The daily business briefing: August 28, 2018

Harold Maass
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Trump announces trade deal with Mexico

President Trump on Monday announced that the U.S. and Mexico had reached an agreement on a tentative, revised trade deal intended to eventually replace the North American Free Trade Agreement. "It's a big day for trade. It's a big day for our country," said Trump, who spoke by phone with Mexican President Enrique Peña Nieto. Several factors remained unresolved, including whether Canada, the third NAFTA party, would sign the deal. White House officials said the terms focused on manufacturing and would help U.S. workers by making it harder for China and other rivals to ship cheap goods destined for the U.S. through Mexico. The agreement also aims to bring labor and environmental rules into sync across the border to protect U.S. salaries and jobs. One senior administration official conceded that the cost of certain goods, such as automobiles, might be driven higher. [The Washington Post, The New York Times]


Toyota invests $500 million in Uber

Toyota announced Monday that it would invest $500 million in Uber. In an effort to step up collaboration between the two companies, Uber will retrofit Toyota Sienna minivans with its autonomous technology, aiming for real-world testing in 2021. The deal gives Toyota a major partner in the intensifying competition among automakers and tech companies to perfect software for autonomous vehicles. "This agreement and investment marks an important milestone in our transformation to a mobility company," Shigeki Tomoyama, the president of Toyota Connected Company, said in a statement. The deal, which signals Uber's desire to work with a partner rather than work on its own, follows the death of a pedestrian who was hit by one of its test vehicles earlier this year in Arizona. [CNN, The Associated Press]


Stocks set records in rally following Mexico deal

U.S. stocks surged on Monday as a tentative trade deal between the U.S. and Mexico lifted the spirits of investors and eased fears of escalating trade tensions. The S&P 500 and Nasdaq Composite rose 0.8 percent and 0.9 percent, respectively, pushing both to record highs. Technology stock gains lifted the Nasdaq to its first close ever above the 8,000 mark. Disputes between the Trump administration and key trade partners have been weighing on investor sentiment for months, as President Trump and leaders of other countries have exchanged tit-for-tat tariffs. With the apparent resolution of issues between Trump and Mexico, "People are feeling a little bit more positive," said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York. Global stocks mostly rose on Tuesday, and U.S. stock futures inched higher. [Reuters, CNBC]


Facebook bans Myanmar military officials after U.N. criticism

Facebook said Monday it was banning several Myanmar military officials from the social media website and from Instagram to prevent the spreading of "hate and misinformation." Facebook said it reviewed the content before making the move. It is the first time Facebook has blocked any country's military or political leaders. The decision came hours after United Nations investigators released a scathing report accusing Myanmar's army of carrying out mass killings and gang rapes against members of the Muslim Rohingya minority. The report accused Myanmar's military of acting with "genocidal intent," and called for prosecuting the military's commander-in-chief and five generals for their responsibility in the crimes. Government spokesman Zaw Htay was quoted in local media saying the government had asked Facebook for specifics on the justifications for the ban. [Reuters]


Trump administration pledges $4.7 billion to help farmers through trade war

Agriculture Secretary Sonny Perdue said Monday that the Trump administration would pay farmers $4.7 billion to offset their losses from international trade disputes. Perdue said the money would protect farmers from "unjustified tariffs" some nations have imposed to retaliate against President Trump's levies. Trump has said his tariffs are necessary to force trade partners to adopt policies that are more fair to U.S. companies. China, Mexico, the European Union, and other trade partners have responded with levies on U.S. soybeans, pork, apples, and other goods. Some industry groups said the money Perdue promised would not be enough to make up for farmers' losses. The Department of Agriculture said in July it would provide up to $12 billion in emergency aid, and Perdue said the $4.7 billion was just an initial payment. [The Wall Street Journal, MarketWatch]