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Showing posts with label DealBook Biefing. Show all posts
Showing posts with label DealBook Biefing. Show all posts

Mar 4, 2019

DealBook Briefing | A China Trade Deal Might Not Change Much

12-15 minutes

President Trump with President Xi Jinping of China.CreditDamir Sagolj/Reuters
President Trump with President Xi Jinping of China.CreditCreditDamir Sagolj/Reuters
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The Trump administration is nearing a trade deal with China that would roll back tariffs on both sides of the Pacific, Ana Swanson and Keith Bradsher of the NYT write.
What America could get:
• The deal would “require Beijing to make big purchases of American agricultural and energy goods and to lower some barriers that prevent American companies from operating in China.”
• The potential agreement “would expand markets for American financial services firms and farmers, in part by requiring that China buy large amounts of energy and farm goods, like liquid natural gas and soybeans.”
• “The Trump administration has also been pushing China to accept an enforcement mechanism that would enable the United States to quickly reinstate tariffs if Beijing fails to live up to specific promises.”
And China:
• “In return, the United States would most likely drop its tariffs on at least $200 billion of the $250 billion worth of Chinese imports currently subject to American levies.”
• Beijing is also “pushing for the elimination of all of the Trump tariffs, a person with knowledge of the negotiations said.””
But “early details indicate it would do little to substantively change the way China has long done business and would not force Beijing to curtail cyber theft or the subsidies that the administration complains create an uneven playing field for American companies.”
• “The language aimed at China’s discrimination against foreign companies, like its antimonopoly law or standard-setting processes, is probably too vague to be enforceable,” according to an unidentified source.
• “The pact also doesn’t alter China’s tight restrictions on data,” and “many of the big purchases that Beijing is promising would occur over a number of years, which could give China further leverage.”
More: How Apple prevailed in the trade war. And why President Trump’s battle hasn’t helped narrow the trade deficit.
The Chinese telecom giant plans to take the U.S. government to court for banning federal agencies from using its products, Ray Zhong and Paul Mozur of the NYT report.
• “The move could be aimed at forcing the United States government to more publicly make its case against the Chinese equipment maker.”
• “It is part of a broad push by Huawei to defend itself against a campaign led by the United States to undermine the company, which Washington sees as a security threat.”
• Huawei’s lawsuit will challenge a section in a defense-spending law that blocks federal agencies from using its equipment. The company will argue that the provision amounts to a “bill of attainder,” or a legislative act that singles out a person or group for punishment without trial.
• Huawei’s C.F.O., Meng Wanzhou, has already sued Canadian authorities for arresting her and moving to extradite her to the U.S.
• Not everyone thinks that Ms. Meng’s legal action is sensible. “The quest for justice is everyone’s right,” Tim Culpan of Bloomberg Opinion writes, “yet Huawei risks coming off as belligerent instead of the calm and trustworthy partner it’s trying to portray.”
CreditSteve Marcus/Reuters
CreditSteve Marcus/Reuters
On Friday, the Trump re-election campaign — including its manager, Brad Parscale, and an adviser, Newt Gingrich — called for a nationwide “wholesale” 5G network, that would allow the government to control the spectrum and find a way to share it with carriers.
“A 5G wholesale market would drive down costs and provide access to millions of Americans who are currently underserved,” Kayleigh McEnany, the campaign’s national press secretary, told Politico.
The news was met with surprise as it’s at odds with current White House policy. Axios says it was unable to find telecom policy advisers inside the Trump administration “who knew in advance from the Trump campaign that it would make this announcement.” The telecoms industry has long argued against nationalized 5G networks.
The campaign later walked back its comments. “The White House sets the policy on 5G and all issues,” Ms. McEnany said in a statement. “The campaign fully supports the president’s priorities and his policy agenda.”
But it raises concerns about what happens next. The administration previously contemplated taking a role in 5G, as detailed in a National Security Council memo leaked early last year. Brendan Carr, an F.C.C. commissioner, called such a move “China-like nationalization.”
In the wake of Amazon pulling out of plans for a campus in New York City, the NYT studied the tactics the company has used to drive hard bargains all over the country.
• Amazon closed its only warehouse in Texas after state officials pushed the company to pay nearly $270 million in back taxes in 2010. Texas eventually waived the taxes in exchange for new warehouses.
• South Carolina officials denied Amazon a sales tax break in 2010, but gave the company an exemption after it threatened to stop hiring there.
• The company has collected over $2.4 billion in taxpayer subsidies for its locations, according to Good Jobs First, a nonprofit that tracks corporate tax breaks.
• “They are just as cutthroat as can be,” Alex Perlstein, vice president of Market Street Services, told the NYT.
• And Amazon has no regrets, according to the NYT: “Asked recently by a business publication if Amazon would change anything about the headquarters search in retrospect, Holly Sullivan, the Amazon executive who led the search, said: ‘You know, no. I think it was rewarding for us internally.’”
Meanwhile, the NYT editorial board supports New York officials’ efforts to lure Amazon back: “Progressives shouldn’t stand athwart progress, yelling stop.”
More: How Hollywood disrupted Jeff Bezos’s life as Amazon sought to disrupt its business. And Mr. Bezos’s security chief is said to be preparing a 90-page report accusing the National Enquirer’s parent company of running its exposé to curry favor with Saudi investors.
A collection of the top tech minds in the country assembled at the NYT’s New Work Summit last week in Half Moon Bay, Calif. Here’s what some of them had to say about the future of artificial intelligence regulation:
“The idea that these companies who are not accountable to us or elected by us should get to decide sort of the new safeguards of society, that seems like the wrong way to do it,” said Sam Altman, the president of Y Combinator.
“We think democratically elected governments should be in the business of regulating technology companies — not the other way around,” Brad Smith, Microsoft’s president, said.
“We’re fans of regulation when it’s smart regulation,” Kent Walker, Google’s chief legal officer, said. “What do I mean by that? So, regulation that starts out with a really crisp definition of what’s the problem you’re trying to solve? That is then narrowly tailored to solve that problem and minimize blowback and side effects.”
“I’ve found the European Commission to be very well-reasoned and thoughtful in their approach, and really putting consumers first,” Evan Spiegel of Snapchat said. “The more that companies can align with the government to do what’s right for customers, I think everyone will win there.”
The offices of OpenBiome, a public stool bank.CreditKayana Szymczak for The New York Times
The offices of OpenBiome, a public stool bank.CreditKayana Szymczak for The New York Times
A fierce lobbying battle has arisen over an unlikely product, according to the NYT: human excrement, and more specifically its use in treating disease.
• The skirmish is over the future of fecal microbiota transplants, a therapy that “transfers fecal matter from healthy donors into the bowels of ailing patients, restoring the beneficial works of the community of gut microbes that have been decimated by antibiotics.” The treatment is especially effective in treating Clostridioides difficile, also known as C. diff, a debilitating bacterial infection.
• “At the heart of the controversy is a question of classification: Are the fecal microbiota that cure C. diff a drug, or are they more akin to organs, tissues and blood products that are transferred from the healthy to treat the sick?”
• Most material currently used in fecal transplants comes from OpenBiome, a public stool bank in Massachusetts. But the F.D.A. has recently increased oversight that raised prices.
• Several drug companies, including Rebiotix and Seres Therapeutics, have raised tens of millions of dollars from investors and begun lobbying the F.D.A. (A critic told the NYT they were the “poop drug cartel.”) The market for drug-based treatments of C. diff is estimated to eventually reach about $1.7 billion.
• “At stake, some researchers says, is the future of pioneering therapies that harness the human microbiome — the trillions of organisms that colonize the body and are increasingly seen as critical for healthy brain development and immune function.”
Ray Kelvin, the founder and C.E.O. of the British fashion chain Ted Baker, resigned amid accusations of inappropriate behavior.
Fabio Schvartsman “temporarily” stepped down as Vale’s C.E.O. in the wake of a deadly dam burst in Brazil.
KKR hired Kate Richdale, most recently the chairwoman of Goldman Sachs’s investment banking team in Asia, as its head of strategy and business development in the same region.
John Havens stepped down as chairman of the hedge fund Napier Park Capital after being charged in a prostitution ring bust.
The insurer Aviva named Maurice Tulloch, the head of its international operations, as its next C.E.O.
• Lyft publicly filed for an I.P.O. on Friday, revealing surging revenues but nearly $1 billion in losses. (NYT)
• Nissan executives reportedly told Carlos Ghosn that the Japanese government would back their bid to block his proposed merger of the carmaker with its corporate sibling, Renault. (FT)
• Margrethe Vestager, the E.U.’s competition commissioner, warned governments of the “consequences” of easing merger regulations. (FT)
• The hedge fund BlueMountain nominated 12 candidates for the board of PG&E, including the lawyer Kenneth Feinberg and a veteran Democratic politician, Phil Angelides. (NYT)
• The maker of Instant Pot agreed to merge with the parent company of Pyrex and CorningWare. (WSJ)
Politics and policy
• President Trump publicly criticized Jay Powell, the chair of the Federal Reserve, over the weekend. Mr. Powell’s European counterparts aren’t getting much love from their governments, either. (Bloomberg)
• American intelligence officials increasingly emphasize economic, not national security, issues in their briefings to the president. (NYT)
• A new poll showed that Americans don’t like socialism but want the federal government to become more active in helping them. (CNBC)
• Representative Jerry Nadler, the chairman of the House Judiciary Committee, said he will request documents from more than 60 people, including Donald Trump Jr. and the C.F.O. of the Trump Organization. (NYT)
• Prime Minister Theresa May promised £1.6 billion, or about $2.1 billion, to poorer areas of Britain — and was quickly criticized for trying to buy the support of opposition lawmakers. (Bloomberg)
• Pro-Brexit lawmakers outlined three conditions that Mrs. May must meet to win their support for her Brexit deal. (Times of London)
• France plans to introduce a five percent digital tax on the revenue of about 30 internet giants. (Bloomberg)
• Uber’s chief legal officer is trying to clean up the company before it goes public. (NYT)
• North Korean hackers hit over 100 American and allied targets as President Trump met with Kim Jong-un last week. (NYT)
• Amazon reportedly plans to open a chain of grocery stores in the U.S. that would be separate from its Whole Foods brand. (WSJ)
• Tesla says it will unveil a new S.U.V., the Model Y, on March 14. (Reuters)
Best of the rest
• Carlos Ghosn’s lawyer is using a new legal strategy, and thinks it’s possible the auto executive could “be released in the near future.” (Reuters)
• What it’s like to work as a comment moderator on a far right website. (NYT Op-Ed)
• Wells Fargo reached a $240 million settlement with its U.S. shareholders over the creation of millions of unauthorized customer accounts by its employees. (Reuters)
• The first American spacecraft capable of carrying astronauts since the retirement of the space shuttles launched Saturday, and successfully docked with International Space Station last night. (NYT, BBC)

Source: NYT