The daily business briefing: March 23, 2018
Stocks fall as Trump and China battle over tariffs, Citigroup unveils restrictions gun sales by business customers, and more
Trump and China threaten tariffs in trade dispute that spooks stocks
The Dow Jones Industrial Average plunged more than 700 points, or 2.9 percent, on Thursday as President Trump unveiled his plan to impose tariffs on about $60 billion in Chinese goods annually, stoking fears of a trade war between the world's two biggest economies. Stock futures pointed to more losses early Friday. The White House is trying to punish China for forcing U.S. companies to hand over their technology to local partners in exchange for access to the Chinese market. Early Friday, China criticized Trump and said it would impose tariffs on $3 billion worth of U.S. goods, including pork, fruit, and scrap aluminum, in retaliation. "China does not want to fight a trade war, but it is absolutely not afraid of a trade war," China's Commerce Ministry said.
Citigroup announces restrictions on gun sales by business customers
Citigroup plans to bar retailers who are customers from selling guns to people who have not passed background checks, or who are under 21. The bank also barred the sale of bump stocks and high-capacity magazines. The restrictions apply to companies that issue store credit cards through Citigroup, or use the bank for lending or other services. "The policy was designed to respect the rights of responsible gun owners while helping to keep firearms out of the wrong hands," Citigroup Chief Executive Officer Mike Corbat said in a Thursday memo to staff. Citigroup is the first major bank to impose restrictions regarding firearms, although numerous retailers have done so on their own in response to the Feb. 14 school shooting that left 17 dead in Parkland, Florida.
Dropbox prices IPO at $21 per share
Dropbox priced its IPO at $21 per share Thursday, higher than expected, ahead of the stock's Friday debut. The expected range was $18 to $20 per share, and that had been nudged up by $2 per share over the cloud storage company's earlier estimate. Dropbox raised $756 million in what amounted to the largest tech IPO since Snap last year. It sold 36 million shares, and was 25 times oversubscribed, CNBC reported. The IPO gave Dropbox a market capitalization of $8.2 billion, down from the $10 billion valuation it had in a 2014 round of private funding.
DOJ argues AT&T-Time Warner merger would drive up popular channel prices
At Thursday's start of the high-stakes antitrust trial over AT&T's proposed merger with Time Warner, the Justice Department argued that AT&T would be able to use Time Warner's content as a "weapon" if the deal is allowed to go through. The Justice Department is suing to block the $85 billion deal, arguing it will hurt competition and drive up prices for consumers because the merged company could charge rival cable and streaming companies more for popular channels. AT&T and Time Warner disputed that argument, saying they need to join forces to compete with streaming and tech giants such as Amazon, Netflix, Facebook, and Google. "The government's theory is fundamentally stuck in the past," said lead AT&T and Time Warner lawyer Daniel Petrocelli.
More allies exempted as Trump's steel and aluminum tariffs take effect
President Trump's steel and aluminum tariffs, overshadowed by his newly unveiled import-tax plan for other Chinese goods, take effect on Friday. At a legislative hearing on Thursday, the top U.S. trade official, Robert Lighthizer, told senators that the administration had exempted more U.S. allies. The list now includes Argentina, Australia, Brazil, South Korea, and the European Union, in addition to Mexico and Canada, which were excused from the 25 percent steel tariff and the 10 percent aluminum duty from the start. More than half of the U.S. supply of the metals comes from the exempted nations. The countries that will have to pay include China, Russia, Taiwan, Japan, and India.