This week’s news includes; Trump’s begins trade war, Restaurant businesses falter, Goldman Sachs begins Brexit exodus and Blackberry sues Facebook.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- City A.M asks Could Italy’s election result spell the end of the EU?
- Investopedia looks at How an Amazon Bank Could Rival JPMorgan, Citigroup, Wells Fargo
- Bloomberg claims that protectionism isn’t why China Tech prospers.
1. TRUMPS TRADE WAR
Donald Trump has signed an executive order imposing tariffs on imported steel and aluminium. The US will now impose 25% tariffs on imported steel and 10% tariffs on aluminium. Only Canada and Mexico have been exempted so far. The EU has expressed anger that there is no clarity as to how the Union can gain an exemption.
This appears the beginning of an international trade war as China and the EU have both announced plans to retaliate. This will undoubtedly harm businesses that rely on imported metal and finally consumers. Trump argues that this measure will help protect and strengthen the US steel and aluminium industries. The tariffs will be implemented on the 23rd of March 2018.
BBC News analyses Trump’s controversial new tariffs.
2. ASIA PACIFIC TRADE DEAL
The Trans-Pacific Partnership deal has been rescued, with the notable absence of the USA. Eleven Asia-Pacific Countries successfully signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The deal cuts trade tariffs between members and limit obstacles to trade. In addition, there
The USA pulled out last year but the deal will still cover roughly 500 million citizens. Donald Trump claimed that TPP deal was a disaster for American workers.
The member countries are; Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
BBC News analyses the winners and losers of the deal.
3. RETAIL WOES CONTINUE
The pace of the demise of UK high street retail stores is increasing rapidly. New Look has announced that it will be cutting 980 jobs and will close 60 stores.
The plan is still to be approved by creditors but there is concern that even this may not be sufficient. Like many other retailers it blames challenging market conditions for its economic troubles. It currently has £1.2 billion of debt which it is struggling to pay back. Many analysts claim that its 600 stores is an excessive number, particularly in the internet age therefore store closures would be inevitable. (BBC News)
Debenhams is also looking to rent out its flagship store space in London. Debenhams is seeking to reduce its high street presence. It announced last year that it would close 10 out of its 240 stores as part of its £10 million cost saving plan. (The Guardian)
4. RESTAURANT INDUSTRY STRUGGLING
A third of the UK’s top 100 restaurant chains are not making a profit. Carluccio’s has just joined the list of faltering chains. The Italian restaurant group announced that it has brought in KPMG to devise cost saving strategies. The restaurant market is saturated and major players are struggling. Jamie’s Italian’s, Prezzo’s and Bryon Burger have all been forced to close a total of 117 stores because of falling revenues.
The story of the restaurant business is similar to the retail industry. Rising running costs and low consumer confidence have hit the pockets of restaurant groups across the UK. In addition, living costs have spiked post-Brexit vote, so many consumers cut eating out as a primary money saving method.
BBC News analyses the state of the restaurant business.
5. RBS REACHES $500 MILLION SETTLEMENT
Royal Bank of Scotland has agreed a $500 million settlement deal with the state of New York. The case relates to the misselling of the mortgage-backed securities in 2008. RBS broke underwriting rules and failed to comply with relevant regulations. More fines are expected from the US Department of Justice and $3.5 billion has been set aside to cover this. RBS will pay $400 million in consumer relief payments and $100 million to the state.
Despite positive financial results in 2017, RBS has warned that these fines will heavy impact its performance in 2018. RBS is still 72% owned by the British government. (Sky news)
6. GOLDMAN GIVES LONDON STAFF BREXIT NOTICE
Goldman Sachs has put its some of its London staff on notice to move to Frankfurt. The investment bank stated that it couldn’t wait for clarity on the final Brexit deal and had to take action. The jobs that will be moving will primarily be sales and trading roles. Goldman has not commented on this move but dozens of jobs are expected to be moved. Many people have already signed their new Germany contracts. Goldman is seeking to increase its presence in mainland Europe in general and hopes to boost its Frankfurt team to 400.
Theresa May has already ruled out the prospect of passporting rights for financial services. The increasingly likely prospect of “hard” Brexit is likely to lead a number of banks following Goldman in moving jobs.
Reuter’s looks closer at Goldman’s decision and the potential banking Brexit exodus.
7. NEXT FACES EQUAL PAY LEGAL CLAIM
Female shop workers at fashion retailer Next have launched a legal claim against their employer. The claimants allege that the predominantly female shop-floor workers are paid less than the mainly male warehouse staff. Over 3000 workers are expected to participate in the claim and could cost Next up to £30 million.
The crux of this dispute is whether this payment structure constitutes sexual discrimination. The case will turn on whether shop floor workers and warehouse workers are deemed to do work of “equal value”.
Legal claims of this nature have been flooding in. Tesco faced a similar legal action launched against it on this basis. In Tesco’s case however, it may be liable to pay up to £4 billion in back pay. Asda, Sainsbury’s and Morrisons also face similar cases. The judgements in these cases will set a crucial precedence for a number of companies. The Guardian looks closer at this increasingly important employment law issue.
8. BLACKBERRY SUES FACEBOOK
Blackberry is suing Facebook for an alleged patent infringement. Blackberry claims that features on Facebook messenger infringe on Blackberry patents. It hopes to recover lost profits and injunctive relief. The aspects in question are primarily interface, security and functionality features that Blackberry claim are patented.
Facebook has criticised this move and claims it “sadly reflects the current state of its messaging business.” They claim Blackberry’s abandonment of innovation has led to this move.
Blackberry also sued Nokia last year. Last year, Blackberry’s market share fell to 0.001%. CNBC looks closer at Blackberry’s comments.
9. US JOBS FIGURES
The US economy is “firing on all cylinders” as it revealed strong job figures. Over 300,000 jobs were created in February, smashing expectations and renewing positivity. Despite this, unemployment did not budge, staying at a rate of 4.1%.
In addition, annual wage growth fell from 2.8% to 2.6%. While this may appear negative, it was deemed ideal by the markets. In January, the markets crashed over fears that wage growth would prompt the Federal Reserve to increase interest rapids more rapidly.
For more on the US economy, check out the BBC News’ report.
10. KFC REVERTS TO OLD SUPPLIER
KFC chickened out on DHL after its delivery crisis. KFC will now go back to Bidvest Logistics for delivery of produces. Last month KFC was forced to close over 600 outlets after DHL faced logistical “teething problems”. After a review, KFC decided to ditch DHL and its partner QSL.
Bidvest will now supply 350 KFC restaurants across England and Wales. This renewed contract will allow Bidvest to rehire the staff who were made redundant were DHL initially. (Sky News)