By Alec Hogg
In today’s global business headlines:
- In a year when President Donald Trump imposed tariffs on a range of imports to cut his country’s trade imbalance, the United States posted its largest deficit since 2008. Although partly offset by $270bn in net earnings from services, tourism and banking, America’s trade gap with the rest of the world grew 12% from 2017 to a decade high $621bn last year. China accounted for half of the total, up more than 10% on 2017. Despite tariffs, the gap keeps growing, with December’s $60bn the US’s biggest monthly deficit on record. Economists say 2018’s deficit was, ironically, fuelled by buoyant spending from Trump-initiated tax cuts which stimulated demand for imports from consumers and businesses. Some respite for the US president is that his possible re-election in 2020 will no longer be threatened by Warren Buffett’s pick for president, Michael Bloomberg. Yesterday the media mogul and former New York mayor announced he would not be joining the presidential race, despite claiming in a blog he would beat Trump in a general election. Bloomberg doesn’t fancy the chances of winning his own party’s nomination: “I am clear eyed about the difficulty of winning the Democratic nomination in such a crowded field.”
- Pressure on the US’s big tech giants rose a notch yesterday as the French government introduced a 3% tax on online advertising and digital marketplace revenues generated in the country. France’s levy will raise €400m this year and is but one of many similar taxes being introduced across Europe. Analysts reckon that in total these taxes will cost Silicon Valley companies billions of dollars. The new French tax is part of European efforts to address decades-old international regulations that allow companies like Google, Facebook, Amazon and Apple to switch reporting of revenues to jurisdictions where tax rates are lowest. Spain, the UK and Germany have publicly proposed introducing similar at-source taxes. The Silicon Valley companies say they pay all the taxes they owe.
- Zimbabwean finance minister Mthuli Ncube, who is on an investment roadshow in the US, yesterday said that the country has scrapped the 51% local ownership rule on platinum mines. Appearing in Washington on Bloomberg TV, Ncube said “We are removing that indigenising rule which is discouraging foreign investment. We say Zimbabwe is open for business – you can only be open if you allow ownership of 100 percent.” Zimbabwe has the world’s second largest platinum reserves behind South Africa, but investment has stalled since former president Robert Mugabe introduced indigenisaton laws. Zimbabwe’s mining minister Winston Chitando said in a separate interview that the 100% foreign ownership rules could also be extended to diamond mining.
- In South African news, the day of reckoning drew a little closer yesterday for former Steinhoff CEO Markus Jooste and his fellow directors. The SA police’s serious commercial crimes unit disclosed that four separate criminal cases had been lodged and 21 statements taken relating to the fraud and theft that occurred at the company during Jooste’s reign. South Africa’s Financial Sector Conduct Authority said yesterday it would be ready within two months to lay charges relating to insider trading and the publication of false financial statements by Steinhoff. German public prosecutors are also working on the case, having stated in 2017 they would be laying charges against the company and its directors.
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