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Confusion over Trump’s trade truce, and a glimmer of hope
It’s a bird … It’s a plane … It’s “Tariff Man,” as President Trump dubbed himself in one of several provocative tweets he posted on Tuesday. And it seems that this superhero’s special power may be an uncanny ability to get in his own way.
Uncertainty hangs over the U.S.-China trade deal. Other than the 90-day postponement of further tariffs, it’s unclear what was agreed to by Mr. Trump and President Xi Jinping of China at the Group of 20 meeting in Buenos Aires on Saturday. Bloomberg compared the diverging claims from Beijing and Washington, and it seems there’s little agreement between the two sides.
Mr. Trump may have overstated China’s concessions. Michael Pillsbury, the former Pentagon official Mr. Trump has called “probably the leading authority on China,” told Axios that there was concern in China about American reports of concessions that Beijing never agreed to. They include the Chinese “immediately” addressing intellectual property theft, resuming purchases of American agricultural products and cutting car tariffs.
And he continues to be bullish on the prospects for a pact. “The negotiations with China have already started,” Mr. Trump said on Twitter, and those leading the talks will see “whether or not a REAL deal with China is actually possible.” His conclusion: “If it is, we will get it done,” he added. “But if not remember, I am a Tariff Man.”
But China may be starting to make moves. Beijing offered its first acknowledgment of the 90-day deadline, saying it was “confident in implementing” trade commitments to the U.S. “as soon as possible.” Bloomberg notes that China is preparing to import U.S. soybeans and liquefied natural gas. Reuters reports that the Chinese oil trader Unipec plans to resume U.S. crude shipments to China in March. And China announced new punishments for intellectual property theft.
The markets plunged, and it’s complicated
That was fast. A day after stocks rallied after the announcement of a truce in the U.S.-China trade war, they bombed again: The S&P 500 lost more than 3 percent on Tuesday. But don’t believe anyone who points to a single reason for the rout.
Trade issues have a lot to do with it. Investors worry that the trade war is far from over, and that an extended dispute would undermine global growth and hurt American companies. As Steven Mnuchin, the Treasury secretary, said yesterday, the markets are in a “wait and see” period while investors try to determine whether an actual trade deal can be struck.
You can also blame the inverting yield curve. Part of the curve, which shows the difference between interest rates on short- and long-term government bonds, went negative on Monday, which is often considered a sign of a looming recession. That helped drive S&P 500 bank shares down 4.4 percent, making Tuesday their worst day since February.
And there’s more. Bloomberg points out that worries about the housing market, continuing volatility in the tech sector, the uncertainty over Britain’s departure from the European Union and numerous other issues also weighed on the markets yesterday.
But things might brighten. While global markets followed the U.S. sell-off overnight, futures tracking U.S. stocks are all ticking up this morning, most likely because of positive comments on trade by the Chinese government. (The U.S. markets are closed today in honor of former President George Bush, whose funeral will be held at Washington National Cathedral at 11 a.m. Eastern; they reopen on Thursday.)
CBS findings are more bad news for Les Moonves
The draft of a report prepared for the board of CBS by lawyers for the company, and seen by the NYT, contains a series of new allegations against Mr. Moonves, CBS’s former chief executive. The report says the company has justification to deny him $120 million in severance.
Among the revelations in the document:
• Mr. Moonves “engaged in multiple acts of serious nonconsensual sexual misconduct in and outside of the workplace, both before and after he came to CBS in 1995.” Some of those allegations had not been previously disclosed.
• Lawyers involved in the inquiry spoke with Mr. Moonves four times and found him to be “evasive and untruthful at times, and to have deliberately lied about and minimized the extent of his sexual misconduct.”
• Investigators determined that Mr. Moonves had “received oral sex from at least 4 CBS employees under circumstances that sound transactional and improper to the extent that there was no hint of any relationship, romance or reciprocity.”
The report also explains what the CBS board and management knew about Mr. Moonves’s conduct. More on what that means from the NYT columnist James B. Stewart:
Many of the company’s employees, including high-ranking executives and even members of its board, were aware of the former chief executive Leslie Moonves’s alleged sexual misconduct and subsequent efforts to conceal it. Yet no one acted to stop him — and the repercussions for that failure are likely to reverberate at CBS for years.
Was Amazon scamming the Postal Service?
President Trump repeatedly accused Amazon in the spring of engaging in a “scam” against the United States Postal Service. On Tuesday, his administration delivered its verdict: not really.
More on that from Jim Tankersley of the NYT:
The task force created by Mr. Trump to investigate the Postal Service’s finances did conclude that the mail system is losing money. But a report issued on Tuesday said that commercial package delivery for Amazon and other e-commerce retailers was actually profitable for the Postal Service and was not costing the United States “massive amounts of money,” as Mr. Trump has suggested in his tweets.
Commercial package delivery is not profitable enough to offset the revenue losses the Postal Service is suffering, however, as Americans mail fewer and fewer first-class letters.
The report did recommend some changes: that the Postal Service change the price of package delivery to maximize profit instead of maximizing delivery volume, and that it create separate accounting books for letters and for packages, among other things. Such changes could increase delivery prices, making online retailers nervous.
How did Carlos Ghosn hide $70 million from Nissan?
It’s been two weeks since Mr. Ghosn, who led an alliance comprising Nissan, Renault and Mitsubishi, was arrested in Japan, and there hasn’t been much clarity on how he might have sneaked $70 million of salary and benefits past the company that pays him, as he is suspected of doing.
Now Jason Clenfield and Yuki Hagiwara of Bloomberg explain how he might have done that:
What is certain is that Nissan Motor Co.’s own corporate governance rules gave unusual powers to its former chairman, a business celebrity who was given extraordinary deference for having once rescued the automaker from financial ruin. Those powers included near-total say over how much — and how — he was paid, according to Nissan’s own internal rules.
Several people familiar with the prosecutors’ investigation now say the probe appears to hinge on a relatively arcane point of accounting — whether retirement payments were properly booked.
The Bloomberg report also points to questionable governance at Nissan, with a concentration of power at the top and independent board members, including an “ex-race-car driver and former model,” who may not have been qualified to ask searching questions of the leadership team.
Why the world needs to rethink retirement
The golden years of leisure after decades of toil are beginning to look very different, depending on where in the world you live and, increasingly, which generation you belong to. That’s according to Katie Robertson of the NYT, writing in a special section of the newspaper about the future of retirement.
Things look bleak. “Nearly half of those surveyed in a recent report by the Aegon Center for Longevity and Retirement say future generations would be worse off than those now in retirement, partly because people are living longer. According to the United Nations, the number of those over 60 worldwide is expected to double by 2050 to 2.1 billion.”
What needs to change? “A new global retirement model would need to include universal access to a retirement savings system for workers, greater financial literacy and affordable health care, among other solutions.”
Read more: Here’s the entire special section on the future of retirement.
Katy Knox, president of U.S. Trust, and Andy Sieg, head of Merrill Lynch Wealth Management, will join Bank of America’s executive management team. (WSJ)
NPR’s chief executive, Jarl Mohn, will step down in June. (WSJ)
Uber hired Aaron Crowell, a longtime health consultant, to lead its health business. Dan Trigub, currently on Lyft’s health care team, will also join the division. (CNBC)
Yang Weidong, the chief of Alibaba’s video-streaming platform, Youku, has stepped down amid “alleged acceptance of improper payments.” (WSJ)
Thomson Reuters will cut 3,200 jobs over the next two years. (WSJ)
The speed read
• Takeda won shareholder approval to finance its $60 billion buyout of the pharmaceutical company Shire. (Reuters)
• Goldman Sachs will reportedly buy a $200 million stake in the venture-capital firm General Catalyst. (WSJ)
• The German oil and gas producer DEA will reportedly announce plans today to buy the Mexican company Sierra Oil and Gas. (FT)
• The Martin Sorrell venture S4 Capital has acquired the California-based digital advertising business MightyHive for $150 million. [FT]
Politics and policy
• The special counsel, Robert S. Mueller III, said that Michael Flynn, Mr. Trump’s former national security adviser, had provided substantial help with the investigation into Russian interference and should receive little to no prison time for lying to federal investigators. (NYT)
• The U.S. plans to suspend its nuclear treaty with Russia in 60 days. (WSJ)
• The campaign committee for House Republicans says its computer systems were hacked this year. (NYT)
• A C.I.A. briefing on the killing of Jamal Khashoggi solidified the view among U.S. senators that Mohammed bin Salman, the crown prince of Saudi Arabia, had ordered the act. (NYT)
• Prime Minister Theresa May of Britain has been forced to publish secret government legal advice on her Brexit deal. (FT)
• President Trump offered German automakers a reprieve from car tariffs, at least for now. (NYT)
• The electronics manufacturer Foxconn is reportedly considering a new plant in Vietnam to avoid tariffs. (Reuters)
• Alibaba plans to take on Amazon in Europe’s cloud computing market. (WSJ)
• The U.S. Secret Service wants to test facial recognition around the White House. (ACLU)
• The first “real world” demonstration of 5G has gone badly. (Verge)
• Apple is resorting to discount promotions to help bolster its iPhone sales. (Bloomberg)
• The digital divide might be wider than we thought. (NYT)
Best of the rest
• Fifty companies, including UPS, Dow DuPont and Boston Consulting Group, that pledged to increase the number of women in their ranks now collectively have a larger representation of women in leadership positions at every level than their global peers do. (Catalyst)
• Federal prosecutors issued the first charges brought in the U.S. in connection with the so-called Panama Papers leaks. (NYT)
• Retailers are using Big Tech-style user tracking to try to keep up with Amazon. (Bloomberg)
• Palladium could steal gold’s crown as the world’s most expensive metal. (WSJ)
• Here are the best U.S. companies to work for, according to their employees. (Spoiler: Facebook is no longer #1). (WaPo)
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