2020年1月16日 星期四

DealBook: Winners and Losers of the Trade Deal

President Trump and a top Chinese official signed a long-awaited phase-one trade deal yesterday. Here's who benefited, and who was left out in the cold.
January 16, 2020
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Vice Premier Liu He of China and President Trump yesterday.
Vice Premier Liu He of China and President Trump yesterday.  Kevin Lamarque/Reuters
What the agreement means for the U.S. and China
President Trump and Vice Premier Liu He of China signed a long-awaited phase-one trade deal at the White House yesterday. Here’s who benefited from the agreement — and who was left out in the cold.
• Mr. Trump. He is claiming a political victory for negotiating a deal that he says his predecessors couldn’t do. (Even if the pact falls short on his earlier promises.)
• President Xi Jinping of China. It eases trade tensions at a time when the Chinese economy is weakening.
• Financial companies. American banks can now take control of their joint ventures in China, while credit-card processors advanced their quest to operate in the country.
• American farmers. They’ll resume exporting to China, after being the biggest casualties of the trade war.
• American farmers. China’s commitment to buying U.S. agriculture products is only for two years, and Beijing is vague about what will come after that.
• Chinese exporters. They remain subject to tariffs on $360 billion worth of goods that won’t be lifted until a phase-two deal is reached.
• China hawks in the Trump administration and elsewhere. The deal doesn’t address Chinese state subsidies, cybersecurity or Beijing’s technology policies.
The deal stabilized U.S.-China relations somewhat and shifted American thinking on Beijing. “There is now a wide consensus in the United States to challenge China on its worst actions,” Heather Long of the WaPo writes.
But there’s at least one unintended consequence, James Politi of the FT writes: The U.S. “is arguably more dependent on trade with Chinese government-backed entities than it was before Trump’s trade war began.”
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York and Michael J. de la Merced in London.
David Solomon, the chairman and C.E.O. of Goldman Sachs.
David Solomon, the chairman and C.E.O. of Goldman Sachs.  Mark Lennihan/Associated Press
The deal that still haunts Goldman
Goldman Sachs had a profitable 2019. But it’s still grappling with fallout from an eight-year-old bond sale that the bank ran on behalf of 1MDB, a now-controversial Malaysian investment fund.
Thirteen percent of Goldman’s profits were reserved for legal costs related to its involvement with 1MDB. The Justice Department has accused the bank of overlooking corruption at the Malaysian government fund, which is now insolvent. (The bank is expected to settle the U.S. investigation for about $2 billion.)
“We are working hard to bring closure to this matter as quickly as possible,” David Solomon, Goldman’s C.E.O., told analysts yesterday.
1MDB is a costly distraction to Goldman at a time when it has other challenges, too. The bank is trying to beef up its consumer operations, where it trails far behind JPMorgan Chase (which reported record profits this week).
Jeff Bezos of Amazon in New Delhi yesterday.
Jeff Bezos of Amazon in New Delhi yesterday.  Anushree Fadnavis/Reuters
Jeff Bezos makes big India pledge amid opposition
The Amazon chief yesterday vowed to invest an additional $1 billion in his company’s India operations to help small businesses on its platform, the WSJ reports. It’s meant to blunt growing opposition in an important market.
Things have grown tougher for Amazon in India recently:
• A top regulator this week ordered an inquiry into whether Amazon (and Flipkart, which Walmart bought control of in 2018) broke antitrust laws and hurt mom-and-pop retailers.
• The Indian government is weighing stronger regulation of data storage in the country.
• And a union of small retailers, the Confederation of All India Traders, is planning protests against Amazon in 300 cities across the country.
Amazon says that it is helping small businesses and that its investment pledge furthers that goal. “We’re making this announcement now because it’s working,” Mr. Bezos said.
Some critics appear unswayed. “Mr. Bezos is creating a false narrative of empowering small retailers,” Praveen Khandelwal of the Confederation of All India Traders told the BBC.
Why the Indian market matters: The country has 1.3 billion people, many of whom are only now coming online. Mr. Bezos said yesterday that he thought the 21st century was “going to be the Indian century.”
Why a great labor market may be bad for your health
U.S. employment continues to rise to near-record highs. That could make flu season worse, Aimee Picchi of CBS News writes.
• Workplaces are becoming more crowded, making it easier for the flu virus to spread.
• Each percentage point increase in the employment is correlated to a 16 percent rise in flu-related doctor visits, according to Erik Nesson, an economics professor at Ball State University.
• “It seems to be a place where higher economic activity is detrimental to people’s health,” Mr. Nesson told CBS News.
  David McNew/Getty Images
The next phase of the streaming rivalry
NBCUniversal is scheduled to unveil Peacock, its streaming service, today, joining the online video battle royal. Now the hard part begins, Alex Sherman of CNBC writes.
Peacock will go up against Netflix, Disney Plus, Apple TV Plus, HBO Max, Amazon Prime, Hulu, CBS All Access and others.
Rolling out the service will be the easy part. The task now for NBCUniversal and other old-school media companies is to figure out “how these services interact with each other and traditional bundled pay television,” according to Mr. Sherman.
An ad-free version of Peacock is expected to cost $10 a month. Subscribers to Comcast, NBCUniversal’s parent company, would get free access to Peacock’s content with limited ads, which would cost $5 per month for nonsubscribers. A free version will have limited content and lots of ads.
NBCUniversal and Comcast seem to be betting that “the transition from pay TV to streaming is best for NBCUniversal if that movement is as slow as possible,” Mr. Sherman concludes.
Mary Erdoes of JPMorgan Chase.
Mary Erdoes of JPMorgan Chase.  Mark Lennihan/Associated Press
‘Will you say, “Thank you, Mr. President,” at least?’
At the trade deal signing ceremony yesterday, President Trump aimed a few quips at business leaders, many of whom were in attendance, Max Abelson of Bloomberg notes.
• To Mary Erdoes, the head of JPMorgan Chase’s asset management unit, he said he deserved some credit for the bank’s stellar earnings report. “They just announced earnings and they were incredible,” Mr. Trump said. “Will you say, ‘Thank you, Mr. President,’ at least?”
• Mr. Trump looked for Ken Griffin, the head of the huge hedge fund Citadel. “Where the hell is he?” the president asked. “He’s trying to hide some of his money.” (Mr. Griffin wasn’t in the room.)
• And to Raymond McDaniel, the C.E.O. of the credit ratings agency Moody’s, Mr. Trump asked, “Are you giving us good ratings, Raymond, please?”
The speed read
• Final arguments in a lawsuit by 13 states to block T-Mobile’s proposed $26 billion takeover of Sprint were made yesterday, leaving the deal’s fate in a federal judge’s hands. (WSJ)
• The logistics company XPO said it was considering spinning off some of its businesses, unwinding an empire built on M.&A. (WSJ)
• KKR has raised $2.2 billion for its second fund dedicated to investments in later-stage tech start-ups in North America, Europe and Israel. (KKR)
• An investment company run by Thomas Farley, the former head of the New York Stock Exchange, and backed by Dan Loeb’s Third Point is reportedly close to buying Global Blue, a payments company, for about $2.6 billion. (WSJ)
Politics and policy
• The Treasury Department’s watchdog is investigating opportunity zones, a tax break that was meant to help low-income areas but became a windfall for wealthy investors. (NYT)
• The Justice Department’s antitrust chief, Makan Delrahim, plans to focus on drug pricing and agreements among companies not to poach one another’s employees. (WSJ)
• Elizabeth Warren to Bernie Sanders: “I think you called me a liar on national TV.” (NYT)
• Twitter will probably never let users edit tweets, Jack Dorsey says. (Verge)
• Goldman Sachs sold its stake in Uber late last year. (CNBC)
Best of the rest
• The Virgin Islands sued the estate of Jeffrey Epstein, alleging that the financier trafficked hundreds of young girls from his Caribbean private island as recently as 2018. (NYT)
• Yamaha warned musicians not to climb into cases for musical instruments after reports that Carlos Ghosn was smuggled out of Japan in one. (Reuters)
• The World Athletics sports federation is reportedly considering restrictions on the use of Nike’s Vaporfly running sneakers. (Guardian)
• Climate change could spell the end of Alpine skiing. (Bloomberg)
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