Elon Musk offers to buy Twitter for $54.20 a share.


Credit…Hector Retamal/Agence France-Presse — Getty Images

Alexandra Stevenson

Nearly 400 million people are estimated to be under some form of lockdown in China as officials try to stop a fast-moving Omicron outbreak that is beginning to weigh on the world’s second-largest economy.

Hundreds of thousands of people have been sent to isolation facilities in China and millions more have been told to stay in their homes. Officials in dozens of cities have shut down normal daily life across the country in a race to track and trace the virus and stamp out China’s worst outbreak since the start of the pandemic.

The Japanese bank Nomura has estimated that 373 million people in 45 cities are currently under some kind of lockdown, about a third of the population, accounting for the equivalent of around $7.2 trillion in annual gross domestic product.

It’s part of a pandemic strategy that is increasingly at odds with China’s own economic growth expectations — one that has prompted economists and even the country’s premier to sound an alarm.

Experts are beginning to warn that China’s target of 5.5 percent economic growth for 2022 is now unrealistic because so much of daily economic life has ground to a halt. Li Keqiang, the country’s premier, alerted local officials to the growing economic cost of each new coronavirus outbreak on Monday urging authorities to balance pandemic control measures with a need to encourage growth.

“It is necessary to coordinate epidemic prevention and control and economic and social development,” Mr. Li said, according to state media.

China has reported more than 350,000 locally transmitted virus cases since its latest outbreak emerged in March. While that may not seem like a big number for any country that has battled an outbreak of the highly contagious Omicron variant, China is still pursuing a strategy that aims to eradicate the virus altogether, driven in part by concerns over its older, unvaccinated population. There are still some 40 million people over the age of 60 who have not had a Covid jab.

China’s response to its latest outbreak is also beginning to have an impact on the world’s global supply chain, as factories that make iPhones, electric cars and semiconductors have had to stop operations. Some critical components cannot be trucked from ports to factories because of roadblocks and stringent Covid test requirements.

Pegatron, a major producer of Apple’s iPhone, said this week that two of its factories in China had stopped production “in response to Covid-19 prevention requirements from local governments.” The German auto parts maker Bosch and the automaker Tesla are among other global companies that have had to suspend operations as truck drivers are required to show negative test results within 48 hours in order to enter cities like Shanghai.

In some places without any reported cases officials have put in place roadblocks, leading the State Council, China’s cabinet, to tell local authorities this week not to obstruct major roads, ports and airports.

The efforts to prevent an outbreak are creating such a big problem that economists have revised down their expectations for China’s economic output this year. One economist has gone so far as to predict that China could go into recession in the coming months.

Beijing has prioritized a zero-tolerance policy toward the coronavirus and outbreaks, said Ting Lu, chief China economist at Nomura.

“The problem is that when you set this kind of policy target, local governments will compete with each other,” he said. The consequence of this competition is that local governments will escalate their own pandemic control policies in order to ensure they don’t risk an outbreak that is difficult to get under control. For example, officials Guangzhou, a city of 15 million, began citywide testing after discovering 20 local cases last week.

“If all local governments are doing it this way then the whole economy would be in trouble,” Mr. Lu said, adding, “the whole system will amplify this zero Covid strategy.”


Credit…Pool photo by Patrick Pleul

Eshe Nelson

Elon Musk has launched a takeover bid for Twitter, offering to buy it for $54.20 a share, just weeks after he became the social media company’s largest shareholder.

Mr. Musk said this was a “best and final offer,” representing a 54 percent premium over the day before he began investing in the company in late January, according to a Securities and Exchange Commission filing. It would value the company at about $43 billion.

In the filing, Mr. Musk said “I don’t have confidence in management” and that he couldn’t make the changes he wanted in the public market.

If the offer is not accepted, Mr. Musk said, he would “need to reconsider my position as a shareholder,” according to a letter sent to Bret Taylor, Twitter’s chair, on April 13 and enclosed in the filing. “Twitter has extraordinary potential. I will unlock it.”

Twitter shares were 11 percent higher in premarket trading. On Wednesday, the closing price was $45.85. Morgan Stanley is Mr. Musk’s financial adviser for the bid, according to the filing.

On April 4, a regulatory filing revealed that Mr. Musk, the billionaire chief executive of Tesla and SpaceX and the world’s richest man, had bought a 9.2 percent stake in Twitter. The next day, Twitter announced Mr. Musk would join its board but by the end of the week he rejected the offer.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Mr. Musk said in the letter to Mr. Taylor sent on April 13.

“However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form,” he wrote. “Twitter needs to be transformed as a private company.”

Twitter’s share price has climbed 16 percent since April 1 and Mr. Musk’s investment became public.


Credit…Stuart Isett for The New York Times

Noam Scheiber

Starbucks’s interim chief executive, Howard Schultz, told a weekly meeting of store managers on Monday that benefits he was considering expanding for nonunion employees would not immediately apply to the company’s newly unionized workers.

The pronouncement, just over one week into Mr. Schultz’s third tour as chief executive, came after workers in at least 16 company-owned stores voted to unionize over the past six months, though the National Labor Relations Board has not yet certified all the results.

Since Mr. Schultz returned as chief executive, Starbucks has fired at least three union supporters, who a spokesman said had violated company policies. Mr. Schultz also suspended stock repurchases so the company would “have the opportunity to invest more in our partners and stores,” he said in a letter to employees on Sunday, and he has held meetings with employees in several cities to ask their ideas for improving the company.

Two appearances became contentious when Mr. Schultz was confronted by pro-union employees.

A Starbucks spokesman said the comments on benefits in the meeting on Monday arose during a question-and-answer session, when Mr. Schultz was asked how new benefits the company was considering might fit in with the union campaign.

The spokesman, paraphrasing Mr. Schultz, said the chief executive responded that when introducing a benefit, “we are not permitted by law to unilaterally give that benefit to the stores that voted for union while they are in collective bargaining.”

The spokesman said the topic of benefits arose from employees’ input at recent sessions with Mr. Schultz, and that the Starbucks chief had not provided examples of benefits he was considering or when they might be offered.

The comments were reported earlier by The Wall Street Journal on Wednesday.

Experts on labor law said that companies were allowed to discuss the difference in benefits that union and nonunion employees received, but that they could not make an implied promise that employees would receive better benefits if they chose not to unionize.

Matthew Bodie, a former lawyer for the labor board who teaches law at St. Louis University, said the comments could be interpreted as undermining the so-called laboratory conditions required for coming union elections if they had been public, but not necessarily if they were expected to remain confidential. Mr. Bodie said the comments could still amount to evidence of an intent to bargain in bad faith by seeking to give union employees a worse deal than nonunion employees, which is also considered an unfair labor practice.

Wilma Liebman, a former chairwoman of the National Labor Relations Board, said the timing of the potential benefits were questionable, since it was unclear whether they would have been added if not for the union campaign.

While it is difficult to know with certainty whether Mr. Schultz crossed a legal line without reviewing his precise comments, which the company did not provide, the spokesman said Mr. Schultz had merely been stating what the law required.

Mr. Schultz has been outspoken in his opposition to the union. In his letter on Sunday, he suggested that many employees who supported unionization were “colluding with outside union forces” and wrote that he did not believe that “conflict, division and dissension — which has been a focus of union organizing — benefits Starbucks or our partners.”

He added that fewer than 1 percent of more than 200,000 Starbucks employees in the United States had voted to unionize, and that roughly 65 percent of employees eligible to vote in a union election had not taken part.


Credit…Omar Ornelas/The El Paso Times, via Associated Press

J. David Goodman

HOUSTON — Gov. Greg Abbott of Texas said on Wednesday that days of snarled traffic on the border, caused by new safety inspections he ordered last week, were part of a concerted effort to force Mexican officials to do more to stop the flow of migrants into the United States.

Ratcheting up the stakes in a clash over immigration that has tangled trade routes into Texas, Mr. Abbott said he would end the inspections only at one entry point — the bridge between Laredo and the Mexican city of Colombia, Nuevo León — and only because the governor of that state had agreed to increase border security on the Mexican side.

The Texas police, Mr. Abbott said, would continue to stop all trucks coming from other Mexican states for safety inspections, despite increasing pressure from truckers, business groups and officials from both parties who are calling for an end to the delays that have stretched for hours and even days and sharply limited commercial traffic.

“Clogged bridges can end only through the type of collaboration that we are demonstrating today between Texas and Nuevo León,” said Mr. Abbott, a two-term Republican up for re-election this year.

The announcement marked a shift in Mr. Abbott’s public description of the safety inspections he ordered last week, an acknowledgment that they were a means to exert political pressure, both on Mexican officials and on President Biden.

“The goal all along has been to ensure that people understood the consequences of an open border and that Texas isn’t going to tolerate it anymore,” Mr. Abbott said.

In a statement on Wednesday, Jen Psaki, the White House press secretary, called the inspections “unnecessary and redundant” and said that “the continuous flow of legitimate trade and travel and C.B.P.’s ability to do its job should not be obstructed,” referring to blockages at Customs and Border Protection facilities. State police in Texas have established their vehicle safety checkpoints just beyond where trucks pass through federal inspection, creating the backups. Ms. Psaki said commercial traffic had declined by as much as 60 percent.

The Mexican Foreign Ministry, in a statement, said that it opposed Mr. Abbott’s actions and that Mexican officials had been in touch with Mr. Abbott and with federal officials to “find alternatives that ensure the security of our shared border without harming binational trade.”

The safety checks have applied to all commercial vehicles entering Texas at major commercial crossings, and in the days since they commenced, backups at the border have grown substantially.

Businesses complain that they cannot get goods into Texas. Mexican truckers, facing daylong delays in sweltering heat without food or bathrooms, began to protest, and created blockades at crossings in the cities of Pharr and El Paso late Monday into Tuesday.

Even some Republican politicians, like the conservative agriculture commissioner, Sid Miller, urged Mr. Abbott to end the inspections, saying they were “increasing the cost of food and adding to supply chain shortages.”

And so on Wednesday, Mr. Abbott appeared in the border city of Laredo with the governor of the Mexican state of Nuevo León, Samuel Alejandro García Sepúlveda, and said that Texas would end the safety checks for trucks coming into Laredo, a crossing that serves a relatively limited area of the border. “The Texas Department of Public Safety can return to its previous policy” of random checks at that crossing, Mr. Abbott said.

Mr. García said that, in exchange, officials in his state had set up some checkpoints on the Mexican side of the crossing and promised that “our 14 kilometers of border with Texas will be continually patrolled with our police.” (The border between Texas and Mexico is 1,254 miles, or more than 2,000 kilometers.)

Mr. Abbott presented the decision as a victory, suggesting he had been able to reach an agreement with Mexican leaders in one state on border security, and promised to do so with others at well.


Credit…Jose Luis Gonzalez/Reuters

But that aim was never mentioned in Mr. Abbott’s rollout of the inspections last week. Instead, he had said the inspections were part of a broad response to the Biden administration’s announcement that it would be ending a Trump-era policy of turning back most migrants at the border under an emergency public health rule, known as Title 42.

Mr. Abbott on Wednesday urged Mr. Biden to maintain the public health policy, which is expected to end next month.

Another part of Mr. Abbott’s effort to pressure the Biden administration, also announced last week, has been to charter buses to take migrants released from federal custody into Texas and bring them to Washington or other locations outside of the state. The migrants went on a voluntary basis, state officials said.

On Wednesday, the first of the buses arrived in Washington, Mr. Abbott said in a statement, carrying two dozen migrants from Colombia, Cuba, Venezuela and Nicaragua. A second was on the way.

A camera crew from Fox News was on hand for the arrival of the first bus and captured images of the migrants as they exited near the Capitol, wearing masks and gripping manila envelopes.

Mr. Abbott and his political strategists have seen the border, and opposition to the Biden administration’s immigration policies, as a winning issue with voters, including many Democrats in Texas.

But the backups caused by the inspections, which industry experts said affected tens of millions of dollars in produce deliveries alone, provided a rare opening for Democrats to use the border against Mr. Abbott.

“It’s the wrong response to the problem of Title 42,” said Representative Henry Cuellar, a Democrat whose district includes Laredo. “All he’s done is delay the national supply chain. He’s affecting a lot of incomes here. The cost, it’s going to be passed on from the companies to the consumer.”

Edgar Sandoval and Niraj Chokshi contributed reporting.


Credit…Erin Schaff/The New York Times

Jeanna Smialek

Christopher J. Waller, one of the Federal Reserve’s governors in Washington, said on Wednesday that recent economic data suggests that the central bank should raise interest rates by more than usual in May, and potentially in June and July as well.

“The data has come in exactly to support that type of policy action, if the committee decides to do so,” Mr. Waller said during a CNBC interview on Wednesday, adding that the data may justify “possibly more in June and July.”

Fed officials have coalesced around the need to “expeditiously” return policy to a neutral setting, one in which borrowing costs are neither stoking economic growth nor slowing it so much that unemployment rises, as inflation remains stubbornly rapid. Mr. Waller and other officials have made a case for making big rate increases to speed up the process, following the Fed’s decision to increase rates by a quarter of a percentage point in March.

Jerome H. Powell, the Fed chair, has signaled that a large rate increase is up for debate, and minutes from the central bank’s last meeting showed that “many” officials would have favored a large increase in March if it hadn’t been for uncertainty created by Russia’s invasion of Ukraine.

Mr. Waller suggested that even though inflation might be touching a peak — data this week showed it rising at the fastest pace since 1981, as the war in Ukraine drove gas prices higher and exacerbated already-rapid price increases — it remained “very high,” and the Fed was going to need to keep working to reduce it.

It is probably the case that “this is pretty much the peak — it’s going to start coming down,” Mr. Waller said, adding that he had forecast price increases slowing throughout the second part of the year as part of the economic projections he submitted at the Fed’s March meeting. “We’re already seeing some oil prices retreating back.”

But Mr. Waller said it was critical to lift rates up to, and even above, neutral to bring down inflation.

“Right now, our main concern is getting these prices down, and we can do that without causing a recession,” he said.

Markets have heavily penciled in big rate increases in May and June, and investors had marked up the odds of a big move in July over recent weeks.

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Eshe Nelson