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By Paul Page 

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The Hunter Harrison takeover of CSX Corp. may be on a fast track. The freight railroad is discussing a settlement with the railroad-industry veteran and the activist investor backing him that could make Mr. Harrison its chief executive, less than two weeks after they launched a campaign for influence over the company. The WSJ's Jacquie McNish, David Benoit and Dana Mattioli report Mr. Harrison presented his vision for CSX to a group that included the railroad's two independent directors at a meeting in Atlanta on Friday. CSX's board has come under pressure to replace Chief Executive Michael Ward since the railroad's stock surged on news that Mr. Harrison had resigned as Canadian Pacific Railway Ltd.'s chief to team up with Paul Hilal, a former top official at Bill Ackman's Pershing Square Capital Management LP. Mr. Harrison is a vocal advocate for building a transcontinental railroad in America, so any action on CSX could be a prelude to a new rail-industry consolidation effort.

Small-business owners are raising bigger concerns over the import-tax plan known as border adjustment. The provision included in an overhaul of the U.S. tax code favored by Republicans in the House of Representatives promises to upend the direction of trade, and the WSJ's Ruth Simon and Richard Rubin report some small-business owners fear it may force them to lay off workers and raise prices as they cope with higher import costs. The proposal could benefit firms that export or don't import raw materials or finished products. Under the plan, imports couldn't be deducted as a cost of doing business, while exports would be exempted. Big retailers are fighting it. But the bigger impact may be deeper in the supply chain: More than 95% of U.S. importers have fewer than 250 employees, according to 2014 U.S. Census data, and several companies say they don't have the cash reserves to ride out the changes nor the flexibility to shift production and realign their supply chains to meet the changed economics of trade.

While trade-war talk grows louder, the existing global battle over steel shipments shows no signs of cooling off. The European Union is imposing new tariffs on two steel products originating from China and Taiwan, the WSJ's Viktoria Dendrinou reports, escalating tensions between the EU and Beijing over Europe's oversupplied steel sector. The new tariffs come as the U.S. is moving forward on its own stronger anti-dumping measures against Chinese steel. Overcapacity in Europe's steel sector has led to thousands of job losses in the past year while steel producers around the world have sought government protection from falling prices amid a global steel glut. China has said it will eliminate what it calls "outdated" steel manufacturing capacity by the middle of this year, but it's unclear so far whether the growing tariffs will eliminate production or simply send China's manufacturers in search of new markets.

ECONOMY & TRADE

Trade is having an outsize impact on recent U.S. economic growth trends. Economic output decelerated in the final three months of the year to a 1.9% growth rate, the WSJ's Ben Leubsdorf reports, returning to the stubbornly lackluster pace that has prevailed through most of the current expansion. The expansion last quarter reflected decent consumer spending, a rebound for home-building and stronger business investment in both new equipment and research-and-development projects -- trends that suggest the goods-moving economy was picking up steam to close out 2016. And private inventories came back strong, contributing a full percentage point to the fourth quarter's growth rate. The strong imports that contributed to a wider trade deficit subtracted 1.7 percentage points from gross domestic product. But those imports also signal confidence in the consumer demand and the progress of the U.S. economy, even as the direction of trade comes under increasingly heated debate.

QUOTABLE

IN OTHER NEWS

Airlines and airports scrambled over the weekend to adjust staffing in response to President Donald Trump's immigration order, while businesses in the Middle East braced for the ban's impact. (WSJ)

Delta Air Lines Inc. flight delays and cancellations stretched into a second day after computer problems led to widespread disruptions. (WSJ)

U.S. factory orders for capital goods excluding defense and aircraft rose 0.8% in December. (WSJ)

Tesco PLC will buy Booker Group PLC for $4.7 billion in a deal that combines the U.K.'s largest retailer with its largest food wholesaler. (WSJ)

Wal-Mart Stores Inc. has failed to settle a foreign-bribery probe that has stretched for five years and cost the company more than $820 million. (WSJ)

Teen retailer Wet Seal LLC is closing all its stores after it was unable to nail down fresh capital or a buyer. (WSJ)

A Chinese phone maker's default on some $166 million in bonds is roiling the world's largest internet investment marketplace. (WSJ)

Startup Santa Fe Natural Gas plans to invest heavily in Mexico following the opening of the country's natural gas market. (WSJ)

American Airlines Group Inc. projected a revenue turnaround this year as it closes the costly integration work that has dogged it since its merger with US Airways. (WSJ)

Colgate-Palmolive Co. is undertaking new plans to boost sales after lackluster growth in the fourth quarter. (WSJ)

Several Florida ports canceled plans to sign a cooperation pact with a Cuban delegation after Gov. Rick Scott threatened to cut their funding. (Miami Herald)

Boeing Co. and its machinists' union agreed to a Feb. 15 date for a vote on unionization at the company's jet factory in South Carolina. (Reuters)

Residents near a new CSX Corp. double-stack route through Washington, D.C., say the expansion has disrupted life in the neighborhood. (Washington Post)

Members of the International Longshoremen's Association slowed operations at South Carolina's Port of Charleston to protest automation efforts. (Charleston Post and Courier)

Truckload carrier Heartland Express Inc.'s fourth-quarter net profit fell 21% on a 14% decline in revenue. (Cedar Rapids Gazette)

Wal-Mart plans to spend $1.2 billion over the next 10 years adding distribution centers in Mexico's Yucatan region. (Yucatan Times)

Orient Overseas Container Line's trans-Pacific volume soared 30.6% in the fourth quarter while Asia-Europe business grew 28%. (American Shipper)

Agencies and institutions in Michigan, Ohio, and Pennsylvania formed the "Smart Belt Coalition" to spur efforts to test and deploy connected vehicles. (Car & Driver)

ABOUT US

Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

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Write to Paul Page at paul.page@wsj.com

(END) Dow Jones Newswires

January 30, 2017 06:47 ET (11:47 GMT)

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