What the U.K. Election Result Means for Global Business

What the U.K. Election Result Means for Global Business


Just out: The Daily has a special episode on Senator Elizabeth Warren in which Andrew helps tell the story of her emergence as a political force after the financial crisis. Take a listen. (Want this by email? Sign up here.)

Prime Minister Boris Johnson and his Conservative Party won a commanding majority in Britain’s Parliament yesterday, a victory that paves the way for Britain’s exit from the European Union next year, write the NYT’s Mark Landler and Stephen Castle. It was the party’s largest win since Margaret Thatcher captured a third term in 1987.

Mr. Johnson said the vote gave him “a powerful new mandate to get Brexit done,” a position that signals a profound change in the global trading system, reports the NYT’s Peter Goodman. “For more than seven decades, the global powers that be operated on the assumption that greater economic integration amounts to historical progress,” Mr. Goodman writes. “But that era is over.”

The prime minister must now decide how to pull Britain out of the E.U. If the country wants access to the bloc’s single market, it will have to give up control in some areas, but hard-liners are likely to push for a clean break, Bloomberg reports.

The U.S. has settled on final terms of a partial trade deal with China, which could ease tensions days before new tariffs are set to take effect, write the NYT’s Ana Swanson, Alan Rappeport and Keith Bradsher.

President Trump agreed to reduce the tariffs he has placed on $360 billion of Chinese goods in return for a commitment from Beijing to buy American agricultural products, the reporters write, citing unnamed sources.

“The president is expected to announce that he will delay or cancel tariffs on $160 billion of consumer products from China that are scheduled to go into effect on Sunday,” they write.

The deal is likely to bring relief, but it also raises questions for farmers and agriculture traders, who are eager for more details, Bloomberg reports: “The more than yearlong tariff spat between the two nations weighed on commodity prices and upended global crop shipments, benefiting Brazil as an alternative supplier.”

The partial resolution to the trade war raises a question: Was it worth it? “There is nothing in this tentative deal that wouldn’t have existed in the absence of the past two years of wrangling,” David Fickling writes for Bloomberg Opinion.

More trade news: The White House is reaching out to Republicans who may rebel against the new trade agreement with Canada and Mexico.

The Federal Trade Commission is considering seeking a preliminary injunction against Facebook to prevent the social media platform from integrating several of its messaging services.

The action could rest on the grounds that Facebook’s policies directing that integration are anticompetitive, the WSJ writes, citing unnamed sources.

Federal officials worry that knitting together Facebook services like WhatsApp, Instagram and Facebook Messenger would prevent any future breakup of the company in an antitrust case.

Facebook bought Instagram and WhatsApp as part of a series of “defensive acquisitions” to protect its position in the social media market, leading antitrust academics have said.

Yet seeking an injunction of this kind would be unusual for a federal antitrust agency, because regulators rarely try to unwind mergers that have been completed, Cecilia Kang and Mike Isaac of the NYT write.

Methane, a potent greenhouse gas, is loosely regulated, difficult to detect and rising sharply. If a plan by the Trump administration succeeds, oil companies could be freed from requirements that they install technology to detect and fix methane leaks from oil and gas facilities, report Jonah M. Kessel and Hiroko Tabuchi of the NYT.

A gas processing plant in West Texas is experiencing major releases of methane, aerial and on-the-ground research shows. The plant is run buy DCP Pegasus, which is partly owned by Phillips 66.

The gas is invisible to the naked eye, so the reporters used a highly specialized infrared camera to photograph the releases — and gathered images of workers walking through the clouds unprotected. The methane is escaping from equipment that is intended to burn it off.

Levels of the gas have soared since 2007, for reasons that are mostly not understood, but natural gas fracking is a major suspect.

Fossil fuel companies made contact with the Trump administration in 2017 to argue for a rollback of methane emissions rules, and have held repeated meetings with federal officials. The industry also wants looser rules on these unintended or “fugitive” emissions.

• A DCP spokeswoman said she had many questions regarding the accuracy of the assessment and assumptions, but did not comment further. Phillips 66 declined to comment.

When Liu Jingyao was a student at the University of Minnesota in 2018, she said, the billionaire founder of one of China’s largest companies, JD.com, followed her to her apartment and raped her.

She has filed suit against the businessman, Richard Liu (the two are not related), in Minnesota civil court, seeking damages of $50,000. Prosecutors declined to pursue a case against Mr. Liu, who has denied the accusations; they did not meet with Ms. Liu.

But hers is not a typical #MeToo story, writes the NYT’s Li Yuan in Ms. Liu’s first interview with an English-language publication. Since then, Ms. Liu has become the target of a level of vitriol on the Chinese internet, 800 million strong, that may be difficult for Westernersto grasp.

The case is attracting outsize attention because Ms. Liu is accusing one of the country’s most powerful men of behavior that has long been ignored. “Sexual harassment and assault are widespread in China, and elites face little scrutiny. Self-made tech tycoons are widely admired celebrities,” Ms. Yuan writes.

Online accusations of sexual misconduct were one of the most heavily censored topics in 2018 on WeChat, China’s biggest social-media platform, according to WeChatscope, a research project at the University of Hong Kong.

Some WeChat accounts that voiced support for Ms. Liu were deleted. WeChat is owned by Tencent, which is also the biggest shareholder of JD.com.

Andy Dunn, the founder of Bonobos, is leaving Walmart, roughly two years after the retail giant acquired the online apparel retailer.

Deals

• The German company Delivery Hero will acquire an 87 percent stake in Woowa, the operator of South Korea’s biggest food-delivery app, in a deal that values Woowa at $4 billion. (Bloomberg)

• An affiliate of John Malone’s Liberty Media is reportedly seeking permission from the Justice Department to buy a larger piece of iHeartMedia. (WSJ)

• In a setback for SoftBank, OneConnect, the financial technology arm of China’s biggest insurance company, cut its expected valuation by about half before a planned U.S. market debut. (FT)

• Citigroup and Credit Suisse have dropped out of the American I.P.O. of the Chinese shared work space provider Ucommune. (Reuters)

• The private equity firm Advent International keeps betting on Lululemon and keeps winning. (Bloomberg)

Politics and policy

• A union in Nevada, the third state to vote in the Democratic primary, told presidential candidates that health care, specifically keeping union health care, is what’s on the minds of its members. (NYT)

• Elizabeth Warren’s wealth tax would raise $2.7 trillion over a decade, $1.1 trillion short of her campaign’s estimates, according to a new analysis. The campaign has said tighter enforcement would make up the difference. (WSJ)

• A government report found that health insurance companies offering Advantage plans had combed through patient charts to obtain billions of dollars of additional payments from the Medicare program. (NYT)

• A closer look at Deval Patrick’s time at Bain Capital. (Politico)

• The Senate confirmed Dr. Stephen Hahn as commissioner of the Food and Drug Administration. (NYT)

• Some rules in the Community Reinvestment Act, which requires banks to do some of their business in less-wealthy areas, could be relaxed, but the Fed isn’t on board. (NYT)

Trump impeachment inquiry

• The House Judiciary Committee postponed the expected party-line approval of two articles of impeachment, a decision now set for today that will send the charges to the full House for a vote. (NYT)

• In a polarized era, will impeachment become the new normal? (NYT)

• An inside look at behind-the-scenes moments in the impeachment case. (NYT)

Tech

• WeWork has been trying to reduce the number of buildings it leases even faster than is widely understood. (The Information)

• AT&T, Cox, Comcast and other broadband companies persuade the F.C.C. to omit unflattering data on speed tests, among other tactics, to improve their scores. (WSJ)

• Lyft said it was bringing out a car rental service within its main app; shares of Hertz and Avis shares dropped on the news. (CNBC)

Best of the rest

• David Solomon, the Goldman Sachs C.E.O., and his management team are moving to an open floor plan to make the company’s work more transparent. (Business Insider)

• Refinitiv, which until last year was owned by Reuters’ parent company, Thomson Reuters, has blocked a growing number of Reuters articles in mainland China under government pressure. (Reuters)

• The family behind Krispy Kreme Doughnuts, Panera Bread and Pret A Manger is donating $5.5 million to a fund for Holocaust survivors after learning that their business once supported the Nazis. (NYT)

• Worries that the U.S. economy will tip into recession have receded, but risks remain. Here are key indicators to watch. (NYT)

• Can consumer spending overcome corporate gloom? (FT)

• The National Labor Relations Board ordered a judge to approve a settlement that doesn’t consider McDonald’s liable for labor law violations by its franchisees. (NYT)

Correction: Yesterday’s newsletter, using information from CNBC, misstated the day of Blue Origin’s third launch and landing of the New Shepard rocket this year. The launch happened on Wednesday, not yesterday.

Thanks for reading! We’ll see you tomorrow.

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