Record Fuel Prices Threaten Higher Food and Freight Costs

Oil closes in on $100 a barrel, as energy price anxiety mounts, plus Canada ups the ante in its trade spat with the US as reciprocal tariffs kick in, and Germany's far-right AFD party delivers a jolt to the country's political system. "If the AFD manages to form a government and rule the state, it would be the first government let by a far-right party in Germany since the end of World War II." It's Tuesday, September 8th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Stock markets are slipping today as higher oil prices drag on investor sentiment. Brent Crude is trading just below $100 a barrel, as supply disruptions in the Middle East and Russia continue to push up fuel costs. Yesterday, diesel and gasoline prices hit fresh, labor-day records, and its commodities reporter Julia Petroni explains the spike hasn't topped out yet. "Analysts are telling me that prices could rise even faster as we head into the fall, and the reason is that across the northern hemisphere, farmers are in harvest season, a time when they use large amount of diesel to power tractors and other machinery. And at the same time, colder weather means demand for heating fuel is likely to rise. On top of all of this, refineries typically carry out seasonal maintenance in the fall. That means some processing capacity will temporarily be offline, just as demand for diesel and other fuels is picking up." "With real economic consequences likely to fall." Diesel plays a huge role in the global economy. It powers the trucks that move our food and everyday products, including groceries, clothes, and furniture. But also the heavy machinery you see on construction sites and even ships carrying cargo across the world. And it's not just about transportation. Diesel is also widely used for heating, making it an important part of how homes, businesses, and industries keep running. So if that supply crunch lasts for a while, the effects can spread through the wider economy. Copper prices are also hitting fresh records with buyers scrambling for the metal amid concerns over mine supply and the prospect of potential U.S. tariffs. The bronze metal is also part of the AI trade, as it's used widely in power grids, data centers, EVs, and other energy infrastructure. Copper prices have gained 16% so far this year. Well, speaking of trade levies, Canada's retaliatory tariffs are taking effect today, hitting $20 billion in American goods. Effective products include steel, aluminum, cheese, and clothing. At rates of 15, 25, or 50%, which Canada says match Washington's tariffs. Prime Minister Mark Carney says the fight is necessary because U.S. demands would hollow out key Canadian industries. We don't want to make gains in the short term that then are taken away a few months later or a year later from that. That's not fair to our workers or our companies or our communities. So that's part of the reason why the deal wasn't good enough was in the forest product sector specifically. Yesterday, President Trump threatened to ban the sale of aircraft from Canada's Bombardier unless they manufacture their planes in the United States. Accident investigators are probing whether an Amazon cargo plane that crashed in Miami on Sunday, killing five people on the ground, may have approached the airport too fast and should have performed a routine go-around maneuver to redo its landing attempt. The Boeing 767 hit a pair of vehicles before coming to rest 1,300 feet past Miami's Runway 30, which wasn't equipped with crushable material that's designed to help planes come to a quick stop. While FAA and airport officials said so-called E-MAS system wasn't needed on the runway, the National Transportation Safety Board Chairwoman Jennifer Hammondy said that investigators would be looking into the effect that it might have had. The questions are on E-MAS and whether that would have helped prevent this tragedy and should the E-MAS be everywhere at every airport that will be a key part of our investigation. Miami Airport spokesman said the facility has consistently met federal safety requirements and would evaluate any future safety recommendations. And Belgian authorities have arrested a Chinese citizen suspected of stealing advanced microchip technology and passing trade secrets to a Chinese company. Officials say the arrest was made just before the suspect was set to fly to Beijing in May and highlights growing European fears of Beijing's trade practices and its quest for industrial secrets. European intelligence agencies have warned that Chinese entities target Western researchers and companies and policymakers are considering new economic security measures to address concerns about China. Representatives from China's Embassy to Belgium and its EU mission didn't immediately respond to requests for comment. It's the first trading day after Labor Day weekend and investors are preparing for another wave of large IPOs. Leading the pack is Aura, which is filed to go public at an expected valuation of over $11 billion and the smart ringmaker listed a surprise underwriter Robin Hood markets. Wall Street giants such as Goldman Sachs, Morgan Stanley and JP Morgan are the lead bookrunners on the deal, and retail brokerage Robin Hood is listed 18th and last, but it's still a win, as working as an underwriter should give Robin Hood more influence over the number of shares, ultimately set aside for its customers. The French startup Mestral AI is also raising cash, securing a nearly $3.5 billion infusion from the likes of Samsung Electronics pushing its valuation above $24 billion, despite being supported by major backers, including Black Rock and Advent, Mestral's valuation still lags far behind its US rifles. And Jaguar Land Rover is planning to cut roughly 9% of its workforce in response to US tariffs and intensifying British competition. The British automaker is aiming to save the equivalent of $2.3 billion over two years. The news comes as other European carmaker struggle, as we reported last week, Volkswagen now plans to have its model portfolio and eliminate 100,000 jobs. Coming up a right-wing surge in Germany sets up the AFD to reorient the country's politics and ways not seen since the end of World War II. Let's turn to Germany now where the country's far-right political party, the alternative for Germany or AFD, scored a historic regional election victory on Sunday that could reshape the country's political system. The AFD's agenda includes speeding up the deportation of undocumented migrants, increasing welfare benefits for native-born Germans, ending sanctions on Russia and Germany to Ukraine, and pulling the country out of the EU. And now, our Berlin-Bierre Chief Bertrand Benoit told me that Sunday's results put the populous party within reach of forming a state government in Saxony and Holt. If the AFD manages to form a government and rule the state, it would be the first government led by a far-right party in Germany since the end of World War II. He has been unable to do most of what he's campaigned for and that's because his party wasn't able to rule on its own or with a political ally, but had to form a government with the centre-left social democrats who don't see eye to eye on many of these points and everything has been compromised, so he stayed quite behind his promises and that's alienated, especially school voters. And Bertrand, this also exposes one of the weaknesses of what's called the "Firewall" in Germany. No, this decades-old strategy in which a number of disparate political parties ban together to try and keep the far-right out of power. The firewall in Germany has worked in the sense that all of the parties to the left of the far-right AFD had an informal agreement not to govern with it, not just not to govern with it, but also not to vote with it on any policy proposal. And so the AFD has been completely ostracised. To be fair, if your goal is to prevent the AFD from governing, it's a strategy that's worked really well. The AFD has been very popular for some time and for a few years now it's been the most popular party in Germany, but it hasn't come anywhere near power. Bertrand, you report that one response that we could see here from the chancellor and the CDU would be to allow its party members at the local level to vote with the AFD. Explain the logic of that. Is that so that moderate conservatives could basically tell voters, "Hey, we get it. We hear you because right now the CDU is struggling to make the case that when they're in power, they can actually govern conservatively." Yes, you have a strange situation where you have a big chunk of the electorate voting for the AFD and then the next big chunk of the electorate still votes for the CDU, but both count governs. So what happens is that you have. big majority of voters voting to the right of the center, but the CDU in order to govern has to make alliances with center-left parties. And so it is never in a position to implement its conservative agenda. And that's been a massive source of frustration for voters, and it's been costing the CU more and more and more votes. And so it has become a bit of a political debt end for the party. And the AFD can credibly say that, right? And the AFD has been saying if you vote for the CDU, you're going to get a left-wing government, and there is some truth to that. That was the journal's Berlin Bureau Chief Bertrand Benoit. And that's it for what's news for this Tuesday morning. Today's show was produced by Hadi Moyer, our supervising producer of his Sandra Killhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a news show. And until then, thanks for listening.