Tesla CEO Elon Musk certainly knows how to court controversy. But, even by Musk’s extravagant standards, the last few months have been more than usually eventful, culminating in a US Securities and Exchange Commission (SEC) lawsuit, as well as a reported Department of Justice criminal probe that could put his role as head of a publicly traded company into jeopardy.
It all started with a series of ill-advised tweets at the beginning of August, in which Musk hinted at an imminent change in Tesla’s ownership. Statements, including teasers such as ‘Am considering taking Tesla private at $420’ and ‘Funding secured’, saw share prices soar, amid fevered speculation over whether the tweets represented a serious intention or were just, in fact, elaborate ‘weed’ jokes.
At the moment, it’s a war of words with a side order of sabre-rattling. But as tensions between the US and its overseas rivals rise, the President’s crusade to make what he sees as a long-overdue ‘correction’ to the country’s trade deficit is beginning to have unintended consequences in America’s – and his own – heartland.
Since he took office, President Trump has been committed to the idea of righting the wrongs he believes have been perpetrated by trading partners looking to make gains at the expense of US interests. After dabbling with tariffs on solar panels and washing machines, a new set of curbs on steel and aluminum imports was introduced in spring of this year, swiftly followed by import duties designed to target billions of dollars’ worth of Chinese imports.
But, while China may have borne the brunt of the action, America’s traditional allies certainly haven’t escaped scot-free. Initially exempting Canada, Mexico and the EU from the steel and aluminium tariffs, Washington later confirmed that it would impose the duties across the board – special relationships notwithstanding.
Alibaba spin-off Ant Financial is making history. The four-year-old Hangzhou-based fintech ‘lifestyle platform’ is purported to be raising funds that would value the company at $150bn, making it the world’s most valuable startup – bigger, even than Goldman Sachs.
As traditional financial models are giving way to digital disruptors, there’s plenty of scope for agile, tech-based companies to change the way people think about banking services. Enter Ant Financial, the brainchild of Alibaba founder Jack Ma.
Established in 2014, the company is a hybrid internet business, bank and payment platform that evolved from a payment service (AliPay) originally conceived to bridge the gap between shoppers and sellers on Alibaba’s Taobao marketplace. At Ant’s last funding round in 2016, the company commanded a valuation of around $60bn.
With the release of Amazon’s Q1 earnings, its share price has soared to a record high and the company’s trajectory towards overtaking Apple as the world’s largest company seems assured.
The brainchild of CEO Jeff Bezos, Amazon appears to be an unstoppable force. In the first three months of 2018, Amazon more than $550m a day from Amazon.com sales and other ventures, including Whole Foods, the premier grocery chain acquired just last year. There was also strong growth in Amazon Web Services (AWS), which delivered an impressive $1.4 billion in profits – the bulk of Amazon’s profits over the quarter.
Interestingly, these results were achieved, despite President Trump’s determination to make the company pay more tax and higher postal rates – changes that experts believe would have negligible impact on Amazon’s status.
While many presidential promises evaporate on entering the Oval Office, Trump has certainly proved to be a man of his word when it comes to honouring his campaign trail commitment to pursuing a more protectionist trade policy.
Within just a few days of acceding to the presidency, Trump drove a truck through the emerging Trans-Pacific Partnership (TTP) and agreed to take a fresh look at the North America Trade Agreement (NAFTA) to try to squeeze a better result for the United States. Next, hot on the heels of his announcement of the imposition of tariffs on solar panels and washing machines, a new set of curbs on steel and aluminum imports was introduced. Most recently, Trump has announced the introduction of a wider swathe of tariffs that will slap a 25% tax on an as-yet-unspecified $60 billion-worth of Chinese imports.
Another bite of the Apple
Could times be a-changing for tech giant Apple? After coming under fire for its tax evasion policies, it seems as if the company could be softening its stance towards corporate tax obligations, as CEO Tim Cook announced in January that Apple would be making a payment of $38 billion to repatriate part of its overseas cash holdings. Cook also committed to spending $30 billion in the US over a five-year period, creating 20,000 jobs and a new campus in the process.