Hurricane Milton Pummels Florida
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Hurricane Milton barrels through Florida. Plus, Donald Trump wants to lower taxes on U.S. citizens living abroad. And despite escalating tensions with Washington, China is still hungry for advice from Western consultancies. We found thousands of contracts

between a lot of Western consulting firms and Chinese government agencies and sensitive Chinese government-controlled companies. Spending is among the highest of any region in the world. It's Thursday, October 10th. I'm Kate Bullivant for The Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

More than 3 million people in Florida are without power this morning after Hurricane Milton made landfall as a Category 3 hurricane. The storm hit near Siesta Key in Sarasota County last night, with maximum sustained winds estimated at 120 mph.

Before making landfall, Milton hammered Florida with several inches of rain, dangerous winds, storm surge and tornadoes. Thousands of flights were cancelled for yesterday and today as airports in the area shut down. Millions have been urged to evacuate ahead of the storm. Last night, Florida Governor Ron DeSantis told those who had stayed behind to shelter in place. Stay inside and stay off the roads. Floodwaters and rushing storm surge are very dangerous conditions.

And I would say that's even more so in spite of everything the state did to help these local communities hit by Helene remove a lot of debris. And they did move a lot of debris over the last 72 hours. You're going to have new debris created and you still have some of that old debris in some of those places. So there's going to be hazards in the storm surge and in the floodwaters.

The National Hurricane Center predicted that a stretch of Florida's coast, including Sarasota, could see up to 13 feet of storm surge. Tampa Bay to the north was expected to get up to nine feet.

Parts of central and northern Florida could see up to 18 inches of rain through today, creating a risk of life-threatening flooding. Lynn Waddell has been reporting for us about an hour north of where Milton made landfall in St. Petersburg, outside of an official evacuation zone. I've covered many storms over the years. I've lived here since 1995 and actually we've had many, many near-misses.

And recently we had Hurricane Helene, which did an astronomical amount of damage here on the coastal areas due to flooding.

And even those of us who were not directly impacted by it, we saw it. I mean, we've seen the results. And so we know this is real and people are really scared. Joellen Schilke had to evacuate her home and was weathering the storm with Lynn last night. I live about two and a half blocks from Tampa Bay. And we had a lot of water during Helene. My block was fine, but just one block away, all of those houses were flooded. And their stuff...

that they pulled out of their houses to be picked up that was wrecked is still on easements all over the neighbourhood. So I think we're all pretty worried about that blowing around. We're at Lynn's. Right now it's a little bit after nine. The winds are so fierce. They're so loud and things are just whipping around out there. Milton was downgraded to a Category 2 hurricane late last night and weakened further to a Category 1 earlier today.

The hurricane centre says the storm is expected to move quickly through Florida and emerge into the Atlantic around sunrise.

Turning to the presidential campaign, Donald Trump has pledged an end to so-called double taxation for Americans living outside of the US. Like his prior ideas to eliminate taxes on tips and overtime pay, the former president's latest policy promise goes beyond extending tax cuts that he put in place in 2017.

America is alone among major economies in taxing citizens who live outside of the country and already pay taxes where they live.

According to the most recent statistics available from the Federal Voting Assistance Programme, roughly 4.4 million Americans lived abroad in 2022 and some 2.8 million were eligible to vote. The Trump campaign is hoping the proposal will appeal to many of those voters, particularly those who live in Israel, according to a person familiar with the matter.

It isn't clear how extensively Trump plans to revise the tax code and campaign officials offered no additional details.

We are exclusively reporting that TD Bank's US entity is expected to plead guilty today to charges that it failed to properly monitor money laundering by drug cartels. As part of a settlement with regulators and prosecutors, the Canadian bank is expected to pay about $3 billion in penalties and accept limits on its growth in the US.

Both the Justice Department and the Treasury's Financial Crimes Enforcement Network are planning to put independent monitors in place to watch the bank closely and ensure compliance. TD has said it's working to address the issues with its anti-money laundering programmes.

And McDonald's is rolling out a chicken Big Mac today. The twist on its flagship burger comes as many in the restaurant industry put more chicken on menus. According to the US Department of Agriculture, per capita consumption of chicken has skyrocketed over the past 60 years, while demand for beef has slowly decreased.

And let's take a look at what's happening in markets today. Investors are awaiting the release of the Consumer Price Index for September, due out at 8.30am Eastern. Economists polled by the Wall Street Journal forecast that inflation likely rose by 2.3% from a year earlier, a slowdown from August's 2.5% rate.

The equivalent rate for core CPI, which strips out volatile food and energy prices, is seen holding steady at 3.2%. And Delta Airlines are set to post earnings ahead of the opening bell. Coming up, China is still big business for Western consulting firms despite escalating geopolitical tensions. And why switching jobs can dent your retirement savings. That's after the break.

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Rising tensions between Beijing and Washington mean Western consulting and audit firms are having to tread a fine line in pursuing business in China. But as Journal Enterprise editor Aruna Vishwanatha reports, China is still big business for these companies.

Arash Hasukri began by asking her about the documents she reviewed for her story. We found thousands of contracts between a lot of Western consulting firms and Chinese government agencies and sensitive Chinese government-controlled companies. And we found

What we found more broadly was that over the past five years, spending on Western consulting firms has been up 53%, according to research firm Kennedy Intelligence, and that is among the highest of any region in the world. So just give us some examples of how these consulting and accounting firms are threading what seems to be a very fine, very tight needle.

Right. So just in the past month, we have PricewaterhouseCoopers fined $62 million there and banned from working there for six months because of audits it did for a Chinese firm that's at the center of the property sector collapse in China. But then when we dug into it, what we found also was that other

Other units of PwC there at the same time that it was doing this audit work was also handling work for the local government in Xinjiang where the U.S. alleges human rights abuses and has taken up a pretty major campaign to try to limit Western business there.

So it's important to note here that consulting and audit companies like PwC are allowed to work in China. But some of the Chinese companies that these firms do business with are sanctioned by the U.S. Is that right? That's right. We found around 100 contracts between these Western consulting firms and PwC.

companies in China that are subject to some U.S. sanctions. A lot of these sanctions are ones in which the Pentagon has designated them as Chinese military companies, that they are undertaking work that is aiding in China's military development. And

With that designation, that means the Treasury Department has imposed these sanctions that prohibit Americans from investing in these companies. It doesn't affect providing services to these companies, so it's a pretty narrow sanction. So what the consulting firms are doing is not illegal by any means, but it's something that's coming under more pressure from Washington.

Right. And as you report, these firms have set up structures where their Chinese units are legally separate from their HQ. Tell us what these firms actually do.

and their local units had to say about their work in China? So the big four accounting firms didn't answer questions about any specific contracts that we looked at, citing client confidentiality. PWC China told us also that it complies with all applicable laws and the China units of the other big four consultancies didn't respond to requests for comment and neither did Chinese regulators.

And finally, Aruna, you report that while consulting firms do a lot of business in China still, it's also the case that Chinese authorities and companies need these foreign consultants. Tell us a little bit about that.

Yeah, that's right. In our reporting on this topic, me and colleagues in China heard from these partners that work at these firms who said that the international branding is actually pretty valuable in China and companies and even government agencies there are pretty receptive to wanting advice that's sort of benchmarked against international best practices. So they're pretty hungry still for that kind of top tier advice.

That was Wall Street Journal Washington Enterprise Editor Aruna Viswanathan. Aruna, thank you very much indeed. Thanks for having me.

And finally, switching jobs can boost your pay and prospects, but it can also drag on your retirement savings. According to new research from Vanguard Group, the majority of people who change jobs end up putting less of their pay into their 401ks, often without realising it. Over a four-decade career, that can mean as much as $300,000 less in retirement wealth for someone with average pay.

Here's Journal reporter Anne Turgerson. People who are very engaged in their retirement savings, if they leave a job, those people often will sign up for the next 401k plan. But there's a lot of people who are not actively engaged. And for those people, when they change a job, if the new employer requires them to sign up for the 401k plan, a considerable percentage of those people just never sign up.

or they move into another job that automatically enrolls them in the 401k plan. But often automatic enrollment happens at like 3% of pay, which is pretty low. And a lot of people who aren't super on top of their retirement savings will just leave their savings rate at 3%. For more about how changing jobs could impact your retirement savings, check out the Your Money Briefing podcast.

And that's it for What's News for Thursday morning. Today's show was produced by Daniel Bark with supervising producer Christina Rourke. And I'm Kate Bullivant for The Wall Street Journal, filling in for Luke Vargas. We'll be back tonight with a new show. Until then, thanks for listening.

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