U.S. and Israel Consider Attacks on Iran’s Economy

0:00In a world full of noise, long-term thinking stands out. On the Capital Ideas Podcast, Capital Group leaders explore the decisions that matter most, in investing, leadership, and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years. Listen to the Capital Ideas Podcast, from Capital Group, published by Capital Client Group Inc. President Trump pledges to destroy Iran's power plants in less it opens the straight of hormones, plus Jamie Diamond warns of an inflation run-up stemming from the war, and the Trump administration goes to bat for American cheese makers, raising a stink in Europe. The United States government has probably never really taken this level of consistent action to try to make sure that American cheese makers are not discriminated against international markets.

1:00It's Monday, April 6, I'm Luke Varquez 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. President Trump is due to hold a press conference on the Iran War this afternoon, likely detailing the rescue of an American aviator who had been trapped in Iran for more than 36 hours, and potentially providing an update on diplomatic dealings with Tehran. In an interview with Fox, Trump reportedly said that the U.S. could reach a deal with Iran as soon as today, even as he threatens to escalate the conflict. Trump has given Iran until Tuesday evening to reopen the straight of hormones, and saying that hell will rain down if they don't. And in an expletive laden follow a post yesterday, he promised to destroy Iran's energy sites and bridges if the waterway isn't opened. correspondent Dove Lieber said the warning comes as both the U.S. and Israel have drawn up plans to shift the war into a new phase that's focused on striking civilian infrastructure.

2:00The Israelis tell me that they have plans to hit Iranian energy facilities, that's something that they promised they would hold off doing after Trump, but ask them to following a strike on Iranian gas field. But now they've got new plans, and they're waiting for permission from Washington to hit those energy facilities, and what's happening here is that both the United States and Israel are looking for a new type of leverage, a leverage they haven't been able to gain by going after pure military sites. The U.S. is conducting talks with Iran, but those don't seem to be going very well. And I think the two sides are hoping that by striking these infrastructure sites, they will be able to increase the pain on the Iranian government and hopefully buy themselves some leverage. Both U.S. and Israeli officials have brushed off concerns that attacking civilian infrastructure risks violating international law, saying they're legitimate targets because they produce material used by Iran's military. However, Dove told me that pulling the trigger against civilian targets risks putting economic facilities of importance to the U.S. and its allies in the crosshairs.

3:01There's no guarantee that even if Israel and the United States hit all of these sensitive energy sites and infrastructure that the Iranians are going to give up anyway, and the Iranians are promising to retaliate in kind across the region in a way that will seriously affect the regional economy as well as the global economy, potentially for many months or years to come. And so we're getting into a new type of escalation here where there can be a lot of economic pain on both sides, and it's not clear whether that will actually bring us to a resolution either way. In addition to warnings from Iran's military, an Iran-backed militia in Iraq has pledged to attack energy infrastructure across the Middle East should the U.S. try to open the Strait of Hormuz by force, according to a statement posted by Iranian state media. And while Japan appears to be hoping that diplomacy can help unblock its oil exports trapped in the Gulf, with Prime Minister Sinai Takaichi saying that her government is seeking talks with Tehran to secure the release of vessels stuck in the vital shipping lane. She added that she wants to see all vessels released from the Strait, regardless of their

4:04nationality, though it's an outcome that appears increasingly unlikely without a change in direction from Iran. This revolutionary guard corps navy said yesterday that it's working to enforce a new security order in the Persian Gulf, and that the Strait would, quote, never return to its previous condition. It was correspondent Sunar Asmusin. The biggest unknown in this, of course, is Iran. And I think a lot of shippers and insurance companies will not be willing to take on the risk of resuming shipping in the Strait if they don't have guarantees from Iran that Iran will not fire at ships. So in a sense, it's also up to Iran to declare when the war is over. The U.S. is definitely the dominant military power here. But Iran has the ability to escalate things in the Persian Gulf, in the Strait of Hamuz, and as long as Iran doesn't agree to cease hostilities or to cease threats against ships going through, well, then the uncertainty remains for international shippers. A very important factor is going to be the amount of international pressure that's put

5:07on Iran. And China is a major customer of Middle Eastern oil, and it's also an important economic partner and political partner of Iran. So going forward, I would definitely be watching for whether China's step someone is willing to exert enough pressure on Iran to get this problem solved. Chinese flag vessels are among a limited number of ships that have been allowed through the Strait in recent weeks. Meanwhile, oil futures are a little changed. After this weekend's escalatory rhetoric, despite an agreement by a group of OPEC-plus countries to raise oil production by more than 200,000 barrels a day starting next month, their second consecutive such move. And JP Morgan Chase's Jamie Diamond is warning of more oil and commodity price shocks in the months to come. In his annual shareholder letter, Diamond warned that the war could lead to prolonged inflation and ultimately higher interest rates, calling that a skunk at the party scenario that could drag down financial markets this year. US inflation figures will be in focus at the end of this week, with February's PCE price

6:11index due out on Thursday, followed by the Consumer Price Index on Friday. Coming up, the Trump administration requires trading partners to accept America's view on generic names for cheeses, including Osceago and Parmesan and NASA astronauts head to the dark side of the moon, those stories and more, after the break. What defines a cheese-like Parmesan? According to the US government, it's the product itself, rather than where it's made, a view that runs counter to the European Union's policy on protecting regional provenance. In an effort to boost global sales of US-made cheese, the Trump administration is now requiring trade partners to accept America's view on cheese names like Feta, Bri, and Parmesan. Journal reporter John Emont says the effort aims to protect American cheese makers, many of whom are large and efficient from international discrimination, though the move faces significant

7:11pushback. If you take a cheese-like Feta, the European Union's policy is that Feta can only come from specific areas of Greece, and so when they sign trade deals with foreign countries, they frequently require these other countries to accept the European Union definition of what Feta is. What that means is if you're a Feta producer in, say, Wisconsin or Vermont, you can't sell your Feta into the market on what you call something different, like a crumbly hard cheese or something. Parmesan is another one that sometimes comes up in these discussions because American Parmesan producers can access a lot of foreign markets because of rules that originated in the European Union, which say that these cheeses like Parmesan only come from Northern Italy. American cheese makers are very excited because going forward, it looks like they're going to just have a lot more market access and in some very big dairy markets, places like Argentina, like Indonesia, like Malaysia, like Taiwan.

8:12We're exclusively reporting that three sovereign wealth funds led by Saudi Arabia have agreed to back Paramount's $81 billion takeover of Warner Brothers Discovery. The agreements could help to offset the cost to the Ellison's and Redbird Capital partners, which is also backing the deal. The Gulf investors won't have voting rights in the new Paramount Warner entity, and their involvement is not expected to trigger reviews by the Committee on Foreign Investment or the Federal Communications Commission. Thousands of striking beef plant workers in Colorado, Mar, set to return to work today ending a three-week walk out at a slaughterhouse owned by JBS. The union representing the 3,800 workers set over the weekend that they would resume their shifts as contract negotiations with the world's largest meat packer are set to restart later this week. And drinks giants Pepsi and Diagio have pulled their sponsorship of a summer music festival in London after Kanye West was announced as a headliner to perform all three days of

9:12the event. British Prime Minister Kear Starmer has also criticized the decision to book West, who now goes by E, and who's been promoting a new album. West has been trying to repair his image after years of controversies, including denying the Holocaust. In January, he took out a full-page ad in the Wall Street Journal, where he blamed his behavior and anti-Semitic views on his bipolar disorder. Representatives for the Wireless Festival and the Rapper didn't respond to requests for comment. To the Artemis 2 mission now, as NASA astronauts are set to make history with a lunar fly-by that will break a distance from Earth record currently held by the Apollo 13 mission. It was NASA's Laurie Glaze speaking yesterday in Houston. So we're really gearing up now for what's going to be an exciting lunar fly-by tomorrow. Our flight operations team and our science team are ready for the first lunar fly-by in more than 50 years. For the three Americans and one Canadian on board, the six-hour journey will offer unprecedented

10:16views of the Moon's far side, regions that were either too dark or too difficult for previous Apollo astronauts to see. And speaking of out of this world, there's a huge universe out there. The Super Mario Galaxy movie has achieved the biggest box office opening so far of 2026, with estimated global earnings topping $370 million. The success of a second film, around a more than 40-year-old Nintendo game, reflects a trend around video games, driving theater attendance, after last year's a Minecraft movie based on the Microsoft series grossed more than $960 million globally. According to ComScore, total domestic box office this year is up 26% from a year earlier. And that's it for what's news for this Monday morning. Today's show was produced by Heidi Moyer. Our supervising producer was Daniel Bach, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.