Trump Fires Kristi Noem as Homeland Security Secretary

0:00Chip Cutter:Instagram teen accounts default teens into automatic protections for who can contact them and the content they can see.

0:07Rolfe Winkler:Explore teen accounts and all of our ongoing work to protect teens online at Instagram.com slash teen accounts.

0:18Rolfe Winkler:Kristi Noem 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.

0:28Chip Cutter:Apple is going to also face higher costs, but they just have more capability to withstand it and to use it as a weapon.

0:37Rolfe Winkler:And U.S. 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 Oselev 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.

1:01Rolfe Winkler:President Trump has removed Kristi Noem 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 Mullen of Oklahoma. Trump had previously defended Noem, despite widespread criticism of how she handled the immigration enforcement operation in Minneapolis that left two U.S. 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 Noem has attempted to burnish her personal stardom.

1:35Rolfe Winkler:Advisors familiar with Trump's thinking said that the final straw for the president was Noem's combative hearing on Tuesday before the Senate Judiciary Committee. She was questioned by Senator John Kennedy, a Republican from Louisiana.

1:46Chip Cutter: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.

1:59Rolfe Winkler:Did it correct? Did the president know you were going to do this? Yes.

2:02Chip Cutter:He did? Yes.

2:04Rolfe Winkler:OK. Trump was upset and told senators and advisers he had not signed off on such a campaign. Trump said in a social media post today that Noam will have a role in a new security initiative he plans to announce on Saturday. Posting on social media this afternoon, Noam thanked Trump for her new appointment and said she had made historic accomplishments in her time at the Department of Homeland Security.

2:29Rolfe Winkler:On day six of a conflict in the Middle East, Israel and Iran continued to exchange attacks. Azerbaijan 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.

3:03Rolfe Winkler:Chip Cutter, who covers workplace issues for the journal, has spoken to some.

3:06Chip Cutter:So for many of these employees, this was the first time they had 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've 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?

3:38Rolfe Winkler: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.

3:52Chip Cutter: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 via flights. It could be via land. And the CEO of KPMG in the U.S. told me that essentially they just wanted to do whatever was possible to keep their workers safe. I talked to some security officials who said, for example, they were advising to have a go bag ready. There's been a lot of planning, a lot of trying to just keep in close contact with employees knowing this is all really fluid and changing so quickly.

4:33Rolfe Winkler:Two dozen states have filed a lawsuit challenging President Trump's new 15 percent global tariff. The president imposed the tariff after the Supreme Court struck down an earlier set of levies. That decision sent companies scrambling to get back the tariffs 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.

5:07Rolfe Winkler: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. Anthropik said last week it would challenge the designation in court. And House Speaker Mike Johnson and top Republican leaders asked Texas Representative Tony Gonzalez to drop his re-election bid, a day after he admitted to having an affair with an aide who later killed herself.

5:42Rolfe Winkler:Gonzalez this week advanced to a runoff in the Texas Republican primary. Gonzalez's 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.

6:26Chip Cutter:Would you like fresh towels? It matters where you stay. Book now at Hilton.com. Hilton, for this day.

6:40Rolfe Winkler: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 ouster 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.

7:04Rolfe Winkler:The continuing conflict in the Middle East weighed on stock markets today. The Dow fell 1.6 percent, or 785 points, while the S &P and Nasdaq both fell by less than 1 percent. U.S. oil prices rose 8.5 percent 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 effective 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.

7:46Rolfe Winkler: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?

8:12Chip Cutter: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.

8:36Rolfe Winkler:And what about for the iPhone?

8:38Chip Cutter: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.

9:01Rolfe Winkler:Yeah, let's talk about that memory crisis a little bit. So the costs 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?

9:16Chip Cutter: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.

9:59Chip Cutter: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. So all of a sudden the gap with an iPhone 17e is going to be smaller. So Apple can use the memory crisis. People who haven't thought about coming into the iOS universe, maybe they'll make that switch.

10:38Chip Cutter:And you could say the same for this new low-level Mac.

10:44Rolfe Winkler:That was WSJ reporter Rolf Winkler. Thanks, Rolf.

10:47Chip Cutter:Yeah, sure, Alex.

10:48Rolfe Winkler:And that's What's News for this Thursday afternoon. Heads up that we dropped a special bonus episode earlier today. In the latest What's News and Earnings, we look at what's dominated the media industry this earnings season? Murder drama. That's in your What's News feed now. Today's show is produced by Pierre Bien-Aimé with supervising producer Tali Arbel. I'm Alex Osilev for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

11:41Chip Cutter:Transcription by CastingWords navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash take on the week to subscribe now.