EU leaders oppose US protectionism

EU leaders say they will respond firmly to US protectionism and have plans to introduce a law for screening foreign investments, according to Reuters.

Leaders of EU Member States met in Brussels for a summit that included trade issues and immigration. The consensus was that US tariffs imposed on imports of steel and aluminium were unjustified and should be challenged by the European Commission, with duties levied against US products in the meantime.

In a statement, the leaders said: “The EU must respond to all actions of a clear protectionist nature.”

EU leaders said they would continue to seek trade agreements with partners, following the recent provisional deals with Japan and Mexico. Similar free trade deals are sought with the Mercosur group (Argentina, Brazil, Paraguay and Uruguay) and with Australia and New Zealand.

There was also acknowledgement that the EU wished to protect its own key industries and retain technology to guard against unfair competition. China has been criticised for unfair trade practices such as dumping and state subsidy.

The EU leaders called for a legislative proposal on scrutiny of foreign investments within the bloc, to address concern about Chinese acquisitions in Europe.

EU announces retaliatory tariffs on US exports

The European Union has announced a range of tariffs to be levied against US exports, according to BBC News.

The move is in retaliation to US tariffs on steel and aluminium revealed earlier in June. The EU tariffs target US products such as blue jeans, motorbikes and bourbon whiskey. Trade Commissioner Cecilia Malmstrom acknowledged that the EU “did not want to be in this position.”

The tariffs, which also target cranberries, orange juice, sweetcorn and peanut butter, responds to the 25% tariffs on steel and 10% on aluminium. President Trump has justified the tariffs on security grounds.

South Korea, Australia, Argentina and Brazil have agreed to impose voluntary limits on exports to the US while Canada has unveiled its own retaliatory measures. Mexico has also imposed tariffs on American products such as steel, pork and bourbon.

The EU tariffs will impact around €2.8bn of US goods, whereas the US tariffs impact €6.4bn of EU exports. The EU tariffs will be cancelled if the US tariffs are removed.

The EU selected products to have the greatest political impact. Bourbon whiskey is a prime product of Kentucky, the state of Senate majority leader Mitch McConnell. Orange juice is important for Florida, a key swing state.

IMF director Christine Lagarde said a trade war would result in “losers on both sides” and could have a “serious” impact.

Comcast tops 21st Century Fox’s Sky bid

US cable TV firm Comcast has bid £22bn for Sky in a move that threatens media giant Rupert Murdoch’s attempts to take over the pay-TV group, according to BBC News.

Murdoch’s 21st Century Fox is seeking to take full control of Sky, with a £19bn bid for the 61% of shares it does not own. Sky has withdrawn its recommendation to shareholders for that bid to proceed following the Comcast offer.

Sky shares have risen 3.4% to £13.52 on the FTSE 100 following news of the bid.

Comcast is a vast US cable TV company that owns NBC and Universal Pictures. Its bid is around 16% higher than Fox’s offer of £10.75 a share.

Chief executive Brian Roberts said: “We have long believed Sky is an outstanding company and a great fit with Comcast. Sky has a strong business, excellent customer loyalty, and a valued brand.”

Analyst George Salmon of Hargreaves Lansdown said that the Comcast bid raised the possibility of a bidding war.

Salmon said: “Part of the reason the value of the deal is significantly higher than what Fox originally put forward is that Sky has since secured three more years of rights to Premier League football at a reduced cost. As far as the value of Sky goes, that’s a game-changer.”

Comcast is working with Sky’s directors to see if its deal will be recommended to shareholders. It has said it plans to agree several legally binding commitments in the deal, including maintaining the company headquarters in Osterley, London for at least five years.

HSBC settles US private Libor claims

HSBC Holdings Plc has agreed to pay $100m (£71.3m) to settle private litigation over the Libor rigging scandal in the US, according to Reuters.

The bank is the fourth major company to settle claims that employees conspired to manipulate the Libor benchmark interest rate. The settlement is subject to court approval and was filed at the US District Court in Manhattan, New York.

HSBC has denied wrongdoing in the affair, but said it had settled the claims to reduce risk and avoid the cost and distraction of ongoing litigation.

The London Interbank Offered Rate or Libor is used to set rates on a vast array of products including credit cards, mortgages, student loans and other transactions. It sets the cost of banks borrowing from another.

Bankers were accused of fixing the rate by investors including the city of Baltimore and Yale University. The UK Financial Conduct Authority has said Libor will be phased out by the end of 2021.

China announces tariff plans for US soybeans, cars and orange juice

China has outlined plans to increase import tariffs on American goods in response to US plans to levy higher taxes on Chinese imports, according to BBC News.

Soybeans, cars and orange juice are among the 106 products Beijing indicated would be subject to a 25% tariff. Washington recently said 1,300 Chinese products would be hit with a 25% tariff on import, including televisions and motorcycles.

Earlier this year an initial wave of tariffs was announced by the US to target aluminium and steel imports. None of the tariffs have yet come into force.

US President Donald Trump claimed the tariffs were not intended to start a trade war between the US and China, but that the move was a bid to reduce the US trade deficit and that China had been sanctioning unfair intellectual property practices.

The Chinese government says it ‘strongly condemns and firmly opposes’ the proposed US tariffs, which it says are ‘unilateralistic and protectionist.’

The products targeted by Chinese tariffs were worth $50bn in 2017, according to the Chinese commerce ministry. They include chemicals, aircraft parts, corn products, whiskey, cigars, some types of beef, lubricants, propane, SUVs and some electric vehicles.

Economists warned the US President that increasing tariffs on Chinese imports was likely to provoke retaliation which could lead to higher prices for US consumers. Around 18.2% of all Chinese exports in 2016 went to the US.

Fed reveals interest rate rise

The US central bank has announced an interest rate rise to a target range of 1.5% to 1.75%, according to BBC News.

The Federal Reserve said the 0.25% change was being made to reflect a strengthened economic outlook. It was also hinted that interest rates would be raised twice more this year, while forecasts were also raised for increases in 2019.

The chairman of the Federal Reserve, Jerome ‘Jay’ Powell also expressed concern about trade tensions following the US government’s announcement of tariffs on steel and aluminium entering the US and the threat of sanctions targeted at China.

At a press conference, Powell said bankers and business leaders see the trade tensions as “a risk to the outlook.”

Members of the Federal Open Markets Committee, the body that votes on rate changes, forecast that the US economy will grow by 2.7% in 2018, above the 2.5% predicted in December 2017.

Members also expect higher interest rates in 2019 and 2020 than was the case in December 2017, which Brian Coulton of Fitch Ratings described as a “firming up of the future trajectory of policy tightening.”

Following the ultra-low interest rates put in place following the financial crisis, the Federal Reserve has been slowly increasing rates since 2015. The challenge for the central bank is to balance low unemployment with the potential for higher inflation.

EU considers tariffs on US exports

The EU is set to retaliate against US tariffs on steel imports by imposing import duties on US products including peanut butter, bourbon whisky, orange juice, cranberries, steel and industrial products.

EU trade commissioner Cecilia Malmstrom said the measures were intended to respond to US tariffs, which threaten jobs in the EU steel industry. US President Donald Trump has said EU rules make it ‘impossible’ for US firms to trade with European member states.

Malmstrom said she had ‘serious doubt’ about the US justification for steel and aluminium tariffs. It is claimed that US national security is threatened and therefore 25% tariffs on steel and 10% on aluminium are reasonable.

The trade commissioner confirmed that proceedings to challenge the tariffs would be initiated through the World Trade Organisation.

Malmstrom said: “From what we understand, the motivation of the US is an economic safeguard measure in disguise, not a national security measure. We are discussing different US products on which different import tariffs can be imposed.”

According to Malmstrom, global overcapacity is the root cause of problems with the global steel and aluminium markets, which are supported by “massive state subsidies… under non-market conditions.”

Why DNC Hack Should Serve as a Harsh Lesson for Businesses​

The recent revelation that Russia may have hacked into the Democratic National Committee’s (DNC) email database has brought the topic of Advanced Persistent Threats (ATPs) back to the forefront of cyber security experts around the business world.

According to a report by on Reuters, U.S. Democratic presidential candidate Hillary Clinton has stated that Russian intelligence services were behind a sophisticated attack that saw thousands of internal emails stolen. Although these accusations have been refuted by Russian officials, the issue remains unresolved which is significant for two reasons.

Firstly, even if the Russian’s aren’t involved as Israel’s intelligence forces suggest, the latest hack shows the danger ATPs can pose to powerful government agencies. Secondly, if a major entity like the DNC has trouble dealing with ATPs, then businesses around the world need to take the threat extremely seriously.

Given the complexity of an ATP, big businesses are usually the target for hackers and any company that falls victim to an attack can find their bottom-line in serious trouble. As outlined by the Ponemon Institute’s 2015 Cost of Data Breach Study, the average financial impact of a breach is now $3.79 million. Surveying 350 companies in 11 countries, the study found that the cost of an attack had jumped 23% in two years.

A Three-Stage Threat

Analysing the basics of an Advanced Persistent Threat (ATP), Imperva Incapsula breaks down a successful attack into three stages:

  • Network infiltration
  • Expansion of the attacker’s presence
  • Extraction of amassed data

Using a combination of malicious uploads (such as SQL injections), Trojans and backdoor shells and then DDoS attacks (to act as a distraction), hackers can enter and extract data from a target site virtually undetected. Indeed, one of the reasons ATPs are so effective is that the distraction tactics often mean the real threat isn’t discovered until it’s too late.

By this point, the victim is forced to piece together a myriad of information in order to track it back to the attacker. Indeed, this is something the DNC is now facing. Even if Russian forces had something to do with the incident, it will take many weeks, and potentially, months, for the DNC’s security experts to determine the source of the email hack.

WAFs More Important than Ever

While political parties and governments will have their own means of protecting their servers, businesses wanting to avoid a similar fate should use web application firewalls (WAFs) to bolster their defences. When used in conjunction with security hardware, WAFs provide a vital layer of protection against ATPs.

By using traffic monitoring to guard against SQL injections, offering provisions for access control (restricting employee’s system access for their own protection) and more, WAFs can help protect businesses from ATPs. Of course, if the DNC can fall victim to advanced hackers, anyone can. Indeed, the DNC’s email breach should serve as a warning to all business out there, regardless of how secure they believe their systems are.

UK engineering consultant WS Atkins considers selling North American unit

UK engineering consultancy WS Atkins Plc (LON:ATK) is looking into strategic alternatives for its loss-making North American construction unit Peter Brown and expects to be clear about its future this summer, finance director Heath Drewett told Reuters.

The options Atkins is looking at include a closure or a disposal of the operation. An exit would be part of a plan to concentrate on more profitable activities in the engineering and design consultancy field.

In a trading statement, the company said that Peter Brown is still experiencing soft market conditions, but expects an improved margin performance in the second half. The construction management business is seen to post a loss of some GBP6m (USD9.2m/EUR7m) for the fiscal year to 31 March 2013 due to additional costs in closing out its legacy contracts.

However, Atkins anticipates to report annual results slightly ahead of previous projections thanks to the strength of its UK operations. According to Drewett, the company is also considering some acquisition opportunities in the US and the Asia-Pacific, even though it prefers to grow organically. It targets aerospace and defence as well as energy businesses.

Global economy faces continued sluggish growth, according to Dun & Bradstreet

US commercial information provider Dun & Bradstreet (NYSE: DNB) said it has published a five-year forecast of the global economy predicting continued but sluggish growth against challenging headwinds, differing from region to region.

D&B said that its Global Economic Outlook to 2017, based on a study and analysis of its proprietary business data and external data sources, provides insights on several contributing factors to real GDP growth for more 132 countries, representing seven major geographic areas.

According to D&B concerns over a double-dip recession in the US are unfounded despite the fiscal policy challenges. The significant improvement in the health of the corporate sector in combination with moderate consumer spending growth are offsetting austerity that will be required at all levels of government.

Growth remains constrained but the recovery continues to gradually gain momentum.

The outlook for European economies remains troubling. The immediate crisis in the Eurozone has subsided, but the underlying challenges in the region remain substantial.

While attention remains focused on fiscal and monetary policy D&B remains concerned about the competitiveness of European economies and the ability of their business sector to offset fiscal restraint. The outlook for the region remains unsettled with substantial downside risk given policy uncertainty.

In 2012, three years into the recovery, D&B downgraded 32 countries in its country risk analysis–the third highest number of downgrades in one calendar year–while only upgrading seven.

Risk ratings for 56 of the 132 countries are worse than in October 2009 when the recovery started, while only 23 are better.