10 The EconomistOctober 5th 2019
The world this week Business
A 15-yeardisputeoversub-
sidiesintheaerospacein-
dustrycametoa partialclimax
whentheWorldTradeOrgani-
sationruledthatAmerica
couldlevy$7.5bn-worthof
tariffsonexportsfromthe
EuropeanUnionbecauseofthe
illegalaidgiventoAirbus.Next
yearthewtowillprobably
approveEuropeanpenaltieson
Americabecauseofitsaidto
Boeing.Thedecisionaddsto
alreadyheightenedtradeten-
sions.Americasaidit would
startimposingthetariffson
October18th,of10%onaircraft
and25%ona rangeofother
goods,includingcheese,
olives,wineandwhiskey.Earlier,thewtosaidit now
expectsglobaltradeflowsto
increasebyjust1.2%thisyear,
downfromthe2.6%it forecast
inAprilandtheslowestpace
sincethefinancialcrisis.
Unresolvedtradeconflicts
haveledtogreateruncertainty
aboutpolicy,causingbusi-
nessestoputoffinvestment.
Thegrowthofexportsand
importsslowedacrossall
regionsinthefirsthalfof2019.
Meanwhile,anindexofAmeri-
canmanufacturingfelltoits
lowestlevelsinceJune2009.Perils of the cocktail party
The chairman of Credit Suisse
said the bank had been wrong
to conduct surveillance on
Iqbal Khan, a former executive,
over fears he would lure away
staff and clients. The bank’s
chief operating officer, who
admitted to acting alone in
ordering the operation, and the
head of security, resigned. A
review by a law firm called in
by Switzerland’s second-big-
gest bank cleared Tidjane
Thiam, the chief executive, of
any involvement. Mr Thiamhad an acrimonious relation-
ship with Mr Khan; the pair
reportedly had a blazing row at
a cocktail party in January.Wells Fargonamed Charles
Scharf as its new chief
executive, six months after
Tim Sloan resigned in the
aftermath of a mis-selling
scandal. Mr Scharf has led
Bank of New York Mellon and
Visa and was a senior executive
at JPMorgan Chase during the
financial crisis.India’scentral bank reassured
the public that the banking
system is “safe and stable and
there is no need to panic” as
another scandal emerged.
Curbs had to be imposed on
withdrawals by nervous savers
from Punjab and Maharashtra
Co-operative Bank as it came
under scrutiny for financial
irregularities. Another bank
faced restrictions on its ability
to make new loans.Faced with a sharp downturn
in the country’s housing mar-
ket, Australia’scentral bank
cut its main interest rate by a
quarter of a percentage point,
to 0.75%, the lowest ever.A drop in Turkey’sannual
inflation rate to 9.3%, the
lowest in almost three years,
increased the betting that thecentral bank would cut interest
rates again, despite recent
remarks by its new governor
that there was limited room for
manoeuvre.PayPal became the first foreign
company to enter China’s
payments industrywhen it
took a 70% stake in a domestic
digital-payments firm. Ameri-
can companies have been
trying for years to break into a
market that is dominated by
Alibaba and Tencent.Japan’s sales taxrose from 8%
to 10%. The increase had been
postponed in 2015 and again in
2017 amid worries of a slump in
consumer spending, which
happened after a previous raise
to the tax in 2014. Food and
non-alcoholic drinks continue
to be taxed at 8%.Novartisannounced a
partnership with Microsoftto
apply artificial-intelligence
technology to medicine. In one
of the biggest collaborations in
the field, the Swiss drugmaker
said the research would start
with tackling personalised
remedies for eye degeneration,
cell and gene therapy and drug
design.Founded in 1969 by two men
making surfboards in a garage,
Rip Curl, an Australian surfinggear and clothing company,
was sold to Kathmandu, a New
Zealand outdoor specialist.
The men, now in their 70s, sold
their firm for A$350m ($235m).A report from Kroll, a corporate
investigations and consultan-
cy firm, highlighted the rep-
utational risk to businesses
from fake news on social
media. Across the company
bosses surveyed in 13 coun-
tries, 84% felt threatened by
attempts to manipulate mar-
kets with fake stories, either by
competitors or short sellers.
One American cosmetics
company saw sales drop by a
fifth after a campaign on Twit-
ter falsely claimed it tested its
products on animals.The guru
The leaked transcript of Mark
Zuckerberg’scomments at a
staff meeting provided a
glimpse into the inner
thoughts of Facebook’s boss.
Mr Zuckerberg said that Eliza-
beth Warren’s proposal to
break up big tech companies
would “suck” and “you go to
the mat and you fight” over
something so “existential”.
When asked about brain-
computer interfaces, he joked
that disapproving headlines
would say “Facebook wants to
perform brain surgery”.Economic policy uncertaintySource: Economic Policy UncertaintyGlobal average 1997-2015=2005 10 15 190100200300400