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The accounting firm that prepared former President Donald Trump’s annual financial statements says the documents, used to secure lucrative loans and burnish Trump’s image as a wealthy businessman, “should no longer be relied upon” after New York’s attorney general said they regularly misstated the value of assets.

In a letter to the Trump Organization’s lawyer February 9, Mazars USA LLP advised the company to inform anyone who had gotten the documents not to use them when assessing the financial health of the company and the ex-president. The firm also said it was cutting ties with Trump, its highest-profile client.

Mazars’ letter, made public in a court filing Monday, came just weeks after New York Attorney General Letitia James said her civil investigation uncovered evidence that Trump and his company used “fraudulent or misleading” valuations of its golf clubs, skyscrapers and other properties to get loans and tax benefits.

“While we have not concluded that the various financial statements, as a whole, contain material discrepancies, based upon the totality of the circumstances, we believe our advice to you to no longer rely upon those financial statements is appropriate,” Mazars General Counsel William J. Kelly wrote to his Trump Organization counterpart, Alan Garten.

Kelly told Garten that Mazars could no longer work with Trump because of a conflict of interest and urged him to find another tax preparer. Kelly said several Trump-related tax returns still needed to be finished, including those of the former president and first lady.

The Trump Organization said in a statement it was “disappointed that Mazars has chosen to part ways,” but took Kelly’s letter as a positive because the accounting firm hadn’t found material discrepancies in Trump’s financial statements.

The letter “confirms that after conducting a subsequent review of all prior statements of financial condition, Mazars’ work was performed in accordance with all applicable accounting standards and principles and that such statements of financial condition do not contain any material discrepancies,” the Trump Organization said. “This confirmation effectively renders the investigations by the DA and AG moot.”

Kelly said Mazars performed its work on Trump’s financial statements “in accordance with professional standards” but that it could no longer stand by the documents in light of James’ findings and its own investigation. Kelly said Mazars’ conclusions applied to Trump’s 2011-2020 financial statements. Another firm handled Trump’s 2021 financial statement.

James’ office included a copy of Kelly’s letter in a court filing as she seeks to enforce a subpoena to have Trump and his two eldest children, Donald Jr. and Ivanka, testify under oath. A state court judge, Arthur Engoron, is scheduled to hear arguments Thursday in the subpoena dispute.

James, a Democrat, said Monday that given the evidence, “there should be no doubt that this is a lawful investigation and that we have legitimate reason” to question Trump, a Republican, and his children, both of whom have been Trump Organization executives.

Trump’s lawyers have argued that any testimony they give could be used against them in a parallel criminal investigation being overseen by the Manhattan district attorney’s office — a probe that led to tax fraud charges last year against the Trump Organization and Allen Weisselberg, its longtime chief financial officer.

Trump has given his Statement of Financial Condition — a yearly snapshot of his holdings — to banks to secure hundreds of millions of dollars’ worth of loans on properties such as a Wall Street office building and a Florida golf course, and to financial magazines to justify his place among the world’s billionaires.

In a court filing last month, James’ office detailed several instances in which Trump misstated the value of assets on financial statements given to banks.

Deutsche Bank accepted Trump’s financial statements without objection in a deal for $300 million in loans for three of his properties and, in internal memoranda, emphasized Trump’s reported financial strength as a factor in lending to him, James’ office said.

Another bank said it received financial statements in 2014 stating Trump had a net worth of $5.8 billion and liquidity of $302 million. A bank official involved in that deal told James’ office that if he were aware of misstatements on Trump’s statement of financial condition, he would have killed the deal.

James’ office said its investigation started after Trump’s former personal lawyer, Michael Cohen, told Congress in 2019 that Trump had a history of misrepresenting the value of assets to gain favorable loan terms and tax benefits.

Cohen gave copies of three of Trump’s financial statements to the House Committee on Oversight and Reform. Cohen said Trump gave the statements to Deutsche Bank to inquire about a loan to buy the NFL’s Buffalo Bills and to Forbes magazine to substantiate his claim to a spot on its list of the world’s wealthiest people.

Cohen served time in federal prison after pleading guilty in 2018 to tax crimes, lying to Congress and campaign finance violations, some of which involved his role in orchestrating payments to two women to keep them from talking about alleged affairs with Trump.

Trump’s lawyers have portrayed Cohen as having a vendetta against Trump and said in a recent court filing that it “stretches all credibility to believe that” James’ office put “any legitimate stock” in his testimony.

James’ office responded Monday that not only did it rely on Cohen’s testimony, but that his testimony is “vindicated by the evidence obtained to date and Mazars’s notification that those statements should not be relied upon.”
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Japanese drinks giant Kirin said Monday it would withdraw from Myanmar, after a failed bid to disentangle its operations from a joint venture with a junta-owned company after last year’s coup.

With international pressure building against the military since it ousted and detained civilian leader Aung San Suu Kyi and waged a widespread crackdown on dissent, the brewery becomes the latest foreign company to pull out of Myanmar.

Kirin said its decision came after months of wrangling following last February’s coup, which prompted the company to express concerns about human rights and eventually seek to end its joint venture Myanmar Brewery Limited.

It had decided “to withdraw from the business in Myanmar in order to urgently terminate its joint venture partnership” with military-linked MEHPCL, the company said in a statement.

Myanmar Brewery, whose beverages include its flagship and ubiquitous Myanmar Beer brand, boasted a market share of nearly 80 percent, according to figures published by Kirin in 2018.

Kirin’s attempts to terminate the partnership with MEHPCL were unsuccessful, and the Japanese drinks maker said in November it would contest a bid to dissolve their joint brewery over fears liquidation proceedings would not be fair.

On Monday, Kirin said it had taken “every measure to find a way forward that would allow it to continue to contribute to Myanmar’s economy and society.”

That included filing for arbitration in Singapore in a bid to end the joint venture and proceed without the military-linked partner.

“In the end, Kirin Holdings determined that it would be difficult to quickly terminate the joint venture in the manner it desires,” the company added.

“Therefore, Kirin Holdings has now commenced and is proceeding with discussions with MEHPCL in order to withdraw from the business in Myanmar, giving top priority to the termination of the joint venture as soon as possible.”

A junta spokesperson did not immediately respond to a request for comment.

Firms withdrawing

With the economy tanking and pressure mounting from rights groups, companies from France’s TotalEnergies to British American Tobacco and Norway’s Telenor have upped sticks or announced they will leave Myanmar.

After the coup and arrest of the country’s democratically elected leaders, Kirin said it was “deeply concerned” by the military’s actions.

The brewery had been under pressure even before the coup over its ties to Myanmar’s military, and launched an investigation after pressure from rights groups over whether money from its joint venture had funded rights abuses.

In a statement, Justice For Myanmar spokesperson Yadanar Maung welcomed Kirin’s decision to withdraw from the country, praising the firm for “listening to the voice of Myanmar people and Myanmar, Japanese and global civil society.”

“Kirin should never have entered into business with a brutal and corrupt military conglomerate,” she added, accusing the brewery of having “financed atrocity crimes and enriched top generals.”

The activist group urged other Japanese firms doing business with the military to cut ties, and called on Kirin to avoid payments to MEHPCL or the military during the withdrawal process.

Investors piled into Myanmar after the military relaxed its iron grip in 2011, paving the way for democratic reforms and economic liberalization in the country of more than 50 million people.

They poured money into telecoms, infrastructure, manufacturing and construction projects, but the coup upended the democratic interlude and damaged the economy.

The pandemic and supply chain disruptions have also hit the country, with Kirin saying in its earnings report released Monday that Myanmar’s beer market had shrunk by about 20%.

It said Myanmar Brewery’s sales volumes had decreased by around 30 percent compared with the same period last year.

Japan’s government is a major provider of economic assistance to Myanmar, and Tokyo has long-standing relations with the country’s military.

After the coup it announced it would halt all new aid, though it stopped short of imposing individual sanctions on military and police commanders, as some other nations have.

Tokyo has repeatedly called for Suu Kyi’s release and the restoration of democracy, and last year the country’s foreign minister said dialogue with the junta was ongoing but warned all foreign aid could be halted if rights violations continued.
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Super Bowl advertisers this year want Americans to forget about pandemic woes and focus on the future: of electric vehicles, mind reading Alexas, robots and cryptocurrency — and also to harken back to the nostalgic past of ’90s movies like “Austin Powers” and “The Cable Guy.” 
The Los Angeles Rams are taking on the Cincinnati Bengals in Super Bowl 56 on Sunday at the SoFi Stadium in Inglewood, California. But for many, the big show of the night will be the commercials.

Advertisers are hoping to deliver a dose of escapism with light humor and star-studded entertainment amid the pandemic, high inflation and tensions between Russia and Ukraine.

“Marketers are recognizing Americans have had a very heavy, difficult two-year period and are responding by bringing some good old-fashioned entertainment for Super Bowl Sunday,” said Kimberly Whitler, marketing professor at the University of Virginia.

NBC sold out of its ad space briskly and said an undisclosed number of 30-second spots went for $7 million, a jump from the $6.5 million that last year’s ads went for. 

Super Bowl viewership has declined in recent years. Last year, 92 million people tuned in, according to Nielsen, the lowest viewership since 2007. But viewership at other big live events like the Grammys and the Oscars has also plummeted. Ratings for the Olympics — which NBC is broadcasting concurrent with the Super Bowl — are way down, too. So the Super Bowl remains the biggest night for advertisers. 

“It’s the only game in town,” said Villanova marketing professor Charles Taylor.

This year’s ads will be amusing and warm, leading Kelly O’Keefe, CEO of brand consultancy Brand Federation, to dub this year the “Ted Lasso Super Bowl.” It’s not just because two of the Apple+ sitcoms’ stars are starring in ads — Jason Sudeikis for TurboTax and Hannah Waddingham for Rakuten.

It’s because the ads, like the sitcom, will be “nothing too heavy,” O’Keefe said. “It’s funny, positive, and makes you happy — but doesn’t go too deep.”

Future forward

What does the future look like? Electric, if automakers have anything to do with it. With automakers back in full force this Super Bowl, BMW shows Arnold Schwarzenegger as Zeus, the god of the sky (or in this commercial, the god of lightning) whose wife, Salma Hayek Pinault, gives him the EV BMW iX to spice up retirement.

Kia showcases the Kia EV6, the brand’s first battery electric vehicle, in its ad, along with a cute “robo dog.” Nissan gives a nod to its all-electric 2023 Nissan Ariya.

A first-time advertiser, Wallbox, showcases an actual survivor of being struck by lightning in its ad for its home electric vehicle charger.

Other advertisers are future forward, too. Amazon’s spot shows real-life spouses living in a world where Amazon’s digital assistant Alexa can read your mind. In a regional ad, Samuel Adams shows Spot, the dancing robo-dog from Boston Dynamics, getting down with the brewer’s employees.

Bud Light NEXT, a new zero-carb Bud Light brand expansion, showcases an NFT in its ad. And Facebook gives a glimpse of its vision of the metaverse in a humorous ad that shows a discarded animatronic dog meeting up with his pals again in the metaverse.

Crypto bowl

Among the 30 new advertisers are several cryptocurrency exchanges. Advocates of the blockchain-based digital currencies that have captured the interest of investors and financial service firms alike, want to lure regular Americans too. Exchanges Crypto.com, FTX and eToro have all announced Super Bowl ad plans, and others have been rumored but not confirmed.

While the Super Bowl can be a good place to launch a new brand or category into the public consciousness, there are risks of getting lost in the shuffle as first-time advertisers. And they have a big task with 30 seconds.

“They need to educate the public on what their product is, why it’s not risky, and where they can access it,” Villanova’s Taylor said.

Pop culture nostalgia

Nostalgia is always a safe bet to win over viewers, and this year’s Super Bowl is no different.  

In a teaser, Verizon hints that it’s bringing back Jim Carrey to reprise his loathsome 1996 “Cable Guy” character for their ad. GM has enlisted Mike Myers for an “Austin Powers”-themed ad that features a reprise of his role as Austin Powers’ nemesis, Dr. Evil. Sidekicks played by Rob Lowe, Seth Green and Mindy Sterling also join.

And some ad executives are hoping people can still remember iconic advertising as well. ETrade hinted in a teaser that it’s bringing back the spokesbaby that appeared in its Super Bowl ads from 2008 to 2014. A Hellmann’s ad shows former New England Patriots linebacker Jerod Mayo tackling unsuspecting people who waste food. The ad is an homage to a 2003 Reebok Super Bowl ad starring a fictional linebacker named Terry Tate who tackled office workers who weren’t being productive.

Celebrity overload

A well-liked celebrity generally adds some goodwill to a brand message. So how about three to five of them? Super Bowl ads are always stuffed with celebrities, but this year, many ads are overstuffed with them.

“I’ve ever seen anything like this number of A-List celebrities,” said Villanova’s Taylor.

Uber Eats wanted to get across the message that you can order household items and other sundries from its delivery service, not just food. So its ad shows celebrities and other actors trying to eat everything from cat litter to diapers. “If it was delivered by Uber Eats, does that mean I can ‘Eats’ it?” White Lotus actor Jennifer Coolidge asks. Gwyneth Paltrow tries to eat a candle, Trevor Noah tries to eat a light bulb and Nicholas Braun from “Succession” tries to eat dish soap.

In Michelob Ultra’s ad, a bowling alley run by Steve Buscemi unites superstar athletes from across sports enjoying some bowling in their off time: tennis great Serena Williams, former NFL quarterback Peyton Manning, the NBA’s Miami Heat all-star forward Jimmy Butler, WNBA star Nneka Ogwumike, top golfer Brooks Koepka and U.S. women’s soccer star Alex Morgan.

Planet Fitness’ ad has narration by William Shatner and shows Lindsay Lohan working out, winning Jeopardy against Dennis Rodman and bedazzling Danny Trejo’s ankle bracelet.

And in Nissan’s ad, a straight-laced Eugene Levy is transformed into an action hero by taking a drive in a 2023 Nissan Z sports car, alongside stars Danai Gurira and Dave Bautista. Levy’s “Schitt’s Creek” co-star Catherine O’Hara appears in Nissan’s new Ariya electric car.

Social messages

Most advertisers are steering clear of sentiment.

“People are avoiding the deeper issues,” said Brand Federation’s O’Keefe. “People aren’t going to try to unite us or divide us or get us to think deeply. Ads will be much more amusing. But also very safe.”

A few, though, are delivering heartfelt messages.

The Budweiser brand, absent last year, returns with a spot centered on one of its Clydesdale mascots. After it’s injured by jumping a barbed wire fence — a not-so-subtle reference to the U.S. and the coronavirus pandemic — another Budweiser mascot, a Labrador, a stableman, and a vet, help the Clydesdale recover and gallop again. Budweiser wanted to return “with a message of strength and resilience,” said Daniel Blake, group vice president at Anheuser-Busch.

Google’s ad for the Pixel 6 stars the singer Lizzo and focuses on how the phone’s camera highlights darker skin tones. And Toyota’s ad, which debuted during the Olympics but will also run during the Super Bowl, tells the story of the McKeever Brothers, cross-country skiers who have won 10 Paralympic medals together.
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In a bid to boost agro-tourism, the Botswana government is offering wildlife start-up stock to farmers to keep in their ploughing fields. The government says the move will give locals an improved stake in the lucrative tourism sector.

Botswana’s National Parks and Wildlife director, Kabelo Senyatso, said the government will run a pilot project between February and July this year, where farmers will receive start up stock.

Each farmer will get five animals per species, Senyatso said.

“The species that the department would be availing are impala, gemsbok, zebra, eland and warthog. It is important to clarify that applicants should not restrict themselves to these species, people can keep whatever wildlife that they are keen to keep. It is also important to clarify that the scheme that we are referring to relates to keeping of herbivores. It excludes carnivores,” said Senyatso.

He said farmers must meet certain water, fencing and space requirements depending on the species they want to keep.

Randy Motsumi, a professional hunter, is keen to keep animals within his holding.

However, he is concerned the costs will be prohibitive due to start-up capital required.

“This is a very good initiative. But the problem now is the expenses. It is going to be very expensive for an ordinary Motswana. Just fencing will cost an ordinary Motswana over P1million [approximately $100,000]. So this initiative is good, but it needs a lot of funding,” he said.

According to requirements, game keepers must ensure there is adequate fodder and reliable water supply.

The fence height should be between 1.5 and 2.4 meters depending on the species kept.

Conservationist Map Ives agrees that the venture requires a lot of resources.

“Wildlife farming or keeping is a highly specialized business, which requires huge capital outlay. If you are going to keep animals like eland which are capable of jumping extreme heights, you are going to need infrastructure. You will also need reliable water infrastructure supplying fresh portable water. A lot of water in western Botswana is quite saline,” said Ives.

He adds the initiative might end up benefiting an elite few who have access to resources.

“I understand the principle of spreading the ownership or keeping wildlife to the people. They are also trying to spread tourism away from national parks or wildlife management areas into other parts of Botswana but again, I believe this is not well thought through and will probably benefit only elites who can afford to have large tracts of land, high quality infrastructure and people to look after that wildlife,” he said.

In announcing the initiative in 2020, President Mokgweetsi Masisi said it was one of the ways to revive a tourism sector hard hit by COVID-19.

Botswana is one of Africa’s leading tourism destinations, with the sector contributing 13% of the country’s Gross Domestic Product.
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Afghanistan’s former president, Hamid Karzai, joined the Taliban rulers Sunday in urging the United States to review its decision to allow half of the roughly $7 billion in his country’s foreign frozen assets to be reserved for families of victims of the September 11, 2001, terror attacks.

“The people of Afghanistan share the pain of the families and loved ones of those who lost their lives in the tragedy of September 11. We commiserate with them,” Karzai told a news conference in Kabul.

However, the “Afghan people are as much victims as those families who lost their lives,” Karzai said. “Withholding money or seizing money from the people of Afghanistan in that name is unjust and unfair and an atrocity against the Afghan people.”

Da Afghanistan Bank, that country’s central bank, had funds on deposit at the U.S. Federal Reserve Bank of New York. The money has been frozen since August, when the U.S.-backed Afghan government collapsed and the Taliban seized control of the country.

Critics say the U.S. freezing of Afghan funds has worsened an already bad humanitarian situation in the conflict-torn country and pushed its foreign-aid dependent economy to the brink of collapse.

On Friday, U.S. President Joe Biden issued an executive order calling on banks to set aside $3.5 billion of the frozen assets in a trust fund slated for humanitarian assistance in Afghanistan. The remaining funds, $3.5 billion, would stay in the United States to finance payments from lawsuits by U.S. victims of terrorism that are still working their way through the courts.

“I ask the U.S. courts to do the opposite, to return the Afghan money back to the Afghan people. This money does not belong to any government. Much of this money was collected during my time in office. This is the property of the Afghan people,” Karzai said.

Karzai served as president for 13 years starting December 2001, shortly after the U.S.-led foreign military invasion ousted the then-Taliban government from power for harboring al-Qaida planners of the 9/11 terror attacks on the United States.

Washington and the global community at large have not recognized the Taliban takeover of Afghanistan.

U.S. officials have said Biden’s executive order also “is designed to provide a path for the funds to reach the people of Afghanistan, while keeping them out of the hands of the Taliban’s malicious actors.”

Taliban authorities condemned the unilateral U.S. move, saying it “shows the lowest level of morality and humanity of a country and a nation.”

Suhail Shaheen, the Taliban permanent representative-designate to the United Nations, on Sunday reiterated his government’s call for Washington to release the Afghan funds, saying using them for any other purpose was unacceptable.

“It is only used for implementation of monetary policy, facilitation of trade and boosting financial system of the country,” Shaheen argued.

“It is never intended to be used for any other purpose rather than that. Its freezing or disbursement unilaterally for any other purpose is injustice and not acceptable to the people of Afghanistan,” the senior Taliban official wrote on Twitter.

Meanwhile, Taliban Foreign Minister Amir Khan Muttaqi traveled to Doha on Sunday for meetings with representatives of European Union, Gulf countries, and foreign diplomatic missions to Afghanistan operating out of the capital of Qatar after the fall of Kabul to the Islamist group last summer. Taliban sources said Muttaqi would also raise in the meetings Biden’s controversial order on frozen Afghan funds.

Protesters gathered in the Afghan capital Saturday, asking for financial compensation for the tens of thousands of Afghans killed during the U.S.-led war in Afghanistan.

The U.S. withdrawal last August ended the nearly 20-year war. but United Nations and other international relief groups say Afghanistan faces one of the world’s worst humanitarian crises, which stems from more than four decades of conflict and natural calamities.

More than half of the country’s poverty-stricken population, or an estimated 24 million Afghans, face an acute food shortage and some one million children under age 5 could die from hunger by the end of this year, according to U.N. estimates following the U.S. withdrawal from the country.
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A new report found that Cambodia had 2.8 million loans for 3.6 million households, totaling $11.8 billion, with an average “microloan” size of $4,280, higher than the annual income of 95% of Cambodian households.
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Several senior members of President Joe Biden’s administration led the charge Thursday for a significant practical expansion of the nationwide use of electric vehicles.

The federal government is “teaming up with states and the private sector to build a nationwide network of EV chargers by 2030 to help create jobs, fight the climate change crisis, and ensure that this game-changing technology is affordable and accessible for every American,” said Transportation Secretary Pete Buttigieg outside the headquarters of the U.S. Department of Transportation.

In the largest investment of its kind, the Biden administration is to distribute $5 billion to begin building up to a half million roadside rapid charging stations across the country for electric cars and trucks.

To rid EV drivers of “range anxiety,” there will be a “seamless network” of charging stations along the nation’s highways, said Energy Secretary Jennifer Granholm.

“Most of them will have more than one [charging] port associated with them,” Granholm added.

“The future is electric, and this administration is moving toward it at lightning speed,” she said.

“Soon we’ll be rolling out an additional two and a half billion [dollars] for a new grant program with even more funding for chargers at the community level across the country,” Buttigieg announced.

Most EVs are hampered from driving long distances by the gap between charging stations and the time it takes to recharge their batteries, which have limited range. Most new electric cars can travel about 500 kilometers or less between charging stops, although some models with ranges beyond 800 kilometers are set to come on the market in the next several years.

The federal money being distributed will “help states create a network of EV charging stations along designated Alternative Fuel Corridors, particularly along the Interstate Highway System,” according to the Transportation Department.

It is estimated that nearly $40 billion will need to be spent to build public charging stations to reach the goal of 100% EV sales in the United States by 2035.

Some analysts see a bumpy road toward Biden’s clean energy destination.

“EVs do not necessarily generate lower carbon emissions than gasoline-powered vehicles,” said Jeff Miron, vice president of research at the Cato Institute, a public policy think tank. “The energy needed to charge batteries comes from somewhere, and in some parts of the country, that source tends to be coal, which generates even more carbon than gasoline,” he told VOA.

“Building charging stations will lower the cost of using EVs, which might encourage more driving,” added Miron, who is also a senior lecturer in economics at Harvard University. “More generally, unless an anti-carbon policy raises the price of using carbon-based fuels, it is unlikely to be the most efficient way to reduce carbon emissions.”

To tap the funds, the 50 states must submit an EV Infrastructure Deployment Plan by August 1, with approvals from the federal government to come by the end of the following month.

The federal guidance requests that states explain how they will deliver projects with at least 40% of the benefits going to disadvantaged communities.

The Biden White House has an initiative named “Justice40,” which calls for a minimum of 40% of the federal funds for climate mitigation and clean energy to go to disadvantaged areas.

The initial $5 billion in funds for the public charging stations comes from the $1 trillion infrastructure law. The investment is seen as a significant contribution toward the president’s stated goal of cutting carbon emissions caused by transportation and ensuring half of new cars are electric by 2030.

“We will have to expand both the transmission grid as well as the sources of clean energy that we add to it in order to get to the president’s goal,” acknowledged Granholm.
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A trucker-led protest of coronavirus vaccine mandates that is blocking traffic at a key bridge linking the United States and Canada picked up urgency as it threatens to dampen business activity in both countries.

The protesters, who are demanding an end to Canada’s coronavirus restrictions, have blockaded the Ambassador Bridge between Detroit, Michigan, in the U.S. and Windsor, Ontario, Canada, bringing central Ottawa to a halt. The blockade prevented traffic from entering Canada Wednesday, but U.S.-bound traffic continued.

Trucks transport about 25% of all trade between the two countries across the bridge, much of which is linked to the automobile sector.

Canadian authorities have said they are increasingly concerned about the economic effects of the protest, which is inspiring similar protests in France, Australia and New Zealand.

“Blockages, illegal demonstrations are unacceptable, and are negatively impacting businesses and manufacturers,” Canadian Prime Minister Justin Trudeau warned as he addressed the House of Commons Wednesday.

While the mayor of Canada’s capital city, Ottawa, declared a state of emergency Wednesday because of demonstrations there, police warned in a statement that protesters “must immediately cease further unlawful activity or you may face charges.”

White House press secretary Jen Psaki said Wednesday the Biden administration was in close contact with Canadian officials and voiced concern the blockade could also affect the U.S. economy as it “poses a risk to supply chains, to the auto industry.”

Ford Motor Company spokesman Said Deep said Thursday the blockade has forced the automaker to reduce operations at its Ontario province plants in Oakville and Windsor, according to The New York Times.

On Wednesday, Toyota spokesman Scott Vazin said the company will not be able to manufacture anything at three Canadian plants for the rest of this week because of the blockade.

Shortages due to the blockade also forced General Motors to cancel the second shift of the day Wednesday at a factory near Lansing, Michigan, in the U.S. GM spokesman Dan Flores said Wednesday the factory was expected to reopen on Thursday.

The blockade, which began nearly two weeks ago, has prompted the U.S. Department of Homeland Security to issue a warning that a convoy of truckers could begin protests as early as this weekend in Los Angeles, California, the site of the National Football League’s Super Bowl, according to multiple reports.

CNN reports that DHS issued a bulletin to U.S. law enforcement agencies informing them the convoy would probably begin protests in California as early as mid-February and make their way across the U.S. to Washington as late as mid-March.

Some information for this report came from Agence France-Presse, The Associated Press, and Reuters.
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European Commission President Ursula von der Leyen Thursday announced a more than $172 billion investment plan for Africa, as part of the European Union’s Global Gateway infrastructure initiative.

Von der Leyen made the announcement at a news conference in Senegal’s capital, Dakar, as she spoke to reporters alongside President Macky Sall. Von der Leyen is in the West African nation to prepare for an EU–African Union summit scheduled for next week.

Senegal currently holds the rotating presidency of the AU.

In her comments, Von der Leyen said the funds for Africa represent the first regional package to be implemented as part of the Global Gateway investment initiative, first announced late last year. The Global Gateway seeks to invest up to $340 billion for public and private infrastructure projects around the world by 2027.

Seen as a response to China’s Belt and Road initiative, the investment scheme will draw on private sector investments as well as funding from EU institutions and member countries.

In a release on its website, the EU says the package will include more than $488 million for COVID-19 vaccines and vaccine rollouts; roughly $1.7 billion toward strengthening health security architecture, pharmaceutical systems and manufacturing, and improving access to health care, along with nearly $70 million for sexual and reproductive health and rights infrastructure.

Von der Leyen said investments such as these and others “will be at the heart” of discussions at next week’s EU-AU summit, “because they are the means of our shared ambition.”

She said, “In this area Europe is the most reliable partner for Africa and by far the most important.”

Some information for this report came from Agence France-Presse.
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Sting has sold his songwriting catalog — including solo works as well as hits with The Police like “Roxanne” — to Universal Music Group, the company said Thursday, the industry’s latest such blockbuster transaction.

The company did not disclose financial terms of the deal, but U.S. media estimated it was worth some $250 million. It covers Sting’s entire body of songwriting work, including songs written for The Police.

Sting’s sale reunites his publishing catalog with his recorded music rights, which are already controlled by Universal, according to the company’s statement.

Universal now stands to receive all future income related to Sting’s song copyrights and songwriter royalties, for hits including “Every Breath You Take” and “Fields of Gold.”

In a statement, the 70-year-old British-born artist said he is “delighted” for Universal’s publishing division to manage his catalog, saying “it is absolutely essential to me that my career’s body of work have a home where it is valued and respected — not only to connect with longtime fans in new ways but also to introduce my songs to new audiences, musicians and generations.”

It’s the latest high-profile deal of the recent music rights purchasing rush, which has seen artists including Bob Dylan and Bruce Springsteen sell off their catalogs for astronomical sums.

The trend is driven in large part by the anticipated stability of streaming growth combined with low interest rates and dependable earning projections for time-tested hits.

It’s also useful for artists focused on estate planning, and those whose touring income has been stymied by the pandemic.

Companies have acquired a number of major catalogs including from David Bowie’s estate, Stevie Nicks, Paul Simon, Motley Crue, The Red Hot Chili Peppers and Shakira.
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U.S. consumer prices surged at an annual pace of 7.5% in January, the fastest increase in four decades, the Labor Department reported Thursday.

Americans are facing higher costs for autos, household furniture and appliances, according to the government. While some of those purchases can be delayed, U.S. household budgets are being squeezed by something everyone needs — food — with consumers facing higher prices for meat, eggs, citrus fruit and now produce as well. Gasoline prices for motorists also remain high in the U.S.

The inflationary surge is being fueled by coronavirus-related supply-and-demand issues.

Consumers seem willing to buy goods after the coronavirus curbed personal spending, but now manufacturers have been unable in some cases to make enough of their products and at the same time face a shortage of shippers and truckers to get their goods into stores and showrooms.

“The price pressures on households just don’t end,” Greg McBride, the chief financial analyst at Bankrate.com, said in a statement. “Not only have home prices jumped 20% in the past year, but now many rents are too, rising 0.5% in the past month alone. Nothing squeezes household budgets more than the outsized increases we’re currently seeing on costs for shelter and housing.”

The U.S. economy is sharply increasing, recovering from the pandemic at a faster pace than economists once projected, advancing by 5.7% in 2021, the fastest full-year gain since 1984.

The U.S., with the world’s biggest economy, added 467,000 more jobs in January, while its unemployment rate ticked up to 4% as more unemployed people looked for work. Businesses added a record 6.4 million jobs last year.

The inflation reading for January included a once-a-year revision that affects seasonally adjusted data for the past five years, with the Labor Department also updating the list of goods included in the calculation, to reflect consumer buying habits in recent years.

Economists are predicting that, over time, inflationary pressures will ease. But policymakers at the Federal Reserve, the country’s central bank, are signaling they will start increasing their benchmark interest next month to tamp down inflation and keep the U.S. economy from overheating. The Fed normally tries to set policies allowing for a 2% annual inflation rate, far less than the current jump in prices.

An increase in the Fed’s key interest rate will likely, over time, boost borrowing costs for consumers and businesses as well, helping to keep inflation in check.

New claims for jobless benefits fell in the United States last week, the Labor Department also reported Thursday, as many employers hung on to the workers they have and searched for more.

The agency said 223,000 unemployed workers filed for compensation, down 16,000 from the revised figure of the week before. The new total was in line with the claim figures from recent weeks as the U.S. economy continues to recover from the havoc inflicted on it by the advance of the coronavirus pandemic that swept into the country nearly two years ago.

Many employers are looking for more workers, despite about 6.5 million workers remaining unemployed in the U.S.

At the end of December, there were 10.9 million job openings in the U.S., but the skills of available workers often do not match what employers want, or the job openings are not where the unemployed live. In addition, many of the available jobs are low-wage service positions that the jobless shun.

 
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A blockade of the bridge between Canada and Detroit by protesters demanding an end to Canada’s COVID-19 restrictions forced the shutdown Wednesday of a Ford plant and began to have broader implications for the North American auto industry.

Prime Minister Justin Trudeau, meanwhile, stood firm against an easing of Canada’s COVID-19 restrictions in the face of mounting pressure during recent weeks by protests against the restrictions and against Trudeau himself.

The protest by people mostly in pickups entered its third day at the Ambassador Bridge between Detroit and Windsor, Ontario. Traffic was prevented from entering Canada, while U.S.-bound traffic was still moving.

The bridge carries 25% of all trade between the two countries, and Canadian authorities expressed increasing worry about the economic effects.

Ford said late Wednesday that parts shortages forced it to shut down its engine plant in Windsor and to run an assembly plant in Oakville, Ontario, on a reduced schedule.

Shortages caused by the blockade also forced General Motors to cancel the second shift of the day at its midsize-SUV factory near Lansing, Michigan. Spokesperson Dan Flores said it was expected to restart Thursday and no additional impact was expected for the time being.

Later Wednesday, Toyota spokesperson Scott Vazin said the company will not be able to manufacture anything at three Canadian plants for the rest of this week because of parts shortages. A statement attributed the problem to supply chain, weather and pandemic-related challenges, but the shutdowns came just days after the blockade began Monday.

A growing number of Canadian provinces have moved to lift some of their precautions as the omicron surge levels off, but Trudeau defended the measures the federal government is responsible for, including the one that has angered many truck drivers: a rule that took effect Jan. 15 requiring truckers entering Canada to be fully vaccinated.

“The reality is that vaccine mandates, and the fact that Canadians stepped up to get vaccinated to almost 90%, ensured that this pandemic didn’t hit as hard here in Canada as elsewhere in the world,” Trudeau said in Parliament.

About 90% of truckers in Canada are vaccinated, and trucker associations and many big-rig operators have denounced the protests. The U.S. has the same vaccination rule for truckers entering the country, so it would make little difference if Trudeau lifted the restriction.

Protesters have also been blocking the border crossing at Coutts, Alberta, for a week and a half, with about 50 trucks remaining there Wednesday. And more than 400 trucks have paralyzed downtown Ottawa, Canada’s capital, in a protest that began late last month.

While protesters have been calling for Trudeau’s removal, most of the restrictive measures around the country have been put in place by provincial governments. Those include requirements that people show proof-of-vaccination “passports” to enter restaurants, gyms, movie theaters and sporting events.

Alberta, Saskatchewan, Quebec, Prince Edward Island and Nova Scotia announced plans this week to roll back some or all of their precautions. Alberta, Canada’s most conservative province, dropped its vaccine passport immediately and plans to get rid of mask requirements at the end of the month.

Alberta opposition leader Rachel Notley accused the province’s premier, Jason Kenney, of allowing an “illegal blockade to dictate public health measures.”

Despite Alberta’s plans to scrap its measures, the protest there continued.

“We’ve got guys here — they’ve lost everything due to these mandates, and they’re not giving up, and they’re willing to stand their ground and keep going until this is done,” said protester John Vanreeuwyk, a feedlot operator from Coaldale, Alberta.

“Until Trudeau moves,” he said, “we don’t move.”

As for the Ambassador Bridge blockade, Windsor Mayor Drew Dilkens said police had not removed people for fear of inflaming the situation. But he added: “We’re not going to let this happen for a prolonged period of time.”

The demonstration involved 50-74 vehicles and about 100 protesters, police said. Some of the protesters say they are willing to die for their cause, according to the mayor.

“I’ll be brutally honest: You are trying to have a rational conversation, and not everyone on the ground is a rational actor,” Dilkens said. “Police are doing what is right by taking a moderate approach, trying to sensibly work through this situation where everyone can walk away, nobody gets hurt, and the bridge can open.”

To avoid the blockade and get into Canada, truckers in the Detroit area had to drive 70 miles north to Port Huron, Michigan, and cross the Blue Water Bridge, where there was a 4½-hour delay leaving the U.S.

At a news conference in Ottawa that excluded mainstream news organizations, Benjamin Dichter, one of the protest organizers, said: “I think the government and the media are drastically underestimating the resolve and patience of truckers.”

“Drop the mandates. Drop the passports,” he said.

The “freedom truck convoy” has been promoted by Fox News personalities and attracted support from many U.S. Republicans, including former President Donald Trump.

Pandemic restrictions have been far stricter in Canada than in the U.S., but Canadians have largely supported them. Canada’s COVID-19 death rate is one-third that of the U.S.  
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President Joe Biden on Tuesday announced that an Australian company that makes chargers for electric vehicles will build a manufacturing facility in Tennessee, while reiterating his commitment to make the U.S. government’s fleet of cars electric. 

The new plant will produce up to 30,000 electric vehicle chargers per year and create 500 local jobs, according to Biden and the Brisbane-based company, Tritium. State officials said production is scheduled to start in the third quarter of 2022. 

Biden touted “an American manufacturing comeback.” Tritium’s chargers will “use American parts, American iron, American steel,” and will be installed by union workers, Biden said. He said the federal government’s fleet of 600,000 vehicles will “end up being electric vehicles.” 

“The benefits are going to ripple through thousands of miles in every direction and these jobs will multiply,” Biden said, adding the manufacturing plants will lead to a growth in steel mills, small parts suppliers and construction sites throughout the country. 

Tritium CEO Jane Hunter appeared alongside Biden at the White House and said Biden’s policies “have contributed to enormous demand” for Tritium products in the United States. This “directly led us to pivot and change our global manufacturing strategy.” 

Biden also announced that this week, the White House will roll out a state-by-state allocation of $5 billion in funding for electric vehicle chargers. He used the speech to highlight contributions by U.S. companies involved in manufacturing electric vehicles including Tesla, a company Biden has refrained from naming in the past. 

Biden has made rebuilding American manufacturing a key of his economic agenda, including pushing for billions of dollars of public and private investments in the electric vehicle industry. The bipartisan infrastructure bill passed last year provided money for a sprawling network of electric vehicle charging stations across the country. 

Biden has said electric cars will be more climate-friendly and affordable for American families, and the White House has set a target of half the vehicles sold in the United States to be electric or plug-in hybrids by 2030. 

The Tritium announcement is the latest in recent weeks by major companies announcing investments in U.S. manufacturing and jobs, including Intel, General Motors and Boeing. More than $200 billion in investments in domestic manufacturing of semiconductors, electric vehicles, aircraft, and batteries have been announced since 2021. 

 
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The United States posted its largest ever full-year trade deficit in the 12 months ending in December, according to data released by the Commerce Department on Tuesday, signaling continued strong economic growth and vibrant consumer demand as the country emerges from the recession induced by the COVID-19 pandemic. 

In calendar year 2021, the U.S. imported goods and services worth $859.1 billion more than it exported, a 27% increase over the gap in 2020 and the largest single-year figure since the government began tracking the measure in 1960. The next-closest was in 2006, when the deficit hit $763.53 billion. 

In the month of December alone, the U.S. imported $80.7 billion more than it exported, just shy of the one-month record of $80.8 billion set in September. The country’s total imports in December amounted to $308.9 billion, as compared with $228.1 billion in exports. 

A sign of economic health 

Although a trade deficit is often cast in negative terms, economists usually see it as a sign of economic strength, indicating a net flow of investment into the country. 

“Whenever the U.S. economy is doing well, the deficit gets worse,” Joseph Francois, an economist and the managing director of the World Trade Institute at the University of Bern, Switzerland, told VOA.  

A strong U.S. economy attracts foreign investment, helping to create new jobs and driving up consumption, much of which is targeted at goods manufactured overseas, Francois said.  

“You’ve got more investment coming in, because people want to put more money in the U.S. economy when it’s doing better,” Francois said. “And the result is the trade deficit looks worse, especially for merchandise. So in a sense, when the economy is doing what it is doing now – creating lots of jobs and recovering from the COVID recession – you’re going to see an increase in the deficit relative to the baseline that we had before.” 

Francois also pushed back against the common misconception that a trade deficit in the U.S. somehow translates into fewer jobs for American workers.  

“The idea that somehow, if the deficit is big, you’re losing jobs just runs counter to the facts,” he said. “When the economy does better, the deficit gets bigger. Again, keep in mind, you want more investment. That’s what generates jobs. And you can’t have net investment unless you’ve got a trade deficit.” 

Biden administration touts economic improvement 

A spokesperson for the National Security Council told VOA the White House sees the trade figures released Tuesday as part of a larger positive story about the direction of the U.S. economy, while at the same time pointing to efforts to increase exports. 

“Over the course of 2021, our exports also recovered from the pandemic-induced decline of 2020,” the spokesperson said. “For example, during President Biden’s first 11 months in office, American agricultural exports reached a record $160 billion, generating an estimated $342 billion in total economic output and supporting more than 1.2 million jobs here in the United States.” 

The NSC spokesperson also mentioned the Biden administration’s efforts to sell more U.S. goods abroad, noting agreements with the United Kingdom and the European Union on the sale of civilian aircraft and a broader agreement on steel and aluminum. 

“That being said, the trade deficit does not determine American prosperity or American influence in the world,” the spokesperson said. “In fact, the recent rise in the deficit is primarily a sign of the strength of the economic recovery and the efforts the administration has made to resolve supply chain disruptions.” 

Deficit with China remains largest  

China remains the single largest source of the U.S. trade deficit, accounting for $355.3 billion of the total deficit in 2021, or 41% of the total. That figure was up from $310.3 billion in 2020, but reflected a lower percentage of the total deficit. 

The next-largest single-country trade deficit posted by the U.S. in 2021 was with Mexico, which exported $108.2 billion more in goods and services to the U.S. than it imported, a decline from a deficit of $113.7 billion in 2020. 

The U.S. also ran a net deficit with the countries of the European Union, importing $219.6 billion more in goods and services than it exported, an increase of 19.1% over 2020. However, the net deficit with the EU reflected roughly the same percentage of the total trade deficit, about 26%, as it had a year earlier. 

Trade tensions with China persist 

U.S. officials remain frustrated by the fact that China has not yet complied with the obligations it undertook in the so-called Phase One trade deal negotiated by the Trump administration in January 2020. The deal was an effort to lower tensions in the trade war that erupted between the two nations during Trump’s term in office. 

Under the deal, the Chinese government had promised to increase its imports from the U.S. by $200 billion over and above its pre-2020 levels. 

An analysis released by the Peterson Institute for International Economics on Tuesday pointed out that since then, China’s purchases of U.S. goods have fallen far short of those promises. 

“In the end, China bought only 57 percent of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war,” the analysis found. “Put differently, China bought none of the additional $200 billion of exports Trump’s deal had promised.” 

In a press conference at the White House on Tuesday, White House press secretary Jen Psaki said that the Biden administration had, through the Office of the U.S. Trade Representative, “expressed our concerns” about the issue. “It is on China to show that it can follow through on its commitment,” Psaki said. 

Patsy Widakuswara contributed to this report.
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In a surprising burst of hiring, America’s employers added a robust 467,000 jobs last month, a sign of the economy’s resilience in the face of a wave of omicron infections. 

The government’s report Friday also drastically revised up its estimate of job gains for November and December by a combined 709,000. It also said the unemployment rate ticked up from 3.9% to a still-low 4%, mainly because more people began looking for work and not all of them found jobs right away. 

The strong hiring growth for January, which defied expectations for only a slight gain, demonstrated the eagerness of many employers to hire even as the pandemic raged. Businesses appear to have regarded the omicron wave as having, at most, a temporary impact on the economy and remain confident about their longer-term prospects. 

“Employers have assumed that omicron would be painful but short term, so they haven’t changed their hiring plans,” said Mathieu Stevenson, the CEO of Snagajob, a job listings site focused on hourly workers. “Demand from employers is as strong as ever.” 

January’s hiring gain and sharp upward revisions to previous months mean that the United States has 1.1 million more jobs than government data had indicated only a month ago. The solid hiring, along with steady wage gains, are boosting consumer spending, which has collided with snarled supply chains to accelerate inflation to a four-decade high. 

Adjusted for price increases, Americans’ paychecks on average don’t go as far as they did a year ago, even though many workers have received raises. Many households, especially lower-income families, are struggling to afford necessities like gas, food, rent and child care. 

Those trends will give the Federal Reserve more leeway to raise interest rates, perhaps even faster than it had planned, to cool inflation. The Fed has indicated that it will begin raising rates in March, and it could do so again at its next meeting in May. Faster rate hikes could reduce borrowing and spending and possibly weaken the economy. 

Stocks initially fell on the expectation that the Fed will tighten credit more quickly, before share prices recovered in early afternoon. But the yield on the 10-year Treasury jumped nearly one-tenth of a percentage point, to 1.91%, a sign that investors anticipate higher borrowing costs. 

Across the economy, most industries hired workers last month, including retailers, which added more than 61,000 jobs, and restaurants and hotels, which gained 131,000. Shipping and warehousing firms added 54,000. Many companies in those industries likely held onto some of the workers they had hired over the winter holidays, economists said, rather than laying them all off. 

Omicron did leave some fingerprints on the report: The percentage of Americans who were working from home rose to more than 15%, up from 11% in December. And the number of people out sick last month soared to 3.6 million, up from fewer than 2 million in the previous January and about triple the pre-pandemic level. This forced many companies, from restaurants to retailers to manufacturers, to reduce their hours or even close because of staff shortages. 

Among the workers who were out sick was Perla Hernandez, whose entire family of eight contracted COVID last month. Hernandez and her husband and 20-year old daughter all missed work, a major blow to the family’s finances. 

Hernandez, 42, who lives in the San Jose, California, area, missed six days from her job as a Burger King cook and janitor. Because she has no paid sick leave, the paycheck she receives every two weeks amounted to just $230. 

About one-fifth of U.S. workers receive no sick pay, and the proportion is far higher among lower-paid service workers. Only 33% of workers who are at the bottom 10% of the pay scale receive paid sick leave, compared with 95% of employees in the top 10%. 

“Thank God that we already had paid the rent for January,” she said through an interpreter. “We had to go to a food bank.” 

Hernandez said she earns $15.45 an hour, after having received a 45-cent raise six months ago. But she and her colleagues, including managers, have been working especially long hours because the restaurant has had difficulty hiring. 

Daniel Zhao, senior economist at the employment website Glassdoor, said the healthy hiring — not only for January but also for November and December — is a sign that last month’s gains weren’t merely a blip. 

“This is an actual trend, and job growth was faster than we realized,” Zhao said. 

A greater proportion of Americans are also now working or looking for work, the report showed, a trend that makes it easier for companies to find workers. It suggests that concerns about long-term labor shortages may have been overblown, at least in some industries. 

“There are workers out there — it’s just taking time to integrate them back into the labor force,” Zhao said. 

Grady Cope, the CEO of Reata Engineering and Machine Works, said nine of his 43 staffers were out sick last month — the most he can remember in nearly 30 years of running the company. 

But Cope’s company, which makes parts for airplane and medical device manufacturers, also has the biggest order backlog it’s ever had. He wants to add at least eight employees, including machinists, assemblers and engineers. Last month, he raised pay 18%, far more than the usual 3%-4% increases. His company is based near Denver, where rents and other costs are rising fast. 

“People have to have wages so they can support themselves and raise families,” he said. 

Still, Cope has been increasing his own prices to offset his workers’ higher pay. The competition for workers, he said, is the toughest he’s ever seen. In October, four of his workers quit. Only one gave notice. 

“That’s never happened in 28 years,” he said. 

The overall outlook for the job market remains bright, with openings near a record high, the pace of layoffs down and the unemployment rate having already reached a healthy level. The nation gained more jobs last year, adjusted for the size of the workforce, than in any year since 1978. Much of that improvement represented a rebound from record job losses in 2020 that were driven by the pandemic recession. 

 
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Norway’s central bank, Norges Bank, announced Friday it has appointed NATO Secretary-General Jens Stoltenberg to take over as its next governor after his term leading the military alliance ends later this year.

The central bank announced the appointment in a statement on its website, saying Stoltenberg had been appointed by Norway’s King Harald V. 

Stoltenberg will take over from current Norges Bank Governor Øystein Olsen, who is retiring later this month after holding the position since Jan. 1, 2011.

The 62-year-old Stoltenberg, a former prime minister of Norway, also served as finance minister from 1996 to 2000. He had previously said if he got the central bank governor position, he wouldn’t be able to start before leaving his NATO job on Oct. 1.

The central bank statement said it hopes Stoltenberg can start in his new role by Dec. 1. Until then, Norges Bank Deputy Governor Ida Wolden Bache will run the bank in an interim capacity beginning March 1.

In a statement, Norway’s current finance minister, Trygve Slagsvold, said he had been “concerned with identifying the best central bank governor for Norway, and I’m convinced that this is Jens Stoltenberg.”

The appointment ends speculation that Stoltenberg would stay on at NATO, and the search for a successor must now begin ahead of a meeting of member nation leaders in June this year.

Some information for this report was provided by the Associated Press, Reuters and Agence France-Presse.

 
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The same technology companies that helped drag the U.S. stock market back from the depths of the pandemic recession in 2021 led the market into a sharp plunge on Thursday after Meta Platforms, the company that owns Facebook, revealed that user growth on its marquee product has hit a plateau, and revenue from advertising has fallen off sharply.

Meta was not the only U.S. tech company to suffer on Thursday. Snap Inc., the owner of Snapchat; Pinterest, Twitter, PayPal, Spotify and Amazon all suffered sharp sell-offs during trading.

U.S. tech stocks are facing a variety of major challenges right now, including a possible economic slowdown, changes to privacy rules, increased regulatory pressure and competitive challenges that have pushed users — especially young people — to new platforms such as TikTok.

Every major U.S. stock index was down significantly on Thursday, with the Dow Jones Industrial Average falling by 1.45%, the S&P 500 down 2.44%, and the tech-heavy Nasdaq down 3.74%.

Meta’s Facebook struggles

Although the pain was spread broadly across the tech sector Thursday, it was the travails of Facebook that captured much of the public’s attention. The company’s shares, which were trading at $323 when the markets closed Wednesday, opened on Thursday at $242.48 and never recovered, closing at $237.76.

The 27% decline in the company’s share value translated into a loss of more than $230 billion in market value, an utterly unprecedented one-day loss for a single firm.

The share price began its tumble after the company announced for the first time ever that its total number of monthly users had not risen in the fourth quarter of 2021. Additionally, in its key North American market, Facebook saw monthly users decline slightly.

The stagnant user figures raised concerns about the company’s ability to grow even as more bad news poured in from its advertising business, which generates the overwhelming majority of the company’s profits.

Last year, Apple changed the privacy setting on its iPhones and other devices, requiring apps, including Facebook, to get each user’s explicit permission to track their activity on the internet. Prior to that change, Facebook had made extensive use of tracking software to deliver targeted advertising to its users — something its advertising clients were willing to pay a significant premium for.

Since Apple instituted the change, the majority of users have declined to allow Facebook to track their browsing, greatly diminishing the company’s ability to target advertisements. On Thursday, Meta Chief Financial Officer David Wehner told investors the company expects the changes to cost it $10 billion in advertising revenue in 2022.

Trouble with young users

Facebook has long struggled to attract younger users to its platform, and on Thursday, company officials admitted that the firm is finding it difficult to compete with TikTok, an app created by the Chinese firm ByteDance, which allows users to share brief videos.

In a call with investors, Meta CEO Mark Zuckerberg said the company’s answer to TikTok, a service called Reels, is still being developed.

“Over time, we think that there is potential for a tremendous amount of overall engagement growth” he said. “We think it’s definitely the right thing to lean into this and push as hard to grow Reels as quickly as possible and not hold on the brakes at all, even though it may create some near-term slower growth than we would have wanted.”

Zuckerberg, who holds 55% of the voting shares of Meta, giving him de facto control of the company, saw his personal wealth fall by an estimated $24 billion as a result of Thursday’s market rout.

Economic headwinds

Over the past year, investors have consistently pushed the share prices of U.S. tech firms higher. Now, though, with the Federal Reserve preparing a series of interest rate increases meant to cool the U.S. economy and slow price inflation, investors appear to be reconsidering the prices they are willing to pay.

Investors typically judge the value of a stock based on its price-to-earnings (P/E) ratio, which is determined by dividing the share price by the fraction of the company’s earnings represented by an individual share of stock.

When a company’s shares trade at a high P/E ratio that is usually because investors expect the underlying business to continue growing. However, that growth can be hampered by a slowdown in the broader economy, something many investors expect to see in the coming m

Political challenges

In addition to concerns about economic headwinds, the tech sector is facing a distinctly unfriendly regulatory environment in the U.S. Lawmakers in both parties have expressed their concern that big technology companies enjoy too much influence over areas like popular culture and political discourse but face too little accountability.

Facebook and its subsidiary, Instagram, were subjected to hostile congressional hearings last year, after a whistleblower revealed internal documents that showed the companies understood that their products could be harmful to some users but took little action to address the issue.

During the hearings, high-profile lawmakers, including Democratic Senator Elizabeth Warren, called for Facebook to be broken up into multiple, smaller companies.

 
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