In a surprise move, U.S. President Donald Trump announced via a
tweet that he would impose fresh tariffs of 10 per cent on Chinese
goods worth $300 billion, starting on September 1. The proposed
tariffs would cover nearly all Chinese goods exported to the US,
pushing up prices and bringing the prospect of retail job losses. In
later remarks, Trump told the media that the proposed 10 per cent
tariffs could be a short-term measure, and it could be lifted to more
than 25 per cent. A total of $250 billion of Chinese goods are already
subject to a 25 per cent import fee. The new mandate came after
teams from both countries recently resumed trade talks in Shanghai.
Trump, however, said Chinese President Xi Jinping “was not moving
fast enough” to resolve the prolonged trade war. The sudden jolt saw
the European and Asian stock markets fall by more than 2 per cent.
PFIZER'S UPJOHN TO BE
MERGED WITH MYLANPharma major Pfizer has decided to merge
its off-patent drugs business Upjohn with
generic drugmaker Mylan in an all-stock
deal, creating a potential powerhouse of
generic medicines. Both pharma compa-
nies had hit setbacks as their heavy-hitting
drugs started to face tough competition.
The combined business is expected to
earn $19-20 billion in annual sales, and
the companies anticipate annual savings
of $1 billion by 2023. Upjohn’s placing as
a standalone entity in the deal has also
raised speculations whether Pfizer is mull-
ing to spin it off. Earlier, Pfizer decided
to buy Array BioPharma for $10.6 billion
to gain access to its new cancer drugs,
which could end or control the use of
painful chemotherapy for some patients.US FED CUTS RATES AFTER
A DECADE
The US Federal Reserve broke a 10-year
streak and lowered the interest rates by
25 basis points in a bid to keep the econ-
omy growing. The boost might not have
been required as the US economy grew
faster than expected in the last quarter,
and unemployment in the country is
still at record lows. Earlier this year, the
Fed said it would pre-emptively end the
process of shrinking its balance sheet to
sustain the country’s longest-ever expan-
sion. The slow rise of consumer prices in
June and pressure from President Trump
also made the rate cut inevitable. The
previous rate cut happened in December
2008, when Ben Bernanke slashed them
to near-zero as the country struggled to
cope with a global meltdown.
LONDON STOCK EXCHANGE
BUYS REFINITIV FOR $27 BNThe London Stock Exchange will buy finan-
cial data provider Refinitiv in an all-stock
deal worth $27 billion, including its debt. The
former arm of Thomson Reuters is now con-
trolled by the investment giant Blackstone and
others. Post the deal, Refinitiv shareholders
will own a 37 per cent stake in the LSE group.
The acquisition will provide the LSE Group
adequate scale to compete with global giants
like Bloomberg. LSE’s revenue has seen a big
shift in the last decade as trading has become
more computerised. Around 40 per cent of its
revenue now comes from information services- roughly double of what it earns from tradi-
tional stock trading. With Refinitiv in its kitty,
LSE says it will become even less dependent
on shrinking revenue sources and will grow
earnings faster than its rivals.
THE BUZZUS-CHINA TRADE WAR ESCALATES APPLE SHINES, BUT IPHONE SALES DOWNApple has done it again, not on the power of its iconic
iPhones but its wearables and services segment. The
Cupertino company posted better-than-expected results
for its third quarter (April-June), posting a revenue of $53.
billion against an estimated $53.39 billion and up 1 per cent
from the year-ago quarter. But for the first time since 2012, its
iPhone sales did not account for more than 50 per cent of the
revenue and stood at $25.99 billion, falling 12 per cent posted
in the same quarter last year. The company said it had spent
over $17 billion on share buybacks and had paid out $3.6 bil-
lion in dividends and equivalents during the quarter. Apple
recently purchased Intel’s smartphone modem business for
$1 billion, a big payout going by its acquisition history.16 I BUSINESS TODAY I August 25 I 2019GLOBAL BUSINESS