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- [00:01]
Airbnb Representative
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- [00:12]
Caitlin McCabe
For peace of mind, visit deel.com Korean citizens detained in a Georgia immigration raid are headed back home following a deal between Seoul and Washington police. Plus we look at why the EU's trade truce with the US is threatening to unravel, and BMW and Mercedes gear up to zoom past Tesla in the EV arms race.
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Stephen Wilmot
There's been a shift in the European market away from American brands and towards Chinese brands, with the European brands largely holding their own for now and fighting on for their survival, really.
- [00:47]
Caitlin McCabe
It's Monday, September 8th. I'm Caitlin McCabe for the Wall Street Journal, and here's the AM edition of what's News, the top headlines and business stories moving your world. South Korea's foreign minister is on his way to Washington, D.C. this morning to help bring Korean workers back following one of the largest workplace immigration raids under President Trump. Almost 500 people were arrested by immigration authorities at last week's raid at a Hyundai plant in Georgia. This morning, South Korea said a deal had been reached with the US to release Korean citizens. US Authorities have said that those arrested had illegally crossed the border, entered with the wrong type of visa, or had overstayed their visas. According to the government in Seoul, South Korean nationals were largely given visas suitable for training purposes, such as the B1 visa, and many were working there as instructors. Overnight, President Trump posted a warning to other foreign companies to respect US Immigration laws, while US Border czar Tom Homan told CNN yesterday that workplace raids will continue in order to secure the border. Meanwhile, Chicago remains on edge after the president on Saturday escalated his threats to send troops and immigration officers to the city, only to roll those threats back Sunday. Journal reporter Joseph Bassani has the story.
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Joseph Bassani
President Trump has been threatening to send the National Guards to Chicago for weeks. He's called the city a mess, and he said that federal intervention is needed to fight crime there. But then on Saturday, he posted a meme on Truth Social that was riffing on the Vietnam War movie Apocalypse now and it said I love the smell of deportations in the morning. And it also said Chicago about to find out why it's called the Department of War. Democrats condemned the messaging. There have been no indications of federal troops in Chicago. Trump on Sunday, he was asked if he was threatening war on Chicago and he said, we're not going to war, we're going to clean up our cities. So it's something that's still being watched of course, Trump has sent troops to Washington, D.C. already and also Los Angeles. The governor of Illinois has said that if troops do come into the state, he will sue to stop them.
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Caitlin McCabe
This weekend, the Department of Homeland Security said it was setting its sights on Massachusetts next, targeting immigrants with criminal records. It's been less than two months since President Trump unveiled his trade deal with the European Union, and frustration with the deal is growing in Europe. One key reason the administration's decision to expand its 50% metals tariff to cover hundreds of additional products that contain steel and aluminum. That decision has slapped many European manufacturers with higher levies than the 15% that Trump and the EU agreed on for most of the products. Our EU reporter Kim McCrail says that's stirring complaints among businesses about the new hurdles the tariffs have caused.
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Kim McCrail
So a lot of businesses had really hoped that the trade truce that was reached in the summer between the US and the EU would bring them some more stability. But actually what happened is just a couple of weeks after that, the US Expanded its tariffs on steel and aluminum. And that meant that producers that thought they knew what they were working with in terms of tariffs actually found that they're facing some new tariffs that they weren't expecting. This means that they actually have to do the work of figuring out how much steel and aluminum is in a lot of products that they produce, especially for machinery.
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Caitlin McCabe
Kim also says that's led to fresh frustration from European politicians and members of the European Parliament.
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Kim McCrail
I think one example we can look at is Bernd Lange, a German politician who leads the parliament's trade committee. And he said last week that the expansion of metals tariffs from the US Shows there's no security or predictability in the US EU deal. And he said he's basically expecting that politicians in the European Parliament will look for changes to some draft legislation that the European Commission has put forward. And this is legislation that looks to eliminate or reduce tariffs for a lot of different US Imports.
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Caitlin McCabe
Investors are bracing for a period of extended volatility in Japanese markets after the country's prime Minister, Shigeru Ishiba said he would step down. Having previously fended off calls to resign, Ichiba succumbed to pressure to take responsibility for his party's electoral losses. The latest upheaval is likely to add fresh volatility to Japan's bond market, which has been under pressure from a global sell off that sent ultra long bond yields soaring. On Monday, stocks in Japan rose following Ichiba's resignation. While the yen strengthened against the dollar, yields on Japan's long dated bonds advanced. Meanwhile, France is also on the verge of political upheaval, with Prime Minister Francois Beirut facing a confidence vote in Parliament later today. If, as expected, he loses, it could deepen the country's economic malaise, with economists warning that the EU's second largest economy faces a debt crisis if it doesn't act urgently. Beirut has proposed a drastic budget making around $54 billion in savings, including cutting 2 of the country's annual public holidays. But that has been met by considerable opposition and even anger among the French public. Coming up, can old school German automakers zoom past Tesla and Chinese companies in the ever competitive EV market? That story and more after the break.
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Caitlin McCabe
Europe's most important auto show kicks off this week and German automakers BMW and Mercedes Benz are using the event to come for Tesla's electric vehicle crown. Both companies in recent days have unveiled new electric SUVs designed to compete with Tesla's Model Y. And as Journal Auto supporter Stephen Wilmot writes, the new vehicles will test car buyers appetite for expensive European brands at a time when Chinese automakers are speeding ahead in the EV race. So Steven, it seems like this is the most comprehensive effort we've had by old school automakers to compete in this category.
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Stephen Wilmot
Absolutely. Yes, that's right. The key thing really is that they've redesigned the cars around the notion of computing and software. And that was Tesla's key innovation to put essentially Silicon Valley technology at the heart of the car. And it's taken a long time for incumbent automakers to match that technology. It's been easier for startups, particularly in China, to match it. That's the key element really. But there is a secondary element which is that they've massively upgraded the battery technology so that they have much longer range and faster charging times than their predecessor models and actually better than the Tesla long range Model Y.
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Caitlin McCabe
What's also really interesting to me is the timing here. So Tesla is having a moment of weakness, particularly in the European market. And at the same time, Chinese automakers are increasingly picking up the pace in the EV race. Where does that leave the German automakers?
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Stephen Wilmot
Well, Tesla's weakness is clearly an opportunity, particularly perhaps in Europe, where Elon Musk's controversial statements around the political right have not gone down well. And so there's a clear opportunity for BMW and Mercedes to give consumers something fresh. As for the Chinese, automakers clearly present the risk on the other side of the equation. And there are plenty of them at this show here in Munich coming in with attractive new vehicles. And the German brands are watching them extremely closely.
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Caitlin McCabe
It seems like one area where China is really able to compete is on price. You note in your piece that the vehicles by German automakers will be more expensive than what's currently on the market.
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Stephen Wilmot
I would say the consensus among analysts and industry consultants is that the luxury brands are in a better position than the volume brands, the mainstream brands here in Europe. They are obviously in a tighter spot to fight off the incursion from value oriented Chinese brands than should we say BMW and Mercedes with their more affluent customer bases. So the key things that I'm going to be looking out for today are the Chinese brands and what they're doing, how they're thinking about bringing their technology to Europe. There are only two American brands exhibiting here in Munich, Lucid, the new EV maker, and then Ford. And I think that is a bit the sign of the times in the European market. The Chinese brands have been gaining market share at the expense of American brands. Tesla never exhibits at car shows, so it's not a surprise. It's not here. But yeah, there's been a shift in the European market away from American brands and towards Chinese brands, with the European brands largely holding their own for now and fighting on for their survival.
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Caitlin McCabe
Really sounds like a busy day ahead for you. Steven, thanks so much for joining us.
- [09:52]
Stephen Wilmot
Thank you.
- [09:57]
Caitlin McCabe
And two years ago, in a bid to ease the extremely tight rental market and to remove noisy tourists from residential buildings, New York rolled out a major crackdown on Airbnb and other short term rentals. Fast forward to today and the problem of partying tourists disturbing residents is largely resolved. However, apartment rents are still at all time highs and vacancy is low. As Journal reporter Allison Poley explains, Airbnb is using the housing crisis in a bid to try and change the regulation.
- [10:25]
Airbnb Representative
Airbnb says, look, this has not solved the affordability crisis and in fact, people who used to host are now struggling to pay their rent or to pay their mortgage because they relied on this income and they can no longer do so. So Airbnb formed a political action committee called Affordable New York, and that PAC is the largest spender in New York City's elections. So right now you can only have two guests and you need to be present during the stay. Airbnb's bill that they're supporting in front of city council would let people have up to four guests. You would not need to be present during the short term stay. So they're hoping that that will change ahead of next summer in the World cup when lots of tourists will be in New York City.
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Caitlin McCabe
And that's it for what's news for this Monday morning. Today's show is produced by Kate Bullivant and Hattie Moyer. Our supervising producer is Sandra Kilhoff. And I'm Kaitlin McCabe for the Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for.
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Kim McCrail
Foreign.
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Stephen Wilmot
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