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Yahoo
8 minutes ago
- Yahoo
China Stops US Commerce Employee From Leaving, Reports Say
(Bloomberg) -- China has stopped an American citizen who works for the US Commerce Department from leaving the nation for several months, according to media reports — an episode that coincides with Beijing and Washington trying to arrange a leaders' summit so they can address their differences on trade. Why the Federal Reserve's Building Renovation Costs $2.5 Billion Milan Corruption Probe Casts Shadow Over Property Boom How San Jose's Mayor Is Working to Build an AI Capital The Chinese-American individual who works for the Patent and Trademark Office had traveled to meet relatives, the Washington Post reported, citing four people familiar with the matter, who asked not to be identified discussing the sensitive issue. The US sent a very high-level message to Beijing to let the man depart, the newspaper added, citing one person. It said it didn't know the name of the man facing a so-called exit ban, which was put in place over an apparent failure to disclose on a visa application that he worked for the US government. Officials from Beijing and Washington — including in the Commerce Department — are negotiating a trade deal after President Donald Trump hit goods from China with heavy tariffs that he later paused. Trump also wants a meeting with Chinese leader Xi Jinping to sort through their problems, which touch on technology curbs, rare earths and the status of Taiwan. To get the sitdown and a trade pact, Trump has recently softened his harsh campaign rhetoric that focused on the US's massive trade deficit with China and resulting job losses. Earlier this month, US Secretary of State Marco Rubio said after meeting his Chinese counterpart, Wang Yi, that there was 'a strong desire on both sides' for a Xi-Trump meeting. The outlook for such a meeting could be complicated if the episode involving the employee of the US Commerce Department escalates. The incident is somewhat magnified because Wells Fargo & Co. recently suspended travel to the world's second-biggest economy after one of its top trade financing bankers was blocked from leaving. 'These cases in combination are significant and will have a chilling effect on US business travel to China,' said Jeremy Chan, a senior analyst on the China and Northeast Asia team at Eurasia Group, who once worked as a diplomat in China and Japan. 'Given that Trump's team is reportedly planning to bring a group of CEOs along with him for his summit with Xi later this year, these reports may complicate that effort or make US business executives less willing to participate.' The Commerce Department employee, a veteran of the US army, was detained when he arrived in the southwestern city of Chengdu in April, the South China Morning Post reported Sunday, citing a person familiar with the situation. He was being prevented from leaving China because his case was 'related to actions Beijing deemed harmful to national security,' the newspaper reported, though the specifics couldn't be confirmed. Since the man arrived in Chengdu, he had also traveled to the Chinese capital with a US official, the newspaper reported. The Patent and Trademark Office the man works for handles US patents and registers trademarks. It says on its website that its 'mission is to drive US innovation and global competitiveness.' A spokesperson US Embassy in Beijing said that its 'highest priority is the safety and security of US citizens overseas.' It added that 'we track these cases closely, and have raised our concern with Chinese authorities about the impact these arbitrary exit bans have on our bilateral relations and urged them to immediately allow impacted US citizens to return home.' The Foreign Ministry in Beijing didn't respond to a request for comment. China's use of exit bans has been a point of contention between Beijing and Washington in recent years. The US State Department has repeatedly advised citizens to reconsider travel to China based on what it called the 'arbitrary enforcement of local laws, including in relation to exit bans.' The move by Wells Fargo came after Chenyue Mao, an Atlanta-based managing director for the bank who was born in Shanghai, was banned from departing after entering China in recent weeks, according to a person with knowledge of the situation. The case underscores multinational companies' fears about the risks of operating in China, especially in regard to staff safety and restrictions on movement. Among notable incidents in recent years, the Wall Street Journal in 2023 reported a senior executive at US risk advisory firm Kroll was prevented from leaving China. In 2019, Bloomberg reported that a UBS Group AG wealth manager was detained for about three months before returning home. An academic analysis published in 2022, based on data from six governments, found 128 cases of foreign citizens facing Chinese exit bans, with at least a third of the cases driven by business disputes. Chinese law prohibits people suspected of crimes from leaving the country. Chinese citizens judged to have endangered national security can also face exit bans under the country's recently updated espionage law. --With assistance from Catherine Lucey and James Mayger. (Updates with comments from Eurasia Group analyst.) 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CNBC
10 minutes ago
- CNBC
Brexit made businesses abandon the UK. Trump's hefty EU tariffs could bring them back
In 2016, the U.K.'s vote to leave the EU prompted many businesses to shift operations to the European continent, taking investment and headcount with them. Fast forward to 2025, and the specter of U.S. President Donald Trump's 30% trade tariffs on the EU, which will kick in on Aug.1 unless a trade deal is reached, could bring them back. "The U.K. could be a big indirect winner" if the threatened U.S. duties on the EU become a reality, according to Alex Altmann, partner and head of the German desk at London-based accountancy and business advisory firm Lubbock Fine. "If the tariff rate for the EU finally ends up anywhere near this 30% level then the U.K.'s much lower U.S. tariffs would offer a major incentive for EU companies to shift some of their manufacturing to the U.K. or to expand their existing U.K. facilities," he noted in emailed comments. "The U.K. has a lot of spare manufacturing capacity after Brexit. A big gap between U.K. and EU tariffs would be a major opportunity for the U.K. to regain some of its lost status as a key European manufacturing hub," added Altmann, who is also the vice president of the British Chamber of Commerce in Germany. As things stand, the U.K. has already struck a trade deal with the U.S. that reduces duties on cars to 10% and grants it the lowest duty on steel imports. London also has a "reset" deal with the EU, after the Labour government under Prime Minister Keir Starmer — who was opposed to Brexit — carved out a trade agreement following years of post-referendum acrimony. The sweet spot the U.K. now finds itself in comes after several years of uncertainty and angst for businesses, as they've tried to navigate a post-Brexit world of more red tape and barriers to export. That's been an ongoing gripe for exporters, given that the 27-country EU remained the U.K.'s largest trading partner after Brexit was finally enacted in 2020. The EU accounted for more than 50% of Britain's foreign trade in goods in 2024, according to the European Commission. A number of big businesses, and particularly financial services firms such as Goldman Sachs and JPMorgan, sought to avoid the transnational regulatory complexities of the post-Brexit landscape by relocating operations and assets to other financial hubs in the EU, such as Dublin, Paris, Amsterdam and Frankfurt. The exodus was ultimately not as dramatic as was initially feared. Supporters and critics argue over the merits and disadvantages of Brexit and the divorce from the EU's single market and customs union, as well as the free movement of goods and people that came with EU membership. Yet most economists agree that Brexit dented U.K. exports, jobs and economic growth. The Office for Budget Responsibility, the U.K.'s independent forecaster, estimates that exports and imports will be around 15% lower in the long run, compared to if the U.K. had remained in the EU. Although economists argue over the impact on the wider economy, it's generally agreed that the U.K.'s GDP is around 5% lower than it would have been, had Britain not voted to leave the bloc. While the U.K. is reveling in its newfound harmony with its American and European business partners, the extent of any windfall that comes as a result of the EU's trading pain with the U.S. remains to be seen. It remains unclear whether Trump's planned 30% tariff on the bloc will actually go ahead on Aug.1. The U.S. president's mercurial nature means the ultimate levy rate could go higher — he previously threatened a 50% tariff — or lower, toward the baseline 10% level that the EU is pursuing. Not everyone agrees that the U.K. could benefit from trade misfortunes that befall the EU, whatever the outcome of last-ditch talks between Brussels and Washington. "First of all, the 30% tariffs for the EU, they're not a given," Carsten Nickel, managing director at Teneo, told CNBC last week, pointing out that any potential post-tariffs shift in business investment from Europe back to the U.K. would be unlikely to happen quickly. "If we were to talk about moving production facilities from Europe to the U.K. because the U.K. has a deal with the U.S. — the time horizon for that is a multi-year, if not decade-long, kind of time horizon," he said. In addition, Nickel noted that the U.K.'s strength remained in financial services rather than in manufacturing, which remains more prevalent in export-oriented countries like Germany and Italy. "The reality is that the U.K.'s comparative advantage is not in high-end manufacturing ... so the idea that you're going with this stuff that you're currently producing in, say, Germany and Switzerland, and you're moving that to the U.K. tomorrow ... it's just not a decision that that a business leader in Europe can take just like that," Nickel said.
Yahoo
11 minutes ago
- Yahoo
Tesla at a Crossroads: What to Watch in Q2 Earnings
Tesla Q2 Earnings Preview Zacks Rank #4 (Sell) stock Tesla (TSLA) will be one of the most-watched stocks to kick-off earnings season, reporting second quarter earnings after the close on Wednesday, July 23rd after the market close. Tesla, and its eccentric and outspoken CEO Elon Musk, have been all over the news in 2025 after Musk entered the political scene, faced boycotts, and is embroiled in an ugly spat with US President Donald Trump over his 'Big Beautiful Bill.' Beyond the headline-driven noise, the upcoming earnings report will help answer many of the questions that investors have about Tesla and its future. Before we dig deeper into Tesla's future roadmap and key metrics to watch, below are some historical data points to help investors prepare for Wednesday's report: · TSLA Earnings Price Move: The options market implies an earnings move of +/- 7.4% following Wednesday's report. However, over the past few quarters, TSLA has averaged actual earnings moves that were slightly higher (~10%). · Earnings Surprise History: Tesla has missed the Zacks Consensus Estimatessix times in the past seven quarters. Over the past four quarters, Tesla has missed estimates by an average of -8.33%. Image Source: Zacks Investment Research · Tesla Stock Performance: Year-to-date, Tesla shares exhibit relative strength, down 18.4% while the S&P 500 Index is up 6.6%. Image Source: Zacks Investment Research Though Tesla remains the dominant global electric vehicle (EV) manufacturer, its legacy business has slowed. That said, in true Elon Musk fashion, Tesla is going 'all in' on transitioning and diversifying its business to dominate the future. 5 Questions to Ponder During Tesla's Earnings Call 1. Can the Tesla Robotaxi Catch Waymo? Tesla finally launched its robotaxi service in Austin, Texas, late last month. Although the launch is a beta test, utilizing a limited fleet of Model Y vehicles with safety companions on board, it is meaningful in that it signifies the company's official entrance into the robotaxi race. Currently, Alphabet's (GOOGL) 'Waymo' is off to a wide lead, operating in five major US cities. That said, Tesla bulls argue that Tesla will be able to scale much faster than Waymo and at a significantly lower cost (due to the fact that FSD does not require the expensive lidar sensors used by Waymo). A key question for Tesla investors to ask is, 'How quickly does Tesla plan to expand its robotaxi service to other cities?' 2. Will Tesla Invest in xAI? Elon Musk made headlines last week when his 'Grok' chatbot leapfrogged legacy large language AI models like Meta Platform's (META) 'Llama' and OpenAI and Microsoft's (MSFT) 'ChatGPT' to become the most powerful model in terms of pretraining and reasoning evaluations. Though Musk has ruled out a merger between 'Grok' parent XAI and Tesla, he has suggested that he may decide to hold a shareholder vote on whether Tesla should invest in xAI. A Tesla investment in xAI could provide Tesla shareholders with some reassurance in the fact that the company can diversify away from its slowing legacy business into the red-hot AI industry. 3. Will Tesla's EV-business Steady? Tesla's annual revenues are expected to shrink in 2025 for the first time in more than five years. Meanwhile, the company experienced its first ever margin decline in 2024 amid falling volumes and generous discount offers. Nevertheless, if Musk can reassure investors that the worst is behind them, Tesla shares can rally. Image Source: Zacks Investment Research 4. Can Tesla's Energy Business Remain Electric? Tesla's energy business is one of the few bright spots for the company recently, with energy storage deployments doubling year-over-year in 2024 as revenues spiked 67%. Can the momentum continue? Image Source: Zacks Investment Research 5. How will Tariffs and Politics Impact Tesla? While the global trade picture has become clearer since President Trump's 'Liberation Day,' there is still considerable uncertainty about how much pressure tariffs will put on Tesla's margins. Meanwhile, following Musk's spat with President Trump, Musk has threatened to start a new political party. Should Musk signal that he is going through with the idea, it may hurt shares. Historical precedent illustrates that investors want Musk at the helm, and any outside distractions are often met with selling. Beyond the questions above, investors will look for updated timelines on new products such as the 'Optimus' robot. Bottom Line Tesla is at a crossroads as the company looks to diversify away from its legacy business into new businesses, such as the robotaxi business. Investors will gain valuable new insights when the company reports earnings on Wednesday evening. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
