OECD Warns of Recessions If Iran War Drags On

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Harvard Business School Executive Education delivers a world-class learning experience that energizes aspiring and established changemakers. Prepare for the next elevation for your organization and for yourself. Learn more at hbs.me slash breakthrough. That's hbs.me slash breakthrough.

Luke Vargas (0:18)

We'll take stock of yesterday's primaries as vote counting continues in California and the president's pick to be Iowa's next governor falters. Plus, the US proposes new tariffs on top trading partners, and the OECD warns of multiple recessions if the war in Iran continues.

Paul Hannon (0:37)

If it stretches well into 2027, then you would see severe slowdowns in global economic growth, and that would make it the weakest year this century, with the exception of COVID and the global financial crisis.

Luke Vargas (0:51)

It's Wednesday, June 3rd. 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.

We begin in California, where Republican Steve Hilton and Democrat Javier Becerra are leading in the race to succeed Governor Gavin Newsom. Results from yesterday's primary are still coming in, though Hilton, a former Fox News host, was optimistic of his chances of emerging as one of the top two vote-getters and leaned into his endorsement from President Trump.

Steve Hilton (1:24)

The most important thing is the results that the next governor gets for the California people. And I think it's going to be very helpful in a practical way to have a governor that has a good constructive relationship with the administration in Washington.

Luke Vargas (1:38)

Former Health Secretary Becerra has taken a surprise lead in a crowded field of Democrats, and if elected would become the state's first Latino governor since the late 1800s.

Javier Becerra (1:48)

California is bigger than Trump. Our values are undeniable and undeportable.

Luke Vargas (1:58)

Meanwhile, in LA's mayor's race, incumbent Democrat Karen Bass has advanced to a runoff election. It's not yet clear who shall face in that vote, though former reality star and Republican candidate Spencer Pratt is currently in second place as counting continues.

And in a close Republican gubernatorial primary in Iowa, Trump-backed Representative Randy Feenstra has come up short against businessman and farmer Zach Lane, marking a rare rebuke for the president. Lane had won the backing of Charlie Kirk-founded Turning Point Action and campaigned on an Iowa First message, which he emphasized at a victory rally last night heard here courtesy of KCCI-TV.

Zach Lane (2:37)

I'll tell you this, but nobody thought this could be done. We were outspent, opposed by the establishment, told to wait our turn.

Well, tonight, the people of Iowa had something to say about that, that we're not going to wait anymore.

Luke Vargas (2:51)

Lane is set to face Democratic state auditor Rob Sand in November, a race that analysts have rated a toss-up.

The US. Supreme Court has allowed Alabama to use a congressional map that eliminates a Democratic-leaning seat, giving Republicans the upper hand in a redistricting battle after a similar court win in Virginia. Despite those judicial setbacks, political analysts say that Democrats still have a strong chance to win the US. House, driven by President Trump's negative approval ratings. The effect fell from the Iran conflict and greater enthusiasm among voters for a party out of power. And veteran 60 Minutes correspondent Scott Pelley was fired by CBS News on Tuesday after publicly attacking the leadership of editor-in-chief Barry Weiss and new executive producer Nick Wilton at a staff meeting. Pelley claimed he was terminated for political reasons, accusing management of eroding the show's standards to quote, ...curry a moment of favor with the Trump administration. A spokeswoman for CBS parent Paramount didn't immediately comment. Coming up, the Trump administration proposes new tariffs for 60 countries, including several top trading partners. That and the rest of the day's news after the break.

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Luke Vargas (4:28)

The US is proposing tariffs of at least 10% on major trading partners, including Canada, Mexico, the UK and EU, following an investigation into goods allegedly produced by forced labor. The report from the Office of the US. Trade Representative also proposed a 12.5% tariff on a raft of other countries, including China, Japan, India, and South Korea. And here to break this down is friend of the pod, Dow Jones, economics editor Paul Hannon.

Paul, we mentioned actually on yesterday's show that these exact Section 301 tariffs could be coming, so I guess they're far from a surprise. I mean, yeah, it's one thing to talk about them in the abstract and yet another when they are formally proposed. What should we make of these findings from the USTR?