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The U.S. will go ahead with a ban on short-video app TikTok if China wont drop demands for reducing tariffs and technological restrictions as part of a divestiture deal, a senior U.S. official with knowledge of negotiations said on Monday. U.S. and China delegations are discussing the divestment from TikTok by Chinese owner Bytedance as part of a round of broader talks on tariffs and economic policy taking place in Madrid. TikTok faces being shut down as early as Sept. 17 in the U.S. unless it moves to U.S. ownership. The Chinese delegation came to the Madrid talks with a fundamental misunderstanding of the U.S. position on TikTok, the official, who asked not to be named, said. Speaking to reporters earlier before Monday’s talks began, U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer said China wanted concessions on trade and technology in exchange for agreeing to divest from the popular social media app. “Our Chinese counterparts have come with a very aggressive ask,” Bessent said. “We will see if we can get there at present. We are not willing to sacrifice national security for a social media app,” he said. The U.S.-China negotiations at the Spanish foreign ministry’s baroque Palacio de Santa Cruz are the fourth round of talks in four months to address strained trade ties and a looming divestiture deadline for TikTok. They take place as Washington demands that its allies place tariffs on imports from China over Chinese purchases of Russian oil, which Beijing on Monday said was an attempt at coercion. “This is a typical act of unilateral bullying and economic coercion, a serious violation of the consensus reached by the Chinese and U.S. heads of state in their phone call, and could severely impact global trade as well as the stability of industrial and supply chains,” a Chinese Commerce Ministry spokesperson said in a press conference in Beijing. PROGRESS ON TECHNICAL DETAILS Bessent said both sides had made good progress on technical details but reaching a deal on other issues would be challenging. Extending the TikTok divestment deadline would depend largely on how talks went on Monday, he said. “From the Chinese perspective, they view as part and parcel of the potential TikTok deal a variety of matters, whether it’s tariffs or other measures that have been taken over years,” Greer said. “We still have to grind through negotiations and discussions of the common understanding, and I don’t think this is the moment to just pull all those things.” Chinese Foreign ministry spokesperson Lin Jian said China had no new information to give. “Regarding TikTok, China has repeatedly stated its position,” Lin said at a press conference in Beijing on Monday. Adding further tension, China’s market regulator said on Monday that a preliminary investigation of Nvidia had found the U.S. chip giant had violated its anti-monopoly law. The probe is widely seen as a retaliatory shot against Washington’s curbs on the Chinese chip sector. Delegations led by Bessent and Chinese Vice Premier He Lifeng have met in European cities since May to try to resolve differences that prompted U.S. President Trump to raise tariffs on Chinese imports and sparked tit-for-tat measures, including similarly high import duties by China on U.S. goods and a halt in the flow of rare earths to the United States. The Trump administration, however, faces a ruling from the U.S. Supreme Court that could strike down the U.S. tariffs on Chinese goods imposed this year, potentially weakening Trumps leverage over Beijing. A ruling is expected by early 2026. The delegations last met in Stockholm in July, where they agreed to extend for 90 days a trade truce that sharply reduced triple-digit retaliatory tariffs on both sides and restarted the rare-earth exports from China to the United States. LOW EXPECTATIONS Experts had low expectations of a significant breakthrough in Madrid. “I’m not expecting anything substantive between the United States and China unless and until there is a one-on-one meeting between Trump and (Chinese President) Xi,” said William Reinsch, a senior trade adviser at Washington think tank the Center for Strategic and International Studies. “Setting that up is really what these talks are all about.” Trump has repeatedly expressed interest in a meeting with Chinese President Xi Jinping, but Reinsch said the Chinese would not agree to such a meeting until they knew the outcome and were pushing for further easing of U.S. export controls on chips and other high-tech goods. Even if a deal over Chinese divestment from TikTok was not reached it would not affect relations, Bessent added. “It’s still very good at the highest levels,” “Ambassador Greer and myself have great respect for all counterparts.” David Lawder and Pietro Lombardi, Reuters
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E-Commerce
Visa is widening its aperture. In a new ad for the financial services company narrated by Ryan Reynolds that’s set on a haunted desert island, the company is pitching itself not just for everywhere you want to be anymore, but everywhere you don’t want to be. “True story: we actually pitched this campaign idea to Visa years ago and it kind of went nowhere,” Reynolds tells Fast Company. “Lots of time brands will come to us and say ‘scare us’ and then we do and they run away screaming. It wasn’t until early this year when I got connected to [Visa CMO] Frank [Cooper] and I half jokingly told him we had worked on this idea and he was like . . . wait a second . . .” The spot, by the production company Maximum Effort that Reynolds and George Dewey cofounded in 2018, imagines Fyre Fest but spookier. The failed music festival is a zombie brand that sold its brand assets in July on eBay for $245,300 to a mystery buyer. Its value isn’t in putting on a successful music festival, but for the meme of it all. Though Visa didn’t buy the name, they’re using it in the ad to set the tone. As the camera zooms through the scene, an actual zombie pops out of the sand, and when the viewer is brought to the shore, they learn the only way off the island is via a man with a boat named Rusty. “And he does not take emotional distress,” Reynolds says in the voice over. But Rusty does, however, take Visa. Reynolds then closes out the ad with Visa’s slogan “everywhere you want to be,” and follows it up with his subversive twist, “and some places you really don’t.” Reynolds calls the process of creating the ad “fairly simple”: “Take an iconic positioning and try to bring new life to it with a simple subversion. It’s core to how we think at Maximum Effort,” he says. The zeitgeisty production company is behind ads for brands like Mint Mobile, Netflix, and July’s quick-turnaround video for Astronomer starring Gwyneth Paltrow, and now it’s bringing humor to the staid payments category. A new twist on an old slogan Visa used the slogan, “It’s everywhere you want to be” from 1985 to 2006 and brought it back in shortened form in 2014 as just “Everywhere you want to be.” The slogan was about connecting the brand to experiences, Cooper, Visa’s CMO says. “Everywhere you want to be was closely connected to the idea of cross-border travel, which is one of the major areas for transactions for Visa,” he says. But now the company is looking to expand on it. “People want solutions to two things,” Cooper says. “Problems and dreams, and so we gave them the dreams part.” The new version of the slogan is about solving problems. Visa, which reported reported $10.2 billion net revenue in the most recent quarter, faces a shifting payments landscape where upstart buy-now-pay-later services like Affirm and Klarna compete now with longtime consumer finance giants. In tapping Reynolds, referencing Fyre Fest, and playing with humor, Visa is looking to compete on new ground. “Historically, humor has not played a central role in the brand,” Cooper says. “I think the view has been in financial services overalland even in paymentsthat, hey, this is a very serious category.” But the serious approach is taking a backseat in a world where attention is the ultimate currency. “In a world where we’re battling for attention, and the hardest part is having the stopping power . . . humor is is a great angle in,” Cooper says.
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E-Commerce
In a sign of how unusual this week’s Federal Reserve meeting is, the decision it will make on interest rates usually the main event is just one of the key unknowns to be resolved when officials gather Tuesday and Wednesday.For now, it’s not even clear who will be there. The meeting will likely include Lisa Cook, an embattled governor, unless an appeals court or the Supreme Court rules in favor of an effort by President Donald Trump to remove her from office. And it will probably include Stephen Miran, a top White House economic aide whom Trump has nominated to fill an empty seat on the Fed’s board. But those questions may not be resolved until late Monday.Meanwhile, the U.S. economy is mired in uncertainty. Hiring has slowed sharply, while inflation remains stubbornly high.So a key question for the Fed is: Do they worry more about people who are out of work and struggling to find jobs, or do they focus more on the struggles many Americans face in keeping up with rising costs for groceries and other items? The Fed’s mandate from Congress requires it to seek both stable prices and full employment.For now, Fed Chair Jerome Powell and other Fed policymakers have signaled the Fed is more concerned about weaker hiring, a key reason investors expect the central bank will reduce its benchmark interest rate by a quarter point on Wednesday to about 4.1%.Still, stubbornly high inflation may force them to proceed slowly and limit how many reductions they make. The central bank will also release its quarterly economic projections Wednesday, and economists project they will show that policymakers expect one or two additional cuts this year, plus several more next year.Ellen Meade, an economics professor at Duke University and former senior economist at the Fed, said it’s a stark contrast to the early pandemic, when it was clear the Fed had to rapidly reduce rates to boost the economy. And when inflation surged in 2021 and 2022, it was also a straightforward call for the Fed, which moved quickly to raise borrowing costs to combat higher prices.But now, “it’s a tough time,” Meade said. “It would be a tough time, even if the politics and the whole thing weren’t going on the way they are, it would be a tough time. Some people would want to cut, some people would not want to cut.”Amid all the economic uncertainty, Trump is applying unprecedented political pressure on the Fed, demanding sharply lower rates, seeking to fire Cook, and insulting Powell, whom he has called a “numbskull,” “fool,” and “moron.”Loretta Mester, a former president of the Federal Reserve Bank of Cleveland and finance professor at the University of Pennsylvania’s Wharton School, said that Fed officials won’t let the criticisms sway their decisions on policy. Still, the attacks are unfortunate, she said, because they threaten to undermine the Fed’s credibility with the public.“Added to their list of the difficulty of making policy because of how the economy is performing, they also have to contend with the fact that there may be some of the public that’s skeptical about how they’ve gone about making their decisions,” she said.David Andolfatto, an economics professor at the University of Miami and former top economist at the Federal Reserve Bank of St. Louis, said that presidents have pressured Fed chairs before, but never as personally or publicly.“What’s unusual about this is the level of open disrespect and just childishness,” Andolfatto said. “I mean, this is just beyond the pale.”There are typically 12 officials who vote on the Fed’s policies at each meeting the seven members of the Fed’s board of governors, as well as five of the 12 regional bank presidents, who vote on a rotating basis.If a court rules that Cook can be fired, or Miran isn’t approved in time, then just 11 officials will vote on Wednesday. Either way, there ought to be enough votes to approve a quarter-point cut, but there could be an unusual amount of division.Miran, if he is on the board, and Governor Michelle Bowman may dissent in opposition to a quarter-point reduction in favor of a steeper half-point cut.There could be additional dissenting votes in the other direction, potentially from regional bank presidents who might oppose any cuts at all. Beth Hammack, president of the Fed’s Cleveland branch, and Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, have both expressed concern that inflation has topped the Fed’s 2% targer for more than four years and is still elevated. If either votes against a cut, it would be the first time there were dissents in both directions from a Fed decision since 2019.“This degree of division is unusual, but the circumstances are unusual, too,” Andolfatto said. “This is a situation central banks really don’t like: The combination of inflationary pressure and labor market weakness.”Hiring has slowed in recent months, with employers shedding 13,000 jobs in June and adding just 22,000 in August, the government reported earlier this month. And last week a preliminary report from the Labor Department showed that companies added far fewer jobs in the year ending in March than previously estimated.At the same time, inflation picked up a bit last month and remains above the Fed’s 2% target. According to the consumer price index, core prices excluding food and energy rose 3.1% in August compared with a year earlier.With inflation still elevated, the Fed may have to proceed slowly with any further cuts, which would likely further frustrate the Trump White House.“When you get to turning points, people can reasonably disagree about when to go,” Meade said. Christopher Rugaber, AP Economics Writer
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E-Commerce
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