new show tomorrow morning.

Thanks for listening.

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