America First is back—and it’s messing with the global rollout of Covid vaccines
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Good morning. David Meyer here in Berlin, filling in for Alan.
This is a “super election year” in Germany, with September’s federal polls being preceded by six state-level elections. The first two of those took place yesterday, providing very bad news for Angela Merkel’s Christian Democrats (CDU).
The chancellor herself is retiring, but her conservative party would very much like to stay in power. However, the CDU lost about 15% of its support in Rhineland-Palatinate and Baden-Württemberg, demonstrating voters’ unhappiness with the way the CDU-led federal government has been managing the pandemic.
This is partly due to accusations of corruption in the procurement of masks, but it’s also about Germany’s lackluster vaccine rollout, which has seen just 7.4% of the population receive a first dose—in the U.S., that figure is 19.9%.
To be clear, there are many reasons to lay into the German government (and other European administrations) over the pace of COVID vaccinations—coordination has been lacking and, particularly when it comes to AstraZeneca’s vaccine, officials have given mixed messages that have led to thousands of doses lying unused.
But the biggest problem is constrained supply. And a lot of the blame for that can be laid at the door of the U.S. I’m not talking about the intellectual property restrictions that are stopping some factories from making vaccines—those are backed by the EU, too—but about the U.S. stymying global vaccine production in general.
On Friday, AstraZeneca said its already-disappointing EU shortfalls would be even worse than feared, because of “export restrictions” hampering sourcing from its international supply chain. This is most likely a reference to problems being faced by the Serum Institute of India, a major manufacturing partner for AstraZeneca, Novavax and others.
Both the Serum Institute and Biological E, another Indian firm that is contract-manufacturing Johnson & Johnson’s vaccine, have clearly said the U.S.’s pandemic export controls—which cover not only vaccines themselves, but also key materials that are needed for their production—are holding them back.
“It’s not only going to make the scale up for COVID vaccines difficult, but because of this it’s going to make manufacturing of routine vaccines extremely difficult,” Biological E CEO Mahima Datla told the Financial Times today.
The fact of the matter is that, while Italy’s blockage of a single AstraZeneca shipment to Australia earlier this month caused conniptions around the world, the EU has exported 34 million doses—including 1 million doses to the U.S.—and the U.S. has exported precisely none, and is also hobbling other countries’ ability to make their own. The U.S. may be on track to offer vaccinations to its entire adult populace within the next few months, but the rest of the world can only dream of such a situation.
This is likely to come back to bite the U.S. Apologies for sounding like a broken record, but the longer the pandemic remains uncontrolled anywhere, the greater the risk of it mutating and undoing the great gains of recent months. Just look at P.1, the Brazilian variant, which is hitting young people hard, infecting people who already had an earlier strain of the coronavirus, and now spreading around the world.
But even without taking into account the potential for epidemiological blowback, the U.S.’s stance on export controls is a moral failure that is likely to cause global resentment—and political turmoil, as countries such as Germany enter new waves of the pandemic. The world may have warmly greeted the ascent of President Biden as respite from the overt aggression of his predecessor, but on this issue it appears America First is still White House policy. And a lethal one at that.
More news below.
Shares in the Chinese smartphone firm Xiaomi leapt more than 10% at one point today, after a U.S. judge gave it a temporary reprieve from former President Donald Trump's restriction against American investors funding the company. U.S. district judge Rudolph Contreras granted Xiaomi a preliminary injunction against the order on Friday, citing the likelihood of "irreparable harm in the form of serious reputational and unrecoverable economic injuries." CNBC
Meanwhile, Huawei—another Chinese telecoms player targeted by the Trump administration—is diversifying its business to protect itself against the impact of sanctions. The company is now providing inverters for solar panels on fish farms, sensors and cameras for coal mines, and lidar sensors for electric cars. Bloomberg
Travel and leisure
European travel and leisure stocks have, as a whole, erased the last of their pandemic losses. The Stoxx 600 Travel & Leisure Index rose more than 3% today, following vaccine-fueled rallies—and, crucially, massive gains in gambling stocks. Bloomberg
More than a third of seafood sold across 30 countries is fraudulently mislabelled, according to a Guardian report: "Because seafood is among the most internationally traded food commodities, often through complex and opaque supply chains, it is highly vulnerable to mislabelling. Much of the global catch is transported from fishing boats to huge transshipment vessels for processing, where mislabelling is relatively easy and profitable to carry out." Guardian
AROUND THE WATER COOLER
Chamber of Commerce
The Washington Post has an interesting piece on Suzanne Clark, who on Thursday became the first female CEO of the U.S. Chamber of Commerce: "Clark’s new job will require her to play the political equivalent of the Frogger arcade game, racing back and forth across the road to shore up frayed relationships on the right and left—all while advancing a corporatist agenda that has lost favor with elements of both parties." WaPo
Google, Apple and other tech giants are increasingly hiring local lobbyists in an attempt to influence state-level policy proposals that have bipartisan support, and that could hit the companies' privacy and advertising practices or see them paying more tax. Wall Street Journal
With the stimulus checks now in the mail, President Joe Biden and Vice President Kamala Harris (and their spouses) are today embarking on a nationwide tour to sell their $1.9 trillion American Rescue Plan. The effort is an attempt to avoid a major perceived mistake made by the Obama administration, which didn't do a good enough sales job on its own economic recovery plan. Fortune
Twitter says it has fixed a bug that, bizarrely, locked people out of their accounts if they used the word "Memphis" in their tweets. The bug was first noticed by Twitter users who wanted to discuss the Dutch soccer player Memphis Depay. CBS News
This edition of CEO Daily was edited by David Meyer.