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Source: Bloomberg

President Donald Trump is planning to launch a new investigation into drug prices aimed at ensuring foreign countries pay as much as Americans do for their medicines, according to people familiar with the matter.

The probe would fall under Section 301 of the Trade Act of 1974, the people said, declining to be identified because discussions are private. Section 301 is a powerful tool that gives the president powers to impose tariffs in response to other nations' trade measures it deems as discriminatory to American businesses or in violation of US rights under international trade agreements.

The White House declined to comment. News of the planned investigation was first reported by the Financial Times.

The fresh probe could result in tariffs or other trade actions in the coming months related to pharmaceutical products, which would exacerbate tensions with major economies. Drugmakers typically charge much less for medicines in countries where governments can directly negotiate lower prices. The Trump administration has railed against this system, calling it "global freeloading on American pharmaceutical innovation."

The Section 301 investigation would give the administration a path to force countries to align their drug prices with what Americans pay. The tariffs could be a "marginal positive" for the pharmaceutical sector, said Leerink Partners analyst David Risinger. "But it remains to be seen how much the Trump administration can drive up ex-US drug prices."

It marks another turn in Trump's unpredictable trade policy, which has resulted in sweeping global tariffs and renewed brinkmanship with China. Still, Trump has yet to follow through on prior threats to slap new import taxes on drugs, and the investigation could prove to be yet another leverage play by the president. Trump has cajoled pharmaceutical companies to lower drug prices for US consumers, demanding they offer the best price for drugs or face consequences.

The president last month threatened to slap a 100% tariff on branded or patented medicines starting at the beginning of October unless manufacturers started to reshore production to the US. But Trump backed away from that proposal, as he and his advisers said they wanted to give companies more time to lower prices and open American factories.

US drug prices have been a focal point of Trump's health-care agenda. In May, he signed an executive order calling on the pharmaceutical industry to cut costs to the lowest level paid by similar countries. Over the summer, he sent letters to 17 drugmakers insisting they immediately lower what they charge Medicare for existing medicines, giving them 60 days to comply.

Section 301 investigations focus on foreign governments, but the US Trade Representative can conduct parallel reviews of a common concern that relates to multiple countries. It did so during Trump's first term, looking at the digital services taxes of multiple nations, including France and the UK.

Drug companies, for their part, appear to support Section 301 tariffs. AbbVie Inc. Chief Executive Officer Robert Michael said that the tariffs are something that can be used to address "unfair practices" related to international drug pricing.

"Clearly, I think the pharma companies alone cannot get it done," he told investors at a Morgan Stanley conference in early September. "We do need partnership with the administration through trade negotiations to address these unfair practices. There are tools that are available to the president. Section 301, certainly something that can be employed to address these unfair practices."

Source: Bloomberg Europe

Western nations agonized for years over how they might use Russian central bank assets deposited abroad to support Ukraine's military and rebuild its shattered economy. Many European officials were skeptical, concerned that doing so could amount to illegal expropriation.

Now that President Donald Trump is pulling US financial support from Ukraine and Europe's governments are scrambling to fill the gap, the region's leaders are putting aside those reservations and becoming more radical in their approach.

The Group of Seven industrialized nations already agreed to leave the Russian assets untouched but allow Ukraine to tap the profits they generate. A new proposal being discussed by European Union member states would go much further, allowing the Russian money to be used to provide loans to Ukraine. The government in Kyiv may never have to repay them unless Russia's government agrees to compensate its neighbor for the damage the war has caused.

The bloc is proceeding with extreme caution, aware that an outright asset seizure might expose member states to massive potential liabilities.

Under the first plan agreed in 2024, G-7 countries are providing Ukraine with loans to be repaid using the interest earned on the Russian foreign assets they froze following Moscow's 2022 invasion of the country. The EU agreed to provide Ukraine with €45 billion ($52 billion) in loans through that initiative.

The EU is now discussing the idea of using the assets themselves to unlock about €140 billion in fresh loans to Kyiv. Russia would not recoup the assets, which are sitting in Brussels-based European depository institution Euroclear, unless it agrees to pay for Ukraine's reconstruction.

To placate the government of Belgium, which hosts Euroclear and has voiced concerns about being left on the hook for tens of billions of euros if Russia successfully sues for the return of the money, the EU would strike a "tailored debt contract" with a 0% interest rate to be triggered if Euroclear ends up being forced to honor any potential future Russian claims. Belgium wants to make sure those guarantees are legally solid.

The EU's plans are also backed by the UK and Canada, while the US and Japan have yet to decide whether they will join the initiative.

The EU, the G-7 and Australia froze about $280 billion of Russian central bank assets in the form of securities and cash. The biggest chunk of the money is in Europe as Russian President Vladimir Putin pulled the bulk of his central bank's assets out of the US in 2018 following earlier waves of sanctions. Sanctions imposed on prominent Russian individuals had frozen an additional estimated $58 billion in assets, including homes, yachts and private aircraft, as of March 2023, the US Treasury said in a statement at the time.

That's still being discussed, but broadly the additional financing would be used to purchase weapons, ramp up Ukraine's defense industry and meet its economic needs. The government in Kyiv desperately needs money: The International Monetary Fund has estimated its funding gap at $65 billion over the next four years.

With Moscow relentlessly bombarding Ukrainian cities and decimating energy infrastructure, President Volodymyr Zelenskiy has been pleading with allies to send more air-defense systems and longer-range missiles to strike military targets deep inside Russia. Trump wants Europe to pay for those weapons, and a special procurement program has been set up so that Ukraine can buy US military equipment with funds provided mostly by European partners.

There are precedents for this: After the 2003 invasion of Iraq and the ousting of its leader Saddam Hussein, US President George W. Bush ordered the seizure of $1.7 billion of Iraqi funds held in American banks, some of which went to pay the salaries of Iraqi government employees. In 1996, the US seized Cuban funds and used them later to help compensate the families of three Americans killed when their planes were shot down by Cuba's armed forces.

The problem for the EU is that seizing and spending the Russian funds could be construed as theft, even when carried out by a group of powerful governments under a legally binding accord. As a general rule, legal asset seizures only tend to happen when a court has decided they are the proceeds of crime. Russia's invasion of Ukraine clearly violates international law, but that doesn't mean its central bank assets count as ill-gotten gains.

Russia cannot repatriate or use the funds. But neither can EU nations unwind its legal ownership of the assets. So the G-7 and EU moves have been designed to make use of the money without actually removing it from Euroclear.

France, Germany and the European Central Bank had raised the risk that seizing the Russian assets could have an impact on global financial stability and the euro's status as a reserve currency. There's concern that depositors from developing nations may be encouraged by Russia and China, its powerful de-facto ally, to pull money out of western banks, fragmenting the global financial system.

Moscow portrays the western push to mobilize its assets in support of Ukraine as violating a basic principle of the global economic system — the sanctity of private property.

Russia has threatened reprisals that could include confiscating assets from "unfriendly" countries held in its own banks that it also froze at the start of the conflict. Putin in October signed an order allowing for fast-track sales of state-owned assets under a special procedure, raising the risk that foreign-held companies could be nationalized and sold off in retaliation for the use of Russian holdings abroad to support Ukraine.

Yes. These included yachts tied to Russian billionaires that were seized in Fiji and Spain soon after the 2022 invasion of Ukraine by local law enforcement acting on requests from US authorities.

The US Office of Foreign Assets Control designated one of the billionaires, Suleiman Kerimov, as part of a group of oligarchs who profited from Russian government corruption. Viktor Vekselberg's $99 million yacht, called Tango, was linked to suspected bank fraud, money laundering and sanctions violations. The US also seized homes belonging to Kerimov, Vekselberg and another Russian billionaire, Oleg Deripaska.

Source: Bloomberg Europe

President Donald Trump's mass firings of federal workers during the second-longest government shutdown in U.S. history could hamper implementation of two tax incentives made permanent in his massive tax-cut and spending bill meant to boost investment in low-income communities.

The administration said in a court filing that more than 1,400 Treasury Department employees were fired. Those firings were put on a temporary hold by a federal judge, but according to two people briefed on the plan, they target about 95 staff members of the Community Development Financial Institutions Fund, which spearheads economic development programs within the department.

The fund's staff works on two tax provisions made permanent by Republican legislation this year, administering the New Markets Tax Credits and helping the Internal Revenue Service establish the Opportunity Zones program.

For the last 25 years, the new market credits encouraged private investments into manufacturing, offices and retail locations in economically distressed areas with low median incomes and high rates of unemployment. Within the last seven years, governors encouraged more than 8,700 opportunity zones in every state to attract business and housing developments.

Without the CDFI fund staffers, money appropriated by Congress for the programs could be left unutilized, which would delay investments throughout the country, said Pravina Raghavan, the most recent head of the fund who stepped down in July.

"It blows your mind. You made something permanent, but you're not going to run it, so why make it permanent?" said Raghavan, who now leads Locus Impact, a Richmond, Virginia-based CDFI.

The White House and Treasury Department did not respond to requests for comment.

Cuts hit years-long programs

The programs use similar tax mechanisms to drive private investments into low-income neighborhood businesses and housing developments.

The New Markets Tax Credits offer investors lower taxes through credits. Opportunity Zones allow investors with income from selling stocks and property to lower and delay paying capital gains taxes.

In July, Republicans in a party-line vote approved $5 billion in annual funding for the new market credits and reauthorized the Opportunity Zone program in Trump's tax-cut law.

Trump has boasted about opportunity zones since they were created in his first term, calling the program "probably the number one economic development project ever in our country" at a White House Black History Month event in February.

Both programs have gone to every state in the country, with more than $77 billion in new market tax credits awarded since 2000, and more than $100 billion invested in opportunity zones.

Six of the top 10 states with investments through the new market tax investments are represented by Republican senators, according to real-estate consulting firm Novogradac.

Yet the firings, which are separate from the temporary furloughs federal workers experience during a shutdown, threaten the program's stability.

Trump recently said these actions were targeted at "Democrat programs," a stance meant to increase pressure on Senate Democrats who have voted against Republicans' stopgap funding bill 11 times so far in a bid to force a conversation about healthcare fixes. As of Wednesday, the shutdown is in its 22nd day, tying a record set in late 1995 and early 1996 for the second-longest government shutdown in U.S. history.

"It's completely mind-boggling that the president's own budget office would seek to completely dismantle the CDFI Fund. Makes you wonder if the president was even made aware," said U.S. Senator Mark Warner, a Virginia Democrat who called the permanency of the new market tax credits "one of the few bright spots" in the Republicans' legislation.

Staff needed to administer programs

The Opportunity Zones fund staff help the IRS screen and approve areas state governors want to designate in an effort to attract new investments.

The IRS provides the New Market Tax Credits subsidies, while the CDFI Fund certifies organizations to hold investors' money and allocates how much money each organization gets based on an annual application.

Without staffing, no one will be present to make the certifications and distribute the money, Raghavan said.

Republican Senator Mike Rounds of South Dakota said the Senate's bipartisan CDFI Caucus has discussed the potential hit of staff cuts to new market tax credits.

"I do have a concern with it because CDFIs play a real role in my part of the country," said Rounds.

Lawmakers also embrace these programs as job creators. Representative Mike Kelly, a senior Republican tax writer from Pennsylvania, advocated for making the tax credits permanent, saying they "revitalize Main Street" and three recent development projects created 518 jobs.

Similar to education programs for low-income Americans, the CDFI staff cuts follow a pattern of the administration pursuing its own cuts without Congressional approval. The president earlier this year proposed eliminating the CDFI Fund completely.

Source: Investing

The 60,000 men and women responsible for keeping American skies safe have gone unpaid throughout the government shutdown. Without a funding agreement soon, many will be forced to dip into savings, rack up credit-card debt, or take on part-time jobs to make ends meet, several federal employees said.

The shutdown is now three weeks old, and rapidly approaching the time when the tens of thousands of government employees who keep security lines moving and air traffic safe will miss a full paycheck. Those workers last received paychecks in mid-October, and those checks were missing up to two days' worth of pay.

"People are saying, 'Well, when I get off work, I'm going to do Uber or DoorDash or Lyft or something like that because I need to put food on the table and I got a kid at home'," said Neal Gosman, treasurer of the American Federation of Government Employees Local 899 in Minnesota, a union representing Transportation Security Administration workers.

Gosman, who also works part time as a transportation security officer in addition to his union duties, said he received about 60% of his normal TSA pay in the last paycheck but that a co-worker received only $6.34.

National Air Traffic Controllers Association President Nick Daniels said on Monday that controllers are going to get a pay stub on Thursday that shows no pay for next week, and many will face very hard choices.

"How do I deal with calling my employer and telling them I can't afford child care? I have my two kids with me. What do you want me to do?" Daniels said of controllers struggling to make ends meet without paychecks.

The authority that operates the Minneapolis-St. Paul International Airport plans to set up a shelf to provide nonperishable food items to federal employees as it did during the 2018-19 government shutdown, according to spokesperson John Welbes. If the shutdown stretches into November, the authority is considering offering boxed lunches.

But that will not be enough. A TSA officer at Dallas-Fort Worth Airport, who asked to be identified only as M., said he will take out a $3,000 loan to help cover his expenses.

"The loan will be for car payments and to pay for the new apartment because I can no longer afford the current one because of everything that's going on," said M., who did not want his full name used due to concerns about being fired for speaking out.

In 2019, during a 35-day shutdown, the number of absences by air-traffic controllers and TSA officers rose as workers missed paychecks, which added to passenger wait times at airport checkpoints. Authorities were forced to slow air traffic in New York, which pressured lawmakers to quickly end the standoff.

On Day 31 of that shutdown, 10% of TSA workers called in sick - triple the normal absence rate.

Last week, the U.S. Transportation Department shared information on how to make donations of food, clothing or other items to the more than 50,000 TSA officers across the country, who earn an average of $40,000 per year. The guidelines said that gifts of donuts, pizza and coffee are fine, but not cash, and that people should never donate at a checkpoint.

U.S. PresidentDonald Trump's fellow Republicans hold majorities in both chambers of Congress but need at least seven Democratic votes to pass a funding bill in the Senate. Democrats are holding out for continuing and expanding healthcare subsidies for people who buy insurance through the Affordable Care Act. Another vote to pass a government spending bill is expected on Thursday.

"I'm more just disappointed that there's no true negotiations going on," said another TSA officer in Dayton, Ohio, adding that he does not understand why Congress is playing "political chess" with his paycheck.

Source: TradingView

Key points:

The White House said on Tuesday it will submit plans for President Donald Trump's $250 million White House ballroom project to a body that oversees federal building construction, even though demolition work began earlier this week.Trumpreveled on Tuesday in the demolition sounds by construction workers for the ballroom addition to the White House, the first major change to the historic property in decades.But critics, aghast about images of the White House walls crumbling after Trump had pledged the project would not interfere with the existing landmark, said a review process should have taken place before the work began.

The White House still intends to submit those plans to the National Capital Planning Commission, which oversees federal construction in Washington and neighboring states, a White House official told Reuters."Construction plans have not yet been submitted to the National Capital Planning Commission but will be soon," the official said, adding that the NCPC does not have jurisdiction over demolition work.Asked why the demolition of East Wing walls was occurring despite Trump's promise that it would not affect the existing building, the official said modernization work was required in the East Wing and changes had always been a possibility.

"The scope and size was always subject to vary as the project developed," he said.Trump, a former New York real estate magnate who has made changes to the Oval Office, Rose Garden and other parts of the executive mansion complex since taking office in January, has long wanted to build a ballroom to host larger gatherings. Trump has said it will be paid for by himself and donors, allowing him to avoid seeking congressionally appropriated government funds but raising questions about possible conflicts of interest.Bryan Green, who served as an NCPC commissioner under Democratic President Joe Biden, said demolition work was connected to the ballroom project.

"Demolition really cannot be separated from the new construction that follows," he said. "These are linked."A tennis pavilion on White House grounds completed during Trump's first term went through a review process with the NCPC and the U.S. Commission of Fine Arts, Green noted.Doing the same kind of review this time would have avoided the shock that many observers felt this week when the demolition began unannounced on Monday. Trump later said ground had been broken on the project after images of the demolition started circulating in news reports.

"You don't have the image of a wrecking ball hitting the president's house, one of the most important buildings in our country, by surprise to everyone except a small handful of people," Green said.Trump's White House dismissed criticism, calling it "manufactured outrage." It pointed to additions and renovations that have been made to the executive mansion and its grounds by presidents from Theodore Roosevelt to Bill Clinton.

'IT REMINDS ME OF MONEY'

Loud banging from the East Wing demolition caught the attention of tourists walking past the south lawn of the White House on Tuesday, causing several people to stop briefly to see demolition excavators tearing down the roof.“I think it’s a total waste of money and shows a complete lack of respect for historic buildings in our nation's capital, but it’s totally not surprising. I am having PTSD from my bathroom remodel,” said Catheryn Koss, 52, from California. "I thought they said they were going to preserve it.”

Several prominent Democrats also voiced disapproval.

“It’s not his house. It’s your house. And he’s destroying it,” former first lady and Democratic presidential nominee Hillary Clinton said on X.There has been some ambiguity about which entities have jurisdiction over the project.Priya Jain, who chairs a heritage conservation committee at the Society of Architectural Historians, which has expressed concern about the work, said the National Historic Preservation Act of 1966 normally requires reviews for projects that affect historic buildings.

But a carve-out for the White House, the U.S. Capitol and the Supreme Court and their grounds meant Trump's project was exempt."We have best practices (on) how to do this, and it would have been nice to see some of that process, even if it was not required by law," she said.The U.S. Treasury, which sits adjacent to the White House, confirmed that it directed its employees not to share pictures of the construction site."Carelessly shared photographs of the White House complex during this process could potentially reveal sensitive items, including security features or confidential structural details," a spokesperson said.

The White House's East Wing sits on top of the Presidential Emergency Operations Center, a bunker the president would use in a wartime scenario. It is unclear how the facility is being impacted.Speaking to Republican lawmakers gathered in the White House Rose Garden on Tuesday, Trump noted the noises of demolition work coming from the other side of the grounds."You probably hear the beautiful sound of construction to the back," he said, sighing approvingly. "That's music to my ears. I love that sound. Other people don't like it. ... When I hear that sound it reminds me of money."

Source: TradingView