Global cooperation is suddenly in vogue.
At a G-20 summit in Rome over the weekend, the U.S. and the European Union agreed to end a dispute over steel and aluminum tariffs imposed by the Trump administration. Under President Donald Trump, the U.S. placed a 25% tariff on European steel and 10% on aluminum on national security grounds. The agreement keeps the tariffs in place but allows “limited” volumes of European imports to enter the U.S. tariff-free, U.S. Commerce Secretary Gina Raimondo said Saturday. In return, the EU won’t impose retaliatory tariffs.
The agreement has big implications for markets, with some European steel producers enjoying gains Monday. Harley-Davidson CEO Jochen Zeitz called it a “big win” for the company. Investors clearly feel the same way, as the motorcycle maker’s stock climbed more than 8% in premarket trading.
It’s an even bigger win for international relations. European leaders were hopeful of a new dawn in the relationship with the U.S. after Joe Biden won last year’s presidential election. Things didn’t move as quickly as expected at first, leading to some frustration. But a 17-year trade dispute over Boeing and Airbus subsidies was resolved in June and now the Trump-era steel and aluminum row has followed.
Of course there is more to it than just being friends with Europe; Raimondo said the agreement would relieve supply-chain problems and drive down costs for U.S. manufacturers and consumers. U.S. steel prices have surged close to 80% this year but a small correction could now be on the cards.
*** In this week’s Barron’s Streetwise podcast, columnist Jack Hough asks are travelers ready for a nine-month cruise? Bookings are strong, says Royal Caribbean CEO Richard Fain. Listen here.
At Glasgow Summit, U.S. Aims to Show Climate Leadership
President Joe Biden is aiming to show U.S. leadership in fighting global warming at the United Nations-sponsored COP26 climate summit in Glasgow, Scotland, this week, but he is still waiting for Congress to sign off on $555 billion in proposed climate spending.
- Biden reversed former President Donald Trump’s withdrawal from the 2015 Paris Agreement, which called for nations to limit the Earth’s warming to less than 2 degrees Celsius—and keep it near 1.5 degrees—by the end of the century. Biden has said the U.S. can tackle climate change in ways that offer economic opportunities.
- Developing nations want the U.S. and other wealthy nations to contribute more than the $100 billion a year they have committed to help poorer nations transition to cleaner energy. Wealthy nations could reach that spending goal in 2023, which is three years later than expected.
- U.S. special climate envoy John Kerry told The Wall Street Journal: “People are right to worry about why it’s taken so long, but I’m proud of what the United States has done to help pull that money together and to put us on track to produce it.”
- More than 140 countries, including Japan and Brazil, have made more aggressive commitments to curb their greenhouse gas emissions heading into the summit. Economists argue that earlier economic models showing that climate change harms weren’t enough to justify the costs of achieving net-zero emissions were based on outdated data.
What’s Next: The G-20 meeting in Rome wrapped up Sunday with a vague agreement among world leaders to seek carbon neutrality by midcentury. The COP26 summit runs through Nov. 12. “These commitments, as welcome as they are, are drops in a rapidly warming ocean,” said U.K. Prime Minister Boris Johnson.
—Janet H. Cho
Barclays Boss Quits Ahead of Report on Jeffrey Epstein Ties
Jes Staley has stepped down as CEO of Barclays ahead of the publication of a report by regulators investigating his relationship with the disgraced late financier Jeffrey Epstein, a convicted sex offender. The news sent shares in Barclays slipping Monday, down near 2% in early London trading and underperforming U.K. stocks.
- According to the bank, regulators made Barclays and Staley aware Friday night of preliminary conclusions in a long-running investigation into what Staley told Barclays, and what Barclays told regulators, about his relationship with Epstein. Their ties have been described as a professional relationship from earlier in Staley’s career, when he was at JPMorgan Chase .
- In view of the conclusions, which Staley intends to contest, he agreed to quit as Barclays’ CEO and as a director at the group. He has had the top job at the British banking giant since 2015.
- The bank revealed last year that regulators were investigating Staley and Epstein’s ties. Epstein’s death in prison in August 2019—ruled a suicide—came as he awaited trial on charges linked to the sex trafficking of minors. He was previously jailed after pleading guilty to solicitation of prostitution from a minor.
What’s Next: Effective immediately, Staley has been replaced by C.S. Venkatakrishnan—Barclays’ current co-president and head of global markets and, before joining the British bank in 2016, a 22-year veteran of JPMorgan Chase.
House Presses Ahead for Votes on Biden’s Economic Agenda
House Democrats are pressing ahead for a vote on Biden’s economic agenda, both the $1 trillion bipartisan infrastructure bill and the $1.85 trillion social safety net and climate bill, which was still being negotiated over the weekend.
- The larger bill includes funding for child care and preschool, cleaner energy, in-home care for elderly residents, Medicare hearing benefits, and other measures. Agreement on that bill would allow a House vote on the $1 trillion infrastructure bill to modernize roads, bridges, railways, and other projects.
- Sen. Bernie Sanders (I., Vt.), chairman of the Senate Budget Committee, told CNN’s State of the Union on Sunday that he was still pushing for Medicare coverage for dental and vision benefits and allowing the government to negotiate with drug companies for lower prescription drug prices.
- An ABC News/Ipsos poll reported Sunday that although 55% of the 514 adults surveyed on Friday and Saturday said they are following news of the negotiations at least somewhat closely, 69% said they know just some or little to nothing about what’s in both bills.
- A separate NBC News poll found that 54% of Americans disapprove of Biden’s job performance, and 71% of 1,000 respondents said the country was headed in the wrong direction. Only 51% approve of Biden’s handling of the pandemic, and 40% approve of his handling of the economy.
What’s Next: The wrangling over the spending bills and Biden’s declining poll numbers could influence the gubernatorial race in Virginia as voters head to the polls on Tuesday. Democratic candidate and former governor Terry McAuliffe is locked in a heated battle with Republican Glenn Youngkin.
—Janet H. Cho
FDA Delaying Approval of Moderna’s Covid-19 Vaccine for Children 12 to 17
Moderna said regulatory approval of its Covid-19 vaccine for adolescents aged 12 to 17 could be postponed until January, after the Food and Drug Administration said it needed more time to review the drug’s international data on the risks of a rare heart inflammation.
- The Centers for Disease Control and Prevention and the World Health Organization said heart inflammation after mRNA vaccines, particularly in young men, has been rare and generally mild. Moderna said myocarditis rates among 1.5 million vaccinated adolescents “does not suggest an increased risk” among those under 18.
- Moderna said it would delay filing for emergency-use authorization to inoculate children aged six to 11 with a half-dose of the vaccine while the FDA evaluates its vaccine for adolescents. Last week, it said its vaccine spurred a strong antibody response in younger children.
- Moderna said Sunday that the safety of vaccine recipients is of “paramount importance” and that it is “fully committed” to working with the FDA on its review.
- The FDA on Friday approved the Covid vaccine from Pfizer and BioNTech for children five to 11.
What’s Next: The vaccines advisory panel to the CDC is scheduled to consider the Pfizer-BioNTech vaccine for children five to 11, and recommend its decision to the CDC, on Tuesday. If approved, millions of children’s doses could be available in the U.S. by the end of the week.
—Janet H. Cho
American Airlines Latest to Have Mass Weekend Flight Issues
- As of midafternoon on Sunday, American had canceled 31% of its flights, according to Flightaware.com. Another 281 flights, or 10% of its schedule, were delayed.
- The carrier said wind in Dallas, its busiest hub, and bad weather elsewhere last week left flight crews in the wrong places and forced cancellations to keep the problem from mushrooming further. Passengers were rebooked on new flights the same day.
- Thin staffing has been a challenge for airlines as they try to bring back flights after riding out the pandemic. Southwest Airlines canceled nearly 2,000 weekend flights last month and has since said it would slow its planned growth to catch up on staffing.
What’s Next: American said 1,800 flight attendants who had been out on leave would be returning starting today and another 600 new cabin crew members were in the process of being hired. The airline expects to add 4,000 new employees in the fourth quarter throughout its system.
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