Business
Donald Trump fired the opening salvo in his trade war by threatening to impose tariffs of 25% on all goods exported to the United States from Canada and Mexico and a further 10% on all Chinese goods. Mr Trump said he would do this because Canada and Mexico were permitting illegal migrants and drugs to cross their borders, and because China was not executing enough fentanyl smugglers. Economists warned of soaring prices in America if the duties are imposed. Canada’s oil industry said the tariffs would undermine energy security. After his announcement Mr Trump said that he had had a “wonderful conversation” with Mexico’s president, Claudia Sheinbaum, about stopping migration.
Meanwhile, Mr Trump chose Jamieson Greer to be the trade representative in his new administration. Mr Greer was a senior aide to Robert Lighthizer, the trade chief in Mr Trump’s first government. In May Mr Greer said that “The effort to pursue strategic decoupling from China will cause short-term pain.”
Peter Carlsson stepped down as chief executive of Northvolt, shortly after the Swedish maker of battery cells declared bankruptcy. Northvolt had once been hailed as Europe’s champion in the global market for electric-car batteries, which is dominated by China, but it collapsed under a pile of debt. The company laid off workers earlier this year as it struggled to survive. Some of its problems came from its rapid expansion into technological areas, such as artificial intelligence, which attracted investors but which Northvolt failed to commercialise. Its main factory, in remote northern Sweden, never reached full capacity.
Sticks, but no carrots
Stellantis decided to close its factory in Luton, near London, which makes vans under the Vauxhall brand. The carmaker said it hoped it could relocate hundreds of workers to a plant near Liverpool, though unions warned that 1,100 jobs were at risk. Stellantis reportedly blamed the British government for imposing targets on carmakers to produce electric vehicles when consumer demand for EVs was slowing. Ford also chimed in, decrying the lack of incentives in Britain for drivers to switch to EVs.
Amazon doubled its investment in Anthropic, an artificial-intelligence startup, to $8bn. It made an initial investment only in September last year. Amazon is integrating Anthropic’s technology into its cloud services, and aims to incorporate Anthropic’s chatbot, Claude, in its Alexa voice-command platform. Separately, SoftBank was reportedly planning to invest an additional $1.5bn in OpenAI. After its latest round of fundraising OpenAI is now thought to be worth $150bn.
For the second time this year Samsung overhauled the senior-management ranks of its chip division, which is struggling to compete with the likes of TSMC. “I am fully aware that there are grave concerns about the future of Samsung,” acknowledged its chairman, Lee Jae-yong.
The share prices of Dell and HP fell sharply after both PC-makers reported disappointing earnings. The companies hope that sales will improve when consumers buy new PCs with AI capabilities.
UniCredit, Italy’s second-biggest bank, offered to buy Banco BPM for $11bn, which its smaller rival rejected. The proposal was unexpected. UniCredit has ambitions to take over Commerzbank, a large German lender, though that proposition is fiercely resisted in Germany.
In the first of four big divestments that it announced in May, Anglo American sold its remaining coal assets to Peabody Energy for $3.8bn.
Macy’s had to delay the full publication of its quarterly earnings report, which would have included its forecast of the crucial Christmas shopping season, because it uncovered an attempt by a former employee “to hide approximately $132m to $154m” of delivery expenses since 2021. The employee reportedly did not make a financial gain. It is unclear whether this was an accounting error that had gone unnoticed.
The war on woke
Robby Starbuck, an online activist, claimed another victory in his fight against corporate diversity, equity and inclusion policies, when Walmart told him it would no longer provide preferential treatment to suppliers based on diversity and discontinue racial-equity training, among other things. Mr Starbuck had threatened to highlight Walmart’s DEI practices ahead of the Christmas season, which might have prompted a conservative boycott of its stores. Announcing Walmart’s climbdown, he said “companies can clearly see that America wants normalcy back”.