This is an audio transcript of the FT News Briefing podcast episode: ‘US business raises alarm over Trump’s deportation plan’
Sonja Hutson
Good morning from the Financial Times. Today is Tuesday, November 19th, and this is your FT News Briefing.
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Israel says that it struck a part of Iran’s nuclear program last month. And over in Silicon Valley, Chinese tech companies are hiring. Plus, US employers warned Donald Trump that his deportation plans could cause huge problems.
Taylor Nicole Rogers
It’s pretty apocalyptic. So without those people, those businesses would really be struggling to stay open.
Sonja Hutson
I’m Sonja Hutson, and here’s the news you need to start your day.
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Israeli Prime Minister Benjamin Netanyahu says the military hit a, quote, specific component of Iran’s nuclear program last month. That was in defiance of the White House, which asked Israel to avoid nuclear infrastructure. The strikes were the latest in a series of tit for tat attacks between Israel and Iran. Netanyahu didn’t offer many details about the strikes themselves, but Axios reported last week that they targeted a site that built a plastic part required to detonate a nuclear device.
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President-elect Donald Trump has promised to kick out millions of undocumented workers, but now companies are saying that will cause major labour shortages. The FT’s Taylor Nicole Rogers has been looking into the possible repercussions of Trump’s plans. She joins me now. Hi, Taylor.
Taylor Nicole Rogers
Hey, Sonja.
Sonja Hutson
So give me a few more details here, Taylor. What exactly are executives warning about?
Taylor Nicole Rogers
Essentially the argument from business leaders is that a lot of sectors in the US economy — think restaurants, construction, meat processing, farming — rely entirely on immigrant labour. Their argument is that US citizens just don’t show up to these jobs because they’re really, really difficult. And without these people, things will just kind of collapse.
Sonja Hutson
Wow. OK. So give me a sense of the scope of the problem here. Do we have a good understanding about how much these industries rely on undocumented or immigrant staff?
Taylor Nicole Rogers
Well, there are nearly 12mn people in the US without documentation and we know that most of them are in the workforce and that they are working at higher rates than US citizens. So you can imagine how many people that is and what impact that would have on the labour force. But one of the best estimates we have is from the National Restaurant Association, who says about 54 per cent of the workers in US restaurants are undocumented.
Sonja Hutson
And what effect would that ultimately have on businesses?
Taylor Nicole Rogers
Business owners are saying it could be anything from huge numbers of restaurants having to close down because they don’t have anyone to work, to food processors saying they’ll have to massively raise prices if they have to raise wages enough to get US citizens to come through the door, to people saying that fruit will just be left on trees and cows won’t be able to be milked. I talked to a caregiving service who said 80 per cent of their staff are immigrants. So without those people, those businesses would really be struggling to stay open.
Sonja Hutson
So what then are business leaders advocating for instead of Trump’s current plans?
Taylor Nicole Rogers
Business owners have been saying for years that we need to expand pathways for legal immigration in order to shore up our ageing and shrinking workforce. But mostly they just want to make sure that the deportations are limited to people that are not working. What they’re afraid of is that immigration authorities are going to be storming into restaurants and farms and meat-processing plants and rounding up everyone. And they do not want to see that happen.
Sonja Hutson
Taylor Nicole Rogers covers the US labour market for the FT. Thanks, Taylor.
Taylor Nicole Rogers
Thanks, Sonja.
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Sonja Hutson
Vanguard is letting shareholders vote for profits over environmental, social and governance issues. The asset manager has been trying to navigate the backlash to ESG without angering customers who are committed to it. So retail shareholders will now be able to choose from five options for their proxy votes. They include putting profits above all else, prioritising ESG or letting Vanguard make the decision. But a lot of shareholders don’t seem to want to wade into the controversy either. So far, nearly half of Vanguard investors who expressed a preference have told the company to use its best judgment and vote for them.
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China’s biggest tech companies are moving into Silicon Valley. They’re on the hunt for AI talent and looking to poach from rival US groups. This is in spite of Washington’s efforts to prevent Beijing from developing the cutting-edge technology. Eleanor Olcott is the FT’s China tech correspondent and she joins me now. Hi, Eleanor.
Eleanor Olcott
Hi.
Sonja Hutson
So walk me through some of these recruitment efforts. Which companies are we talking about and what are some of the strategies?
Eleanor Olcott
So there are three companies who are really trying to expand their AI operations in California. That’s Alibaba, the largest ecommerce company in China. They’re recruiting AI engineers and researchers. Also ByteDance, that’s the TikTok owner, which has a very established footprint in San Jose. They also have various teams working on different projects, including integrating AI features into TikTok. And then the food delivery giant Meituan, which is hiring AI talent in the Bay Area and trying to poach staff from rival US groups that can help them catch up in the race to profit from generative AI.
Sonja Hutson
And what’s the big goal here for these companies?
Eleanor Olcott
There are two motivations at play. The first is accessing leading talent, but also it’s maintaining a presence in the Bay Area. They want to keep abreast of the latest gossip, the latest tech trends. The other motivation is a bit more technical. China is banned from buying the highest-end AI chips from Nvidia, but there are currently no restrictions on Chinese-owned entities or affiliates in the US accessing these chips through data centres. So that also looks like a motivation for some of these players.
Sonja Hutson
OK, so getting access to these chips is a big driving factor for these Chinese companies, which makes me wonder: are there any legal restrictions on these kinds of recruitment activities?
Eleanor Olcott
No legal restrictions, as far as I am aware. None of these names are under US sanctions. So it would be a very different story if Huawei were to set up an operation in the US and start trying to kind of hire OpenAI researchers. That’s not what we’re talking about here. You know, Alibaba and Meituan are both listed internet companies. ByteDance is obviously still private, but they all have operations overseas and don’t have any kind of legal restrictions in terms of hiring talent there.
Sonja Hutson
But big picture here, the US has been trying to restrict China’s access to developing AI for years now. So what do these moves ultimately say about those efforts?
Eleanor Olcott
I think what it says to me is that in spite of all of the tensions that we’ve seen between the US and China, the fact that these Chinese tech companies think it’s worth their while building up a presence in the US. I think it just really underscores the fact that, you know, the US is still an incredibly important market for consumers and also for tech talent like the AI revolution is being defined in this space in California. So the Chinese companies have a very, very strong motivation despite all of the hurdles, despite all of the restrictions, to kind of find a way to continue to tap into that.
Sonja Hutson
Eleanor Olcott is the FT’s China technology correspondent.
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Before we go, a UK meal replacement company has gotten so successful they’re branching into — get this — chewable food. Huel started selling powders that are fortified with vitamins and get mixed with water. But the company has recently added snack bars and even hot meals to its offerings. They attribute that to a diversifying customer base. The Hueligans, as they’re called, used to be mainly tech bros wanting an efficient food and nutrition source. But now parents with young kids and people on weight loss drugs have gotten in on it, too.
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You can read more on all of these stories for free when you click the links in our shownotes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.