A.M. Edition for Mar. 26. Ratings company Moody's raises red flags over ballooning U.S. debt and the negative effects of tariffs. Plus, Vice President JD Vance announces he’ll join a controversial visit to Greenland this week, sparking anger and confusion on the island and in Denmark. And WSJ reporter Clarence Leong describes how China’s space industry is racing to catch up to SpaceX. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What economic concerns are raised by Moody's regarding U.S. debt?
Moody's raises red flags over ballooning U.S. debt and the negative effects of tariffs. Plus, anger and confusion in Greenland as Vice President Vance joins a planned visit to the island this week. And China's space ambitions take flight.
Chapter 2: How is China responding to U.S. advancements in space technology?
Beijing is aware that the U.S. is speeding ahead with SpaceX being the prime example. and it feels a sense of urgency to catch up.
It's Wednesday, March 26th. 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 Trump administration is further limiting China's access to American technology, expanding a crackdown that began during Joe Biden's term.
Chapter 3: What measures is the Trump administration taking against Chinese tech companies?
Eighty companies and institutes have been added to the export control list, including a U.S. affiliate of China's Inspur Group that is a large buyer of NVIDIA chips. China tech reporter Lisa Lin says the move closes loopholes that had left room for blacklisted companies to still buy U.S. technology.
This is probably one of the earliest signs from the Trump administration that they are ready to play hardball when it comes to U.S.-China tech competition. Let's not forget that even though China's been on his radar over the last couple of months, it's mostly been about trade and not tech.
So what this new rule does now is to give us an indication of how the Trump team may react when it comes to dealing with sales of advanced technology to China in the future.
A spokesman for China's foreign ministry called the U.S. action, quote, typical hegemonic behavior that severely violates international law. Ratings company Moody's is warning that America's fiscal strength is in for a multi-year decline amid the widening U.S. budget deficit and falling debt affordability. Journal reporter Caitlin McCabe has more.
Chapter 4: Why does Moody's warn about the U.S. fiscal outlook?
I think it's important to start with a bit of context. Moody's had assigned what it calls a negative outlook for America's sovereign rating in November 2023. And it has remained the last of the credit rating agencies to maintain its AAA rating on the U.S. Both Fitch and S&P had issued downgrades in the past.
And so now what Moody's is saying is that this toxic combination of widening federal budget deficits, a rising debt burden, and falling debt affordability has given the agency concerns about America's fiscal strength.
And Caitlin says the report forecasts ways that policy changes out of Washington could complicate the situation further.
Specifically, Moody's points to sustained high tariffs as well as unfunded tax cuts, meaning that there's this expectation that that there will be a full extension of the 2017 tax cuts that are set to expire at the end of this year. But Moody's warns that these may not be sufficiently offset by other revenues.
The Moody's report also says it expects GDP growth to moderate to 2% this year and 1.8% the year after that. And it says that even in its most optimistic scenarios, the U.S. remains still materially weaker than other AAA-rated sovereigns.
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Chapter 5: What are the latest developments in the Boeing 737 MAX legal case?
The federal judge overseeing the criminal case against Boeing has ordered a trial over two deadly crashes of 737 MAX jets. Yesterday, we reported the aerospace giant had been seeking to withdraw an earlier agreement to plead guilty for deceiving regulators before the crashes, which killed 346 people.
Boeing and the Justice Department were expected to propose changes to the settlement by April 11th, but a judge has now scrapped that deadline and ordered the sides to prepare for a trial in June, increasing the odds that Boeing will have to plead guilty or defend against a charge it already said it committed.
Boeing said in a written statement that it continues good-faith discussions with the Justice Department, while a spokeswoman for the department declined to comment. Vice President J.D. Vance is joining his wife, Second Lady Usha Vance, on her upcoming trip to Greenland, testing already strained relations between the U.S.
and European allies as President Trump doubles down on his wish to own the self-governing Danish territory.
And you know, there was so much excitement around Usha's visit to Greenland this Friday that I decided that I didn't want her to have all that fun by herself, and so I'm going to join her.
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Chapter 6: Why is Vice President JD Vance's visit to Greenland controversial?
Vance made that statement in a video on his ex-account. Greenland has denounced the visit, which the White House said would include National Security Advisor Michael Waltz and Secretary of Energy Chris Wright as, quote, highly aggressive. The U.S. has now shifted the visit's focus from a celebration of Greenlandic culture to one of national security.
And according to White House officials, the Vances will be visiting American soldiers at a U.S. military base.
We want to reinvigorate the security of the people of Greenland because we think it's important to protecting the security of the entire world.
Danish Prime Minister Meta Fredriksen dialed up the rhetoric against Washington yesterday, saying that the scheduled visit puts completely unacceptable pressure on both Greenland and Denmark. Trump on Monday rejected the notion that the upcoming visit was a provocation. Despite the lack of an official invitation, he claimed that the delegation has been invited by people in Greenland.
Back in Washington, President Trump signed a raft of executive orders yesterday, including one that could overhaul how American elections are carried out, marking a major push in executive branch influence over voting processes typically administered by states.
The order creates new proof of citizenship requirements for those registering to vote through federal forms, enlists the DOJ and the Commissioner of Social Security to find ineligible voters, and directs federal election funding to be withheld from states that count mail-in or absentee ballots received after Election Day.
The directive is likely to be challenged in court, and some left-leaning advocacy groups said the president lacked the authority to issue it in the first place. And in a separate order yesterday, Trump widened his retribution campaign against law firms that he perceives as enemies, stripping security clearances from lawyers at Jenner and Block and restricting them from access to federal buildings.
The firm recently backed lawsuits challenging the administration's policies on behalf of transgender individuals and asylum seekers and has ties to Andrew Weissman. a top member of the special counsel investigation into Russian interference in the 2016 election.
The order follows moves punishing other major law firms, including Covington & Burling, Perkins Coie, and Paul Weiss, though the order against Paul Weiss was rescinded after it cut a deal with the White House to provide pro bono services to support the administration's initiatives. Coming up, we'll go inside China's efforts to challenge SpaceX as Beijing gives a boost to private rocket companies.
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