Ford Hit, Agriculture Payouts, German Vulnerability: CEO Daily for September 27, 2018
President Donald Trump may think trade is bad, but he doesn’t seem to be convincing many Americans. A new report from my friends at the Pew Research Center says American attitudes toward trade have become more favorable in the last four years. The share of Americans who say growing trade ties between the U.S. and the world are “bad for the U.S.” has declined to 21% this year from 28% in 2014. And those who believe trade leads to job losses is down to 34% this year from 50% in 2014.
But Americans are still more anti-trade than most of the rest of the world. Take a look at the share of people from the following countries who think “trade is good”:
In the U.S., anti-trade views tend to rise with age, decline with education, and remain stronger among Democrats than Republicans.
Ford CEO James Hackett said yesterday that the Trump administration’s steel and aluminum tariffs have cost his firm around $1 billion in profits. “If it goes on any longer, it will do more damage,” he added. Honda has also taken a hit to the tune of “hundreds of millions dollars” and is now considering higher vehicle prices in the U.S. as a result, said that company’s EVP for North America, Rick Schostek. Reuters
The Department of Agriculture has started making payments to farmers to offset the effects of President Trump’s tariffs, but many farmers say it isn’t enough money. The farmers are hit by retaliatory tariffs or straight order cancellations from countries such as China, that have been affected by U.S. tariffs on their imports. “This payment isn’t going to save anybody’s life,” said Iowa pork producer Mike Paustian. “It’ll soften the blow a little bit.” Wall Street Journal
Germany and the EU could plunge into recession if their trade disputes with the U.S. escalate, five leading German economic institutes have warned. “Any escalation of the trade conflict, leading to considerable tariff increases by the U.S. on a broad front, is likely to trigger a severe recession in Germany and Europe,” they wrote. Handelsblatt
The president is again unhappy with the Federal Reserve for raising interest rates. The Fed raised rates for the third time this year. “Unfortunately, they just raised interest rates a little bit because we are doing so well. I’m not happy about that,” said Trump. Except he is happy for savers, who will benefit from the hike. “The people that did it right…got hurt the most [by post-2008 low rates,] so in one sense I like it, but basically I’m a low-interest-rate person,” he said. Fox Business
Around the Water Cooler
Papa John’s is reportedly looking for a buyer, after one heck of a tough year. The news sent the pizza chain’s stock up 9%. Founder John Schnatter, who was booted after making racially-charged remarks during a media training session and is now trying to regain control of the firm, still owns around 30% of the company’s stock. Fortune.
Amazon has opened a physical store in New York that only stocks items that have received at least four-star review averages on the ecommerce platform—well, almost only, as it also stocks new and “trending” products, and bestsellers. Only Amazon Prime members will get to buy items at the Amazon.com price, otherwise they’ll need to pay list price. The Verge
The new CEO of Air France-KLM has warned unions that the French government will not bail out the troubled airline. The appointment of Benjamin Smith, a Canadian, was not popular with the unions that brought down his predecessor, Jean-Marc Janaillac, over a long-running pay dispute. Smith: “Whether you are Anglo Saxon or not Anglo Saxon…there is a reality…and a lot of other areas that the government needs to spend its money on…It’s not as if this airline is being attacked in a disproportionate or unjust way, it just has a competitive model that doesn’t work.” Financial Times
The IMF has boosted its bailout of Argentina by an extra $19 billion, taking it to a total of $57.4 billion by the end of 2021. The Argentine peso has halved in value against the dollar this year, and was sent tumbling further by the shock resignation this week of central bank governor Luis Caputo. CNBC