Sign up to receive FirstFT by email here
US political leaders reacted with anger to an EU decision to hit Apple with a record-breaking €13bn tax penalty, setting the stage for possible US retribution and highlighting the volatile politics around international corporate tax issues.
The US Treasury expressed disappointment at what it called an “unfair” decision by the European Commission to assess taxes retroactively and warned that it could have wider ramifications. Tim Cook, Apple’s chief executive, said the ruling threatened to deal a “devastating blow” to the principle of legal certainty in Europe.
Ireland has promised to appeal, but this comes with political peril. Bluntly, Dublin will have to pay millions of taxpayer cash to lawyers to argue that the world’s richest company should not hand over €13bn to the Irish government.
One minister summed it up succinctly in the Irish Times: “There would be no problem in appealing it if it was only a couple of hundred million euros. But €13 billion? Jesus . . .” (FT, Brussels Blog)
In the news
Trump flies to Mexico Donald Trump will fly to Mexico City on Wednesday for talks with President Enrique Peña Nieto hours before detailing his immigration policy plans in a speech in the US. The US Republican candidate faces accusations of backpedalling on what has been a core tenet of his campaign — the forced deportation of more than 11m undocumented migrants — but insists he will also bring home jobs from south of the border, scrap a trade partnership and build a border wall. (FT)
UBS hires psychologists to revamp research The Swiss bank has brought in psychologists, data scientists, shipments specialists and pricing experts to overhaul how it generates investment ideas and recommendations for clients. The bank says the move — which some investors have viewed with scepticism — has more than doubled readership of its research output in the past two years.(FT)
Isis propaganda chief killed The main spokesman and head of external operations for Isis, Abu Muhammad al-Adnani, has been killed in Syria, the group’s media outlet said on Tuesday. Adnani’s demise, if confirmed, would be the biggest single setback to the leadership of Isis since the group began its blitzkrieg across the Middle East, redrawing a century-old map in its wake. The caliphate’s emir is the elusive Abu Bakr al-Baghdadi, a cleric and Islamic scholar. Adnani was his chief of operations, both inside the Islamic State and abroad. (FT, New Yorker)
Macron seeks France’s top job Emmanuel Macron, France’s economy minister, has resigned and broken away from his mentor François Hollande, France’s president, to prepare an expected rival presidential bid. “I have touched the limits of our system, the last-minute compromises, its imperfect solutions,” Mr Macron said in a televised address. “I want today to start a new phase of my fight.” Mr Hollande has said he would make a decision over whether to seek re-election in December, but his unpopularity has already encouraged a flurry of rivals on the left to declare their candidacies. (FT)
Obama’s historic clemency push Barack Obama on Tuesday commuted the sentences of 111 federal prisoners, granting the most commutations by an American president in a single day and raising the August total to 325, the highest number in any month in American history. The president has pushed to reform the criminal justice system with a particular focus on mandatory sentencing laws that have helped spur mass incarceration in the US. One prisoner granted clemency is Tim Tyler, sentenced to a mandatory life sentence in 1994 for selling LSD while following the Grateful Dead on tour around the country. Tyler was 25 years old at the time and has been in jail ever since. (Slate)
FT explainer: can the US election really be hacked? Authorities in Illinois and Arizona say their voter registration databases were infiltrated by foreign actors. The good news is that most states have policies in place to ensure vote totals are correct. The bad news is that a hacker does not have to manipulate the tally to affect the outcome. (FT)
It’s a big day for
Myanmar, where the government and military are holding landmark peace talks with armed ethnic groups as part of efforts to bring an end to decades of conflict. The meeting in the capital Nay Pyi Taw, involving 17 groups, is being opened by Aung San Suu Kyi and attended by UN secretary-general Ban Ki-moon. (BBC)
Michel Temer Brazil’s nine-month long impeachment process will climax with a historic vote in which more than two-thirds of the 81-seat senate are expected to remove Dilma Rousseff from office for manipulating the budget. Her replacement, former vice-president Michel Temer, will not have long to savour the moment. If he had thought the impeachment was challenging, his next task promises to be even more formidable — how to push through a series of unpopular reforms and end one of the world’s deepest recessions. (FT)
Food for thought
Capitalism and democracy: the strain is showing If the legitimacy of our democratic political systems is to be maintained, economic policy must be orientated towards promoting the interests of the many not the few, writes Martin Wolf. In the first place would be the citizenry, to whom the politicians are accountable. “If we fail to do this, the basis of our political order seems likely to founder. That would be good for no one. The marriage of liberal democracy with capitalism needs some nurturing. It must not be taken for granted.” (FT)
Risks of relying on robots for recruitment Robots are not just taking people’s jobs away, they are beginning to hand them out, too, says Sarah O’Connor. Go to any recruitment industry event and you will find the air is thick with terms like “machine learning”, “big data” and “predictive analytics”. The argument for using these tools is simple: they can sift through candidates more efficiently than humans and do it more fairly. This is a seductive idea but it is also dangerous. Any machine learning algorithm is only as good as the training data from which it learns. (FT)
Snowden goes to Hollywood As real-life narratives go, Edward Snowden’s is a compelling one. His transformation from a shy and pale 20-something to political dissident made him a hero figure to anti-establishment liberals who are in the business of storytelling. Oliver Stone wanted a hit — and the chance to put America’s most iconic dissident on screen. The subject wanted veto power. The Russian lawyer wanted someone to option the novel he’d written. The American lawyer just wanted the whole insane project to go away. Somehow a film got made. (NYT)
Behind SoftBank’s blockbuster bid for ARM SoftBank’s massive, $31.8bn, purchase of UK chip designer ARM was a decade-long courtship for Masayoshi Son, who made it real thanks to one high-powered dinner back in June. (NAR)
Video of the day
The EU’s action over Apple tax, explained The FT breaks down the key aspects of the European Commission’s decision to hit Apple with a record-breaking tax penalty. (FT)
Get alerts on Global Economy when a new story is published