The Washington Post - 06.09.2019

A14 EZ SU THE WASHINGTON POST.FRIDAY, SEPTEMBER 6 , 2019

Economy & Business

AUTO INDUSTRY

GM turns to Google for

dashboard technology

General Motors will use
embedded Google technology to
power navigation, voice-
activated controls and other
vehicle infotainment functions
starting in 2021, in a win for
Alphabet in the race with
Amazon and other technology
companies to control
dashboards.
GM said it will offer Google
Assistant, Google Maps and
other applications available
through the Google Play app
store in all its vehicle brands
outside China, which is GM’s
largest single market. GM said
the first vehicles with built-in
Google infotainment technology
will launch in 2021, with more
models rolling out in the
following years.
Google has struck deals to
embed infotainment technology
in cars built by allied
automakers Renault-Nissan-
Mitsubishi and Volvo, owned by
China’s Zhejiang Geely Holding
Group.
Amazon is wooing automakers
to embed its rival Alexa voice

assistant technology in vehicles.

(Amazon CEO Jeff Bezos owns

The Washington Post.)

For years, GM and other

automakers were reluctant to

share dashboard space with

Google, Apple and other tech

companies. Automakers feared

losing control of valuable data

and having their brands eclipsed

by powerful Silicon Valley

names.

Consumers are, however,

forcing automakers to shift

gears. Having functionality built

in from Internet giants has

begun to make for a smoother

experience.

— Reuters

RETAIL

More chains change

firearms policies

Walgreens Boots Alliance, CVS

Health and supermarket chain

Wegmans Food Markets said on

Thursday they would start

asking customers to not openly

carry firearms in their stores,

joining Walmart and Kroger, in a

change of gun policy following

several deadly mass shootings in

the United States.

The retailers are among a

growing number of U.S.

companies, such as Delta Air

Lines and Bank of America, that

are responding to calls for action

to help curtail the rash of gun

violence that has plagued the

nation, risking backlash from

powerful gun owners’ groups as

politicians consider options.

“We are joining other retailers

in asking our customers to no

longer openly carry firearms into

our stores other than authorized

law enforcement officials,”

Walgreens said in an emailed

statement.

Earlier this week, Walmart

and Kroger said they would ask

shoppers to stop openly carrying

firearms in stores across the

United States. Walmart also said

it would discontinue sales of

ammunition for handguns and

some military-style rifles in U.S.

stores, and called for action on

gun control after a string of mass

shootings.

— Reuters

ALSO IN BUSINESS

U.S. private employers boosted

hiring in August, suggesting the

economy continued to grow at a

moderate pace despite trade

tensions that have stoked

financial market fears of a

recession. Labor market

resilience was underscored by

other data Thursday showing a

slight increase last week in the

number of Americans filing

applications for unemployment

benefits. The year-long trade war

between the United States and

China is weighing on business

investment and manufacturing,

threatening the longest

economic expansion in history.

Retail chain H&M, the world’s

second-biggest fashion retailer,

said on Thursday it had stopped

purchasing leather from Brazil

because of environmental

concerns highlighted by Amazon

wildfires. Sweden-based H&M

follows VF Corp, owner of shoe

and clothing brands including

Timberland, Vans and North

Face, which made a similar

announcement.

Bayer said outside investigators

found nothing illegal in a

Monsanto project that tracked

journalists, politicians and

others in Europe before the

companies combined last year.

Law firm Sidley Austin

concluded a review — ordered by

Bayer — of Monsanto’s past

lobbying and public-affairs

efforts. The probe came after

French news reports in May that

the U.S. company had kept secret

scores on more than 200 people

in a bid to suppress criticism and

lobby for approval of Monsanto

products such as Roundup

weedkiller.

COMING TODAY

8:30 a.m.: Labor Department

releases employment data for

August.

— From news services

DIGEST

JOHN MACDOUGALL/AGENCE FRANCE-PRESSE/GETTY IMAGES

A woman walks past the “Futurium” in Berlin after the building’s

opening ceremony Thursday. The venue is billed as a place where

significant national and international developments in scientific,

technical and social research can be presented and discussed. Stefan

Brandt, the Futurium’s director, says the aim is to “encourage people

to rethink the future and to help shape it responsibly.”

BY DAVID J. LYNCH

AND GERRY SHIH

The announcement of new

U.S.-China trade talks next

month sent stocks higher Thurs-

day, though the two sides remain

far apart and still plan to hit each

other with punishing new tariffs.

The Dow Jones industrial av-

erage jumped nearly 400 points,

or 1.4 percent, to close at 26,728.

The broader Standard & Poor’s

500-stock index rose 1.3 percent,

while the technology-heavy Nas-

daq jumped 1.8 percent.

Businesses that have suffered

from President Trump’s imposi-

tion of tariffs on more than

$550 billion worth of Chinese

goods welcomed word that the

two sides are heading back to the

bargaining table.

“We urge the administration

to end this trade war and come to

an agreement that results in a

complete rollback of the existing

tariffs,” said Matthew Shay, chief

executive of the National Retail

Federation. “This trade war has

gone on far too long, and the

harmful consequences for Amer-

ican business and consumers

continue to grow.”

China’s top trade negotiator,

Vice Premier Liu He, agreed to

the October visit in a phone call

with Treasury Secretary Steven

Mnuchin and U.S. Trade Repre-

sentative Robert E. Lighthizer,

China’s Commerce Ministry said.

“Serious” mid-level discussions

will begin in mid-September to

prepare for next month’s visit,

the ministry added.

The announcement marks the

first sign of a diplomatic thaw

since the two governments trad-

ed tariff blows last month and

engaged in a rhetorical ex-

change that underscored the

adversarial mood settling over

the two capitals. At one point,

Trump ordered American com-

panies to prepare to leave China.

After China last month an-

nounced retaliatory tariffs on

$75 billion worth of American

goods, Trump increased to

15 percent a previously an-

nounced 10 percent tariff on

$300 billion in Chinese imports.

The first installment, affect-

ing $112 billion in Chinese mer-

chandise, took effect Sunday.

The second blow is scheduled to

land Dec. 15. Meanwhile, on Oct.

1, an earlier round of tariff

increases to 30 percent from 25

percent on an additional $

billion in imports.

Trump has used tariffs more

aggressively than any president

since the Great Depression,

damaging both the U.S. and

Chinese economies.

Uncertainty over trade policy

is shaving about 1 percent off the

global economy, hitting the

United States, other advanced

economies and emerging mar-

kets with roughly equal force,

according to a new Federal Re-

serve study of corporate earn-

ings calls and press reports.

Employers in the United

States cited trade worries in

cutting 10,488 jobs last month,

Challenger, Gray & Christmas, a

global outplacement firm, said

Thursday.

Adam Greenberg, owner of

NorthShore Care Supply, is

among those struggling to ad-

just. The Buffalo Grove,

Ill.,-based company makes spe-

cialized adult diapers for indi-

viduals who suffer from a com-

plete lack of bladder control due

to ailments such as nerve dam-

age, hysterectomy, kidney fail-

ure and Alzheimer’s disease.

The company has been able to

find manufacturers equipped to

make the specialized MegaMax

briefs only in China, Greenberg

said. And his Chinese suppliers

so far have refused to share the

tariff pain.

“We have hundreds of thou-

sands of dollars worth of this

product, many containers, on

the water or on the way,” he said.

“We have to raise the price or cut

our costs, which may involve

layoffs.”

Likewise, China’s State Coun-

cil on Wednesday acknowledged

that its economy is coming un-

der more pressure because of an

“increasingly complicated and

challenging external environ-

ment,” according to the state-

run Xinhua news agency.

Several research firms, in-

cluding Bank of America Merrill

Lynch, this week cut their fore-

casts for China’s economic

growth rate this year to below

6 percent.

Although both governments

are interested in a deal, they

remain at odds over several key

issues, including U.S. demands

for structural changes in China’s

state-led economic system.

“I don’t see any real sign that

they’re coming back to the table

because positions have

changed,” said Rufus Yerxa,

president of the National For-

eign Trade Council. “They don’t

want to look like they’re not

willing to engage. Both sides are

hunkering down for a longer

fight.”

The October talks — the 13th

round of dialogue — were origi-

nally scheduled for this month.

Chinese officials in recent weeks

have suggested that lower-level

discussions with Washington

were continuing even while

Trump has fumed on Twitter

about China’s behavior and

threatened “much tougher” ac-

tions.

[email protected]

[email protected]

Taylor Telford in Washington

contributed to this report.

U.S., China to resume

high-level trade talks in

Washington next month

Dow surges nearly 400

points on news, even as

expectations remain low

BY RENAE MERLE

President Trump’s administra-
tion on Thursday released a
sweeping plan that could remake
the U.S. housing market, starting
with ending more than a decade of
government control of two mas-
sive companies, Fannie Mae and
Freddie Mac, that back half of the
nation’s mortgages.
The long-awaited plan from the
Treasury Department features
nearly 50 proposals, including
many technical changes to finan-
cial regulations, and is aimed at
shrinking the government’s role in
the housing market. The corner-
stone of the plan would resolve the
fates of Fannie Mae and Freddie
Mac, which 11 years ago this week
were put into government conser-
vatorship during the global finan-
cial crisis.
The proposals will “protect tax-
payers and help Americans who
want to buy a home,” Treasury
Secretary Steven Mnuchin said in
a statement. “An effective and effi-
cient federal housing finance sys-
tem will also meaningfully con-
tribute to the continued economic
growth under this administra-
tion.”
Fannie Mae and Freddie Mac
play a critical role in the housing
market, buying mortgages from
lenders, then packaging them into
securities to sell to investors. The
government seized control of both
companies in 2008 as the housing
market unraveled and the firms’

losses piled up.

The housing giants back half of

the United States’ mortgages, and

housing experts have warned that

allowing them too much freedom

again could lead to higher mort-

gage costs for consumers while

enriching Wall Street investors.

Fannie Mae and Freddie Mac

represent the last major unre-

solved business from the financial

crisis, and Mnuchin has called

them a top priority for more than

two years. Under the plan, they

would be turned back into private

companies but would be required

to pay taxpayers a fee for govern-

ment protection. It would also

open the market up to competi-

tors for the first time.

While Democrats and Republi-

cans support ending government

control of the companies, several

other plans have stalled in Con-

gress. President Barack Obama’s

administration shied away from

the topic, fearful a wrong move

could disrupt the housing market

and the availability of 30-year

mortgages.

A senior Treasury Department

official said that while the admin-

istration’s plan was extensive, the

changes are designed to be “incre-

mental and realistic.”

The issue is being closely

watched by housing advocates as

well as the banking and housing

industries — all have developed

their own competing proposals on

what should be done with the

companies. Several Wall Street

hedge funds also invested heavily

in the companies’ stock and bet

that the Trump administration’s

efforts may clear the path for them

to secure significant profits.

This comes at a time when

many U.S. home buyers are al-

ready struggling to find affordable

homes. Prices have been rising for

years, and there are not enough

moderately priced homes for sale,

according to National Association

of Realtors data.

Most of the Trump administra-

tion’s proposals require action by

Congress, but the Federal Housing

Finance Agency, the regulator for

Fannie Mae and Freddie Mac,

could take some actions on its

own. The agency is run by Mark

Calabria, formerly Vice President

Pence’s chief economist.

Calabria, without congres-

sional approval, could end the

government conservatorship of

the companies and do away with a

requirement that Fannie Mae and

Freddie Mac send most of their

profits to the Treasury Depart-

ment, for example.

“It is, after 11 years, time to

bring the conservatorships to an

end,” the proposal says. “Ending

the conservatorships is a critical

step to reducing that government

influence” on the housing market.

The plan leaves many questions

unresolved, including what would

happen to the thousands of shares

of Fannie and Freddie stock

owned by the government.

Over the past decade, Fannie

Mae has received $119.8 billion in

taxpayer bailouts, with Freddie

Mac receiving $71.6 billion. As

they returned to profitability, the

companies have sent a combined

$300 billion in dividends to the

Treasury Department.

The Trump administration’s

plan attempts to reduce the gov-

ernment’s influence on the hous-

ing market by shrinking Fannie

Mae and Freddie Mac’s roles. It

also calls for a smaller role for the

Federal Housing Administration,

which backs about 15 percent of

home purchases.

Fannie and Freddie would pay

taxpayers a fee in return for a

government guarantee in case

they fall into financial trouble

again. But taxpayers would be

forced to bail out the companies

again only in “exigent circum-

stances,” according to the 53-page

proposal.

The Treasury Department’s

plan is very similar to a proposal

Sen. Mike Crapo (R-Idaho), chair

of the Senate Banking Committee,

released earlier this year. Crapo

has scheduled a hearing on the

issue next week.

But it is unclear whether Trump

will be able to build the bipartisan

support needed for such legisla-

tion. Before the release of the plan,

Sen. Sherrod Brown (Ohio), the

ranking Democrat on the Banking

Committee, warned that the ad-

ministration could “put the hous-

ing market and taxpayers at risk.”

[email protected]

Trump eyes housing market overhaul

Long-awaited plan would end government control of mortgage giants Fannie Mae and Freddie Mac

BILL O’LEARY/THE WASHINGTON POST

Fannie Mae’s Washington headquarters in late 2017. Fannie Mae and Freddie Mac were put into government conservatorship 11 years

ago during the global financial crisis. Housing experts say allowing them too much freedom again could lead to higher mortgage costs.

DOW 26,728.

UP 372.68, 1.4% 

NASDAQ 8,116.

UP 139.95, 1.8% 

S&P 500 2,976.

UP 38.22, 1.3% 

GOLD $1,525.

DOWN $34.90, 2.2% 

CRUDE OIL $56.

UP $0.04, 0.1% 

10-YEAR TREASURY

DOWN $8.80 PER $1,000; 1.56% YIELD

CURRENCIES

$1= 106.96 YEN, EURO=$1.