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Friday, May 31, 2019

Acting US Defense Secretary calls on Asian allies to boost arms spending

Acting U.S. Secretary of Defense Patrick Shanahan speaking at the IISS Shangri-La Dialogue summit in Singapore on June 1, 2019

Roslan Rahman | AFP | Getty Images

SINGAPORE — Acting Secretary of Defense Patrick Shanahan called on America's allies in Asia Pacific to invest more in national security — a move that's reminiscent of U.S. President Donald Trump's well-worn script to NATO nations on burden-sharing.

Speaking Saturday at the Shangri-La Dialogue in Singapore, Shanahan highlighted an exhaustive list of U.S. contributions to the region before asking allies to commit to more.

"Our government is devoting significant resources to this mission. This is a massive effort," Shanahan said during his remarks. "Every nation, independent of size, has an important role to play. And like the business of building airplanes, no one nation can go it alone," the former Boeing executive added.

Figures provided by the London-based think tank International Institute for Strategic Studies, put China's 2019 defense spending at $176 billion. That's more than the combined budgets of South Korea, Japan, Australia, Singapore, Indonesia, Thailand, Vietnam, Malaysia and the Philippines.

"People have to invest in themselves. I mean, we are making a sizable investment," Shanahan told a small group of reporters on Friday. "Now, different countries can do more, and some just don't have the means and the resources at the time. So, there is not one size fits all but everybody has a responsibility to invest in security," he added.

When asked about the reaction from partners in the region to a potential spending increase, Shanahan said he expects allies to work with the United States.

"When we are having these conversations it'll be about asking what's appropriate for us to help with and what can they do and I think those are natural conversations," Shanahan said. "I have not found the conversations awkward in the least."

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Gunman kills 12 in Virginia Beach; suspect shot dead

A view of Virginia Beach Hospital after a shooter opened fire at the Virginia Beach Municipal Center, in Virginia, United States on May 31, 2019.

Crystal Huffman | Anadolu Agency | Getty Images

A man described by authorities as a disgruntled public utility employee opened fire on co-workers at city offices in Virginia Beach, Virginia, on Friday afternoon, killing 12 people and wounding several others before he was fatally shot by police.

Virginia Beach Police Chief James Cervera said the mass shooting in the coastal resort city began as the gunman entered the public works and utilities building at the city municipal center and "immediately and indiscriminately fired upon all the victims."

The chief later said that the suspTect engaged in a "long-term gun battle" with law enforcement officers as police confronted him inside the building. One police officer was wounded in the shootout, but his bullet-proof vest saved his life, Cervera said.

The police chief said the suspect was armed with a .45-caliber handgun equipped with a "sound suppressor" device and was reloading his weapon with extended ammunition magazines as he moved through the building.

Authorities said the gunman ultimately was shot by police and was pronounced dead at a hospital.

Cervera said the suspect was a longtime public utilities employee, and described him as "disgruntled," but declined to say more about what may have precipitated the attack.

The shooting was believed to be the deadliest act of workplace gun violence in the United States since February, when a factory worker shot five colleagues to death in Aurora, Illinois, just after he was let go from his job.

—CNBC contributed to this report.

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DOJ preparing antitrust probe of Google: WSJ

Google CEO Sundar Pichai speaks during the GDC Game Developers Conference on March 19, 2019 in San Francisco, California. Google announced Stadia, a new streaming service that allows players to play games online without consoles or computers.

Justin Sullivan | Getty Images

The U.S. Justice Department is planning an antitrust investigation into Alphabet's Google subsidiary, the Wall Street Journal reported on Friday.

The report comes amid discussion from politicians and the public about whether large technology companies should be broken up. The Justice Department launched a major antitrust case against Microsoft in 1998 that led to several rules the company had to follow for years.

Alphabet, which racked up $136.8 billion in revenue in 2018, has faced antitrust pressure in the past.

Google and the Justice Department didn't immediately respond to a request for comment.

This is breaking news. Please check back for updates.

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Surprise Mexican tariffs hurt China agreement chances: 'How can you trust Trump to honor a deal?'

Combination of file photos showing U.S. President Donald Trump and Chinese President Xi Jinping.

Mandel Ngan, Nicolas Asfouri | AFP | Getty Images

President Donald Trump's surprise vow to slap new tariffs on Mexican goods has an unintended consequence: It further undermines the chance of a trade resolution with China.

The U.S. is set to impose a 5% tariff on all Mexican imports from June 10, Trump first announced in a Twitter post Thursday night. The move came as a shock as the White House just took a formal step to kickstart approval of the United States Mexico Canada Agreement.

Trump's 180-turn on the U.S.' largest trading partner is sending a ominous message to the international community that he can't be trusted, Wall Street policy analysts said, adding that China, already skeptical of Trump's reliability, is now less likely to sign a trade deal with him.

"We view this action as further deteriorating the U.S.-China trade fight. Chinese officials have stated their concern about the reliability of President Trump as a trading partner. These tariffs were announced the same day as significant advancement of the USMCA. If China does not believe a deal will stick, why negotiate?" said Ed Mills, public policy analyst at Raymond James, in a note.

Chinese leader Xi Jinping and Trump are set to meet at the G20 summit in Japan next month, but the Mexican tariffs put into further doubt that a "substantive" meeting is possible, Mills added.

"Trump's readiness to hit a trading partner with new tariff threats soon after striking a trade deal will make China still more cautious about signing up to a deal that Trump then reneges upon, humiliating its leadership," Krishna Guha. policy strategy analyst at Evercore, said in a note. "Beijing will remain open to talking, but this cannot help prospects for an early breakthrough at G20."

U.S. stock futures plunged on the new tariff threat and Chinese stocks were hit overnight as well.

"How can you trust Trump to honor a deal?" Chris Krueger, Washington strategist at Cowen said. "Mexico submitted USMCA this week for ratification...Trump's signature trade achievement was moving downfield...and he just threatened Mexico -- the U.S.'s largest trading partner -- with unilateral tariffs on ALL Mexican goods exports to the U.S."

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Acting FDA chief says regulators don't know much about CBD despite 'explosion of interest'

A matcha shop that offers drinks with drops of CBD oil.

Angelica Lavito | CNBC

Despite all the hype and excitement around CBD, regulators still don't know how safe the cannabis compound is for human use, acting Food and Drug Administration Commissioner Ned Sharpless said Friday as the agency kicked off its first public hearing on the industry.

"There are real risks associated with [THC and CBD] and critical questions remain about the safety of their widespread use in foods and dietary supplements, as well as other consumer products — including cosmetics, which are subject to a separate regulatory framework," Sharpless said, according to a transcript of his prepared remarks.

"And given the new interest in marketing cannabis products across the range of areas FDA regulates, we will need to carefully evaluate how all these pieces fit together in terms of how consumers might access cannabis products," Sharpless said. "Nowhere is this truer than with CBD. While we have seen an explosion of interest in products containing CBD, there is still much that we don't know."

Sharpless kicked off the FDA's public hearing on CBD, a widely anticipated meeting that's intended to help the agency figure out how to regulate products that add it. He said more than 500 people registered to attend the meeting in-person at FDA's headquarters outside Washington, DC, and more than 800 people registered to join remotely. The FDA has roughly 140 speakers lined up to testify.

Congress in December legalized CBD, or cannabidiol, derived from hemp. The nonintoxicating cannabis compound is being added to just about everything, including makeup, tea, pet treats and soft drinks — even though there's little data to support the many claims of its benefits.

"When hemp was removed as a controlled substance, this lack of research, and therefore evidence, to support CBD's broader use in FDA-regulated products, including in foods and dietary supplements, has resulted in unique complexities for its regulation, including many unanswered questions related to its safety," Sharpless said.

Even though CBD is cropping up in a slew of products, the FDA's rules prohibit companies from adding the compound to any food or dietary supplements because it's an active ingredient in a drug product. Sharpless said the FDA generally prohibits putting drugs into the food supply for "important reasons," like that when approving prescription drugs it carefully evaluates specific formulations, dosages and strengths for a particular population.

"Although the law says that FDA can issue regulations to create new exceptions to these statutory provisions, FDA has never issued a regulation like that for any substance," Sharpless said. "So, if we were thinking about doing that for a substance like CBD, it would be new terrain for the FDA."

Drafting and implementing a regulation could take years. Friday's public hearing is simply a listening session for regulators. The agency is taking public comments through July 2.

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Compelling trend in bond chart signals that yields will rebound, Bespoke says

A major shift may be coming to the bond market, according to Bespoke Investment co-founder Paul Hickey.

He sees a more conducive environment for higher rates materializing in a weekly chart of the 10-Year Treasury note yield going back to 1986.

According to Hickey, the data suggests the yield is retesting its latest lows and will bounce.

"We're really approaching that level right now which is around 2.20% on the 10-Year yield which we would expect would hold some support and then see yields start rising again," he told CNBC's "Trading Nation " on Thursday. "Treasurys are extremely overbought right now [relative to trend.]"

He considers it one of the most important charts to watch as volatility grips the market.

"When you get long-term trend lines breaking with a stock, a major index or in this case yields, what you also see is after the initial break of that trend line, you see a test to the downside of that trend line which eventually becomes support," added Hickey.

The 10-Year Treasury yield was at 2.159 on Friday morning, heading closer to the September 2017 low of 2.04%. He notes the downward pressure is being exacerbated by growth concerns created by the ongoing U.S.-China trade war.

"Right now, the sentiment towards this just being a permanent state of tension between China and the U.S. has reached an extreme," said Hickey.

Hickey sees it contributing to an unusual divergence in the market.

"Just in this month of May, we've seen equities underperform Treasurys by a massive amount," he said.

He believes there will be a resolution between the U.S. and China, and growth concerns will ebb. In response, Hickey predicts the Street will back off its "extreme" rate-cut expectations, yields will push higher and the curve will steepen.

"If rates rise, that should be a better backdrop for equities in this environment," said Hickey, who expects 10-Year yields to rise above 2.5% on a trade war resolution.

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Stocks making the biggest moves premarket: Ford, GM, Uber, Gap, Costco, Ulta, Dell & more

Check out the companies making headlines before the bell:

Big Lots – The discount retailer reported adjusted quarterly earnings of 92 cents per share, compared to a consensus estimate of 70 cents a share. Revenue was slightly above forecasts, although comparable-store sales were up a less-than-expected 1.5%. Big Lots also raised its full-year profit forecast.

Genesco – The apparel and accessories retailer earned an adjusted 33 cents per share for its latest quarter, well above the consensus estimate of 4 cents a share. Revenue beat forecasts as well, and a comparable-store sales increase of 5% beat the 0.6% consensus of analysts polled by Refinitiv.

Ford Motor, General Motors – These and other auto stocks are falling this morning following President Donald Trump's threat to impose tariffs on Mexican imports. GM is the largest automaker in Mexico with 14 plants, among the companies taking advantage of proximity to the U.S. border and lower labor costs.

Uber Technologies — Uber posted a loss of $1.01 billion in its first quarter as a public company, matching Wall Street's forecasts. Revenue was slightly above expectations and up 20% over a year earlier.

Gap Inc. – Gap earned an adjusted 24 cents per share for its latest quarter, 8 cents a share below consensus forecasts. The apparel retailer's revenue was also below forecasts, and a same store sales decline of 4% was larger than the 1.2% drop that analysts had been expecting. The same-store sales decline was most prominent at the Gap flagship brand.

Costco – Costco beat estimates by 7 cents a share, with adjusted quarterly profit of $1.89 per share. The warehouse retailer's revenue was also above forecasts. Comparable-store sales rose 5.5%, just under the consensus forecast for a 5.6% increase.

Ulta Beauty – Ulta reported quarterly profit of $3.26 per share, compared to a consensus estimate of $3.07 a share. The cosmetics retailer's revenue was slightly below forecasts, with comparable-store sales in line with estimates. Ulta also raised its full-year guidance.

Williams-Sonoma – Williams-Sonoma came in 12 cents a share above estimates, with quarterly earnings of 81 cents per share. The housewares retailer's revenue matched Street forecasts. Comparable-store sales were up 3.5%, more than double the 1.7% consensus estimate. Williams-Sonoma also raised its full-year earnings outlook.

Dell Technologies – Dell reported adjusted quarterly earnings of $1.45 per share, 24 cents a share above estimates. The computer maker's revenue came in below forecasts on slowing demand in China.

Amazon.com – Amazon is interested in buying Boost Mobile from T-Mobile US and Sprint, according to Reuters. T-Mobile and Sprint are planning to sell the prepaid mobile brand in order to get their planned merger approved by regulators.

Okta – Okta reported an adjusted quarterly loss of 19 cents per share, 2 cents a share smaller than Wall Street had expected. The maker of identity management software also saw better-than-expected revenue during the quarter, as subscription revenue grew 52% compared to a year earlier.

Kraft Heinz – Piper Jaffray upgraded the food maker's stock to "neutral" from "underweight," saying caution about the company's outlook is reflected in its current valuation. The stock has lost more than half its value over the past year.

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Take a look at the most expensive SUV in the world: the $1.9 million Karlmann King

The Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

If you're looking to spend $1.9 million on a new vehicle, an Italian armored car based on a Ford F-550 chassis is probably not on your radar. Karlmann is trying to change that.

Reclining alligator skin back seats on the Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

The company operates from Los Angeles, has a factory in Italy and is largely financed by Beijing-based International Automotive Technologies. Its first product, the Karlmann King, is a massive rolling lounge complete with recliners, a coffee maker, champagne flutes, a massive TV and a price tag that makes it the world's most expensive SUV.

The exterior door hatch on the Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

Karlmann King to debut at the New York Auto Show.

Source: Karlmann King

On top of the stratospheric starting price, buyers can customize the King to their liking. Alligator-skin seats, real gold trim and specialty upholstery are all available for a price. Michael Nothdurft, Karlman's sales director, says a client in Africa ordered a Karlman King with a $3.5 million price tag.

View of the interior dash on the Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

One big part of that additional cost: bulletproofing. Most King buyers opt for the bullet-resistant option, which adds at least $300,000 to the price depending on the level of protection clients want.

Enjoy coffee and champagne while riding in the Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

The buyers of these bulletproof monster trucks range from clients in dangerous parts of the Middle East and Africa to real estate moguls and high-dollar watch traders in the United States. But for less security-conscious shoppers, Nothdurft stresses that the King is supposed to be a rolling work of art.

Reclining in the Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

It's undeniably different than anything else you'll see on U.S. roads. It has extremely angular styling and is absolutely massive.

"This car is the most emotional car that you can see at auto shows," Nothdurft told CNBC. "People either hate it or they love it."

The backseat control panel on the Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

The King is based on a Ford F-550 chassis. The F-550 a massive truck frame that Nothdurft says was chosen for its proven durability and ability to handle the weight of an armored luxury vehicle. The King maintains the 6.8-liter V-10, suspension components and transmission of the F-550 and is therefore limited to 87 mph. The interior, however, is bespoke.

The Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

Karlman is looking to get a U.S. manufacturing line built in the next few months, but for now, the King is hand-built in Italy. For U.S. market cars, armoring takes place in the States.

The company currently has 20 buyers lined up in North America, Nothdurft said.

Buyers who order a King today should expect delivery in nine to 15 months.

The Karlmann King at the 2019 New York Auto Show.

Adam Jeffery | CNBC

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Automaker shares plunge after Trump's surprise Mexico tariffs, GM shares fall 5%

Trucks carrying cars queue in front of the Otay Mesa border crossing in Tijuana.

Omar Martinez | picture alliance | Getty Images

Shares of the largest U.S. automakers dropped in premarket trading Friday after President Donald Trump announced that the U.S. will impose a 5% tariff on goods imported from Mexico on June 10.

General Motors was hit the worse, down 5.5% in premarket trading Friday. Ford lost 4%. Fiat Chrysler also dropped more than 5%.

The big three automaker each have billions of dollars at stake due to production and suppliers in Mexico.

"Automakers may indeed see large financial impact and uncertainty from the tariffs, as all major OEMs import a considerable portion of the vehicles they sell in the US from Mexico," Deutsche Bank said.

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Bitcoin's resurgence could help fuel the next rally in chip stock Advanced Micro

The semis have been crushed this month, but one stock remains in the green: Advanced Micro.

AMD has risen more than 1% in May, shaking off the SMH semiconductor ETF's 14% slump. It's also up 102% over the past 12 months, while the SMH ETF has fallen 8%.

"AMD is definitely the star that shines within the SMH group," Boris Schlossberg, managing director of FX strategy at BK Asset Management, said Thursday on CNBC's "Trading Nation. " "Analysts are saying they have a better product for the first time in 50 years than Intel does, and they're getting a tremendous amount of love as a result."

Schlossberg sees another catalyst driving the AMD rally: bitcoin's resurgence.

"We've had a very strong rally in bitcoin. Bitcoin was a big driver of the semi rally when it rallied the first time, so if we get bitcoin over $10,000, we can get it back to that mania of mining again, and that should be an additional tailwind for AMD. So I think AMD is very well positioned," said Schlossberg.

AMD's graphics chips have the capacity to power bitcoin mining, which requires fast processors, so as bitcoin demand grows, the need for AMD chips also climbs. The cryptocurrency has rallied 126% in the past three months, to above $8,000, a gain of more than $4,000.

Matt Maley, equity strategist at Miller Tabak, says the rest of the semis space could see a rebound, though it may prove short-lived.

"The semis have sold off very hard this month. They're getting oversold. They're just below their 200-day moving average but not enough to really cause a major problem," said Maley during the same segment. "They could see a little bit of a bounce here in the near term, especially since Intel, which is by far the biggest weighting in the SMH with a 12% weighting, it's incredibly oversold."

The SMH ETF's relative strength index is trading at 33, while Intel's RSI is 35. Any level approaching 30 or below is considered oversold.

"However, on a longer-term basis, you look at its weekly RSI, the SMH is not very oversold, so I think it's going to have some more downside here over time and, therefore, if you want to look at the group overall you're really going to have to pick your individual stocks," said Maley.

On a weekly basis, the SMH ETF's RSI sits at 42, above the threshold suggesting oversold conditions. It traded with a lower RSI at the beginning of the year.

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Gap cuts profit forecast after an 'extremely challenging' quarter; shares tank 15%

Gap cut its 2019 profit forecast and posted the biggest drop in same-store sales in at least three years at its Gap brand, underscoring its struggles to compete with fast-fashion retailers in the face of changing customer preferences.

Shares of the company, once a trendsetter with its casual logo emblazoned hoodies and khaki cargos, were down 15% in premarket trading on Friday.

Chief Executive Officer Art Peck called the quarter "extremely challenging" and cited unusually cold weather in February, late spring breaks, a delayed Easter and lower tax refunds as reasons for the dour performance.

Unseasonably cold weather has been a drag for most U.S. apparel retailers in the first few months of 2019, with Gap's Old Navy especially hit as most of its apparel is tailored toward warmer weather.

The Gap and Old Navy stores located in Times Square, New York.

Adam Jeffery | CNBC

However, analysts were unconvinced and felt the absence of in-fashion products was weighing on Gap brand's turnaround efforts.

"Every quarter management claims that products are improving and that the (Gap brand) is responding to changing consumer demand," said Neil Saunders, managing director of GlobalData Retail. "And yet every season, Gap churns out the same bland range of undifferentiated product which has barely changed over the past 20 years."

On a post-earnings call, Chief Financial Officer Teri List-Stoll acknowledged the lack of strong products at both Old Navy and Gap in the first quarter and said the company had held back on marketing until designs and assortments improved.

Sales at established Gap brand stores fell 10% in the three months ended May 4, steeper than the 4% decline analysts had estimated.

Peck replaced Gap brand's head last year and hired a new marketing chief, in efforts to turn around the unit with more appealing products, shorter response times in bringing designs from sketchpad to stores and better advertising.

But those efforts are yet to succeed. Quarterly same-store sales at the brand have risen only once since the start of 2016, according to Refinitiv data.

Adding to the worries, Old Navy, a bright spot for the company in recent years and which is being separated as a publicly listed company, reported a surprise drop in same-store sales.

Peck said he remained confident in Gap's plan to separate into two independently companies in 2020 and had hired a dedicated team to manage the separation.

Overall same-store sales fell 4%, bigger than the 1.2% drop analysts had expected.

The San Francisco-based company cut its 2019 adjusted earnings forecast to $2.05 to $2.15 per share, from a previous range of $2.40 to $2.55.

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Costco is looking at alternative sourcing and price hikes as tariffs loom

Costco Wholesale on Thursday reported quarterly profit and revenue that beat Wall Street estimates and said it would tackle the proposed round of tariffs on Chinese imports by sourcing goods from other countries and possible price increases.

The warehouse club operator is the latest American retailer to warn of tariff hit, after dollar store chains Dollar Tree and Dollar General, earlier in the day, said rising tariffs would impact their businesses and consumers.

Costco's Chief Financial Officer Richard Galanti, on a post-earnings call with analysts, said the situation is "pretty fluid" and the company is looking to accelerate shipments before certain tariffs are put into effect.

"At the end of the day, prices will go up on things. What's interesting is that it's hard to predict what the impact is," Galanti said.

"We want to be the last to raise them. And when prices are going down, we want to be the first to lower them. We're not afraid to use some of those monies to again drive business."

The Washington Post | The Washington Post | Getty Images

Washington escalated its trade war this month by raising tariffs on $200 billion of Chinese imports to 25% from 10%. President Donald Trump also threatened new tariffs on remaining $300 billion worth U.S. imports from China.

Costco, which faces competition from retail giants Amazon.com and Walmart, is able to attract customers with its low prices and by creating a treasure hunt shopping experience that cannot be imitated online.

Shares of the Issaquah, Washington-based company were down about 1% in extended trading.

Daniel Martins, founder of independent research firm DM Martins Research, said Costco is better placed than most retailers in the United States.

"Costco stands to deal with the challenges better than most other retailers, given the company's bargaining power and sourcing abilities that result from its large scale (and) size," Martins said.

During the third quarter, Costco sold some big-ticket items like diamond repurchases, one in the $400,000 range, and items like golf simulators that sold for $14,000 each.

Excluding one-time items, Costco earned $1.89 per share in the third quarter ended May 12. Total revenue rose 7.4% to $34.74 billion.

Analysts, on average, had expected the company to post a profit of $1.82 per share on revenue of $34.71 billion.

Overall comparable-store sales, excluding the impact of fuel prices and currency changes, rose 5.6%, above analysts' average estimate of a 5.48% rise.

Watch: 4 trades as Costco falls on earnings

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Trade war could trigger a 'global financial crisis,' says ex-China central bank chief

Shipping containers sit stacked at Qingdao Port after snow on February 14, 2019 in Qingdao, Shandong Province of China.

Visual China Group | Getty Images

China continued to ramp up the rhetoric against the U.S. on Friday, with a former Chinese central bank chief saying that further escalation in trade tensions between Washington and Beijing could greatly hurt the global economy.

"The consequence of the China-U.S. trade war not only will be reflected in both countries, but will also extend to relevant regions, extend to the whole world," Dai Xianglong, a former governor of the People's Bank of China, said Friday morning at a press event in Beijing hosted by think tank China Center for International Economic Exchanges.

"If the China-U.S. trade war continues to grow larger, it may cause the global economy to decline, and may cause a global financial crisis," he said in Mandarin, according to a CNBC translation.

Retaliatory tariffs from China on $60 billion worth of U.S. goods are set to take effect Saturday, June 1. It comes in response to President Donald Trump's decision to raise duties on $200 billion in Chinese products to 25% from 10%.

The trade dispute between the world's two largest economies has roiled global markets for months with worries about the negative impact on growth. As negotiations took a turn for the worse this month, the S&P 500 fell more than 5% — on track for its first negative month since December. The Shanghai composite has struggled to climb, hovering near 2,900 after breaking above the psychologically key 3,000 level earlier this year.

Dai, who was PBOC governor from 1995 to 2002, said Friday that he expects the Shanghai composite will rise steadily above the 3,000 level, helped by China's coming market reforms. The index traded mildly lower, near 2,898, on Friday afternoon.

The former central bank chief also attributed recent weakness in the yuan to the market's reaction to trade tensions, while noting that Beijing would not devalue the currency in response. He said that fundamentals, such as economic growth and foreign exchange reserves, support a stable yuan.

Tensions could last '30 years on more'

The eleven Chinese speakers at Friday's event took a generally tough stance against the U.S. They frequently echoed comments from state media that called American actions on trade "bullying" and that China is not willing to fight, but will fight to the end if necessary.

former vice minister at the Ministry of Commerce, Wei Jianguo, who was moderating the event, also struck a harder line in his comments Friday than he did in an interview with CNBC last week.

"It can be said, that the U.S. this time has at the wrong time, fought a wrong war, and chosen a wrong opponent," Wei said, according to a CNBC translation of his Mandarin-language remarks. He added it might be America's greatest mistake since World War II, or even the country's founding, all out of unwillingness to accept China as a rising power.

Wei said the trade tensions could last 30 years or more, especially since he expects the U.S. will keep on with its investigations — even if a deal is reached in the near term.

"I'm confident that time, reason and truth are on our side," he said. "Our Chinese people will most certainly win, peace will most certainly win."

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Thursday, May 30, 2019

How an island in the Baltic Sea is trying to make renewables a reliable part of its energy mix

Around the world, a host of governments and businesses are looking to reduce their environmental impact by embracing renewable sources of energy.

In the U.S., for instance, the Energy Information Administration expects non-hydroelectric renewables — think wind and solar — will be the "fastest growing source of U.S. electricity generation for at least the next two years."

While this may be beneficial to the planet, it does pose some challenges, not least when it comes to energy storage. This is because while sources such as solar and wind are renewable, they do not promise a constant stream of power.

It's within this context that storage systems are seen as being so important to renewables, as they enable the storage of energy when it's available and then its usage when required.

"To integrate large amounts of renewable energy into the power system two issues need to be solved," Ilka Jahn, a PhD candidate at Stockholm's KTH Royal Institute of Technology, told CNBC's "Sustainable Energy."

"One is that, usually, the energy is not produced where it's needed, so that's a location problem," she explained. "And the second one is that the energy is being produced at a time when it's not needed, so that's a timing problem."

Jahn added that, to overcome this, two things could be done. "One is to build more transmission capacity, so new power lines." The second solution Jahn proposed was the building of more energy storage. "How you actually do that depends on the specific project and the specific requirements."

On the Swedish island of Gotland, which is home to dozens of wind turbines, researchers from several organizations — including major Swedish utility Vattenfall, Schneider Electric and the KTH Royal Institute of Technology — have worked on a project called Smart Grid Gotland, which wrapped up in 2017.

Among other things, the project aimed to integrate wind and other renewable sources into the network while still ensuring reliability.

To give one example of how innovation was used during the project, households on the island were able to monitor their energy usage 24 hours per day. Using technology, they could adjust their heater's settings so that it switched on when cheap, renewable electricity was available and turned off when prices went up.

"The Gotland project was a very interesting project in that it looked at how to repurpose an existing distribution grid into a smarter grid," Daniel Mansson, an associate professor at the KTH Royal Institute of Technology in Stockholm, Sweden, told CNBC.

According to the ETIP Smart Networks for Energy Transition, which was set up by the European Commission, one result of the Smart Grid Gotland project was that it showed how it was "possible to make better use of renewable energy by incentivizing consumers to lower their energy consumption at times of limited renewable production."

Given that Swedish authorities want 100% renewable electricity production by the year 2040, the results of projects such as Smart Grid Gotland will be watched with a great deal of interest.

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How this Hong Kong CEO from a billionaire family is reinventing hotels for millennials

When Sonia Cheng became chief executive of Hong Kong-based Rosewood Hotel Group, she had a particular type of traveler in mind: herself.

Cheng was 30 at the time when one of her family's businesses, New World Hospitality Group, bought Rosewood from its Texan owner for $229.5 million in 2011, and appointed her CEO. She wanted to turn it into a brand that would appeal to affluent younger consumers. Having grown up in her family's hotel business — the Chengs are worth an estimated $22.5 billion, according to Forbes — she had traveled a lot and started her career as an investment banker in New York and Hong Kong.

"When I look at Rosewood, I see myself as a target customer. So, that makes it quite easy to kind of craft the experiences, because I would be looking at the lens of the millennial travelers," she told CNBC's "The Brave Ones. "

When Rosewood took over management of the historic Hotel de Crillon in Paris in 2013, it spent four years renovating it, turning its Michelin-starred Les Ambassadeurs restaurant into a bar. At Rosewood Beijing, Cheng opened a Chinese hot pot restaurant, giving a traditional dish a high-end twist, aiming to "draw the crowd to the destination," she said.

Now 38, Cheng has four children, and wanted to rethink how kids' clubs worked at hotels. At Rosewood Phuket, for example, there is a children's herb garden and a Thai weaving station.

"It is … a brand that the next generation of travelers are looking for, a much more bespoke brand, a brand about experiences, about discoveries," Cheng said.

"I always believe(d) that, you know, resorts should be just for couples ... And then when I had my children … I noticed how the next generation of travelers and people like myself, young families, they travel less as couples … I realize(d) that I want my children to have an educational experience when they are in the resort."

Cheng is the granddaughter of the late Cheng Yu-tung, a Hong Kong property tycoon who died in 2016 with a net worth of $14.5 billion, according to Forbes. The Cheng family's business interests span from real estate to infrastructure, and its Chow Tai Fook jewelry group is the world's ninth-largest luxury goods company, according to Deloitte, with sales of $7.6 billion in 2017.

Rosewood owns or operates 27 hotels, including the Carlyle in New York, and it is working on a further 21 properties.

Sonia Cheng, chief executive of Rosewood Hotel Group

Rosewood Hotel Group

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John Negroponte: Trump's new tariff on Mexico is 'bad politically and bad economically'

A widely followed former American diplomat questioned on Friday whether President Donald Trump was adopting the right strategy by threatening Mexico with a new tariff because of immigration issues.

Trump announced Thursday that his country plans to impose a 5% tariff on all Mexican imports from June 10. In a statement, he attributed that unexpected move to a "border crisis" that has resulted in America being "invaded by hundreds of thousands of people." He even suggested that he could raise the tariff on Mexico's goods to 25% by Oct. 1 this year if the country did not sufficiently halt the flow of migrants into the U.S.

Speaking with CNBC's "Street Signs" on Thursday evening U.S. time, John Negroponte questioned whether Trump's move would have the desired effect.

"I think it's both bad politically and bad economically and I don't think it's really going to help solve the immigration problem, either, which is what Mr. Trump said he's trying to attack," said Negroponte, current vice chairman of consultancy McLarty Associates and formerly U.S. ambassador to Honduras, Mexico, the Philippines, the United Nations, and Iraq.

Mexico, for its part, has said it would not respond well to economic threats.

In a letter addressed to Trump, Mexican President Andrés Manuel López Obrador said he did not want confrontation, and that leaders have a responsibility to seek peaceful solutions to controversies.

John Negroponte on July 17, 2018 in Bogota, Colombia.

Gabriel Aponte | Getty Images

"President Trump: Social problems cannot be resolved with taxes or coercive measures," the Mexican leader wrote.

Negroponte told CNBC he agreed with that sentiment. Still, he said, perhaps now is the time that Washington and Mexico City can come together on the issue. 

In fact, in his letter to Trump, López Obrador requested that U.S. and Mexican officials begin meeting on Friday to discuss how to "reach an agreement for the benefit of both nations."

Even from a domestic politics standpoint, Trump may have overplayed his hand with the new tariff threat.

U.S. Senate Finance Committee Chairman Chuck Grassley, a Republican who represents Iowa, slammed the move. He called it a "misuse of presidential tariff authority."

"Trade policy and border security are separate issues," Grassley said in a statement following the Trump's announcement. "Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump's and what could be a big victory for the country," he warned.

The USMCA refers to the new trade agreement between the U.S., Mexico and Canada, which lawmakers had yet to approve. Several experts suggested that the deal, an updated version of the North American Free Trade Agreement, could now face real difficulties getting passed.

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The yuan is creeping toward 7 against the dollar — that could be a problem for Chinese firms

Investors have been keeping a close watch on the Chinese yuan, seen as a key indicator amid the intensifying U.S.-China trade war — and much concern has been centered on whether it will breach the 7 yuan per dollar key level.

While that's been said to be simply a psychological level, markets may react if the yuan falls below 7, leading to real economic costs for China as well as its companies, experts said.

The yuan has been testing those levels increasingly, as the trade war between the world's two largest economies deteriorated in recent weeks.

What a weak yuan does

A weaker yuan has been a key source of contention between U.S. and the China, with President Donald Trump accusing Beijing of intentionally letting its currency slide lower. A weaker yuan makes Chinese exports more attractive, giving them a competitive advantage in international markets, some experts argue.

However, a rapidly weakening currency could also lead investors to move their money out of China, analysts warned, although they said Beijing could respond by imposing tighter capital controls — or measures aimed at limiting the outflow of foreign capital.

J.P. Morgan's Chief China Economist Zhu Haibin cited a similar occurrence in 2015, where fears of a weakening yuan hit market sentiment and led to large capital outflows.

The currency slide would also hurt Chinese firms, as well as the country's push for greater use of the yuan internationally, according to Khoon Goh, head of Asia research at ANZ Bank.

While a weaker yuan would offset the costs of higher tariffs, there are also disadvantages, Goh told CNBC on Thursday.

"Don't forget, there are also economic costs in a weaker renminbi," he said, referring to another name for the Chinese currency. "A lot of Chinese firms still have large U.S dollar-denominated debt, which is not hedged. That will get them in trouble. "

Ripple effect

Other analysts have warned that a weakening yuan could also hurt other Asian economies.

Arthur Lau, co-head of emerging markets fixed income at PineBridge Investments, said a weakened yuan could hit regional currencies and lead to higher costs for those who hold dollar-denominated bonds.

"A weakening yuan could weigh on currencies in the region. Weaker local currencies imply higher debt servicing cost for US dollar bonds," he said in a note.

Lau added that some Chinese property developers, for instance, had a "relatively large" percentage of foreign currency debts as compared to other sectors.

Risks to yuan's internationalization 

The drive to internationalize the yuan could also be hit.

China has "made a lot of strides to get renminbi included in the ... equity markets, in the MSCI, and this year, the bond market got included in the Bloomberg Barclays index, " said Goh from ANZ Bank. 

He was referring to Chinese A shares — those traded in mainland China — getting included in index provider MSCI's global and regional indexes. The A shares, as well as Chinese bonds in the Bloomberg Barclays index, are traded in yuan.

As Chinese assets are increasingly traded in global markets, more foreigners will need to trade in the yuan, which is the intent of the internationalization drive. But a weak yuan will also reduce investor confidence.

"So from their point of view, allowing the renminbi to weaken too much could put the whole internationalization at risk,"  Goh said.

Analysts estimate that the full inclusion in the Bloomberg Barclays index will attract around $150 billion of foreign inflows into China's roughly $13 trillion bond market, while the MSCI inclusion will also attract billions of inflows.

On Thursday afternoon during Asia trading hours, the offshore yuan was trading at about 6.92 to the dollar, while the onshore yuan was around 6.90 to the dollar.

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Trump may 'end up torpedoing' the new NAFTA after threatening Mexico with a costly tariff

The fate of the updated trade deal between the U.S., Mexico and Canada was thrown into question after U.S. President Donald Trump announced Thursday that his country plans to impose a 5% tariff on all Mexican imports from June 10.

Trump said in a White House statement on Thursday that the tariff was meant to address what he claimed is a "border crisis" that has resulted in America being "invaded by hundreds of thousands of people." He said if Mexico doesn't halt the flow of those undocumented migrants, the U.S. will progressively raise the overarching tariff to 25% by Oct. 1 this year.

John Negroponte, highly esteemed career diplomat and current vice chairman of consultancy McLarty Associates, said Trump's announcement was "ill-timed" given that the process to ratify the three-country trade deal — called the United States-Mexico-Canada Agreement, or USMCA — has just kicked off.

"I think it's both bad politically and bad economically and I don't think it's really going to help solve the immigration problem, either, which is what Mr. Trump said he's trying to attack," Negroponte, who served as U.S. ambassador to Honduras, Mexico, the Philippines, the United Nations, and Iraq, told CNBC's "Street Signs."

He noted that Mexico is a large export market for the U.S., so Trump's Thursday announcement put American exporters at "a certain amount of jeopardy." Mexico is America's third-largest goods trading partner. The U.S. exported $265 billion of goods to Mexico in 2018, according to the Office of the United States Trade Representative.

Mick Mulvaney, acting White House chief of staff, told reporters that the tariff wouldn't affect the approval of the USMCA. He insisted that the latest threatened tariff is "part of an immigration problem," and isn't related to trade.

President Donald Trump answers questions on the comments of special counsel Robert Mueller while departing the White House May 30, 2019 in Washington, DC.

Win McNamee | Getty Images

But Negroponte is hardly the only one predicting a tougher route for ratification of the USMCA, which is intended to be an updated version of the North American Free Trade Agreement. Some say that the deal could have had an easy passage through Mexico's Congress before Trump's latest threats, but it has become politically difficult for lawmakers to ratify it now.

Juan Carlos Hartasanchez, senior director at advisory firm Albright Stonebridge Group, said it seemed unlikely that the USMCA will be ratified this year.

"Many congressmen and senators in Mexico are going to be asking themselves whether or not they're in a position to ratify an agreement when they have a gun pointed to their heads. So it just becomes a very complicated situation," he told CNBC's "Street Signs."

It's not just Mexican lawmakers that will reconsider their stance on the trade deal, noted William Reinsch, senior advisor and Scholl Chair in international business at think tank Center for Strategic and International Studies.

The president's threat "will probably end up torpedoing the USMCA agreement," Reinsch told CNBC's "Squawk Box." He predicted that Mexico "will probably be forced to retaliate," while the U.S. House of Representatives will also "react very negatively."

The Democratic-led House has had lingering concerns about the new three-party trade deal. After U.S. Trade Representative Robert Lighthizer on Thursday sent a letter to congressional leaders to kick start the process of approving the USMCA, House Speaker Nancy Pelosi issued a statement suggesting that the deal lacks "strong enforcement provisions."

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Shares of Asian automakers tumble as US announces tariffs on Mexico

The Toyota Motor manufacturing plant in Georgetown, Kentucky.

Charles Bertram | Lexington Herald-Leader | Tribune News Service | Getty Images

Shares of Asian automakers dropped in Friday trade after U.S. President Donald Trump announced fresh tariffs on Mexico.

In Tokyo afternoon trade, shares of Nissan dropped 3.71%, while Toyota declined 2.02% and Mazda plunged 6.12%.

Similar losses were seen over in South Korea, where Kia Motors saw its stock fall more than 3.64%.

The moves came after Trump announced in a Twitter post on Thursday night stateside that the U.S. plans to impose a 5% tariff on all Mexican imports from June 10, until "the Illegal Immigration problem is remedied." The White House added in a statement that the tariffs could be increased if the immigration issue continues.

Mexico is used as a production base by many Japanese automakers. They manufacture vehicles such as cars and trucks in the North American nation for export, according to data from Mexico's auto industry association AMIA.

One analyst told CNBC that the "mostly likely response" by the automakers was to pass on the additional cost imposed by tariffs to consumers.

"President Trump needs to recognize it's not the Mexicans that are paying the tariffs," said Janet Lewis, head of Asia industrials research at Macquarie Capital Securities.

Lewis added that the sell-off seen in the shares of Asian automakers was not just related to the latest announcement of U.S. tariffs on Mexico, with some of the companies actually "not exposed" in a meaningful manner.

To illustrate her point, she cited the example of Mitsubishi Motor. The company's stock slipped 3% in afternoon trade, even though it "doesn't produce anything" in Mexico.

Instead, she said, there was sense of general unease surrounding the global trade landscape as investors considered the repercussions of a protectionist U.S. on the global economy.

Asked about where the greatest impact would likely be felt, Lewis said "the risk is greatest on supply chain more than the trade in completely built units coming across the border" due to the "extremely integrated" nature of North America's auto industry.

Up to now, investment decisions in parts were made without consideration for whether they were made in the U.S., Canada or Mexico, she said.

The latest moves by the Trump administration come on the back of a recent announcement that it will delay tariffs on cars and auto part imports for up to six months as it seeks to strike trade deals with the European Union and Japan.

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Philippines sends trash back to Canada after Duterte escalates row

Philippine President Rodrigo Duterte

Lean Daval Jr. | Reuters

The Philippines has started returning dozens of shipping containers full of trash to Canada after a long-running row over waste exports that has tested diplomatic ties amid threats from firebrand President Rodrigo Duterte.

The 69 containers were loaded overnight onto a vessel at the port of Subic, northwest of Manila, and left on Friday for a month-long journey to the Canadian city of Vancouver.

A Philippine court in 2016 declared the import of 2,400 tonnes of Canadian waste illegal. It had been mislabelled as plastics for recycling.

Canada said the waste, exported to the Philippines between 2013 and 2014, was a private commercial transaction done without the government's consent.

"The government of Canada is taking all the necessary measures to ensure safe and environmentally sound transport, handling and disposal of the waste in Canada," Mark Johnson, spokesman for Canada's environment and climate change ministry, said in an email statement.

The Philippines had accused Canada of stalling, prompting angry rebukes from Duterte, a volatile but hugely popular president known for his tirades against Western governments.

He threatened to declare war on Canada, dump the trash in front of its embassy in Manila, or personally sail with the waste and leave it in Canadian waters.

His spokesman, Salvador Panelo, said he hoped ties with Canada would now return to normal.

Philippine Foreign Secretary Teodoro Locsin said diplomats whom he had ordered to leave Canada in protest had now been told to return. Locsin posted a picture on Twitter on Friday of the ship departing Subic, with the message "Baaaaaaaaa bye".

The Philippines is the latest Southeast Asian nation to take issue with developed nations they say use the region as a dumping grounds for waste.

Malaysia, the world's main destination for plastic waste after China, said on Tuesday it would return as much as 3,000 tonnes of waste back to the countries of origin.

Environmental activists gathered in Subic as the containers were being prepared, holding banners that said "never again" and "we are not the world's dump site."

Some carried cardboard boxes made to look like shipping containers bearing signs that read "good riddance" and "Canada take back your trash".

"The waste trade is a very unacceptable practice. It is a deplorable practice," Greenpeace Philippines director Lea Guerrero told reporters.

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The US-China rivalry could become dangerous, Asian leaders and experts warn

The U.S. flag flies at a welcoming ceremony between Chinese President Xi Jinping and U.S. President Donald Trump in 2017.

Getty Images News | Getty Images

"We are now entering into a period of great power rivalry. The outcome is unclear, but it is critical that we stabilize the system."

That was the warning on Thursday from Singapore's Heng Swee Keat, the man set to be the city-state's next prime minister. China's rapid ascent over the past decade, he said, has caused a clear shift in global politics, and those changes need to be addressed.

The Singaporean deputy prime minister's sentiment was echoed by other political figures and experts gathered in Tokyo for a conference on the future of the region. At the event, which was sponsored by Japanese media group Nikkei, one of the repeated messages was meant for both Washington and Beijing: The world's economic and military powerhouses need to find ways to coexist before things spiral out of control.

The U.S. and China are increasingly jostling for influence in Asia.

China is the region's biggest economy and is boldly pursuing its geopolitical interests. That includes asserting territorial claims with increasing military muscle in the South China Sea and championing its Belt and Road Initiative — a massive investment program that aims to create infrastructure and transportation networks linking China to much of the world.

The U.S., meanwhile, maintains decades-old security alliances with Japan and South Korea. And, under President Donald Trump, Washington is now taking a more offensive economic approach to Beijing.

"U.S.-China trade tension is a source of concern for everybody in the region," Yoichi Suzuki, an adjunct fellow at the Japan Institute of International Affairs and former chief negotiator for the country's free trade agreement with the European Union, said Friday.

"It is not only affecting these two countries but it's affecting everybody," he told CNBC's "Squawk Box." As you see, the stock market is going down, the economy is slowing. So we need to see a solution as soon as possible."

Singapore's Heng said that competition between the U.S. and China can't be avoided and they each have legitimate concerns, but that is all the more reason for both to make compromises and "accept new realities" to manage relations.

"The U.S. has to accept that it has no better option but to work with China because trying to contain it will result in worse outcomes," he said.

'Realize the seriousness'

China, meanwhile, "needs to demonstrate that its peaceful rise will indeed benefit the rest of the world, including the U.S., and be prepared to shoulder additional international responsibilities," he said.

Jia Qingguo, a professor at Peking University's School of International Studies, said the current poor state of U.S-China relations begs the question of whether the future will be characterized by permanent tensions.

"Personally, I think we are at a moment ... where we have to decide how to manage our relationship to avoid a confrontational new cold war," he said Thursday at a panel discussion titled "Deepening U.S.-China Conflict and Asia."

"At the moment it's not very optimistic," he said.

Malaysian Prime Minister Mahathir Mohamad in a speech to the conference openly worried about possible military conflict arising out of U.S. efforts to project naval power in the South China Sea in response to China's increasing presence.

The correct approach, he said in a post-address question and answer session, is to consider that China has transformed considerably over the decades since the rule of Mao Zedong. The country, he said, has moved toward more openness through engagement by the outside world rather than by military and economic threats.

"So, in a way, we have influenced China to change" by showing it the benefits of open trade, he said. "And that has made tremendous progress."

But Akihiko Tanaka, president of the National Graduate Institute for Policy Studies in Japan, cautioned that competition between the U.S. and China in four areas — trade, technology, political values and security — is only set to expand in the coming months and years.

"We need to realize the seriousness of that," he said at the panel.

Watch: Who owns the South China Sea?

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Claus von Bulow, who was cleared in an attempted murder of his wife, dies

Danish-born socialite Claus von Bulow, who was convicted but later acquitted of trying to kill his wealthy wife in two trials that drew intense international attention in the 1980s, has died. He was 92.

Von Bulow, who moved to London after he was cleared, died at his home there on Saturday, his son-in-law, Riccardo Pavoncelli, told The New York Times.

The tall, aristocratic von Bulow was charged with putting his wife, Martha "Sunny" von Bulow, into an irreversible coma to gain her fortune so he could live with his mistress, a raven-haired soap opera actress. He was convicted of attempted murder in 1982 at a trial in Newport, Rhode Island, that was widely followed with its high society overtones about possible attempted murder by insulin injection.

The conviction was overturned on appeal and he was acquitted at his second trial in 1985.

The case split his family: Sunny von Bulow's two children from her first marriage to an Austrian prince accused their stepfather of attempted murder, while the couple's daughter maintained her father was innocent. That loyalty nearly cost her millions — she was for several years excluded from her wealthy grandmother's will because of her belief in her father's innocence.

The jury in the first case endorsed the prosecution claim that Sunny von Bulow's coma was caused by insulin injections administered surreptitiously by her husband Claus, but the second jury did not reach the same conclusion.

Sunny von Bulow died in 2008, nearly 28 years after she became comatose.

Claus von Bulow, who was portrayed by Oscar-winner Jeremy Irons in a film about the attempted murder case, always maintained his innocence. He did not testify at his criminal trials, but did deny wrongdoing under oath in a civil case brought by his stepchildren.

He rarely spoke about the case, in part because an eventual financial settlement reached with his stepchildren required him to keep mum.

"If I give an interview, it will be a $5 million interview," he told The Associated Press in 2012, referring to a fine he said he might face if he discussed the matter with the press.

Harvard Law Professor Alan Dershowitz, who represented von Bulow and kept in touch with him for decades, said he scrupulously avoided the spotlight.

"He lived a good happy life following his acquittal, because he decided to remain in private. I advised him once we won the case to disappear from public view. He, unlike O.J. Simpson, accepted my advice," Dershowitz said on Thursday.

Before the settlement agreement silenced him, von Bulow described the case as a disaster for all concerned. "This was a tragedy and it satisfied all of Aristotle's definitions of tragedy," he told members of the Harvard Law School during a 1986 talk. "Everyone is wounded, some fatally."

When he was found not guilty at the second trial, von Bulow announced plans to permanently leave the United States for Europe. He also expressed an interest in staying out of the public eye.

"I want to be forgotten and live peacefully," he said.

Dershowitz said he lived a "simple and humble life in a very small apartment," enjoying the company of his daughter and grandchildren and attending the opera and theater.

The trial had shed light on the lives of the super-rich during an era when Ronald Reagan was president and TV shows such as "Dallas" and "Dynasty" were extremely popular.

The von Bulows had a grand Fifth Avenue apartment in New York City to go along with Clarendon Court, their oceanside mansion in Newport, Rhode Island, which had been the setting for the 1956 musical "High Society" starring Grace Kelly, Frank Sinatra and Bing Crosby.

Sunny Von Bulow — who in her youth resembled Kelly, according to many friends — was the source of the wealth. She was the heiress to a substantial fortune, with her mother's net worth estimated at $100 million. In the trials she was portrayed as an unhappy woman, although some friends, including the writer Dominick Dunne, challenged this perception as inaccurate and unfair.

The prosecution said Claus von Bulow on two occasions injected his wife with insulin in an attempt to aggravate her hypoglycemia and kill her. They said he could not face the financial consequences of a divorce that would cut him off from her millions.

Prosecutors said he did not come to her aid after she was stricken, refusing to call a doctor, even though the family maid, Maria Schrallhammer, begged him to summon medical help. Her testimony about his cold-hearted behavior prompted the famous tabloid headline: "Maid: Claus was a Louse."

At the first trial, actress Alexandra Isles, known for her role in "Dark Shadows," gave damning testimony that she had told von Bulow she would end their love affair, if he did not leave Sunny. That helped convince the jury that von Bulow had a motive for trying to kill his wife.

The 1982 guilty verdict in the first trail was overturned by the Rhode Island Supreme Court two years later in a decision that helped establish the national reputation of Dershowitz, who managed the successful appeal.

That led to a second trial, held in nearby Providence.

Dershowitz on Thursday recalled that the appeal he argued was the first time any appeal was covered on television.

"It was the first really highly publicized case in the new age of widespread media coverage," Dershowitz said. "It was a prelude in many ways to the O.J. Simpson case, but it was a decade earlier."

Claus von Bulow used a different legal team that was better able to challenge the medical testimony linking Sunny's coma to insulin injections, and the acquittal marked the end of von Bulow's criminal exposure. That still left him vulnerable to a substantial civil case brought by his stepchildren, who believed he was directly responsible for their mother's vegetative state. They sued him for $56 million in July 1985, just one month after his acquittal.

A settlement was reached two years later in which von Bulow agreed to drop all claims to his wife's fortune, to divorce her, and to refrain from discussing the case or profiting from it.

The divorce meant that he would no longer be legally in charge of Sunny's medical care — which gave his stepchildren some solace.

In exchange, his daughter Cosima — who had been excluded from her grandmother's will because she sided with her father in the dispute — had her lucrative position in the will restored. Von Bulow said at the time that he was pleased with the result because he had been seeking financial parity for Cosima.

The next major development in the drama was the "Reversal of Fortune" film that saw Irons win an Academy Award for his devastating portrayal of von Bulow. Glenn Close played Sunny in the film, which portrayed appeals lawyer Dershowitz (author of the book it was based on) in a heroic light.

Dershowitz said von Bulow liked the book, but disliked the movie because it left as an open question whether he was guilty or innocent, while the book came down definitively on von Bulow's side.

Von Bulow was born Claus Cecil Borberg in 1926 in Copenhagen. During World War II, after the Nazi occupation of Denmark, Claus was moved to England and was brought up by his mother and maternal grandfather, Frits Bulow, a former justice minister in Denmark.

Claus adopted the Bulow name and was said to have added the "von" when he was a young adult.

He graduated in law from Trinity College, Cambridge, and worked in the legal field for some years before he became a personal assistant to oil baron J. Paul Getty.

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Trump reportedly will threaten to curb intelligence sharing with UK over Huawei

President Donald Trump applauds while delivering the commencement address at the U.S. Air Force Academy's graduation ceremony in Colorado Springs, Colorado, U.S., May 30, 2019.

Jonathan Ernst | Reuters

U.S. President Donald Trump plans to tell the British government in person that Washington may limit intelligence sharing with the U.K. if it allows Huawei to build part of its 5G high-speed mobile network, the Financial Times reported.

Trump is set to embark on a three-day state visit to the U.K. in June, days before British Prime Minister Theresa May is set to resign from her post.

According to American and British officials, Trump decided to raise the issue about Huawei after his aides had repeatedly failed to convince the U.K. government to restrict the involvement of the Chinese company, the newspaper said.

A person involved in planning the trip told the FT that Trump was ready to make his objections known both in public and in private: "The president is preparing to repeat the message that Chinese involvement in 5G could pose significant challenges for US-UK intelligence co-operation."

The White House did not immediately respond to an emailed request for comment sent outside regular office hours.

Last month, reports said the British government will allow Huawei to build out parts of its 5G wireless networks, which would defy U.S. demands for a blanket ban on the Chinese tech giant's involvement in the latest digital infrastructure technology. 5G is set to bring faster internet speeds and lower lag times — it has tremendous potential to change the way people interact with new technologies.

Britain's National Security Council was said to have agreed to let Huawei provide "non-core" technology, like antennas, to the country's mobile operators for the next-generation networks. The U.K., however, will not allow the Chinese firm to provide so-called "core" technology that includes software and other equipment linking primary internet connections, according to reports.

Still, White House national security advisor John Bolton said on Thursday that the U.K. may not have made a final decision on Huawei yet, Reuters reported.

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