PwC China faces chaos after losing over 60 partners due to a ban linked to the Evergrande audit. The discussion dives into the fallout from Donald Trump’s steel tariffs and how they shaped industry dynamics. Meanwhile, tensions grow as Hamas delays the release of hostages. Hezbollah finds itself in a precarious position, facing military setbacks and needing to rebuild support from its community amidst financial challenges. The use of cash and WhatsApp groups for mobilization highlights its strategic adaptations.
PwC China's significant partner exodus underscores the impact of regulatory scrutiny and public trust on auditing firms' stability and operations.
Hezbollah's struggle to maintain political influence is tied to its reliance on social services and local networks amid ongoing military and economic challenges.
Deep dives
PwC China's Challenges Amidst Audit Fallout
PwC China is facing significant challenges following its controversial audit of Evergrande, which resulted in a $60 million fine and a ban due to allegations of fraud concealment. Consequently, the firm has witnessed the departure of over sixty partners, indicating underlying instability and a struggle to retain clients, particularly among privately held companies and Hong Kong-listed businesses such as Alibaba and Tencent. This situation highlights the critical impact of regulatory scrutiny and public trust on the operations of audit firms, as they navigate complex environments. The fallout of this scandal raises broader concerns about the auditing profession's integrity and its ability to effectively manage high-profile clients in the future.
Trump's Tariffs: A Repeat of 2018 Dynamics
Donald Trump is reintroducing tariffs on aluminum and steel imports, echoing the economic strategies from his previous term that significantly impacted U.S. metal prices and domestic industries. By imposing a 25% tariff on both metals, Trump aims to protect American manufacturing jobs, especially in regions known for steel production, but this strategy also leads to increased costs for industries reliant on these materials, such as automotive manufacturers. Past implementations showed a drop in imports while prices surged, resulting in varied repercussions across the economy. Other countries responded with retaliatory tariffs on American goods, demonstrating the cyclical nature of trade disputes and their wide-ranging effects.
Hezbollah's Struggle for Popular Support in Post-War Lebanon
Hezbollah is currently facing one of its most challenging periods, grappling with military losses and diminished political influence in Lebanon, especially following the assassination of its leader and setbacks in regional alliances. Despite these challenges, Hezbollah maintains strong local networks and welfare programs that continue to garner a degree of public support, particularly among communities benefitting from its social services. However, the ongoing efforts to assess damages from recent conflicts and the distribution of compensation have resulted in mixed reactions; some constituents feel underwhelmed by the financial support they receive. The group’s ability to rebuild trust and foster loyalty among its base is crucial, as losing that support could undermine its viability as a political and militant organization.
More than 60 partners have left PwC China after a ban over its audit of failed property developer Evergrande, the FT’s Andy Bounds explains what we can learn from Donald Trump’s 2018 steel tariffs, and Hamas said it is postponing the next release of hostages. Plus, Hizbollah is weaker than it’s ever been, and it needs the support of its constituency to rebuild.
The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian, Ethan Plotkin, Lulu Smyth, and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Joseph Salcedo. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. The show’s theme song is by Metaphor Music.
