TheChek News Flow

Collapse of U.S. commercial shipping and shipbuilding poses national-security risk, says growing chorus in Washington

Rising tensions with China are prompting Washington to revisit America’s roots as a trading nation of the seas.

Protecting merchant sailors and their cargo was what compelled Congress to commission the U.S. Navy’s first new warships. That was in 1794, targeting North African Barbary pirates. The young republic’s seaborne traders, a linchpin of economic growth, were vital to national security.

The Navy became a mighty global fighting force. America’s commercial cargo fleet has withered almost to nonexistence.

Now politicians are once again linking national security to a vibrant maritime sector—nonmilitary aspects of the seas—and the benefits it brings to everything from shipbuilding to logistics chains. Washington is seeking ways to reverse its collapse by tapping examples from other industries, encouraging links with shipbuilding allies and plumbing the writings of America’s greatest sea strategist.

No nation has ever successfully ranked as a world naval power without also being a global maritime power. Countries that tried but failed to project seaborne might without robust commercial sea networks include the Soviet Union, Nazi Germany and Spain before the Spanish-American War.

Not long ago, America led the world in sea freight. At the end of World War II, the U.S. commercial marine fleet accounted for about half of the world’s cargo-shipping capacity. An American entrepreneur in the 1950s pioneered the shipping container, which revolutionized international commerce.

The Navy today expends vast resources from the Red Sea to the South China Sea defending the freedom of navigation, but few ships being protected fly the American flag.

U.S. commercial ships today account for less than 1% of the world fleet. U.S. ports are racked by strikes and battles over the type of automation that has supercharged expansion of container terminals across the globe. The Navy struggles to find commercial vessels to support its far-flung operations.

China, meanwhile, dominates both shipping and shipbuilding. Beijing heavily subsidizes its maritime sector, in turn boosting the efficiency of its breakneck naval shipbuilding campaign. President-elect Donald Trump recently expressed a desire to regain control of the Panama Canal, pointing to China—a top user of the waterway—as part of his thinking.

U.S. private shippers succumbed to economic forces of globalization after the Cold War, when government support shrank. Now calls are increasing for Washington to help resurrect U.S. commercial shipbuilding and freight hauling.

Secretary of the Navy Carlos Del Toro has advocated a focus on “maritime statecraft,” stressing commercial shipping’s importance to the Navy in tasks including refueling ships and carrying vital military supplies. He has pushed to support American shipyards that build not just warships but also commercial vessels.

And he has championed expanding the U.S. Merchant Marine, a corps of commercial sailors who can assist the Navy in wartime and whose ranks have plunged over recent decades. Government and industry officials estimate the U.S. now has fewer than 10,000 merchant mariners, compared with roughly 50,000 in 1960.

“I’m not foolish enough to think it’s going to be easy,” said Del Toro in an interview aboard a Navy cargo ship. “But we’ve got to start somewhere.”

That start, Navy and industry officials hope, is a piece of legislation recently introduced by Sens. Mark Kelly (D., Ariz.) and Todd Young (R., Ind.) and two House members, the Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act. If passed, it would be the first major piece of maritime legislation since 1936.

The SHIPS Act, as it is known, aims to revitalize shipbuilding and shipping over more than a decade while rebuilding the merchant marine. It calls for resources and White House-level involvement comparable to policies on energy, semiconductors and aviation. Del Toro, whose term ends with the Biden administration, and his advisers helped shape the legislation. Dozens of other government offices and trade groups also weighed in.

Kelly, a Navy veteran and the first graduate of the U.S. Merchant Marine Academy to serve in Congress, said he was motivated by what he sees as a dangerous imbalance: China has more than 5,500 oceangoing merchant vessels in international trade while the U.S. has 80.

“It’s a major problem for us, especially if we wound up in a conflict or we wind up in a situation where China decides for whatever reason that they want to, you know, stop our economy and put brakes on it in a big way,” Kelly said in an interview. “They have the ability to do that.”

The bill’s prospects in a fractious Congress are uncertain. Supporters say its sponsorship from both parties and both houses is a positive. A sign that it may win favor from the incoming Trump administration is that Kelly’s early partner in drafting the bill was Rep. Mike Waltz (R., Fla.), whom Trump has nominated as his national security adviser.

Waltz, in a September discussion of maritime strategy alongside Kelly, said that China is expanding its navy on the back of massive investment in commercial shipbuilding. “So a shipyard that can produce one of the world’s largest containerships can then pretty easily flip and produce an aircraft carrier, and do it at scale with the workforce, the steel, the aluminum, and the know-how that has been invested and paid for by their commercial shipbuilding industry,” he said.

Since the Cold War, most official U.S. thinking about presence on the seas focused on warships and what military strategists call “force projection,” or the ability to act militarily far from home. During the wars in Iraq and Afghanistan and smaller conflicts, Navy ships played a critical role.

China’s rise as a military rival to the U.S. prompted a push to modernize and expand the Navy. In late 2020, at the end of Trump’s first term, his administration called for a surge in Navy shipbuilding.

The Biden administration has followed its own plans toward similar objectives. Del Toro, while working to improve the Navy’s fighting capacity, has encouraged South Korea and Japan to invest in the U.S. maritime sector. South Korean conglomerate Hanwha on Dec. 19 closed a $100 million takeover of the Philly Shipyard, one of the country’s last producers of commercial ships, from Norwegian investors.

Commercial shipping’s importance to national security gained renewed attention during the Covid-19 pandemic, when the U.S. and allies faced shortages of necessities as basic as surgical masks. Alarm grew in Western capitals about China’s domination of the sea-freight business, ports and obscure specialties such as tracking cargo data.

Navy Secretary Del Toro, in a 2023 speech at Harvard University’s Kennedy School of Government, presented his vision of maritime statecraft, which he said should be based on more than a strong Navy and Marine Corps.

“It should also be equally strong on engagement in areas of economic development, trade and climate diplomacy to enable us to compete more successfully on a global scale,” he said.

Del Toro cited the writings of Alfred Thayer Mahan, a naval strategist who died in 1914 and whose work is drawing fresh attention. Mahan “argued that naval power begets maritime commercial power, and control of maritime commerce begets greater naval power,” Del Toro said.

China’s leadership, he said, “has read and studied Mahan’s theory, and their actions show it.”

America was then already a great maritime power. In the 1830s, East Coast shipwrights had developed clippers, speedy ships that let their users grab business by delivering cargo faster than rivals could.

To showcase U.S. shipbuilding prowess in 1851, the newly formed New York Yacht Club entered an English race attended by Queen Victoria, the Hundred Guinea Cup. The club’s innovation-packed yacht, America, blew past competitors from the era’s greatest naval power. The America’s owners took their trophy home and renamed it the America’s Cup.

Nearly a century later, during World War II, shipyards sprouted around the U.S. to make not just warships but also cargo carriers, known as Liberty Ships, designed to be built quickly. Rivalry among yards slashed production time from over seven months per ship to around six weeks.

At war’s end, the U.S. had roughly 4,500 commercial cargo ships and 75,000 merchant mariners. Those numbers shrank as ships grew in size and efficiency while international competition increased. Decisions by the Reagan administration in the 1980s to end subsidies for shipping and shipbuilding, in part to focus shipyards on a Navy expansion, accelerated the domestic industry’s decline.

Today the U.S. is the world’s leading exporter of liquefied natural gas, but doesn’t have a single LNG ship in its fleet, notes Carleen Lyden Walker, who leads a maritime trade group and this year helped draft a plan to support the sector, titled Zero Point Four, referring to the percentage of the world fleet of oceangoing cargo ships in U.S. hands.

“Our nation suffers from sea blindness,” said Lyden Walker, who works to promote high-paying but unfilled marine jobs. She said audiences she addresses have no idea that clothes, cellphones, fuel and fruit move by ship.

Advocates of maritime-industry support say quick action is vital because progress would be slow.

“One of the hardest things to do in this country is recreate a heavy industry,” said James Watson, a retired U.S. Coast Guard rear admiral who works with Lyden Walker and sees renewed attention to the sector as past due.

“Not thinking of the maritime industry as an important part of your economy, that’s kind of crazy,” he said.

Ahmed al-Sharaa outlines longer than expected transition after fall of Assad regime

Syria’s de facto leader Ahmed al-Sharaa has said it could take up to four years for the country to hold its first elections after the fall of former President Bashar al-Assad’s regime.

In his first comments on a possible timeline for key phases of the country’s political transition, Sharaa said “any valid elections will require a comprehensive population census”.

Drafting a new constitution could also take up to three years, said Sharaa, who formerly used the nom de guerre Abu Mohammad al-Jolani, in an interview with Saudi Arabian broadcasters al-Arabiya and al-Hadath on Sunday.

The longer than expected transition will concern western powers who have been urging Sharaa to form an inclusive administration. They are weighing the removal of sanctions on the Syrian state and terrorist designations on Sharaa and Hayat Tahrir al-Sham (HTS), the Islamist movement that led the lightning rebel offensive to unseat Assad.

Earlier this month, HTS appointed Mohamed al-Bashir as Syria’s interim prime minister,

Bashir, who led the civilian administration in Idlib, the north-west region that has been under HTS’s control for years, announced at the time that his cabinet, which is largely made up of HTS members who had roles in the former Idlib administration, would form a caretaker government until March next year.

Sharaa also addressed HTS’s dominant role in the transitional government, telling the broadcasters that “the current form of appointments was a necessity of the stage” and that a “quota system during this period would have destroyed the transitional work”.

Hadi al-Bahra, head of the Syrian National Coalition — an umbrella group of leading Assad opponents during Syria’s civil war — has called for all opposition parties to be included in the transitional government.

He also laid out an 18-month timeline for a political transition, including a six-month period for drafting a new constitution.

Sharaa also confirmed that HTS and other armed factions would be dissolved into new state authorities, although it is not certain whether Syria’s many factions will accept his initiative.

HTS’s dissolution will be announced at a National Dialogue Conference of leading opposition figures, ethnic and religious leaders and some Assad regime officials who did not have military or security roles.

The conference, a date for which has not yet been announced, is also expected to announce the dissolution of the former parliament and cancellation of the former constitution, along with the formation of an advisory council, organisers told Al Jazeera.

One of the most significant factions that remains outside Sharaa’s sphere of influence is the Kurdish-led, US-backed Syrian Democratic Forces, which control a large portion of the country’s north-east.

Sharaa said on Sunday that the HTS-led administration was negotiating with the SDF over the future status of the region. 

Lawmakers from Social Democrats and Greens criticise media group Axel Springer over publication of opinion piece

German politicians have criticised media conglomerate Axel Springer for publishing an opinion article by Elon Musk in praise of the far-right Alternative for Germany (AfD), as anger grows over the tech billionaire’s increasing advocacy of right-populist parties in Europe.

Matthias Miersch, general secretary of Germany’s ruling Social Democrats (SPD), said it was “shameful and dangerous” that Axel Springer had offered Musk a platform by publishing his article in one of its newspapers, Welt am Sonntag.

“It’s unacceptable that foreign billionaires try to influence our political landscape and support parties that undermine our democratic values,” he told the Handelsblatt newspaper.

Musk’s pro-AfD piece comes less than two months ahead of snap elections in Germany triggered by the collapse of chancellor Olaf Scholz’s three-party coalition. Polls have the AfD in second place behind the centre-right Christian Democrats, with Scholz’s SPD trailing in third place.

Andreas Audretsch, a senior Green MP who is leading the party’s election campaign, took to X to criticise the article.

“It damages our democracy when Herr Musk, the Chinese state or Moscow’s troll factories subvert our democratic discourse,” he said. “That’s why the right-wing extremists in the AfD like all that so much.”

Welt comment editor Eva Marie Kogel announced over the weekend that she was resigning, in a sign of the anger the decision to publish the Musk piece generated in the paper’s newsroom.

“Journalism lives off independence and credibility, Die Welt lives off its reputation,” said Mika Beuster, head of the DJV, the German journalists’ association. “All of that is being thrown, with a great clatter, in the dustbin.”

Musk, a close adviser to US president-elect Donald Trump and a friend of Axel Springer chief executive Mathias Döpfner, used the op-ed article to praise the AfD, large parts of which have been designated extremist by German domestic intelligence and placed under surveillance. The party has also advocated the mass deportation of foreigners.

Musk described Germany as being on the brink of economic and cultural collapse and said the AfD was the “last spark of hope” for the country, praising its policies of market deregulation, tax cuts and cutting red tape, as well as its opposition to immigration. 

He also dismissed the idea that the AfD was “right-wing extremist”, noting that its co-leader, Alice Weidel, is in a same-sex relationship with a woman from Sri Lanka. “Does that sound to you like Hitler? Please!” he wrote.

Musk is heavily invested in Germany, where Tesla has built its first European gigafactory. But his plans to expand the plant, in Brandenburg, ran up against stiff local resistance this year, including from AfD politicians in the state.

The publication of the article came just over a week after Musk retweeted a video by a German rightwing activist, adding: “Only the AfD can save Germany.” Weidel responded: “Yes! You’re absolutely right!”

The AfD is the latest European hard-right organisation to win Musk’s support.

Nigel Farage recently suggested that Musk could donate to Reform UK, telling the BBC that his party was in “ongoing negotiations” with the tech mogul after the pair met at Trump’s Mar-a-Lago estate.

He also waded into the spat between Farage and Conservative party leader Kemi Badenoch, putting a fact-check alert on Badenoch’s tweets in which she claimed that Reform UK had faked its membership numbers. 

Earlier this year, Musk praised Italy’s far-right prime minister Giorgia Meloni, describing her as “someone who is even more beautiful on the inside than she is on the outside” and “authentic, honest and thoughtful”. She reciprocated by praising his “precious genius”.

Insiders at Axel Springer, which also owns Politico, rejected the criticism that, by publishing the article, they were giving a platform to Musk and the far right.

“He’s the owner of Twitter and with one tweet he can reach 200mn people,” said one. “Who is Welt to give him a platform? He is a platform. Better to publish this on our platform where we can guard it and flank it with our own opinion.”

Russian media has picked up on a report in Germany's Bild newspaper which highlights a German government assessment saying the country is defenseless against the Russian Oreshnik missile system.

"The Patriot is not right to combat longer-range ballistic missiles, such as the Oreshnik," Bild quoted a government document as saying, in reference to the US-supplied air defense missile system. "Any interception would be more like sheer luck."

The report further underscored that currently Germany has no effective method of intercepting an inbound ballistic missile, following decades of a 'neutral' and degraded post-WWII military.

"The order came without any specific reason, such as an upcoming trip. It is unclear why the German Foreign Ministry wanted to document this defense gap in Germany. After all, these facts are known to the Ministry of Defense, and appropriate measures have long been taken," a military expert was cited in Bild as explaining of the context of the document.

Berlin has over the last few years since the start of the Ukraine war been rapidly seeking to build its defenses and expand military spending.

The fact that Russia has already used the Oreshnik hypersonic ballistic missile in Ukraine on more than one occasion has likely put greater fear and urgency in European defense officials. Moscow was sending a big 'message'.

Russian state media sources have touted that the Oreshnik reaches speeds greater than Mach 10+, and can reach 5,500km in distance, or 3,400+ miles (as a medium-range weapon).

A retired Russian Army colonel and military analyst, identified as Viktor Litovkin, has described, "The West does not have missiles that fly at such a speed or hypersonic missiles at all."

He said further, "Although the US has repeatedly boasted that it has such missiles, it has never demonstrated a missile flight. They appeared to show missiles that flew at a supersonic speed of 5.5 times the speed of sound or Mach 5.5. However, hypersonic speed begins at Mach 6-7."

With the prior collapse of the INF treaty, which regulated Russian and US ballistic missile deployments throughout the world, Moscow is very wary of a potential US missile build-up in Europe, which it says it is ready to mirror if threatened.

Boeing 737-800 operated by Jeju Air skidded across runway and smashed into barrier after flight from Bangkok

SEOUL—A passenger plane skidded off the runway, collided with a concrete barrier and burst into flames in South Korea on Sunday, killing nearly all of the 181 people on board and leaving a trail of mystery over one of the deadliest aviation disasters in years.

Investigators were still trying to pinpoint the cause of the fiery crash of an aircraft operated by South Korea’s Jeju Air that occurred just after 9 a.m. local time. The plane was a Boeing 737-800, a narrow-body jet and a workhorse of commercial air travel. It had been attempting to land at an airport in Muan County, in the country’s southwest, local officials said.

Once the blaze was extinguished, all that remained relatively intact was the tail of the aircraft—with a single charred wing angled to the sky. Officials later detailed a six-minute window of mayhem in the final moments of the flight, which had departed from Bangkok with 175 passengers and six crew members aboard. Two were Thai nationals, with the others South Korean citizens.

Some 179 of them died, South Korean officials said, with just two survivors: a pair of flight attendants. One recalled buckling into a seat at the rear of the plane and touching ground before losing consciousness, according to South Korea’s semiofficial Yonhap News Agency, citing local hospital officials.

“What happened?” the flight attendant asked a doctor, Yonhap reported. The attendant sustained a fractured left shoulder and head injuries but is conscious and able to walk. The other flight attendant has been transferred to a hospital, though other details weren’t immediately available.

The Jeju Air flight ranks among the deadliest aviation incidents in recent years. In March 2022, a China Eastern Airlines plane slammed into a mountainside and killed all 132 people aboard, with flight data indicating the crash was caused intentionally, The Wall Street Journal reported. Some 176 people died on a Ukraine International Airlines flight in January 2020, with Iranian officials later admitting the plane had been shot down unintentionally by its armed forces outside Tehran. Boeing’s 737 MAX jets were grounded worldwide in 2019 for nearly two years, after a pair of crashes together took 346 lives.

The South Korean crash caps a tumultuous year for an airline industry that has recovered from the doldrums of the pandemic, though carriers have been left scrambling to replenish staffing and manufacturers struggling to match the bounceback in demand.

The year began with a fiery two-plane collision in Japan on Jan. 2, leaving several Coast Guard members dead. Days later, a 4-foot-long panel blew off an Alaska Airlines plane in midair. Turbulence on a Singapore Airlines flight in May left more than 100 people injured. More than 60 people died after a turboprop plane in Brazil plummeted to the ground. And a passenger jet headed for Russia crashed in Kazakhstan last week, drawing an apology from President Vladimir Putin over the “tragic incident.”

In a roughly two-minute briefing with reporters on Sunday, Kim E-bae, the CEO of Jeju Air, apologized to victims and their family members, promising the company would do its best to support them. He said the plane had no history of accidents and that no abnormalities were detected during maintenance inspections before takeoff.

Boeing said it was in contact with and stands ready to support Jeju Air. “We extend our deepest condolences to the families who lost loved ones, and our thoughts remain with the passengers and crew,” Boeing said.

The airliner tragedy comes during a period of political upheaval in South Korea. Earlier this month, President Yoon Suk Yeol made a short-lived declaration of martial law—a controversial move that led to the country’s legislature impeaching him more than two weeks ago. Then, on Friday, Yoon’s replacement as acting president, Prime Minister Han Duck-soo, was also impeached, after declining to make certain judicial appointments.

That thrust Choi Sang-mok, No. 3 in line and a deputy prime minister, into the nation’s top job. The Muan crash occurred within 48 hours of Choi becoming acting president. Visiting the crash site, he declared the region a special disaster zone, allowing the disbursement of state support funds. More than 1,500 emergency personnel have been dispatched.

“I believe no words of consolation will be enough for the families who have suffered such a tragedy,” Choi said.

Mayday call

The Jeju Air plane had descended without the apparent deployment of its landing gear or flaps, which are movable surfaces on the wings that would allow the jet to slow during a typical landing, according to footage aired on South Korean TV networks.

South Korean officials detailed six minutes of chaos before the fatal crash. At 8:57 a.m., the control tower at Muan International Airport warned of a bird strike to the plane, according to the country’s transport ministry. Two minutes later a pilot declared mayday. With control-tower permission, the Jeju Air plane sought to land on a different runway than designated. And at 9:03 a.m. it crashed.

Any issues posed by a bird strike should have been manageable, as engine damage would likely have been limited and wouldn’t preclude the lowering of landing gear, former pilots and aviation-safety experts said.

The head Jeju Air pilot had more than 6,800 hours of flight experience and had held his current role since March 2019; the co-pilot had roughly 1,650 hours in the cockpit, according to South Korea’s transport ministry. The black boxes have been recovered from the plane, though investigators are still trying to retrieve the voice-recording devices.

The Boeing 737-800—a predecessor of the 737 MAX—is one of the safest airplanes ever built, and an inability to lower the landing gear would be rare and have backstops, such as procedures or checklists to follow if there had been a deployment failure, said Jeff Guzzetti, a former senior accident investigator with the National Transportation Safety Board and the Federal Aviation Administration. Guzzetti, who is now an aviation-safety consultant, said he was puzzled by the crash.

Among the safeguards on the 737-800 is a system that would allow the pilots to let gravity lower the landing gear if other systems failed, said Guzzetti, who isn’t involved in the accident investigation. He said he wondered whether the crew mistakenly tried to land without the plane’s landing gear down, realized the mistake and attempted a “go-around” to redo the landing. That could explain why the plane was traveling so fast and so far down the runway, he said.

“If there was a failure there, why not continue to fly, burn off fuel so you don’t have a lot of fuel on board?” Guzzetti said. “You call emergency rescue crews to be ready for you. I don’t see any of that there.”

The Muan International Airport is also surrounded by various bodies of water, meaning the pilots could have opted for a safer sea landing, said Hiroshi Sugie, a former Japan Airlines pilot who has written books about aviation safety.

The pilots appear to have landed in the most dangerous way, Sugie said. “There are just too many errors here,” he said. “A belly landing isn’t something you rush into doing.”

‘Should I write a will?’

Jeju Air, named after a popular South Korean resort island, is a budget carrier that was founded in 2005. It operates roughly 40 aircraft to more than 40 destinations, and handled more than 12 million passengers in 2023, according to the company’s website.

Shares of Jeju Air have fallen about 30% this year, in the midst of growing competition between budget carriers to lower their fares. A weakened South Korean currency, the won, has caused costs to increase because fuel is generally purchased with U.S. dollars.

The Muan International Airport opened in 2007, though it had been largely serving domestic routes. But in recent weeks, it began boosting the number of daily international flights to various countries. The route to Bangkok started running regularly just this month.

Dozens of bodies were moved Sunday to a temporary morgue, where they awaited family members for identification, local authorities said. A makeshift funeral hall would be installed at a nearby sports complex by midday Monday.

At the airport, dozens of family members crowded into a conference room and the terminal’s waiting areas where they got a briefing from the local fire department and waited for further updates. Some dropped to the floor in tears.

At least one passenger had been texting with a family member in the minutes before the crash, according to local media, which took a photo of a phone that showed the exchange.

“Should I write a will?” one of the messages reads.

Footfall on Boxing Day in Britain declined by 4.9 percent across all U.K. retail destinations, while footfall on Christmas Eve rose by 18.1 percent.

LONDON — British retailers saw a boost in traffic pre-Christmas, but that might be one of the last times in a while consumers splurge as they head into the New Year.

Footfall on Thursday, known as Boxing Day in Britain, declined by 4.9 percent across all U.K. retail destinations when compared to last year, while footfall on Christmas Eve rose by 18.1 percent, according to data from MRI Software.

The results showed that the decline was apparent throughout U.K. high streets, retail parks and shopping centers on Boxing Day, but Christmas Eve numbers showed optimism with shopping centers experiencing a 26.1 percent rise, followed by the high street recording a 17.4 percent jump and retail parks increasing 11 percent.

“Christmas Eve this year fell on a weekday whereas last year it fell on Sunday, which brought with it restricted trading hours. Retail stores and destinations likely benefited from the longer trading hours hence the significant boost in footfall compared to last year,” said Jenni Matthews, marketing and insights director at MRI Software.

“Boxing Day is still perceived as a family day with many people still visiting families for a second round of Christmas Day festivities. This will ultimately impact footfall in retail destinations. Additionally, the growing presence of online shopping continues to reshape spending habits; many retailers kicked off their Boxing Day sales online on Christmas Day providing shoppers with the opportunity to grab early bargains from the comfort of their own home,” she added.

Matthews pointed out that many stores remained closed on Boxing Day this year including John Lewis, Marks & Spencer, Next and Aldi, which are favored by Britons.

According to MRI Software’s Consumer Pulse report, 53 percent of shoppers will be finishing their Christmas shopping online leading into the New Year.

As Britain heads into 2025, there are many challenging aspects ahead, which were laid out in the fall budget in October.

“[The budget] will bring with it financial challenges with rising costs anticipated and decisions will need to be made as to whether these costs are passed on to the consumers or absorbed by the business. This will no doubt impact retail stores and destinations in high streets, shopping centers and retail parks,” Matthews said.

The Consumer Pulse report showed that 51 percent of shoppers are anxious about the rising cost of living driven by higher energy and housing costs in the winter months.

“However, this is an improvement from when it was 60 percent in May 2024, suggesting growing consumer confidence heading into 2025. Retail leaders should bear these trends in mind as the pre-Christmas surge may well be the last big splurge for many consumers ahead of what may be a spending freeze heading into early 2025,” Matthews explained.

Some automakers have seen inventory jump to prepandemic levels, prompting them to spend more on promotions

Car shopping in 2024 started to get back to normal for the first time this decade, with ample choice on the dealership lot and even some bargains for shoppers.

After years of depressed inventory stemming from pandemic-era supply chain problems, U.S. dealers’ stock levels have largely recovered. That has put pressure on retailers and automakers to more aggressively price their unsold vehicles.

Car buyers received about $3,400 in discounts and other incentives on average during the busy December shopping season, up more than 25% from a year earlier, according to research firm J.D. Power. The offers have included low- and zero-percent interest rates, cash-back offers and cheap leases, especially on electric vehicles.

The increase in promotions in recent months has offered inflation-weary car shoppers some relief after several years of having to shell out sums near or even above the sticker price. The stronger promotions have helped boost overall U.S. vehicles sales.

Industrywide U.S. sales rose by about 7% in December, according to a J.D. Power forecast. Most automakers are scheduled to report their latest sales tallies Friday.

“There are good deals to be had out there,” said Geoffrey Pohanka, a Maryland-based dealer who sells Chevrolet, Jeep, Nissan and other brands.

For the year, U.S. vehicle sales are expected to rise 3%, to about 16 million vehicles sold, decelerating from 12% growth in 2023. Industry forecasters expect sales to edge slightly higher again next year.

“The current business is solid from a historical perspective,” Tom Donnelly, chief executive of Mazda’s North American operations, said of the auto industry. “I mean, years ago, 15 million, we’d be high-fiving.”

Pressures on carmakers are building though, Donnelly said, citing tightening tailpipe-emissions regulations and the need to invest in electric cars.

“You’re trying to balance the decent environment that the industry is in with this once-in-a-century transition that the industry is having to undergo,” he said.

The U.S. car market hasn’t returned to the 17-million-vehicle annual sales mark that held steady for several years before the pandemic disruptions. Analysts and car executives say that is partly because many shoppers remain priced out of the market, despite the recent return of promotions and discounts.

Higher interest rates have kept monthly payments elevated relative to prepandemic levels. Also, a dwindling number of smaller, cheaper cars for entry-level buyers has curbed overall sales.

Average discounts are currently about 8% of the sticker price, according to research firm Cox Automotive, up sharply from recent years but still below the 10% industry prepandemic norm.

The affordability problem is one of several factors clouding the outlook for the car industry heading into the new year, despite the steady pace of vehicle sales and a stable economic picture.

Lighter-than-expected demand for electric vehicles has prompted automakers to backtrack on some plans to open EV-related factories and roll out battery-powered models.

Meanwhile, President-elect Donald Trump’s administration has also floated the possibility of steep tariffs on all products imported from Mexico and Canada, threatening a major import pipeline for the industry.

Mexico has emerged in recent years as a bigger source of lower-priced U.S. models. Mary Barra, General Motors’ chief executive, in December said that Trump’s proposed tariffs could have a “very substantial impact” on the carmaker.

Some automakers have laid off workers in recent months, including GM and Stellantis, whose CEO abruptly resigned in early December.

Carmakers will need to work harder in 2025 to attract customers because the pent-up demand from several years of vehicle shortages has largely been filled, analysts say. Many car owners also face elevated interest rates, repair bills and insurance premiums.

New-vehicle prices are expected to continue easing in 2025, a benefit to car shoppers but a potential profit hit for automakers. Morgan Stanley analysts predict that car buyers on average will pay 2% to 3% less for new wheels in the coming year.

The discounts should continue to flow because of improved vehicle availability. There were about 2.7 million vehicles on U.S. dealer lots or en route to stores at the end of December, up 17% from a year earlier, according to research firm Wards Intelligence.

Supply is uneven across manufacturers, though, and some carmakers are still operating with thin inventory, meaning consumers loyal to a particular brand may not get the sweetest deal. Toyota’s inventory remains tight, and the Japanese car brand has discounted less than rivals, according to Cox Automotive.

Electric-vehicle shoppers have the best shot at finding a good offer right now, particularly for those willing to lease a vehicle instead of buying it outright.

EV sales leader Tesla recently sweetened its offers, including 0% financing on the Model 3 sedan and Model Y SUV and leases for $299 a month.

In November, consumers financed the purchase of an electric Kia EV6 with an average monthly payment of $816, according to Edmunds’ data. A lease, meanwhile, went for $471 a month on average.

“Our message to consumers is: If you want an EV, now is the time to buy,” Pohanka said.

Dealmakers say less regulation, lower interest rates and rising stock markets could fuel activity. But ‘people really don’t know,’ one banker says.

Wall Street is optimistic that a buoyant stock market, declining interest rates and Donald Trump’s lighter-regulation agenda will prompt a dealmaking rebound in 2025. But jitters remain thanks to the president-elect’s unpredictability.

Deal volume has been muted for the past few years following record volumes coming out of the pandemic. While total global deal volume is up roughly 12% in 2024 through Dec. 26 compared with the same period in 2023, the number of transactions is lower and volume remains well below the 2021 high, according to Dealogic data.

Dealmakers were encouraged when Trump in December picked Andrew Ferguson, the Republican Federal Trade Commission member, to succeed FTC Chair Lina Khan. Ferguson and Republicans are expected to dismantle Khan’s guidelines that gave the agency new legal powers to try to block deals.

Still, Jay Novak, global co-head of corporate finance at the investment bank Houlihan Lokey, said it remains to be seen exactly where the new Trump’s administration’s antitrust policy will land.

“Sentiment is certainly more positive. People don’t really know the answer, but they’re more positive about the direction,” he said.

The year featured a handful of blockbuster tie-ups, including Capital One’s $35 billion agreement to buy Discover Financial Services DFS -1.31%decrease; red down pointing triangle and Mars’s roughly $30 billion deal for the maker of Cheez-It, Kellanova. But the pace of sizable deals, especially in typically busy sectors such as technology and healthcare, has been noticeably slower.

Both Ferguson and Trump’s administration are expected to keep the pressure on large technology companies. That could include such giants as Apple and Meta Platforms, which have shied away from deals while under increased regulatory scrutiny.

Declining interest rates and frothy markets should help bring corporate CEOs and private-equity firms, which drive a large portion of merger activity, back to the table. Lower rates make it more affordable to finance deals with debt while rising stock prices embolden corporate chiefs to use their shares as currency to fund deals.

“Financing markets are way open such that you can do jumbo deals again,” said Dominic Lester, Jefferies’s head of investment banking for Europe, the Middle East and Africa.

In mid-December, the Federal Reserve reduced interest rates for the third time in 2024, while signaling another two cuts in the year ahead. If the Fed moves fall short of investor expectations, it could trigger stock-market volatility. That risks weighing on M&A by making it harder for buyers and sellers to agree on price.

The S&P 500 index has gained roughly 25% so far in 2024.

The $13 billion deal between the advertising giants Omnicom Group and Interpublic Group IPG -1.54%decrease; red down pointing triangle headlined a flurry of announcements since the election, which some interpreted as a sign that activity is already heating up. Omnicom took advantage of the elevated level of its share price to fund its deal with only stock.

Dialogue with companies globally on possible big deals is up meaningfully, suggesting potential growth of 10% to 15% in activity in 2025, said Mark Sorrell, co-head of global M&A at Goldman Sachs.

Meanwhile, pressure has continued to rise on private-equity firms to sell long-held assets and reinvest newly raised funds to generate returns for impatient investors.

“If private equity could afford to wait to sell assets, they did,” said Mahvesh Qureshi, a corporate finance partner at the law firm Hogan Lovells. “Those dynamics have shifted.”

Still, dealmakers are still trying to parse Trump’s likely moves. He has pledged to impose 25% tariffs on products coming into the U.S. from Mexico and Canada. He has also threatened to impose an additional 10% levy on products from China.

But Trump’s pick for Treasury secretary, Scott Bessent, has suggested that tariffs are a negotiating tool. Before he was selected, Bessent told investors that the “tariff gun will always be loaded and on the table but rarely discharged.”

If steep tariffs do come to fruition, they could encourage foreign companies to acquire businesses in the U.S. as a way of circumventing the levies. They could just as well force American importers to pass on the added costs to consumers, making it harder for the Fed to lower rates, some bankers caution.

The levies could also dent companies’ bottom lines by raising costs, making deals less attractive and stymieing demand. Despite the uncertainty, bankers report a mounting backlog of deals that could happen under the right conditions.