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The daily business briefing: February 15, 2019

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Harold Maass
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1.

Amazon cancels plans for headquarters in New York City

Amazon announced Thursday that it is canceling its plan to build one of its two big new headquarters in New York. The facility would have brought the city 25,000 jobs, but critics of the plan objected to the city's promise of nearly $3 billion in tax breaks to one of the richest companies in the world. "We are disappointed to have reached this conclusion — we love New York," the online retail giant said in a blog post, citing political opposition as reason for the decision. Gov. Andrew Cuomo (D), who had lobbied for the project, slammed politicians who opposed it, accusing them of putting "their own narrow political interests above our community." Rep. Alexandria Ocasio-Cortez (D-N.Y.) rejoiced, saying, "everyday New Yorkers and their neighbors defeated Amazon's corporate greed." [The Associated Press, The New York Times]

2.

Trump expected to sign spending deal but declare border emergency

Congress on Thursday overwhelmingly passed the $333 billion spending and border security deal needed to avoid a government shutdown at midnight Friday. Before the Senate voted, Senate Majority Leader Mitch McConnell (R-Ky.) told lawmakers that President Trump had committed to signing the bill, which includes only a fraction of the $5.7 billion he has demanded for his border wall. McConnell also said that Trump would declare a national emergency on the border, which will let him bypass Congress and find other money to get the wall built. News of that plan, which Trump has floated for weeks, drew immediate condemnation from Democrats, and divided Republicans, although McConnell said he would support it. The Justice Department reportedly has warned the declaration could be blocked by courts. [The Washington Post, CNBC]

3.

Retail sales dropped unexpectedly in December

The Commerce Department reported Thursday that U.S. retail sales unexpectedly fell by 1.2 percent in December from the prior month, the biggest drop in more than nine years. Economists had expected a 0.1 percent gain. The weak data suggested the economy lost momentum as financial markets remained volatile and the government headed into a shutdown. The report dragged fourth-quarter growth estimates below a 2.0 percent annualized rate. Other data showed an unexpected rise in new unemployment-benefit claims last week, and a decline in producer prices for the second straight month. The news weighed on the Dow Jones Industrial Average and the S&P 500, which fell Thursday by 0.4 percent and 0.3 percent, respectively, while the Nasdaq inched higher. Stock index futures edged lower early Friday. [Reuters, MarketWatch]

4.

Trump Organization abandons plans for 2 new hotel chains

President Trump's company, the Trump Organization, said Thursday that it is abandoning plans to open two new hotel chains — the Scion and American Idea brands — largely because of a hostile political environment. "We live in a climate where everything will be used against us, whether by the fake news or by Democrats who are only interested in presidential harassment and wasting everyone's time, barraging us with nonsense letters," said Eric Trump, one of the president's sons and a leader of the business. The Trump Organization unveiled plans for the hotel chains, which were to cater to budget and mid-priced travelers, in March 2017, promising to line up developers fast, but most of the deals fizzled. [The Associated Press]

5.

U.S., China wrap up high-level trade talks

The U.S. and China have ended high-level talks in Beijing aimed at ending their trade war. Chinese President Xi Jinping met with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer on Friday and said the week's meetings had yielded significant progress, adding that discussions would continue next week in Washington. The U.S. is calling for structural reforms to China's economy that President Trump says will make trade between the world's two biggest economies more fair. Xi called for a "win-win agreement" both countries can accept. Trump said this week he is open to delaying an early March deadline for the doubling of tariffs on $200 billion of Chinese goods if the two sides are near a deal. [Reuters, The New York Times]