White House preparing for trade crackdown - http://politi.co/2EqUleP
As Trump returns to a key campaign pledge, upcoming closed-door meetings will shed light on how aggressive the president plans to be.
President Donald Trump’s administration is preparing to unveil an aggressive trade crackdown in the coming weeks that is likely to include new tariffs aimed at countering China’s and other economic competitors’ alleged unfair trade practices, according to three administration officials.
Trump is tentatively scheduled to meet with Cabinet secretaries and senior advisers as soon as this week to begin finalizing decisions on a slew of pending trade fights involving everything from imports of steel and solar panels to Chinese policies regarding intellectual property, according to one of the administration officials.
Senior aides are also laying plans to use Trump’s State of the Union address at the end of the month to flesh out the president’s trade vision and potentially preview a more aggressive posture toward China, according to the official.
Aides stressed that the specifics are still in flux, but multiple officials told POLITICO that internal conversations have moved beyond the basic question of whether Trump should take tough trade steps and are now focused on what precise measures the president should impose.
By turning to trade, Trump is returning to a key campaign pledge that many advisers worry he did not deliver on in his first year in office. And with limited prospects for passing legislation, trade is one of a handful of major policy areas on which the president can act without having to rely on Congress.
Aides said the upcoming closed-door trade meetings with the president will help shed more light on his thinking. Trump’s senior advisers have been fighting behind the scenes for months over the direction of his trade agenda, but officials on both sides of the debate said it remained unclear exactly how aggressive the president was prepared to be.
One official said the president is “undecided and could come out any number of ways.” Still, it is “very likely” that the president will greenlight tariffs of some kind in the coming weeks, the official added, a move that could prompt severe blowback from targeted countries.
Trump has repeatedly expressed frustration to his aides that his administration hasn’t taken more aggressive trade steps, and he has encouraged his advisers to present him with options that include harsh tariffs on Chinese imports, according to officials.
The president outlined his thinking on trade during meetings with Republican congressional leaders at Camp David this weekend. Some Republican lawmakers cautioned against going too far on trade, raising concerns about pulling out of the North American Free Trade Agreement, according to people familiar with the Camp David meetings. GOP senators have made similar arguments during recent meetings with the president at the White House.
A White House spokeswoman did not respond to a request for comment.
Amid widespread concern that the president’s impulsive decision-making could spark a trade war, Trump’s advisers have been organizing weekly meetings since last spring to weigh their options — including where to set any tariffs and import quotas and how much to single out China — in the various outstanding trade cases in the hopes of presenting the president with well-researched policy proposals.
With an overhaul of the tax code complete, the Tuesday meetings, led by White House staff secretary Rob Porter, have been heating up in recent weeks, with key staffers being tasked with drafting memos and conducting economic analyses of key policy options, according to people who participate in the huddles.
The meetings regularly include key Cabinet secretaries and senior administration officials, including Commerce Secretary Wilbur Ross, Agriculture Secretary Sonny Perdue, Labor Secretary Alexander Acosta, Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, trade adviser Peter Navarro, Council of Economic Advisers chairman Kevin Hassett and National Economic Council director Gary Cohn.
Cohn, according to two administration officials, wants to stay in the White House at least long enough to help shepherd the trade decisions to the finish line.
Trump’s advisers are deeply divided on trade, with Cohn and others calling for a more moderate, targeted approach, and others, like Navarro, advocating for sweeping actions. In the past, the meetings have sometimes turned into shouting matches, but aides said they have been less tense over the past couple of months.
Trump spent much of the presidential campaign promising to take a tough stance on trade, but some of the president’s hard-line allies have privately worried that he hasn’t done enough, even though he pulled the U.S. out of the Trans-Pacific Partnership and is renegotiating both the North American Free Trade Agreement and a free trade agreement with South Korea. The president’s former chief strategist and now nemesis Steve Bannon and other China hawks have called on him to impose stiff tariffs on the Asian superpower.
After a year of bluster on trade, a series of deadlines will force Trump to decide just how aggressively he is willing to use U.S. trade remedy laws, given the likelihood of retaliation from China, the European Union and other trade partners.
The pending trade actions are controversial, with the potential to cause serious friction with U.S. trading partners and raise questions about Trump's commitment to the rules-based multilateral trading system. But the options are also legal under U.S. trade law, and the amount of any blowback will depend on how restrictive any measure imposed by Trump is and how many countries are hit.
The first major trade action of 2018 is expected very soon, according to aides. Trump faces statutory deadlines to act by late January and early February in two cases involving solar products and washing machines under Section 201 of the 1974 Trade Expansion Act. The solar decision isn’t expected this week but could come the week after, aides said.
In the solar and washing machine cases, the U.S. International Trade Commission has already determined that increased imports are “a substantial cause of serious injury to the domestic industry.” That gives Trump the legal basis to impose temporary import restrictions to help the affected companies recover.
All four ITC commissioners recommended four years of relief — which could include tariffs or import quotas — in the solar case brought by Suniva and SolarWorld, but they disagreed on how restrictive it should be.
The commissioners unanimously recommended three years of relief in the washing machine case brought by Whirlpool and later joined by General Electric. All four commissioners also recommended setting a 50 percent tariff on imports of more than 1.2 million units. Two commissioners proposed additional lower tariffs on imports within the 1.2-million-unit quota, while two others said they were not needed.
Trump does not have to follow those recommendations and could set tariffs or quotas wherever he wants, within legal limits. He also could decide to exclude some countries from whatever restrictions he imposes if he wants to specifically target China for punishment.
Trump is also facing upcoming decisions in two cases regarding whether current volumes of steel and aluminum imports harm national security by threatening the future of both domestic industries. Ross, the commerce secretary, must formally transmit his recommendations to Trump by Jan. 15 in the steel case and Jan. 22 in the aluminum case.
Once Trump receives the reports, he has 90 days to decide what, if any, action to take. If the Commerce Department finds a national security threat, Trump has a great deal of discretion over what kind of restrictions to impose.
Broad restrictions would almost certainly be met with retaliation and potentially challenged at the World Trade Organization. It could also trigger copycat actions, with other countries closing their markets to American goods in the name of national security.
In a separate case, Trump has until August to make up his mind in an investigation examining Chinese policies regarding intellectual property, but he is expected to make a decision early this year.
Lighthizer, the U.S. trade representative, is widely expected to find that Chinese practices have forced American companies to turn over valuable technology and reduced the value of their intellectual property. However, there is some uncertainty about how soon he will propose specific actions against China.
The extent of any action taken by Trump could be determined by the amount of “damages” Lighthizer uncovers in his investigation. The higher the damages, the greater the amount of retaliation Trump could impose in terms of tariff hikes on Chinese goods or restricting Chinese companies from doing business in certain sectors of the U.S. economy.
Lighthizer has also not ruled out bringing action against China at the World Trade Organization if his investigation uncovers what the United States believes to be violations of WTO rules
MergerMaarket
Regal/Cineworld: rival bid prospects weakened by hurdles
09 JAN 2018
Potential rivals could face hurdles to interrupt Cineworld’s [LON:CINE] proposed takeover of Regal Entertainment Group [NYSE:RGC], a source familiar with the situation and two sector bankers said.
While Cineworld has been considered a possible takeover target in the past, potential rivals could face regulatory, financing, and shareholder hurdles to bid now, they said.
Cineworld announced plans to acquire Regal for USD 3.6bn in cash last month. Cineworld plans to fund the USD 5.8bn enterprise value deal with USD 4bn of new debt facilities and proceeds of a rights issue, which will raise about GBP 1.7bn (USD 2.3bn).
The acquirer’s largest shareholder could be an obstacle to a rival bid, the source familiar said. Global City Holdings [WSE:GCH], controlled by Israel's Greidinger family, has been invested in the company for a while and is keen to remain involved in the business, the source familiar said. Global City is fully subscribed to the proposed equity raise.
Global City declined to comment.
Potential bidders for London-based Cineworld might be more likely to target UK-based cinema chain Vue Internationalas it considers a sale or listing in the coming months, the source familiar said. This news service previously reported Cineworld and Vue have similar market positions in the UK, though Cineworld’s exposure to Eastern Europe was said to provide a greater growth profile.
Press reports have since valued Vue between GBP 1.6bn and GBP 2bn in a listing or sale; Cineworld currently trades near a GBP 1.6bn market cap after shares have fallen 12% since confirmation of the equity raise in November. Cineworld would have to pay Regal a termination fee of USD 20m in the event of recommending a superior proposal to the tabled deal, while Global City would have to pay USD 75m in the same circumstance.
Added to this, logical Cineworld bidders, including Vue Entertainment, owned by Omers Ventures and Aimco, and AMC Entertainment Holdings [NYSE:AMC], which owns Odeon, could face competition concerns, the first banker noted.
Cineworld operates 232 cinemas with 2,227 screens across Britain and Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel, while Vue operates 211 cinema sites, 84 of which are in the UK, 36 in Italy, 33 in Poland, 30 in Germany and 21 in the Netherlands. Odeon operates 243 theatres in the UK, Ireland, Italy, Portugal, Germany, Austria, and Spain.
Vue could buy some of Cineworld’s asset but not all, the first banker said. Added to competition concerns, AMC would struggle to finance an offer as it is more leveraged than Cineworld, he said.
AMC had a net debt/EBITDA ratio of 5.6x and USD 260m in cash as of September 2017.
Other potential bidders for Cineworld could include US operator Cinemark [NYSE:CNK], but as of now it has not shown interest in acquiring European assets, the first banker said.
Estimated synergies from any other combination in the cinema space could be limited, the second banker said. It is challenging to make savings as costs are calculated at an each individual site rather than on a country basis, he said. Cineworld said it expects to have annual synergies at USD 100 million, including cost-cutting of USD 60 million, with additional restructuring benefits of USD 50 million a year.
Certain investors have voiced concerns about Cineworld’s decision to acquire Regal, the first banker said. The move lacks strategic rationale mainly because the US market is very mature and competitive. The lack of growth opportunity has spurred US players to expand in Europe, he said, mentioning AMC’s acquisition of Odeon in 2016 as an example.
Last month, this news service reported at least some shareholders’ concerns about leverage levels undertaken to finance the deal had been allayed. Earnings accretion from the acquisition could help mitigate the added leverage, while the top investor’s commitment to the equity raise as well as a portion of the break-fee had bolstered confidence in the transaction, the shareholders said.
Cineworld declined to comment. Regal did not return a request for comment.
Drug Industry Isn’t Giving Up on Alzheimer’s
Despite fresh setbacks, many drugmakers, scientists keep pursuing treatments, with some focusing on earlier intervention
Efforts to find treatments for Alzheimer’s disease suffered blows in recent days, but many companies, scientists and investors are still optimistic that they can find a way to treat the memory-robbing disease, which affects roughly 5.5 million Americans.
Axovant Sciences Ltd. AXON -56.98% on Monday shuttered development for a once-promising Alzheimer’s drug, an announcement that came days after Pfizer Inc. PFE -1.11% said it was giving up on the space entirely.
“The mood is definitely negative on anything near-term, [but] there continues to be interest in this space,” said Mark Ginestro, a principal for health-care and life sciences strategy at KPMG in San Francisco. “It’s too big of a market to ignore. People are going to continue to go after it despite the roadblocks.”
Roche Holding AG RHHBY -1.05% , Biogen Inc., BIIB -3.75% Eli Lilly LLY -0.51% & Co. and others are still developing therapies. Startups with neuroscience pipelines, like Denali Therapeutics Inc. DNLI -1.90% and Verge Genomics, are attracting funding, and so are early-stage research projects.
During the fiscal year 2017, the National Institutes of Health will have poured an estimated $1.35 billion into Alzheimer’s disease, almost triple its investment for fiscal year 2013. And Pfizer said it had plans to establish a corporate venture fund focused on neuroscience projects.
Sales of successful treatments for the disorder could amount to billions of dollars as demand for therapies increase due to an aging population. Analysts had predicted that annual sales for Axovant’s drug, known as intepirdine, could have topped $2 billion.
“It’s too early to give up,” said Paul Aisen, the director of the University of Southern California’s Alzheimer’s Therapeutic Research Institute in San Diego. “We’re actually on the precipice of major advances. I would not discount all the disappointments over the years, but I believe we’re in good shape.”
The recent failures that have plagued the pharmaceutical industry and brewed much frustration among investors have been the result of a suboptimal approach to drug development, Dr. Aisen said. For years, the industry has focused on dementia, which happens at the latest stages of the disease, when reversing the damage done to the brain is difficult, if not impossible, he said.
Many of the drugs that have failed in large clinical trials have targeted beta amyloid, the sticky plaque in the brains of Alzheimer’s patients that many scientists believe is a leading cause of the disease. But attacking these plaques in the brain didn’t affect cognition.
Companies and researchers pursuing treatments are still pursuing amyloid in many cases, but they are beginning to focus on treating patients earlier in the disease process, before they show memory deficits or cognitive decline. New neuroimaging technologies, genetics and more sensitive cognitive tests are also helping clinicians to better understand how the disease progresses, and to potentially identify patients who could benefit from treatment before cognitive symptoms appear.
In some cases, patients are identified based on genetic testing that suggests they might be at a higher risk of developing the disease. Others have amyloid plaques, but don’t yet have cognitive deficits.
Lilly’s amyloid-targeted drug, solanezumab, failed to benefit patients in several large and costly studies in patients with mild to moderate disease. After the failure of one study in late 2016, Lilly said it had spent nearly $1 billion on the experimental drug, and about $3 billion total on Alzheimer’s research over the past three decades.
But Lilly continues to test solanezumab in other human studies, including one funded by the U.S. government testing the drug in at-risk patients who don’t yet have outward signs of the disease.
Merck & Co. last year stopped a clinical trial of an experimental Alzheimer’s drug, verubecestat, because it wasn’t helping patients with mild to moderate forms of the disease. The drug, a BACE inhibitor, aimed to prevent an enzyme from producing the sticky amyloid.
Merck said it would continue a separate study of verubecestat in patients at an earlier stage of Alzheimer’s known as prodromal. Results from that study are expected in 2019.
“The question is, how early is early enough?” Roger Perlmutter, Merck’s head of research and development, said in an interview. “None of this is easy…we recognize this is one of the hardest drug-development areas,” he said, adding, “we simply do not believe it is acceptable to stand on the sidelines.”
Biogen is currently testing another antibody that goes after amyloid possibly by stimulating microglia, the brain’s scavenger cells, to chew up the plaques. In a recent study, higher doses of the drug, known as aducanumab, cleared more plaques, but adverse effects were more common. The drug slowed cognitive decline in patients with early Alzheimer’s. Some scientists say that the drug could cause inflammation in the long-term, which would be detrimental to brain health. Results for larger trials are expected in 2020.
Merck and other companies have also focused attacks on a different protein, tau, that forms twisted proteins in the brains of Alzheimer’s patients.
That approach suffered disappointment in 2016, when a closely watched trial of a tau-targeted drug developed by TauRx Pharmaceuticals Ltd. failed to improve patients’ cognition or daily functioning in a clinical trial.
Even if companies can figure out how to reach patients earlier in the process, success may not be as simple as targeting one protein or another, scientists say. Some believe an interaction between beta amyloid and tau plays a central role in the disease. Others think there are many possible triggers, including some beyond beta amyloid or tau.
Combination therapies targeting several Alzheimer’s-related proteins, like amyloid and tau, could be more fruitful. Biogen and Lilly said such multifaceted treatments are likely the future of Alzheimer’s therapeutics.
Axovant’s drug, intepirdine, inhibited signaling pathways in the brain. Scientists thought that it could help with cognitive decline. Other attempts at developing similar drugs have also failed.
Some companies are looking for treatments in the cutting-edge field of gene therapy, which introduces beneficial genes to the body to help fight disease.
Johnson & Johnson last week announced a collaboration with the University of Pennsylvania aimed at inserting certain genes into harmless viruses that would carry the genes to the cells. The genes would then instruct the cells to secrete beneficial antibodies that would fight Alzheimer’s.
Once injected into the body, the viruses ideally would be able to cross the blood-brain barrier, which separates brain tissue from the rest of the body, Eric Schaeffer, senior director of neuroscience innovation at Johnson & Johnson, said in an interview. The research is at an early stage and could be four or five years away from human studies, he said.
Denali Therapeutics, a San Francisco-based biotech company that has multiple Alzheimer’s treatments in its pipeline, went public last month. The company has three Alzheimer’s drugs in preclinical development targeting tau and other mechanisms, according to its website. Denali also announced last week it is working with Japan’s Takeda Pharmaceutical Co. to focus on neurodegenerative diseases like Alzheimer’s.
Given the huge unmet need in Alzheimer’s, there are incentives to try to make headway in the market, according to Ritu Baral, senior biotech analyst for Cowen. Big pharmaceutical companies tend to be more conservative, she said.
“Small to midcap biotechs are inherently [willing to be] riskier,” she said. “Everything is an investment for the future.”
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US Equities closed slightly higher. The market struggled for direction following a quiet weekend and ahead of the fourth quarter earnings season, which will kick off on Friday with reports from JPMorgan Chase (JPM 108.50, +0.16) and Wells Fargo (WFC 62.04, -0.71). Stocks opened the session slightly lower and then rose slowly throughout the day. Nine of eleven sectors finished in positive territory. The lightly-weighted utilities (+0.9%) and real estate (+0.6%) sectors were the top performers, bouncing back from poor showings last week, while the top-weighted technology group (+0.4%) extended its lead for the year; the tech space is up 4.6% year to date. energy sector (+0.6%), WTI+0,4% @ $61.69. health care (-0.4%) and financials (-0.1%) spaces declined. GPRO -12.8% after profit warning. US After Hours BGFV -18.5%, SHLM +5.7%, STX +2.2% following earnings/guidance. Asian equities are generally higher as US indices ended mostly positive. Nikkei and USD/JPY pare gains amid BoJ reduction of purchases of longer dated JGBs in daily operation. Japan Finance Min Aso said equities are rising at fast pace on global economic recovery. Samsung Electronics declines as Q4 guidance below consensus. In talks, North Korea and South Korea said to reach agreement on Winter Olympics, but other areas less clear.
Nikkei +0.57% Hang Seng +0.24% CSI +0.64% Shanghai +0.10% Shenzen +0.25%
Eur$ 1.1957 CNH 6.5042 CNY 6.5044 JPY 112.71 GBP 1.3566 CHF 0.9782 RUB 57.0576 WTI$ 62.16 +0.70%
S&P -0.05% EuroStoxx -0.09% Dax -0.03% FTSE +0.20% SMI +0.01%
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Ablynx attracts interest from Boehringer Ingelheim, Abbvie, Merck&Co, Merck KGaA, Sanofi, Galapagos
Boehringer Ingelheim, Abbvie, Merck&Co, Merck KGaA, Sanofi and Galapagos might also be interested in Ablynx, reported Belgian daily De Tijd based on unnamed sources.
Biotech company Ablynx rejected the take over bid by Novo Nordisk, but according to the report, it is possible Novo will put in a higher offer. The companies listed in the article already cooperate with Ablynx. They know the people and technology and might want to prevent the knowledge from coming into a competitor's hands, the report said.
Link to original source (De Tijd)