That’s why The Edge (the leading source for under-performing companies for activist involvement, Special Situations and Spinoffs) believes that an activist should move in to dominate and improve Nokia (NYSE: NOK) before private equity gets its hands on the Finnish firm in a hostile takeover bid.
QCOM currently has a cash reserve of $4 billion and may provide the solution to NOK’s problems by teaming up and becoming the biggest US 5G player.
Trump’s right hand man, Senator John Cornyn (Republican Senate Majority Whip), introduced the Secure 5G and Beyond Act of 2020 on March 27, 2019.
On February 6, 2020, US Attorney General William Barr called China the United States’ “top geopolitical adversary” at the Center for Strategic and International Studies’ China Initiative conference.
He said, “If China establishes full dominance over 5G… from a national security standpoint, if the industrial internet becomes dependent on 5G technology, China would have the ability to shut countries off from technologies and equipment upon which their consumers and industries depend.”
Then, on March 23, 2020, President Trump signed the Act, requiring him to take control and develop an implementation plan and security strategy for US 5G and other next generation telecommunications systems and infrastructure.
Now, as Nokia faces a foe and has brought Citi in to defend itself after being caught in the crosshairs of a mystery private equity firm’s hostile takeover, it is imperative that an activist steps up to the plate.
Cisco CEO Chuck Robbins said the US government should stay out of the 5G investment business, but with their double-digit declines in service provider sales, Cisco may also be a potential acquirer of Nokia completely or look for a controlling stake.
With no significant domestic 5G vendor, the US is losing out to international players like ERICB SS (Sweden), Nokia Oyj (NOKIA FH, Finland) and Huawei Technologies Co. Ltd. (Huawei).
Why is it necessary to have a domestic 5G vendor?
As all major telecom carriers rush toward the deployment of 5G, the much-needed upgrade to a next generation Gigabyte speed is finally here. The network will be ready to do much more than just voice and data for communication and has the potential to transform the world, and the ability to handle large quantities of data will enable IoT growth. Telefonaktiebolaget LM Ericsson (ERIC) expects total IoT connections to grow at a CAGR of 24% from $8.6 billion in FY18 to $22 billion in FY24E.
Additionally, according to estimates, the 5G infrastructure market currently stands at $784 million and is expected to reach $48 billion by FY27E, growing at a CAGR of 67.1% during the period.
The Edge believes the combination of artificial intelligence, machine learning and 5G represents enormous opportunity for businesses and governments to capitalize. As per estimates, Industrial Internet powered by 5G can generate new economic opportunities of $23 trillion by FY25E. Additionally, the healthcare, transportation and manufacturing sectors are expected to be the key beneficiaries from the 5G revolution.
As COVID-19 locks nearly half of the world’s population of seven billion at home, the need for connected smart devices which can remotely perform most (if not all) healthcare functions has become immediately apparent. The Edge believes 5G technology can revolutionize key healthcare functions like remote diagnosis, virtual physician appointments, long-term patient monitoring and remote surgeries.
Automotive and Transportation:
A reliable 5G network with low latency and ability to handle real-time data will be crucial to build truly self-driving vehicles and transform the automotive and transportation sector completely.
Industrial and Manufacturing:
This sector can further leverage the automation capability as 5G will enable industries to monitor key data in real-time. 5G tech and AI/machine learning based solutions will help cut cost by reducing waste, saving energy, and improving efficiency.
Therefore, The Edge believes there is a strong case for an activist investor to bring 5G to the US by pursuing a suitor to acquire Nokia, which is available at a discounted valuation. With the right leadership, financial muscle, and US government backing, Nokia will make a formidable competitor and eliminate US concerns over the risk of losing the 5G struggle to China.
What’s the Opportunity for Activist Investors – No Domestic 5G Supplier is a Worry for US:
As the major US telecom carriers look to upgrade their network infrastructure to 5G, they struggle to find a domestic vendor with the deep product line and execution expertise to match the dominant players Huawei, ZTE Corp. (ZTE), Nokia and ERIC. The lack of a domestic player means the critical network infrastructure that will form part of the multitrillion-dollar economy may be vulnerable to security concerns. Huawei is one of the leading players in the telecom infrastructure space, but the long-standing concern over the potential security risk Huawei poses means the US cannot let market forces dictate the future of the 5G market.
Attorney General William Barr summarized the US’ concerns by saying that apart from the immediate security concern of using communications networks for monitoring and surveillance, China will have the ability to shut countries off from technology and equipment. In response, the US have practically blocked Huawei and its subsidiaries from doing business in the country, on top of trying to influence allies abroad (especially in Europe) to do the same by highlighting the risk factors associated with Huawei and its close-knit relations with the Chinese government. As there are strong concerns in the US with respect to Huawei taking the lead in 5G technology implementation across the world, and since the US does not have a home-grown competitor to match Huawei, The Edge asserts the country should invest in a European giant like ERIC or Nokia.
Who is in the 5G Race?
China has two of the leading Radio Access Network (RAN) infrastructure suppliers: Huawei and ZTE. Together, they hold a 40% market share with Huawei being the leading supplier on every continent except North America. Additionally, the Finnish firm Nokia (17% market share) and the Swedish firm ERIC (14% share) are the only two companies that can compete with Huawei right now as 5G infrastructure suppliers, as they both have the quality and reliable products to guarantee strong execution.
Since the US does not have a domestic equipment supplier, The Edge believes these concerns can be met by the US aligning itself with Nokia and/or ERIC through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies. This would put the US’ large market and financial muscle behind one or both firms and make the US a formidable competitor and eliminate concerns over its staying in the 5G race.
Nokia Looks Attractive to Potential Acquirers:
Nokia has underperformed the index and its direct peer ERIC, losing nearly ~41% of its market value over the last year compared to the -8% decline at ERIC and +19% on the OMX Helsinki 25 Index. Nokia currently trades at a FY20E EV/EBITDA multiple of 5.2x, a 31.2% discount to its Scandinavian peer and direct competitor ERIC, which is trading at a 7.6x FY20E EV/EBITDA multiple. Additionally, through a series of acquisitions, Nokia has built an end-to-end product portfolio (something its competitors do not offer) and it can leverage the depth of its products to differentiate itself in a highly competitive market.
The Edge believes the discount is justified as ERIC has a better margin profile, financial strength and is ahead in the number of 5G contract wins (ERIC has 86 5G contracts compared to Nokias 63 5G contracts). However, in the research firm’s view, 5G prospects remain intact for Nokia, although the company is facing its fair share of issues after recently replacing its CEO Rajeev Suri. Additionally, it also faces cost issues and is struggling with growth and profitability, which have undercut its valuation. The Edge sees an opportunity to bridge the gap in valuation with ERIC if Nokia addresses its short-term concerns and keeps the pace in the 5G race. Most importantly, Nokia is primarily owned by US-domiciled investors and can look for investment/takeover by a US-based firm.
On the other hand, ERIC has a significant Swedish investor base with more than 60% ownership in Sweden and this Swedish ownership may present a hurdle in any potential deal for a major US investment. Cevian Capital (8.4% stake) welcomed the US interest back in early February 2020 in response to AG Barr’s suggestion of direct or indirect investment in either Nokia or ERIC to counter Huawei. However, Cevian indicated any deal will have to be on completely different valuation levels, hinting that it will take a significant premium from current valuation levels for ERIC to accept a deal. Paying a hefty premium on an existing high valuation means the acquirer misses out on the potential upside in the stock resulting from the ongoing 5G upgrade.
Cisco & Qualcomm (With the Financial Muscle and Expertise) are Potential Beneficiaries:
Based on The Edge’s analysis, Nokia is an ideal acquisition candidate, which will allow US tech giants to look at the Finnish network hardware company’s technologies to capitalize on the 5G rush. Cisco Systems, Inc. (CSCO) and Qualcomm, Inc. (QCOM) are the two companies that will emerge as the strongest candidates for activist investors to use to acquire Nokia.
CSCO is one of the largest networking companies with a market cap of ~$175 billion. It has built an industry-leading portfolio of products and is never shy to acquire leading companies at the forefront of technology and market transitions. CSCO’s acquisitions fit its strategy of a) entering new markets, b) accelerating its market participation, and c) expand its market position.
CSCO has underperformed the S&P 500 and its peers in the last year with returns of -20% compared to the S&Ps -2%. Similarly, over the past three years, CSCO has underperformed even its closest peers like QCOM and Intel Corp. (INTC). Historically focused on acquiring companies, The Edge believes adding Nokia’s wireless telecom infrastructure business will complement its current networking business and help expand and cement CSCO’s position as a networking giant. The Infrastructure platforms segment offers CSCO core networking capabilities with products across switching, routing, wireless, and data center solutions. In FY19, CSCO generated ~$30 billion (68% of total revenues) from its Infrastructure platforms segment.
The US company broke its silence over speculation of an acquisition of Nokia in February 2020, with CSCO’s CEO strongly denying the rumors (The Edge believes the reason was the low-margin nature of Nokia’s business). However, in this COVID-19 pandemic where a lot has changed in two months, as well as Nokia’s stock price falling sharply over that period, while a deal may take some convincing for CSCO, the opportunity looks much more appealing now. CSCO currently has net cash balance of $11 billion and a leverage ratio of 0.5x, so CSCO has the financial muscle to acquire Nokia completely or look for a controlling stake.
Meanwhile, QCOM is a leading wireless technology player with its core focus on integrated circuits, and the company faces headwinds on multiple fronts. The Edge sees an increased push by mobile manufacturers towards reducing their dependence on third party suppliers. For example, Huawei and Samsung Electronics Co. Ltd. (Samsung) have already started using their own processor chips as of Q3FY19.
Additionally, Apple, Inc.’s (AAPL) recent $1 billion acquisition of Intel’s smartphone modem business hints toward the company’s intent to reduce future dependence on QCOM products. The Edge expects QCOM’s sales will see a negative impact due to the ban on Huawei by the US government. Therefore, the complete acquisition or a stake in Nokia’s Telecom infrastructure business will reduce the company’s dependence on its processor business and improve revenue visibility. QCOM currently has a cash reserve of ~$4 billion.
For more bespoke ideas in the activism and corporate catalyst space like this, reach out to The Edge (at firstname.lastname@example.org) or directly to Jim to discuss the situations coming up.
Source: Forbes “Trump’s 5G China Security Deadline Will Force Nokia M&A”
Note: This is Forbes’ article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
The president faulted the WHO and again praised his administration’s response, despite the U.S. having the highest number of cases and COVID-19 deaths.
By Sarah Ruiz-Grossman
4/14/2020 10:19 pm ET Updated 8 hours ago
President Donald Trump used Tuesday’s White House press briefing on coronavirus to blame the World Health Organization for thousands of deaths in the pandemic while not acknowledging his administration’s faulty response in the U.S.
Trump announced that the U.S. would be halting funding to the WHO while it conducts a review of the organization’s response to the pandemic. This comes as the Trump administration has faced mounting criticism over its initial slow response to the crisis.
Attacking the WHO for “severely mismanaging and covering up the spread of coronavirus,” as well as for being “very China-centric,” Trump claimed one of the organization’s “most dangerous and costly decisions” was opposing travel restrictions from China.
Trump then credited himself with “saving untold numbers of lives,” adding without evidence that “thousands and thousands would have died” if he hadn’t restricted travel from China on Jan. 31. (The virus is believed to have originated in the country).
The WHO has faced criticism for being overly deferential to China, even as the country initially concealed news about the spread of the novel coronavirus and failed to disclose alarming data about infections among health care workers for more than a month. The group has also lagged in making some key recommendations: Its guidelines still say people don’t need to wear face masks in public unless they are sick, while the U.S. Centers for Disease Control and Prevention has recommended all Americans do so. The group waited until mid-March to declare COVID-19 a pandemic, which some experts thought came too late.
However, Trump’s ramped-up criticism of the WHO shifted blame away from his own failings just as his administration has come under increased scrutiny. A New York Times report over the weekend detailed how Trump was slow to listen to early warnings from senior aides about the urgency of the spreading virus.
The president spent late January through early March largely downplaying the threat of the virus.
As of Tuesday, the United States continues to lead countries worldwide in both confirmed coronavirus cases and deaths — with more than 600,000 reported cases and 25,000 deaths as of Tuesday. Governors spent weeks repeatedly criticizing the lack of key medical equipment, such as ventilators, and hospitals and health workers are still reporting a shortage of the personal protective equipment they need to stay safe while treating patients with the virus.
On Tuesday, Trump attacked the WHO for its delay in declaring a public health emergency, which he said “cost valuable time.” The WHO declared a global health emergency on Jan. 30.
Trump, however, has still not issued a national stay-at-home order, despite calls from public health experts to do so.
“So much death has been caused by their mistakes,” Trump said of the WHO, claiming without evidence that the group’s reliance on China’s information “likely caused a twenty fold increase in cases worldwide.” He also criticized the organization for not acknowledging its mistakes, “of which there were many,” he said.
On Tuesday, when a reporter brought up the tens of thousands of deaths in the U.S. and said people in some places say they still can’t get tested and aren’t taking social distancing seriously, Trump disparaged the reporter — as he has other reporters in previous briefings — calling him a “showboat” and “loudmouth.”
Partway through the briefing, Trump began to shift future responsibility for reopening the largely closed U.S. economy on state governors, one day after declaring he has “total” authority as president when he was asked about restarting state economies.
“The governors are responsible. They have to take charge,” he said, explaining he’d authorize each governor to implement the reopening plan for their state.
“The governors will be held accountable,” Trump said, after noting that over 20 states were in “extremely good shape” when it came to the spread of the coronavirus.
Pressed on how the president would ensure workers were not sent back to their jobs under unsafe conditions if a governor were to reopen a state’s economy too early, Trump pushed the onus back on governors, saying: “That’s going to be up to the governors. The governors are going to want to make sure everything’s safe.”
Source: Huffpost “Trump Shifts Blame For Coronavirus Crisis To World Health Organization”
Note: This is Huffpost’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
Urgent warnings were ignored by a president consumed by his impeachment trial and intent on protecting a robust economy that he viewed as central to his reelection chances.
Jonathan Lemire, Zeke Miller, Jill Colvin and Ricardo Alonso-Zaldivar
April 12, 2019
WASHINGTON (AP) — By the time President Donald Trump first spoke publicly about the coronavirus, it may already have been too late.
Interviewed at Davos, a gathering of global elites in the Swiss Alps, the president on Jan. 22 played down the threat posed by the respiratory virus from China, which had just reached American shores in the form of a solitary patient in Washington state.
“We have it totally under control,” Trump said on CNBC. “It’s one person coming in from China, and we have it under control. It’s going to be just fine.”
In the 11 weeks since that interview, the coronavirus has reached every corner of the globe. It has infected more than 500,000 Americans and killed at least 20,000. It has rewritten the rules of society, isolated people in their homes, closed schools, devastated the economy and put millions out of work.
When Trump spoke in Switzerland, weeks’ worth of warning signs already had been raised. In the ensuing month, before the president first addressed the crisis from the White House, key steps to prepare the nation for the coming pandemic were not taken.
Life-saving medical equipment was not stockpiled. Travel largely continued unabated. Vital public health data from China was not provided or was deemed untrustworthy. A White House riven by rivalries and turnover was slow to act. Urgent warnings were ignored by a president consumed by his impeachment trial and intent on protecting a robust economy that he viewed as central to his reelection chances.
Twenty current and former administration officials and Republicans close to the White House were interviewed for this account about the critical weeks lost before the president spoke to the nation on Feb. 26. Most spoke on condition of anonymity because they were not authorized to speak publicly about private discussions.
On New Year’s Eve, China informed the World Health Organization of a “mysterious pneumonia outbreak” spreading through Wuhan, an industrial city of 11 million.
The government closed a seafood market at the center of the outbreak, moved all patients with the virus to a specially designated hospital and collected test samples to send to government laboratories. Doctors were told to stay quiet; one who issued a warning online was punished. He later died of the virus.
The Pentagon first learned about the new coronavirus in December from open source reports emanating from China. By early January, warnings about the virus had made their way into intelligence reports circulating around the government. On Jan. 3, the head of the U.S. Centers for Disease Control and Prevention, Robert Redfield, received a call from his Chinese counterpart with an official warning.
Dr. Anthony Fauci, the government’s top infectious disease expert, was alerted to the virus around the same time — and within two weeks was fearful it could bring global catastrophe.
Quickly, U.S. intelligence and public health officials began doubting China’s reported rates of infection and death toll. They pressed China to allow in U.S. epidemiologists — both to assist the country in confronting the spread and to gain valuable insights that could help buy time for the U.S. response. U.S. officials also pressed China to send samples of the virus to U.S. labs for study and for vaccine and test development.
On Jan. 11, China shared the virus’ genetic sequence. That same day, the National Institutes of Health started working on a vaccine.
Ultimately, the U.S. was able to get China’s consent to send two people on the WHO team that traveled to China later in the month. But by then precious weeks had been lost and the virus had raced across Asia and had begun to escape the continent.
For much of January, administration officials were doing a delicate balancing act.
Internally, they were raising alarms about the need to get Americans on the ground in China. Publicly, they were sending words of encouragement and praise in hopes Beijing would grant the Americans access.
Matthew Pottinger, Trump’s deputy national security adviser, persistently urged more aggressive action in calling out China and sending teams there.
But while word of the virus was included in several of the president’s intelligence briefings, Trump wasn’t fully briefed on the threat until Health and Human Services Secretary Alex Azar called with an update on Jan. 18 while the president was at his private Mar-a-Lago club in Florida.
Trump spent much of the conversation wanting to talk about vaping; he was considering a new policy restricting its use. White House officials now believe Trump didn’t fully grasp the magnitude of the threat to the U.S. in part because Azar, who was feuding with several members of Trump’s inner circle, did a poor job communicating it.
Azar was trying to walk a fine line between Trump’s upbeat statements and preparing the government for what might lie ahead. “America’s risk is low at the moment,” he later told House lawmakers. “That could change quickly.”
Moreover, the president was in the middle of his Senate impeachment trial and focused on little else, punctuating nearly every White House meeting with complaints about the Democrats out to get him, grievances he would continue late into the night on the phone from his private quarters.
Trump also had little desire to pressure Beijing or criticize its president, Xi Jinping, with whom he wanted to secure cooperation on ending a yearlong trade war before the reelection campaign kicked into high gear. When Trump fielded his first question about the virus in Davos, he enthusiastically praised Xi’s response, going well beyond the calibrated risk-reward messaging his aides were encouraging.
The West Wing was adrift.
By late January, acting chief of staff Mick Mulvaney held the post in name only as rumors swirled of his impending, post-impeachment departure. He was on the initial coronavirus task force, which was plagued with infighting. At the same time, the White House Office of Management and Budget was clashing with Azar’s HHS over money to combat the virus.
HHS wanted to send a special coronavirus funding request to Congress but the White House budget office resisted for weeks, insisting that HHS should instead repurpose $250 million of its existing budget to bolster the national stockpile by buying protective equipment. HHS, however, claimed that without congressional authorization it could not buy the needed quantities of masks, gowns and ventilators to rapidly bolster the national stockpile
Eventually, an initial request went to Congress for $2.5 billion in virus aid, an amount that lawmakers of both parties dismissed as too low. The bill that Congress quickly passed and Trump signed — the first of three so far — was for $8 billion.
Even as the two agencies fought, there was no influential voice in Trump’s orbit pushing him to act swiftly on the pandemic. Trump had surrounded himself with loyalists and few in the administration, including national security adviser Robert O’Brien, were able to redirect the president’s attention. In mid-January, meetings were being held at the White House, but the focus was on getting U.S. government employees back from China, which was still playing down how contagious the virus was.
A Jan. 29 memo from senior White House aide Peter Navarro accurately predicted some of the challenges faced by the U.S. from what would become a pandemic, though he was hardly the first to sound the alarm. But he, like Pottinger, was viewed by others in the White House as a “China hawk” and their concerns were rejected by others in the administration who did not bring them to the president.
On Jan. 30, the WHO declared the virus a global health emergency while Trump held a packed campaign rally in Iowa. The next day, the Trump administration banned admittance to the United States by foreign nationals who had traveled to China in the past 14 days, excluding the immediate family members of American citizens or permanent residents.
Trump styled it as bold action, but continued to talk down the severity of the threat. Despite the ban, nearly 40,000 people have arrived in the United States on direct flights from China since that date, according to an analysis by The New York Times.
‘VERY, VERY READY’
On Feb. 10, Trump stood before thousands of supporters packed into a New Hampshire rally and declared: “By April, you know, in theory, when it gets a little warmer, it miraculously goes away.”
The crowd roared its approval at Trump’s unproven assertion. The Senate had acquitted Trump on the impeachment charges and the president shifted his focus toward reelection even as others in the administration keyed in on the virus.
Federal officials put the CDC solely in charge of developing a test for the virus and left out private interests, a choice that cost precious time when the resulting CDC test proved faulty.
Trump spent many weeks shuffling responsibility for leading his administration’s response to the crisis. He put Azar in charge of the administration’s virus task force before replacing him with Vice President Mike Pence toward the end of February. Even as the virus spread across the globe, prevailing voices in the White House, including senior adviser Jared Kushner and Treasury Secretary Steve Mnuchin, urged the president to avoid big steps that could roil financial markets.
The president had firmly linked his fate to Wall Street, and it took a tumble by the markets for Trump to ratchet up his response. In late February, while Trump was on a trip to India, the Dow Jones plummeted 1,000 points amid rising fears about the coronavirus.
Trump stewed about the collapse on his Feb. 26 flight back to Washington and lashed out at aides over comments made by a top CDC official, Dr. Nancy Messonnier, during a briefing the prior day, when she warned Americans that they would have to prepare for fairly severe social distancing.
“It’s not so much of a question of if this will happen anymore but rather more of a question of exactly when this will happen,” she said.
The White House announced that Pence would brief the media about the response that night. But Trump took the podium instead and has not relinquished the stage much since, belatedly making himself the face of the battle against the virus.
When Trump first took the lectern in the White House briefing room to speak about the virus, the U.S. had 15 coronavirus patients.
“We’re at that very low level, and we want to keep it that way,” Trump said. “We’re very, very ready for this.”
Lemire reported from New York. Associated Press writers Deb Riechmann, Kevin Freking and Lauran Neergaard also contributed to this report.
Source: Huffpost “Behind Trump’s Botched And Delayed Coronavirus Response”
Note: This is Huffpost’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
A state leader elected by universal suffrage cannot be sure that he has the support of the houses of representatives. Theoretically, voters who have elected a state leader shall elect the leader’s party to facilitate his governance of the country. Often, however, that is not the case especially in the United States. Up to 1994 Democrats controlled Congress for 40 years but in 28 of the 40 years there were Republican presidents.
Why? Theoretically, the philosophy of American political system is democracy. In order to maintain democracy, there shall be the separation of the executive, the legislature and judiciary to prevent any of the three powers grow too great, especially the executive that may grow without limit and become an autocracy.
With the separation of three powers, in the US the power of the state leader, i.e. the president is limited. In a serious national economic depression from 1929 to 1933, quite a few of President Roosevelt’s New Deal programs to save the economy and provide jobs and relief to poor people were overturned by the Supreme Court.
Roosevelt tried to have the Justice Procedure Reform Bill passed by Congress for removal of conservative justices, but Congress would not cooperate.
Why? It is said that the judiciary and legislative wanted to protect the separation of three powers.
Politics Driven by Interests
The true cause is the fact that in a multi-party democracy politics is driven by interests.
Various party represents various interest groups. The strongest group or groups may have the majority votes and have the largest number of representatives in the houses of representatives of the country called parliament, congress or otherwise.
In a parliamentary system, the party or the coalition of parties that has the majority chooses the prime minister as the state leader in power. The prime minister has to work for the interests of the party or coalition of parties so that he will have the party’s or coalition’s support. Otherwise he will face a vote of no-confidence and loses his position. Then another prime minister will be elected if the party or coalition remains the majority. Otherwise, a new election will be held to generate a majority party or coalition, which will appoint its prime minister..
As a result, even if the country is split into various interest groups, a majority can after all be generated to enable the country to have a government supported by the majority in the houses of representatives and empowered to carry out its policies
If a state leader elected by universal suffrage is elected with a substantial majority, his party must have the support of the majority in the houses of representatives. In reality, that was not often the case. In the past, a president is often elected by a substantial majority. Even so, voters would elect a house of representatives and Senate controlled by a party other than the president’s. To restrict the president? I don’t know. Perhaps, voters elect the house or houses of representatives out of some specific interests of theirs while elect the president out of their general interests.
As a result, even the Democratic Party of President Clinton who won election with quite a large majority failed to control US Congress resulting in his failure to have Congress adopt the bill on his health care plan that was one of the most prominent items on his legislative agenda.
Now the United States is a split country. President Trump could only win a mojority of Electrol College vote but lost the popular vote by nearly three million votes. However, he is better than President Jorge Bush Jr., who needed a recount of votes to determine his victory with a marginal majority.
Trump’s Republican Party controlled only the House of Representatives when Trump came to office but lost control of the House in the midterm election. Trump perhaps believes that people supported him and had him elected as he promised to build a border wall between the US and Mexico to prevent entry of illegal immigrants who may take away job opportunities away from American people. That was the desire of grass root who would suffered from unemployment whenever there were some economic difficulties. However, the vested interests that control Congress especially big moneys can make lots of profits by employing the cheap labor provided by illegal immigrants.
Due to the conflicts of interests, Trump was unable to obtain funds for the construction of the border wall from Congress. His dispute with Congress on that issue finally led to the 2018-2019 government shutdown for 35 days.
If one of the most powerful tech companies can’t call out the president’s dishonesty, who can?
By Greg Bensinger
Mr. Bensinger is a member of the editorial board.
March 21, 2020
President Trump’s handling of the coronavirus pandemic has been a case study in a management style marked by falsehoods and intimidation. Rather than risk inviting his ire, subordinates and fellow Republicans covered for him as he delayed a coordinated response to the coronavirus and it felled nearly 200 Americans.
His political allies haven’t been the only ones to fall into line. Just look at the way the president co-opted Google.
While declaring the national emergency last Friday, President Trump announced that he had enlisted Google to create a broadly available website to help facilitate testing for the virus. He said that 1,700 engineers were working on the site and had “made tremendous progress.”
It sounded ambitious and promising. If only it were true.
What followed were attempts by Google to placate the president and a mad scramble to get done what he’d said it was already doing.
Blindsided by the announcement, Google at first revealed that a subsidiary of its parent company known as Verily was working on a small-scale website initially intended only for health care workers in two Bay Area counties. The Verily site was being developed in coordination with Jared Kushner, the president’s son-in-law and senior adviser, who was taken with the idea after speaking with Verily’s chief executive, Andy Conrad, The New York Times reported. (It rolled out on Sunday but was immediately overwhelmed by people seeking testing.)
But then Google pivoted and announced it was in fact also working on a new national informational coronavirus website. The saga could have ended there, but Mr. Trump instead lambasted the press for correctly reporting that Google initially had no plans for the website he described. And Google did nothing to correct the record, making itself complicit in his stoking of press mistrust.
Mr. Trump asserted on Sunday that Google’s national site was always the plan, while doubling down on his attack, saying, “I don’t know where the press got their fake news, but they got it someplace.” And he said Sundar Pichai, chief executive of Google-parent Alphabet, called to apologize, though he didn’t clarify what he meant by that.
Alphabet refused to confirm to The Times whether such a call even occurred or for what Mr. Pichai would need to apologize. And it declined to discuss the episode further.
It’s not the first time a technology company has bent to Mr. Trump’s will. Apple’s chief executive, Tim Cook, failed to correct Mr. Trump when he took credit in November for opening a Texas computer manufacturing plant that had been in operation since 2013.
Source: The New York Times “Google Gives Cover to Trump’s Lies”
Note: This is The New York Times’ article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
The diplomatic spat between Washington and London continues to spiral us into unknown territory this weekend, with the news that even President Trump’s personal plea to Prime Minister Johnson on Friday evening has not pulled the U.K. back from the brink of its decision to allow Chinese tech giant Huawei into its 5G network.
The Sunday Times reported on January 26 that “Trump’s anger” would cast a cloud over the U.K.’s Brexit week, and that the president had told Johnson “that giving a green light to the [Huawei] deal would be a grave threat to national security.” There was even a suggestion from the U.S. that the two countries might forge an alternative to Huawei. The U.K., though, takes the view that to do so would take too long.
With a U.K. Huawei decision expected on Tuesday, January 28, the intensity around U.S. and U.K discussions is only matched by the fierce debate raging within the U.K. government itself. Johnson’s more hawkish cabinet members are said to be furious at the prospect of being “bounced” into a pro-Huawei decision. According to the Sunday Times, one source sourly suggested that “Huawei is next week’s Chinese virus.”
U.S. Secretary of State Mike Pompeo will make a last ditch attempt to sway minds in the U.K. this week, but sources close to events believe this is a now a done deal. There is even talk of a choreographed announcement on Tuesday involving Huawei itself. One would imagine that such a spectacle would be highly incendiary to the U.S.
Writing in the Sunday Times, British MP Bob Seely, a candidate to head the foreign affairs select committee, warned that the country may “regret our refusal to say ‘no way, Huawei’,” adding that he fears that “by the time we see the real cost, in the decades to come, it may be too late.”
On Friday, it was reported that Trump’s immediate riposte to Huawei, to significantly tighten sanctions against the company to damage its supply chain further has been thwarted by the Department of Defense, the argument being that such a move would damage U.S. industry and innovation. This led to an angry challenge from leading senators who suggested to the Pentagon that U.S. companies contracting with Huawei was akin to the same being down with KGB subsidiaries during the Cold War.
Now another letter has now been crafted from U.S. senators, this one directed at the U.K.’s National Security Council. The letter says that the Huawei decision is linked to the special relationship between the two countries. While specifically pulling back from trade agreement or intelligence-sharing threats, Senators Rubio, Cotton and Cornyn urge the U.K. to “make the right decision on Huawei,” which they stress would be “in the best interests” of that relationship.
It remains unclear what will actually happen on Tuesday if the U.K. does not take a last minute U-turn on Huawei. Spooks on both sides of the Atlantic are divided as to the actual risks and the practical application of any change to security alliances. What will be more of an immediate issue is other countries around the world, all of which are less capable than the U.K. of mitigating any Huawei risks, using the U.K. decision as an excuse to defy U.S. warnings. If it’s good enough for Washington’s closest ally, they will argue, it’s good enough for us.
Johnson remains in a bind on the issue. It is tricky for the U.K. to completely backtrack on Huawei without incurring significant cost and delays to the critical 5G rollout. At the same time, if he is seen to kowtow to Washington against the advice of his officials, it will play badly domestically—there is no popular uprising in the U.K. against Huawei. And so, it is likely that Johnson is taking a Brexit-like “let’s just get it done,” after which reparations can be made and political concessions offered.
And so all eyes are on what happens post-Tuesday, when absent any last minute shock, the U.K. will confirm the inevitable. Months of lobbying and wrangling will come to an end—at which point the real work begins as everything changes. Much of this work will be political, and the U.S. will need to be seen to act in some capacity to back up the risks they have raised and the mitigating actions they have threatened.
Whether there is any security or trade deal hangover from these events will be the subject of intense speculation in the coming weeks. While it is unlikely to scupper a trade deal, one can assume some impact. For the U.S., such as been the intensity of its lobbying that it cannot simply roll over on the issue—that would undermine its case. But any action could well be limited to the optics around security arrangements and need not interfere in anything commercial.
For the U.K., with the security issue settled other issues will come to the fore. Chief amongst these will be Huawei’s work in Xinjiang, where its technology forms part of the surveillance programs subjugating the Uighur minority. If the U.K. decision turns up the political heat on Huawei to face up to Beijing and back away from all such involvement, then at least something good will have come from this protracted process.
Source: Forbes “Angry Trump Now Helpless To Stop Huawei’s Stunning Victory: This Week Everything Changes”
Note: This is Forbes’ article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views
In comments described by the Sunday Times today (January 12) as “surprisingly outspoken,” the U.K. defence secretary Ben Wallace confirmed “how aggressive the Trump administration has been about Huawei,” confirming the threats that have been issued over ongoing security arrangements as the U.K. nears its decision on whether to allow the Chinese company’s equipment into its new 5G networks. A change to U.S. intelligence arrangements with its closest defence and security ally, the U.K., would be by far the most critical impact from the Huawei fallout.
The rhetoric-driven back and forth between the Trump administration and China’s Huawei has been non-stop for months. What started as a campaign against U.S. allies buying 5G networking equipment from the tech giant has spiralled, and is now threatening the company’s ability to survive in its current shape.
But one aspect of the campaign rises above all others in its potential to impact the relationship between the U.S. and its closest allies. Speculation has been rife as to whether Washington would really undermine intelligence-sharing arrangements with governments that ignore its warnings and allow Huawei into their 5G networks. The U.S. argues that the integrity of that secret data is compromised with any risk it is carried across a Chinese-built network. Huawei says there is no such risk, that U.S. claims it can be used as a collections agency by Beijing are nonsense.
All countries within the western alliance, spanning NATO and a wide range of defence and security collaboration agreements, benefit from some level of U.S. intelligence. But within that wide collective, the Five Eyes are on a different level. A post-war treaty sees the U.S., U.K., Canada, Australia and New Zealand share data and intelligence on a near-transparent level. It is an arrangement that is so critical to national security and counter-terrorism, that it’s difficult to overstate.
Wallace told the Sunday Times that President Trump as well as key members of his administration have said “personally to me directly when we met at Nato,” that they have “threatened” to reduce such intelligence-sharing arrangements if the U.K. does approve Huawei. “It’s not a secret,” he said. “They have been consistent. Those things will be taken into account when the government… makes a decision on it.”
Last year, it looked as though the U.K. was set to ignore U.S. warnings and allow Huawei into the “non-core” parts of its network, the outward radio technologies rather than the data-carrying backbone. The U.S. refutes the U.K. claim that it can manage any security risk from this approach. Last year’s decision was taken under Prime Minister Theresa May, her successor, Boris Johnson, is expected to take a harder line.
Dominic Raab, the U.K. foreign secretary has also been engaged in discussions this week with his U.S. counterpart, Mike Pompeo, which are said to have touched on the Huawei issue. Ahead of those discussions, the U.S. position was characterised as a “shot across the bow” for the U.K. ahead of its decision.
On January 11, the Daily Telegraph reported that the U.S. had. dispatched a team of officials to issue a final plea or a final set of threats to the U.K. ahead of that decision, which is expected before the end of the month. Officials from the U.S. National Security Agency, which partners with the U.K.’s GCHQ, alongside others from Trump’s National Economic Council are travelling to meet U.K. officials who, it’s reported, have briefed their government that risks can be controlled. If Huawei is blanket excluded, U.K. officials have made clear that is a political decision.
There is mounting political pressure within the U.S. to enforce restrictions on allies ignoring U.S. warnings on Huawei. Last week, U.S. Senator Tom Cotton introduced a bill to ban intelligence-sharing in such circumstances, warning that governments should not “allow an intelligence-gathering arm of the Chinese Communist Party to operate freely within their borders,” adding that “allies around the world [should] carefully consider the consequences of dealing with Huawei.”
Andy Purdy, Huawei’s U.S. security chief has been heavily critical of some of the “falsehoods” he says are being spread by U.S. officials during such meetings. Purdy would not be drawn on the specifics of the U.K. decision, but said that “what’s really struck me in the last year, is the number of things said by American government officials that are flat out wrong.” He also told me that “after a year this really astounds me, it’s awful, it’s inexcusable,” describing some of the U.S. claims on Huawei’s alleged security risk as “flat out ridiculous—how a U.S. government official can be so flat out mistaken and say things that are so demonstrably false is shocking.”
In his interview with the Sunday Times, Wallace confirmed his “backing” for the U.S. killing of Iran’s Qassem Suleimani: “The intelligence information I have seen,” he said, “under the right to defend yourself against an imminent threat, that would have been met.” He described the changing shape of the military against the changing shape of the threat from Iran, as well as Russia and China—the shifting balance between the cyber and physical domains. That shift has been evident in the Iranian escalation.
Wallace also echoed the comments in recent months on the security risks in the encrypted messaging, as that debate rages on. “That will add to the ability of everyone from paedophiles to terrorists to spread their evil and increase their capabilities,” he said. “That keeps me awake at night. That’s massive.”
Source: Forbes “Trump’s Most Critical Huawei Threat Just Confirmed In ‘Surprisingly Outspoken’ Interview”
Note: This is Forbes’ article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
President Donald Trump speaks to reporters while participating in a “roundtable on small business and red tape reduction accomplishments” in the Roosevelt Room at the White House in Washington, U.S. December 6, 2019. REUTERS/Kevin Lamarque
WASHINGTON (Reuters) – U.S. President Donald Trump on Friday called for the World Bank to stop loaning money to China, one day after the institution adopted a lending plan to Beijing over Washington’s objections.
The World Bank on Thursday adopted a plan to aid China with $1 billion to $1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to “gradually decline” from the previous five-year average of $1.8 billion.
“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote in a post on Twitter.
Spokespeople for the White House and the World Bank did not immediately respond to requests for comment.
The World Bank loaned China $1.3 billion in the fiscal 2019 year, which ended on June 30, a decrease from around $2.4 billion in fiscal 2017.
But the fall in the World Bank’s loans to China is not swift enough for the Trump administration, which has argued that Beijing is too wealthy for international aid.
Reporting by Makini Brice; Editing by Mohammad Zargham and Cynthia Osterman
Source: Reuters “Trump calls for World Bank to stop loaning to China”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.
The US on Friday announced it would shield dozens of products from steep import tariffs it levied against China last year.
The move was seen as a way to mitigate domestic concerns ahead of the 2020 elections, but it came at a critical moment in trade negotiations.
Thousands of companies have requested relief from tariffs, warning the Trump administration that those measures could eventually force them to raise prices or slash jobs.
The US on Friday announced it would shield dozens of products from steep import tariffs it levied against China last year.
The move was the latest acknowledgment by the Trump administration that its trade policies have threatened to cause financial pain for American companies. President Donald Trump has often downplayed the domestic effects of his tit-for-tat dispute with the second-largest economy, arguing that it’s necessary to win fairer trade agreements.
Lollipops, vacuum cleaners, table lamps, bicycles, outdoor tables, canoes, cots, and more would be excluded from the tariffs implemented on $200 billion worth of Chinese products in September 2018, the Office of the US Trade Representative said. In May, Trump more than doubled the tax rate on those imports to 25%.
Thousands of companies have requested relief from those measures, warning the Trump administration that they could eventually force them to raise prices or slash jobs. But companies and watchdogs have criticized tariff decision-making as lacking transparency.
Joseph Barloon, the USTR general counsel, said that as part of the exclusion process officials determine whether the tariff would “cause severe economic harm to the requestor or other US interests” and ask whether the product is available only from China, is strategically important, or is related to industrial programs there.
The new exclusions were seen as a way to mitigate domestic concerns ahead of the 2020 elections, but they came at a critical moment in trade negotiations.
China threatened countermeasures against the US over the weekend after Trump signed into law a bill that backed pro-democracy demonstrators in Hong Kong, casting doubt on the first part of an interim trade agreement that was announced in October but has still not been put to paper.
“I’m still not sure both sides will reach a ‘phase one’ agreement, but the Chinese authorities are capable of expressing displeasure about the human-rights bills and continuing to negotiate on the trade war,” said Jared Bernstein, a senior economic adviser in the Obama administration.
Last week, both sides expressed optimism that progress could be made before tariff escalations in December.
While there have been clashes over agricultural purchases and tariffs in recent weeks, China outlined plans to bolster its rules on patents, copyrights, and trademarks in a document released Sunday.
The document proposes concrete ways in which the central government would work to tame the provincial officials who are often involved with intellectual-property violations, according to Mary Lovely, a trade scholar at the Peterson Institute for International Economics.
“Such an incentive can be effective, although we also know that the evaluation system can be gamed, as has been the case in environmental protection,” she said. “These new guidelines move in the right direction, even as we wait for more specifics to emerge about how these new policies will be carried out.”
Source: market.businessinsider.com “In latest sign of trade-war pain, the Trump administration announces tariff relief for dozens of Chinese products”
Note: This is market.businessinsider.com’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
An article on The Hill yesterday titled “Trump already has won the trade war with China” says Trump has already been able to get 90% of what he wants in his trade war with China. However, he would not stop and keeps on tariff rises to hurt US and world economy.
The article lists what trump has or would have got from China if he simply accepted Chinese commitments in the trade negotiations, such as reduction of US trade deficit by Chinese purchase of lots of US energy and agricultural products, protection of intellectual property, prevention of forced transfer of technology, end of government subsidies to industries, ensure of fair treatment for US entities, etc.
What is Trump’s strategic goal?
The article says, “In the U.S., President Trump appears to be holding out for a starkly decisive outcome — equivalent to China’s unconditional surrender — to maximize his political standing for winning re-election in 2020.”
Trump’s problem is his failure to see China’s strategic goal. China would not surrender as it wants Trump to keep on US pressure to facilitate China’s further reform and opening up for transformation from export- and investment-geared growth to innovation-, creation- and consumption-led growth.
Such transformation certainly will slow down China’s economy. US trade war only quickens the transformation while worsen the slowdown. However, such slowdown is but short-term. In the long run the transformation will enable China to achieve better growth later.
To keep exports to the US, China has to move its labor intensive export-oriented enterprises to its neighbors where labor costs are lower.
China has been helping Sri Lanka train workers for employment in Sri Lanka’s vast special economic zone near Hambantota to enable China to move such enterprises to the zone. The port China is building there will facilitate the exports.
Similar zones are being established in Bangladesh and Myanmar since China signed memorandums of understanding with them on the establishment of China-Bangladesh Economic Corridor and China-Myanmar Economic Corridor last year.
China-Pakistan Economic Corridor is being built and there are also such zones for China to move such enterprises there.
The construction of infrastructures of power stations, roads, railways and ports in those countries under China’s Belt and Road initiative will facilitate such movements.
US tariff hikes will only quicken such movements to avoid the hikes. China will only have the problem of substantial unemployment due to the movements, but the unemployed will blame US tariff hikes instead Xi Jinping’s economic transformation.
On the other hand, Chinese enterprises in those countries will make greater profits due to reduction of labor costs and have greater competitive edge in US market in exporting their products to the United States. As US enterprises cannot compete with them due to much higher labor costs, the US has to keep on importing the products. Its trade deficit will increase instead of decrease. However, China is not to blame as the deficit of trade with China has been switched to that of trade with China’s neighbors.