The daily business briefing: July 3, 2018
Merkel compromises on migration to save her coalition, the Trump administration says it will consider Iran-sanction waivers, and more
Merkel compromises on immigration to save her government
German Chancellor Angela Merkel agreed on Monday to build camps for asylum seekers at the Austrian border, reversing her longstanding policy of welcoming asylum seekers in a bid to prevent the collapse of her coalition government. The change marked a compromise with Merkel's interior minister, Horst Seehofer, who also is the leader of one of her coalition partners, the Christian Social Union. Seehofer had threatened to resign, saying last week's European Union migration agreement didn't do enough to discourage the flow of migrants into Germany. The deal won't be finalized until the parties in Merkel's coalition all agree, but Merkel said she and Seehofer had "reached a good compromise." Seehofer said the agreement was "sustainable." European stocks rose early Tuesday in what was widely interpreted as a sign of relief.
U.S. will consider waivers on Iran oil sanctions
The Trump administration will consider requested waivers from Iran sanctions on a "case-by-case" basis, instead of shutting down imports altogether, a senior State Department official said Monday. Brian Hook, the State Department's director of policy planning, said the U.S. isn't "looking" to make any exceptions for countries that import Iranian oil when the sanctions are due to go back into effect on Nov. 4 as a result of President Trump's decision to scrap the Obama-era deal intended to curb Iran's nuclear program. Still, Hook said, the U.S. is "willing to work with countries" arguing they need more time to reduce their imports. Oil prices rose to multi-year highs last week on signs the U.S. would try to cut Iran exports faster than expected and punish countries and companies that don't go along.
EU warns of massive response if Trump imposes auto tariffs
The European Union on Monday warned that it could impose retaliatory tariffs on roughly $300 billion in U.S. goods if President Trump follows through with his threatened levies on auto imports. European Commission spokesman Margaritis Schinas said such a move by the U.S. "lacks legitimacy, factual basis, and violates international trade rules." The EU made similar allegations about the U.S. tariffs on steel and aluminum imports imposed last month. President Trump said those tariffs were necessary to preserve the U.S. steel and aluminum industries for national security. The EU called those tariffs "pure protectionism," and placed new duties on some U.S. products. Futures for the three main U.S. stock indexes edged higher early Tuesday, after they all shook off early losses to end higher on Monday.
Feds expand inquiry into Facebook data-sharing with Cambridge Analytica
Facebook's stock dropped by more than 1 percent in extended trading on Monday after a report that the federal investigation into its role in the Cambridge Analytica data-sharing scandal was expanding. The stock had risen by 1.6 percent in regular trading before The Washington Post, citing people familiar with the investigations, reported that the FBI and the Securities and Exchange Commission had joined the Justice Department in looking into the issue, with increased focus on Facebook's role in the scandal. Cambridge Analytica in 2015 obtained access to personal information for 71 million Americans through Facebook. It used the information to create voter profiles, and later did work for the Trump campaign and other Republicans.
Lyft extends rivalry with Uber into bike-sharing
Lyft announced Monday that it would buy the core operations of Motivate, the parent company of CitiBike. The business will be renamed Lyft Bikes, and it will control Motivate's bike-sharing contracts with New York, Chicago, and six other cities. Motivate will keep its bike maintenance operations as a stand-alone company, and continue to service Lyft Bikes. The financial terms of the deal, which extends Lyft's competition with ride-hailing rival Uber into the bike-sharing business, were not announced. Uber reportedly paid $200 million to enter the industry when it bought bike-sharing company Jump in April. Earlier reports indicated that Lyft would pay about $250 million if it bought Motivate, the largest bike-sharing provider in the U.S.