Trade: Trump’s lumber tiff with Canada
The Trump administration is picking a trade fight with Canada by escalating a “decades-old” dispute over lumber, said Peter Nicholas and Paul Vieira in The Wall Street Journal. The Commerce Department announced this week that it plans to impose a 20 percent tariff on Canadian softwood lumber. Nearly $6 billion worth of the wood was imported into the U.S. last year, mostly for home construction. The U.S. has long alleged that the Canadian government subsidizes loggers by letting them cut wood from government-owned land at belowmarket prices. But this step represents a “sharp pivot” by Trump away from America’s secondlargest trade partner.
The White House is using lumber to demonstrate toughness on trade “without doing much economic damage,” said Ian Austen and Peter Baker in The New York Times. Disputes with Canada over lumber are routine and relatively minor in scale, and usually end in a deal to limit Canadian lumber shipments to the U.S. But by moving to introduce tariffs, the Trump administration is setting the stage for “potentially thorny negotiations” over NAFTA. In the meantime, American construction firms, which rely on the lumber imports, say the tariffs will raise the cost of the average new home by $3,000, because U.S. mills “don’t cut enough lumber” to meet demand.
Retail: PetSmart acquires Chewy.com
PetSmart is buying online pet-food seller Chewy.com “in possibly the biggest e-commerce acquisition ever,” said Nancy Dahlberg in the Los Angeles Times. The deal, announced last week, is rumored to be worth as much as $3.35 billion, which would make it “even larger than Walmart’s $3.3 billion deal for Jet.com last year.” Chewy, which controls 51 percent of the online pet-food market, is not yet profitable. But it expects to hit nearly $2 billion in revenue this year, up almost 7,600 percent since it was founded in 2011. PetSmart is the nation’s largest pet-supplies retailer, with 1,500 store locations.
Airlines: United CEO won’t become chairman
United CEO Oscar Munoz will no longer become chairman of the company’s board in 2018, said Alana Wise in Reuters.com. The airline amended Munoz’s employment agreement last week as it continues to grapple with the global fallout from its treatment of a passenger who was dragged off a United flight in Chicago in early April. United also said it will revise its 2017 executive compensation “to more directly tie incentives to improvements in customer satisfaction.” Munoz, who made $18.7 million last year, has come under heavy criticism for his initially dismissive response to the scandal.
Banks: Wells Fargo board tepidly re-elected
Wells Fargo’s board of directors barely survived a revolt by shareholders this week, said Kevin McCoy in USA Today. All 15 board members were re-elected for new one-year terms at the company’s annual shareholder meeting, but investors repeatedly “vented anger and frustration” at the bank’s handling of its recent fraudulent-accounts scandal. Four board members were re-elected by the slimmest of majorities—one with just 53 percent of shareholder votes, an uncommonly tight margin for a corporate election.
Aerospace: Uber unveils plan for ‘flying cars’
“Uber, not satisfied with giving customers rides on land, is now looking to the skies,” said Matt McFarland in CNN.com. The ride-hailing giant announced this week that it’s working with the cities of Dallas and Dubai to build a network of “flying cars” that take off and land vertically. Uber says it hopes to demonstrate the technology by 2020, with full-scale operations starting in 2023. Uber isn’t alone. Flying-car startup Kitty Hawk, backed by Google co-founder Larry Page, released a video this week of a prototype vehicle that can hover over water.