The daily business briefing: June 1, 2018
Allies retaliate after Trump imposes tariffs, U.S. unemployment rate falls to 18-year low, and more
Trump imposes tariffs, and U.S. allies retaliate
President Trump imposed steel and aluminum tariffs on the European Union, Canada, and Mexico, prompting immediate retaliation by some of America's closest allies. The U.S. tariffs of 25 percent on imported steel and 10 percent on aluminum took effect at midnight Thursday. "This is protectionism, pure and simple," said Jean-Claude Juncker, president of the European Commission. Mexico said it would slap taxes on imported U.S. pork bellies, apples, cranberries, grapes, certain cheeses, and various types of steel. Canada imposed a surtax on $16.6 billion of American steel, aluminum, and other products. Canadian Prime Minister Justin Trudeau called Trump's claim that the tariffs were necessary for national security an "affront" to Canadians who have fought alongside Americans from World War II to Afghanistan.
U.S. economy adds 223,000 jobs, after Trump tweets controversial preview
The Labor Department reported Friday that U.S. employers added 223,000 nonfarm jobs in May, more than expected. Economists polled by MarketWatch had predicted a gain of 200,000 jobs. The continued strong hiring helped bring down the unemployment rate from 3.9 percent to 3.8 percent, an 18-year low. The yearly rate of pay gains rose to 2.9 percent from 2.8 percent. Just over an hour before the numbers were released, President Trump tweeted: "Looking forward to seeing the employment numbers at 8:30 this morning." Washington Post White House economic policy reporter Damian Paletta said Trump's teaser was "the first time a president had ever sent a signal to investors about what the jobs numbers might look like an hour before they came out." Former Obama White House economic adviser Austan Goolsbee tweeted that in doing so, Trump had released "classified information."
Italian populists end chaos with deal on coalition government
Italy's two leading populist groups, the anti-establishment Five Star Movement and the anti-immigrant League, reached a deal to form a government on Thursday, easing turmoil that roiled global markets. Days earlier, President Sergio Mattarella rejected a cabinet proposal over fears that one minister would try to lead Italy, Europe's fourth largest economy, out of the eurozone. The move threatened to force early elections that could have turned into a Brexit-like vote on splitting from the European Union. It was not immediately clear, however, to what degree the new government would ease the quarreling among Italy's political factions. In Spain, Prime Minister Mariano Rajoy, who survived a financial crisis, was ousted over corruption scandals. He'll be replaced by a leader from the opposition Socialist Party.
GM shares jump after SoftBank puts $2.25 billion into its autonomous car unit
General Motors shares jumped Thursday after the automaker announced that Japanese technology conglomerate SoftBank would invest $2.25 billion in its autonomous car unit, GM Cruise. The deal gives SoftBank nearly 20 percent of the unit. GM CEO Mary Barra said her company would inject another $1.1 billion into the unit to help speed up the broad deployment of self-driving robotaxis next year. GM shares shot up by 11 percent, their biggest one-day gain since the company emerged from bankruptcy eight years ago. The SoftBank Vision Fund also reached a deal in January to spend about $9 billion on a 15 percent stake in Uber. It also owns part of China's leading ride-hailing service, Didi Chuxing.
Goldman Sachs executive charged with insider trading
Federal prosecutors on Thursday charged a Goldman Sachs vice president, Woojae "Steve" Jung, with insider trading. Jung, a 37-year-old South Korean citizen, allegedly made trades based on confidential information about looming transactions by several companies that were clients of Goldman Sachs. Prosecutors said Jung used a brokerage account under the name of a friend in South Korea, and made more than $130,000 on the trades. A Goldman Sachs representative said the investment bank was cooperating with authorities on the case. "Woojae Jung violated his duty to his company and traded on stolen insider information, over and over again," U.S. Attorney Geoffrey Berman in Manhattan said.