Trump says Huawei dispute could be resolved in trade deal with China

Trump says Huawei dispute could be resolved in trade deal with China

U.S. President Donald Trump speaks about a range of subjects including failed infrastructure talks with Democratic lawmakers, as Agriculture Secretary Sonny Perdue listens during an event to discuss administration efforts to “support America’s farmers and ranchers” in the Roosevelt Room of the White House in Washington, U.S., May 23, 2019. REUTERS/Carlos Barria

WASHINGTON (Reuters) – U.S. President Donald Trump characterized Chinese telecommunications giant Huawei Technologies Co Ltd as very dangerous on Thursday but said its dispute with the United States could be resolved in a trade deal with China.

Citing national security concerns, Washington last week effectively banned U.S. firms from doing business with Huawei, the world’s largest telecoms network gear maker. The move prompted many tech companies around the world to fall in line.

Reporting by Diane Bartz; Editing by Susan Thomas

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U.S. aid program to use $16 billion to boost farmers, expand markets: USDA’s Perdue

U.S. aid program to use $16 billion to boost farmers, expand markets: USDA’s Perdue

WASHINGTON (Reuters) – The Trump administration on Thursday unveiled a $16 billion farm aid package to offset losses from a 10-month trade war with China and said payment rates to farmers would be determined by where they farm rather than what crops they grow.

The package, the bulk of which will be spent on direct payments, surprised growers and traders who had expected to learn separate payment rates for soybeans, hogs, corn and other crops in the Department of Agriculture (USDA) briefing.

Many farm groups welcomed the move, but called for a trade deal with China as soon as possible. Some Democrats have slammed the plan, calling it a ‘band-aid’ and said the county-based payment system could leave some farmers with reduced aid.

Farmers, a key constituency that helped carry U.S. President Donald Trump to his 2016 electoral win, have been among the hardest hit from a trade dispute with China, once a destination for more than 60 percent of U.S. soybean exports.

“The farmers have been attacked by China,” Trump said in a press conference about the aid package. “But the $16 billion of funds will … make clear that no country has veto on America’s economic and national security,” he said.

The trade dispute, which escalated this month after Washington and Beijing hiked tariffs on imports of each other’s goods, has left U.S. farmers sitting on record volumes of soybeans with China halting purchases.

USDA officials said on Thursday they will roll out $14.5 billion in direct payments in three separate tranches with the first one planned for late July.

“The package we are announcing today ensures that farmers will not bear the brunt of those trade practices by China or any other nations,” Secretary of Agriculture Sonny Perdue said. “While farmers would tell you they’d rather have trade not aid, without the trade … they’re going to need some support.”

China, the world’s top soybean importer, curbed purchases of U.S. soy last year when Trump imposed tariffs on Chinese goods, prompting China to retaliate with tariffs on U.S. soy, pork, corn and other products.

An imminent trade deal between Washington and Beijing seems unlikely as the trade tensions between the world’s top two economies rose after U.S. placed China’s Huawei Technologies on a trade blacklist last week, triggering sharp protest from China.

Perdue also said the second and third tranches, with exact amounts yet to be decided, will be dependant on the progress in the trade talks and whether the U.S. will get a deal with China. The total package also includes $1.4 billion of support through food purchases and $100 million allocated to development of foreign markets.


Perdue said the USDA has redesigned last year’s aid program of up to $12 billion based on feedback. The new package therefore will have a single payment rate per county, calculated by the damages in that area, instead of a rate for every commodity across the nation.

“Those per acre payments are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions,” USDA said in a statement.

Chicago Board of Trade corn futures turned lower and soybean futures extended earlier losses after the announcement.

The county-based mechanism for the aid payments have triggered a heated debate on whether it would impact planting decisions. Some analysts said the trade aid package could encourage farmers to try to seed their crops in order to qualify for the relief despite overly wet fields that have stalled planting this spring.

Jim Hefner, an Ohio farmer who has not been able to start planting due to heavy rain, said the plan could cause him to alter his initial acreage plans, however.

“I guess we would make more of an effort to get something planted,” Hefner said. “We may forgo corn and plant soybeans.”

FILE PHOTO: Justin Mensik, corn and soybean farmer, attends to his cattle at his farm in Morse Bluff, Nebraska, U.S. March 22, 2019. REUTERS/Humeyra Pamuk/File Photo

Some farmers remain skeptical.

Dan Henebry, a corn and soybean farmer in Buffalo, Illinois, said the payments are directed at rural areas that helped propel Trump into office. Henebry, who voted for a third-party candidate in 2016, said he wants the president to end the trade war with China.

“If we solve the issue, we wouldn’t need this,” he said about the aid package.

Additional reporting by Jeff Mason and Susan Heavey and Tom Polansek, Mark Weinraub, P.J. Huffstutter, Karl Plume in Chicago, Editing by Chizu Nomiyama, Jeffrey Benkoe and Susan Thomas

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U.S.-China trade dispute continues with no sign of resolution – The Globe and Mail

U.S.-China trade dispute continues with no sign of resolution – The Globe and Mail

The United States and China remain locked in one of the largest trade wars in history with no sign of resolution as talks in Washington failed to reach a deal.

U.S. President Donald Trump jacked up tariffs on Friday to 25 per cent from 10 per cent on US$200-billion worth of Chinese goods – on top of US$50-billion of products subject to the same levies since last year – in a key fight of his nationalistic economic agenda.

China vowed retaliation, even as Vice-Premier Liu He hunkered down with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for a second straight day in a bid to break the impasse. But there were few concrete signs of progress.

“They were constructive discussions. That’s all I can say,” Mr. Mnuchin said as he left Mr. Lighthizer’s office near the White House.

In early evening, Mr. Lighthizer announced that he would start working on a plan to extend tariffs even further, to cover all US$539-billion worth of Chinese imports.

The gulf separating the two sides appears vast. The United States wants Beijing to change laws on intellectual property, stop obliging American companies to turn over trade secrets and get rid of subsidies to Chinese companies. The United States also wants the right to keep its tariffs in place until it is certain China is complying with the deal, but for China to give up the right to impose tariffs on the United States in retaliation.

China had previously made concessions on at least some of these measures, the White House has said, before changing its mind last week and reneging on its promises. This prompted Mr. Trump to order the tariff hike.

In a series of tweets on Friday, Mr. Trump made clear that he believes tariffs are good economic policy and not merely a useful negotiating tactic. He also falsely claimed that their cost is paid by China. In fact, U.S. tariffs on China are paid by American companies that import Chinese goods. Often, U.S. importers pass that cost on to American consumers in the form of higher prices. Instances in which Chinese companies compensate American businesses for the cost of the tariffs are believed to be rare.

“Talks with China continue in a very congenial manner − there is absolutely no need to rush − as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Mr. Trump tweeted. “These massive payments go directly to the Treasury of the U.S.”

The President said he planned to use the money from tariffs to buy American agricultural products and give the food to low-income countries. The administration did not release any specific plan for making this happen.

The President also spoke Friday with Prime Minister Justin Trudeau about the trade negotiations and “relations with China,” according to a summary released by Mr. Trudeau’s office. Ottawa has been agitating for Washington to pressure China to release two Canadian citizens detained since December in apparent retaliation for police in Vancouver serving an American arrest warrant on Huawei CFO Meng Wanzhou.

The tariffs cover a vast swath of goods, ranging from auto parts to meat to CD players to sports equipment.

The average American family of four will pay US$767 more annually in increased costs because of the tariffs, and the economy will lose 934,000 jobs, according to one estimate by The Trade Partnership, a Washington consulting company. The same study found that covering all Chinese exports with tariffs would raise those numbers to US$2,300 and 2.1 million.

After the initial round of tariffs last year, China retaliated with levies on U.S. goods, particularly food. This ensured the fallout from the battle between the world’s two largest economies would be particularly acute across the Trump-voting American heartland.

Bret Davis, who farms soybeans in central Ohio, said the trade war has pushed prices down from US$10.38 a bushel last year to $8 now – a loss of $200,000 in revenue for his operation. He’s had to cope by deferring purchases of new equipment, growing still-profitable crops of wheat and corn and relying on savings built up over 40 years of farming.

“It’s getting kind of serious now,” Mr. Davis, secretary of the American Soybean Association, said in an interview. “You tighten your belt. It’s a trying time here on the farm.”

Tiffany Zarfas Williams, third-generation owner of the Luggage Shop of Lubbock in west Texas, said roughly 85 per cent of the bags and briefcases she sells are made in China. The 10-per-cent tariff increase last year meant a price hike to most goods in her store; sales are already down 8 per cent so far this year.

“We’re Americans first and we certainly want to respect our country and we want trade with China to be addressed, and want that to be fair and enforceable … it’s just difficult for a small store owner to have so much of that impact on what we sell and what we do,” she said in a conference call with reporters organized by the National Retail Federation.

Trade experts largely agree that China has behaved badly by unfairly competing through flooding global markets with heavily subsidized products and forcing foreign companies to turn over their trade secrets as a condition of doing business. But many argue there are other ways to deal with these problems.

Inu Manak, a trade scholar at the libertarian Cato Institute think tank, said one option would be for the United States to sue China at the World Trade Organization. Joining the Trans-Pacific Partnership, a free-trade deal covering 11 countries in east Asia and the Americas meant to counter Chinese influence, would be another idea.

Ms. Manak said she could not think of another trade war of this size.

“This is a shock-and-awe approach,” she said. “It’s unprecedented. It’s something that’s never been done to this scale.”

Jorge Guajardo, a former Mexican ambassador to China, said he agrees with using tariffs to push China into trade concessions. But he said Mr. Trump’s love of tariffs for their own sake, and the fact that he would like to keep them in place even if China makes a deal, gives Beijing little incentive to negotiate.

What’s more, Mr. Guajardo said, Mr. Trump had hurt his own case by simultaneously fighting trade wars with Canada, Mexico and the European Union, which remain subject to American steel and aluminium tariffs.

“China keeps promising reform, keeps promising it will play by the rules of the game, but it never does. I can’t think of any way to confront China other than this,” Mr. Guajardo said. “The U.S. could accomplish so much if it had brought other countries on board.”

A similar thought had occurred to Skip West, owner of Maxsa Innovations in Fairfax Station, Va.

Maxsa designs and distributes a suite of electronics manufactured in China, including laser guidance systems for parking cars and heated blankets that plug into car cigarette lighters. When selling goods through large retailers, Mr. West said, he is not allowed to raise prices to match the tariffs, meaning the costs come straight out of Maxsa’s bottom line.

Mr. West has long done business in Canada, as well, and said he couldn’t understand why Mr. Trump took aim at the country, along with other free-market democracies, instead of enlisting them as allies in his push against China.

“Why did we piss off our trading partners instead of having them as a united front?”

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The close: Global stocks bounce back as Trump downplays U.S.-China trade fight – The Globe and Mail

The close: Global stocks bounce back as Trump downplays U.S.-China trade fight – The Globe and Mail

North American and European stocks regained ground on Tuesday after President Donald Trump downplayed the U.S.-China trade war as “a little squabble” a day after a spike in tensions between the world’s two largest economies rattled financial markets.

Fears that the United States and China were spiraling into a fiercer, more protracted trade dispute that could derail the global economy have shaken investors in the past week. On Monday, MSCI’s gauge of stocks across the globe posted its biggest one-day decline in over five months and touched a two-month low. The MSCI index gained 0.49 per cent on Tuesday.

Trump insisted trade talks with China had not collapsed, while China’s Foreign Ministry spokesman said the two sides had agreed to continue pursuing relevant discussions. This followed Washington’s decision last week to hike its levies on $200 billion of Chinese imports to 25 per cent from 10 per cent.

On Wall Street, technology stocks led the rebound but major indexes finished below their session highs. The Dow Jones Industrial Average rose 207.06 points, or 0.82 per cent, to 25,532.05, the S&P 500 gained 22.54 points, or 0.80 per cent, to 2,834.41 and the Nasdaq Composite added 87.47 points, or 1.14 per cent, to 7,734.49.

“It’s a nice bounce-back certainly after yesterday for sure,” said Gary Bradshaw, portfolio manager of Hodges Capital Management in Dallas. “It seems like President Trump has been more jovial and more upbeat in making comments that hopefully will get this trade situation squared away. I think that’s got investors buying the dip.”

Canada’s main stock index rose on Tuesday, following a three-day slump, as upbeat comments from Washington and Beijing calmed nerves over a further escalation in their trade war, which has kept global financial markets on edge.

The Toronto Stock Exchange’s S&P/TSX Composite index was unofficially up 91.12 points, or 0.56 per cent, at 16,284.53.

Eight of the index’s 11 major sectors were higher, led by the energy and health care sectors, which climbed 2.1 per cent and 3.1 per cent, respectively.

The financials sector gained 0.5 per cent, while the industrials sector rose 0.9 per cent.

The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and investors grew more optimistic on U.S.-China trade talks, but the currency stuck to a narrow range ahead of Canada’s inflation report on Wednesday.

Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hurt by a slowdown in the global flow of capital or trade.

“I think the slight uplift in oil today has helped (the loonie),” said Amo Sahota, director at Klarity FX in San Francisco. “What I think is more significant when focusing just on the loonie is how will Canadian inflation come out tomorrow?”

Canada’s inflation report for April is due on Wednesday, which could help guide expectations for Bank of Canada interest rate policy. Money market see a nearly 40-per-cent chance of a rate cut by the end of the year.

Domestic data on Tuesday showed that home prices failed to rise for the eighth consecutive month in April.

The Canadian dollar was trading 0.1 per cent higher at 1.3466 to the greenback, or 74.26 U.S. cents. The currency, which has advanced 1.3 per cent since the start of the year, traded in a narrow range of 1.3457 to 1.3488.

The pan-European STOXX 600 index rose 1.01 per cent.

The U.S. benchmark S&P 500 recorded its biggest one-day loss since Jan 3 on Monday, after China struck back in the trade dispute by saying it would impose higher tariffs on a range of U.S. goods.

“It’s likely that it will take markets a day or two to adjust to this increased rhetoric around trade, because markets up until a week ago thought that trade had been put to bed,” said Carol Schleif, deputy chief investment officer with Abbot Downing in Minneapolis.

In another sign trade tensions are hurting the economic outlook, Germany’s ZEW institute said investors’ mood had deteriorated unexpectedly in May.

In currencies, the dollar index, which measures the greenback against a basket of currencies, rose 0.2 per cent, with the euro down 0.15 per cent to $1.1206.

The euro slid after Italy’s deputy prime minister said the country was ready to break European Union budget rules if necessary to spur employment. Italian government bond yields rose sharply.

Benchmark U.S. 10-year Treasury notes last fell 3/32 in price to yield 2.4139 per cent, from 2.405 per cent late on Monday.

Oil prices rose over 1 per cent on Tuesday after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco.

That move higher comes as the market waits for a report from the American Petroleum Institute (API), an industry group, which is expected to show U.S. crude stockpiles fell by 800,000 barrels last week, their second decline in a row, according to analysts in a Reuters poll.

The poll was conducted ahead of weekly reports from API at 4:30 p.m. EDT on Tuesday and the U.S. Energy Information Administration (EIA) at 10:30 a.m. EDT on Wednesday.

Brent futures gained $1.01, or 1.4 per cent, to settle at $71.24 a barrel, while U.S. West Texas Intermediate crude gained 74 cents, or 1.2 per cent, to $61.78.

That was the highest settle for Brent since May 6 and WTI since May 8 and caused the closing premium of Brent over WTI to rise to a nine-week high.

Saudi Arabia said armed drones had struck two oil pumping stations in the kingdom on Tuesday in what it called a “cowardly” act of terrorism two days after Saudi oil tankers were sabotaged off the coast of the United Arab Emirates.


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Fox host, Chinese state TV anchor face off over trade war

Fox host, Chinese state TV anchor face off over trade war

BEIJING (Reuters) – A Chinese state TV anchor and a host from Fox Business, whose sparring over the U.S.-China trade war has been avidly followed on Chinese social media, brought their duel to the American cable network for what turned out to be a respectful encounter.

FILE PHOTO: Flags of U.S. and China are displayed at American International Chamber of Commerce (AICC)’s booth during China International Fair for Trade in Services in Beijing, China, May 28, 2019. REUTERS/Jason Lee/File Photo

The showdown between Liu Xin of state-run English channel CGTN and Fox Business Network host Trish Regan was aired on Wednesday evening in the United States but was not shown live on TV in China, though it had been hyped by state and social media.

Many people in China followed the debate on state broadcaster CCTV’s blog and some watched via livestream, while others on social media were clamoring for the full video.

The rhetoric out of Beijing has become more strident since Washington moved this month to raise tariffs on Chinese imports and blacklist tech giant Huawei Technologies Co Ltd.

The 16-minute segment began with Liu correcting Regan to say that she was not a member of the Chinese Communist Party and was speaking for herself as a CGTN journalist. Otherwise, there was little in the way of fireworks.

Liu agreed that intellectual property theft was a problem, although not only in China, and that there was a “consensus” in China that “without the protection of IP rights, nobody, no country, no individual, can be strong and can develop itself.”

Regan asked Liu to define state capitalism, and Liu described China’s system of “socialism with Chinese characteristics, where market forces are expected to play the dominating or the deciding role in the allocation of resources.”

Liu said state-owned enterprises play “an important but increasingly smaller role, maybe, in the economy”, adding that the private sector accounted for 80% of Chinese employment.

Washington argues that Huawei, the world’s largest maker of telecoms network gear, is linked to the government and therefore poses a security risk, which Huawei disputes, arguing that it is owned by employees.

Key Chinese industries such as energy, telecoms and banking are dominated by state controlled firms, and foreign players are excluded from some sectors, or forced to form joint ventures.


Liu had said on Twitter that because of broadcasting rights issues, CGTN would not be able to show the debate live, though it would “report on it closely”.

A Fox News spokesperson said a free live stream of the debate would be available on the Fox Business Network website and the entire segment would be available after the broadcast.

The internet in China is heavily censored and many major foreign media sites are blocked.

Liu was connected by video link to the Fox studio from Beijing and delays, which Regan had warned about, meant the two sometimes talked over each other.

Chinese internet users generally thought Liu performed well, but the top hashtag on the Twitter-like service Weibo, garnering more than 130 million views, was “CGTN host Liu Xin has been interrupted by Trish Regan three times.”

Some were annoyed they could not watch it live.

“Before the debate, everyone was noisily promoting it any which way. Yet, the livestream wasn’t a real livestream, it became a live blog,” said user Wangyuanwai, who had been unable to watch the debate live.

The feud between Liu and Regan had started on air and was amplified on Twitter and taken up by Chinese social media.

Liu had been critical of Regan’s China coverage, leading Regan to call on Liu to have an honest debate.

“She’s so sure of U.S. victimhood, so indignant that her eyes practically spit fire, yet in carefully analyzing her words, it’s all emotion and accusation, supported with little substance,” Liu said of Regan on CGTN.

Regan responded this week on air and on Twitter: “They’re launching a full-scale information war against the United States of America, and their latest target is me.”

CCTV and the People’s Daily newspaper had shared news of the debate on Weibo, while other Chinese media outlets had joined in, some even circulating footage of Liu in an English speech competition from 23 years ago.

Chinese state media has opened the floodgates to patriotic commentaries since the latest U.S. tariff hike and there has been a surge in internet chatter about the trade war during the past few weeks.

Reporting by Tony Munroe, Michael Martina and Huizhong Wu; Editing by Simon Cameron-Moore and Darren Schuettler

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Factbox: U.S. companies warn Trump’s tariffs could hit results

Factbox: U.S. companies warn Trump’s tariffs could hit results

(Reuters) – A host of U.S. consumer companies have warned that costs related to tariffs on goods imported from China would weigh on their results.

FILE PHOTO: U.S. and Chinese flags are seen in front of a U.S. dollar banknote featuring American founding father Benjamin Franklin and a China’s yuan banknote featuring late Chinese chairman Mao Zedong in this illustration picture taken May 20, 2019. REUTERS/Jason Lee/Illustration/File Photo

The United States increased tariffs on $200 billion in Chinese imports to 25% from 10% last week.

U.S. President Donald Trump has also threatened an additional round of tariffs on $300 billion that would cover nearly everything imported from China to the United States.

BEST BUY CO INC: “The impact of tariffs at 25% (proposed to be enacted) will result in price increases and will be felt by U.S. consumers,” CEO Hubert Joly said.

HOME DEPOT INC: If the latest round of tariffs hold, it would increase annual cost of goods sold by $1 billion, on top of a $1 billion hit that the home improvement chain has taken from tariffs imposed in 2018.

The impact from new tariffs would still be manageable as it would make up less than 1% of total sales, said Edward Decker, executive vice president of merchandising.

J.C. PENNEY CO INC: “We do anticipate a more meaningful impact on both our private and national brands if the potential fourth tranche of tariffs does go into effect,” CEO Jill Soltau said.

KOHL’S CORP: Tariffs will primarily hit China-sourced merchandise in home and accessories business but apparel and footwear are not impacted at this point.

The department store chain said about 20% of its merchandise is sourced from China.

WALMART INC: “Higher tariffs will lead to higher prices for customers,” CFO Brett Biggs told Reuters in an interview last week. He said the company, known for lower prices, will try to minimize the effect of the levies on the company and its customers.

MACY’S INC: “The increase of the third tranche from 10% to 25% on May 10 does have some impact, particularly on our furniture business. However, the team anticipates that this can be mitigated,” CEO Jeffrey Gennette told investors on a conference call on Wednesday.

“It’s too early to comment on what we think that’s going to mean in terms of potential price increases and what categories are going to be more affected than others,” he said.

RALPH LAUREN CORP: “The tariffs enacted to date have a limited impact on our business, but our teams are prepared for multiple scenarios and have accelerated the diversification of our supply chain to mitigate the long-term impact of any potential tariff outcomes,” CFO Jane Nielsen told investors on a conference call last week.

DEL MONTE FOODS INC: “It’s not just tariffs. Transportation costs are up, labor costs are up,” CEO Greg Longstreet told Reuters at a conference in New York last week. “It’s an inflationary environment. A lot of that’s going to have to be passed on. The consumer is going to have to pay more for a lot of critical goods.”

Del Monte has already raised prices on many products, including mandarin oranges that it imports from China, and will do so again with tariffs rising, he said.

Reporting by Nandita Bose, Siddarth Cavale, Rod Nickel, Aishwarya Venugopal and Uday Sampath Kumar; Editing by Anil D’Silva and Arun Koyyur

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Starbucks’ Chinese nemesis Luckin Coffee surges 20 percent in public debut

Starbucks’ Chinese nemesis Luckin Coffee surges 20 percent in public debut

Shares of Luckin Coffee jumped 20% in its first day of trading on the Nasdaq stock market.

After opening at $17.00, shares of the Chinese Starbucks competitor climbed as high as $25.96, or more than 50%, before settling back down to $20.38 at the market’s close. The company has a market cap north of $5 billion after its first day of trading.

The brick-and-mortar coffee chain has achieved major success in China by offering speedy delivery services to Chinese consumers. The company has nearly 2,400 stores compared to Starbucks’ 3,500, but it has plans to more than double that number by the end of the year as it seeks to become the country’s coffee king.

Luckin’s success doesn’t immediately seem to be thwarting the stock market success of Starbucks, which has had a glowing 2019. The company hit another all-time high Friday, closing out the day at $78.91, up more than 35% from a year ago, giving the Seattle company a market cap of nearly $96 billion.

Starbucks and Luckin Coffee may seem like mortal enemies, but their rivalry is more complicated than one might immediately think. Check out our Extra Crunch deep dive from earlier this week on the Xiamen-based company’s financials.

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Man behind WestJet deal – Business News –

Man behind WestJet deal – Business News –

Photo: The Canadian Press

Gerry Schwartz, CEO of Onex Corporation

The wealthy Canadian behind a deal to buy WestJet has a reputation for his stellar business acumen and owning a mansion among mansions in downtown Toronto, but a longtime family friend says the titan has not forgotten his humbler beginnings.

On Monday it was announced that the Toronto-based private equity firm Onex Corp. signed a deal to buy the Calgary-based airline for $3.5 billion. The man behind the yoke of the massive transaction for Onex is its 77-year-old founder and chief executive officer, Gerald Schwartz.

“Even though he’s been in Toronto now for probably a majority of his life, I don’t think he’s ever lost that sense of being a Winnipegger,” said David Asper.

Asper is the son of Izzy Asper, who founded CanWest Capital with Schwartz in the 1970s. Asper remembers meeting Schwartz when the now famous financier was articling under his father in the 1960s.

“I have vivid memories of Gerry as a young man who started working for my dad and he was a fantastic character and he would come over and do magic tricks and entertain us,” Asper said. “He was very vivacious and loved to laugh and was full of life.”

Along with his wife, Heather Reisman — the founder and CEO of Indigo Books and Music — and the couple’s children, Schwartz is a member of one of Canada’s richest families.

He has an almost incomparable reputation for business — Onex is considered a global force in private equity — and for philanthropy, donating millions to universities and hospitals.

He’s been inducted into the Canadian Business Hall of Fame and is an officer of the Order of Canada.

The couple’s home in Toronto’s Rosedale neighbourhood, nicknamed “Fort Schwartz,” has a reputation as possibly the most expensive in the city.

It’s all worlds away from Schwartz’s formative years in Winnipeg, Asper said with a laugh.

Schwartz was born in the Prairie city in 1941. In an online video from when he accepted the 2016 Horatio Alger Award, he explained how his mother was deaf, which resulted in her being very distant. But he was extremely close with his father, a local businessman and auto-parts dealer.

“My dad was a fantastic guy who I looked up to, admired and loved,” Schwartz said in the video, adding his dad “came from much more humble beginnings, he worked his way up.”

Schwartz worked in his father’s store starting when he was 10. He earned commerce and law degrees from the University of Manitoba, and later pursed a Master of Business Administration from Harvard University.

His goal was to get to Wall Street, Schwartz told students at the University of Toronto during a speech in 2016. But things didn’t go according to plan.

“A successful career doesn’t have to follow a straight line,” he said. “You can afford to make choices that turn out to be serious mistakes and time will let you correct the trajectory that you want to be on.”

In 1977, at age 35, Schwartz and Izzy Asper formed CanWest Capital in Winnipeg. By 1984, that partnership was dissolved, and Schwartz took his portion of the industrial assets to start Onex.

Asper said the mutual respect both men had for each other in business — and as friends — was maintained.

Schwartz’s worth has grown steadily. He’s one of 45 Canadians to make Forbes list of billionaires in 2019, with his net worth pegged by the magazine at $1.6 billion. Onex boasts $33 billion in assets, Forbes says.

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Apple’s stock jumps 5 percent after beating expectations

Apple’s stock jumps 5 percent after beating expectations

Apple released earnings for its fiscal second quarter today, reporting revenue of $58 billion, a decline of 5% from the year-ago quarter, and quarterly earnings per diluted share of $2.46, down 10%. International sales accounted for 61% of the quarter’s revenue.

The market apparently approves. Apple’s shares have jumped $10 apiece since the earnings were released, putting the company in spitting distance of the $1 trillion market cap it has been flirting with since last August.

The earnings are also in line with the guidance that Apple had provided during its last earnings call. In late January, per Apple’s guidance for the second quarter, it had estimated that its revenue would fall between $55 billion and $59 billion, its gross margins between 37% and 38%; its operating expenses between $8.5 billion and $8.6 billion; and that it would see other income of $300 million.

In a release, the company did not break out iPhone sales, which have come under pressure. Instead, CEO Tim Cook tried focusing attention on other aspects of the company’s business. “Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for services, and the strong momentum of our wearables, home and accessories category, which set a new March quarter record,” said Cook in the release. “We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”

Apple had a tough 2018, with iPhone sales in the last quarter of the year falling 15% from where they’d been at the end of 2017 owing in part to stalled demand in China. Overall, sales in China fell a whopping 27% between the end of 2017 and the end of 2018, from $18 billion in revenue in the fourth quarter of 2017, or 20% of the company’s total revenue during the period, to $13.2 billion, or 16% of the total.

Apple has blamed softening consumer demand in China’s market for its woes, but it hasn’t given up on the country; it can’t afford to, given its potential. In fact, earlier this month, to goose demand, Apple trimmed by up to 6% prices on the iPhone, iPad and other products it sells in China, according to Xinhua, the state-run news agency. The move was ostensibly triggered by China reducing its value-added tax, which is akin to sales tax in the U.S., to 13% (from 16%).

Devices have been tough for everyone. As we reported yesterday, Alphabet’s Q1 earnings were a disappointment for Wall Street primarily because of the company’s ad revenue shortcomings but also because of a stagnating global smartphone market that has impacted virtually all players. (CEO Sundar Pichai cited “year over year headwinds” when referring to the company’s smartphone line.)

Indeed, as widely anticipated, hardware proved a mixed bag for Apple in the second quarter. In the meantime, Apple has dramatically increased its focus on its services business. Roughly a month ago, the company announced a credit card in partnership with Goldman Sachs and Mastercard that’s designed for the iPhone and works with the Wallet app. It also officially unveiled it streaming initiative, Apple TV+, which is coming this fall and will be supported through an ad-free subscription.

Apple announced last year that its fiscal fourth quarter of 2018 was the last quarter in which it would report detailed iPhone figures, which may frustrate current and potential shareholders.

As famed VC Bill Gurley noted in a series of tweets earlier today, “Interesting to see very large companies get away with a lack of segment disclosure. AWS for a long time was not broken out. Mixing search and YouTube revenues makes no sense for $GOOG, and is quite unhelpful to investors trying to understand the company . . .Our much smaller companies are routinely told by their auditors and the SEC that they need to provide segment analysis, but it seems remarkably unfair when a company the size of Google with a segment as large as YouTube (~$20B) are not held to same standard.”

We’ll have more on Apple’s earnings for you soon.

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Google says its app store will continue to work for existing Huawei smartphone owners

Google says its app store will continue to work for existing Huawei smartphone owners

Google said today that existing users of Huawei Android devices can continue to use Google Play app store, offering some relief to tens of millions of users worldwide even as it remains unclear if the Chinese tech giant will be able to use the fully-functioning version of Android in its future phones.

Existing Huawei phone users will also be able to enjoy security protections delivered through Google Play Protect, the company said in a statement to TechCrunch. Google Play Protect is a built-in malware detector that uses machine learning to detect and weed out rogue apps. Google did not specify whether Huawei devices will receive future Android updates.

The statement comes after Reuters reported on Sunday that Google is suspending some businesses with Huawei, the world’s second largest smartphone maker that shipped over 200 million handsets last year. The report claimed, a point not addressed by Google, that future Android devices from Huawei will not run Google Mobile Services, a host of services offered by Google including Google Play Store, and email client Gmail. A Huawei spokesperson said the company is looking into the situation but has nothing to share beyond this.

For Huawei users’ questions regarding our steps to comply w/ the recent US government actions: We assure you while we are complying with all US gov’t requirements, services like Google Play & security from Google Play Protect will keep functioning on your existing Huawei device.

— Android (@Android) May 20, 2019

It’s a major setback for Huawei, which unless resolved in the next few weeks, could significantly disrupt its phone business outside of China. The top Android phone vendor, which is already grappling with controversy over security concerns, will have to rethink its software strategy for future phones if there is no resolution. Dearth — or delay in delivery — of future Android updates would also hurt the company’s reputation among its customers around the globe.

“We are complying with the order and reviewing the implications,” a company spokesperson said in a statement.

The two tech companies find themselves in this awkward situation as a result of the latest development in the ongoing U.S-China trade war. Huawei and 70 of its affiliates have been put on an “entity list” by the U.S. Commerce Department over national security concerns, requiring local giants such as Google and Intel to take approval from the government before conducting business with the Chinese firm.

Huawei may have already foreseen this. A company executive revealed recently that Huawei had built its own Android-based operating system in case a future event prevented it from using existing systems. Per Reuters, Huawei can also continue to use AOSP, the open source Android operating system that ships stripped off Google Mobile Services. And on paper, it can also probably have an app store of its own. But convincing enough stakeholders to make their apps available on Huawei’s store and continually push updates could prove incredibly challenging.

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