National

In New York City, 85,476 people tested positive for COVID-19 on Sunday. In Xi’an, which has a larger population, that number was 122. But it’s the central Chinese city that’s currently living under the world’s strictest lockdown.

Why it matters: The Chinese government is going to drastic lengths to maintain its “zero COVID” policy even with more contagious variants like Omicron emerging and the rest of the world largely learning to live with the virus — including countries like Australia and New Zealand that had previously tried to keep all cases out.

Driving the news: 12 days into a strict lockdown, residents of Xi’an are in most cases barred from leaving their homes, let alone the city, except for testing.

Cries for help have bubbled out from Xi’an on platforms like Weibo. Some residents say they haven’t received enough to eat or any deliveries at all, per CNN. Residents of one housing compound were evacuated en masse just after midnight on Jan. 1 and forced into quarantine facilities, the BBC reports.

“All we can do is add the shop owners’ WeChats and sneak out at night. Buying food is like being a thief,” one resident posted, per the FT. Local officials pledged Saturday to increase free deliveries of food and other essential goods.

At least 26 officials have been punished in Xi’an for their handling of the outbreak, according to the Economist. Two COVID-prevention workers were detained after being captured on video beating a man who left home to purchase steamed buns.

The big picture: The zero COVID approach has in many ways been a massive success. Life has largely gone on as normal in China as hospitals filled and death tolls climbed in the West. 

Over 80% of the population is vaccinated, and authorities have deployed mass testing at scale where necessary (over 6 million tests were conducted in Xi’an in one day last week).

Yes, but: The dismount will be very difficult. China has only recorded a few cases of Omicron thus far, but the strain will be hard to keep out and contain. The Winter Olympics, starting Feb. 4 in Beijing, will be one major test.

There is little immunity in the population, and China’s domestic vaccines are less effective than the mRNA vaccines available in the West.

A study in Hong Kong found that one of the primary Chinese vaccines, CoronaVac, does not prevent infection from Omicron even with a booster (it can still prevent hospitalization and death).

What to watch: The Eurasia Group consultancy placed China’s zero COVID conundrum atop its annual list of global risks, released Monday.

The authors anticipate a cycle of infections, lockdowns, economic disruptions, state intervention and growing public dissatisfaction in 2022, with ripple effects for the global economy and the supply chain crisis.

China's "zero COVID" challenge is getting tougher

China

Coronavirus

Conflicts, policies and powers are intersecting and shaping the world. Breaking news and analysis of national security, foreign policy and global crises.

World

The U.S. health system faces critical questions about cost, access and equity. Technological advances and new discoveries about diseases like cancer and Alzheimer’s are transforming patient care and reshaping public health.

Health

The Biden administration brought 36 migrants back to the U.S. for court hearings on Monday under the reimposed Remain in Mexico program and expanded its enforcement of that program into San Diego, even as it continues efforts to end the policy, administration officials told reporters on a call. 

The big picture: The administration has asked the Supreme Court to intervene to allow them to end what's formally known as the Migrant Protection Protocols (MPP), which forces asylum seekers at the southern border to wait in Mexico while their cases are heard. 

More than 200 migrants have been already returned to Mexico since a court forced the policy's reimplementation last month.

Officials highlighted attempts to make the program more humanitarian compared to when it was first enforced under President Trump, including providing better access to legal counsel both before being sent back to Mexico and ahead of court hearings. 

Migrants will now be provided transportation directly to shelters after returning to Mexico, facilities have better WiFi and the Mexican government has committed to providing enhanced security at shelters. 

By the numbers: As of the end of 2021, just over 200 single male adults had been returned via the El Paso-Ciudad Juarez border crossing under MPP, a spokesperson for International Organization for Migration in Mexico told Axios.

Administration officials declined to provide official numbers on the Monday call. 

Migrants will now be enrolled in the San Diego sector in addition to El Paso, and "we anticipate expanding in the near future to other ports of entry along the border, as well," one official said on the call.

Remain in Mexico expands as U.S. immigration court hearings begin

36 migrants were brought back to the U.S. for court hearings on Monday.

 Immigrants from Haiti and Venezuela await transfer by sheriff's deputies to a U.S. Border Patrol processing center 

Immigrants await transfer to a U.S. Border Patrol processing center in Yuma, Ariz. Photo: John Moore/Getty Images

Immigration

Latin America and Latinos

2024 will be an election year like no other, as President Biden seeks re-election amid economic uncertainty, two wars and questions about his age. His likely foe, former President Trump, faces felony charges and vows revenge on his political enemies. Meanwhile, Americans generally are dissatisfied with those choices and are divided over immigration, race, education and more.

Politics & Policy

Apple on Monday became the first publicly traded company to be worth $3 trillion, the New York Times reports.

Driving the news: It comes less than two years after the company became the first to hit a $2 trillion valuation. 

$3 trillion roughly equal to the gross domestic product of Britain or India, the Times notes.

Our thought bubble, via Axios' Hope King: Investor trust and confidence in Apple has never been higher and the milestone today continues to solidify its position as one of the most consequential companies in the world.

Apple becomes first company worth $3 trillion

It comes less than two years after the company became the first company to hit a $2 trillion valuation.

Picture of the apple logo and there's a building behind it

Apple

Big Tech

Emerging Tech

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

The Capitol's attending physician on Monday urged congressional offices to shift towards remote work due to a skyrocketing coronavirus positivity rate among staff.

Why it matters: The push comes as the highly infectious Omicron variant has caused a resurgence of the pandemic across the country.

Coronavirus cases have "exploded throughout the USA" due mainly to Omicron and the "residual" Delta variant, attending physician Brian P. Monahan said in an alert to congressional offices.

What they're saying: "These variant viruses have caused an unprecedented number of cases in the Capitol community affecting hundreds of individuals," Monahan wrote.

Monahan said the Capitol test center's seven-day positivity rate has risen from 1% to 13%.

"Congressional offices, Committees, and Agencies should immediately review their operations to adopt a maximal telework posture to reduce in-person meetings and in-office activities to the maximum extent possible," Monahan wrote.

Congress warned of explosive Omicron spread on Capitol Hill

The attending physician urged congressional offices to shift towards remote work.

Omicron variant COVID

New York Attorney General Letitia James has issued subpoenas for two of former President Trump's children, Donald Trump Jr. and Ivanka Trump, as part of a civil investigation, according to court documents filed Monday.

Why it matters: The move represents another escalation in the attorney general's investigation into the former president's business practices. James requested a deposition from Trump in early December.

The big picture: The subpoenas for both Trump and his two children were issued on Dec. 1, though the ones for Donald Trump Jr. and Ivanka Trump were not publicly known until now, the New York Times reported.

In late December, Trump sued James in an effort to block her office's civil investigation into whether the Trump Organization engaged in financial fraud by submitting false property valuations to reduce its tax burden.

Trump's son Eric was questioned by the attorney general's office for James' civil investigation in October 2020.

The latest: The Trump Organization on Monday evening filed a motion to block or stay the enforcement of the subpoenas, arguing that testimony from the pair would circumvent immunity rights afforded to them if they appeared before a grand jury for a separate, criminal investigation.

"These delay tactics will not stop us from following the facts or the law, which is why we will be asking the court to compel Donald Trump, Donald Trump Jr., and Ivanka Trump to testify with our office under oath," James said in a statement. 

What they're saying: "We are confident that our questions will be answered and the truth will be uncovered because no one is above the law," a spokesperson for the attorney general's office told Axios.

Editor's note: This post has been updated with comment from a spokesperson for the New York Attorney General's office and news that the Trump Organization filed a motion to block the subpoena.

New York AG subpoenas Donald Trump Jr. and Ivanka Trump

The move represents another escalation in the attorney general's investigation of Trump's business practices.

Ivanka Trump and brother Donald Trump Jr.

Donald Trump Jr. and Ivanka Trump. Photo: Mandel Ngan/AFP via Getty Images

Donald Trump

Senate Democrats will use Thursday's anniversary of the Jan. 6 attack on the U.S. Capitol to propel their efforts to pass sweeping voting rights legislation.

Driving the news: In a letter to colleagues Monday morning, Senate Majority Leader Chuck Schumer (D-N.Y.) said the Senate will debate and vote on changing Senate rules if Republicans block a vote on the Freedom to Vote Act backed by Sen. Joe Manchin (D-W.Va.). Schumer promised a vote on Senate reforms by Martin Luther King Jr. Day on Jan. 17.

Why it matters: This is the furthest Schumer has gone in calling on Democrats to change Senate rules to bypass Republican obstruction to their efforts to protect or expand voting rights.

Behind the scenes: Meetings on potential rules changes with senators including Manchin, Jon Tester (D-Mont.), Angus King (I-Maine) and Tim Kaine (D-Va.) continued over the break and will continue this week, Senate leadership aides say.

What they're saying: "Much like the violent insurrectionists who stormed the US Capitol nearly one year ago, Republican officials in states across the country have seized on the former president’s Big Lie about widespread voter fraud to enact anti-democratic legislation and seize control of typically non-partisan election administration functions," Schumer said in the letter.

"We must ask ourselves: if the right to vote is the cornerstone of our democracy, then how can we in good conscience allow for a situation in which the Republican Party can debate and pass voter suppression laws at the State level with only a simple majority vote, but not allow the United States Senate to do the same? We must adapt. The Senate must evolve, like it has many times before."

"We hope our Republican colleagues change course and work with us. But if they do not, the Senate will debate and consider changes to Senate rules on or before January 17, Martin Luther King Jr. Day, to protect the foundation of our democracy: free and fair elections."

Dear Colleague 1.3.22

Schumer promises vote on Senate rules changes by MLK Day

Senate Democrats will use the one-year anniversary of the Jan. 6 Capitol attack to propel their voting rights push.

Photo: Sarah SIlbiger/Bloomberg via Getty Images

Voting rights

The Food and Drug Administration expanded COVID-19 vaccine booster eligibility on Monday to allow 12- to 15-year-olds to receive a third shot of the Pfizer-BioNTech vaccine.

Why it matters: The expansion comes as coronavirus cases soar to record numbers due to the highly contagious Omicron variant, raising concerns over hospitals' ability to respond to the anticipated deluge of patients.

Driving the news: The FDA also approved shortening the period people must wait between receiving a second shot and booster from six months to five months.

It also authorized booster shots for certain children aged 5–11 with immune deficiencies.

The big picture: More than 70% of people in the U.S. above the age of 12 are fully vaccinated, according to the CDC.

NIAID director Anthony Fauci last week encouraged parents to get their children vaccinated against COVID-19 to prevent "avoidable" hospitalization and severe illness.

What they're saying: "Throughout the pandemic, as the virus that causes COVID-19 has continuously evolved, the need for the FDA to quickly adapt has meant using the best available science to make informed decisions with the health and safety of the American public in mind," acting FDA commissioner Janet Woodcock said in a statement Monday. 

“With the current wave of the Omicron variant, it’s critical that we continue to take effective, life-saving preventative measures such as primary vaccination and boosters, mask wearing and social distancing to in order to effectively fight COVID-19."

What to watch: The CDC's vaccine advisory committee is expected to meet this week to decide whether to endorse the FDA changes, according to the New York Times, which first reported on the expansion. 

Go deeper: Fauci says child COVID hospitalizations "avoidable" with vaccine

FDA authorizes Pfizer boosters for 12- to 15-year-olds

More than 70% of people in the U.S. above the age of 12 are fully vaccinated.

A healthcare worker administers a dose of the Pfizer-BioNTech Covid-19 vaccine to a child at an Oklahoma County Health Department Vaccine Clinic.

A health care worker administers a dose of the Pfizer-BioNTech COVID-19 vaccine to a child at an Oklahoma County Health Department Vaccine Clinic on Nov. 17, 2021. Photo: Nick Oxford/Bloomberg via Getty Images

Coronavirus vaccines

Capital

Axios Capital

Monopolies cause inflation — so cracking down on monopolies will cause inflation to decline. That's the claim of the Biden administration, anyway.

Why it matters: It's very hard to find good-faith arguments on any side of this debate. But one thing is clear: The U.S. government is currently being broadly blamed for rapidly rising prices. If inflation does decline, for any reason, then it will surely claim credit. 

Driving the news: The White House said in December that rising meat prices were due to four monopolists in the meat-processing industry abusing their 85% share of the market. 

“Their goal is to control the market so that they can control the price,” NYU professor Marion Nestle told the NYT last week. 

The other side: The North American Meat Institute says that the White House doesn't understand agricultural economics. 

They're backed up by a Twitter thread from Harvard economist Larry Summers, claiming that increases in demand won't create higher inflation in monopolistic industries than in competitive ones. 

That said, Summers also believes that "competition helps constrain inflation," something that is well established in the literature. 

The big picture: Corporate profits have soared during the pandemic, in part thanks to the fact that in the current inflationary environment, companies don't find themselves punished by consumers for raising prices. 

The more competition there is in an industry, however, the harder it is to raise prices. 

Be smart: Monopolies tend to find it easier to raise prices and cause inflation — think of pharmaceutical companies steadily ratcheting up the price of drugs they control. Monopsonies, on the other hand, where there's a single buyer and multiple sellers, tend to keep consumer prices low.

When demand rises in say the meat industry, where a small number of meatpackers sell to many buyers, supermarkets are forced to compete with each other to buy beef — which means offering to pay more. 

One step up the supply chain, however, it's the other way around: Cattle farmers aren't seeing higher prices for their beef, because the handful of buyers are able to keep wholesale prices low. 

Between the lines: The White House's Brian Deese told the NYT last month that a focus on antitrust issues “will deliver lower prices for Americans right away.” That seems unlikely. Supply-chain issues and labor shortages aren't going away any time soon, especially given anemic immigration. 

But so long as inflation comes down before the 2022 election, the Biden administration now has a way of taking credit for that. 

The bottom line: Inflation is a microeconomic phenomenon, a macroeconomic phenomenon, and a political attack vector all at once. Republicans will blame Democrats for causing it — and Democrats will blame greedy corporations. Both attacks are stronger on political expedience than they are on explanatory power. 

Biden's monopoly gambit

The Biden administration claims that cracking down on monopolies will cause inflation to decline.

Inflation

Whats Next

Axios What's Next

New York City's charismatic new mayor, Eric Adams, was sworn in just after midnight on New Year's Day, promising to bring a fresh set of eyes to a thankless job in a crime-ridden and COVID-weary town.

Why it matters: New York's urban problems — always a national bellwether — have spiraled during the pandemic. This tough-on-crime mayor, a longtime NYC police captain, vows to clean things up but has his hands full.

Problems include rampant homelessness, a rising murder rate, small businesses in turmoil, the devastation of the corporate tax base due to COVID-19, and economic inequality that prompted Adams to characterize New York as "a tale of two cities."

If Adams succeeds, he could go far: He has called himself "the future of the Democratic Party."

Biography: The fourth of six children of a single mother who cleaned houses, Adams, 61, grew up in Queens. At age 15, he "was arrested on a criminal trespass charge for entering the home of an acquaintance," Mara Gay wrote in the New York Times. "He has said he was beaten so severely by police officers that his urine was filled with blood for a week."

He joined the New York Police Department in 1984 and served for 22 years, after which he was elected to the New York State Senate.

He rose to political prominence in Brooklyn, where he was elected borough president in 2013.

"Stylistically, Mr. Adams could be the most flamboyant mayor New York City has seen in decades," per a New York Times profile of Adams. He's "an early riser, a vegan and a wellness enthusiast who keeps a frenetic schedule."

"He is a stylish dresser who campaigned shirtless at Orchard Beach in the Bronx; he socializes with Republican billionaires and celebrities; he wants to take his first paycheck in Bitcoin."

The race factor: Adams is NYC's second Black mayor — David Dinkins, in the early 1990s, was the first. With his election, "working-class Black New York, which makes up the heart of the Democratic base but has long been shut out of City Hall, will finally have its moment," per Gay's piece in the Times.

Despite his appeal to the working class — whom he told in his November victory speech, "I am you" — he is moderate in his politics and has a habit of frustrating the left with his tough-on-crime stance.

Out with the old: Adams' predecessor, Bill de Blasio, had become a punchline (and a punching bag) by the time he left office, blamed for everything from rising crime  to the mismanagement of COVID, the city's economy and its schools.

"Sayonara sucker!" Andy Cohen jeered at de Blasio during a New Year's Eve broadcast on CNN with Anderson Cooper.

The Wall Street Journal called de Blasio's tenure "eight years of progressive failure" and said that Adams "inherits a mess but also has a turnaround opportunity."

For his part, Adams says he won't proceed with de Blasio's plan to end the city's gifted and talented program in schools and plans to restore a plainclothes police unit that targets violent crime, which his predecessor had controversially disbanded. 

The bottom line: On his first day in office, Adams was commuting to work on the subway when he saw some men start to throw punches and called 911.

"He did not immediately identify himself as the mayor on the call," per The New York Post.

"'I have an assault in progress of three males,' he said, repeating it for the operator who seemed to misunderstand him." 

"'No, assault in progress. Not past assault,' he said. 'They are fighting each other on the street right now.'"

"At the end of the call, he told the operator that he was 'Adams, Mayor Adams.'" 

Jennifer's thought bubble: New Yorkers are eager for Adams to keep our stores open, reinvigorate our schools and make us feel safe on the subway again.

Eric Adams dials 911 on Day 1 as NYC mayor

Adams vows to clean up crime in the  city, but has his hands full.

NYC Mayor Eric Adams is sworn in on Jan. 1

New York City Mayor Eric Adams is sworn in on Jan. 1.  Photo: Arturo Holmes/Getty Images

New York City

Vitals

Axios Vitals

Months after Delta threatened the fall back-to-school ritual, COVID-19 is again complicating kids' return to the classroom.

Why it matters: While government officials worked to convince school administrators and parents over the last several days that kids could safely get back to in-person learning after the holidays, the reality on the ground amid the spread of Omicron is much more complicated.

What they're saying: "I still believe very firmly and very passionately, not only as an educator but as a parent, that our students belong in the classroom and that we can do it safely," Education Secretary Miguel Cardona said on CBS' "Face the Nation" on Sunday. 

NIAID director Anthony Fauci pointed to vaccination rates among teachers, growing vaccinations among kids and increased testing. 

"I think all those things put together, it's safe enough to get those kids back to school, balanced against the deleterious effects of keeping them out," Fauci told ABC News' "This Week."

Yes, but: While many of the nation's school districts are moving ahead with in-person classes, more than 2,100 schools are expected to be closed or open only for remote instruction this week, according to the school tracking website Burbio.

Major school districts, such as those in Washington, D.C., and Baltimore, extended their holiday break by a few days to allow time to test students and teachers.

Smaller districts around the country, including in Michigan, Ohio and New Jersey, are opting for remote learning for at least the first week back from the holiday break. 

Among the concerns, Omicron numbers are surging and hospitals are already filling up or overwhelmed, fueling concerns that kids' return to schools could further drive up case rates.

Pediatric hospitalizations have hit record levels, largely attributed to large numbers of kids being not fully vaccinated against COVID. 

While the Biden administration announced a "test-to-stay" strategy last month to keep schools open, the logistics so far have proved challenging as tests in many places were delayed, the Wall Street Journal and USA Today reported.

Some good news: Early data indicates Omicron may not cause much severe illness. 

"Given the large number of cases, we have not seen a concomitant increase in the relative percentage of hospitalizations," Fauci told ABC News.

"But, again, hospitalizations are often late, lagging indicators," he warned.

The bottom line: As the U.S. gets back to business and school in the new year, Americans will be adjusting to increased testing, changing isolation protocols, and evolving views on the importance of mask quality.

Amid the spread of a highly transmissible variant, the next few weeks could prove to be especially challenging.

Back to school: Omicron edition

Months after Delta threatened the fall back-to-school ritual, a COVID-19 variant is again complicating kids' return to the classroom from their holiday breaks this week.

Illustration of an open backpack with a giant bottle of hand sanitizer in it.  

COVID-19

Car dealers' annual year-end sell-a-thons have turned into wait-a-thons for many shoppers unable to find the vehicle they want on dealer lots — but that could be about to change as some companies modernize the way they sell their cars.

Why it matters: Supply chain disruptions could have a silver lining for automakers if Americans can be trained to order the exact car they want — color, features, bells and whistles — and then wait a month or so for it to be delivered.

This is how Europeans have been buying cars since World War II, when money and materials were in short supply and factories were struggling to recover.

But Americans are accustomed to going to the dealership and driving home in a shiny new car off the lot.

What's happening: Some companies say they plan to capitalize on the inventory crunch to permanently shift to an order-based system, starting with their new lineups of electric vehicles.

Ford Motor, for example, is trying a build-to-order scheme with its new Mustang Mach-e, which is in high demand.

And Ford is offering a $1,000 discount to customers who pre-order any vehicle.

What they're saying: "You cannot imagine ... how much money we waste by not -- by guessing what our launch mix is for a new product," Ford CEO Jim Farley told investors and analysts in October.

A build-to-order model, he says, is a far more efficient way to run the business. 

Between the lines: Packing lots with large numbers of cars, trucks and SUVs is a huge drain on profits for both dealers and automakers.

Dealers have to cover the cost of financing all those cars sitting around, waiting for a buyer. 

And automakers usually wind up producing more cars than they need to, in hopes of satisfying every shopper's desire. That means more parts, more labor and more cost.

Inevitably, though, they end up spending more on advertising and incentives to clear out the slow sellers.

Yes, but: Automakers have tried before to switch to a build-to-order model, with little success. 

"Americans have no patience. We're too impulsive," said Michelle Krebs, executive analyst at Cox Automotive. 

"Right now, we’re in an unusual situation, so people are putting their dibs in," says Krebs. That doesn't mean it's a new business model. 

It's been a hard lesson for newcomers like Polestar, the Swedish electric car manufacturer spun off from Volvo, which had to tweak its U.S. strategy. 

It had planned to deliver customer-ordered vehicles to stores, which would carry no vehicles on their lots.  

But franchised Polestar dealers discovered impatient buyers wouldn't wait, and they risked losing sales to competitors. 

Now, Polestar furnishes retailers with five to seven cars for spot deliveries.

The bottom line: The pandemic finally made it possible to complete your car purchase online without ever setting foot in a showroom. 

The big question is whether ordering the exact car you want from the factory is next. 

Editor's note: Cox Automotive's parent, Cox Enterprises, is an investor in Axios. 

Car shortage could change buying behavior forever

Some car companies may switch to a "made to order" model so buyers aren't disappointed.

Automobiles

Scientists say there's reason to expect even more menacing extreme weather disasters in 2022, after a year in which extreme weather and climate events, from the Pacific Northwest heat wave to the Texas cold snap, affected us all. 

Extreme weather could get even worse in 2022

Global warming is now showing up clearly in our weather patterns.

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