Business briefing

The daily business briefing: April 27, 2017

Trump vows to renegotiate NAFTA instead of scrapping it, United hikes payments for bumped passengers as high as $10,000, and more

1

Trump says he will renegotiate NAFTA, not scrap it

President Trump told Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau on Wednesday that the U.S. has no plan to withdraw from the North American Free Trade Agreement, or NAFTA, "at this time," but he will renegotiate it. The White House said that Trump had agreed not to pull out of the trade deal and his counterparts in Mexico and Canada "agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries." The conversations came after reports that the White House was in the late stages of writing an order to terminate the 1994 trade deal, which allows for the free flow of goods and services between the U.S., Canada, and Mexico without tariffs. Trump vowed during his campaign that he would renegotiate the trade deal, calling it a "job killer" that was "very, very bad for our country."

2

United hikes payments for bumped passengers as high as $10,000

United Airlines said Thursday that it would raise the maximum payment to passengers who give up seats on overbooked flights to $10,000. The company also vowed to increase training for its employees, and cut back on the practice of selling tickets outnumbering the seats on planes. The moves came after the airline faced an angry backlash after a video was posted online showing a passenger being violently dragged out of his seat and off of a plane in Chicago after he refused to give up his seat for a member of a partner airline's flight crew. "People are upset," United CEO Oscar Munoz said, "and I suspect that there are a lot of people potentially thinking of not flying us."

3

Trump unveils tax plan with cuts for businesses and families

President Trump on Wednesday proposed sharp tax cuts for businesses and individuals, promising that the overhaul would help pay for itself by dramatically boosting economic growth. Critics, however, said that the steep reductions would inflate the federal deficit. Trump proposed reducing the corporate tax rate from 35 percent to 15 percent. The plan also would double the standard amount that individual taxpayers can deduct, potentially saving middle class families thousands of dollars a year. The proposal, a one-page sketch short on detail, also would allow private business owners to claim the new lower rate for their take-home pay. It would reduce the number of tax brackets for individuals from seven to three, and lower the top tax rate from 39.6 percent to 35 percent.

4

U.S. broadens investigation of China's Huawei over dealings with sanctioned nations

U.S. officials are widening an investigation into whether Chinese technology giant Huawei violated American trade controls on Cuba, Iran, Sudan, and Syria, The New York Times reported, citing a previously unreported Treasury Department subpoena sent to Huawei in December. The Office of Foreign Assets Control, the Treasury Department agency overseeing international sanctions, got involved after the Department of Commerce issued a subpoena to Huawei last summer. Huawei has not been accused of committing crimes, but the investigation comes at a sensitive time, as the Trump administration pressures China to reduce trade with North Korea as leverage to get the Hermit Kingdom to rein in its missile and nuclear weapons programs.

5

Mnuchin says Trump 'has no intention' of releasing taxes

Treasury Secretary Steven Mnuchin said Wednesday that President Donald Trump "has no intention" of releasing his tax returns. Going back decades, Trump's predecessors in the White House have released their tax returns. Trump has kept his private, although during his campaign he promised to make them public once the Internal Revenue Service had completed an audit. The IRS and tax lawyers say nothing prevents someone under audit from releasing their own tax documents. On Wednesday, Mnuchin said Americans already have "plenty of information" on Trump's finances.

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