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Today’s best news
The French luxury group LVMH became the first European company to reach a market value of $500 billion as the return of Chinese customers pushed up its share price.
UK Chancellor Jeremy Hunt admitted that UK business taxes were too high, but insisted that the best way to reduce them would be expand the economy.
A European Central Bank policymaker told the FT that investors were underestimating how high eurozone interest rates it might have to rise unless wage growth starts to fall along with core inflation.
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The semiconductor standoff between the US and China intensified today as Washington tried to rally allies for its battle with Beijing against a backdrop of growing mutual suspicion and geopolitical tensions.
As South Korean President Yoon Suk Yeol arrives in DC for a state visit, the White House has asked his country’s chipmakers not to fill market gaps in China if Beijing prohibits the sale of tokens of Micron of the United States, one of the three big companies in the DRam memory chip market along with Samsung and SK Hynix of South Korea. China’s move is a retaliation for US attempts to prevent it from sourcing or producing advanced semiconductors and is seen as a litmus test of the extent to which Beijing is willing to crack down on US companies.
At the same time, the US is attempting the difficult task of breaking its dependence on China by relocating production, an exercise described by the founder of Taiwan’s TSMC, the world’s largest chipmaker, as a “very expensive exercise in futility”.
Meanwhile, semiconductor companies have signaled that the current slowdown in the industry is lasting longer than expected as weakening demand for auto parts adds to a slump in sales of smartphones and personal computers after the boom times of the pandemic era.
The developments follow a liquidation in asian markets this morning that was fueled by expectations that China will announce broader restrictions on US investment at the G7 summit next month.
Investors are also nervous about tensions in the South China Sea. United States in the weekend celebrated war games in the philippinesa potential front line in a possible future conflict over Taiwan, while Australia today revealed its biggest strategic shift in defense since the second world war as a reaction to China’s military buildup in the region.
Tensions between China and Europe are also escalating after Beijing’s ambassador to France questioned the legal status of the former Soviet nations. Estonia, Latvia and Lithuania and Ukraine’s sovereignty over Crimea, before Beijing rejected the comments. Relations with China are on the agenda of today’s meeting of EU foreign ministers in Luxembourg as they seek to “recalibrate” their approach to Beijing.
The problem with the EU, says FT commentator Martin Sandbu, is that it is too often willing to subordinate political strategy to their economic ambitions, with many business leaders still salivating at the size of the Chinese market. “It is time for Europe to learn that what is good for VW is not necessarily good for Europe,” he concludes.
I need to know: UK and European economy
Work has started on the largest in the UK solar and battery storage plant near Faversham in Kent, which is forecast to generate enough power each year to service close to 100,000 homes.
UK lawmakers are concerned that buyer concerns about food price inflation – which last week reached its highest level in more than 45 years – could drive demand for higher wage settlements, incorporating higher headline inflation. Nothing, yet, however, compares to grocery prices in the US, home of the Ham and cheese sandwich $29.
In Spain, meanwhile, the lack of rain has pushed olive oil prices at record levels. The country is the largest producer in Europe and represents around half of world supplies.
another one of our great reads examines France’s attempts to offer a second nuclear age as an ambitious reactor construction program faces a shortage of skilled workers.
I need to know: global economy
of President Joe Biden Inflation Reduction Law can help reindustrialize the US and create new jobs, but won’t stop raising pricescritics argue. A scramble to get workers for these new projects could trigger another bout of inflation, complicating the Federal Reserve’s efforts to cool the economy.
A somewhat surreal legal battle over mackerel in the Pacific has reached the Supreme Court in London. Vanuatu, a small island nation, is challenging an obscure Panamanian company for the acquisition of their fishing rights “in perpetuity” for a fraction of its market value.
I need to know: business
swiss credit hit by outflows of 61.2 billion Swiss francs ($68.6 billion) in the first quarter customers fled the damaged bank, highlighting the challenge that lies ahead for the new owners of UBS. here is a new great read about how several warnings were ignored in Silicon Valley Bank in the United States before an official autopsy on his collapse.
Are the difficulties of the banking sector a good opportunity to Apple to test its mettle as a financial institution? Although there is debate about whether a marriage between Big Tech and big banks is good for competition, columnist Rana Foroohar says the company is well placed to solve some of the current problems of the industry.
profit warnings in UK companies rose in the first quarter, particularly among tech companies, as economic uncertainty left them grappling with “recessionary conditions”. UK-listed companies are also becoming more lose their chief executives.
It is not yet clear when—or if— business trip return to pre-pandemic health, writes columnist Pilita Clark, noting high airfaresflexible work patterns and climate change concerns.
florida governor ron desantis launched new salutes in his battle against “woke” Disneythe largest employer in the state, ahead of an expected run for the 2024 Republican presidential nomination.
With global supply chains under threat, 3d print it could be vital to the future of American manufacturing. watch our new video.
the world of work
Employers are using psychological tests to resolve disputes and diversify its workforce, but its accuracy is not guaranteed, writes management editor Anjli Raval. Headhunters say people lie, answers can change from day to day, and practice tests mean you can beat the system.
Tech companies are firing herds of middle managers in a phenomenon calledthe flattening”. Creating a staff layer could speed up decisions, but some argue it removes a vital link between bosses and staff.
Proposal for new UK laws on sexual harassment in the workplace seems likely to fail thanks to a series of amendments by the Tories in the House of Lords that include, for example, the exclusion of “vexatious, frivolous or malicious” claims.
Andrew Hill disagrees with the idea that harassment should have a threshold level for action, as suggested by Dominic Raab, who resigned as UK deputy prime minister on Friday after the allegations against him were confirmed. Bosses don’t have to cuss and yell to undermine or intimidate their staff, Hill argues.
some good news
Researchers in Abu Dhabi have created a new nanomaterial that they say can clean trillion gallons of wastewater from the textile industry that flows untreated into rivers and streams, loaded with harmful chemicals and dyes. (CNN)