Aurelia Butler

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldTop dealmakers and investors have warned that the incoming Trump administration could use the approval of cross-border deals to pressure foreign governments into aligning with US policy priorities, such as increased defence spending.Several advisers who have been in discussions with people close to the president-elect said Donald Trump was determined to use all government agencies to push other countries to support his agenda, including by withholding deal approvals for their companies. “Certainly we are preparing for this,” said one European merger and acquisitions banker. “The people in this administration have no compunction about using every lever at their disposal to achieve their aims.”Trump is expected to put pressure on European countries to increase their defence spending to as much as 5 per cent of GDP and push for more favourable terms from trading partners. He has threatened to levy tariffs on imports into the US from Europe and other allies. Inbound deals are overseen by the Committee on Foreign Investment in the US, or Cfius, which screens transactions for national security risks to the US. The inter-agency panel is chaired by the Treasury secretary and includes officials from foreign and domestic intelligence agencies as well as top economic advisers and representatives from major government ministries. If a deal is deemed to have unresolved security risks, Cfius can recommend that the president block or place conditions on the transaction.The approvals process, once largely bureaucratic, has become increasingly politicised under the first Trump and now the Biden administrations, according to several people who spoke to the Financial Times. In practice, the committee has broad purview to determine what constitutes a national security risk, creating room for political manoeuvring. “Cfius [has] wide discretion to do what they want, as long as there is some national security nexus,” said one cross-border deals lawyer. “There are some deals [in the pipeline] right now — let’s see what happens when they go through the Cfius process.”Bill Reinsch, chair in international business at the Center for Strategic and International Studies, said the Cfius analysis of Nippon Steel’s planned purchase of US Steel was more political than it should have been. Joe Biden’s rejection of the deal represented the first time a US president had intervened to stop a transaction involving a non-Chinese company acquiring a target that has no US military contracts. That rejection is now the subject of a lawsuit. “The president early on announced his opposition to the deal, and that poisoned the well and sent a strong message about what the bureaucrats should do,” said Reinsch. “[Trump’s] tendency is to view these things from a personal point of view, and what he thinks are in his interests. It will be political under him, too.”A spokesperson for the Treasury declined to comment about Cfius becoming politicised under Biden. The Trump transition team did not respond to a request for comment. During his first term, Trump sought to restrict social media platform TikTok, which is owned by Chinese parent company ByteDance, in part through a Cfius review. He also blocked Singapore-registered chipmaker Broadcom’s attempted $142bn hostile takeover of rival Qualcomm in 2018, based on Cfius recommendations. “The first Trump president was an amateur,” said another lawyer focused on foreign investment. “This time around he will know how to press the levers of power and he won’t just use Cfius, he’ll use antitrust agencies, the Fed and much more . . . it will all be highly unpredictable.”   More

Amin Nasser, the head of Saudi Aramco, the world’s largest oil company, has always had one special customer: China. In his 10 years in charge, Nasser has seen the value of Saudi oil exports to China more than triple, to a record $56bn in 2022, a year in which almost one in six barrels that Saudi Arabia pumped was shipped to Chinese refineries. Foreign oil has underpinned China’s economic rise, as the country built the world’s largest car industry from scratch, new railways and air travel networks, and thousands of skyscrapers. In 2022, 72 per cent of its total crude oil supply was imported, according to the International Energy Agency (IEA).“I have no doubt that elevating our relationship to undreamed-of heights would help turbo-charge China’s efforts to meet the hopes and dreams of its people,” said Nasser at last year’s China Development Forum in Beijing. But there are now signs that China’s thirst for crude is reaching a peak sooner than expected, a development that has sent shockwaves through the oil market. The end of the Chinese supercycleThis is the second of a two-part series on how Chinese demand for commodities, which transformed the mining and energy industries for two decades, is now beginning to weaken, in part because of the property crisisPart one: The China commodities supercycle is over. Will there be another?This week, China said its oil imports had fallen nearly 2 per cent, or 240,000 barrels a day, to just over 11mn b/d in 2024 compared with the year before, the first decline in two decades barring the disruption during the Covid pandemic. China’s stuttering economy is partly to blame. The country’s ongoing property crisis led to a slowdown in construction, which hit demand for diesel to run heavy machinery, as well as for the petrochemicals used in paint, pipes and insulation.But the decline stems from longer-term trends too. There was a boom in trucks switching from diesel to liquefied natural gas, and, most importantly, the rising number of electric vehicles helped to depress sales of petrol and diesel. Sales of both road fuels peaked in 2023, according to China National Petroleum Corp, and will now fall by 25-40 per cent over the next decade. In December, Sinopec, China’s biggest refiner, brought forward its forecast for crude oil consumption to reach a peak to 2027, compared with the range it previously gave of between 2026 and 2030. The implications of China hitting peak oil are enormous. If Chinese demand is reaching a plateau that would fulfil projections by the IEA of global oil demand peaking before 2030. The forecast sustains hope for the world to reach net zero carbon emissions by 2050.The milestone would also shake the global economy. Over the past three decades, China has accounted for half of all growth in the world’s oil demand — some 600,000 b/d. If that rate continues to level off, the $500bn that oil companies are spending every year on finding new sources of oil and gas may be far too high. “The jury is out on whether the demand will be there to absorb it or not,” says Martijn Rats, an analyst at Morgan Stanley. “The answer may be that it is not.”In December, Sinopec, China’s biggest refiner, brought forward its forecast for peak crude oil consumption to 2027, compared with the previous range of between 2026 and 2030 More

SEOUL (Reuters) – South Korea’s central bank unexpectedly left its policy interest rate unchanged on Thursday, weighing the impact of its back-to-back cuts last year while supporting the won which weakened to a 15-year low versus the U.S. dollar in recent weeks.The Bank of Korea held its benchmark interest rate at 3.00% at its monetary policy review, an outcome expected by only seven of 34 economists polled by Reuters. The remaining 27 had expected the bank to cut the rate by 25 basis points.The decision is the first since impeached President Yoon Suk Yeol’s attempt to impose martial law in early December threw Asia’s fourth-largest economy into its biggest political crisis in decades. The turmoil prompted the government to cut its 2025 economic growth forecast to 1.8% from 2.2%.The crash of Jeju Air flight 7C2216, which killed 179 people in the deadliest air disaster on South Korean soil, has also weighed on the economy.On top of that, the won’s slide has been a major concern among policymakers. In the final three months of 2024, the currency weakened 10.6% against the dollar, the biggest quarterly drop since the third quarter of 2008.Local currency dealers said South Korea has been relying on smoothing operations in the onshore dollar-won market as well as the National Pension Service’s currency hedging operations to support the won.”(Thursday’s rate decision) would be due to its (the BOK’s) greater focus on economic and financial stability concerns, until political uncertainty eases. Instead of January, we expect the BOK to cut the policy rate again at its February meeting, after it revises its economic outlook.” said Park Jeong-Woo, an analyst at Nomura Securities who was one of the seven analysts who correctly predicted the rate decision.Analysts now see the central bank eying a more gradual pace of interest rate reduction in the year ahead.Median forecasts in the survey showed one interest rate cut of 25 basis points this quarter and cuts of the same degree in both the second and third quarters taking the rate to 2.25%.Market focus now switches to Governor Rhee Chang-yong’s press conference at 0210 GMT, where the names of any dissenters to the policy decision could be announced. Dissenting votes typically lead to policy changes in subsequent months. More

Apple shipped 13.1 million units versus Huawei’s 12.9 million, the data showed. That give Apple a share of 17% and number one position, followed closely by Huawei. Total (EPA:TTEF) fourth quarter smartphone shipments from China increased 5% year-over-year to 77.4 million units.Annual shipments of smartphones in China in 2024 increased 4% year-over-year to 285 million units. More

NEW YORK (Reuters) – U.S. Treasury Secretary Janet Yellen said on Wednesday U.S. President-elect Donald Trump’s plan to set up a new government agency to collect tariffs would duplicate an existing agency and was unlikely to save money.Yellen, taping an appearance on “The Late Show with Stephen Colbert,” dismissed Trump’s plan for an “External Revenue Service,” first announced on Tuesday on his social media platform Truth Social.”If they’re looking to save money for American taxpayers, setting up a duplicative agency doesn’t seem like a good first step,” she told the U.S. television comedian.Trump on Tuesday said he would create the new agency on Jan. 20, the day he takes office, “to collect tariffs, duties, and all revenue” from foreign sources.He did not specify if the new agency would replace collections of tariffs, duties, fees and fines by the existing U.S. Customs and Border Protection, or the collection of taxes on foreign corporate and individual income by the Internal Revenue Service.It was unclear whether the move would create additional government bureaucracy, which would appear to go against the plans of Trump’s informal Department of Government Efficiency, an effort led by billionaire Elon Musk and former biotech executive Vivek Ramaswamy aimed at finding trillions of dollars in budget savings by streamlining government operations.Yellen also took aim at Trump’s repeated promises to impose new tariffs, saying they would amount to a “tax increase for the American consumer.”Trump has proposed a 10% tariff on global imports, a 25% punitive duty on imports from Canada and Mexico until they clamp down on drugs and migrants crossing borders into the U.S., and a 60% tariff on Chinese goods.Trade experts say the duties would upend trade flows, raise costs and draw retaliation against U.S. exports.Yellen said U.S. consumers would face higher costs for any imported goods and tariffs would make U.S. companies less competitive globally, while failing to address Americans’ concerns about higher prices.”What they’re going to see is the cost of making goods and services is going to go up. They’re going to be less competitive in the global economy,” she said. “So this doesn’t seem like a way to address the things that Americans have said are bothering them.” More

Labour shortages in Japan, particularly among non-manufacturers and small firms, are reaching historic levels, the government has said, stoking concerns that this supply-side constraint could stifle economic growth.Some 66% of respondents indicated that labour shortfalls were seriously or fairly seriously affecting their businesses, while 32% said the impact was not very serious.”It goes without saying this drives up personnel costs, but it could even pose a business continuity risk,” a manager at a railroad operator wrote in the survey. The number of bankruptcies caused by labour shortages in 2024 surged 32% from a year earlier to a record 342 cases, according to credit research firm Teikoku Databank. Nearly a third of respondents to the Reuters survey said the labour shortage is worsening, with only 4% reporting improvements and 56% saying the situation is neither getting better nor worse. The survey was conducted by Nikkei Research for Reuters from Dec. 24 to Jan. 10. Nikkei Research reached out to 505 companies and 235 responded on condition of anonymity. When asked about specific measures to address the labour shortfall in a question that allowed multiple answers, 69% said they were intensifying recruitment activities for new graduates and 59% were implementing such measures as extending retirement ages and re-hiring retired employees.The official retirement age is set at 60 for about two-thirds of Japanese companies, although most have introduced measures allowing employees to keep working until they turn 65, a poll by the Health Ministry showed last year. In response to a Reuters survey question about investment priorities for 2025, 69% chose capital investment and 63% selected wage hikes and other human resources-related investments. This question also allowed multiple answers.”What’s essential are wage hikes for retaining employees and capital investment for rationalising production,” an official at a chemicals company said.This trend in investment priority among Japanese firms aligns with the government’s policy of seeking economic growth through higher wages and investments. With labour shortages driving up wages and a weak yen raising import costs, 44% of Japanese companies plan to raise prices for their goods and services this year, the survey found. That compares with 17% that intend to keep their prices unchanged and 26% that plan to raise some prices but cut others.”We just cannot help but raise prices because of an across-the-board increase in wages and other fixed costs, in transportation costs and in costs of raw materials,” a manager at a metals company said in the survey. Tokyo’s core consumer price index, which excludes volatile fresh food costs, rose 2.4% in December from a year earlier. That was an acceleration from a 2.2% rise in November, keeping alive market expectations for a near-term interest rate hike. More

Maduro, whose nearly 12 years in office have been marked by deep economic and social crisis and mass migration, was sworn in for a third term on Friday, despite a six-month-long election dispute and international calls for him to stand aside.The government has employed orthodox methods to try to tamp down inflation, which has reached triple digits in recent years, with some success. Inflation was 189.8% in 2023, according to the central bank. Maduro said this month that the economy grew 9% last year. More

NEW YORK (Reuters) -Drake sued his longtime label on Wednesday, accusing Universal Music Group (AS:UMG) of defamation for promoting Kendrick Lamar’s “Not Like Us,” saying the song’s false accusation that the Canadian rapper is a pedophile has put him and his family in danger.In a complaint in Manhattan federal court, Drake said the song was “intended to convey the specific, unmistakable, and false factual allegation that Drake is a criminal pedophile” and the public should exert “vigilante justice” in response.Drake said it led to attempted break-ins at his home, prompting him to travel with extra security, and pull his seven-year-old son from his Toronto elementary school and the Toronto area.He and Lamar, an American rapper who won the 2018 Pulitzer Prize for Music, have feuded for about a decade. The lawsuit seeks compensatory and punitive damages for defamation and harassment.”UMG may spin this complaint as a rap beef gone legal, but this lawsuit is not about a war of words between artists,” according to the complaint from Drake, whose given name is Aubrey Drake Graham.”Notwithstanding a relationship spanning more than a decade, UMG intentionally sought to turn Drake into a pariah, a target for harassment, or worse,” the complaint added. “UMG chose corporate greed over the safety and well-being of its artists.”In a statement, UMG said it has not defamed anyone, called Drake’s claims untrue, and said it would be illogical to harm his reputation after investing massively to make him commercially and financially successful.UMG also accused Drake of trying to “weaponize” the legal process in seeking damages, and trying to silence Lamar’s creative expression for “having done nothing more than write a song.”Lamar is not a defendant, though Drake called “Not Like Us” defamatory. Drake’s lawyers had no additional comment.COMPETING ‘DISS’ TRACKSWednesday’s lawsuit followed a November petition in a New York state court in which Drake, through his company Frozen Moments, accused UMG and Spotify (NYSE:SPOT) of using payola and streaming bots to promote “Not Like Us” at his music’s expense.Drake withdrew that petition on Tuesday night. His related case against UMG and radio company iHeartMedia (NASDAQ:IHRT) remains pending in a Texas state court, online records show.The feud between Drake and Lamar has played out in part through so-called “diss” tracks including “Not Like Us.”In that song, released last May 4, Lamar mentioned Drake by name, saying “Drake, I hear you like ’em young” and calling him and others “certified pedophiles.”A day earlier, Drake released “Family Matters,” appearing to accuse Lamar of physical abuse and infidelity, and questioning whether Lamar’s business partner fathered one of his children.”Not Like Us” topped Billboard’s Hot 100 for two weeks last year. It received five nominations for the Feb. 2 Grammy Awards, including record of the year and song of the year.The case is Graham v UMG Recordings Inc, U.S. District Court, Southern District of New York, No. 25-00399. More