Economy

The president is under pressure from Democrats and Republicans to block the sale to Japan’s Nippon Steel, which could upset a key foreign ally.U.S. Steel is an iconic example of the lost manufacturing muscle that President Biden says his economic policies will bring back to the United States.But last month, the storied-but-diminished company announced plans to be acquired by a Japanese competitor. That development has put Mr. Biden in an awkward bind as he tries to balance attempts to revitalize the nation’s industrial sector with his efforts to rebuild international alliances.Mr. Biden’s administration has expressed some discomfort with the deal and is reviewing the proposed $14.1 billion takeover bid by Japan’s Nippon Steel. The company is offering a hefty premium for U.S. Steel, which has struggled to compete against a flood of cheap foreign metal and has been weighing takeover offers for several months.The proposal has quickly become a high-profile example of the difficult political choices Mr. Biden faces in his zeal to revive American industry, one that could test the degree to which he is willing to flex presidential power in pursuit of what is arguably his primary economic goal: the creation and retention of high-paying union manufacturing jobs in the United States.Mr. Biden is under pressure from the United Steelworkers union and populist senators from both parties, including Democrats defending crucial swing seats in Ohio and Pennsylvania this fall, to nix the sale on national security grounds. The senators contend that domestically owned steel production is critical to U.S. manufacturing and supply chains. They have warned that a foreign owner could be more likely to move U.S. Steel jobs and production overseas.“This really should be a no-brainer,” Senator Josh Hawley, Republican of Missouri, said in an interview last week. “I don’t know why it would be difficult to say, my gosh, we’ve got to maintain steel production in this country, and particularly a company like this one, where you have thousands of workers in good union jobs.”U.S. Steel executives say the deal would benefit workers and give the merged companies “world-leading capabilities” in steel production. They announced last month that Nippon Steel had agreed to keep the company’s headquarters in Pittsburgh and to honor the four-year collective bargaining agreement that the steelworkers’ union ratified in December 2022.Other supporters of the takeover bid say blocking the sale risks angering a key American ally. Mr. Biden has courted Japanese collaboration on a wide range of issues, including efforts to counter Chinese manufacturing in clean energy and other emerging technologies, and welcomed Japanese investment in new American manufacturing facilities including for advanced batteries.Wilbur Ross, a former steel company executive who served as commerce secretary under President Donald J. Trump, wrote last week in The Wall Street Journal that there is “nothing in the deal from which the U.S. needs defending. Attacks by Washington pols only create unnecessary geopolitical tensions, and those, not the acquisition itself, could endanger American national security.”Adding to the cross-pressures on Mr. Biden: It is unclear what would happen to the 123-year-old U.S. Steel if the administration scuttles the deal and whether doing so would actually guarantee greater job security for the company’s nearly 15,000 North American employees.U.S. Steel executives say the deal with Nippon Steel would benefit workers, but skeptics of the deal are urging President Biden to review it to prevent lost steel production and jobs.Lawrence Bryant/ReutersU.S. Steel has faced challenges for decades because of intensifying foreign competition, particularly from China, which has flooded the global market with cheap, state-subsidized steel. American presidents have spent years trying to bolster and protect domestic steel makers through a mix of subsidies, import restrictions and so-called Buy America requirements for government purchases.“No U.S. industry has benefited more from protection than the steel industry,” Scott Lincicome, a trade policy expert at the libertarian Cato Institute think tank, wrote in a 2017 research paper.In recent years, presidents have increased those protections further. Mr. Trump imposed tariffs on imported steel, including from Japan. Mr. Biden has partially rolled back those levies in an attempt to rebuild alliances. Mr. Biden also included strict Buy America provisions in sweeping new laws to invest in infrastructure, clean energy and other advanced manufacturing.Those efforts have not come close to bringing back the levels of domestic steel production that the United States enjoyed in the 1970s — or even of recent decades. Raw steel production reached higher levels under Presidents Bill Clinton, George W. Bush and Barack Obama than it has under Mr. Biden or Mr. Trump.Employment in the industry fell steadily in the 1990s and mid-2000s. In 2022, there were just over 83,000 workers in iron and steel mills in the United States, which was less than half the number from 1992.Senators including Sherrod Brown of Ohio and Bob Casey of Pennsylvania, both Democrats, and Mr. Hawley and J.D. Vance of Ohio, both Republicans, urged Mr. Biden to review the proposed U.S. Steel sale to guard against lost steel production and jobs. Mr. Brown cited Nippon Steel’s failure to notify or consult with union leaders ahead of making its bid for the company.“Tens of thousands of Americans, including many Ohioans, rely on this industry for good-paying, middle-class jobs,” he wrote in a letter to Mr. Biden last month. “These workers deserve to work for a company that invests in its employees and not only honors their right to join a union, but respects and collaborates with its work force.”The calls for an administrative review of the deal largely focused on the Committee on Foreign Investment in the United States, which is known as CFIUS and headed by Janet L. Yellen, the Treasury secretary. The committee scrutinizes possible sales of American firms to foreign ones for possible national security threats, then issues recommendations to the president, who can suspend or block a deal.Shortly before Christmas, Mr. Biden appeared to grant the request for review, while stopping short of saying he would block it.Lael Brainard, who chairs the White House National Economic Council, said in a news release that Mr. Biden welcomed foreign investment in American manufacturing but “believes the purchase of this iconic American-owned company by a foreign entity — even one from a close ally — appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”The administration, Ms. Brainard said, “will be ready to look carefully at the findings of any such investigation and to act if appropriate.”Steelworkers cheered the move. David McCall, president of United Steelworkers International, said in a statement that Mr. Biden was “demonstrating once again the president’s unwavering commitment to domestic workers and industries.”Independent experts say it would be well within historical norms for the committee to evaluate the sale. That will likely include a detailed economic analysis of whether the deal could lead to diminished steel production capacity in the United States, said Emily Kilcrease, a CFIUS expert and senior fellow at the Center for a New American Security.But Ms. Kilcrease said that based on the committee’s past decisions, she expected the review to stop well short of a recommendation to kill the sale. Instead, she said, CFIUS might require an agreement from Nippon Steel to maintain certain levels of U.S. employment or production as a condition of the sale’s going through.“I would be shocked if this deal got blocked,” she said.Mr. Hawley said the choice was ultimately Mr. Biden’s — and a test of his commitment to the industry.“If the administration wants to block the sale, they absolutely have grounds to do it and the legal authority,” he said. “So it’s just a question of, do they want to? And will they have the guts to do it?” More

Scientists recently analyzed a Peruvian 10-cent piece with an unexplained origin.A decade ago, a funny money mystery fell into the hands of scientists and students at the Pontifical Catholic University of Peru in Lima.The university had been acquiring 19th- and 20th-century Peruvian coins from local dealers, and graduate students in the chemistry department were analyzing the pieces for their thesis work. But one coin, a 10-cent piece known as a dinero, stood out.The dinero was marked “1899.” The problem was that official records indicated no coins of that denomination were minted in Peru that year — according to the people who made the money, the coin never existed.Most international coin catalogs don’t list 1899 dineros, said Luis Ortega, a chemist at the university. And in the rare cases that they do, there is often only a note of “counterfeit” with no further detail, Dr. Ortega said. “No one was able to provide more information about it.”Now Dr. Ortega and Fabiola Bravo Hualpa, a doctoral student, believe they have shed new light on the mystery of the coin that came from nowhere. In a paper published last year in the journal Heritage Science, they described how they subjected one of the two known 1899 dineros to a barrage of scientific analyses, illuminating its possible origins and the role it might have played during an unstable era of South American history.To the naked eye, the 1899 coin resembles other dineros: It’s silver in color and features the same coat of arms and seated woman that represents the goddess of liberty. And it’s remarkably similar in size to other dineros minted around the turn of the 20th century — about the dimensions of a U.S. dime.But when Dr. Ortega and Ms. Bravo Hualpa bombarded the 1899 coin with X-rays and measured the light it re-emitted, they determined that the dinero was largely made of copper, zinc and nickel. This alloy is known as nickel silver. It’s commonly used to make silverware and ornamental objects and has a silvery appearance, but it contains no silver. Genuine dineros produced by the Lima Mint, on the other hand, are roughly 90 percent silver.Dr. Ortega and Ms. Bravo Hualpa also found that the 1899 dinero contained traces of iron, cobalt and lead. Those impurities imply that the coin was counterfeited long ago, not more recently, the researchers suggest. Such contaminants are characteristic of older alloys because of limitations in technology at the time. “The refining methods were not as good as they are now,” Dr. Ortega said.The presence of impurities, paired with the coin’s worn faces, suggests that it was produced in the 19th or 20th centuries, the researchers concluded. But given that nickel silver wasn’t widely used for coins or tokens in Peru at that time, it’s likely that this coin was created abroad, the researchers suggest. Its producer might have therefore been wholly unaware that no dineros were officially minted in 1899.“The counterfeiter probably didn’t realize that that coin didn’t exist,” Dr. Ortega said.He said that an influx of low-value coinage would have been welcomed in Peru at the dawn of the 20th century. The country’s economy was reeling from the recent War of the Pacific, and the government was focusing on printing larger-denomination paper bank notes to pay off international loans; in 1899, the Lima Mint produced roughly one-tenth the number of silver coins it produced just five years earlier.As a result, people in Peru were using coins from neighboring nations or even cutting their own country’s coins in half to conduct small transactions. “Counterfeiters found a field of opportunity,” Dr. Ortega said.Dineros were low-denomination coins used by everyday people. Studying this coin, and the economic and political situation that prompted its creation, can therefore be illuminating. “If you want to study our society, you don’t want to look at a Ferrari,” said Laura Perucchetti, an archaeometallurgist at the British Museum in London, not involved in the research. “You want to look at a Volkswagen or a Ford.”Dr. Ortega is not finished studying counterfeit coins and their historical context. He plans to meet with a collector based in Lima who amassed an assortment of coins ostensibly minted from the 1830s through the 1960s. Another 1899 dinero has already surfaced in that collection, and he is on the lookout for more.“There must be a few around,” Dr. Ortega said. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Two-thirds of Republican voters say they trust Donald Trump more than any other GOP presidential candidate to manage the US economy, according to an FT-Michigan Ross survey that underscores his dominance on bread-and-butter issues a week before primary season gets under way.The findings are particularly problematic for Nikki Haley, the former South Carolina governor who has surged in the polls to become the biggest threat to the former president.Only 8 per cent of Republican voters said she would be their choice to handle the US economy, while 67 per cent picked Trump. Ron DeSantis, the Florida governor whose floundering campaign has been overtaken by Haley in some early voting states, was the choice of 9 per cent of respondents.The Iowa caucuses on January 15 will fire the starting gun on the primary process in which Republican voters will select their party’s nominee for the White House in 2024. New Hampshire’s primary will follow a week later. The Financial Times’s polling on the economy reflects Trump’s commanding lead among Republicans in early primary race states, where he enjoys the support of about half of Iowa’s caucus-goers and 44 per cent of GOP voters in New Hampshire. DeSantis is polling in second in Iowa with 18.4 per cent, while Haley is second in New Hampshire on 25.7 per cent.On the campaign trail, Trump has touted the strength of the US economy when he was in the White House and insisted that the “next economic boom” would start the “instant” he is elected as president in November.Haley, a former ambassador to the UN who has leaned heavily on her foreign policy credentials, has sold herself as a fiscal conservative and blamed inflation on billions of dollars in federal spending by the Trump and Biden administrations. DeSantis has vowed to slash taxes if elected and proposed a single flat federal income tax for all Americans.But their pitches appear to be falling short given Trump’s overwhelming lead in the polls.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Haley has focused much of her campaigning efforts in New Hampshire, where independent voters make up a significant share of the Republican primary electorate. But more than a third of independents surveyed in the FT-Michigan poll said they trusted Trump the most to handle the economy, followed by Haley with just 10 per cent. Roughly a quarter of independents said they did not trust any of the Republican contenders on the economy.Erik Gordon, a professor at the University of Michigan Ross School of Business, said the findings partly reflected respondents’ greater familiarity with Trump’s economic policies than those of Haley or DeSantis.“Many Republicans and more than a few Democrats remember the economy as being better under Trump than it is now, whether or not it really was,” he added.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Trump has also been buoyed in recent weeks by several national polls that show him beating President Joe Biden in a hypothetical head-to-head race. Biden has staked his re-election bid in part on “Bidenomics”, an agenda rooted in billions of dollars of public investments, a focus on middle-income workers and an effort to rejuvenate parts of the rustbelt and spur investment in new manufacturing capacity.The White House has touted record numbers of jobs created under Biden, and on Friday hailed a bumper labour market report for December, saying it “confirms that 2023 was a great year for American workers”.But the president has battled persistently low approval ratings and an electorate that remains downbeat on his handling of the economy.The latest FT-Michigan Ross survey found just 38 per cent of voters said they approved of Biden’s handling of the economy compared with 60 per cent who disapproved.Eighty-five per cent of respondents named price increases as among their biggest sources of stress, followed by just over half who cited their income level, while about a quarter pointed to either rent or credit card costs. Trump has criticised Bidenomics in his stump speeches and recently blamed his likely general election opponent for an “inflation catastrophe” that was “demolishing your savings and ravaging your dreams”.“Just ask yourself, were you better off five years ago? Or are you better off today with the inflation with bacon that costs you four times higher than you would have had to pay a little while ago?” Trump asked at a recent campaign rally in Waterloo, Iowa. “Nobody has ever seen anything like it.” Inflation has more than halved in the past year, to about 3.1 per cent in November 2023, although more than 50 per cent of survey respondents thought prices had increased by more than that rate, based on their own experience.The FT-Michigan Ross poll was conducted online by Democratic strategists Global Strategy Group and Republican polling firm North Star Opinion Research between December 28, 2023 and January 2, 2024. It reflects the opinions of 1,000 registered voters nationwide and has a margin of error of plus or minus 3.1 percentage points. More

The housing market continues to grapple with high housing costs and a scarcity of inventory, factors that are likely to persist even if the Federal Reserve reduces rates. Despite these challenges, projections suggest that the rate of new home construction, or home starts, is expected to remain steady. This could provide a measure of stability in the market, even as potential homebuyers face higher borrowing costs.The Federal Reserve’s hints at future rate cuts are based on their ongoing assessments of economic conditions. If such reductions occur, they could help ease mortgage rates from their current levels. However, the timing and impact of any such policy changes remain uncertain.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

“The law will modernize and increase the efficiency and effectiveness of tax administration and strengthen taxpayer rights and allow the government to capture as many taxpayers as possible into the tax net,” his office said in a statement.Called the “Ease of Paying Taxes Act”, the new law simplifies procedures by allowing taxpayers to electronically or manually file tax returns with the Bureau of Internal Revenue (BIR), any authorised agent bank or authorised tax software provider. The new law also allows non-residents to register for these facilities, in a bid attract foreign investors and make it easier for them to do business in the Philippines. Under the law, the tax authority is mandated to act on claims to refund taxes erroneously or illegally collected within 180-days. The threshold for mandatory issuance of receipts was raised to 500 pesos ($8.99) from 100 pesos, the law added. The number of income tax return pages was also cut to two from four previously. To speed up the process, the BIR must also craft a digitalisation roadmap to ease tax compliance especially for micro and small taxpayers, the law stated. Marcos, who was elected president in June 2022, has outlined an ambitious plan for his six-year term in office that focuses on fiscal management and infrastructure upgrades. His government wants to raise its tax effort, which is the share of tax collections to gross domestic product, to above 17% by 2028 from more than 14% currently, and sustain infrastructure spending at 5% to 6% of gross domestic product. ($1 = 55.6100 Philippine pesos) More

The investigation follows a recent press release from Mobileye on January 4, 2024, revealing preliminary financial results for FY2023 and an initial outlook for 2024. In the release, Mobileye projected a significant decrease in revenue for Q1 2024, expecting a drop of about 50% compared to Q1 2023’s revenue of $458 million. This forecast led to a sharp decline in Mobileye’s stock price, which fell by $9.75 per share, or 24%, closing at $29.97 on the same day, accompanied by unusually high trading volume.Shareholders of Mobileye who have incurred losses may be eligible for compensation through a class action lawsuit being prepared by The Rosen Law Firm. The firm is actively seeking participants for the prospective class action and has not disclosed any out-of-pocket fees or costs for joining the lawsuit, as it operates on a contingency fee basis.The Rosen Law Firm has a history of engaging in securities class actions and shareholder derivative litigation and has achieved significant settlements for investors, including the largest ever securities class action settlement against a Chinese Company. The firm’s track record and peer recognition, including a number one ranking by ISS Securities Class Action Services for the number of settlements in 2017, positions it as a notable player in the field of investor rights law.Investors in Mobileye securities who wish to learn more about the class action or join the lawsuit are encouraged to contact The Rosen Law Firm for further information. This announcement is based on a press release statement and does not serve as an endorsement of the firm’s services or a prediction of the lawsuit’s outcome.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The company’s role in advancing AI technologies has been a major factor in its success, and it is anticipated to maintain its growth trajectory as the AI hardware market continues to expand. Nvidia’s standout performance has been a key contributor to the strong recovery of the Nasdaq Composite, which has witnessed a 43% rise following a previous downturn.The current economic climate appears to be favorable for technology investments, particularly for companies like Nvidia that are positioned for sustained growth in various high-growth sectors. This optimism is supported by controlled inflation levels and the prospect of interest rate cuts by the Federal Reserve, creating an encouraging environment for technology stocks.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

By David CarnevaliNEW YORK (Reuters) – Healthcare dealmakers are making their way to San Francisco for a major industry conference, optimistic that more deals are in the offing after a wave of biotech company takeovers at the end of last year.The four-day JPMorgan Healthcare Conference beginning on Monday is expected by organizers to attract over 8,000 people, including delegations from the world’s largest drugmakers, a signal of a return to business as usual after fewer participants were invited last year over COVID-19 concerns. Last month alone, drugmakers including AbbVie (NYSE:ABBV), Bristol Myers (NYSE:BMY) Squibb and AstraZeneca (NASDAQ:AZN) announced roughly $25 billion worth of U.S.-listed biotech deals, according to data provider LSEG Deals Intelligence. Overall, global M&A activity in the healthcare sector grew 8% on an annual basis to $365 billion in 2023, lagging the previous five-year average spending of $432 billion, LSEG calculated. “We’ve had an uptick of M&A recently, we’re seeing stocks rebound with the market recovery and interest rates lowering,” said JPMorgan global head of healthcare investment banking Mike Gaito, who will interview CEO Jamie Dimon on the opening day. “People are open for business.” Among the hottest topics will be the wildly popular weight-loss drugs revolutionizing the fight against obesity that have established Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) as two of the world’s most valuable companies.Analysts forecast current drugs and other obesity treatments in development could garner $100 billion a year by the end of the decade. Gaito said other companies are feeling the pressure to get into the space, and those that are want to be able to offer other treatment options.Two deals epitomizing this in 2023 were Roche’s $2.7 billion acquisition of Carmot Therapeutics and Eli Lilly’s takeover of Versanis Bio for up to $1.93 billion, which strengthened the Mounjaro maker’s pipeline of obesity drugs. Other themes will range from regulation and antitrust to the financing environment and possible effects of the 2024 U.S. presidential election on the industry, participants said. WALL STREET RALLY The conference comes after a blistering Wall Street rally in recent weeks, propelled by expectations the Federal Reserve will cut interest rates this year.Biotech companies were among the beneficiaries. The SPDR S&P Biotech (NYSE:XBI) ETF, a gauge of biotech industry performance, was up more than 18% in December. The benchmark U.S. 10-year Treasury note dropped by nearly 50 points last month, easing financing costs for acquirers. “We expect the macro environment, including how people are thinking about sector growth, interest rates and the labor dynamic, to be top of mind (at the conference),” said Ali Satvat, a partner at private equity firm KKR. The buying spree by drugmakers late last year was part of their strategy to help offset expected revenue declines as patents on blockbuster therapies expire. AbbVie, already facing biosimilar competition for its cash cow Humira, and Bristol Myers collectively spent roughly $35 billion in deals to bolster their neurology and oncology franchises. The annual conference at the Westin St. Francis Hotel in San Francisco will include smaller drugmakers and companies from all corners of the healthcare industry, such as health insurers and medical device firms.Investors will meet companies in public and private settings. “It’s an opportunity to actually sit in a small group, with investors but also with some corporate people, and meet with the managements to ask questions directly and really gather a lot of competitive intelligence,” said investment firm Perceptive Advisors managing director Doug Giordano. After a slow 2023, private equity firms will be looking for investment opportunities for a record level of $2.59 trillion of unspent cash. They’ll also be searching for buyers. “There is a very significant backlog of private equity-owned companies that will come out for sale in 2024,” said Devin O’Reilly, a partner at buyout firm Bain Capital. Dealmakers from JPMorgan’s rival investment banks and law firms also will be in town to win new business from the over 400 healthcare companies expected to attend. Competitors set up their own headquarters in hotels near the conference and lure clients by offering better catering and amenities.Latham & Watkins M&A partner Charles Ruck said you could have fun ranking “who has got better food at their mini conferences around and compare it to the JPMorgan.” More