UNITED STATES
GDP growth misses target
The economy last year missed the 3 percent growth target of the administration of President Donald Trump for a second straight year, posting its slowest annual growth in three years as a slump in business investment deepened amid damaging trade tensions. The 2.3 percent expansion last year reported by the Department of Commerce on Thursday suggested the White House and Republicans’ massive US$1.5 trillion tax cut package had provided the economy only a temporary boost. Moderate growth undercuts the argument by Trump and his fellow Republicans that strong growth would pay for the tax cuts, which are expected to help push the federal budget deficit to US$1.02 trillion this year. Growth last year was the slowest since 2016 and followed the 2.9 percent notched in 2018.
AUTOMAKERS
VW offers Navistar US$2.9bn
Volkswagen AG (VW) offered to buy the rest of Navistar International Corp in a US$2.9 billion bid to secure a bridgehead in the the US’ heavy-truck market and step up its challenge to global rivals Daimler AG and Volvo AB. Volkswagen’s Traton SE unit has offered Navistar holders US$35 a share in cash, 45 percent higher than its Thursday closing price. Navistar, which builds International-brand trucks, school buses, defense vehicles and engines, said its board would review the proposal, adding that there is no assurance the deal would take place. Volkswagen already owns a stake of almost 17 percent.
RETAIL
Perssons get fortune boost
Hennes & Mauritz AB (H&M) chairman Stefan Persson just received a hefty retirement gift from investors. Persson, who on Thursday announced he is stepping down in May, added US$1.4 billion to his fortune, as the clothing retailer’s shares rose 9.4 percent in Stockholm. His son Karl-Johan, the CEO, is to take over as chairman and hand the CEO role to chief operating officer Helena Helmersson, making her the first woman to run H&M. The jump in share price reinforces the Perssons’ standing as Sweden’s richest family,with a fortune of more than US$20 billion, according to the Bloomberg Billionaires Index. Stefan Persson, 72, said it was a “natural change” to hand control to his son after two decades as chairman. He said the family, which owns about half of the business, would remain committed owners of the world’s second-largest garment retailer.
MACROECONOMICS
France, Italy post declines
The French and Italian economies unexpectedly shrank at the end of last year, casting a shadow over expectations the eurozone was on a firmer footing. The French economy contracted 0.1 percent amid a decline in exports and a huge drag from companies using up stocks rather than increasing production. All of the economists surveyed by Bloomberg had predicted growth. Without the inventory effect, growth would have been about 0.3 percent, according to Bloomberg Economics. Italy’s GDP fell 0.3 percent, the most in almost seven years. Neighboring Spain fared significantly better at the end of last year, reinforcing its position as one of Europe’s outperformers. Faster-than-anticipated growth of 0.5 percent was driven by buoyant exports and a strong increase in services. France’s unexpected contraction is a sting for French President Emmanuel Macron, who is already facing mass protests and strikes against his pension reforms that have disrupted household spending.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
OPTION: Uber said it could provide higher pay for batch trips, if incentives for batching is not removed entirely, as the latter would force it to pass on the costs to consumers Uber Technologies Inc yesterday warned that proposed restrictions on batching orders and minimum wages could prompt a NT$20 delivery fee increase in Taiwan, as lower efficiency would drive up costs. Uber CEO Dara Khosrowshahi made the remarks yesterday during his visit to Taiwan. He is on a multileg trip to the region, which includes stops in South Korea and Japan. His visit coincided the release last month of the Ministry of Labor’s draft bill on the delivery sector, which aims to safeguard delivery workers’ rights and improve their welfare. The ministry set the minimum pay for local food delivery drivers at
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