DealBook: We Still Have Questions About Today’s Trade Truce


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President Trump and Vice Premier Liu He of China will meet at the White House today to sign a phase-one trade agreement meant to ease tensions between Washington and Beijing. But there are still plenty of unresolved issues.

• A big one is how seriously China will hold itself accountable, Ana Swanson of the NYT writes. Critics say Beijing’s promises “appear both broad and vague and overlap with other changes it has been pursuing anyway.”

• Beijing did not pledge to refrain from hacking U.S. companies, particularly to steal intellectual property. Chinese officials say it isn’t a trade issue.

• Bigger changes to China’s economy, like subsidies to its commercial giants, remain under negotiation.

• And the tech giant Huawei may still be a target of pressure by the Trump administration, perhaps through tougher limits on what U.S. companies can sell to it, Bob Davis and Katy Stech Ferek of the WSJ report. Treasury Secretary Steven Mnuchin has resisted escalating pressure on Huawei.

But American businesses still feel a sense of relief. “We are pleased from what we’ve heard,” Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce, said yesterday.

Some hope those issues will be resolved in a phase-two deal, though its prospects are far from certain. (President Trump hasn’t set a target date for one, for starters.)


Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York and Michael J. de la Merced in London.


The computer giant hopes to quickly settle a dispute with Attorney General Bill Barr over decrypting iPhones. But it’s also planning for a legal battle, Jack Nicas and Katie Benner of the NYT report.

Tim Cook, Apple’s C.E.O., has organized a small team of top advisers to steer the company through the standoff over iPhones used by the gunman in a shooting in Pensacola, Fla., last month.

It comes as the Trump administration increases pressure on Apple to comply with requests to break into the phones. President Trump tweeted yesterday: “We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers and other violent criminal elements.”

Executives at Apple have been “surprised by the case’s quick escalation,” Mr. Nicas and Ms. Benner write. The company is also skeptical that the Justice Department has exhausted all options for getting into the iPhones.

Security experts say that plenty of tools exist to break into iPhones, especially older models like the ones used by the Pensacola gunman. “I wouldn’t call it child’s play, but it’s not super difficult,” Will Strafach of the cybersecurity company Guardian Firewall told Bloomberg.

The $7 trillion money manager is shaking up Wall Street with its plan to make climate change a key focus of its investment decisions. Environmental activists said that they were encouraged but that BlackRock needed to go even further.

Advocacy groups took a victory lap, having made BlackRock a target of protests last year:

• “BlackRock’s new initiatives match the size of the crisis we’re seeing in 2020 and are the direct result of an outpouring of pressure from the global climate movement,” said Diana Best, a senior strategist for the Sunrise Project, an environmental group.

• “This announcement is a major step in the right direction for BlackRock,” Moira Birss of Amazon Watch said.

But they said more needed to be done:

• Ms. Birss said BlackRock hadn’t pledged to stop investing in companies involved with deforestation.

• Ben Cushing of the Sierra Club was critical of BlackRock’s continuing investments in oil, gas and coal companies.

BlackRock says it can do only so much on climate change, since two-thirds of its assets are in passive index funds. But its huge influence can nudge investors toward funds focused on sustainability, Matt Levine of Bloomberg Opinion writes.

JPMorgan Chase and Citigroup ended last year with something for their investors to cheer: brisk profits and the promise of more good news to come.

• JPMorgan reported a record $36.4 billion in net income for 2019, with strong trading results.

• Citi announced $19.4 billion in profits for the year, its best results since the 2008 financial crisis.

Banks have the U.S. economy to thank, particularly growing spending by consumers and an easing of trade tensions with China. They expect the good times to continue: “We have a constructive outlook as we’re heading into 2020,” Jennifer Piepszak, JPMorgan’s C.F.O., said yesterday.

The outlier is Wells Fargo, which is still trying to extricate itself from a thicket of legal problems. “I’m not sure that any of these public issues will be closed this year,” Charlie Scharf, its C.E.O., told analysts.

On deck: Goldman Sachs and Bank of America report today, and Morgan Stanley announces results tomorrow.

It’s like “Succession,” but over the environment. Rupert Murdoch’s younger son, who left the family empire when the bulk of it was sold to Disney, and his wife, Kathryn, have publicly criticized his father’s business over its news outlets’ reporting on the Australian wildfires.

“Kathryn and James’s views on climate are well-established and their frustration with some of the News Corp. and Fox coverage of the topic is also well-known,” a representative told Lachlan Cartwright of The Daily Beast.

“They are particularly disappointed with the ongoing denial among the news outlets in Australia given obvious evidence to the contrary.”

The context:

• Murdoch-owned news outlets, which dominate Australia’s media industry, have been accused of misleadingly minimizing the role of climate change in the country’s devastating wildfires.

• James Murdoch has long been considered the more liberal of the two Murdoch sons, and has at times feuded with his father and his brother, Lachlan.

Ray McGuire is one of Citigroup’s most senior deal makers and one of Wall Street’s top black executives. Now he’s reportedly being urged to run for the city’s top job, Brian Schwartz of CNBC writes, citing unnamed sources.

Business leaders are said to be pitching Mr. McGuire on a run in 2021, when Mayor Bill de Blasio’s second term ends. Mr. McGuire would most likely campaign as a business-friendly moderate in the Mike Bloomberg vein.

He’s well-known in Democratic circles as a top donor to candidates like Senator Kamala Harris, and is reportedly leaning toward backing Joe Biden in the presidential race.

Mr. McGuire is staying put for now. “Talk about him considering a run for mayor of New York City is pure speculation,” a Citi spokeswoman told CNBC.


• Private equity firms are reportedly discussing selling off huge parts of their portfolios if a Democrat becomes president, fearing a change to tax laws. (Axios)

• MGM Resorts agreed to sell the real estate of the MGM Grand and Mandalay Bay casinos in Las Vegas to a joint venture that includes Blackstone. (WSJ)

• KKR was a pioneer in leveraged buyouts. It’s now also a huge underwriter of loans for such deals. (Bloomberg)

Politics and policy

• Senator Elizabeth Warren said she would cancel billions of dollars in student debt as president — and wouldn’t need congressional approval to do so. (CNBC)

• The E.U. isn’t prepared for the economic pain that its push for carbon neutrality by 2050 will bring, according to the head of the bloc’s environmental policy. (FT)


• A bipartisan group of senators has proposed spending $1 billion to fund competitors to Huawei in 5G wireless technology. (CNBC)

• Amazon lifted a ban on the use of FedEx Ground for Prime shipping by third-party sellers on its marketplace. (WSJ)

• And Amazon is scaring the publishing industry as it signs up top authors like the novelist Dean Koontz. (WSJ)

• Venture capital investing in British tech start-ups grew at a higher rate than funding for U.S. and Chinese rivals last year. (CNBC)

Best of the rest

• Nissan is struggling. Auto industry experts are blaming Carlos Ghosn’s strategy. (NYT)

• Orders for Boeing planes fell last year to a 16-year low. (WSJ)

• Expect 1MDB, insider trading and accounting fraud to be big topics in white-collar crime prosecutions this year. (DealBook)

• All hail Ken Jennings, the “greatest of all time” champion on “Jeopardy!” (NYT)

Thanks for reading! We’ll see you tomorrow.

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