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A lifeline to farmers; a sign of continued trade war
President Trump yesterday unveiled a $16 billion bailout for farmers hurt by his trade war with Beijing. That signals a protracted fight lies ahead, Ana Swanson of the NYT writes.
• “The new program will make $14.5 billion in direct payments to producers, for a range of products — from soybeans and cotton to chickpeas and cherries — in up to three tranches, beginning in late July or early August.”
• “The government will also put in place a $1.4 billion program to purchase surplus commodities affected by the trade war.”
Any hope of a quick resolution has faded. The U.S. and China have both hardened their positions after a trade deal collapsed this month. “Treasury Secretary Steven Mnuchin said on Wednesday that no additional meetings with Beijing were scheduled and that he was encouraging American firms to reorient their supply chains and source their products elsewhere,” Ms. Swanson notes.
“I remain hopeful that at some point we’ll get together with China,” Mr. Trump said yesterday. “If it happens, great. If it doesn’t happen, that’s fine. That’s absolutely fine.”
Global markets tumbled as investors realized that the farmer payouts were a sign that Mr. Trump’s trade war is here to stay. Benchmark indexes in China, Germany and France all dropped, while the S&P 500 fell 1.2 percent.
More: The Trump administration plans to penalize countries that undervalue their currencies. Tariffs could cost the average U.S. household $831 a year. And a look at how America’s chief trade negotiator, Robert Lighthizer, has a track record of all-or-nothing negotiations.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
May is quitting. Now what?
Theresa May announced this morning that she would step down as Britain’s prime minister, Stephen Castle of the NYT writes.
• She will resign as party leader on June 7, but stay on as prime minister until a successor is chosen.
• Her departure comes after she repeatedly failed to win Parliament’s approval for a deal to withdraw Britain from the European Union.
• “I have done everything I can,” Mrs. May said. But she added that it was in the “best interests of the country for a new prime minister” to lead Britain through the Brexit process.
• The breaking point comes at an awkward moment, with President Trump scheduled to arrive in Britain on June 3 for a state visit.
The announcement “could set off a ferocious succession contest within her governing Conservative Party,” Mr. Castle writes. The former foreign secretary, Boris Johnson; the former Brexit secretary, Dominic Raab; and Andrea Leadsom, who had quit as leader of the House of Commons on Wednesday, are all seen as likely contenders.
It leaves Britain’s future more uncertain than ever, with no clearly favorable route out of the E.U., nor any obvious plan to stay in the bloc either. Mrs. May’s successor has a tough task ahead.
Trump hints at leniency toward Huawei
President Trump issued contradictory messages about the Chinese technology giant yesterday, calling Huawei a “very dangerous” security threat — but also hinting that it could be part of a trade deal with China. Here’s what he said:
“Huawei is something that’s very dangerous. You look at what they’ve done from a security standpoint, from a military standpoint, it’s very dangerous. So it’s possible that Huawei even would be included in some kind of a trade deal. If we made a deal, I could imagine Huawei being possibly included in some form, some part of a trade deal.”
He offered no specifics of what that might look like. When pushed for details, Mr. Trump responded: “Oh it’s too early to say. We’re just very concerned about Huawei from a security standpoint.”
Huawei is hurting because U.S. companies are blocked from selling products to it. It has received a 90-day grace period for some of those sales,which has been viewed by some people as a sign that the freeze-out is only short-lived trade posturing.
Sound familiar? Last year, Mr. Trump banned the sale of U.S. parts to the Chinese technology company ZTE after it violated sanctions on Iran and North Korea. It was given a 90-day reprieve, and the ban was subsequently lifted.
But this time could be different. Mr. Trump’s contradictory comments may cause confusion, but if U.S. authorities stick by their assessment of the risks posed by Huawei then the predictions that this is the start of tech’s Cold War still appear likely to hold true.
More: Huawei’s European customers are being hit particularly hard by the Trump ban. One of its executives has been accused of stealing trade secrets. And Amazon Japan has stopped selling Huawei devices.
Harvey Weinstein may pay $44 million to settle charges
The disgraced former movie executive has tentatively agreed to pay $44 million to settle lawsuits by New York’s attorney general and women who have accused him of sexual misconduct.
Here are the terms of the proposed deal, according to the NYT, citing unnamed sources:
• About $30 million would go to a pool of plaintiffs that includes alleged victims, creditors of Mr. Weinstein’s former studio and some former employees.
• The balance would cover legal fees for associates of Mr. Weinstein, including board members named as defendants in the lawsuits.
• Insurance policies would cover the $44 million if the current agreement is finalized.
The proposed sum is less than half what had been previously discussed. Last year, conversations between an investor group interested in buying parts of the Weinstein Company and the New York attorney general at the time, Eric Schneiderman, included a victim’s fund worth up to $90 million. But those talks collapsed at the last minute.
The outcome will be important because lawsuits are one of the few ways to hold Mr. Weinstein accountable, the NYT notes. Though he faces criminal charges in Manhattan — which he has pleaded not guilty to — the vast majority of complaints against him involve sexual harassment, which is a civil violation.
Julian Assange faces espionage charges
The WikiLeaks leader has been indicted in the United States on 17 counts of violating the Espionage Act. It’s a novel case — and one that raises profound First Amendment issues, Charlie Savage of the NYT reports.
The case centers on the leaking of documents, in particular Mr. Assange’s role in the release of hundreds of thousands of government files by Chelsea Manning, a former Army intelligence officer. It has nothing to do with Russia’s interference in the 2016 U.S. elections.
The indictment could amount to the pursuit of a publisher for making that material available to the public, Michael Grynbaum and Marc Tracy of the NYT write. This would go beyond the targets of previous cases like this: government employees who provided material to journalists.
Justice Department officials tried to minimize the precedent. They said most of the charges are related to obtaining the classified information, not publishing it. And the few charges that are tied to publication of the documents focused on issues like revealing the names of informants in war zones.
But supporters of journalistic freedoms are rattled. “If you can charge Julian Assange under the law with publishing classified information, there is nothing under the law that prevents the Justice Department from charging a journalist,” Matthew Miller, a former Justice Department spokesman in the Obama administration, told the NYT.
U.S. household finances are still fragile
Paychecks may be improving thanks to a strong job market, but a new Fed survey shows that many Americans are still struggling with their personal finances, Jeanna Smialek of the NYT writes.
• “Four in 10 American adults wouldn’t be able to cover an unexpected $400 expense with cash, savings or a credit-card charge that could be quickly paid off.”
• “About 27 percent of people surveyed would need to borrow or sell something to pay for such a bill, and 12 percent would not be able to cover it at all.”
• “One-quarter of working individuals say they have no retirement savings at all,” the WSJ notes.
• “Roughly a quarter of adults skipped medical care in 2018 because they were unable to pay,” it adds.
“Many Americans remain on the edge financially even as this economic expansion is approaching record length and people have become more optimistic,” Ms. Smialek writes.
But it’s not all bad news. For an unexpected $400 expense, “the share that could cover such an expense more easily has been climbing steadily and now stands at 61 percent, up from just half when the Fed started this annual survey in 2013,” Ms. Smialek writes.
“Household finances over all have shown a marked improvement over the life of this report, thanks in large part to an improving labor market that has lifted wages and left more Americans with jobs. Three-quarters of adults said they were ‘doing O.K.’ or ‘living comfortably’ when asked about their economic well-being, up from 63 percent in 2013.”
More: The cover story of this week’s Economist explains that rich countries are enjoying “an unprecedented jobs boom.”
David Tepper gives up the hedge fund life
For more than two decades, David Tepper has been one of the most celebrated and successful hedge fund managers. Now he plans to leave the industry, in part to focus on other passions like running the N.F.L.’s Carolina Panthers.
His firm, Appaloosa, could return outside clients’ money. Executives there have reportedly discussed several ways that could happen, Juliet Chung of the WSJ reports, citing unnamed sources. More than 70 percent of the money currently managed by the $13 billion hedge fund is his.
That would make Appaloosa a family office, freed from the burdens associated with managing other people’s cash — and the requirement of disclosing his firm’s investment returns to outsiders.
Next up for Mr. Tepper: football. He bought the Panthers last year for a record $2.2 billion and wants to focus on turning the team around, Ms. Chung reports. He’s also reportedly interested in bringing a Major League Soccer team to the stadium where the Panthers play.
Deutsche Bank’s chairman, Paul Achleitner, and investment banking chief, Garth Ritchie, avoided a vote of no confidence by the bank’s shareholders yesterday.
Brad Bao will become C.E.O. of the electric scooter company Lime, taking over from fellow co-founder Toby Sun.
Barclays has reportedly hired Taylor Wright from Morgan Stanley as its co-head of U.S. equity capital markets, and Akhil Ahuja from Wells Fargo as the head of its enterprise and communications technology investment banking.
Jay Fielden stepped down as the editor of Esquire magazine.
The speed read
• Endeavor, the talent agency, has filed for an I.P.O. (WSJ)
• DoorDash, the food delivery company, raised $600 million in new funding at a $12.6 billion valuation — nine times what it was valued at last year. (WSJ)
• Shares in Kontoor Brands, the owner of the Lee and Wrangler jeans labels, fell 7 percent in their market debut yesterday. (Business Insider)
• Two big payments processors, Global Payments and Total Systems Services, have reportedly held merger talks. (Bloomberg)
Politics and policy
• President Trump has reportedly urged the head of the Army Corps of Engineers to hire Fisher Industries, a company led by a prominent Republican donor, for construction of a border wall with Mexico. (WaPo)
• The Trump administration is preparing to bypass Congress to sell billions of dollars worth of weapons to Saudi Arabia and the U.A.E. (NYT)
• Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez demanded more information about Treasury Secretary Steven Mnuchin’s time as a director of Sears. (Business Insider)
• Global aviation authorities want more details from the Federal Aviation Administration about Boeing’s proposed fixes for the 737 Max. (NYT)
• Southwest Airlines won’t charge customers who want to switch flights to avoid flying on a 737 Max plane in the future. (CNBC)
• Facebook says it is more aggressively enforcing its content rules. It considered — but ultimately demurred on — a ban on political ads. And Mark Zuckerberg said that calls to break the company up would make it harder for it to clean itself up. (NYT, WSJ, Business Insider)
• Snapchat’s employees reportedly abused an internal tool to spy on user data. (Vice)
• SpaceX launched 60 communications satellites into space, the start of a big experiment in beaming high-speed internet around the world. (NYT)
• Should we stop fetishizing privacy? (NYT Op-Ed)
• Tesla’s shares lost almost a fifth of their value in a week, which will dent its ability to raise money just when it could really use it. (FT)
Best of the rest
• JPMorgan Chase has dropped Purdue Pharma, the maker of OxyContin, as a client. (FT)
• How Goldman Sachs “wants to manage the assets of the middling rich.” (Economist)
• Federal prosecutors charged the chairman of a Chicago bank with arranging $16 million in high-risk loans to Paul Manafort in an effort to obtain a senior position in the Trump administration. (NYT)
• Carlos Ghosn reportedly proposed creating a foundation to consolidate his control over the Renault-Nissan-Mitsubishi alliance and his own compensation. (FT)
• Why are so few S&P 500 C.E.O.s under 50? (WSJ)
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Business News - Opportunities - Reviews