DealBook Briefing: Trump Gives Huawei a Breather. Sort of.


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Over the weekend in Japan, President Trump appeared to choose trade over national security when he suspended a ban on U.S. companies’ selling products to Huawei, in a bid to hasten a trade deal with China. (More on that below.)

That could be a huge relief for Huawei. The Chinese tech company had faced a future where supplies of chips and software for its products — from smartphones for consumers to networking gear for telcos — ran dry. (Until recently, the company had spent $11 billion with American companies.)

But the truce also underlines concerns about Washington’s tech strategyAndrew writes in his latest column:

• If the ban were lifted entirely, it would galvanize Huawei’s role as perhaps the biggest long-term competitive threat to a significant American role in the next-generation wireless technology known as 5G.

• That serves as a reminder that the U.S. lacks a meaningful strategy to lead the world in 5G.

• “No American company makes the devices that transmit high-speed wireless signals. Huawei is the clear leader in the field; the Swedish company Ericsson is a distant second; and the Finnish company Nokia is third.”

Domestic oil production has risen by more than 60 percent since 2013, to 12 million barrels a day. Oil executives say that production could grow by an additional five million barrels a day in the next few years.

But oil and gas stocks have suffered over that timedropping as a proportion of the S&P 500, to about 4.6 percent, from 8.7 percent. The stock price of Exxon Mobil, the biggest producer, has barely budged over the past decade, while 175 oil and gas companies have filed for bankruptcy protection over the last four years. (The latest: Weatherford International.)

Blame slowing demand for oil. Energy experts say annual global oil demand is growing about 1.2 percent, which is too slow for American oil companies to make a profit on any increases in production, Mr. Krauss points out.

And maybe climate change as well. “When you talk to investors, they are concerned about oil companies spending money on something that will be in decline,” David Katz, the president of an investment firm, told Mr. Krauss.

More: Officials from OPEC and Russia are expected to maintain oil production cuts after a series of meetings this week.

The setup of the social network’s proposed cryptocurrency, Libra, could cause complications for many users, the FT reports:

• “The tax problem stems from Facebook’s idea to peg the value of Libra to a basket of currencies globally rather than fix it in value against its users’ domestic currency.”

• “As global exchange rates change, the domestic value of a user’s Libra holdings will change accordingly, creating capital gains and losses, which would be realized each time someone used Libra to make a purchase.”

• “In most countries, gains will be taxable, meaning consumers will have to file a detailed tax return showing all their transactions and the exchange rate at the time, and pay any tax due,” Dan Neidle, a partner at the law firm Clifford Chance, told the FT. “This seems to us to be a significant barrier to wide adoption.”

Facebook acknowledged the issueand said that it hoped to work with policymakers “as they clarify the application of existing tax laws to cryptocurrencies, or in some cases to update those laws.”

This adds to a list of worries about Libraon top of privacy concerns about Facebook’s involvement and the way it could further concentrate the tech company’s power.

• “Investors have tightened their standards. They now want established businesses with substantial revenue and high growth.”



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