The daily business briefing: August 28, 2023

1. Commerce secretary seeks to ease tensions in China trip

Commerce Secretary Gina Raimondo arrived in Beijing on Sunday to start a four-day visit to China, in the Biden administration's latest push to improve tense relations between the world's two biggest economies. Raimondo said she would be "practical" in seeking ways to mend ties without sacrificing U.S. interests. "I'm also very realistic and clear-eyed about the challenges. And the challenges are significant," she told reporters Saturday before leaving. Raimondo said she would seek "actionable, concrete steps where we can move forward on the commercial relationship." She is expected to discuss boosting travel opportunities, following up on the recent easing of restrictions on big tour groups from China.

The Associated Press

2. Report: 3M agrees to pay veterans $5.5 billion over combat-earplug complaints

3M has tentatively agreed to pay $5.5 billion to settle claims by more than 300,000 veterans that the company's combat earplugs failed to prevent hearing loss, Bloomberg reported Sunday, citing people familiar with the negotiations. The talks are ongoing, and 3M's board hasn't signed off yet, according to The Wall Street Journal. The veterans in the earplug litigation — the largest mass tort in U.S. history — say 3M and Aearo Technologies, which 3M acquired in 2008, produced faulty earplugs and provided them to the U.S. military, failing to protect users from hearing loss. 3M has argued that the earplugs work when used properly. Some analysts had predicted the case would cost 3M $10 billion or more.

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Bloomberg The Wall Street Journal

3. Evergrande shares plummet as trading resumes after suspension

Chinese property developer Evergrande's shares plunged 80% on Monday, their first day of Hong Kong trading since they were suspended in March 2022. The embattled company's stock has lost more than 99% of its value since Beijing started cracking down on property speculation three years ago, leaving Evergrande at the heart of a real estate crisis now dragging down the world's second biggest economy, according to BBC News. On Sunday, Evergrande reported that it lost $4.5 billion in the first six months of 2023. "The key for policymakers at this moment is to prevent financial contagion and limit spillover into the overall financial system," Qian Wang, chief Asia Pacific economist at investment firm Vanguard, told BBC News.

BBC News

4. Stock futures rise slightly after Fed comments

U.S. stock futures edged higher early Monday after comments from Federal Reserve Chair Jerome Powell, who said the Fed would "proceed carefully" with additional interest rate hikes. Futures tied to the Dow Jones Industrial Average, the S&P 500 and the Nasdaq were up about 0.2% at 7 a.m. ET. The Dow and the S&P 500 gained 0.7% on Friday after Powell spoke at the central bank's annual symposium in Jackson Hole, Wyoming. Powell noted signs of economic strength but said the Fed was "prepared to raise rates further if appropriate" and keep them high as long as needed to contain inflation. "Although inflation has moved down from its peak — a welcome development — it remains too high," Powell said.

CNBC

5. Unions in Georgia, Alabama pressure Hyundai over EV plants

Labor unions and civic groups in Georgia and Alabama are launching a push Monday to pressure non-union automaker Hyundai to increase training and protection for workers at its electrical-vehicle plants, noting the federal money it's getting from President Biden's signature green energy laws. The coalition hopes the effort will "push the Biden administration to make good on its oft-repeated pledge to create not just jobs but 'good union jobs,'" The New York Times reported. The nudge to persuade Hyundai could also increase pressure on other automakers, including BMW in South Carolina and Mercedes-Benz in Alabama, that have put new EV manufacturing resources in areas historically unfriendly to unions, according to the Times.

The New York Times