FT : ‘China has been trying to have it both ways’ : Antony Blinken

Antony Blinken: ‘China has been trying to have it both ways’
The outgoing US secretary of state on putting pressure on Beijing over Ukraine, the ‘road map’ for Syria — and why America must co-operate in order to lead

“What did Mike Tyson say? You have the best plans and then you get hit in the face,” quips Antony Blinken when I ask him to take stock of the past four years. 

“We faced the worst economic crisis arguably since the Great Depression. We faced the worst public health crisis in at least 100 years. We had strong divisions at home, a challenge to our democracy, and we had very fraught relations with our closest allies and partners.”

Today the US is grappling with many foreign policy crises around the world, from Ukraine and Gaza to Syria. But the outgoing US secretary of state is anything but downbeat about the record of the Biden administration. Back in 2021, he says, adversaries believed the US was in “inexorable decline”. Since then, big investments at home, including in infrastructure and the domestic chip industry, in addition to intense work with allies, have changed the landscape. “We’re now operating from a position of strength.”

We are meeting at Central Michel Richard, an upscale bistro in Washington, where I arrive hoping America’s top diplomat will join me in some liquid holiday cheer. “I’m good with that,” Blinken says at first, indicating the water on the table. But I press the point and he relents. “I probably shouldn’t, but why not.”

Blinken orders a glass of Cabernet Sauvignon. I pick a Burgundy, prompting a flicker of anxiety in my guest. “I hope I actually got an American Cabernet,” he frets. Blinken, 62, is a Francophile who speaks fluent French from his teenage years living in Paris. But buying non-US products can be risky for officials. (His wine turns out, thankfully, to be Californian.)

Blinken has just returned from a tour of the Middle East to discuss the situation in Syria after the collapse of Bashar al-Assad’s brutal regime. He says the trip to Jordan, Turkey and Iraq generated some alignment between countries about expectations for the interim authorities in Damascus by creating a “road map”, but cautions that the situation is “very fraught”.

“It’s a moment of incredible possibility, especially after the horrors of the Assad dictatorship . . . but we’ve seen too many times when one dictator’s been replaced by another,” he explains. “It was very important that we get in there early and try to bring everyone together, which we did.”

Blinken was surprised at how quickly the regime fell, which he says was partly due to the pressure the US has been putting on Assad’s patrons Russia and Iran. “They were in no position to actually come to his rescue.”

As our wine arrives, I mention that Israel’s prime minister Benjamin Netanyahu claimed it was Israeli pressure on Iran that created the conditions for the collapse. Without revealing the frustration many in the Biden administration feel about Netanyahu, he replies carefully.

“I imagine the prime minister would be among the first to acknowledge that the unprecedented support we gave to Israel, faced with unprecedented attacks from Iran, was a huge difference maker,” he says. “Iran is not in much of a position to pick a fight with anyone . . . That had real repercussions for Syria in a positive way.”

The challenge, he adds, is to translate the current situation into a “positive and enduring” outcome and to provide “the best possible hand to the Trump administration so that they can take the baton”.

He thinks Trump will be motivated partly because of his success in his first term completing the elimination of Isis’s territorial caliphate. “I imagine that he has a strong incentive in not seeing Isis re-emerge.” 

I am conscious that we have only 90 minutes. “Shall we order?” I suggest. “I don’t want to send you back starving.” 

“I’m only doing this because it’s a free meal,” he jokes. “I so rarely get out for lunch that it’s a great opportunity to start to reintegrate.” 

Blinken and his wife Evan Ryan, the White House cabinet secretary, have two small children (aged four and five) so they have little spare time. He has also spent 12 months of the past four years travelling the world. How do they manage, I ask? His wife’s parents live with them and help look after their kids, he tells me.

Do they get a salary? “They could easily ask, and I would do it,” he says with a smile. 

As the waiter hovers, we talk about the restaurant scene in Washington, which has changed markedly since he was an intern at The New Republic magazine in the 1980s. “Back in the day, you could count the restaurants on one hand. Now, at least what I’m told, it’s quite a different scene.” 

Central was opened by French chef Michel Richard, whose obituary in the Washington Post noted he had brought “Gallic flair” to “a city long belittled as a stodgy outpost of steakhouses and uninspired cuisine”. 

Our menu is not uninspiring. Blinken chooses a kale salad and the Atlantic salmon. I pick a tarte Alsacienne — bacon, onions and crème fraîche on thin pastry — and opt for the salmon as well.

Blinken says that his “greatest satisfaction” was rebuilding alliances, pointing to Biden’s efforts to “connect the Atlantic and the Pacific” and show that “what happens in one theatre has profound consequences in the other”. 

He notes that four Indo-Pacific countries — Japan, Australia, New Zealand and South Korea — were invited to attend Nato summits during the Biden administration and that the transatlantic alliance now criticises China, which was previously unimaginable. He recalls how former Japanese prime minister Fumio Kishida warned that “Ukraine [today] might be east Asia tomorrow”, in a veiled reference to China. 

I ask why Nippon Steel’s $15bn acquisition of US Steel has faced such opposition in the administration as a security threat, even though Japan is the most important US ally in Asia. An inter-agency panel is reviewing the deal, but critics say the president has politicised the process. 

Does Blinken concede that it is causing tensions? “We’ve worked to be very clear and transparent with our Japanese allies about what the considerations are . . . Let me just leave it at that.” 

The presence of North Korean soldiers fighting with Russians against Ukraine has further underscored how conflicts in one region have implications for nations in other parts of the world. Giving another example, Blinken stresses that Chinese groups are still providing Russia with critical materiel to help it rebuild its defence industry base.  

“This is . . . powerful evidence to Europeans that the biggest threat to their security . . . is unfortunately being driven in part by the contributions of countries that are halfway around the world in the Indo-Pacific.” 

Blinken has repeatedly lambasted China for allowing companies to send dual-use items with both civilian and military applications to Russia. The flow of trade has not fallen, so I ask why the administration has not taken actions with more teeth. 

“They’ve been trying to have it both ways,” says Blinken, a reference to China also claiming to want to help bring peace to Ukraine. He says “China is hearing a chorus of concern from many countries” who along with the US have imposed sanctions on Chinese entities aiding the Russian war effort.

It’s not flipping a light switch, but I think [sanctions are] putting China in an increasingly difficult position . . . They certainly don’t like the actions that we’ve taken against Chinese entities

I push again, saying the US sanctions don’t appear to have changed the calculus in Beijing. “It’s not flipping a light switch, but I think it’s putting China in an increasingly difficult position . . . They certainly don’t like the actions that we’ve taken against Chinese entities. And I imagine that there’ll be more to come as necessary, including in the weeks ahead.” 

His worst moment as secretary of state came when 13 members of the US military died in Kabul in 2021 during the withdrawal from Afghanistan — the botched handling of which is widely seen as a big failure for Biden. Blinken defends the decision to withdraw when the US did, however, saying that its adversaries wanted Washington to remain “bogged down” in Afghanistan. But he stresses that the deaths were “incredibly hard”. 

Another “painful moment” was the brutal Hamas attack on Israel on October 7 2023, and then the ensuing suffering of innocent civilians in Gaza. 

Biden has been criticised for failing to put more pressure on Netanyahu to cut civilian casualties in Gaza, with some critics accusing the president of not doing enough to prevent a genocide. As he prepares to leave office, I ask if Blinken thinks the US has the appropriate balance between supporting Israel and helping Palestinians? 

He says the US has three goals: to stand with Israel and prevent another October 7, to avoid a wider war, and to do everything possible to protect innocent Palestinians. He says the situation is “uniquely difficult” because Hamas is enmeshing itself in the population, but that has not “removed Israel’s responsibility for doing whatever it can, both to avoid civilian casualties and to . . . ensure that assistance gets to people.”

I am also curious how he views the situation in Gaza compared to Xinjiang, where the Chinese government has detained more than 1mn Uyghurs in a persecution campaign. In his 2021 Senate confirmation hearing, he said China was committing “genocide” against the Uyghurs. Could the same conclusion not be drawn for the tens of thousands of innocent civilians in Gaza? Blinken simply says “No”.

Our food arrives. The kale salad looks big enough to feed a small embassy. The salmon is decorated with broccolini, carrots, bamboo shoots and mushrooms, surrounded by a red pepper coulis. 

Looking at the vast array of challenges in the world and China’s growing clout, does Washington still have the capacity to lead? Blinken says the US has no choice but to assert leadership, partly to avoid a vacuum being filled by a bad actor. But he says there’s a “greater premium than ever” on co-operating with other nations to create more leverage to respond to China. 

Critics say those efforts, however well intentioned, have had little impact on Beijing. But Blinken pushes back, citing the lectures he gets from Wang Yi, China’s foreign minister, as proof of success. 

“The last time I saw him, in Laos, he accused me half-jokingly, half-seriously of being on an encirclement tour, because I was going to Laos, Japan, the Philippines, Singapore and Mongolia on that trip,” he says. 

Blinken is making headway with his salad so I decide to refrain from asking why anyone would eat kale. My tarte Alsacienne, on the other hand, is lush. 

As Blinken has engaged with allies, he and other US cabinet secretaries have also stepped up engagement with China in the two years since Beijing flew a spy balloon over the US. Some critics describe the efforts as “zombie diplomacy” and say engaging with China is futile, but he says the US has a “responsibility” to talk to Beijing despite big differences.

I am curious if he thinks the engagement helped reduce the odds of a conflict with China over Taiwan? “Yes,” he says emphatically. “Certainly [of an] accidental [conflict] and possibly even deliberate.”

Blinken says allies had also been worried that US relations with China were veering out of control and wanted the countries to step up efforts to reduce the turbulence. One of the big questions as Trump prepares to take office is what stance he will take on China and in what fashion he will enlist US allies and partners to help. 

Noticing the lack of turbulence in my glass, the waiter asks if I would like a second. I reply in the affirmative, before looking towards Blinken who resists the temptation. “I’m still nursing this one.” 

Switching to the war in Ukraine, I ask how seriously the US viewed the nuclear sabre-rattling by Russian President Vladimir Putin. Biden often referred to the risk of escalation in deciding not to provide certain weapons that Kyiv had requested.  

Blinken says the US was “very concerned” because Putin seemed to be at least considering the nuclear option. “Even if the probability went from 5 to 15 per cent, when it comes to nuclear weapons, nothing is more serious.” 

But nuclear weapons was also one of the few issues where China may have helped the US, despite Beijing’s support for Russia. “We have reason to believe that China engaged Russia and said: ‘Don’t go there’,” he says. 

He adds that a similar dynamic may have occurred when the US told China that Putin was planning to put a nuclear weapon in space. 

The waiter has cleared our plates. But Blinken tells his nearby hovering aide that he needs a few minutes on Ukraine. He stresses that Putin has suffered a “strategic defeat” and that Nato is bigger and more resourced than ever. Without mentioning Trump’s criticism that Europe must do more, he says US allies have provided $150bn in addition to the $100bn from Washington. “I don’t think anyone can complain that they haven’t done their fair share.”

He also pushes back on suggestions that the Biden administration dragged its feet in providing weapons, saying it had to take into account a range of factors such as whether Ukraine could operate and maintain the systems.

We are approaching the end of our allotted time. Blinken is a huge music lover who plays guitar and posts his own songs on Spotify. Will this be his next act? “Given the love and respect I have for the American people, I should not inflict any more music on them,” he says.

Friends and critics like to say that Tony — as he is universally known in Washington — is “too nice”. What does he make of that? He pauses before saying a good diplomat must be able to listen especially when also being assertive, but then adds what could be a veiled warning to critics.

“I suspect that it’s also true that anyone who’s had the immense privilege of being given this responsibility as secretary of state has not been nice all the time.”

WSJ : Boeing Adds More Surprise Quality Checks in Its Factories

Boeing Adds More Surprise Quality Checks in Its Factories
Jet maker outlines moves taken to address concerns about production problems, a year after Alaska Airlines incident

Boeing BA -2.90%decrease; red down pointing triangle is conducting more surprise inspections at its factories as part of a broader plan to prevent manufacturing snafus like the one that led to a jet-panel blowout on an Alaska Air flight a year ago.

The jet maker outlined on Friday more than a dozen steps it has taken in recent months to tackle a manufacturing quality crisis that has forced Boeing to slow production and has put it under the microscope of federal regulators. Some of the steps have been previously reported.

Boeing restarted production at its 737 factory in December after a machinists strike stopped work for several months. The company is still producing far fewer 737 MAXs per month than it was in the months before the Alaska Airlines accident.

Among the new procedures are another layer of random quality checks where plane parts are commonly removed and then put back. In the case of the MAX involved in last January’s incident, workers failed to replace bolts needed to hold a door-plug in place. The plug had been opened to repair faulty rivets.

Other measures include inspecting fuselages made by supplier Spirit AeroSystems before they leave Spirit’s factory, additional worker training, confidentiality safeguards for employees who report problems and simplified instructions for building 737s.

Boeing in May submitted a plan to the Federal Aviation Administration that included performance goals that the agency will use to determine whether its quality-improvement efforts are succeeding.

The metrics will track defects, employee proficiency, supplier shortages, factory work done out of sequence and time spent fixing flaws introduced by Boeing and by suppliers. The company said it has set thresholds that would trigger corrective action for each criteria.

Boeing declined to give any measurements of its progress but said it is tracking the metrics closely.

The FAA’s chief, Mike Whitaker, said in a Thursday blog post that the agency would continue to watch Boeing closely, including weekly meetings with senior FAA leaders. “We’re actively monitoring the results and keeping a close eye on work at key Boeing facilities,” he wrote. “Our enhanced oversight is here to stay.”

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:
  • ASTL -5.7%
Other news:
  • FFIE -10.3% (to Announce FX Business Strategy Update and New Product Details on January 8, 2025 in Las Vegas)
  • PNTG -8.1% (names new chairman)
  • X -7.4% (President Biden will announce decision to block Nippon Steel acquisition of US Steel (X) today)
  • CVNA -3.9% (calls short allegations misleading and inaccurate, according to NY Post)
  • LAES -2.3% (filed prospectus supplement to the Registration Statement with the Commission on January 2)
  • NNBR -2.2% (announces new asset-based lending facility)
  • NEWT -1.7% ( discloses it completed the previously announced sale of its wholly owned subsidiary Newtek Technology Solutions to Paltalk (PALT))
  • BJRI -1.6% (enters into cooperation agreement with activist investor)
  • ITGR -0.9% (announces conversion period for convertible notes)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:
  • LFCR +5.3%, RGP +3.2%
Other news:
  • NUS +13.4% (completes strategic transaction of Mavely for $250 mln)
  • SLRN +10.9% (to Host Virtual Investor Event to Share new Phase 2 Data and Phase 3 Program Design for Subcutaneous Lonigutamab)
  • ETON +4.1% (advances its commitment to rare disease with the acquisition of Galzin)
  • PINE +3.7% (acquires property leased to Lowe's; also updates Q4 activity)
  • MRC +3.5% (authorizes $125 mln share repurchase program)
  • UDR +2.7% (names new COO; to name new CFO)
  • THS +2.2% (completes acquisition of Harris Tea; reiterates FY24 guidance)
  • DCBO +2% (CFO to step down)
  • OZK +2% (increases dividend)
  • WGS +1.7% (names new COO)
  • DKL +1.6% (announces closing of Gravity Water Midstream Acquisition)
  • GGAL +1.5% (ADS offering by selling shareholder)
  • DTI +1.5% (stock offering by selling shareholders)
  • RCKT +1.4% (extended the expiration date of the existing Master Repurchase Agreement)
  • BTBT +1.3% (is required to file periodic reports and registration statements on U.S. domestic issuer forms with the U.S. Securities and Exchange Commission as of Jan 1)
  • COR +1% (completes Retina Consultants acquisition, raises FY25 EPS guidance to reflect addition)
  • CNH +1% (positive Barron's article)

>>> Europe : Brokers Upgrades & Downgrades - 3rd of January 2025 V3(++)

>>> Up
* Argenx ADRs PT Raised to $775 from $665 at Guggenheim (++)
* Boyd Gaming Raised to Buy at Jefferies; PT $92
* Carlyle Group Raised to Outperform at Wolfe; PT $60
* Delek US Holdings Raised to Peerperform at Wolfe
* Devon Raised to Outperform at Wolfe; PT $45
* JPMorgan Raised to Outperform at Wolfe; PT $269
* Knorr-Bremse Raised to Hold at Hauck & Aufhaeuser; PT 65 euros (+)
* Matador Resources Raised to Outperform at Wolfe; PT $72
* Phillips 66 Raised to Outperform at Wolfe; PT $143
* Robert Half Inc Raised to Equal-Weight at Barclays
* Shell ADRs Raised to Outperform at Wolfe
* Steel Dynamics Raised to Outperform at BNPP Exane (+)
* Tesla PT Raised to $404 from $298 at Canaccord (+)
* UBS Raised to Outperform at BNPP Exane (+)

>>> Down
* BNY Mellon Cut to Peerperform at Wolfe
* Commercial Metals Cut to Neutral at BNPP Exane (+)
* Dermapharm Cut to Hold at mwb research AG (++)
* Imperial Oil Cut to Peerperform at Wolfe
* Lazard Inc Cut to Peerperform at Wolfe
* Nexstim Cut to Reduce at Inderes; PT 7 euros (++)
* Outokumpu Cut to Underperform at BNPP Exane (+)
* Sinch PT Cut to 38.30 kronor from 55 kronor at JPMorgan
* Voestalpine Cut to Neutral at BNPP Exane (+)

>>> Initiation
* Vaisala Rated New Buy at SEB Equities; PT 56 euros

>>> Call
* BofA Stock Indicator Is Notch Away From Flashing a ‘Sell’ Signal
* Boyd Gaming, Las Vegas Sands Raised at Jefferies; Red Rock Cut
* Morgan Stanley’s Shalett Sees Big Tech’s Reign in Peril in 2025
* Outokumpu Gets Sole Sell-Equivalent as BNP Flags Steel Headwinds (++)
* UBS Raised to Outperform at BNPP Exane on Buyback Potential (+)

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • SLRN +13%, NUS +12.8%, LFCR +7.4%, RDZN +4.4%, PINE +3.7%, WGS +3%, MRC +3%, UDR +2.7%, DCBO +2%, OZK +2%, GGAL +1.7%, DTI +1.5%, RCKT +1.4%, AVAV +1.3%, KTOS +1%
  • Gapping down:
    • PNTG -8.1%, FFIE -7.6%, ASTL -6.5%, CVNA -3.5%, LAES -3%, NNBR -2.2%, NEWT -1.7%, BJRI -1.6%, THS -1.1%, ITGR -0.9%, AVA -0.8%

WSJ : The Mystery of What’s Causing Young People’s Cancer Leads to the Gut

The Mystery of What’s Causing Young People’s Cancer Leads to the Gut
Obesity and alcohol consumption are first priorities for cancer researchers

Researchers have identified a focal point for the forces they suspect of driving up cancer cases in young people: the gut. They are searching people’s bodies and childhood histories for culprits.

Rates of gastrointestinal cancers among people under 50 are increasing across the globe. In the U.S., colorectal cancer is the leading cause of cancer death in men under 50 and second for women behind breast cancer. Each generation born since the 1950s has had higher risk than the one before.

“Everything you can think of that has been introduced in our society since really the 1960s, the post-World War II era, is a potential culprit,” said Dr. Marios Giannakis, a gastrointestinal oncologist at the Dana-Farber Cancer Institute in Boston.

Robert F. Kennedy Jr., President-elect Donald Trump’s pick for Health and Human Services secretary, has pointed to ultra-processed foods and chemicals in medicines and the environment. Cancer doctors share some of his suspicions about diet and exposure to contaminants such as microplastics, shards that make their way from packaging or clothing into our bodies through water and food. They are scrutinizing those and other potential hazards including “forever chemicals” and even light.

“We’re all concerned and want to do something quickly and act quickly, but we want to do so based on sound science,” said Dr. Andrew Chan, director of epidemiology at Mass General Cancer Center in Boston.

His team has found connections between early-onset colorectal cancer risk and obesity, consuming a lot of sugar-sweetened beverages and physical inactivity. But those studies don’t prove a direct cause.

Chan’s team is expanding its work to incorporate studies that track more people and analyze blood, tumor and stool samples. They will scour the results for potential carcinogens, then expose mice to them and see if cancers develop.

They plan to first focus on obesity and alcohol, said Yin Cao, a cancer epidemiologist from Washington University School of Medicine in St. Louis, who co-leads the work with Chan. Excessive alcohol use is linked with risk for early colorectal cancer, studies show, along with diets high in fat and added sugars. One study found people who ate more ultra-processed foods had a greater risk of precursors to colon cancer.

The group plans to test ways to lower risks, including whether prescribing weight-loss drugs including Ozempic can help prevent colorectal cancer. Another trial will assign some participants a healthier diet and study whether changes in the bacteria and pathogens in the gut, called the microbiome, affect their risk.

“There’s an interplay most likely between the things we eat, the bacteria in the gut, and what those bacteria produce,” said Dr. Jordan Kharofa, a gastrointestinal-cancer specialist at the University of Cincinnati Cancer Center, who isn’t involved in the study.

Kharofa and other researchers have uncovered links to diets high in sulfur, which results from consuming lots of liquor and processed meat and few fruits and vegetables. Gut bacteria can turn that sulfur into hydrogen sulfide, which could inflame the colon and raise cancer risk.

But some patients don’t fit that description at all.

“They are very, very health conscious, and then they come into your clinic and they’re 33 and they’ve got stage-four colon cancer,” said Dr. Marwan Fakih, a gastrointestinal oncologist at City of Hope in Duarte, Calif. “There’s no question we’re missing something.”

Some researchers are looking at antibiotics, which disrupt the microbiome. One California team analyzed medical records and failed to find a solid link to broad-spectrum antibiotics, but the early results suggest long-term use could increase risk.

At the University of California, Irvine, cancer biologist Selma Masri has shown in mice that changing the body’s internal clock, called the circadian rhythm, changes the diversity and abundance of gut bacteria. Some of the changes were linked to reduced levels of mucus that protects the gut lining from harmful bacteria.

She also found a link between disrupting the circadian clock and colorectal cancer. Masri and some other scientists think near-constant light from cellphones, laptops and other devices could throw off internal clocks and promote cancer growth by tampering with the immune system, metabolism and the microbiome.

“The amount of light pollution that’s gone up has been staggering,” Masri said.

Other researchers used drinking water to expose mice to a chemical called PFOS, used to make products resistant to stains and oil and part of the family of “forever chemicals” known as PFAS. They found changes in mice’s intestinal tissue that could increase their risk of developing colorectal cancer.

“We don’t have all the answers yet,” said Jane Figueiredo, a professor of medicine at Cedars-Sinai Medical Center in Los Angeles. “There might not be a magic bullet.”

WSJ : From M&A to AI, How CFOs Are Mapping Out the Year Ahead

From M&A to AI, How CFOs Are Mapping Out the Year Ahead
Corporate leaders are searching for greater efficiencies and implementing acquisition plans heading into 2025

Corporate chiefs spent much of the year concerned about inflation and the U.S. election and generally focused on how to wring more operational efficiencies out of their organizations. While 2025 brings more clarity ahead on many fronts, one constant remains: managing change.

Inflation will still be a focus in the year ahead, as consumers continue to watch their grocery bills, and companies weigh the potential inflationary effects of tariffs and their impact on trading partners including Canada, Mexico and China.

2025 will be a watershed year for artificial intelligence, as companies integrate generative AI into their workflows to a greater degree, including in investor relations departments and earnings preparation.

And with the new Trump administration set to take office, expectations for lower interest rates, measures to curb inflation and a pullback in regulatory scrutiny also have some chief financial officers adjusting their game plans and gearing up for “animal spirits” to provide a tailwind for M&A activity in the coming year.

The Wall Street Journal interviewed some top finance chiefs and analysts about their expectations and plans for the year ahead. These are the main themes CFOs are focusing on:

Leveraging AI
Investments in AI will continue to be a theme, said Don McGuire, the chief financial officer at payroll, HR and tax services company ADP. The company already has embedded various AI tools in its sales processes to help with call preparation, prospect prioritization and coaching, McGuire said.

For sales reps, AI tools can “whisper in their ears,” he said. “Things that people used to sit beside you and have a headset, now you can do those things with GenAI tools, and that helps you navigate.”

ADP also uses GenAI to prepare for investor days by going over the topics that dozens of clients will talk about and to outline key themes.

“The big difference with GenAI is you can literally go through tens of millions of interactions and really get deep summarization on what’s happening,” McGuire said.

“So it’s back to doing more with the same, or doing more with less.”

Adapting to tariffs
The threat of tariffs can be expected to ripple through business operations, affecting supply-chain costs and investment priorities, according to Michael Perica, CFO of Rimini Street, an enterprise-software provider.

Key considerations for CFOs will include how to adapt various financial strategies to support supply-chain disruptions. Companies also will need to allocate resources to absorb potential tariff expenses or redirect investments into partnerships with local suppliers to have greater flexibility, Perica said.

In some cases, business projects will be cut as a result of higher tariffs, he forecast.

“We are having conversations as [clients are] prepping for this and what feels like an inevitability, and we are absolutely partnering with folks to help them along and take a look and evaluate what’s a ‘nice-to-have’ project versus ‘got to have,’ ” he said.

Interest rates and the U.S. economy
While equities have surged since the election, the bond market has sold off, said Adam Barsky, the CFO at the New York Power Authority. So the Treasury yield curve is getting steeper, meaning that the cost of debt in the 7-10 year range of the curve has gone higher.

“Higher inflation expectations as well as higher federal debt and deficits are bearish for the bond market while there is uncertainty,” Barsky said. “Once we see what ultimately happens with tariffs, there will be a reset.”

On the U.S. economy, ADP’s McGuire said he sees continued tailwinds helping in terms of growth and the U.S. labor market.

“The U.S. economy does continue to be strong. Unemployment rates and employment participation rates are almost at where they were prepandemic. Things like new business formations, they came back, in the month of September. They continue to be at elevated levels from a historical perspective. The U.S. economy’s pretty resilient and will continue to be so for quite some time,” he said.

M&A
Dealmaking has already been picking up, with a steady rise in the volume of deals valued at over $1 billion during the past year, but even more seems likely in 2025 as the Trump administration reconsiders regulatory efforts.

“Between an incoming change administration and a different economic environment, from an industry perspective, you’re going to see that that kind of momentum will continue to 2025,” said David Dean, managing director for M&A consulting at consulting firm WTW.

Specific sectors to watch include life sciences, financial services and insurance, Dean said. GenAI also will have a role in M&A activity, according to Dean. “One dimension is companies that are trying to buy AI capabilities in one form or fashion,” he noted. Companies also will increasingly use AI to analyze and weigh potential deals, he said.

Whether M&A picks up in 2025 will depend on how much the Federal Reserve cuts rates, however, and exactly which regulatory changes Trump brings, according to Suzanne Kumar, an executive vice president in the global M&A and divestitures practice at consulting giant Bain & Co.

Deal activity in the venture-capital and private-equity sectors will also be a factor, she said. “We still have the sense that the market is idling, and we’re waiting for something to unlock momentum,” Kumar said.

Many buyers and sellers remain at odds when it comes to agreeing on a valuation. Higher rates have made financing more expensive than it was several years ago, and have lowered the projected enterprise value of potential targets. Meanwhile, stock-market valuations have risen over the past year, giving sellers confidence to ask for higher prices.

“What is happening is, if sellers have the option to wait, they are,” Kumar said.

>>> Fannie Mae: Treasury Department and Federal Housing Finance Agency amend pre

Fannie Mae: Treasury Department and Federal Housing Finance Agency amend preferred stock purchase agreements for Fannie Mae (FNMA) and Freddie Mac

"Further information on the key changes in the letter agreements and side letter is provided below:

Restoration of Consent Rights: As amended, the PSPAs restore Treasury's right to consent to a release of the GSEs from conservatorship, consistent with the terms of the PSPAs from 2008 to 2021, and provide Treasury with a right to consent to any discretionary action by the FHFA to commence a receivership of the GSEs.
Commitment to Conduct a Market Impact Assessment: As reflected in the side letter from FHFA to Treasury, prior to releasing the GSEs from conservatorship (except through receivership), FHFA will issue a public request for information outlining in detail one or more specific options for the termination of conservatorship and seek input on potential impacts of each option on the housing market and on the GSEs. This process will increase transparency to the public and key stakeholders and will help inform FHFA's and Treasury's decision making. FHFA will brief the Financial Stability Oversight Council on the public input, including regarding factors that could have potential impacts on U.S. financial stability. FHFA will then provide Treasury with a recommended approach to the termination of the conservatorship, reflecting the public input and assessing potential impacts on the housing market and the GSEs. Treasury will consult with the President prior to consenting to a release of the GSEs from conservatorship.
Technical Updates: The letter agreement updates several provisions of the PSPAs to make corrections or reflect existing practices, including making technical updates to the definitions of "Indebtedness" and "Mortgage Assets"; eliminating certain business-activity restrictions from the PSPAs that have been suspended since September 14, 2021; updating references to the Enterprise Regulatory Capital Framework to refer to that framework as amended from time to time; and updating notice provisions to allow for electronic communications between the parties."

FT : Joe Biden expected to block $15bn takeover of US Steel President set to ki

Joe Biden expected to block $15bn takeover of US Steel

President set to kill Nippon Steel’s bid in one of his final acts in office

President Joe Biden is expected to block a $15bn deal by Japan’s Nippon Steel to buy US Steel, ending months of frantic lobbying and delivering a setback to Washington’s relationship with its closest Asia-Pacific ally.

In one of his final actions in government, Biden — long opposed to the takeover — is expected to announce as soon as Friday his decision to kill the proposed acquisition of the iconic American steelmaker, according to two people familiar with the matter.

One of those people said the White House had yet to notify Nippon Steel about the decision.

The president’s expected move comes after an inter-agency investment screening review, known as the Committee on Foreign Investment in the US (Cfius), failed to reach consensus by a December 23 deadline on whether the acquisition posed a national security threat.

Two people close to the situation said Nippon Steel was likely to take legal action against the outgoing president’s ruling.

One person said such an action could, during the discovery process, reveal the extent to which the decision had been led by politics rather than national security concerns. The process would also expose the limitations of the Cfius process and its vulnerability to political interests.

Nippon Steel declined to comment.

President-elect Donald Trump had also threatened to quash the deal and vowed to protect the Pittsburgh-based company through a mix of tariffs and tax incentives.

The year-long saga’s conclusion marks the failure of an audacious gambit by the Japanese group that soon morphed into a sensitive political issue in an election year. It also represents a significant departure from the US’s long-standing open investment environment.

Biden’s decision risks undercutting four years of work to reassure allies such as Japan of their special relationship with the US amid strategic competition with China and a shift towards protectionism, support for trade unions and an “America first” sentiment in US politics.

US and Japanese government officials fear broader ramifications for investment and M&A by Japan and other partners in America and implications for the solidity of the US-Japan alliance.

Takahiro Mori, vice-president at Nippon Steel, spearheaded last-ditch efforts by the Japanese steelmaker to win over government officials and union members in Washington and Pennsylvania.

Those efforts included a new proposal this week that offered the government a veto over any reductions in steelmaking capacity at the majority of Nippon Steel’s plants in the US, adding to an array of other assurances on jobs and investment.

The gesture followed concerns from Cfius that US Steel could lower domestic steel production under Japanese ownership, affecting industries of national importance.

However, those moves were of little avail, even as some of Biden’s senior advisers tried to talk him out of obstructing the deal.

Its death marks a victory for Katherine Tai, the US trade representative, and David McCall, president of the United Steelworkers union, who were the deal’s two staunchest opponents.