Business review from the Economist
U.S., China meet but fail to strike trade deal
U.S. and Chinese negotiators wrestled over a trade deal. President Donald Trump's threat, backed by senior U.S. officials, to increase tariffs on Chinese goods if an agreement was not reached rattled stock market investors. Equity prices had bounced back this year in part on renewed optimism about trade. Meanwhile, data showed that Chinese exports fell unexpectedly in April; exports to the U.S. were 13% lower than the same month in 2018.
Trump tweeted that Stephen Moore had withdrawn from consideration for a seat at the Federal Reserve. Trump's choice of Moore, a tax-slashing warrior, had raised concerns, even among Republicans, that he was trying to plant political supporters in the central bank. Moore was also in hot water for disparaging remarks about women that he made in the past.
The Danish press reported that Thomas Borgen, the former chief executive of Danske Bank, had been charged in relation to the suspected money-laundering of as much as €200 billion ($224 billion) through Danske's operations in Estonia. Borgen resigned last year. He is the first person connected to the case to be indicted, reportedly for a failure of oversight.
A former banker at Goldman Sachs pleaded not guilty at a court in New York to involvement in the embezzlement of $2.7 billion from Malaysia's 1MDB development fund. Roger Ng returned to the U.S. to face the charge; he has also been indicted in Malaysia. His former manager is awaiting sentence after pleading guilty to participating in the scheme, which channeled money from 1MDB bond sales to Malaysian officials. Goldman has said it expects to receive a hefty fine.
Anheuser-Busch InBev confirmed that it was considering listing its Asia operations in Hong Kong. The brewer would use the proceeds to pay down some of the enormous debt pile it amassed during a spree of takeovers.
German conglomerate Siemens plans to spin off its struggling power and gas unit, combined with its wind-power assets, in a stock market flotation. It hopes that by cutting the cord now it will avoid the same fate that befell General Electric.
Problems mounted at Kraft Heinz. Under a subpoena from the Securities and Exchange Commission for its accounting practices, the food company said it would have to restate earnings for three years after uncovering mistakes in its procurement procedures. Kraft Heinz also disclosed that the SEC has expanded the scope of its inquiry and is scrutinizing a $15 billion write-down that was announced in February.
Facebook said that London would be the base for staff working on its new mobile-payments service, which will be available later this year on WhatsApp. The social-media company chose London because of the availability of fintech workers from countries where WhatsApp is widely used, such as India.
Ikea opened its first store in central Paris, part of a plan to place more of its retail space in urban areas. The store is Ikea's first in a city center to offer a full range of items (rather than just kitchen-planning), a concept that it intends to repeat.
Global politics from The Economist
U.S. raises its naval presence in Middle East
The U.S. sent an aircraft-carrier group to the Middle East in response to "troubling and escalatory" signs that Iran might attack U.S. forces in the region. Iran, meanwhile, said it would no longer abide by all of the terms of the nuclear deal that it signed with the U.S. and other world powers in 2015. The U.S. withdrew from that deal last year and reimposed sanctions, aiming to cut off Iranian oil exports; it announced new sanctions this week, targeting iron, steel, copper and aluminum, which account for around 10% of Iran's exports.
South Africans voted in a general election that was held 25 years after the end of apartheid. Polls suggest that the African National Congress, which has ruled since 1994, would win again, although with its smallest-ever majority.
The World Health Organization is to increase the number of vaccinations it administers in an effort to contain the spread of the Ebola virus in the Democratic Republic of Congo.
The Sultan of Brunei responded to critics of the harsh Islamic penal code he promulgated by suggesting that its most controversial punishment, death by stoning for sex outside marriage, would not be carried out. But the law remains on the books, and he made no commitment regarding other gruesome punishments, such as amputation for theft.
King Vajiralongkorn of Thailand was crowned.
North Korea tested a series of short-range missiles. It did not break the country's moratorium on tests of long-range missiles and nuclear weapons, it was interpreted as a signal that the North was chafing at the slow progress of talks with the U.S.