Stock markets around the world are down as the two countries traded tariffs. Everyone is trying to figure out if the spat is for show — or meaningful.
Good Friday morning. Breaking: GlaxoSmithKline withdrew its bid for Pfizer’s consumer division. Bank of America Merrill Lynch paid $42 million to settle with N.Y.’s attorney general over trading practices. Some links require subscriptions.
They’re here. President Trump imposed $60 billion worth of tariffs and penalties on Chinese goods. China is threatening tariffs on $3 billion worth of U. S. goods like nuts, wine and pork. Now S.&P. 500 futures and markets in Asia and Europe are down this morning, following yesterday’s steep sell-off (which was driven in large part by Boeing).
The context: Mr. Trump has made subtext — China is the U. S.’s main economic rival and must be treated as a strategic competitor — text. Few in the U. S. are happy with Beijing’s trade and intellectual property policies. But the world is now watching to see whether the fight turns out to be a spat, or a prolonged and damaging conflict.
Peter Eavis’s take: A trade fight that eventually relaxes some of China’s disadvantageous conditions could bolster the long-term prospects of U. S. firms. And if the U. S. is able to recruit other countries to its cause, China may relent. Still, much could go wrong.
On the other tariffs: The E. U. is still waiting for confirmation of exemptions from the imported metals tariffs. They may get quotas instead. Meet Century Aluminum, the tiny manufacturer that pressed for those penalties.
Critics’ corner
• Stephen Gandel of Gadfly writes, “Trump’s tariffs and especially his protectionist rhetoric threaten to cut more and more of the world off.”
• Paul Krugman writes, “America has much less trade leverage over China than Trump imagines, and a trade war with ‘China’ will anger a wider group of countries, some of them close allies.”
• The WSJ editorial board writes, “A rising and aggressive China poses considerable risks to world order, but persuading its leaders to conform to trading norms requires more than scattershot tariffs.”
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Today’s DealBook Briefing was written by Michael J. de la Merced and Amie Tsang in London.
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The file-storage company priced its market debut at $21, raising a bigger-than-expected $756 million for a fully diluted market value of $9.2 billion. The big question: Will that encourage other unicorns onto the public markets?
The valuation is still shy of Dropbox’s last private fund-raising round, but few in tech care. The proof of the pudding is in the trading, when “DBX” appears on Nasdaq screens this morning.
The deals flyaround
• Steve Wynn has sold his entire stake in Wynn Resorts, worth $2.1 billion as of Wednesday. And Hong Kong’s Galaxy Entertainment Group, which aims to reshape the Asian gambling market, bought in.
• In its opening statement at the Time Warner deal trial, the Justice Department warned that AT&T would use its newly bought content as a “weapon” to raise prices. Tim Wu of Columbia Law School agrees. Naturally, AT&T does not.
• The entertainment mogul Byron Allen bought The Weather Channel’s broadcast assets for $300 million. ( Variety)
• Blade, the helicopter taxi service, has raised $38 million from the likes of Airbus and Colony NorthStar. ( Axios)
• The publisher of New York magazine bought Splitsider from The Awl Network. ( WSJ)
• Deutsche Bank priced the spinoff of its DWS asset-management unit at the low end of the expected range. ( WSJ)
The state’s attorney general, Eric Schneiderman, is expected to announce today that Bank of America Merrill Lynch is settling an investigation over its electronic trading practices.
Mr. Schneiderman is expected to announce that the bank routed some clients’ trade orders to so-called electronic liquidity providers like Citadel Securities, then doctored trade confirmations and post-trade reports to say it had executed them in-house. The attorney general said the process was applied to some 16 million client orders between 2008 and 2013.
He has previously gone after Barclays, Credit Suisse and Deutsche Bank over their electronic trading practices.
It came halfway through the 2018 fiscal year, and it was opposed by the House Freedom Caucus. But the 2,232-page, $1.3 trillion bipartisan bill will avert a government shutdown .
And President Trump appears grudgingly willing — for now — to sign it into law, even though it’s a rebuke of his policies, with a fraction of what he wanted for the wall, no sharp cuts to the E. P. A.’s budget and an increase in federal arts spending.
Here’s how Congressional leaders settled lawmakers’ objections .
The political flyaround
• President Trump has replaced his perpetually on-the-bubble national security adviser, H. R. McMaster, with the hard-line John Bolton. And John Dowd quit the president’s legal team for the special counsel inquiry.
• A donor to N.Y.C. mayor Bill de Blasio testified that he steered tens of thousands of dollars to the mayor’s campaigns in exchange for favorable treatment. ( NYT)
• Saudi Arabia’s Mohammed bin Salman reportedly boasted that he had Jared Kushner “ in his pocket .” Separately, the State Department approved a $670 million sale of anti-tank missiles to the kingdom.
• The former Trump International Hotel in Panama City has some new cocktails: the Stormy Jack Daniels and Little Rocket Man. ( @KirkSemple)
Sheryl Sandberg told CNBC yesterday, “We’re open to regulation.” And Mark Zuckerberg told the WSJ, “There’s no reason why the internet advertising industry should have a lower transparency standard than print or TV ads.”
Their openness comes as advertisers like Mozilla and Commerzbank suspend campaigns on the social network and Britain’s advertising society is asking to question executives.
In Cambridge Analytica news: Steve Bannon downplayed his involvement in the use of Facebook data and cast doubt on the usefulness of the firm he co-founded. Britain’s information commissioner may finally enter the consultancy’s offices today.
Critics’ corner: Kevin Roose wonders if smaller might be better for Facebook. And The Economist tells the tech industry to create a data ombudsman before governments do it for them.
The tech flyaround
• The human in the Uber self-driving car that killed a woman in Arizona was a felon with a history of traffic citations who wasn’t watching the road. The company raised $1.5 billion in a new debt offering. And it’s struggling to hire truck drivers.
• Naspers is selling almost $10 billion worth of shares in Tencent. ( WSJ)
• E. U. leaders cast doubt over plans to overhaul how big U. S. tech companies are taxed. ( Bloomberg)
• Inside Jeff Bezos’s braniac pow-wow. ( NYT)
• The V. C. firm Blockchain Capital has raised a new $150 million fund. Physical Bitcoins are still attracting collectors. Nasdaq’s C. E. O. praised the S. E. C.’s scrutiny of initial coin offerings.
• Over a dozen executives have left Whole Foods since Amazon came in. ( WSJ)
• Samsung added three new independent board members, including its second-ever female director.
