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Trump may wait for ‘real deal’ with China
President Trump said he may let his March 2 deadline for reaching a trade agreement with China “slide for a little while” if the two countries are near a deal by then.
Washington and Beijing are deep in negotiations. “In the talks this week, Chinese and U.S. negotiators are focusing on producing a broad outline of a trade agreement for their presidents to clinch at a possible summit,” the WSJ reports. “Officials holding trade and economic portfolios are seeking to narrow the still-substantial gap between the concessions China is willing to offer and what Mr. Trump’s administration will accept.”
Mr. Trump wants to maintain momentum. The president characterized those discussions as “going well,” according to Deborah B. Solomon of the NYT, and said he thought the U.S. had a chance “to make a real deal.” He added that he wanted “a real deal, not just a deal that looks cosmetically good for a year.”
But any pact will face a big obstacle: Chinese commitment. A history of broken policy promises between China and the rest of the world hangs over U.S. negotiators, Keith Bradsher of the NYT writes. So they want to ensure that “any deal they strike has teeth if Beijing does not live up to its obligations.” One proposed solution: “a mechanism that would automatically raise tariffs on Chinese goods if its exports to the United States keep rising.”
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
Was Theresa May’s Brexit endgame overheard in a bar?
The British prime minister reportedly plans to leave a parliamentary vote on her Brexit deal to the last moment, then force politicians to pick between it or a long delay for Britain’s exit from the E.U.
That revelation was overheard in a Brussels bar. According to the British broadcaster ITV News, one of its reporters heard Oliver Robbins, one of Mrs. May’s top aides, discussing the plans in a hotel bar. “The issue is whether Brussels is clear on the terms of extension,” Mr. Robbins reportedly said. “In the end they will probably just give us an extension.”
Mrs. May previously opposed a delay. She has insisted that lawmakers have a choice between her deal or no deal. “An option to extend for a longer period would just continue the uncertainty,” she told business leaders in a conference call yesterday.
The comments could spell trouble for her. They may undermine her efforts to muster enough support in Parliament for her deal. Mrs. May’s office had no comment on the remarks attributed to Mr. Robbins.
More Brexit news: The Bank of England’s governor, Mark Carney, said that the potential economic harm from Brexit shows that trade uncertainty can be more damaging than a financial crisis. Economists say that the British economy could improve if a deal is reached. Ford reportedly told Mrs. May that it is preparing alternative production sites outside Britain as a result of Brexit.
T-Mobile and Sprint face off against Congress
The carriers’ C.E.O.s are scheduled to appear on Capitol Hill this week to defend T-Mobile’s proposed $26 billion acquisition of Sprint. Their first stop is the House Committee on Energy and Commerce today, where they’ll face Democrats who are increasingly skeptical about letting the nation’s third- and fourth-biggest carriers combine.
What to expect: John Legere of T-Mobile will repeat his claim that merging the two companies would create a stronger rival to Verizon and AT&T. “I want to reiterate unequivocally that prices will go down and customers will get more for less,” he told Bloomberg in an interview. And he’ll emphasize the combined company’s ability to roll out 5G wireless service, playing off fears that the U.S. may fall behind China in that area.
But lawmakers have issues with the deal. Democrats think a merger would actually increase prices for consumers, as well as bring job cuts. Some lawmakers also contend that promises to increase rural wireless broadband are empty. And some critics say that dozens of stays by Mr. Legere at President Trump’s Washington hotel since the deal was announced may have been improper.
A political caveat:Though Democratic opposition to the deal appears to be growing — nine senators called for the deal to be blocked — Congress doesn’t get a say. It can only apply pressure to the Justice Department and the F.C.C. to block it.
Still, the telecoms aren’t resting easy. Bloomberg notes that the spread between T-Mobile’s offer price and Sprint’s stock price has grown since December, suggesting that investors think the deal’s chances of winning approval are getting worse.
The U.S. edges toward a China wireless ban
The Trump administration is moving closer to barring telecom companies in the U.S. from using Chinese equipment while building next-generation wireless networks, Julian E. Barnes of the NYT writes.
• “The executive order, which has been under discussion for months, is aimed largely at preventing Chinese telecom firms like Huawei from gaining access to the fifth-generation — or 5G — wireless networks that companies are beginning to build in the United States.”
• “President Trump has been briefed on the proposed ban, which would prevent the use of equipment from ‘adversarial powers,’ and the order could be issued in the coming days, American government and industry officials said.”
The case against a ban: Robert Hannigan, a former director of the British intelligence agency G.C.H.Q., argues in the FT that blanket bans on Chinese tech “make no sense.” Lawmakers, he says, should “base decisions on Chinese involvement in future telecoms on technical expertise and rational assessment of risk, rather than political fashion or trade wars.”
Carlos Ghosn’s new legal tack
The former Nissan chairman, who’s still detained in Japan, has replaced his legal team — perhaps in a bid to try a more aggressive strategy.
Who’s out: Motonari Otsuru, a former prosecutor familiar with the tactics employed in Japanese courtrooms.
Who’s in: Junichiro Hironaka, whose nickname in Japan is “the innocence contractor.” He has successfully defended government officials against corruption charges and a prominent businessman against accusations of insider dealing.
Potentially behind the change: The FT notes that “Mr. Otsuru at times appeared to defend the practices of Japanese prosecutors and the way that suspects are interrogated without the presence of their lawyers.”
More Nissan news: The French government reportedly pressed the Japanese carmaker about merging with its corporate sibling, Renault, but was rebuffed. And the company reported a 45 percent drop in third-quarter earnings yesterday.
America’s wealthiest donors are giving less
The Chronicle of Philanthropy’s list of the 50 most generous donors to charitable causes shows that they jointly gave $7.8 billion in 2018. That’s impressive — until you compare it to 2017, when donors gave $14.7 billion.
Topping the list were Jeff and MacKenzie Bezos, who gave $2 billion. Michael Bloomberg was a distant second, having given $767 million. Other notable donors included Blackstone’s Steve Schwarzman, Mark and Priscilla Zuckerberg, and Bill and Melinda Gates.
The drop-off in giving was stark. Theodore Schleifer of Recode points out that the Gates Foundation gave $150 million last year, compared with $4.8 billion in 2017. The Zuckerbergs donated $200 million last year, down from $2 billion in 2017.
The big picture: As Mr. Schleifer notes, this shows “how a few decisions by the country’s wealthiest Americans can totally change the portrait of big-dollar philanthropy.” The drop in charitable giving, he adds, comes at a bad time, “given the louder conversation in the U.S. about the responsibilities of billionaires.”
Publishers don’t like Apple’s news plans
Some of America’s largest news publishers are unhappy with the financial terms of a news subscription service that Apple plans to unveil later this year, according to the WSJ, citing unnamed sources.
• “The service, described by industry executives as a ‘Netflix for news,’ would allow users to read an unlimited amount of content from participating publishers for a monthly fee.”
• BuzzFeed reports, citing anonymous sources, that it is expected to be unveiled on March 25.
• But “in its pitch to some news organizations, the Cupertino, Calif., company has said it would keep about half of the subscription revenue from the service,” according to the WSJ.
• “Another concern for some publishers is that they likely wouldn’t get access to subscriber data, including credit-card information and email addresses.”
• “The New York Times and the Washington Post are among the major outlets that so far haven’t agreed to license their content to the service, in part because of concerns over the proposed terms.”
Chris Christie’s takes on 2020
The former N.J. governor weighed in on the presidential race at a party for his new book last night. (It was hosted by the hedge fund magnate Steve Cohen at his Midtown Manhattan penthouse, which is up for sale for $45 million.) Here were some of Mr. Christie’s observations:
• He called the Democratic senators Kamala Harris and Cory Booker, both of whom are black, “articulate.” Of Ms. Harris, he said, “She presents herself pretty well.” Of potential supporters of Mr. Booker, he said, “Will they love him for the second speech, third speech and fourth speech?”
• He wondered of Joe Biden: “Is he going to be the adult in the room or is he going to be crazy Uncle Joe?”
• Of Senator Amy Klobuchar, he said, “Her entire rollout gets stepped on by a whole bunch of her former staff saying that she’s a monster, and screams and yells and throws stuff at people and is a lunatic to work for,” adding, “I don’t see her being in the right spot.”
At the party: Gary Cohn, the former Trump economic adviser and Goldman Sachs president; John Flannery, who was ousted as G.E.’s chief executive last fall; and Douglas Haynes, who resigned as president of Mr. Cohen’s Point72 hedge fund.
Activision Blizzard plans to lay off 8 percent of its workers, or 775 employees, as traditional video game companies struggle to compete with hits like “Fortnite.”
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is opening an office in San Francisco to help strike more tech deals.
The speed read
• Amazon and GM are reportedly in talks to invest in Rivian, a start-up that plans to build electric pickup trucks, at a valuation of up to $2 billion. (Reuters)
• Lyft’s founders are planning to keep control of the ride-hailing company after it goes public, despite owning just 10 percent of its shares. (WSJ)
• Ellie Mae, a mortgage software company, agreed to sell itself to the investment firm Thoma Bravo for about $3.7 billion. (Reuters)
• France is calling for an overhaul of E.U. merger rules. (FT)
Politics and policy
• President Trump says he’s “not happy” with Congress’s deal to fund border security, but declined to say whether he would veto it. Allies predict the president will ultimately approve it. (NYT, Politico)
• A new Prudential survey shows how the 35-day government shutdown hurt federal workers. One example: 62 percent depleted most of their emergency savings. (Axios)
• Senator Marco Rubio, Republican of Florida, proposed raising taxes on capital gains to discourage companies from stock buybacks. (CNBC)
• How President Trump’s trade war has hurt American whiskey. (NYT)
• China has held talks with Venezuela to protect its investments there. (WSJ)
• Tesla has been importing Model 3s into China ahead of the March 2 deadline for U.S.-China trade talks. (SCMP)
• In an awkward Twitter-based interview, the social network’s C.E.O., Jack Dorsey, said that his company and its peers haven’t done enough to fight abuse. (Wired, Reuters)
• Why Amazon is caught in an unexpected brawl in New York about its new campus. Also: The company is now raising prices at Whole Foods, having slashed them when it first took over. (NYT, WSJ)
• The Pentagon’s new A.I. strategy document, released the day after the White House unveiled a poorly received directive on the topic, reads in part like a pitch deck to Silicon Valley. (Fortune, Axios)
• Governor Gavin Newsom of California has proposed a “digital dividend” that would allow consumers to take a slice of Big Tech’s profits. (Bloomberg)
Best of the rest
• The Fed’s chairman, Jerome Powell, says that U.S. economic expansion has been uneven. (WSJ)
• A lawsuit by CBS shareholders accuses current and former executives of insider trading because they sold stock ahead of disclosures about sexual harassment allegations against Les Moonves. (WSJ)
• The Mexican crime lord known as El Chapo was convicted yesterday after a three-month trial in New York. (NYT)
• The national debt has risen above $22 trillion for the first time. (AP)
• Americans are highly optimistic about their finances right now. Perhaps they shouldn’t be. (Barron’s)
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