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Survey: Higher number of small businesses hurt by tariffs

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NEW YORK — A growing number of small business owners say the Trump administration’s trade tariffs and policy are hurting their companies.

That’s one of the findings of a Bank of America survey of owners taken during July and August and obtained by The Associated Press. Forty-four per cent of the 1,323 owners surveyed said their businesses have been affected by the administration’s trade tariffs and policy. That was up from 41% in a survey taken during the spring and 36% in a survey released a year ago. In the latest survey, nearly a fifth of the owners said tariffs and trade policy had a negative impact on their companies, up from 18% in the spring, and 16% reported a mixed impact, up from 14%.

Separately, a report released Monday showed that the trade conflict contributing to a further deterioration in the manufacturing sector, which includes many small businesses. The Institute for Supply Management, an industry organization for corporate purchasing executives, said its index of manufacturing activity fell to 48.1 in November from 48.3 in October. Any reading below 50 signals a contraction in manufacturing; the index has fallen since August.

New orders, production and hiring all dropped for the fourth straight month, the ISM said.

“Global trade remains the most significant cross-industry issue,” said Timothy Fiore, head of the ISM’s survey committee.

President Donald Trump has imposed tariffs on foreign steel, aluminum and thousands of goods from China. In the Bank of America survey, 61% said they were paying more for goods and supplies due to the tariffs. Fifty-five per cent said they had to raise their prices because of the tariffs, and nearly a quarter said they had lost customers.

The survey also found that political environment and health care remain owners’ top economic concerns, each cited by 61% of those surveyed. They were followed by consumer spending, cited by 54%; the strength of the dollar, cited by 50% and interest rates, a concern for 48%.

Owners’ hiring plans were little changed, with 24% saying they plan to hire over the next 12 months, the same as in the spring survey. They were slightly more pessimistic about their revenue; 58% expect their revenue to increase over the next 12 months, down from 59%.

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Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg. Her work can be found here: https://apnews.com

Joyce M. Rosenberg, The Associated Press

The post Survey: Higher number of small businesses hurt by tariffs appeared first on Canadian Business – Your Source For Business News.



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Tiffany Dives After Report That Deal With LVMH Is Uncertain

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(Bloomberg) — Tiffany & Co. plunged after Women’s Wear Daily reported LVMH’s $16 billion deal to buy the jeweler is uncertain as the U.S. economy faces widespread upheaval.Board members of the French luxury giant arranged to meet Tuesday to discuss the planned acquisition, WWD reported, citing unidentified individuals. Directors are concerned about the Covid-19 pandemic that has disrupted the U.S. economy and growing unrest over police violence, the fashion publication said. They also expressed worries over Tiffany’s ability to cover its debt covenants at the end of the transaction.Tiffany shares fell 8.9% to $117.03 Tuesday, the steepest intraday drop since 2015. LVMH, which has agreed to pay $135 a share for Tiffany, was little changed in Paris trading Wednesday.Tiffany’s representatives didn’t immediately respond to a request for comment from Bloomberg. An LVMH representative declined to comment.“I would imagine it is normal that LVMH internally discusses the proposed Tiffany acquisition — given the size of the deal, the Covid-19 situation and the recent social unrest in the U.S.,” wrote Luca Solca, an analyst at Sanford C. Bernstein. “Having said that, the Tiffany takeover would provide a unique strategic opportunity to LVMH, boosting its position in branded jewelry.”Solca said it’s an “open question” whether LVMH would try to renegotiate better terms. Tiffany has dropped 12% since the French company agreed to the purchase, the biggest in the luxury-goods industry, in November. The deal was supposed to close in the middle of this year.The economic fallout from the pandemic has disrupted or derailed a number of prominent deals, including L Brands Inc.’s agreement to sell a majority stake in Victoria’s Secret to private-equity firm Sycamore Partners. If the LVMH-Tiffany tie-up falls apart, it would be one of the largest so far related to Covid-19.The New York-based jeweler’s website says that as of June 1, its stores are temporarily closed until further notice. The pandemic has also affected the company’s ability to offer next-day and express shipping. The stores went dark in mid-March due to the pandemic shutdown. Some of its locations have had their windows boarded up as protests roil cities across the U.S.Virus EffectLVMH’s planned purchase of has been the subject of speculation after the coronavirus pandemic altered the consumer landscape across the globe.For the French company, the deal originally made strategic sense: Buying U.S.-based Tiffany would help the Louis Vuitton owner challenge Cartier parent Richemont for dominance in the global jewelry business. But as Americans curb discretionary spending and retail stores temporarily close their doors, growing exposure to the U.S. market doesn’t have quite the same appeal as it did when the tie-up was announced last November.Prior to the virus lockdown, the 183-year-old Tiffany was struggling with a lull in international tourist traffic and civil unrest in Hong Kong. In the U.S., management has worked to attract younger clients, though sales have been slow to rebound. Chief Executive Officer Alessandro Bogliolo made China a priority, counting on the market as a growth engine.(Updates with deal price in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Prime Minister Boris Johnson says U.K. will offer Hong Kong residents refuge from Beijing

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On Wednesday, U.K. Prime Minister Boris Johnson published an op-ed in Hong Kong’s largest English-language newspaper, the South China Morning Post, that directly warned Beijing against imposing a national security law on Hong Kong by threatening a major reform to the visa rights of some Hong Kong residents.

“If China imposes its national security law [on Hong Kong], the British government will change our immigration rules and allow any holder of [British National Overseas] passports from Hong Kong to come to the U.K. for a renewable period of 12 months and be given further immigration rights, including the right to work, which could place them on a route to citizenship,” Johnson wrote, claiming the move would be “one of the biggest changes in our visa system in British history.”

There have been calls in recent weeks, from within U.K. Parliament and elsewhere, for the British government to respond to what critics see as China’s erosion of the “one country, two systems” principle enacted when Britain returned Hong Kong to Chinese sovereignty in 1997.

Under that principle, Beijing pledged Hong Kong’s “current social and economic systems” would remain unchanged for 50 years and that Hong Kong would maintain a “high degree of autonomy.”

Beijing’s pledge was enshrined in the Sino-British Joint Declaration—a binding UN treaty—which a chorus of international observers say Beijing has now violated by unilaterally imposing a law against “treason” on Hong Kong.

“Many people in Hong Kong fear their way of life—which China pledged to uphold—is under threat. If China proceeds to justify their fears, then Britain could not in good conscience shrug our shoulders and walk away; instead we will honor our obligations and provide an alternative,” Johnson said.

British National Overseas (BNO) passports were created in 1985 specifically for Hong Kong citizens born prior to Hong Kong’s handover in 1997. However, BNO passports afford holders few rights as “British nationals.” Currently, BNO holders can visit the U.K. for six months without a visa and are denied the right of abode—meaning BNO holders have to go through regular immigration channels if they want to settle permanently in the U.K.

According to Johnson, there are currently around 350,000 BNO holders in Hong Kong and a further 2.5 million people who “would be eligible to apply.” Many BNO holders have let their passports expire, since holding one offers few advantages. However, as both pro-democracy protests and the pro-establishment response intensified last year, applications for BNO passport renewals surged. There were 120,000 applications last year, compared to 14,000 in 2018.

Yet Johnson’s announcement on Wednesday falls short of calls made by some members of parliament to grant BNOs the right of abode. Johnson also doesn’t say whether family members of BNO holders will be eligible to apply for BNO status, too. (Currently, they are not.)

More must-read international coverage from Fortune:



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Some branches of Victoria Court to be shuttered

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Several branches of local motel operator Victoria Court under Angelina Mead King are closing because of the pandemic, while branches under her brother, Atticus King, will still be operational but will be retrenching employees, according to two separate videos shared on social media.

“I don’t think that hotel and motel operations will be able to produce the same results as how we used to,” Ms. Mead King said in a video addressed to her employees which made rounds of social media on June 2.

Ms. Mead King handles the operations for three Victoria Court branches: Taft, Pasay, and Malate while the rest are under Mr. King.

Despite housing medical frontliners so they can stay closer to their hospitals and Overseas Filipino Workers (OFW) who are completing their mandatory 14-day quarantine, Ms. Mead King that it’s “still not enough for the business to sustain itself and take care of all of us.”

“We all have to go into survival mode. It is better for us to prepare for this now, rather than ignore it,” she said.

Her group will be preparing the employees’ retirement and retrenchment packages over the next few weeks to help them “survive the next few months,” and she advised them to look for other jobs. She then assured them that “when the business does re-open again,” the displaced employees will be the first ones the company will be calling back.

“Please don’t think that we have come to this decision lightly. It was a great difficulty. I want to let you know that we value all your hard work and loyalty that you have given during my management. And I really wish there was another way to go about this,” she said.

Ms. Mead King told BusinessWorld in an e-mail that the video was supposed to be private and was not meant for the public and that she will be making an official announcement soon.

The King family has been in the motel business since businessman Angelo King opened Anito Lodge in Pasay City in 1975. When his sons, Archimedes and Wyden, joined the company, it expanded with the openinbg of Akasya Lodge in Sta. Mesa, Manila in 1984. A year later, the company opened Anito Royale and Anahaw and the first Victoria Court in Pasig. The Victoria Court brand is known for its themed rooms.

Victoria Court is now under the management of both Ms. Mead King and Atticus King.

In a separate video, Atticus King clarified that only the branches under his sister’s management are closing, while he has opted to try “to keep the lights on” for those he manages. The company’s website lists 10 Victoria Court branches across Metro Manila.

“For clarity, we both share the brand Victoria Court but we have completely different management groups. Given that, our solutions to the ongoing situation are completely different and unrelated,” he said in a video posted on his Facebook account on June 2.

“For my group, we decided to retrench and we are trying our best to keep the lights on,” he said, explaining that they are also providing accommodations for OFWs under quarantine, employees of business process outsourcing companies, and medical frontliners.

“It’s not ideal. We are not optimized for it and we are looking back to things reverting back to normal,” he said. — Zsarlene B. Chua



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