US and China Agree to Slash Tariffs & Time to Overhaul Air Traffic Control?
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, a biotech startup eerily similar to Theranos is raising funding. Investors? Possibly you. Until you find out who's behind it. Then say goodbye to those sneaky, sneaky checkout fees. A new FTC rule cracks down on bait and switch pricing. It's Monday, May 12th. Let's ride.

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 percent to 30 percent, while China is lowering its tariffs on the U.S. from 125 percent to 10 percent. 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 Pesent said at a news conference in Geneva. What does this mean for businesses? You'll probably see a pulling forward of demand again as companies and consumers struggle

try to furiously schedule shipments that take place during this 90-day negotiating window. And speaking of nine-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 up

above where they stood on April 2nd, the day that Trump's Liberation Day tariffs were announced.

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New Jersey is still dealing with an old issue as Newark Airport can't seem to shake the system glitches that are leading to delays in safety concerns. On Sunday, another FAA equipment failure led to a temporary ground stop at the country's 13 busiest airport. That's on top

of last week's outage that caused radar screens to go black for about 90 seconds early Friday morning. Transportation Secretary Sean Duffy said that the problem isn't going away anytime soon with, quote, several weeks of reduced capacity and delays ahead. The equipment that we use, we have to go on eBay and buy parts if one part goes down, Duffy said. You're dealing with really old equipment.

It's why the Trump administration is looking into a major overhaul of the air traffic control system with plans to replace more than 600 radars and upgrade more than 12 airport towers. The telecom network that underwrites 45,000 flights a day would also be replaced by a wireless and satellite-based system over the next three years, with a price tag that would run in the tens of billions of dollars if Congress can find the funding to make it happen.

While a plan to overhaul the aging air traffic control system has bipartisan support, Senate Minority Leader Chuck Schumer called on the FAA to prioritize repairs at Newark. We need all hands on deck. Make Newark number one. Get it done and get it done fast, he told reporters.

Neil, planes are still flying in and out of the airport, but flights are being scaled back in the meantime while this glitch gets figured out. 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

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 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. United is uniquely exposed there because they obviously went all in on Newark. 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 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, said,

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 sort 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. The biggest problem here for consumers, according to experts and people who study this thing, is that it eliminates the possibility for you to compare prices. So you can't do comparison shopping across various products because you're

when you see something like a U-Haul for $19.95 and you're going to compare it to an actual moving service, there's no way for you to understand how much that U-Haul is going to ultimately come out to when it comes to pricing. So we are just bludgeoned into this hidden, deceptive pricing scheme that, you know, there is a better way and the FTC is taking steps here, which is great. It's just sort of remarkable that we've lived under this regime where we don't know how much we're going to pay and, you know,

that's just been the way it is. And we've accepted that. That is kind of what businesses count on. The fact that you just get tired, like you don't want to go through all the comparison steps. So you just accept it. When you reach checkout, you're not going to go through that whole process of running you haul truck and go, you know what? I'm actually not going to pick up the car now that I'm here because of these extra fees. So they're counting on you to kind of be bludgeoned down and just accept what they are presenting your way. Some industries though, have been arguing that this is actually a beneficial option.

set up for consumers. Airlines is the big one here. They call it choose your own adventure. We'll give you these add-on fees so you can customize what level of leisure you want. Do you really want that extra leg room? Do you want the extra baggage fee? Banks also say that all their overdraft fees that they charge customers is actually to help them

discourage overspending in the first place. So there are going to be some pushback to this, even though if you put yourself in a consumer's shoes, which we've all been there, this is clearly an annoying part of the market right now. And you mentioned how businesses are responding. Well, it does seem like a lot of companies that are going to be affected in short-term rentals and hotels have already made changes. Two years ago, Airbnb rolled out

that optional toggle where you could see the price that you would pay for, uh, you know, your vacation home all in now that as, as of April 21st, that is now the default. So if you go on Airbnb and look to book a place, you're going to see the all in price right away. Marriott has done something similar. It does have that optional toggle. Uh, I was on SeatGeek the other day and

I remember like a couple of years ago, the first thing you would see was not with fees. And now the default is here's how much you're going to pay for this particular event you're going to with fees included. So that's the price you see up front. It seems like the industry has gotten ahead of these regulations. But it is exciting to see from a consumer's perspective that some of these deceptive tactics are going away.

Let's head to our winners of the weekend, the segment where Toby and I pick two things that chilled harder than everyone who picnicked in the park this weekend. I won the pre-show can jam game, so I get to go first. And my winner is Second Chances. A biotech startup with a striking similarity to Theranos has reportedly raised millions of dollars and is on the hunt for more to achieve its goal of revolutionizing diagnostic testing. Here's the twist. The company is run by Elizabeth Holmes Platt.

partner. Yes, according to the New York Times, Billy Evans, a 33-year-old hotel heir who has two children with the imprisoned Theranos founder, has started a company called Hemanthus, the flower also known as the blood lily, and it's a very similar concept to what Holmes was trying to achieve.

If you don't recall, that didn't work out too well. Theranos' breakthrough finger-pricking device turned out to be smoke and mirrors, and she was sentenced to 11 years in prison for fraud. That's not stopping Evans, apparently. Marketing materials show his company plans to use light detection technology to bring medical tests out of the lab and into the mainstream, making them much more accessible to patients.

At first, these patients will be animals. Using a laser technique called Raman 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 back

that makes you uniquely equipped 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 to...

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. And 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. So fascinating link between LIDAR technology and pet blood sampling, but I think there is something there. Okay. You took 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 in 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.

doesn't think this 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. Who do you want to align yourself with, early Facebook investor or Toby and a tapas bar owner? That's the question you have to ask yourself. Up next, we have my winner of the weekend.

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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 Mother's Day.

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 Sofia, at least, with the

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. Sophia was just knocked out of the top five by Mia. So it takes a lot of work to get to the top. It takes even more to stay there. Right now, Liam and Olivia are

at the top of the world right now, top of the baby world. We'll see how long they stay there. I just want to defend Sophia'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 Sophia in the top 10. There's Sophia with a PH at number six, and then there's Sophia with an F at number 10. 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 truce, which is, you know, just means peace. And it rose 11,000 spots. You would, 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 Truth. Truth, absolutely. Not even 20, less than that at this point. And then also some big risers for girls were Annalia Scotti, which is kind of cool, 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 Breyer or halo, which are, I don't know about what I, that's very, you know, Gen Z coded. I feel like naming your baby whole halo, but one name that isn't on any of these lists necessarily as big risers that I am bullish on is going to be Leo because I think first American Pope just chose Leo as his name. I think we're going to see a lot more Leos down the stretch. Yeah.

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 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.

Right. April inflation numbers are probably going to show some of these elevated inflation pressures that came along with tariffs. But again, we're not going to be able to see that.

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. Once you get past people calling themselves auteurs and the rest of the snobbery, there will be buzzy releases such as Wes Anderson's The Phonetian Scheme and the global premiere of the last Mission Impossible movie. And I wasn't joking about the Oscars. Last year, Onora won the top prize at Cannes and later picked up the top prize at the Academy Awards. There's a couple of direct

debuts too that you can keep an eye on. Scarlett Johansson is jumping behind the cameras for a movie called Eleanor the Great. It's a story about a 94-year-old who relocates from Florida to New York City. It's a little reverse snowbird action there. And then also Kristen Stewart is making her directorial debut with a film titled The Chronology of Water. That's adapted from a Portland, Oregon author's memoir. So if you don't want to see Mission Impossible, you got those two options as well. Yeah, I want to see Mission Impossible.

Okay, in sports, the new season of the WNBA tips off on Friday. Hoping to build on a historically popular season last year, the league will greet the arrival of the newest expansion team, the Golden State Valkyries. And then also Paige Beckers looked pretty dang good in her preseason, so excited for that storyline as well. Golf's PGA Championship, the second major of the year, will tee off at Quail Hollow near Charlotte on Thursday.

All eyes will be on how Rory McIlroy will follow up his emotional win at the Masters in April. I mean, people joking call Quail Hollow Rory McIlroy Country Club because he's nearly 50 strokes apart better than his next closest competitor. So definitely look out for Roars. And finally, the Preakness horse racing second leg of the Triple Crown takes place in Baltimore on Saturday.

But honestly, I'm not going to watch and you probably won't either. Sovereignty, the horse that won the Kentucky Derby, won't be in the field over health concerns. It's so sad. But also, if you had a multimillion dollar horse, you're considering it as a long term investment, not trying to, you know, chase glory with a triple count. So I understand the decision to not run them. But yes, it does take a little bit of the edge off. And did you see the jockey who won the Kentucky Derby was fined more than $60,000 for hitting the horse too often twice?

During the race. So, I mean, sovereignty is, you know, maybe peaked a few weeks ago in Kentucky. OK, let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful start to the week. If you have any thoughts on the show, don't keep it to yourself. Send an email with your questions, comments or feedback to Morning Brew Daily at Morning Brew dot com.

Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lick. How original. Scoops Dardaris is on audio. Hair and Makeup is really glad they bought the dip. Devin Emery is our president and our show's a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

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