Business review from the Economist

Business review from the Economist

NAFTA talks begin under U.S. pressure

Officials from the United States, Mexico and Canada began renegotiating the North American Free Trade Agreement. The 23-year-old pact, pilloried by President Donald Trump, is due for an upgrade. New rules to govern labor and environmental standards, digital trade and dispute resolution could all feature. Nonetheless, talks are expected to be difficult, particularly if the Trump administration sticks rigidly to its "America First" agenda.

Standard Life and Aberdeen, two asset-management firms, completed an £11 billion ($14.2 billion) merger. Standard Life Aberdeen will have £670 billion under management, making it Europe's second-largest fund.

Industrial production in China grew by 6.4 percent in the year to July, falling short of expectations. Although the IMF raised its GDP-growth forecast this year from 6.2 to 6.7 percent, it warned that the country was shoring up growth by taking on dangerous amounts of debt. Non-financial-sector debt could reach almost 300 percent of GDP by 2022.

Japan's GDP grew at an annualized pace of 4 percent in the second quarter compared with the first. Consumption expanded at its fastest rate since sales tax was raised in 2014. It was the country's sixth consecutive quarter of growth.

Tesla sold $1.8 billion of unsecured ("junk") bonds, the first such offering from the electric carmaker. The sale was expanded from $1.5 billion because of overwhelming demand from investors. The proceeds will be used to finance production of the popular Tesla Model 3. Having built around 80,000 cars last year, Tesla hopes to produce 500,000 vehicles in 2018.

SoundCloud said it had raised new funds, ensuring its survival until the end of the year. The music-streaming service has 88 million users but has struggled to generate revenue.

President Donald Trump ordered an investigation into Chinese trade practices, a possible precursor to penalties. Robert Lighthizer, the United States Trade representative, is to look into China's alleged theft of intellectual property, which the administration estimates to be worth as much as $600 billion.

A conflict within the United States' solar industry ignited. Suniva and SolarWorld, two struggling manufacturers of solar cells, brought a complaint in front of the U.S. International Trade Commission, claiming that they were ruined by cheap imports. Chinese-owned Suniva has asked the commission to recommend the imposition of duties on cell imports and a floor on the price of imported panels. The companies' opponents say such action could clobber solar installers, threatening thousands of jobs.

Air Berlin filed for insolvency. Germany's second-largest carrier will be kept aloft by a €150 million ($176 million) government loan; the firm's biggest shareholder, Etihad Airways, has refused to pump in any more money.

Amazon raised $16 billion in a bond sale to finance its purchase of Whole Foods Market, a supermarket chain. The issue was more than three times oversubscribed. The acquisition signals the online giant's push to enter the grocery market.

Global Politics from the Economist

Argentine president's party wins

In Argentina, President Mauricio Macri's business-friendly "Let's Change" coalition performed better than expected in a primary legislative election. In Buenos Aires Province, a former electoral stronghold for the Peronist party, Cristina Fernández de Kirchner, the populist ex-president, tied with Macri's candidate.

The World Health Organization announced that the number of suspected cholera cases in war-torn Yemen has reached half a million. Some 2,000 people have died from the diarrheal disease. The rate of new cases is declining, but the epidemic remains a serious problem in the country.

Iran's president, Hassan Rouhani, said his country could abandon the deal over its nuclear program that it signed with the United States, Britain, China, France, Germany and Russia in 2015, "within hours," if Trump imposed new sanctions.

Gunmen opened fire on a cafe in Ouagadougou, the capital of Burkina Faso, killing at least 18 people. Jihadists are suspected of carrying out the attack. Other Islamic extremists were responsible for a similar shooting in the same street last year. Hours after the attack, another set of gunmen fired on the United Nations mission in Mali, killing seven.

Grace Mugabe, the wife of Zimbabwe's President Robert Mugabe, was accused of assaulting a 20-year-old South African model with an extension cord at an upmarket hotel in Johannesburg. A leading contender for Zimbabwe's presidency after the retirement of Mugabe, a nonagenarian, a criminal record could stymie her path to the top job.