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Axios Visuals

Curt Moldenhauer, PwC's US China Inbound Leader, tells Axios that the burgeoning trade wars could increase the amount of cross-border M&A:

"Let's assume that a company can no longer easily trade into China or the U.S. but still has a desire to do so for strategic reasons. One option is greenfield investment, like building a plant to skip tariffs, or you can go buy somebody local to do the same thing. These are basically substitution effects for trade."

Moldenhauer says he is using "M&A" liberally here, as it could be anything from a complete buyout to a joint venture to strategic transactions that don't involve any equity (such as certain biotech partnerships that might be encouraged by the Chinese government).

  • "The last big trade war began in the 1970s with the Japanese, when both sides were taking a similar amount of political grief over similar things like trade deficits and investments in sensitive industries... as it played out, Japan became one of the biggest investors in the U.S. economy, including through M&A."
  • Moldenhauer stresses that his is a long-term view as, right now, trade uncertainty is depressing both inbound and outbound deal-flow. "I suspect we'll see a bit of a rough third quarter."

Go deeper

Updated 30 mins ago - World

Death toll mounts as fighting between Israel and Hamas intensifies

Palestinian Muslims exchange wishes for Eid al-Fitr, marking the end of the fasting month of Ramadan, near a razed building in the northern Gaza Strip town of Beit Lahia, on May 13. Photo: Majdi Fathi/NurPhoto via Getty Images

At least 109 Palestinians and seven people in Israel have been killed since recent fighting between Israel's military and Hamas began Monday.

The big picture: Israel began massing troops on its border with Gaza on Thursday, launching attacks from the air and ground as Hamas continued to fire rockets into Israel.

By the numbers: Where the earmarks are wanted

Expand chart
Data: House Committee on Appropriations; Chart: Danielle Alberti/Axios

The Dallas-Fort Worth area is being targeted for the largest collective earmark request in the country, according to a detailed breakdown of overall requests released by the House Appropriations Committee.

Why it matters: House appropriators are trying to balance bipartisan momentum for infrastructure investment with "pork-barrel" spending's checkered political history. The data dump is an effort to provide transparency for what are now termed "community project funding" requests.

Democrats open to user fees for infrastructure deal

President Biden sits Thursday with Sen. Shelley Moore Capito (R-W.Va.) as they discuss his $2.3 trillion infrastructure proposal. Photo: T.J. Kirkpatrick/The New York Times/Bloomberg via Getty Images

Some Senate Democrats are open to paying for a compromise infrastructure package by imposing user fees, including increasing the gas tax and raising money from electric car drivers through a vehicle-miles-traveled charge.

Why it matters: By inching toward the Republican position on pay-fors, some Democrats are bucking President Biden's push to offset his proposed $2.3 trillion plan by focusing only on raising taxes on corporations and the wealthy.

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