Major International Business Headlines Brief::: 05 February 2025

Wed Feb 5 11:20:47 CAT 2025

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Major International Business Headlines Brief:::  05 February 2025 

 <mailto:info at bulls.co.zw> 

ü  Nigeria raises ₦606bn in bond auction

ü  Sasol sees up to 36% drop in half-yearly profit on lower oil prices

ü  Here’s what to expect when Disney reports earnings before the bell

ü  Chipotle earnings beat estimates, but stock falls on weak same-store sales forecast

ü  GM cuts 50% of Cruise staff after ending robotaxi business

ü  Chipotle downplays looming Trump tariffs, says only half of its avocados are from Mexico

ü  Walmart’s latest acquisition is a shopping mall in Pennsylvania

ü  Boeing’s Starliner losses top $2 billion after spacecraft program reports worst year yet

ü  PepsiCo earnings beat estimates, but demand for drinks and snacks drops in North America

ü  Pfizer tops earnings estimates as Covid product sales beat expectations and cost cuts pay off

ü  Shein ramps up charm offensive as London IPO nears

ü  US Postal Service halts China parcels after Trump tariffs

ü  UK denies it faces paying more for Chagos deal

ü  Google drops pledge on AI use for weapons

ü  Ghana wants more for its cashews, but it's a tough nut to crack

ü  Five ways China is hitting back against US tariffs

 <mailto:info at bulls.co.zw> 

Nigeria raises ₦606bn in bond auction

Nigeria’s first bond auction for 2025 witnessed significant demand from local investors as the government raised over 600 billion naira as investors priced bonds at higher rates across the 5-year, 7-year and 10-year maturities. Oluwamayowa Sanni, Financial Institutions Sales Manager at Stanbic IBTC joins CNBC Africa to unpack the government's borrowing appetite for 2025.

Sasol sees up to 36% drop in half-yearly profit on lower oil prices

(Reuters) – South African petrochemical firm Sasol forecast a fall of up to 36% in half-yearly earnings on Wednesday, mainly due to a decline in oil prices and lower sales volumes.

Sasol said in a trading update that it expects its headline earnings per share (HEPS), a profit measure widely used in South Africa, to come in between 13 rand and 15 rand ($0.6955-$0.8025), down from 20.37 rand in the same period last year.

The company, which produces chemicals and liquid fuels from coal and gas, said the decline was primarily because of a 13% fall in the average rand Brent crude oil price per barrel, as well as a significant drop in refining margins and fuel price differentials.

A 5% decrease in sales volumes due to lower production and market demand also hurt income, Sasol said.

The company will release its half-yearly results on Feb. 24.

($1 = 18.6923 rand)

Here’s what to expect when Disney reports earnings before the bell

Growth and profitability in Disney’s streaming business — combined with a blockbuster box office year and further investments in the company’s theme parks business — appeased investors when the company last reported quarterly results, sending shares soaring.

However, as the company enters 2025, the clock continues to tick on Iger’s time at the helm. Iger is expected to hand over the CEO post in early 2026, with his replacement to be named closer to that date.

The company’s succession plans have been of particular interest in recent quarters.

Subscriber growth will also be top of mind, especially as Disney’s competitors in recent weeks have reported hefty subscriber gains. Netflix last month reported it had surpassed 300 million paid memberships, adding a record 19 million subscribers during its most recent quarter.

Yet, subscription numbers are just part of the equation. Disney, like other streamers, has turned to profit-driving measures like ad-supported tiers and password-sharing crackdowns to drive revenue and keep Wall Street happy.

Chipotle earnings beat estimates, but stock falls on weak same-store sales forecast

However, the burrito chain disappointed investors with its same-store sales forecast for 2025 and commentary about weaker January traffic. Shares of the company fell more than 4% in extended trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: 25 cents adjusted vs. 24 cents expected

Revenue: $2.85 billion, meeting expectations

The company’s net sales climbed 13.1% to $2.85 billion. Same-store sales rose 5.4%, narrowly missing StreetAccount estimates of 5.7% growth.

Transactions rose 4% in the quarter, continuing the burrito chain’s streak of higher traffic. For the past year, Chipotle has outpaced the broader restaurant industry, which has seen traffic slump as many consumers opt to cook their meals to save money.

But sales softened at the end of December, which executives attributed to Christmas and New Year’s Day falling on Wednesdays.

However, sales have been “volatile” so far in 2025, CFO Adam Rymer said on the company’s conference call. The weather, including the wildfires in Los Angeles, has been having a larger impact on traffic than it did last year, according to executives.

“While we believe underlying transaction trends are healthy and we have a strong plan for the year, we do compare against progressively tougher comps in the first half of the year and therefore are guiding to a low to mid single digit comp for the full year,” Rymer said.

Wall Street was anticipating same-store sales growth of 5.4% for the full year, according to StreetAccount estimates.

Chipotle’s forecast doesn’t include the impact of any tariffs that may be implemented on Canadian and Mexican imports. Executives said that tariffs would raise the company’s cost of sales by 60 basis points, or 0.6 percentage points.

In September, Chipotle brought back its Smoked Brisket. The company charges more for the limited-time menu item than its other protein options.

Chipotle reported fourth-quarter net income of $331.8 million, or 24 cents per share, up from $282.1 million, or 20 cents per share, a year earlier.

Excluding restaurant impairment charges, legal costs and other items, Chipotle earned 25 cents per share.

The company opened 120 restaurants during the quarter, including one international licensed location. After 30 years of focusing primarily on its U.S. business, Chipotle is trying to expand internationally. For example, last year it entered Kuwait, its first new country in a decade.

For 2025, Chipotle expects to open between 315 and 345 new locations, more than 80% of which will have a “Chipotlane” for digital orders.

GM cuts 50% of Cruise staff after ending robotaxi business

The plans come two months after GM said it would no longer fund Cruise after spending more than $10 billion since acquiring the self-driving car business in 2016.

“Today, Cruise shared the difficult decision to part ways with approximately 50% of its workforce,” Cruise said in an emailed statement. “We are grateful for their passion and contributions to help us reach this stage, and our focus is on supporting them into their next chapter with severance packages and career support.”

Cruise had nearly 2,300 employees as of the end of last year, a GM spokesman previously told CNBC.

In an internal email sent Tuesday morning to all Cruise employees, which was viewed by CNBC, Cruise President and Chief Administrative Officer Craig Glidden wrote that the 50% reduction came “as a result of the change in strategy we announced in December.”

“With our move away from the ride-hail business and toward providing autonomous vehicles to customers alongside GM, our staffing and resource needs have dramatically changed,” Glidden wrote.

He added that a string of executives will also depart this week, including Marc Whitten, CEO; Nilka Thomas, chief human resources officer; Steve Kenner, chief safety officer; and Rob Grant, chief government affairs officer. Mo Elshenawy, president and chief technology officer, will stay on at Cruise through the end of April to help with transition duties, Glidden wrote.

The Cruise layoffs, which were first reported by TechCrunch, were expected, but executives had previously declined to speculate on the amount.

The job cuts were announced in conjunction with the Detroit automaker reporting the completion of Cruise becoming a wholly owned subsidiary within GM, which is now focusing on “personal autonomous vehicles” rather than robotaxis.

About 88% of remaining employees are in engineering or related roles, and affected employees were given 60 days’ notice, according to the company.

During the remainder of their time with Cruise, the affected employees will receive full base pay, as well as eight weeks severance. Employees who had been with Cruise for more than three years will receive an additional two weeks pay for every additional year spent at Cruise, the company said.

“While not an easy decision, we are focused on combining efforts with General Motors to accelerate autonomy at scale on personal autonomous vehicles,” Cruise said.

GM’s Cruise was considered a leader in the business along with Alphabet

-backed Waymo until the company grounded its robotaxi fleet and announced the end of its commercial operations late last year. That came after an October 2023 accident in which external probes found the company misled or deceived regulators about the incident.

In January 2024, a third-party probe into Cruise revealed that culture issues, ineptitude and poor leadership were at the center of regulatory oversights and cover-up concerns that had plagued the company.

The report addressed, in part, controversy that had swirled around Cruise since an Oct. 2, 2023, accident in which a pedestrian in San Francisco was dragged 20 feet by a Cruise robotaxi after being struck by a separate vehicle. Results of the investigation, which reviewed whether Cruise representatives misled investigators or members of the media in discussing the incident, were published months later in a 105-page report.

Chipotle downplays looming Trump tariffs, says only half of its avocados are from Mexico

A day earlier, President Donald Trump paused his plans for 25% tariffs on Mexican and Canadian imports. If implemented after the one-month suspension, imports such as avocados and beef would be more expensive for restaurants, which would likely try to pass on the increased cost to their diners.

But Chipotle executives shook off the tariff fears during the company’s earnings conference call on Tuesday. If tariffs aimed at Mexico, Canada and China all go into effect, Chipotle expects that its cost of sales would rise about 60 basis points, or 0.6 percentage points, according to Chief Financial Officer Adam Rymer.

Chipotle only sources about 2% of its sales from Mexico, importing produce such as avocados, tomatoes, limes and peppers, Rymer said.

In fact, while Mexico supplies roughly 90% of the avocados eaten in the U.S., Chipotle buys about half of its avocado supply from Colombia, Peru and the Dominican Republic, according to CEO Scott Boatwright. In recent years, Chipotle has taken steps to buy more of its avocados outside of Mexico, he told analysts.

Looking beyond Chipotle’s guacamole supply, less than 0.5% of Chipotle’s sales are sourced from Canada and China. Trump has already imposed a 10% tariff on Chinese imports.

In recent quarters, Chipotle has shown that it has pricing power, even as diners become more value-conscious.

For the fourth quarter, the company reported same-store sales growth of 5.4%, fueled by a traffic increase of 4%. Chipotle’s earnings topped Wall Street estimates, but a conservative forecast for its same-store sales growth sent shares down 5% in extended trading.

The outlook did not include the effect of any tariffs.

Walmart’s latest acquisition is a shopping mall in Pennsylvania

On Tuesday, the big-box retailer confirmed that it bought Monroeville Mall, which is roughly 12 miles east of Pittsburgh.

In a statement, Walmart said it “is very interested in being part of any future redevelopment of this site.” It declined to share specific plans for the future of the mall.

CBL Properties sold the mall in a $34 million all-cash deal, according to a news release from the Tennessee-based mall owner in late January. The company did not name the buyer at the time.

Walmart’s purchase is an example of the unexpected ways that malls are being redeveloped and repurposed. Shopping centers have added new restaurants, turned former stores into apartments or gotten demolished for completely new uses, as mall anchors like Sears have shuttered and others like Macy’s

are downsizing.

Some malls have changed to reflect evolving buying habits, becoming Amazon fulfillment centers where workers pack up purchases and send them to shoppers’ doors.

Tenants at Monroeville Mall include department stores Macy’s and JCPenney, specialty retailers like Claire’s, Victoria’s Secret and American Eagle, and a Cinemark movie theater, according to Monroeville Mall’s website. The mall is on a 186-acre site.

Walmart’s real estate deal was previously reported by the Pittsburgh Post-Gazette.

Walmart’s previous deals have been more retail related, including the $3.3 billion acquisition of e-commerce startup Jet.com. But it also acquired smart TV maker Vizio last year in a $2.3 billion deal, as it bulks up its advertising business.

Walmart hired Texas-based Cypress Equities to manage the property and oversee the redevelopment of the mall, where the horror classic “Dawn of the Dead” was filmed.

Chris Maguire, CEO of Cypress Equities, said the company has worked with the discounter before to find new sites, build stores or close older locations. But he said Walmart’s interest in a mall caught him by surprise.

Walmart brought Cypress in to look at the project in early October, Maguire said. Now, he said, the project is “shifting into planning mode,” and a design and architecture team will work on a master plan for the mall. 

“This is going to be a retail-driven, mixed-use project,” he said.

He said there’s a need for more entertainment and food and beverage concepts in the area. And he said the company has spoken to the city about turning some of the site into housing.

Walmart has more than 4,600 stores and about 600 locations of Sam’s Club, its membership-based warehouse club, in the U.S. Both stores, Walmart and Sam’s Club, have been expanding.

Two years ago, Sam’s Club announced that it planned to open more than 30 stores in the U.S. over a five-year period. Walmart said early last year that it expected to build more than 150 stores over the next five years, with some of those locations being a conversion from a smaller to a larger-format store.

Walmart opened three stores last year in North Carolina, Florida and Georgia, and it plans to open a dozen more locations over the next 12 months, Hunter Hart, senior vice president of Walmart Realty, said in an interview in late January. Many of those stores will open in high-growth parts of the country, such as North Texas or Houston, he said.

It’s also made a more aggressive push to refresh its big-box stores with features like brighter lighting and more spacious aisles. Over the past three years, it has remodeled more than 2,000 stores, Hart said.

Going forward, Hart said Walmart plans to remodel about 650 locations per year — a step up from its typical cadence of 450 to 500 per year.

Walmart did not say if it is considering any other mall purchases.

Cypress’ Maguire said Walmart’s deal could inspire other similar projects. 

“As we all know, there’s a lot of malls out there in the U.S. that aren’t going to operate as an enclosed mall,” he said. “So hopefully things like this are going to happen in other markets with properties that have really deteriorated over a long period of time and need a new vision.”

Boeing’s Starliner losses top $2 billion after spacecraft program reports worst year yet

Boeing’s losses on its Starliner spacecraft topped $2 billion and counting after a rough year.

Last summer, Boeing’s first crew flight went awry after part of the capsule’s propulsion system malfunctioned and NASA decided to return Starliner empty.

Since 2014, when NASA awarded Boeing with a nearly $5 billion fixed-price contract to develop Starliner, the company has recorded losses on the program almost every year.

Boeing has lost more than $2 billion and counting on its Starliner spacecraft after a rough year in which the capsule’s first astronaut flight turned into a headache for NASA.

The Starliner program reported charges of $523 million for 2024 — its largest single-year loss to date — Boeing reported in a filing on Monday. The company noted that Starliner is under a fixed-price contract from NASA, so “there is ongoing risk that similar losses may have to be recognized in future periods.”

Since 2014, when NASA awarded Boeing with a nearly $5 billion fixed-price contract to develop Starliner, the company has recorded losses on the program almost every year.

Boeing’s program competes with Elon Musk’s SpaceX, which has flown 10 crew missions for NASA and counting on its Dragon capsules.

Last summer, Boeing’s first crew flight went awry after part of the capsule’s propulsion system malfunctioned. While Starliner delivered astronauts Butch Wilmore and Suni Williams to the International Space Station, NASA made the decision to bring Starliner back empty and use SpaceX to return the crew early this year — an agency choice that recently became politicized.

Neither Boeing nor NASA have provided details on how or when they plan to resolve the Starliner propulsion issue.

Boeing last week confirmed that Starliner Vice President Mark Nappi was leaving his role, Reuters reported, with the company’s ISS program manager John Mulholland named as his replacement. Mullholland previously led the Starliner program from 2011 to 2020.

Nearly four months ago, NASA said it was keeping “windows of opportunity for a potential Starliner flight in 2025,” but scheduled SpaceX to fly both its crews on missions launching in spring and late summer. NASA then specified that “the timing and configuration of Starliner’s next flight will be determined once a better understanding of Boeing’s path to system certification is established.”

The agency has not given an update on Starliner since making those comments in October.

Published Tue, Feb 4 20256:22 AM ESTUpdated Tue, Feb 4 20254:05 PM EST

PepsiCo reported mixed quarterly results on Tuesday as demand for its snacks and drinks fell in North America for the fifth straight quarter.

Shares of the company closed down more than 4%.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $1.96 adjusted vs. $1.94 expected

Revenue: $27.78 billion vs. $27.89 billion expected

Pepsi posted fourth-quarter net income attributable to the company of $1.52 billion, or $1.11 per share, up from $1.3 billion, or 94 cents per share, a year earlier.

Excluding restructuring, impairment charges and other items, the food and beverage company earned $1.96 per share.

Net sales dropped slightly to $27.78 billion.

The company’s organic revenue, which excludes acquisitions, divestitures and foreign exchange, rose 2.1% in the fourth quarter.

Pepsi’s worldwide volume increased 1% for convenient foods and 1% for beverages. The metric strips out pricing and foreign exchange.

But demand was weaker in the company’s home market, North America. Pepsi has previously said that shoppers in the U.S. have grown more cautious, snacking less and making fewer purchases at convenience stores.

Still, executives think Pepsi’s domestic business will pick up again.

“We’re very confident that our North American business will accelerate this year. We’re confident in our plans ... and we see opportunities, especially away from home,” Laguarta told analysts on the company’s conference call.

Frito-Lay North America’s volume fell 3% in the quarter. Consumers have been watching their grocery budgets, thanks to several years of higher food prices and interest rates.

“In 2024, the salty and savory snack categories underperformed broader packaged food, following multiple years in which these categories had outperformed packaged food,” CEO Ramon Laguarta and CFO Jamie Caulfield said in prepared remarks.

The company’s North American beverage unit reported a 3% decline in quarterly volume. But there were some bright spots for the division, as Gatorade gained market share and Mountain Dew Baja Blast surpassed $1 billion in annual sales.

Pepsi is also planning to push more into protein drinks, executives said on the company’s conference call. The segment is growing quickly, fueled in part by the adoption of GLP-1 drugs.

Quaker Foods North America, still reeling from a recall from the prior December, saw its volume fall 6%. The company expects that Quaker’s performance will improve in 2025 as it laps the fallout from the recall, executives said in prepared remarks.

For 2025, Pepsi is projecting a low-single-digit increase in its organic revenue and a mid-single-digit rise in its core constant currency earnings per share.

“Looking ahead to 2025, we will continue to build upon the successful expansion of our international business, while also taking actions to improve performance in North America,” Laguarta said in a statement.

Pfizer tops earnings estimates as Covid product sales beat expectations and cost cuts pay off

Pfizer on Tuesday reported fourth-quarter earnings and revenue that beat estimates as sales of the company’s Covid products topped expectations and its broad cost-cutting efforts took hold.

Here’s what the company reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

Earnings per share: 63 cents adjusted vs. 46 cents expected

Revenue: $17.76 billion vs. $17.36 billion expected

Shares of Pfizer were down slightly on Tuesday.

The results cap off a critical year for Pfizer, which has been pursuing broad cost reductions as it recovers from the rapid decline of its Covid business and stock price over the last two years. The company said it is on track to deliver overall net cost savings of roughly $4.5 billion by the end of 2025 from its cost-cutting program. 

Pfizer believes “our revenue volatility is largely in the past as Covid-related uncertainties have diminished,” the company’s CFO Dave Denton said on an earnings call on Tuesday. “Additionally, our cost improvement programs have set the stage for ongoing margin expansion.”

The company booked fourth-quarter net income of $410 million, or 7 cents per share. That compares with a net loss of $3.37 billion, or a loss of 60 cents per share, during the same period a year ago. 

Excluding certain items, including restructuring charges and costs associated with intangible assets, the company posted earnings per share of 63 cents for the quarter.

Pfizer reported revenue of $17.76 billion for the fourth quarter, up 22% from the same period a year ago.

The fourth-quarter results are “unlikely to shock many investors, but we view another top- and bottom-line beat as positive for improving sentiment,” BMO Capital Markets analyst Evan Seigerman said in a research note on Tuesday.

The company reiterated the full-year 2025 outlook it provided in December, forecasting sales of $61 billion to $64 billion, with a similar performance from its Covid products as seen in 2024. Denton noted that changes to the Medicare program resulting from the Inflation Reduction Act will hurt sales by $1 billion, dampening growth by approximately 1.6% compared to 2024.

Stripping out one-time items, the company expects 2025 earnings to be in the range of $2.80 to $3 a share. 

But Wall Street is likely more concerned with Pfizer’s long-term financial health and its drug pipeline. Investors are also watching to see whether Pfizer can win a slice of the booming weight loss drug market with the once-daily version of its experimental obesity pill, danuglipron. 

Pfizer appears to have dodged a proxy battle with activist investor Starboard Value, which has a roughly $1 billion stake in the pharmaceutical giant, for now. The deadline passed for nominating board members for this year.

Covid products top estimates

Pfizer’s fourth-quarter beat was fueled in part by higher-than-expected demand for its Covid products.

Paxlovid, its antiviral pill, brought in $727 million in sales for the quarter, up from the loss of $3.1 billion in revenue recorded in the year-earlier period. But the same quarter last year included a revenue reversal tied to the planned return of around 6.5 million Paxlovid doses from the U.S. government. 

Pfizer said the growth was driven by strong demand, particularly in the U.S. during a recent Covid wave, and a one-time contract delivery of 1 million treatment courses of Paxlovid to the federal government. Analysts expected the drug to bring in $630.7 million in sales, according to StreetAccount. 

The company’s Covid shot booked $3.4 billion in revenue, down $2 billion from the same period a year ago. Pfizer said the decline was mainly driven by fewer Covid vaccinations globally and lower contracted doses of its shot. 

Analysts expected $3 billion in sales for the shot, according to StreetAccount.

Non-Covid product growth

Excluding Covid products, Pfizer said revenue for the fourth quarter rose 12% on an operational basis, fueled by approved cancer products from Seagen, which it acquired in 2023 for a whopping $43 billion.

Those drugs brought in $915 million in revenue for the quarter, compared with just $132 million in sales in the fourth quarter of 2023.

Revenue also got a boost from sales of Pfizer’s Vyndaqel drugs, which are used to treat a certain type of cardiomyopathy, a disease of the heart muscle. Those drugs booked $1.55 billion in sales, up 61% from the fourth quarter of 2023.

Analysts had expected that group of drugs to take in $1.51 billion for the quarter, according to estimates from StreetAccount.  

Pfizer said its blood thinner Eliquis, which is co-marketed by Bristol Myers Squibb, also helped drive revenue growth during the period. The drug posted $1.83 billion in revenue for the quarter, up 14% from the year-earlier period. 

That is slightly higher than the $1.67 billion that analysts were expecting, according to StreetAccount. 

Sales of Eliquis could take a hit in 2026, however, when a new price for the drug goes into effect for certain Medicare patients following negotiations with the federal government. Those price negotiations are a key provision of President Joe Biden’s Inflation Reduction Act that the pharmaceutical industry fiercely opposes.

Pfizer’s vaccine against respiratory syncytial virus, or RSV, saw $198 million in revenue for the fourth quarter, down 62% from the year-earlier period. The shot, known as Abrysvo, entered the market during the third quarter of 2023 for seniors and expectant mothers who can pass on protection to their fetuses.

The company said the decline came after a significant decrease in U.S. vaccination rates among older adults due to current recommendations from advisors to the Centers for Disease Control and Prevention, which narrowed the market opportunity for RSV shots. The advisory panel in June voted to recommend RSV shots to adults 75 and above, but said those 60 to 74 should do so only if they are at higher risk for severe disease.

Analysts had expected the shot to generate sales of $459.5 million, according to StreetAccount estimates.

Shein ramps up charm offensive as London IPO nears

Shein is ramping up its charm offensive again as the fast-fashion giant eyes a public listing in London as soon as this year. 

The retailer issued a press release on Friday detailing the steps it’s taking to keep the items it sells safe. The announcement came about a week after its first product safety recall in the U.S. since 2021. 

Shein said it conducted more than 2 million product safety tests last year using industry-leading labs such as Bureau Veritas and Intertek, adding that its vendors are required to submit documentation for items like toys, baby products, medical devices and electronics. 

Shein made the announcement, which included details on its sustainability initiatives and a new nonprofit foundation it set up, as the company looks to win over lawmakers in the U.K. and ease concerns that it’s selling unsafe products that are made with forced labor. 

Last week, Shein recalled more than 300 hair dryer brushes because they posed an electrocution or shock hazard to consumers. The Teckwe Hair Dryer Brush appeared to be a so-called dupe of a similar product sold by Dyson. No injuries were reported and Shein is offering a refund to impacted customers. 

A spokesperson for Shein told CNBC the company conducted safety tests on products it sells itself and did “risk-based, randomized testing” on items sold by third-party vendors on its marketplace before their listing.

Product safety testing is common for items that a retailer sells, even if they’re online only, because they could be held liable for defects under consumer protection laws in the U.S. On the other hand, a retailer’s liability is less clear for third-party sellers on an online marketplace, which makes product testing prior to an item’s listing unusual.

Shein’s decision to conduct product safety tests on items sold by third-party sellers makes it stand out in an industry that has been rife with safety concerns. Typically, online marketplaces just require sellers to conduct their own testing and provide documentation to support it.

Shein added in its press release that it terminated more than 260 sellers on its marketplace over the last year for not meeting compliance requirements. 

Shein faces U.K. scrutiny

Shein’s campaign to show it takes product safety and sustainability seriously comes as it prepares to go public in the U.K. — and follows a similar charm offensive in the U.S. before its doomed initial public offering bid there.

Earlier this month, U.K. lawmakers criticized attorneys for Shein when they appeared before a British parliamentary hearing and evaded questions about the company’s supply chain and whether it sells products made with cotton from China, The Associated Press reported. 

Shein’s general counsel in Europe, Yinan Zhu, repeatedly declined to say whether the company’s products contain cotton from Xinjiang and whether the company prohibits suppliers from sourcing raw materials in the region, which has become notorious for its Uyghur detention camps. 

When asked whether the company believes there is forced labor in Xinjiang, Zhu said it wasn’t the company’s place to have a “geopolitical debate” and repeated a line Shein often uses when grilled on its supply chain, “We comply with the laws and regulations in the countries that we operate in.”

Committee Chairman Liam Byrne said Zhu’s refusal to answer questions left lawmakers “horrified” and gave them “zero confidence” in the integrity of Shein’s supply chain.  

“The reluctance to answer basic questions has frankly bordered on contempt,” Byrne said.

Throughout 2023, when Shein was still hoping for a U.S. IPO, it commonly spoke publicly about its cotton supply chain and the tests it had conducted to ensure it wasn’t sourcing from banned regions. It even told CNBC it had stopped sourcing cotton from China altogether. 

Shein did not make similar statements in the parliamentary hearing.

US Postal Service halts China parcels after Trump tariffs

The US Postal Service (USPS) said it has stopped accepting parcels from mainland China and Hong Kong until further notice.

Letters will not be affected by the suspension, said the company, which declined to offer a reason for the decision.

However, on Tuesday new rules came into force which closed a loophole that allowed small packages worth $800 (£641) or less to be sent to the US without paying tax or fees.

It was one of the measures announced by US President Donald Trump who imposed an additional 10% tariff on all goods imported to the US from China.

The so-called de minimis tax loophole has faced increased scrutiny in recent years as Chinese e-commerce giants like Shein and Temu have used it to reach millions of US customers.

Changes to the tax exemption under President Joe Biden were already in progress before Trump took office.

But in his trade announcement at the weekend, Trump extended tariffs to all China goods being imported into the US, including fashion items and toys.

In response, China said it would implement tariffs on some US imports.

>From 10 February coal and liquefied natural gas (LNG) will face a 15% levy. Crude oil, agricultural machinery and large-engine cars will be subject to a 10% tariff.

Beijing hits back – can China and US avoid trade war escalation?

Why Trump tariffs could mean Barbie dolls cost more

Nick Stowe, chief executive of Monsoon & Accessorize, told the BBC's Today programme he was in support of the changes in the US to the de minimis exemption, claiming that it had allowed major Chinese retailers to "undercut" rivals in other markets.

"It has long been a complaint of UK retailers, European retailers as well as the US retailers that Shein are exploiting this loophole, not paying customs duty and they have built a business at an industrial scale," he said.

Trump is expected to speak to his Chinese counterpart Xi Jinping in the coming days.

"Trump's tariff changes are especially sharp if goods were previously shipped via e-commerce directly from China to the US," said trade expert Deborah Elms.

Close to half of all parcels entering the US under de minimis exemptions were sent from China, according to a 2023 report by US Congress.

Officials have pointed out that the large flow of parcels entering the country through this exemption made it increasingly difficult to screen them for possible illegal goods.

The BBC has contacted USPS to request more details about the decision.-bbc

UK denies it faces paying more for Chagos deal

The UK government has denied claims made by the prime minister of Mauritius that it faces paying more under a renegotiated deal over the future of the Chagos Islands.

Last October, the UK announced it would hand over sovereignty of the islands to Mauritius but maintain a 99-year lease over the UK-US military airbase on the largest island, Diego Garcia.

However, shortly after the deal was struck, Mauritius elected a new prime minister, Navin Ramgoolam, who wanted to reopen negotiations. He told his MPs on Tuesday new conditions had been negotiated meaning the UK's lease payments would be linked to inflation and frontloaded.

But the UK Foreign Office said the figures being quoted were "inaccurate and misleading".

"The UK will only sign a deal that is in our national interest," a spokesperson said.

The Mauritian PM had said he was "confident" the new deal would be approved, saying UK Prime Minister Sir Keir Starmer had said he intended to "push ahead" with the renegotiated deal.

Speaking to Mauritian MPs on Tuesday, Ramgoolam railed against the former agreement, which he said was a "sell-out" for Mauritius.

"We have to be inflation-proof. What's the point of getting money and then having half of it by the end? This is what would happen, we have made the calculations," he said.

However, he did not reveal the exact amount the UK would pay, saying: "I'm not in a position to give details but let me say something, that package was very badly negotiated."

He said the old package had also been tweaked so the UK would pay more in "front-loading" at the beginning of the deal. "That also is being approved I think," the Mauritian leader added.

Ramgoolam also said the UK would no longer be able to unilaterally act on a clause in the deal where the lease could be extended for 40 years.

This was also denied by the UK government with the Foreign Office spokesperson saying: "There has been no change to the terms of extension in the treaty."

Progress on the deal had been paused while the UK consulted new US President Donald Trump on the deal.

There had been efforts to get the treaty signed before Trump's inauguration on 20 January. However, the UK changed course, saying it was "perfectly reasonable for the US administration to consider the detail" of any agreement.

On Tuesday, Downing Street reiterated it was "absolutely right" for the US to consider the deal.

US Secretary of State Marco Rubio had previously raised concerns, saying the deal posed a threat to US security, given China's influence in the region. Mauritius has an economic relationship with China.

Ramgoolam's words were also noted by the UK government's political opponents on Tuesday,

Dame Priti Patel, the shadow foreign secretary, said Sir Keir had "the audacity to tell the British people they will foot the bill and pay for the indignity of his surrender of the Chagos Islands, as he isolates the new US administration by bending the knee to Mauritius and emboldening our enemies with his disastrous surrender deal".

Tory leader Kemi Badenoch said the prime minister should "come to Parliament and be honest with MPs" about what she called a "foolish deal".

Reform UK leader Nigel Farage also voiced opposition to the deal, saying if the UK ceded sovereignty of the Chagos Islands, "our value to America" would become "considerably reduced".

The UK took control of the Chagos Islands, or British Indian Ocean Territory, from its then colony, Mauritius, in 1965 and went on to evict its population of more than 1,000 people to make way for the Diego Garcia base.

Mauritius, which won independence from the UK in 1968, has maintained the islands are its own, and the UN's highest court has ruled, in an advisory opinion, that the UK's administration of the territory is "unlawful".

The Chagos islanders – some in Mauritius and the Seychelles, but others living in the UK – do not speak with one voice on the fate of their homeland.

Some have criticised the deal, saying they were not consulted in the negotiations.-bbc

Google drops pledge on AI use for weapons

Alphabet, the parent company of technology giant Google, is no longer promising that it will never use artificial intelligence (AI) for purposes such as developing weapons and surveillance tools.

The firm has rewritten the principles guiding its use of AI, dropping a section which ruled out uses that were "likely to cause harm".

In a blog post Google senior vice president James Manyika, and Demis Hassabis, who leads the AI lab Google DeepMind, defended the move.

They argue businesses and democratic governments need to work together on AI that "supports national security".

What is AI and how does it work?

There is debate amongst AI experts and professionals over how the powerful new technology should be governed in broad terms, how far commercial gains should be allowed to determine its direction, and how best to guard against risks for humanity in general.

There is also controversy around the use of AI on the battlefield and in surveillance technologies.

The blog said the company's original AI principles published in 2018 needed to be updated as the technology had evolved.

"Billions of people are using AI in their everyday lives. AI has become a general-purpose technology, and a platform which countless organisations and individuals use to build applications.

"It has moved from a niche research topic in the lab to a technology that is becoming as pervasive as mobile phones and the internet itself," the blog post said.

As a result baseline AI principles were also being developed, which could guide common strategies, it said.

However, Mr Hassabis and Mr Manyika said the geopolitical landscape was becoming increasingly complex.

"We believe democracies should lead in AI development, guided by core values like freedom, equality and respect for human rights," the blog post said.

"And we believe that companies, governments and organisations sharing these values should work together to create AI that protects people, promotes global growth and supports national security."

The blog post was published just ahead of Alphabet's end of year financial report, showing results that were weaker than market expectations, and knocking back its share price.

That was despite a 10% rise in revenue from digital advertising, its biggest earner, boosted by US election spending.

In its earnings report the company said it would spend $75bn ($60bn) on AI projects this year, 29% more than Wall Street analysts had expected.

The company is investing in the infrastructure to run AI, AI research, and applications such as AI-powered search.

Google's AI platform Gemini now appears at the top of Google search results, offering an AI written summary, and pops up on Google Pixel phones.

Originally, long before the current surge of interest in the ethics of AI, Google's founders, Sergei Brin and Larry Page, said their motto for the firm was "don't be evil". When the company was restructured under the name Alphabet Inc in 2015 the parent company switched to "Do the right thing".

Since then Google staff have sometimes pushed back against the approach taken by their executives. In 2018 the firm did not renew a contract for AI work with the US Pentagon following a resignations and a petition signed by thousands of employees.

They feared "Project Maven" was the first step towards using artificial intelligence for lethal purposes.-bbc

Ghana wants more for its cashews, but it's a tough nut to crack

I'm trying to establish how the rather flimsy 30g bag of roasted cashew nuts she's selling, beside a sweltering highway in Ghana's capital, costs me the equivalent of about 75 cents (60p).

That's obviously not a lot of money for me, a visitor from the UK, but I'm amazed at the mark up.

The price is at least 4,000% higher than the cost of buying the same weight of raw, unshelled cashews from a Ghanian farmer.

"It's incredible," I protest. Yet she doesn't understand my English, or my reasoning.

The price of the nuts was, after all, printed on the packet. And explaining why I thought it was beyond the pale was never going to be easy.

Cashing in on Ghana's cashews

Ghana is the world's third-biggest exporter of unprocessed cashew nuts, behind Ivory Coast in first place, and Cambodia in second.

To produce the crop, around 300,000 Ghanaians make at least part of their living growing cashews.

Nashiru Seydou, whose family have a farm in the country's north-east, some 500 miles (800km) from Accra, is one of them.

He says the work is hard, and unreliable supply chains and volatile wholesale prices make survival difficult.

"We are struggling. We can use the sunlight, the fertile land, to create more jobs," he says. "I'd be happy if the government comes to our aid and helps support our industry."

He tells me that he currently gets around $50 for a large 100kg sack of unshelled cashews.

Ghanaian cashew nut farmer Nashiru Seydou

Ghanaian cashew nut farmer Nashiru Seydou says it is a tough way to make a living

"It's amazing," says Bright Simons, an entrepreneur and economic commentator in Accra, who has studied the numbers. "Roasters and retailers buy the nuts from farmers for $500 a tonne, and sell to customers [both at home and abroad] for amounts between $20,000 and $40,000 a tonne."

As a whole, Ghana grows about 180,000 tonnes of cashews annually. More than 80% is exported, and in raw, unshelled form. This generates some $300m in export revenues, but means that Ghana misses out on the significantly higher returns you get from roasted, ready-to-eat cashews.

Mildred Akotia is one person trying to increase the amount of cashews that are shelled and roasted in Ghana. She is the founder and CEO of Akwaaba Fine Foods, which currently processes just 25 tonnes a year.

Ms Akotia denies any suggestion that she and others like her are price-gouging. The packaging and roasting machinery a western business would automatically use in this industry, she says, is out of reach for her because of the high cost of credit in Ghana.

"If you go to a local bank, it will cost you 30% interest to get a loan," she complains. "As a manufacturer you tell me how large your margins are that you can afford that kind of interest? We've had to rely on what we can get: soft loans from relatives and grants from donor agencies."

She says that this situation is why less than 20% of Ghana's cashews are processed locally. The bulk are scooped up and exported to big factories in countries like India, Thailand and Vietnam.

Remarkably, some of those packaged nuts are then exported back to Ghana, where they are sold for the same price as domestically roasted cashews. This is despite the 20,000-mile sea freight round trip, and import costs.

It is a similar picture for rice, which is exported to Ghana from Asia and sold at low prices, despite Ghana also growing the crop itself.

A bag of Ghanaian cashews that were roasted locally

Domestically processed and roasted cashew nuts are available in Ghana, but imported brands are the same price

Back in 2016 the Ghanaian government experimented with an export ban on raw cashews in order to encourage homegrown processing. However the policy had to be abandoned within a couple of weeks after uproar from farmers and traders.

Without available cheap loans, it wasn't possible for sufficient new Ghanaian roasters to enter the market. So the price of raw nuts crashed, and many started rotting for want of a buyer.

More recently there has been talk of increased tariffs on raw cashew exports and bans on exporters purchasing cashews directly from farms.

But all these policy interventions miss a key point, according to Mr Simons. A big challenge for local producers, he says, is to work harder on the basics of doing business, and growing their companies.

"In order to be efficient at this, you need scale," he says, adding that firms need to promote eating cashews to make it more widespread in the country. "You need a lot of a Ghanaians consuming the nuts, not just a small middle class".

Prof Daron Acemoglu, a Turkish-American economist, agrees that building a strong local market is important for Ghana's cashew industry. He was one of last year's winners of the Nobel Memorial Prize in Economic Sciences, for his work on the struggles facing low-income economies, and in particular their home-grown businesses.

Yet he says that the first priority should be improving access to international markets for processed Ghanaian cashews.

"These firms are dealing with workforces that aren't properly skilled, they have infrastructures that aren't working, they are constantly in fear of corrupt officials, or rule changes, and also it's very difficult to reach foreign markets, he says. "They need the foreign market because the domestic market is small, and their own government has very little capacity [to boost it]."

He also wants to see the Ghanaian government improve the network of roads and railways to ease the cost of transportation.

But Mr Simons reckons the onus should now be on Ghanaian businesses themselves, to do the basics to enhance the branding and marketing of cashews. As it is, he says, many of the country's most enterprising business people are just leaving Ghana for better paid opportunities abroad because of the red tape and cronyism in Ghana are so prohibitive.

"There's a massive brain drain," he says. "My theory of why Africa's economic development has been slow is because we focus too much on the supply side, but the real beauty is in demand, creating a consuming class of cashew-eating enthusiasts, and you don't have an entrepreneurial class that can create demand transformation."

He says the same argument applies to Ghana's other bigger exports, like gold and chocolate, neither of which gets much value-addition within Ghana before getting exported to the West.

Mildred Akotia hopes she might be one of those entrepreneurs to buck the trend. She now wants to build her own logistics arm, to be able to process the cashews direct from the farm gate.

"I have a lot of calls from the UAE, from Canada and America. Currently we can't meet demand. We can't get enough kernels to roast.

"There's a ready market both locally and internationally. My branding is good, my marketing is good. My dream is to give a facelift to Ghanaian processed foods."-bbc

Five ways China is hitting back against US tariffs

The trade war between the world's two biggest economies has escalated after China hit back against the introduction of tariffs by the US with measures of its own.

Beijing has set out to target specific American goods with retaliatory taxes, among other measures, following the blanket 10% tariff introduced by President Donald Trump on all Chinese imports to the US.

In some ways, this latest tit-for-tat is nothing new and builds on the long-running trade dispute between the nations, with tariffs having already been imposed and threatened on various goods since 2018.

Trump has said he plans to speak to Chinese President Xi Jinping, so a deal could yet be struck. But if China proceeds with its response on 10 February as planned, what could the impact be?

Part of China's countermeasures to Trump's tariffs is to announce import taxes of its own on US coal and liquefied natural gas (LNG) of 10%, and a 15% charge on crude oil.

The response from Beijing means companies wanting to import fossil fuels from the US would have to pay the tax in order to do so.

China is the world's largest importer of coal, but it gets most of it from Indonesia, although Russia, Australia and Mongolia are also among its suppliers.

When it comes to the US, China has been increasing imports of LNG from the country, with volumes nearly double 2018 levels, according to Chinese customs data.

But its overall fossil fuel trade is modest, with US imports accounting for just 1.7% of China's total crude oil bought from abroad in 2023. This suggests China is not dependent on the US and so the impact of the tariffs on its economy could be minimal.

Rebecca Harding, a trade economist and chief executive of the Centre for Economic Security think tank, said China could easily source more supplies from Russia, where it has already been buying oil on the cheap as the Kremlin seeks to fund its war effort.

On the flipside, the US is the world's largest LNG exporter, and so has plenty of other customers, particularly the UK and the European Union.

What are tariffs and why is Trump threatening to use them?

Trump sows uncertainty - and Xi Jinping sees an opportunity

Agricultural machinery, pick-up trucks and big cars

As well as fuel, China has slapped a 10% tariff on agricultural machinery, pick-up trucks, and some large cars.

But China is not a big importer of US pick-ups and it gets most of its cars from Europe and Japan, so a 10% tariff on an already small number of imports would not hit consumers too hard.

In recent years, China has increased investments in farm machinery to enhance production and reduce reliance on imports, and to strengthen its food security.

So the introduction of tariffs on agricultural machinery might be another move to try to boost domestic industry.

Julian Evans-Pritchard, head of China economics at consultancy Capital Economics, said all the tariff measures were "fairly modest, at least relative to US moves".

He suggests that China's targeted goods represent about $20bn (£16bn) worth of annual imports - around 12% of China's total imports from the US.

"This is a far cry from the more than $450bn worth of Chinese goods being targeted by the US."

But he said China had "clearly been calibrated to try to send a message to the US [and domestic audiences] without inflicting too much damage".

Google probe

The Chinese authorities have also announced some non-tariff measures, one of which is an anti-monopoly investigation into US tech giant Google.

It is unclear what the investigation will involve, but for context, Google's search services have been blocked in China since 2010.

The company still has some business presence in the country through providing apps and games to the Chinese markets by working with local developers.

But China only generates about 1% of Google's global sales, which suggests if it cut ties entirely with the country, it wouldn't be much worse off.

China has added PVH, the American company that owns designer brands Calvin Klein and Tommy Hilfiger, to its so-called "unreliable entity" list and accused them of "discriminatory measures against Chinese enterprises".

The list, which has other US firms on it, was created in 2020 by Beijing amid the heating up of trade tensions.

For Calvin Klein and Tommy Hilfiger, being on China's list will make it harder to do business in the country. They may face sanctions, including fines, and having the work visas of their foreign employees revoked.

Regulators will also go to factories of the firms to investigate operations, according to Andreas Schotter, professor of international business at Western University in Ontario, Canada.

The US has its own "entity list", which bars certain organisations from buying products from US companies without approval from Washington.

"China is hitting back in the same way President Trump is accusing Chinese companies. This is all part of the US driven de-coupling of the US and China," Prof Schotter added.-bbc

 Invest Wisely!

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