“Ethical Markets is happy to see BlackRock becoming politicised! This is the future for all large, publicly-traded corporations, many of which are larger and more influential than most nation states!
~Hazel Henderson, Editor”.
Good Tuesday morning. Should mutual funds become activists on guns? How Cfius is getting tougher. And could the Trump tariffs be weakened? On the calendar: Expect questions about Aramco’s I.P.O. when the oil giant’s chief speaks at an industry conference today.
Zack Wittman for The New York Times
What BlackRock and other investors could do about guns
Some institutional investors have talked about divesting their shares in gun makers like American Outdoor Brands and Vista Outdoor. (And some, like the Carlyle Group’s David Rubenstein, say they will never invest in the industry.)
But, Andrew asks, what if those giants became shareholder activists to change those businesses? From his latest column:BlackRock has enormous influence over both gun makers and retailers. It could pressure them to raise the minimum age for buying AR-15-style rifles to 25 years old, and impose strict screening and background checks that go far beyond what is required by law. BlackRock could even push gun makers to stop producing such weapons altogether.The rub: Any decision has to be anchored by financial logic, since BlackRock and others have fiduciary duties to their own investors. But then gun makers are facing costs from boycotts by both consumers and businesses like REI.Elsewhere in guns: A bipartisan bill would require federal officials to notify state law enforcement within 24 hours if someone fails a national background check. And the dating app Bumble has banned gun-related images from user profiles.
Today’s DealBook Briefing was written by Andrew Ross Sorkin on the road, and Michael J. de la Merced and Amie Tsang in London.
Steven Mnuchin oversees Cfius. Eric Thayer for The New York Times
Broadcom shows Cfius flexing its muscle
Every expert that Michael and our colleagues spoke to yesterday acknowledged that the national security panel’s review of Broadcom’s bid for Qualcomm was extraordinary. (One other time Cfius was involved in a contested situation, recalled by Reuters: BHP Billiton’s bid for Rio Tinto in 2008.)Its move shows Washington’s worries about the selling of U.S. companies to foreign counterparts — and its willingness to act. From Alan Rappeport, Cecilia Kang and Chad Bray of the NYT:With the White House making the case for more government intervention, Cfius is expected to gain more authority. A bipartisan group of lawmakers wants to expand the panel’s scope beyond mergers, giving it the power to review joint ventures and investments in start-ups.The deal context: Qualcomm filed for a review of the proxy fight on Jan. 29, before voting on the board contest began. But as of yesterday, Broadcom looked on course to win at least four seats, with a decent chance of six. Big index funds like BlackRock and Vanguard hadn’t voted yet.Bonus explainer: Everything you’d want to know about Cfius.In other foreign deals: The Chicago Stock Exchange’s proposed sale to Chinese investors is dead.
Al Drago for The New York Times
Could Trump’s tariffs be defanged?
Though President Trump insisted that the tariffs on all imported aluminum and steel are coming, there are signs that he may soften their impact.• He left open the possibility that Canada and Mexico could be exempt if they signed a new Nafta pact.• Gary Cohn is organizing a meeting with executives from U.S. companies that would be hurt by tariffs, according to Bloomberg.Who has criticized the tariffs: House Speaker Paul Ryan, Goldman Sachs economists and the consulting firm The Trade Partnership.Europe’s plan: It includes retaliatory tariffs on Harley-Davidson motorcycles and Kentucky bourbon and challenges at the World Trade Organization. (Those moves may also violate W.T.O. rules.) As Jean-Claude Juncker of the European Commission said on Friday, “It’s actually a stupid process that we must to do this, but we have to.”
Elsewhere on tariffs: Why economists don’t hate the trade deficit.