Top international headlines: Big brands’ tax affairs in the spotlight this week
The US sees a 13-year high in inflation rate, emergency stimulus tapering off, and more.
As the US deals with an inflation high driven by a rise in the cost of used cars, it issues a warning to businesses with operations in China’s Xinjiang province, while Mastercard and Verizon look to the future of 5G contactless payments. Meanwhile, Nike loses its appeal on an EU decision to probe its tax affairs, and leading economies exit pandemic-induced emergency stimulus measures.
US records 13-year inflation high
US inflation hit a 13-year high in June, driven by a rise in the cost of used cars. Consumer prices rose 5.4 percent in the 12 months to the end of June, up from five percent the previous month, the largest increase since August 2008.
The jump in prices will put pressure on the Federal Reserve to tighten monetary policy sooner than expected, which could in turn dampen a consumer-led recovery and drive demands for wage increases, reports The Guardian.
Emergency stimulus tapering off
The Reserve Bank of New Zealand plans to halt its pandemic-induced quantitative easing programme, becoming the latest major central bank to start exiting emergency stimulus.
As major economies bounce back thanks to Covid-19 vaccination campaigns and an easing of lockdown restrictions, a debate about dialling back emergency stimulus is underway at a number of first world countries, according to Reuters.
Just didn’t do it
Nike has failed in its attempt to repeal an EU decision to probe its tax affairs amid a crackdown on allegedly unfair fiscal deals for big companies.
The European Commission complied with procedural rules when it decided to scrutinise the sportswear giant, the EU’s General Court has ruled. The decision follows the commission’s 2019 opening of a probe into whether so-called tax rulings by the Netherlands may have given Nike an unfair advantage over its competitors, reports Bloomberg.
Amazon and Apple have previously won their appeals to topple tax-payback demands.
Mastercard and Verizon tackle contactless payment
Mastercard and Verizon have formed a partnership to focus on 5G contactless payments for consumers as well as small- and medium-sized businesses.
The collaboration aims to enable businesses to use emerging payment technologies to turn smartphones into cash registers, to turn wearables like watches into payment devices, and to facilitate touchless retail.
The partnership looks to further digitise and disrupt global consumer spending at retailers and other merchants, which the payments giant estimates to be around $50 trillion (R723 trillion) annually, reports CNBC.
US issues warning on Xinjiang
The US has issued a tough new warning to companies about doing business in China’s Xinjiang province, saying American firms that still have supply chain and investment ties in the region “could run a high risk of violating US law”.
Washington cited evidence of genocide and other human rights abuses in Xinjiang.
China has denied previous allegations that the region’s Uyghur population has been subjected to human rights abuses, reports BBC News.