Morning Brew Daily
US and China Agree to Slash Tariffs & Time to Overhaul Air Traffic Control?
Mon, 12 May 2025
Episode 580: Neal and Toby discuss the latest trade news where the US and China agreed to a tariff deal for the next 90 days while talks are still ongoing. Then, another flight fiasco in Newark Airport prompts the Federal government to propose an overhaul of air traffic control. Next, Elizabeth Holmes’ husband is reportedly raising millions for a blood-testing startup…sound familiar? Also, companies are facing increased scrutiny for ‘bait and switch’ pricing tactics. Meanwhile, trade talks with China continue to cool tensions and Olivia and Liam continue to be popular baby names. Finally, what you need to know in the week ahead. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Visit endthecampaign.com for more Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What is the latest US-China tariff agreement and how will it impact businesses?
This weekend was beautiful here in New York City, but I was also thinking it'd be nice to have a pool to cool off. Turns out the U.S. and China were thinking the same thing when it comes to their trade war. After talks in Switzerland this weekend, the U.S. and China agreed to a significant reduction in tariffs on each other for a 90-day cool-off period. The U.S.
is lowering its tariffs on China from 145% to 30%. while China is lowering its tariffs on the U.S. from 125% to 10%. These temporary reductions give businesses a big break from what had been devastating import fees and allow the U.S. and China to hammer out a more concrete agreement over the next three months. Stocks are ripping this morning, with the Nasdaq up nearly 4% and the S&P 500 nearly 3%.
It really reads like the U.S. and China went through marriage counseling over the weekend. We concluded that we have shared interests, Treasury Secretary Scott Besant said at a news conference in Geneva. What does this mean for businesses? You'll probably see a pulling forward of demand again as trade
Companies and consumers try to furiously schedule shipments that take place during this 90-day negotiating window. And speaking of 90-day windows, the 90-day pause on elevated U.S. tariffs on most other countries instituted back in April, that is set to expire on July 9th, while this China window extends to August 10th.
So those are kind of the two dates that you need to have circled on your calendar. As for stocks, they are ripping right now, and they are on track as of now. to open above where they stood on April 2nd, the day that Trump's Liberation Day tariffs were announced. And now a word from our new sponsor, Iterable.
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Chapter 2: Why is the US government proposing an overhaul of air traffic control?
Yeah, I mean, it's not like a bathroom. You can't just hang an out of order sign on an airport. You have to do construction and maintenance and do these improvements while the airport is in operation, while planes are landing. So what you have to do is just reduce capacity. It's kind of like when they repair a highway and move four lanes to two. That's exactly what's happening at Newark.
Duffy is convening all of the major airline CEOs this week so they can work out how to reduce capacity at Newark. United Airlines is going to be the airline that's most effective because they handle 68% of all flights into and out of Newark. But it has just been a disaster flying out of Newark. It's been the punching bag of the aviation and travel industry for the past couple of weeks.
There have been an average of 34 flights arrival cancellations per day since mid-April. So for almost a month now and then a bunch of more delays increasing throughout the day from an average of five in the mornings to 16 by the evening. So you have this cascading effect. Those delays tend to last 85 to 137 minutes on average.
So I know anyone we've talked to recently when they say they're flying out of Newark, you know, it's just a huge groan.
Yeah, and part of that groan is I'm just going to put some more numbers on how big these delays are. Travelers have waited on 1,155 flights collectively. That means they've spent more than 296,000 hours waiting, which is equivalent to nearly 34 years. So, of course, you're hearing some groans out of Newark. And right now, operations are down about 33% from historical levels.
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Chapter 3: What are the causes and consequences of the Newark Airport flight delays?
United is uniquely exposed there because they obviously went all in on Newark. They They didn't land a contract with JFK, and so they've said, all right, we're doing Newark. This is our connection to New York City. But it's not going to crush it necessarily.
And the only reason I say that is some analysts did some estimations and said that the plan cuts over the next 60-day period would result in a reduction of about 30%. 0.5% of United's total second quarter capacity. So it's not like an earth shattering 20, 30%. It is less than 1%, if you believe analysts, which would lower the revenue by about $90 million.
So again, it is very annoying, mainly from a brand perspective, because now you don't want to fly United. You don't want to fly out of Newark anymore, but it's not going to crush the bottom line again, if these estimates prove to be true.
And if you're thinking, oh, great, I don't live in New York City and I don't plan on flying there, then I should be fine. Well, Duffy, the transportation secretary, warned that what you're seeing in Newark is going to happen in other places across the country. It has to be fixed. I'm concerned about the whole airspace. This is just a big problem that's festered for decades.
We're using floppy disks. We're using technology from the 1970s. We'll see if Congress comes through with the tens of billions of dollars needed to upgrade and train more air traffic controllers. Because what we're looking at right now is just an antiquated system that is starting to break. It's being crystallized at Newark. It could happen anywhere.
If you've ever seen a price listed on a hotel website or driving by emblazoned on a U-Haul truck, that seemed too good to be true. The FTC agrees and is doing something about it. New rules on unfair or deceptive fees are set to go into effect today that prohibits so-called bait-and-switch pricing that deliberately misrepresents the actual price you pay when fees and extras are included.
According to the FTC's FAQ about the new policies, companies have to prominently display the total costs including all charges or fees the business knows about and can calculate upfront before asking for payment. They also must avoid vague phrases like convenience fees, service fees, or processing fees, and be clear what a charge is for.
The main culprits here are live event ticket sellers and short-term rental providers. But those sorts of switcheroos happen across all industries, from airlines to cable companies. U-Haul has emerged as an especially egregious offender for listing very low prices nowhere near the final tally. The watchdog group Truth in Advertising filed a complaint accusing U-Haul
of engaging in bait-and-switch pricing schemes, saying its 1995 truck rental ads mislead consumers by hiding hefty add-on fees in the fine print. It's the exact type of practice the FTC has been trying to eliminate, and after the rules come into play today, we'll see how businesses start to navigate this new era of transparency.
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Chapter 4: What new FTC rules address bait and switch pricing tactics?
At first, these patients will be animals. using a laser technique called raymond spectroscopy evans wants to laser your pet's blood urine and sweat to find any possible issues like cancer or infections this is big business the pet cancer screening detection market is worth billions of dollars all by itself the question is will any serious investors bite on someone closely affiliated with holmes
who presided over the largest destruction of venture capital money perhaps ever. Toby, pretend you're on Shark Tank and Elizabeth Holmes' partner pitches you on a medical testing startup. What's your first question?
Honestly, first of all, I'm saying great name. Hemanthus, Greek for blood flower, is objectively cool. But secondly, I am asking what it is about your background that makes you uniquely a to tackle this problem. And right now, a dozen people from the startup actually worked at Luminar Technologies, which developed sensors for autonomous vehicles.
It's a very interesting link because they are trying to use this light detection technology that they think can guide them and help them carry out these medical tests. The actual technique, Raman spectroscopy, works by shining a laser on samples, measuring a small fraction of light that scatters due to interactions with the cell's molecular vibrations.
This is a very in-the-lab technique that they think they can downsize. It's very Theranos-esque that they want to take something and put it in a very small package and get a lot of diagnostics out of them as well. Fascinating link between LIDAR technology and pet blood sampling, but I think there is something there.
Okay. You took like the Harvard business review angle to this story. I'm going to go the people magazine angle. How much is Elizabeth Holmes involved in what's going on? Apparently she has been providing advice to Billy Evans from her prison, from her cell in a federal facility in Bryan, Texas. Unfortunately, she won't be able to be chair of the board when she gets out.
She won't be able to be an officer or director at a public company for a decade under her punishment from Securities and Exchange Commission. I'm also wondering who is going to invest in this thing. You know, you sound like you're interested, but James Breyer, who's a well-known venture capitalist and early investor here.
and facebook was asked by the new york times about this pitch and he said we passed on it just like we passed twice on theranos in diagnostics we've long held that the difference between a compelling story and a great company lies in scientific defensibility and clinical utility clearly breyer doesn't think so uh doesn't think this uh company passes snuff right now michael dell also turned it down there is one investor that could be identified
He is a part-time owner of a Mediterranean tapas bar in downtown Austin. He's bullish.
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Chapter 5: How are companies responding to the new pricing transparency regulations?
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Fund your account in minutes or less and earn up to $10,000 when you transfer your old investment portfolio. Get started at public.com slash morningbrew. That's public.com slash morningbrew. Paid for by Public Investing. Full disclosures in podcast description. My winner of the weekend is Liam and Olivia because by the year 2075, there's going to be no one in America named anything else.
For the sixth consecutive year last year, Liam and Olivia were together the most popular baby names for boys and girls in the U.S., according to a new report from the Social Security Administration. And anyone who isn't Olivia or Liam will probably be named Emma or Noah, which have been the second most popular name for girls and boys, also for six years running.
The Social Security Administration tracks baby names going back to 1880 and releases its findings every year ahead of Mother's Day. It's a window into how cultural trends, TV shows, and even celebrities influence parents when it's time to name their baby. For instance, between 1880 and 2011, Not a single girl was born named Khaleesi. Since then, because of Game of Thrones, nearly 5,000 have.
Still, no HBO character or any other name is presenting any kind of challenge to Liam and Olivia, who are on a dominant run right now.
Dominant run right now. But look at Bill Belichick. One day you're on top of the world. The next day you're getting made fun of. That's what's happened to Sophia, at least with a pH. That was the number one name for girls from 2011 to 2013. It's been in the top five every year from 2009 till now, except one that Sophia was just knocked out of the top five by Mia.
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Chapter 6: What is the new biotech startup linked to Elizabeth Holmes’ partner?
I just want to defend Sofia's honor here for a second, though, because, yes, it did get kicked out of the top five, but there's actually two iterations of Sofia in the top ten. There's Sofia with a PH at number six, and then there's Sofia with an F at number ten, so... You might say that it's actually, if you combine those two, it is still on top of the world.
But yes, it is fascinating to see how baby names kind of transition and which are risers and which are fallers. Some of the big risers in the boys category is the name Trey. Truce, which is, you know, just means peace. And it rose 11,000 spots with the 991st rank. So, again, this is not necessarily a name that you're going to be seeing in your classrooms anytime soon.
20 years from now, there will be an Oklahoma quarterback named Truce.
absolutely i'm not even 20 less than that at this point and then also some big risers for girls were analia scotty which is kind of cool s-o-s-c-o-t-t-i-e marjorie and aliani so definitely some interesting names are climbing up the ranks on the bowie side if you're not a fan of truce you can also go with colson briar or halo which are i
I don't know about what I, that's very Gen Z coded, I feel like, naming your baby Halo, but one name that isn't on any of these lists necessarily as big risers that I am bullish on is gonna be Leo, because I think first American Pope just chose Leo as his name. I think we're gonna see a lot more Leos down the stretch.
Okay, it's Monday, so here are the major events you need to know about in the week ahead. President Trump leaves on his first major foreign trip of his second term today, heading to Gulf nations Saudi Arabia, Qatar, and the United Arab Emirates. Much like Disney, which announced its next park would be in Abu Dhabi, Trump is headed to the region to lock in business deals,
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Chapter 7: How does Hemanthus plan to revolutionize blood testing using laser technology?
of up to $1 trillion with these ultra wealthy and increasingly influential countries. Trump is very keyed in on this part of the world. Remember, his first trip during term number one was to Saudi Arabia where we got that viral orb picture.
Yeah, but also the viral storyline from this trip is this supposed gift that Trump is receiving from the royal family of Qatar who want to hand him over this big tricked out Boeing 747 plane for Trump to use as Air Force One. potentially before he leaves office, but then also after he leaves office.
A lot of people are saying $400 million, which is what this plane is estimated to cost, could be the most valuable gift ever sent to a U.S. from a foreign government, which obviously has led to a lot of discussion around the ethics of this. Does it violate the Constitution? Democrats think so.
Trump's administration thinks that they figured out a way to get around some of the constitutional issues here, but expect to see more dialogue around this big $400 million plane as well.
On Wall Street, the main event is Tuesday's inflation report for April, which could show some of the first traces of the tariff impact on consumer prices. This information is important to your wallet, of course, but also the Federal Reserve, which is watching inflation like a hawk to determine its next moves. Then we'll get a gut check on the consumer with Walmart earnings.
As the world's largest retailer by revenue, it gives us maybe the best snapshot possible of people's shopping habits. Many smaller retailers have been warning that consumers are spending less, but Walmart may provide the clearest answer.
Right. April inflation numbers are probably going to show some of these elevated inflation pressures that came along with tariffs. But again, economists are saying June is probably where they'll mostly show up. But now we've got this pause, so who knows what will happen. Then you mentioned Walmart as well.
We also get retail sales data for April on Thursday, so we will get a peek into the consumer's wallet as well.
If you're wondering who might contend for Best Picture at next year's Oscars, then check out the movies debuting at the Cannes Film Festival, which kicks off tomorrow in the French Riviera.
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