Connect with us

Popular World News

Europe’s Shaky Union Faces Trump’s G-7 Stress Test By Bloomberg

© Reuters.  Europe’s Shaky Union Faces Trump’s G-7 Stress Test


Europe’s Shaky Union Faces Trump’s G-7 Stress Test By Bloomberg


© Reuters. Europe’s Shaky Union Faces Trump’s G-7 Stress Test

(Bloomberg) — Want to receive this post in your inbox every day? Sign up for the Terms of Trade newsletter, and follow Bloomberg Economics on Twitter for more.

Europe has a lot at stake ensuring the 2019 Group of Seven summit doesn’t end badly like last year’s gathering in Canada.

A refresher: President Donald Trump threatened to stop trading with everyone, bolted early from La Malbaie, Quebec, criticized the host and withheld U.S. support for the communique before eventually signing it. His trade adviser Peter Navarro said Canada’s prime minister deserved a “special place in hell.” A photo went viral of Trump, seated with arms crossed, looking up at German Chancellor Angela Merkel and other leaders who all seemed to be saying, “Donald, you can’t be serious.”

This weekend’s talks are in Biarritz, a French seaside village popular with surfers. The stoke will probably dissipate when the high-stakes diplomacy rolls into town. Because on matters of trade, France, Germany and the U.K. have plenty riding on more unity than in 2018:

  • Europeans worry that Trump will turn his tariffs on them like he has on China. While trade isn’t on the G-7 agenda, it’s almost certain to be a pressure point.
  • The U.S. is completing a probe into a French tax on internet giants like Google (NASDAQ:) and Facebook (NASDAQ:) that could pave the way for retaliatory import taxes.
  • The EU is braced for the WTO give the U.S. the green light for levies on as much as $7 billion of EU goods after a ruling on illegal aircraft subsidies.
  • The U.S. wants more access to Europe’s agricultural markets — a red line for the French in any upcoming talks.
  • Trump is weighing whether to impose tariffs on auto imports, and a decision could come by mid-November. Doing so would spark retaliation from Brussels and pummel a German economy already on a brink of a recession.
  • U.K. Prime Minister Boris Johnson makes his G-7 debut still committed to Britain’s exit from the EU on Oct. 31, without an agreement if necessary — a scenario economists say would harm Europe’s second-biggest economy amid disruptions in, among other things, cross-border commerce.

All this amounts to a big test for French President Emmanuel Macron as he tries to maintain G-7 peace at a time of trade stress and steady a global economy wobbling because of it.

Charting the Trade War

Looking at the big German automakers, China has already supplanted the U.S. as the largest foreign market for each, most recently for Mercedes-owner Daimler in 2017. 

Today’s Must Reads

  • Australia’s edge | ranchers have a chance to triple exports of grain-fed beef to China by 2030 to satisfy the nation’s growing appetite for the highly marbled meat.
  • Needing stimulus | Thailand’s Finance Ministry cut its economic growth and export forecasts as the U.S.-China trade war and baht strength take their toll.
  • Close to home | Home Depot became the latest U.S. company to cut revenue forecasts, citing a decline in lumber prices and concern that tariffs will hurt consumer demand.
  • Huawei delay | The U.S. will extend for another 90 days a narrow set of exemptions that shielded rural networks and other American customers from a ban on China’s Huawei. The company’s founder warned of a “live or die moment.”
  • Shipyard struggle | The decline of the city of Ulsan in South Korea tells the story of the seismic forces shaking the global shipbuilding industry.

Economic Analysis

  • China borrowing costs | Bloomberg Economics sees further room for the Loan Prime Rate to decline in the coming months, aided by other policy easing measures.
  • Amazon’s French pain | Complying with France’s new 3% digital revenue tax will cost (NASDAQ:) “millions,” according to a company official.

Coming Up

  • Aug. 21: South Korea 20-days exports, Thai exports
  • Aug. 24-26: G-7 leaders meet in France

Like Terms of Trade?

Don’t keep it to yourself. Colleagues and friends can sign up here. We also publish Balance of Power, a daily briefing on the latest in global politics.

For even more: Subscribe to Bloomberg All Access for full global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.

How are we doing? We want to hear what you think about this newsletter. Let our trade tsar know.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


To Top
error: Content is protected !!